Exhibit 1.01
60,000,000 CAPITAL
SECURITIES
CITIGROUP CAPITAL
XVI
6.45% Enhanced Trust Preferred
Securities (Enhanced TruPS Ò
)
$25 Liquidation Amount
Guaranteed to the extent set forth
in the
Prospectus dated November 15, 2006
by
CITIGROUP
INC.
UNDERWRITING
AGREEMENT
New York, New York
November 15, 2006
Citigroup
Global Markets Inc.
Merrill Lynch,
Pierce, Fenner & Smith
Incorporated
Morgan Stanley
& Co. Incorporated
UBS Securities
LLC
Wachovia
Capital Markets, LLC
A.G. Edwards
& Sons, Inc.
RBC Dain
Rauscher Inc.
Banc of America
Securities LLC
Bear, Stearns
& Co. Inc.
Lehman Brothers
Inc.,
as
Representatives of the several Underwriters
c/o Citigroup
Global Markets Inc.
388 Greenwich
Street
New York, New
York 10013
Ladies and
Gentlemen:
Citigroup Capital XVI (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. §3801
et seq .), proposes, upon the terms and conditions set
forth herein, to issue and sell 60,000,000 6.45% Enhanced Trust
Preferred Securities (Enhanced TruPS ® ) with an
aggregate liquidation amount equal to $1,500,000,000 (the
“Underwritten Securities”) to the several Underwriters
named in Schedule I hereto (the “Underwriters”), for
whom you (the “Representatives”) are acting as
representatives. The Trust also proposes to grant the Underwriters
an option to purchase 9,000,000 additional 6.45% Enhanced Trust
Preferred Securities (Enhanced TruPS ® ) to cover
over-allotments (the “Option Securities” and, together
with the Underwritten Securities, the “Capital
Securities”).
The Capital Securities and the Common Securities
(as defined herein) are to be issued pursuant to the terms of an
amended and restated declaration of trust, dated as of November 22,
2006 (the “Declaration”), among Citigroup Inc., a
Delaware corporation (the “Company” and, together with
the Trust, the “Offerors”), as sponsor, the trustees
named therein (the “Citigroup Capital 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. Pursuant to the
Declaration, the number of Citigroup Capital Trustees will
initially be five. Three of the Citigroup Capital Trustees (the
“Regular Trustees”) will be persons who are employees
or officers of the Company. The fourth Citigroup Capital Trustee
will be a financial institution unaffiliated with the Company that
will serve as property trustee under the Declaration and as
indenture trustee with respect to the Capital Securities for
purposes of the Trust Indenture Act (the “Institutional
Trustee”). The fifth Citigroup Capital Trustee will be a
financial institution or an affiliate thereof which maintains a
principal place of business in the State of Delaware, meeting the
requirements of the Delaware Act (the “Delaware
Trustee”). Initially, The Bank of New York, a New York
banking association (“BoNY”), will act as the
Institutional Trustee and The Bank of New York (Delaware), a
banking association with its principal place of business in the
State of Delaware, will act as the Delaware Trustee until removed
or replaced by the holder of the Common Securities. The Capital
Securities will be guaranteed by the Company on a subordinated
basis with respect to distributions and payments upon liquidation,
redemption or otherwise (the “Guarantee”) pursuant to
the Capital Securities Guarantee Agreement dated as of November 22,
2006 (the “Guarantee Agreement”) between the Company
and BoNY, as Trustee (the “Guarantee
Trustee”).
The assets of the Trust will consist of 6.45%
Junior Subordinated Deferrable Interest Debentures due December 31,
2066 (the “Subordinated Debentures”) of the Company
which will be issued under an indenture, dated as of September 15,
2006 (as supplemented, the “Indenture”), between the
Company and BoNY, as Trustee (successor-in-interest to JPMorgan
Chase Bank, N.A.) (the “Indenture Trustee”). Under
certain circumstances, the Subordinated Debentures will be
distributable to the holders of undivided beneficial interests in
the assets of the Trust. The Capital Securities, the Guarantee and
the Subordinated Debentures are referred to herein as the
“Securities.”
The Offerors wish to confirm as follows their
agreement with you and the other several Underwriters listed on
Schedule I on whose behalf you are acting, in connection with the
several purchases of the Capital Securities by the Underwriters. To
the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used
herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or
plural as the context requires. Any reference herein to the
Registration Statement, any Preliminary 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 of the Registration Statement or the issue date
of any Preliminary 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, any Preliminary 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 any Preliminary
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 21 hereof.
1. Registration Statement and Prospectus
. 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 No. 333-135163), including a related form
of 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 date hereof, 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
Company 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 the
Representatives shall agree in writing to a modification, shall be
in all substantive respects in the form furnished to you prior to
the date hereof or, to the extent not completed by the date hereof,
shall contain only such specific additional information and other
changes (beyond that contained in any preliminary prospectus) as
the Company has advised you, prior to the date hereof, will be
included or made therein. The Registration Statement, as of the
date hereof, 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 date hereof.
2. Agreements to Sell and Purchase
. (a) The Trust hereby agrees,
subject to all the terms and conditions set forth herein, to issue
and sell to each Underwriter and, upon the basis of the
representations, warranties and agreements of the Offerors herein
contained and subject to all the terms and conditions set forth
herein each Underwriter agrees, severally and not jointly, to
purchase from the Trust, at a purchase price of $25 per Capital
Security, the number of Underwritten Securities set forth opposite
the name of such Underwriter in Schedule I hereto (or such number
of Capital Securities increased as set forth in Section 10
hereof).
The Company agrees that, in view of the fact
that the proceeds of the sale of the Underwritten Securities will
be invested in the Subordinated Debentures, it shall pay to the
Underwriters as compensation (“Underwriters’
Compensation”) for their arranging the investment of the
proceeds therein, on the Closing Date (as defined herein), $0.7875
per Underwritten Security; provided, however, that with respect to
sales made by the Underwriters to certain institutional purchasers
(the “Institutional Purchasers”), the Company agrees to
pay Underwriters’ Compensation of $0.500 per Underwritten
Security. The Representatives confirm to the Offerors that for this
purpose, the number of Underwritten Securities sold to
Institutional Purchasers is 2,331,500.
Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth,
the Trust hereby grants an option to the several Underwriters to
purchase, severally and not jointly, up to 9,000,000 Option
Securities at the same purchase price per share as the Underwriters
shall pay for the Underwritten Securities. Said option may be
exercised in whole or in part at any time (but not more than once)
on or before the 30 th day after the date of the initial
public offering, upon written or facsimile notice by the
Representatives to the Trust setting forth the number of Option
Securities as to which the several Underwriters are exercising the
option and the date on which delivery and payment shall occur,
which shall not be less than three Business Days after the date of
the notice of exercise. The number of Option Securities to be
purchased by each Underwriter shall be the same percentage of the
total number of Option Securities to be purchased by the several
Underwriters as such Underwriter is purchasing of the Underwritten
Securities, subject to such adjustments as the Representatives, in
their absolute discretion, shall make to eliminate any fractional
shares.
3. Terms of Public Offering . The Offerors have been advised by you that the
Underwriters propose to make a public offering of their respective
portions of the Capital Securities as soon as the Underwriters deem
advisable after this Agreement has been executed and delivered, and
the Declaration, the Guarantee Agreement and the Indenture have
been qualified under the Trust Indenture Act. The entire proceeds
from the sale of the Capital Securities will be combined with the
entire proceeds from the sale by the Trust to the Company of its
common securities (the “Common Securities”), and will
be used by the Trust to purchase an equivalent amount of the
Subordinated Debentures.
4. Delivery of the Capital Securities and Payment
Therefor . Delivery to
the Underwriters of, and payment for, the Capital Securities shall
be made at the office of Cleary Gottlieb Steen & Hamilton LLP,
One Liberty Plaza, New York, New York 10006, at 8:30 A.M., New York
City time, on November 22, 2006 (the “Closing Date”).
Delivery to the Underwriters of, and payment for, the Optional
Securities (if the option provided for in Section 2(b) hereof is
exercised) shall be made on the date and at the time specified in
the notice of exercise of the option, which shall not be less than
three Business Days after the date of the notice. The place of
closing for the Capital Securities and the Closing Date may be
varied by agreement between you and the Company.
Delivery of the Capital Securities shall be made
to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters directly
or through the Representatives of the net purchase price thereof to
or upon the order of the Trust by wire transfer payable in same-day
funds to an account specified by the Trust. Delivery of the Capital
Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise
instruct.
It is understood that the Representatives,
acting individually and not in a representative capacity, may (but
shall not be obligated to) make payment to the Company on behalf of
any other Underwriter for Capital Securities to be purchased by
such Underwriter. Any such payment by the Representatives shall not
relieve any such Underwriter of any of its obligations
hereunder.
The Company shall pay to the Representatives on
the Closing Date for the accounts of the Underwriters any fee,
commission or other compensation specified herein. Such payment
will be made by wire transfer payable in same-day funds to an
account specified by the Representatives.
5. Agreements of the Offerors
. The Offerors jointly and severally
agree with the several Underwriters that:
(a) Prior to the termination of the offering of the
Securities, the Offerors will not file any amendment of the
Registration Statement or supplement to any Preliminary Prospectus
or the Final Prospectus unless the Company has furnished the
Representatives a copy for their review prior to filing and will
not file any such proposed amendment or supplement to which they
reasonably object. The Offerors will cause the Final Prospectus,
properly completed, and any supplement thereto, to be filed in a
form acceptable to the Representatives with the Commission pursuant
to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly
advise the Representatives (1) when the Final Prospectus, and
any supplement thereto, shall have been filed with the Commission
pursuant to Rule 424(b), (2) when, prior to termination
of the offering of the Securities, 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 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
Offerors of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Offerors will use their respective 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 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 its best efforts to have such
amendment or new registration statement declared effective as soon
as practicable.
(b) The Offerors will prepare a final term sheet,
containing solely a description of final terms of the Capital
Securities and the offering thereof, in a form acceptable to you
(the “Final Term Sheet”) and to file such term sheet
pursuant to Rule 433(d) within the time required by such
Rule.
(c) 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 will (1) notify promptly the
Representatives 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.
(d) If, at any time when a prospectus relating to
the Capital Securities 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 use or delivery of the
Final Prospectus, the Company promptly will (i) notify the
Representatives 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 its 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 the Representatives in such
quantities as the Representatives may reasonably
request.
(e) As soon as practicable, the Offerors will make
generally available to the Trust’s security holders and to
the Representatives a consolidated earnings statement or statements
of the Company and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158.
(f) Upon request, the Offerors will furnish to the
Representatives and counsel for the Underwriters, without charge,
signed copies of the Registration Statement (including exhibits
thereto) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and, so long as delivery of a
prospectus by an 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 any Preliminary
Prospectus, the Final Prospectus and any Issuer Free Writing
Prospectus and any supplement thereto as the Representatives may
reasonably request. The Offerors 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 the
Offerors.
(g) The Offerors will arrange, if necessary, for
the qualification of the Securities for sale under the laws of such
jurisdictions within the United States as the Representatives
reasonably may designate, will maintain such qualifications in
effect so long as required for the distribution of the Securities
and will pay any fee of the National Association of Securities
Dealers, Inc., in connection with its review of the offering;
provided that in no event shall either of the Offerors 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 Securities, in any jurisdiction where it is
not now so subject.
(h) (i) Each Offeror agrees that, unless it has
obtained or will obtain, as the case may be, the prior written
consent of the Representatives, and (ii) each Underwriter,
severally and not jointly, 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 Capital Securities 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, other than the Final Term
Sheet described above or other free writing prospectuses containing
solely a description of the final terms of the Capital Securities
and the offering thereof. Any such free writing prospectus
consented to by the Representatives or the Offerors is hereinafter
referred to as a “Permitted Free Writing Prospectus.”
Each Offeror agrees that (x) it has treated and will treat, as the
case may be, each Permitted Free Writing Prospectus as an Issuer
Free Writing Prospectus and (y) it has 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.
(i) The Offerors will not, without the prior
written consent of Citigroup Global Markets Inc., 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 Trust or any affiliate
of the Company or the Trust or any person in privity with the
Company, the Trust or any affiliate of the Company or the Trust)
directly or 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 preferred securities, any
preferred stock or any other securities including any guarantee of
such securities (other than a guarantee of securities issued by
Citigroup Funding Inc.), of the Offerors, in each case that are
substantially similar to the Capital Securities or any security
convertible into or exchangeable for the Capital Securities or such
substantially similar securities, or publicly announce an intention
to effect any such transaction, during the period beginning the
date hereof and ending 60 days after the Closing Date.
(j) The Trust will apply the net proceeds from the
sale of the Capital Securities, and the Company will apply the net
proceeds from the sale of the Subordinated Debentures,
substantially in accordance with the description set forth in the
Final Prospectus.
(k) The Company 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 the Company’s directors and officers,
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.
(l) 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 either of the Offerors to facilitate the
sale or resale of the Capital Securities, except that the Offerors
makes no agreement as to the activities of any
Underwriter.
6. Representations and Warranties of the
Offerors . The Offerors
jointly and severally represent and warrant to, and agree with,
each Underwriter that:
(a) 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, 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 on the date hereof, 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 Indenture and 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 the Citigroup Capital Trustees 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 any
Underwriter through the Representatives 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 any Underwriters
consists of the information described as such in Section 7
hereof.
(b) The execution and delivery of, and the
performance by the Company and the Trust of their respective
obligations under, this Agreement have been duly and validly
authorized by the Company and the Trust, respectively, and this
Agreement has been duly executed and delivered by the Company and
the Trust.
(c) The Capital Securities have been duly and
validly authorized by the Declaration and, when executed by the
Trust and authenticated by the Institutional Trustee in accordance
with the Declaration and delivered to you against payment therefor
in accordance with the terms hereof, will be validly issued and
(subject to Sections 9.8 and 3.10(a)(vi) of the Declaration) will
be fully paid and non-assessable undivided beneficial interests in
the assets of the Trust, will be entitled to the benefits of the
Declaration and will conform in all material respects to all
statements relating thereto contained in the Registration
Statement, the Disclosure Package and the Final Prospectus, and any
amendment or supplement thereto; the issuance of the Capital
Securities is not subject to preemptive or other similar rights;
holders of Capital Securities will be entitled to the same
limitation of personal liability extended to stockholders of
private corporations for profit under the General Corporation Law
of the State of Delaware; and the Capital Securities have been
registered under the Exchange Act and authorization for listing the
Capital Securities on the New York Stock Exchange has been given,
subject to notice of official issuance.
(d) The Declaration has been duly and validly
authorized by the Company and, at the Closing Date, will have been
duly executed and delivered by the Company and the Regular
Trustees, and assuming due execution and delivery by the
Institutional Trustee and the Delaware Trustee, the Declaration
will be a valid and legally binding obligation of the Company and
the Regular Trustees, enforceable in accordance with its terms,
except as enforcement thereof may be limited by bankruptcy,
insolvency or other similar laws affecting creditors’ rights
generally and general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity);
and the Declaration has been (or will have been) duly qualified
under the Trust Indenture Act and conforms in all material respects
to the description thereof in the Registration Statement, the
Disclosure Package and the Final Prospectus, and any amendment or
supplement thereto.
(e) The Guarantee has been duly and validly
authorized by the Company and, at the Closing Date, will have been
duly executed and delivered by the Company, and assuming due
execution and delivery by the Guarantee Trustee, the Guarantee will
be a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, except as enforcement
thereof may be limited by bankruptcy, insolvency or other similar
laws affecting creditors’ rights generally and general
principles o
