TARGETS TRUST [XXVIII]
- TARGETS
Targeted Growth Enhanced Terms Securities (TARGETS(R))
With Respect to the Common Stock of [ ]
Due on -, -
guaranteed to the extent explained
in the Prospectus dated -, 2006 by
CITIGROUP FUNDING INC.
and
CITIGROUP INC.
UNDERWRITING AGREEMENT
-, 2006
CITIGROUP GLOBAL MARKETS INC.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
TARGETS Trust [XXVIII] (the "Trust"), a statutory trust organized under
the Statutory Trust Act (the "Delaware Act") of the State of Delaware (Chapter
38, Title 12, of the Delaware Business Code, 12 Del. C. Section 3801 et seq.),
proposes, upon the terms and conditions set forth herein, to issue and sell - of
its Targeted Growth Enhanced Terms Securities (TARGETS(R)) (the "TARGETS") to
you, as underwriter (the "Underwriter"). The TARGETS are to be issued pursuant
to the terms of a declaration of trust, dated as of March 8, 2006 and to be
amended and restated as of -, 2006 (the "Declaration"), among Citigroup Funding
Inc., a Delaware corporation, as successor sponsor (the "Company"), Citigroup
Inc., a Delaware corporation, as guarantor (the "Guarantor" and, together with
the Company and the Trust, the "Offerors"), the trustees named therein (the
"TARGETS Trustees") and the holders from time to time of undivided beneficial
interests in the assets of the Trust. The Declaration is qualified as an
indenture under the Trust Indenture Act.
Any reference herein to the Registration Statement, the Base
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Exchange Act on or
before the Effective Date or the issue date of the Base Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend," "amendment" or "supplement" with
respect to the Registration Statement, the Base Prospectus, any
Preliminary Final Prospectus or the Final Prospectus shall be deemed to refer
to and include the filing of any document under the Exchange Act after the
Effective Date of the Registration Statement or the issue date of the Base
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference. Certain terms used
herein are defined in Section 18 hereof.
The TARGETS represent undivided beneficial ownership interests in the
assets of the Trust. The assets of the Trust will consist solely of (i) a
forward contract with respect to the Common Stock of [ ], purchased by the Trust
from the Company (the "Forward Contract") and (ii) a portfolio of stripped U.S.
treasury securities (the "Treasury Securities"). The Company, the Guarantor and
JPMorgan Chase Bank, N.A., a national banking association, as trustee (the
"Guarantee Trustee"), are to enter into the TARGETS Guarantee Agreement dated as
of -, 2006 (the "Guarantee") with respect to the TARGETS. The Guarantee, when
taken together with the Forward Contract and the Company's obligation to pay all
fees and expenses of the Trust, constitutes a full and unconditional guarantee
by the Company and the Guarantor of all payments to be made to the holders of
the TARGETS. The TARGETS, the Guarantee and the Forward Contract are hereinafter
collectively referred to as the "Securities."
1. Representations and Warranties. The Offerors represent and
warrant to, and agree with, you, as Underwriter, as set forth below in this
Section 1.
(a) The Offerors meet the requirements for use of Form S-3
under the Act and have prepared and filed with the Commission an
automatic shelf registration statement as defined in Rule 405 (File
Nos. 333- ***, 333- *** and 333- ***), including a related base
prospectus, for registration under the Act of the offering and sale of
the Securities. Such Registration Statement, including any amendments
thereto filed prior to the Execution Time, became effective upon
filing. The Offerors may have filed with the Commission, as part of an
amendment to the Registration Statement or pursuant to Rule 424(b), one
or more preliminary prospectuses relating to the Securities, each of
which has previously been furnished to you. The Offerors will file with
the Commission a final prospectus relating to the Securities in
accordance with Rule 424(b). As filed, such final prospectus shall
contain all information required by the Act and the rules thereunder,
and, except to the extent you shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other
changes (beyond that contained in the Base Prospectus and any
Preliminary Prospectus) as the Company, the Guarantor or the Trust has
advised you, prior to the Execution Time, will be included or made
therein. The Registration Statement, at the Execution Time, meets the
requirements set forth in Rule 415(a)(1)(x). The initial Effective Date
of the Registration Statement was not earlier than the date three years
before the Execution Time.
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(b) On each Effective Date, the Registration Statement did,
and when the Final Prospectus is first filed in accordance with Rule
424(b) and on the Closing Date (as defined herein), the Final
Prospectus (and any supplement thereto) will, comply in all material
respects with the applicable requirements of the Act, the Exchange Act
and the Trust Indenture Act and the respective rules thereunder; on
each Effective Date and at the Execution Time, the Registration
Statement 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 on the Effective Date and on the Closing Date, the
Declaration did or will comply in all material respects with the
applicable requirements of the Trust Indenture Act and the rules
thereunder; on the date of any filing pursuant to Rule 424(b) and on
the Closing Date, the Final Prospectus (together with any supplement
thereto) will not include any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that the Offerors make no
representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of each of the
Institutional Trustee, the Guarantee Trustee and the Delaware Trustee
or (ii) the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing
to the Offerors by or on behalf of you, as Underwriter, specifically
for inclusion in the Registration Statement or the Final Prospectus (or
any supplement thereto), it being understood and agreed that the only
such information furnished by or on behalf of you, as Underwriter,
consists of the information described as such in Section 8 hereof.
(c) As of the Execution Time, the Disclosure Package 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.
The preceding sentence does not apply to statements in or omissions
from the Disclosure Package based upon and in conformity with written
information furnished to the Company by you, as Underwriter
specifically for use therein, it being understood and agreed that the
only such information furnished by or on behalf of you, as Underwriter
consists of the information described as such in Section 8 hereof.
(d) (i) At the time of filing the Registration Statement, (ii)
at the time of the most recent amendment thereto for the purposes of
complying with Section 10(a)(3) of the Act (whether such amendment was
by post-effective amendment, incorporated report filed pursuant to
Sections 13 or 15(d) of the Exchange Act or form of prospectus), (iii)
at the time the Offerors or any person acting on its behalf (within the
meaning, for this clause only, of Rule 163(c)) made any offer
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relating to the Securities in reliance on the exemption in Rule 163 and
(iv) at the Execution Time (with such date being used as the
determination date for purposes of this clause (iv)), the Guarantor was
or is (as the case may be) a "well-known seasoned issuer" as defined in
Rule 405. The Guarantor agrees to pay or cause to be paid the fees
required by the Commission relating to the Securities within the time
required by Rule 456(b)(1) without regard to the proviso therein and
otherwise in accordance with Rules 456(b) and 457(r).
(e) (i) At the earliest time after the filing of the
Registration Statement that the Offerors or another offering
participant made a bona fide offer (within the meaning of Rule
164(h)(2)) of the Securities and (ii) as of the Execution Time (with
such date being used as the determination date for purposes of this
clause (ii)), none of the Company, the Guarantor or the Trust was or is
an Ineligible Issuer (as defined in Rule 405), without taking account
of any determination by the Commission pursuant to Rule 405 that it is
not necessary that the Company, the Guarantor or the Trust be
considered an Ineligible Issuer.
(f) The Issuer Free Writing Prospectus does not include any
information that conflicts with the information contained in the
Registration Statement, including any document incorporated therein and
any prospectus or prospectus supplement deemed to be a part thereof
that has not been superseded or modified. The foregoing two sentences
do not apply to statements in or omissions from the Disclosure Package
based upon and in conformity with written information furnished to the
Company by you, as Underwriter, specifically for use therein, it being
understood and agreed that the only such information furnished by or on
behalf of you, as Underwriter, consists of the information described as
such in Section 8 hereof.
Any certificate signed by any officer of the Company or the
Guarantor or by any trustee of the Trust and delivered to you, as Underwriter,
or counsel for the Underwriters in connection with the offering of the TARGETS
shall be deemed a representation and warranty by the Company, the Guarantor or
the Trust, as the case may be, as to matters covered thereby, to you, as
Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Trust agrees to sell to you, as Underwriter, and you, as Underwriter, agree to
purchase from the Trust, at a purchase price of $10 per TARGETS, plus accrued
distributions, if any, on the TARGETS from -, 2006, - TARGETS.
(b) The Company agrees that, in view of the fact that the
proceeds of the sale of the TARGETS will be invested in the Forward
Contract, it shall pay to you, as Underwriter, as compensation
("Underwriter Compensation") for your
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arranging the investment of the proceeds therein, on the Closing Date
(as hereinafter defined), $- per TARGETS.
3. Delivery and Payment. Delivery of and payment for the
TARGETS shall be made at 10:00 AM, New York City time, on -, 2006, or at such
time on such later date not more than three Business Days after the foregoing
date as you shall designate (such date and time of delivery of and payment for
the TARGETS being herein called the "Closing Date"). Delivery of the TARGETS
shall be made to you against payment by you of the purchase price thereof to or
upon the order of the Company by wire transfer payable in same-day funds to an
account specified by the Company. Delivery of the TARGETS shall be made through
the facilities of The Depository Trust Company unless you shall otherwise
instruct.
4. Offering by Underwriters. It is understood that you propose
to offer the TARGETS for sale to the public as set forth in the Final
Prospectus.
5. Agreements of the Offerors. The Offerors jointly and
severally agree with you, as Underwriter, as follows:
(a) Prior to the termination of the offering of the
Securities, the Offerors will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus or
any Preliminary Final Prospectus) to the Base Prospectus unless the
Offerors have furnished you a copy for your review prior to filing and
will not file any such proposed amendment or supplement to which you
reasonably object. The Offerors will cause the Final Prospectus,
properly completed, and any supplement thereto, to be filed in a form
approved by you with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to you of such timely filing. The
Offerors will promptly advise you (1) when the Final Prospectus, and
any supplement thereto, shall have been filed (if required) with the
Commission pursuant to Rule 424(b), (2) when, prior to termination of
the offering of the TARGETS, any amendment to the Registration
Statement shall have been filed or become effective, (3) of any request
by the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any
supplement to the Final Prospectus or for any additional information,
(4) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any notice objecting
to its use or the institution or threatening of any proceeding for that
purpose and (5) of the receipt by the Company, the Guarantor or the
Trust of any notification with respect to the suspension of the
qualification of the TARGETS for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company and the Guarantor will use their best efforts to prevent the
issuance of any such stop order or the occurrence of any such
suspension or objection to the use of the Registration Statement and,
upon such
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issuance, occurrence or notice of objection, to obtain as soon as
possible the withdrawal of such stop order or relief from such
occurrence or objection, including, if necessary, by filing an
amendment to the Registration Statement or a new registration statement
and using their best efforts to have such amendment or new registration
statement declared effective as soon as practicable.
(b) If, at any time prior to the filing of the Final
Prospectus pursuant to Rule 424(b), any event occurs as a result of
which the Disclosure Package would include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein in the light of the circumstances under which they
were made at such time not misleading, the Offerors promptly will (1)
notify you so that any use of the Disclosure Package may cease until it
is amended or supplemented; (2) amend or supplement the Disclosure
Package to correct such statement or omission; and (3) supply any
amendment or supplement to you in such quantities as you may reasonably
request.
(c) If, at any time when a prospectus relating to the TARGETS
is required to be delivered under the Act (including in circumstances
where such requirement may be satisfied pursuant to Rule 172), any
event occurs as a result of which the Final Prospectus as then
supplemented would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements
therein in the light of the circumstances under which they were made
not misleading, or if it shall be necessary to amend the Registration
Statement, file a new registration statement or supplement the Final
Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, including in connection with the use or delivery of
the Final Prospectus, the Offerors promptly will (i) notify you of such
event, (ii) prepare and file with the Commission, subject to the second
sentence of paragraph (a) of this Section 5, an amendment or supplement
or new registration statement which will correct such statement or
omission or effect such compliance, (iii) use their best efforts to
have any amendment to the Registration Statement or new registration
statement declared effective as soon as practicable in order to avoid
any disruption in use of the Final Prospectus and (iv) supply any
supplemented Final Prospectus to you in such quantities as you may
reasonably request.
(d) As soon as practicable, but in any event not later than 16
months after the Closing Date, the Guarantor will make generally
available to the holders of the TARGETS and to you an earnings
statement or statements of the Company and the Guarantor covering a
period of at least 12 months beginning after the Closing Date and
otherwise satisfying Section 11(a) of the Act.
(e) Upon request, the Offerors will furnish to you and counsel
for the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a
prospectus by an
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Underwriter or dealer may be required by the Act (including in
circumstances where such requirement may be satisfied pursuant to Rule
172), as many copies of each Preliminary Final Prospectus, the Final
Prospectus and each Issuer Free Writing Prospectus and any supplement
thereto as you may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to
the offering that are required to be prepared, furnished or delivered
by it.
(f) The Company and the Guarantor will arrange, if necessary,
for the qualification of the TARGETS for sale under the laws of such
jurisdictions as you reasonably may designate, will maintain such
qualifications in effect so long as required for the distribution of
the TARGETS and will pay any fee of the NASD, Inc., in connection with
its review of the offering; provided that in no event shall the
Company, the Guarantor or the Trust be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to
take any action that would subject it to service of process in suits,
other than those arising out of the offering or sale of the TARGETS, in
any jurisdiction where it is not now so subject.
(g) (i) The Offerors agree that, unless they have obtained or
will obtain, as the case may be, the prior written consent of the
Underwriter, and (ii) the Underwriter agrees with the Offerors that,
unless it has obtained or will obtain, as the case may be, the prior
written consent of the Offerors, it has not made and will not make any
offer relating to the TARGETS that would constitute an Issuer Free
Writing Prospectus or that would otherwise constitute a "free writing
prospectus" (as defined in Rule 405) required to be filed by the
Offerors with the Commission or retained by the Offerors under Rule
433; 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 as a schedule to this Underwriting Agreement. Any
such free writing prospectus consented to by the Underwriter or the
Offerors is hereinafter referred to as a "Permitted Free Writing
Prospectus." The Offerors agree that (x) they have treated and will
treat, as the case may be, each Permitted Free Writing Prospectus as an
Issuer Free Writing Prospectus and (y) they have complied and will
comply, as the case may be, with the requirements of Rules 164 and 433
applicable to any Permitted Free Writing Prospectus, including in
respect of timely filing with the Commission, legending and record
keeping.
(h) None of the Company, the Guarantor or the Trust will,
without your prior written consent, offer, sell, contract to sell,
pledge, or otherwise dispose of, (or enter into any transaction which
is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company, the
Guarantor or the Trust or any of their respective affiliates or any
person in privity with any of them or any of their respective
affiliates) directly or
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indirectly, including the filing (or participation in the filing) of a
registration statement with the Commission in respect of, or establish
or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange
Act, any TARGETS or any other securities, including any backup
undertakings for such securities, of the Company or the Trust, in each
case that are substantially similar to the TARGETS or any security
convertible into or exchangeable for the TARGETS or such substantially
similar securities of either the Trust or the Company, or publicly
announce an intention to effect any such transaction, during the period
beginning the date of the Underwriting Agreement and ending the Closing
Date.
(i) Each of the Company, the Guarantor and the Trust will
comply with all applicable securities and other laws, rules and
regulations, including, without limitation, the Sarbanes Oxley Act of
2002, and use its best efforts to cause its directors and officers (or,
in the case of the Trust, trustees), in their capacities as such, to
comply with such laws, rules and regulations, including, without
limitation, the provisions of the Sarbanes Oxley Act of 2002.
(j) The Offerors will not take, directly or indirectly, any
action designed to or that would constitute or that might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Company or the Trust to facilitate the sale or resale of the TARGETS;
except that the Offerors make no agreement as to the activities of the
Underwriter.
(k) The Company and the Guarantor, whether or not the
transactions contemplated hereunder are consummated or this Agreement
is terminated, will pay all expenses incident to the performance of the
Offerors' obligations hereunder, including, without limiting the
generality of the foregoing, all costs, taxes and expenses incident to
the issue and delivery of the Securities, all fees and expenses of the
Offerors' counsel and accountants, and all costs and expenses incident
to the preparing, printing, filing and distributing of all documents
relating to the offering, and will reimburse you, as Underwriter, for
any expenses (including fees and disbursements of counsel) incurred by
you in connection with the matters referred to in Section 5(f) hereof
and the preparation of memoranda relating thereto, for any filing fee
of the NASD Inc. relating to the TARGETS, and for any fees charged by
investment rating agencies for rating the TARGETS.
6. Conditions to the Underwriter's Obligations. The
obligations of you, as Underwriter, to purchase the TARGETS shall be subject to
the accuracy of the representations and warranties on the part of the Offerors
contained herein as of the Execution Time and the Closing Date (as if made on
the Closing Date), to the accuracy of the statements of the Offerors made in any
certificates pursuant to the provisions hereof,
8
to the performance by the Offerors of their obligations hereunder, and to the
following additional conditions:
(a) The Final Prospectus, and any supplement thereto, have
been filed in the manner and within the time period required by Rule
424(b); any material required to be filed by the Offerors pursuant to
Rule 433(d) under the Act, shall have been filed with the Commission
within the applicable time periods prescribed for such filings by Rule
433; and no stop order suspending the effectiveness of the Registration
Statement or any notice objecting to its use shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company and the Guarantor shall have requested and
caused Xxxxxxx X. Xxxxxxx, Esq., counsel for the Company and the
Guarantor, to have furnished to you, as Underwriter, an opinion, dated
the Closing Date and addressed to you, substantially in the form
attached hereto as Exhibit A.
(c) The Trust shall have requested and caused Xxxxxxxx, Xxxxxx
& Xxxxxx, P.A., special Delaware counsel for the Trust, to have
furnished to you, as Underwriter, an opinion dated the Closing Date and
addressed to you, as Underwriters, substantially in the form attached
hereto as Exhibit B.
(d) The Company and the Guarantor shall have requested and
caused Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP, special tax counsel to the
Company and the Guarantor, and counsel to the Offerors, to have
furnished to you their opinion, dated the Closing Date and addressed to
you, substantially in the form attached hereto as Exhibit C.
(e) The Guarantee Trustee shall have requested and caused
Xxxxxxx Xxxxxxxx & Xxxx, counsel to the Guarantee Trustee, to have
furnished to you his opinion, dated the Closing Date and addressed to
you, substantially in the form attached hereto as Exhibit D.
(f) You shall have received from Xxxxxx Xxxxxxxx Xxxxx &
Xxxxxxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to you, as Underwriters, with
respect to the issuance and sale of the TARGETS, the Amended and
Restated Declaration of Trust, the Registration Statement, the
Disclosure Package, the Final Prospectus (together with any supplement
thereto) and other related matters as you may reasonably require, and
the Offerors shall have furnished to such counsel such documents as
they request for the purpose of enabling them to pass upon such
matters.
(g) (i) The Company and the Guarantor and (ii) the Trust shall
have furnished to you a certificate, dated the Closing Date, signed by,
(1) with respect to the Company, the Chairman, the President or a Vice
President, and by the
9
Treasurer, an Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary of the Company, (2) with respect to the Guarantor,
the Chairman, any Vice Chairman, the President, any Vice President, the
Chief Financial Officer, the Chief Accounting Officer, the General
Counsel, the Controller or any Deputy Controller and by the Treasurer,
any Assistant Treasurer, the Secretary or any Assistant Secretary of
the Guarantor, and (3) with respect to the Trust, any one of the
Regular Trustees, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Final
Prospectus, the Disclosure Package and any supplements or amendments
thereto, as well as each electronic roadshow used to offer the TARGETS,
and this Agreement and that:
(i) the representations and warranties of each of the
Company and the Guarantor or of the Trust, as the
case may be, in this Agreement are true and correct
on and as of the Closing Date with the same effect as
if made on the Closing Date, and each of the Company
and the Guarantor, or the Trust, as the case may be,
have or has complied with all the agreements and
satisfied all the conditions on their or its part to
be performed or satisfied at or prior to the Closing
Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement or any notice objecting to
its use has been issued and no proceedings for that
purpose have been instituted or, to the knowledge of
the Company and the Guarantor, or of the Trust, as
the case may be, threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in
the Final Prospectus (exclusive of any supplement
thereto), there has been no material adverse effect
on the condition (financial or otherwise), prospects,
earnings, business or properties of the Guarantor and
its subsidiaries, taken as a whole, whether or not
arising from transactions in the ordinary course of
business, except as set forth in or contemplated in
the Disclosure Package and the Final Prospectus
(exclusive of any supplement thereto).
(h) The Guarantor shall have requested and caused KPMG LLP to
have furnished to you, at the Closing Date, a customary "comfort
letter" (which may refer to letters previously delivered to you), dated
as of the Closing Date, that is satisfactory in content and form to
you.
(i) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Final Prospectus
(exclusive of any supplement
10
thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (e) of this
Section 6 or (ii) any change, or any development involving a
prospective change, in or affecting the condition (financial or
otherwise), earnings, business or properties of the Guarantor and its
subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated in the Disclosure Package and the Final Prospectus
(exclusive of any supplement thereto) the effect of which, in any case
referred to in clause (i) or (ii) above, is, in your sole judgment, as
Underwriter, after consultation with the Guarantor, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the
Registration Statement (exclusive of any amendment thereof), the
Disclosure Package and the Final Prospectus (exclusive of any
supplement thereto) and any Issuer Free Writing Prospectus.
(j) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of the TARGETS or any of the Company's
or the Guarantor's senior or subordinated debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any
intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change.
(k) Prior to the Closing Date, the Offerors shall have
furnished to you such further information, certificates and documents
as you may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled when and as provided in this Agreement, or if any of the opinions
and certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to you and counsel for the
Underwriters, this Agreement and all your obligations hereunder may be canceled
at, or at any time prior to, the Closing Date by you. Notice of such
cancellation shall be given to the Offerors in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the Closing
Date.
7. Reimbursement of Underwriter's Expenses. If the sale of the
TARGETS provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or because of any
refusal, inability or failure on the part of the Company, the Guarantor or the
Trust to perform any agreement herein
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or comply with any provision hereof other than by reason of a default by you,
as Underwriter, the Company and the Guarantor will reimburse you severally on
demand for all out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by you in connection
with the proposed purchase and sale of the TARGETS.
8. Indemnification and Contribution.
(a) Each of the Company, the Guarantor and the Trust agrees to
indemnify and hold harmless you, as Underwriter, your directors,
officers, employees and agents and each person who controls you within
the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in
the registration statement for the registration of the Securities as
originally filed or in any amendment thereof, or in the Base
Prospectus, any Preliminary Final Prospectus, the Final Prospectus, any
Issuer Free Writing Prospectus or in any amendment thereof or
supplement thereto, 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
agrees to reimburse each such indemnified party, as incurred, for any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that none of the Company, the Guarantor or
the Trust will be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with
written information furnished to any of them by you or on your behalf
specifically for inclusion therein. This indemnity agreement will be in
addition to any liability which any of the Company, the Guarantor or
the Trust may otherwise have.
(b) You, as Underwriter, agree to indemnify and hold harmless
the Company, the Guarantor and the Trust, each of their respective
directors, each of their respective officers or, in the case of the
Trust, trustees, who signs the Registration Statement, and each person
who controls the Company, the Guarantor or the Trust within the meaning
of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company, the Guarantor and the Trust to
you, as Underwriter, but only with reference to written information
relating to you furnished to the Company, the Guarantor or the Trust by
or on behalf of you specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any
12
liability that you may otherwise have. The Offerors acknowledge that
(i) the statements set forth in the sentence at the bottom of the cover
page regarding delivery of the TARGETS and, under the heading
"Underwriting", (ii) the list of Underwriters and their respective
participation in the sale of the TARGETS, (iii) the sentences related
to concessions and reallowances and (iv) the paragraph related to
stabilization, syndicate covering transactions and penalty bids in any
Preliminary Final Prospectus and the Final Prospectus constitute the
only information furnished in writing by or on behalf of you for
inclusion in any Preliminary Final Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party
in writing of the commencement thereof; but the failure so to notify
the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the
forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. The indemnifying
party shall be entitled to appoint counsel of the indemnifying party's
choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case
the indemnifying party shall not thereafter be responsible for the fees
and expenses of any separate counsel retained by the indemnified party
or parties except as set forth below); provided, however, that such
counsel shall be satisfactory to the indemnified party. Notwithstanding
the indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the
right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present
such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses
available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii)
the indemnifying party shall not have employed counsel satisfactory to
the indemnified party to represent the indemnified party within a
reasonable time after notice of the institution of such action or (iv)
the indemnifying party shall authorize the indemnified party to employ
separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of
any judgment with respect to any pending or threatened claim, action,
suit or proceeding in
13
respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a), (b) or
(c) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Offerors and you
severally agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively
"Losses") to which the Offerors and you may be subject in such
proportion as is appropriate to reflect the relative benefits received
by the Offerors on the one hand and by you on the other from the
offering of the TARGETS; provided, however, that in no case shall you
be responsible for any amount in excess of the underwriting discount or
commission applicable to the TARGETS purchased by you hereunder. If the
allocation provided by the immediately preceding sentence is
unavailable for any reason, the Offerors and you severally shall
contribute in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Offerors on
the one hand and of you on the other in connection with the statements
or omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the Offerors
shall be deemed to be equal to the total net proceeds from the offering
(before deducting expenses) received by the Trust, and benefits
received by you shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page
of the Final Prospectus. Relative fault shall be determined by
reference to, among other things, whether any untrue or any alleged
untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by the
Offerors on the one hand or you on the other, the intent of the parties
and their relative knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission. The Offerors and
you agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this paragraph (d), 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. For purposes of
this Section 8, each person who controls you within the meaning of
either the Act or the Exchange Act and each director, officer, employee
and agent of you shall have the same rights to contribution as you, as
Underwriter, and each person who controls the Company, the Guarantor or
the Trust, as applicable, within the meaning of either the Act or the
Exchange Act, each officer of the Company or the Guarantor, as
applicable, and each trustee of the Trust who shall have signed
14
the Registration Statement, and each director of the Company or the
Guarantor, as applicable, shall have the same rights to contribution as
the Company, the Guarantor or the Trust, as applicable, subject in each
case to the applicable terms and conditions of this paragraph (d).
9. Termination. This Agreement shall be subject to termination in your
absolute discretion, by notice given to the Offerors prior to delivery of and
payment for the TARGETS, if at any time prior to such time (i) trading in the
Company's or the Guarantor's Common Stock shall have been suspended by the
Commission or the New York Stock Exchange, or trading in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
prices shall have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State authorities or
(iii) there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war, or other
calamity or crisis the effect of which on financial markets is such as to make
it, in your sole judgment, as Underwriter, after consultation with the Offerors,
impractical or inadvisable to proceed with the offering or delivery of the
TARGETS as contemplated by the Final Prospectus (exclusive of any supplement
thereto).
10. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company, the Guarantor, the Trust or their respective officers (or, in the case
of the Trust, trustees) and of you, as Underwriter, 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 you, as Underwriter, or the Company,
the Guarantor and the Trust or any of the officers, directors, employees, agents
or controlling persons (and, in the case of the Trust, trustees) referred to in
Section 8 hereof, and will survive delivery of and payment for the TARGETS. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Underwriter, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
General Counsel; if sent to the Company, will be mailed, delivered or telefaxed
to Citigroup Funding Inc., 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Assistant Treasurer (fax no.: (000) 000-0000); if sent to the
Guarantor, will be mailed, delivered or telefaxed to 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: General Counsel - Finance and Capital Markets (fax
no.: (000) 000-0000); or, if sent to the Trust, will be mailed, delivered or
telefaxed to c/o Citigroup Funding Inc., 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Assistant Treasurer (fax no.: (000) 000-0000).
15
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons (and, in the case
of the Trust, trustees) referred to in Section 8 hereof, and no other person
will have any right or obligation hereunder.
13. No Fiduciary Duty. The Offerors hereby acknowledge that (i) the
purchase and sale of the TARGETS pursuant to this Agreement is an arm's-length
commercial transaction between the Offerors, on the one hand, and the
Underwriter and any affiliate through which it may be acting, on the other, (ii)
the Underwriter is acting as principal and not as an agent or fiduciary of the
Offerors and (iii) the Offerors' engagement of the Underwriter in connection
with the offering and the process leading up to the offering is as an
independent contractor and not in any other capacity. Furthermore, the Offerors
agree that they are solely responsible for making their own judgments in
connection with the offering (irrespective of whether the Underwriter has
advised or is currently advising the Offerors on related or other matters). The
Offerors agree that they will not claim that the Underwriter has rendered
advisory services of any nature or respect, or owe an agency, fiduciary or
similar duty to the Offerors, in connection with such transaction or the process
leading thereto.
14. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Offerors and the
Underwriter with respect to the subject matter hereof.
15. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
16. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
17. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
18. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
"Base Prospectus" shall mean the form of prospectus referred
to in paragraph 1(a) above contained in the Registration Statement at
the Effective Date.
16
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York
City.
"Commission" shall mean the Securities and Exchange
Commission.
"Disclosure Package" shall mean (i) the Base Prospectus, as
amended and supplemented to the Execution Time, (ii) the Preliminary
Prospectus, if any, used most recently prior to the Execution Time,
(iii) the Issuer Free Writing Prospectus attached as an exhibit to this
Underwriting Agreement, and (iv) any other Free Writing Prospectus that
the parties hereto shall hereafter expressly agree in writing to treat
as part of the Disclosure Package.
"Effective Date" shall mean each date and time that the
Registration Statement and any post-effective amendment or amendments
thereto became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus relating to the
TARGETS that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Base Prospectus.
"Free Writing Prospectus" shall mean a free writing
prospectus, as defined in Rule 405.
"Issuer Free Writing Prospectus" shall mean an issuer free
writing prospectus, as defined in Rule 433.
"Preliminary Prospectus" shall mean any preliminary prospectus
which describes the TARGETS and the offering thereof and is used prior
to filing of the Final Prospectus, together with the Base Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements and any prospectus relating to the TARGETS that is filed
with the Commission pursuant to Rule 424(b) and deemed part of such
registration statement pursuant to Rule 430B, as amended on each
Effective Date and, in the event any post-effective amendment thereto
becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended.
17
"Rule 158", "Rule 163", "Rule 164", "Rule 172", "Rule 405",
"Rule 415", "Rule 424", "Rule 430B" and "Rule 433" refer to such rules
under the Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of
1939, as amended, and the rules and regulations of the Commission
promulgated thereunder.
"Well-Known Seasoned Issuer" shall mean a well-known seasoned
issuer, as defined in Rule 405.
18
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Offerors and you, as Underwriter.
Very truly yours,
TARGETS TRUST [XXVIII]
By:
--------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Regular Trustee
CITIGROUP FUNDING INC.
By:
--------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Vice President and
Assistant Treasurer
CITIGROUP INC.
By:
--------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Assistant Treasurer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
Citigroup Global Markets Inc.
By:
---------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
EXHIBIT A
OPINION OF COUNSEL FOR THE COMPANY AND THE GUARANTOR
Ex.A
EXHIBIT B
OPINION OF SPECIAL DELAWARE COUNSEL TO THE TRUST
Ex.B
EXHIBIT C
OPINION OF SPECIAL TAX COUNSEL TO THE COMPANY AND THE GUARANTOR
Ex.C
EXHIBIT D
OPINION OF COUNSEL TO THE GUARANTEE TRUSTEE
Ex.D