Document:

EXECUTION VERSION

 

 

 

EXCHANGE AGREEMENT

 

between

 

CITIGROUP INC.

 

and

 

UNITED STATES DEPARTMENT OF THE TREASURY

 

Dated February 4, 2013

 

    	 

    	 

    

 

EXCHANGE AGREEMENT,
dated February 4, 2013 (this “Agreement”),
between CITIGROUP INC., a Delaware corporation (the “Company”), and the UNITED STATES DEPARTMENT OF THE TREASURY
(the “Investor”).

 

RECITALS:

 

WHEREAS, the Company
issued $4.034 billion of its perpetual preferred stock to the Investor and $3.025 billion of its perpetual preferred stock to the
Federal Deposit Insurance Corporation (the “FDIC”) as consideration for the loss-sharing protection provided pursuant
to a master agreement, dated as of January 15, 2009 (as amended, the “Master Agreement”), among the Company and
certain of its affiliates, the Investor, the FDIC and the Federal Reserve Bank of New York;

 

WHEREAS, the Company
entered into separate exchange agreements, each dated as of June 9, 2009, with the Investor (the “UST Exchange Agreement”)
and the FDIC (the “FDIC Exchange Agreement”) in order to exchange the perpetual preferred stock held by each of
the Investor and the FDIC for capital securities as specified in such exchange agreements, and such capital securities were issued
by Citigroup Capital XXXIII, a Delaware business trust (the “TruPS Issuer”), on July 30, 2009 (the “Capital
XXXIII Capital Securities”);

 

WHEREAS, on December
23, 2009, in connection with the repayment by the Company of funds invested by the Investor as part of the Troubled Asset Relief
Program and the termination of the Master Agreement, the Investor cancelled $1.8 billion of the $4.034 billion Capital XXXIII Capital
Securities it held (the “Cancellation”) and on the same date, pursuant to a letter agreement between the Investor
and the FDIC, the FDIC agreed to transfer an additional $800 million of its Capital XXXIII Capital Securities (the “FDIC
Capital XXXIII Capital Securities”) to the Investor upon the maturity of the last outstanding series of the Company’s
debt issued under the FDIC’s Temporary Liquidity Guarantee Program;

 

WHEREAS, the Investor
exercised its exchange right under the UST Exchange Agreement, as amended, on September 29, 2010 to exchange the $2.234 billion
Capital XXXIII Capital Securities it retained subsequent to the Cancellation for certain registrable trust preferred securities
which were distributed by means of a public, underwritten offering;

 

WHEREAS, pursuant
to a letter agreement, dated as of December 28, 2012, between the FDIC and the Investor (the “FDIC Letter Agreement”),
the FDIC transferred the FDIC Capital XXXIII Capital Securities and assigned its registration rights and certain other rights under
the FDIC Exchange Agreement to the Investor;

 

WHEREAS, the Investor
desires to exchange the FDIC Capital XXXIII Capital Securities currently held by it (the “TruPS Securities”) for
$894.0 million in aggregate principal amount of the Company’s 4.05% Subordinated Notes due 2022 having the terms described in Exhibit
A hereto (the “Subordinated Notes”); and

 

    	 

    	 

    

 

WHEREAS, the Company
acknowledges that a mutual and voluntary exchange of consideration supports this Agreement and, accordingly, that the Agreement
shall not be construed to be unenforceable in any respect.

 

NOW THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the mutual
covenants herein contained, the parties hereto hereby agree as follows:

 

ARTICLE I 

 

EXCHANGE

 

Section 1.1      The
Exchange. (a) On the date hereof, the Investor will transfer and deliver to the Company and surrender the TruPS Securities
and, in exchange therefor, the Company will issue the Subordinated Notes to the Investor (the “Exchange”).

 

(b)        In
connection with the Exchange, (i) the Company will deliver to the Investor certificates in proper form evidencing the Subordinated
Notes and (ii) the Investor will deliver to the Company a certificate of transfer in the form set forth in Exhibit B hereto.

 

(c)        The
Company agrees to cause payment of (i) all accumulated and unpaid distributions on the TruPS Securities from and including the
last distribution date of the TruPS Securities on which distributions were paid in full to, but excluding, the date hereof, to
be paid by wire transfer on the date hereof to an account designated by the Investor and (ii) all accrued and unpaid interest on
the Subordinated Notes from and including the date hereof to, but excluding, the settlement date of the Underwritten Offering (as
defined in Section 3.2), to be paid by wire transfer to an account designated by the Investor on the settlement date of
the Underwritten Offering.

 

Section 1.2     Opinion
of Counsel. In connection with the entry into this Agreement, the Company has delivered to the Investor a written opinion from
counsel to the Company, addressed to the Investor and dated as of the date hereof, in substantially the form of Exhibit C
hereto.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF THE
COMPANY

 

Section 2.1     Organization;
Power; Authorization; Enforceable Obligations. The Company represents and warrants to the Investor that (i) it has been duly
incorporated and is validly existing and in good standing under the laws of the State of Delaware; (ii) it has the power and authority
to enter into this Agreement, to carry out its obligations hereunder, to adopt the Resolution (as defined in Section 2.3
below) and to issue the Subordinated Notes and comply with the terms thereof (collectively, the “Transactions”);
(iii) it has taken all necessary organizational action to authorize the execution, delivery and performance of this Agreement and
the Transactions; (iv) no consent or authorization of, filing with, notice to or other act by or in respect of, any governmental
authority or any other person is required in connection with the execution, delivery, performance, validity or enforceability of
this Agreement or the Transactions, except consents, authorizations, filings and notices as have been obtained or made and are
in full force and effect; and (v) this Agreement constitutes the legal, valid and binding obligation of the Company, enforceable
against it in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforceability of creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 

    	-3-

    	 

    

 

Section 2.2     Non-Contravention.
(a) The execution, delivery and performance by the Company of this Agreement and the consummation of the Transactions and compliance
by the Company with the provisions hereof and the Transactions will not violate, conflict with, or result in a breach of any provision
of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result
in the termination of, or accelerate the performance required by, or result in a right of termination, cancellation or acceleration
therefor, or result in the loss of a benefit under, or result in the creation of, any lien, security interest, charge or encumbrance
upon any of the properties or assets of the Company under any of the terms, conditions or provisions of (1) its organizational
documents or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, permit, agreement or other instrument or
obligation to which the Company is a party or by which it may be bound, or to which the Company may be subject, or (B) violate
any statute, rule or regulation or any judgment, ruling, order, writ, injunction or decree applicable to the Company.

 

(b)     Other
than the filing of any current report on Form 8-K required to be filed with the Commission with respect to the Transactions, such
filings and approvals as are required to be made or obtained under any state “blue sky” laws and such as have been made
or obtained, no material notice to, filing with, exemption or review by, or authorization, consent or approval of, any governmental
authority is required to be made or obtained by the Company in connection with the consummation by the Company of the Exchange
and the Transactions.

 

Section 2.3     Board
Approval. (a) The Transactions have been adopted, approved and declared advisable by the Funding Committee of the Board of
Directors of the Company (the “Board of Directors”) in accordance with the resolutions of the Board of Directors
adopted on January 16, 2013 and in accordance with the Company’s charter and applicable law.

 

(b)     The
terms and conditions of the Subordinated Notes were established pursuant to, and are as set forth in, a resolution of the Funding
Committee of the Board of Directors adopted on the date hereof (the “Resolution”). The Resolution has been duly
adopted by the Company and is in full force and effect.

 

Section 2.4    Subordinated
Notes. (a) The Indenture (as supplemented, the “Indenture”), dated as of April 12, 2001, between the Company
and The Bank of New York Mellon, as successor trustee to J.P. Morgan Trust Company, National Association and Bank One Trust Company,
N.A. (the “Indenture Trustee”) relating to the Subordinated Notes has been duly and validly authorized, executed
and delivered by the Company and, assuming due execution and delivery by the Indenture Trustee, the Indenture is a valid and legally
binding obligation of the Company, enforceable in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforceability of creditors’ rights generally
and by general equitable principles (whether enforcement is sought by proceedings in equity or at law). The Indenture has been
duly qualified under the Trust Indenture Act of 1939, as amended, and the rules and regulations of the Securities and Exchange
Commission (the “Commission”) promulgated thereunder (together, the “Trust Indenture Act”) and
complies in all material respects with the Trust Indenture Act or is exempt from such qualification.

 

    	-4-

    	 

    

 

(b)        The
Subordinated Notes have been duly and validly authorized by the Company and, when authenticated by the Indenture Trustee in the
manner provided for in the Indenture and issued in accordance with the Indenture and delivered to the Investor pursuant to this
Agreement, will be validly issued and delivered, and will constitute valid and legally binding obligations of the Company, enforceable
in accordance with their terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforceability of creditors’ rights generally and by general equitable principles (whether enforcement
is sought by proceedings in equity or at law), and will be in the form contemplated by, and entitled to the benefits of, the Indenture.

 

(c)        The
Subordinated Notes conform, or will conform, to the description thereof in the Registration Statement (as defined in Section
2.5).

 

(d)        The
Company is not now, nor after giving effect to the transactions contemplated in this Agreement will be, and the Company is not
controlled by, or acting on behalf of any person which is, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

 

Section 2.5    Registration
of Subordinated Notes. A registration statement on Form S-3 in respect of the Subordinated Notes (File No. 333-186425) (including
the preliminary prospectus forming a part thereof (the “Registration Statement”) (i) has been prepared by the
Company in conformity with the requirements of the Securities Act of 1933, as amended (the “Securities Act”),
and the rules and regulations of the Commission thereunder, (ii) has been filed with the Commission under the Securities Act and
(iii) the Company expects it will become effective under the Securities Act on the date hereof.

 

ARTICLE III

 

ADDITIONAL AGREEMENTS

 

Section 3.1    Registration
Rights. The Company hereby confirms and agrees that the Registration Rights set forth in Section 4.6 of the FDIC Exchange Agreement
have been assigned to the Investor pursuant to the FDIC Letter Agreement. The Company further confirms and agrees that the Investor
will continue to have such registration rights for so long as the Investor owns any of the Subordinated Notes and the Subordinated
Notes shall be deemed the “Registrable Securities” for purposes of Section 4.6 of the FDIC Exchange Agreement.

 

    	-5-

    	 

    

 

Section 3.2    Commercially
Reasonable Efforts. Subject to the terms and conditions of this Agreement, each of the parties will use its commercially reasonable
efforts in good faith to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper
or desirable, or advisable under applicable laws, and execute and deliver such documents and other papers or instruments as may
be required, so as to permit consummation of the Exchange and the Investor’s offering and sale of its Subordinated Notes pursuant
to an underwritten offering (the “Underwritten Offering”) as promptly as practicable and otherwise to enable consummation
of the transactions contemplated hereby, or as otherwise reasonably requested by the Investor, in each case, as promptly as is
practicable, and shall use commercially reasonable efforts to cooperate with the other party to that end.

 

ARTICLE IV 

 

MISCELLANEOUS

 

Section 4.1    Expenses.
The Subordinated Notes shall be deemed “Securities” for purposes of that certain letter agreement dated December 16,
2009 between the Company and the Investor and, in accordance with the terms of such letter agreement, the Company agrees to pay
all discounts, selling commissions and stock transfer taxes applicable to the sale of all of the Subordinated Notes, as “Securities”
under the letter agreement, and fees and disbursements of counsel for the Investor incurred in connection with any such sale, whether
in a public offering or private transaction.

 

Section 4.2    Entire
Agreement. This Agreement constitutes the entire agreement between the parties hereto, and supersedes all other prior agreements,
understandings, representations and warranties, both written and oral, between the parties, with respect to the subject matter
hereof.

 

Section 4.3    Effectiveness.
This Agreement shall be effective and binding upon its execution and delivery by each of the parties hereto.

 

Section 4.4    GOVERNING
LAW. THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE FEDERAL LAW OF THE UNITED STATES, IF AND TO THE EXTENT
SUCH LAW IS APPLICABLE, AND OTHERWISE IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE.

 

Section 4.5    Counterparts.
This Agreement may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an
original and all of which taken together shall constitute one and the same instrument.

 

    	-6-

    	 

    

 

IN WITNESS WHEREOF,
this Agreement has been duly executed and delivered by the duly authorized representatives of the parties hereto as of the date
first herein above written.

 

	 	CITIGROUP INC.
	 	 	 
	 	By:	/s/ John C. Gerspach
	 	 	Name: John C. Gerspach
	 	 	Title: Chief Financial Officer

 

	 	UNITED STATES DEPARTMENT OF 

THE TREASURY
	 	 
	 	By: 	/s/ Timothy G.
    Massad
	 	 	Name: Timothy G. Massad
	 	 	Title: Assistant Secretary for Financial
	 	 	Stability

 

[Signature
Page to Exchange Agreement]

 

    	 

    	 

    

 

	Citigroup Inc.
	$[ ],000,000
	[
    ]% SUBORDINATED NOTES DUE 2022

 

 

	Terms and Conditions	 
	Issuer:	Citigroup Inc.
	Selling Security Holder:	The United States Department of the Treasury (“Treasury”)
	Ratings:	Baa3 / BBB+ / BBB+ (Negative Outlook / Negative Outlook / Stable Outlook) (Moody’s / S&P / Fitch)
	Ranking:	Subordinated
	Trade Date:	February 5, 2013
	Settlement Date:	February 8, 2013 (T+3 days)
	Maturity:	July 30, 2022
	Par Amount:	$894,000,000
	Re-offer Spread to Benchmark:	T10+[ ] bp
	 	 
	Re-offer Yield:	[  ]%
	 	 
	Semi-Annual Coupon:	[   ]% per annum
	 	 
	Public Offering Price:	[    ]% per note
	Purchase Price:	[ ]% 
	Net Proceeds to Treasury:	$[ ]
	Interest Payment Dates:	The 30th of each January and July, beginning July, 2013. Following business day convention applicable
	 	 
	Day Count:	30/360
	 	 
	Defeasance:	Applicable. Provisions of Sections 11.02 and 11.03 of the Indenture apply
	 	 
	Redemption at Issuer Option:	Only for tax purposes
	 	 
	Redemption for Tax Purposes:	Applicable at issuer’s option if, as a result of any act taken by a taxing authority or changes in U.S. tax law, withholding tax or information reporting requirements are imposed on payments on the notes to non-U.S. persons. Redemption as a whole, not in part
	 	 
	Sinking Fund:	Not applicable
	 	 
	Listing:	Application will be made to list the notes on the regulated market of the Luxembourg Stock Exchange
	 	 
	Minimum Denominations/Multiples:	$1,000 / multiples of $1,000 in excess thereof
	 	 
	CUSIP:	17313TAB8
	 	 
	ISIN:	US17313TAB89
	 	 
	Global Coordinator:	Citigroup Global Markets Inc.
	 	 
	Joint Book Managers:	Deutsche Bank Securities Inc.
	 	Goldman, Sachs & Co.
	 	J.P. Morgan Securities LLC
	 	UBS Securities LLC
	 	Wells Fargo Securities, LLC
	 	Barclays Capital Inc.
	 	ING Financial Markets LLC
	 	Merrill Lynch, Pierce, Fenner & Smith
	 	Incorporated 
	 	RBS Securities Inc.
	 	SMBC Nikko Capital Markets Limited

 

    	 

    	 

    

 

	Citigroup Inc. 
	$[ ],000,000
	[ ]% SUBORDINATED NOTES DUE 2022

 

	Co-Managers:	Apto Partners, LLC
	 	Banco BTG Pactual SA. - Cayman Branch
	 	Blaylock Robert Van, LLC
	 	C.L. King & Associates, Inc.
	 	Capital One Southcoast, Inc.
	 	CastleOak Securities, L.P.
	 	Drexel Hamilton, LLC
	 	KKR Capital Markets LLC
	 	Kota Global Securities Inc.
	 	Lebenthal & Co., LLC
	 	Loop Capital Markets LLC
	 	M.R. Beal & Company
	 	MFR Securities, Inc.
	 	Mischler Financial Group, Inc.
	 	Mizuho Securities USA Inc.
	 	Nomura Securities International, Inc.
	 	Samuel A. Ramirez & Company, Inc.
	 	Scotia Capital (USA) Inc.
	 	The Williams Capital Group, L.P.

 

Citigroup Inc. has filed
a registration statement (including a prospectus) with the Securities and Exchange Commission for the offering to which this communication
relates Before you invest, you should read the prospectus in the registration statement and the other documents Citigroup has
filed with the SEC for more complete information about Citigroup and this offering. You may get these documents for free by visiting
EDGAR on the SEC Web site at www.sec.gov. The file number for Citigroup’s registration statement
is No 333- 186425. Alternatively, you can request the prospectus by calling toll-free
in the United States [ ]

 

    	 

    	 

    

 

EXHIBIT B

 

[FORM OF CERTIFICATE TO BE DELIVERED UPON

TRANSFER OF TRUPS SECURITIES]

 

Citigroup Inc.

399 Park Avenue

New York, New York 10043

Facsimile: 212-793-5629

Attention: Treasury Department

 

The Bank of New York Mellon

101 Barclay Street - 8W

New York, New York 10286

Attention: Corporate Trust Administration

 

	Re:	8.00% Capital Securities, liquidation amount $1,000 per capital security (the “Securities”) CUSIP # 17314MAA4

 

Reference is hereby
made to that certain Amended and Restated Declaration of Trust of Citigroup Capital XXXIII, dated as of July 30, 2009 (the “ARDT”),
among Citigroup Inc., the regular trustees named therein, BNY Mellon Trust of Delaware, as Delaware Trustee, and The Bank of New
York Mellon, as Institutional Trustee (the “Institutional Trustee”). Capitalized terms used but not defined herein
shall have the meanings set forth in the ARDT.

 

This certificate
relates to $800,000,000 aggregate liquidation amount of Securities held in definitive form represented by Certificate No. 8 by
the undersigned.

 

The undersigned,
the United States Department of the Treasury (transferor), hereby requests that the Security Registrar register a transfer of 800,000
Securities ($800,000,000 aggregate liquidation amount), represented by Certificate No. 8, to Citigroup Inc. (transferee).

 

In connection with
such transfer of the Securities, the undersigned confirms that such Securities are being transferred in accordance with their terms:

 

CHECK ONE BOX BELOW:

 

	 	þ	to Citigroup Inc. or any subsidiary thereof; or
	 	 	 
	 	 ̈	to a “qualified institutional buyer” within the meaning of Rule 144A (“Rule 144A”) under the Securities Act of 1933, as amended (the “Securities Act”) and in compliance with Rule 144A;
	 	 	 
	 	 ̈	pursuant to an exemption from registration provided by Rule 144 under the Securities Act or any other available exemption from the registration requirements of the Securities Act.

 

    	 

    	 

    

 

Unless one of the
boxes is checked, the Security Registrar will refuse to register the transfer of any of the Securities referenced in this certificate
or any beneficial interests therein.

 

	 	UNITED STATES DEPARTMENT OF 

THE TREASURY
	 	 	 
	 	By:	 
	 	 	Name: Timothy G. Massad
	 	 	Title: Assistant Secretary for Financial
	 	 	Stability

 

	Signature Guarantee: 	 	 
	 	(Signature must be guaranteed by a participant in a recognized signature guarantee medallion program)	 

  

    	-10-

    	 

    

 

EXHIBIT C

 

[FORM OF OPINION OF COUNSEL]

 

Opinions provided by outside counsel to
the Company on the date hereof:

 

(a)          The
Company is validly existing as a corporation in good standing under the laws of the State of Delaware.

 

(b)          The
Company has corporate power to enter into the Exchange Agreement and to perform its obligations thereunder with respect to the
Exchange and the Exchange has been duly and validly authorized by the Company.

 

(c)          The
Exchange Agreement has been duly and validly authorized by the Company, and duly executed and delivered by the Company, and, assuming
due execution and delivery by the Investor, the Exchange Agreement is a valid and legally binding obligation of the Company, enforceable
against the Company in accordance with its terms.

 

(d)          The
Indenture has been duly and validly authorized, and duly executed and delivered, by the Company, the Indenture is a valid and legally
binding obligation of the Company, enforceable against the Company in accordance with its terms, and the Indenture has been qualified
under the Trust Indenture Act.

 

(e)          The
Subordinated Notes have been duly and validly authorized and executed by the Company and, assuming such Subordinated Notes are
duly authenticated by the Indenture Trustee in the manner provided for in the Indenture and delivered to the Investor against consideration
therefor, have been duly and validly issued and are valid and legally binding obligations of the Company, enforceable in accordance
with their terms, and are in the form contemplated by, and entitled to the benefits of, the Indenture.

 

(f)          The
Company is not now, nor after giving effect to the Exchange will be, and the Company is not controlled by, or acting on behalf
of any person which is, an “investment company” within the meaning of the Investment Company Act of 1940.

 

Opinions provided by in-house counsel to
the Company on the date hereof:

 

(a)          The
Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware.

 

(b)          The
issuance and exchange of the Subordinated Notes pursuant to the Exchange Agreement do not, and the performance by the Company of
its obligations in connection with the Exchange Agreement will not, require any consent, approval, authorization, registration
or qualification of or with any governmental agency or body of the United States or the State of New York, except such as have
been obtained or effected.

 

    	 

    	 

    

 

(c)           The
execution, delivery and performance of the Exchange Agreement by the Company and the issuance of the Subordinated Notes pursuant
to the Exchange Agreement will not result in a breach of any of the terms and provisions of, or constitute a default under, any
of the agreements or instruments of the Company filed by the Company with the Commission as exhibits to the registration statement
on Form S-3 (Registration No. 333-186425), and to its (i) Annual Report on Form 10-K for the fiscal year ended December 31, 2011;
(ii) Quarterly Reports on Form 10-Q for the periods ended March 31, 2012, June 30, 2012 and September 30, 2012; (iii) Current Reports
on Form 8-K filed from January 10, 2012 to the date hereof; (iv) registration statement on Form S-3 (Registration No. 333-172555);
(v) registration statement on Form S-3 (Registration No. 333-172554); (vi) registration statement on Form S-3 (Registration No.
333-152454); (vii) registration statement on Form S-3 (Registration No. 333-135163); and (viii) registration statement on Form
S-3 (Registration No. 333-172562), or result in a violation of the charter or bylaws of the Company or any of its material subsidiaries
or any statute, rule, regulation or order of any governmental agency or body of the United States or the State of New York or any
court of the United States or the State of New York having jurisdiction over the Company; provided, however, that no opinion is
expressed in this paragraph with respect to (i) the rights to indemnity and contribution contained in the Agreement, which may
be limited by federal or state securities laws or the public policy underlying such laws, or (ii) any state securities or blue
sky laws.

 

Statement provided by outside counsel
regarding the effectiveness of the Registration Statement:

 

(a)       based
solely upon our review of the Notice of Effectiveness on the website of the Securities and Exchange Commission (the “Commission”),
the registration statement on Form S-3 (No. 333-186425) (the “Registration Statement”) related to your sale of
the Subordinated Notes is effective under the Securities Act of 1933, as amended, and (b) based solely upon a telephonic confirmation
from a representative of the Commission, no stop order with respect thereto has been issued by the Commission, and to the best
of our knowledge, no proceeding for that purpose has been instituted or threatened by the Commission. To the best of our knowledge,
no order directed to any document incorporated by reference in the Registration Statement has been issued by the Commission and
remains in effect, and no proceeding for that purpose has been instituted or threatened by the Commission.This Note is a Global Security within the
meaning of the Indenture hereinafter referred to and is registered in the name of the Depositary named below or a nominee of the
Depositary. This Note is not exchangeable for Notes registered in the name of a Person other than the Depositary or its nominee
except in the limited circumstances described herein and in the Indenture, and no transfer of this Note (other than a transfer
of this Note as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary) may be registered except in the limited circumstances described herein.

 

Unless this certificate is presented by
an authorized representative of The Depository Trust Company, a New York corporation (the “Depositary”), to the Company
or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede &
Co. or in such other name as is requested by an authorized representative of the Depositary (and any payment is made to Cede &
Co. or to such other entity as is requested by an authorized representative of the Depositary), ANY TRANSFER, PLEDGE, OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.

 

CITIGROUP INC.

4.050% Subordinated Notes due July 30,
2022

 

	 	CUSIP: 172967 G K1
	 	ISIN: US172967GK16
	 	Common Code: 088940695
	REGISTERED	REGISTERED
	 	 
	No. R-0002	$500,000,000

 

CITIGROUP INC., a Delaware corporation
(“Citigroup” or the “Company”, which term includes any successor Person under the Indenture), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of $500,000,000 on July 30, 2022 and
to pay interest thereon from and including February 8, 2013 or from the most recent Interest Payment Date (as defined herein) to
which interest has been paid or duly provided for, semi-annually, on January 30 and July 30 of each year, commencing July 30, 2013,
at the rate of 4.050% per annum, until the principal hereof is paid or made available for payment (each such payment date, an “Interest
Payment Date”). The Subordinated Notes may be redeemed in whole, but not in part, at any time if changes involving United
States taxation occur which could require Citigroup to pay additional amounts.

 

The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid pursuant to the instructions
of the Person in whose name this Subordinated Note is registered at the close of business on the Record Date for such interest,
which shall be the Business Day immediately preceding such Interest Payment Date.

 

    	 

    	 

    

 

Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the holder on such Record Date and may either be paid pursuant to the
instructions of the Person in whose name this Subordinated Note is registered at the close of business on a subsequent Record Date,
such subsequent Record Date to be not less than five days prior to the date of payment of such defaulted interest, notice whereof
shall be given to holders of Subordinated Notes of this series not less than 15 days prior to such subsequent Record Date.

 

Interest hereon will be calculated on the
basis of a 360-day year comprised of twelve 30-day months or, in the case of an incomplete month, the number of days elapsed. In
the event the subordinated notes do not continue to remain in book-entry only form, Citigroup shall have the right to select record
dates, which shall be more than 14 days but less than 60 days prior to an interest payment date.

 

If an Interest Payment Date falls on a day
that is not a Business Day, such Interest Payment Date will be the next succeeding Business Day, and no further interest will accrue
in respect of such postponement. If the Maturity of the Subordinated Notes falls on a day that is not a Business Day, the payment
due on Maturity will be postponed to the next succeeding Business Day, and no further interest will accrue in respect of such postponement.
If a date for payment of interest or principal on the Subordinated Notes falls on a day that is not a business day in the place
of payment, such payment will be made on the next succeeding business day in such place of payment as if made on the date the payment
was due.

 

For these purposes, “Business Day”
means any day on which commercial banks settle payments and are open for general business in The City of New York.

 

Payment of the principal of and interest
on this Subordinated Note will be made at the office or agency of the Trustee maintained for that purpose in The City of New York.

 

Reference is hereby made to the further
provisions of this Subordinated Note set forth on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.

 

Unless the certificate of authentication
hereon has been executed by the Trustee or by an authenticating agent on behalf of the Trustee by manual signature, this Subordinated
Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

    	2

    	 

    

 

IN WITNESS WHEREOF, the Company has caused
this instrument to be duly executed under its corporate seal.

 

Dated: February 8, 2013

 

	 	CITIGROUP INC.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

	ATTEST:	 
	 	 
	By:	 	 
	Name: Martha D. Bailey	 
	Title: Assistant Secretary	 

 

[CORPORATE SEAL]

 

    	3

    	 

    

 

This is one of the Notes of the series
issued under the within-mentioned Indenture.

 

Dated: February 8, 2013

 

	 	THE BANK OF NEW YORK,
	 	as Trustee
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:
	 	 
	 	-or-
	 	 
	 	CITIBANK, N.A.,
	 	as Authenticating Agent
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	4

    	 

    

 

This Subordinated Note is one of a duly
authorized issue of Securities of the Company (the “Subordinated Notes”), issued and to be issued in one or more series
under the Indenture, dated as of April 12, 2001, as supplemented August 2, 2004 (as so supplemented, the “Indenture”),
between the Company and The Bank of New York Mellon (successor to J.P. Morgan Trust Company, N.A. and Bank One Trust Company, N.A.),
as Trustee (the “Trustee”, which term includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties
and immunities thereunder of the Company, the Trustee and the holders of the Subordinated Notes and of the terms upon which the
Subordinated Notes are, and are to be, authenticated and delivered. This Subordinated Note is one of the series designated on the
face hereof, initially limited in aggregate principal to $894,000,000.

 

The Company covenants and agrees that the
indebtedness evidenced by the Subordinated Notes is subordinate and junior in right of payment to all Senior Indebtedness (as defined
in the Indenture as supplemented by the Board Resolutions of the Company establishing the terms of the Subordinated Notes, the
“Resolutions”) to the extent provided in the Indenture, and each holder of Subordinated Notes, by his or her acceptance
thereof, likewise covenants and agrees to the subordination provided in the Indenture (including Article Fourteen thereof) and
shall be bound by the provisions thereof.

 

In the event that the Company shall default
in the payment of any principal of (or premium, if any) or interest on any Senior Indebtedness when the same becomes due and payable
after any applicable grace period, whether at maturity or at a date fixed for prepayment or by declaration or otherwise, then,
unless and until such default shall have been cured or waived or shall have ceased to exist, no direct or indirect payment (in
cash, property, securities, by set-off or otherwise) shall be made or agreed to be made on account of the principal of, or premium,
if any, or interest on the indebtedness evidenced by the Subordinated Notes, or in respect of any redemption, retirement or other
acquisition of any of the Subordinated Notes, except that holders of Subordinated Notes may receive and retain (x) securities of
the Company or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate,
at least to the extent provided in these subordination provisions with respect to the indebtedness evidenced by the Subordinated
Notes, to the payment of all Senior Indebtedness at the time outstanding and to any securities issued in respect thereof under
any such plan of reorganization or readjustment and (y) payments made from a defeasance trust created pursuant to Article Eleven
of the Indenture.

 

In the event of:

 

(i) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar proceeding relating to the Company, its creditors or its
property,

 

    	5

    	 

    

 

(ii) any proceeding for liquidation, dissolution
or other winding up of the Company, voluntary or involuntary, whether or not involving insolvency or bankruptcy proceedings,

 

(iii) any assignment by the Company for the
benefit of creditors, or

 

(iv) any other marshalling of
the assets of the Company,

 

all Senior Indebtedness (including any interest thereon accruing
after the commencement of any such proceedings) shall first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made to any Holder of any of the Subordinated Notes on account thereof (except as provided
in the next sentence). Any payment or distribution, whether in cash, securities or other property (other than (x) securities of
the Company or any other corporation provided for by a plan of reorganization or readjustment the payment of which is subordinate,
at least to the extent provided in these subordination provisions with respect to the indebtedness evidenced by the Subordinated
Notes, to the payment of all Senior Indebtedness at the time outstanding and to any securities issued in respect thereof under
any such plan of reorganization or readjustment and (y) payments made from a defeasance trust created pursuant to Article Eleven
of the Indenture), which would otherwise (but for these subordination provisions) be payable or deliverable in respect of the Subordinated
Notes shall be paid or delivered directly to the holders of Senior Indebtedness in accordance with the priorities then existing
among such holders until all Senior Indebtedness (including any interest thereon accruing after the commencement of any such proceedings)
shall have been paid in full.

 

If an event of default (as defined in the
Indenture) with respect to Subordinated Notes of this series shall occur and be continuing, the principal of the Subordinated Notes
of this series may be declared due and payable in the manner and with the effect provided in the Indenture.

 

The Indenture contains provisions for defeasance
at any time of the entire indebtedness of this Subordinated Note upon compliance by the Company with certain conditions set forth
in Article Eleven thereof, which provisions apply to this Subordinated Note.

 

The Indenture contains provisions permitting
the Company and the Trustee, without the consent of the holders of Securities, to establish, among other things, the form and terms
of any series of Securities issuable thereunder by one or more supplemental indentures, and, with the consent of the holders of
not less than a majority of the principal amount of Securities at the time Outstanding which are affected thereby, to modify the
Indenture or any supplemental indenture or the rights of the holders of Securities of such series to be affected, provided that
no such modification shall, without the consent of the holder of each Outstanding Security so affected, (x) change the Stated Maturity
of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or
the rate of interest thereon or any premium thereon, or change any place of payment where, or the coin or currency in which any
Security or any premium or interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment
on or after the Stated Maturity thereof (or, in the case of redemption on or after the Redemption Date) or modify the provisions
of the Indenture with respect to the subordination of the Securities in a manner adverse to the Securityholders or (y) reduce the
aforesaid percentage in principal amount of the Outstanding Securities of any series, the consent of the holders of which is required
for any supplemental indenture, or the consent of whose holders is required for any waiver provided for in the Indenture, or (z)
modify certain other provisions of the Indenture, as set forth in Section 13.02 of the Indenture.

 

    	6

    	 

    

 

No reference herein to the Indenture and
no provision of this Subordinated Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of and interest on this Subordinated Note at the times, place and rate, and in the coin
or currency, herein prescribed.

 

As provided in the Indenture and subject
to certain limitations therein set forth, the transfer of definitive Subordinated Notes in certificated form is registrable in
the register maintained by the Company in The City of New York for such purpose, upon surrender of the definitive Subordinated
Note for registration of transfer at the office or agency of the registrar, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the registrar duly executed by, the holder thereof or his attorney duly authorized
in writing, and thereupon one or more new Subordinated Notes of this series and of like tenor, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

No service charge shall be made for any
such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith.

 

Prior to due presentment of this Subordinated
Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this Subordinated Note is registered as the owner hereof for all purposes, whether or not this Subordinated Note be
overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

The Company will pay additional amounts
("Additional Amounts") to the beneficial owner of any Subordinated Note that is a non-United States person in order to
ensure that every net payment on such Subordinated Note will not be less, due to payment of U.S. withholding tax, than the amount
then due and payable. For this purpose, a "net payment" on a Subordinated Note means a payment by the Company or a paying
agent, including payment of principal and interest, after deduction for any present or future tax, assessment or other governmental
charge of the United States. These Additional Amounts will constitute additional interest on the Subordinated Note.

 

The Company will not
be required to pay Additional Amounts, however, in any of the circumstances described in items (1) through (14) below.

 

		(1)	Additional Amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld solely
by reason of the beneficial owner:

 

    	7

    	 

    

 

		(a)	having a relationship with the United States as a citizen,
resident or otherwise;

		(b)	having had such a relationship in the past or

		(c)	being considered as having had such a relationship.

 

		(2)	Additional Amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld solely
by reason of the beneficial owner:

 

		(a)	being treated as present in or engaged in a trade or
business in the United States;

		(b)	being treated as having been present in or engaged in
a trade or business in the United States in the past or

		(c)	having or having had a permanent establishment in the
United States.

 

		(3)	Additional Amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld in
whole or in part by reason of the beneficial owner being or having been any of the following (as such terms are defined in the
Internal Revenue Code of 1986, as amended):

 

		(a)	personal holding company;

		(b)	foreign private foundation or other foreign tax-exempt
organization;

		(c)	passive foreign investment company;

		(d)	controlled foreign corporation or

		(e)	corporation which has accumulated earnings to avoid United
States federal income tax.

 

		(4)	Additional Amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld solely
by reason of the beneficial owner owning or having owned, actually or constructively, 10 percent or more of the total combined
voting power of all classes of stock of the Company entitled to vote or by reason of the beneficial owner being a bank that has
invested in a Subordinated Note as an extension of credit in the ordinary course of its trade or business.

 

For purposes of items (1) through
(4) above, "beneficial owner" means a fiduciary, settlor, beneficiary, member or shareholder of the holder if the holder
is an estate, trust, partnership, limited liability company, corporation or other entity, or a person holding a power over an estate
or trust administered by a fiduciary holder.

 

    	8

    	 

    

 

		(5)	Additional Amounts will not be payable to any beneficial
owner of a Subordinated Note that is a:

 

		(a)	fiduciary;

		(b)	partnership;

		(c)	limited liability company or

		(d)	other fiscally transparent entity

 

			or that is not the sole beneficial owner of the Subordinated Note, or any portion of the Subordinated
Note. However, this exception to the obligation to pay Additional Amounts will only apply to the extent that a beneficiary or settlor
in relation to the fiduciary, or a beneficial owner or member of the partnership, limited liability company or other fiscally transparent
entity, would not have been entitled to the payment of an Additional Amount had the beneficiary, settlor, beneficial owner or member
received directly its beneficial or distributive share of the payment.

 

		(6)	Additional Amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld solely
by reason of the failure of the beneficial owner or any other person to comply with applicable certification, identification,
documentation or other information reporting requirements. This exception to the obligation to pay Additional Amounts will only
apply if compliance with such reporting requirements is required by statute or regulation of the United States or by an applicable
income tax treaty to which the United States is a party as a precondition to exemption from such tax, assessment or other governmental
charge.

 

		(7)	Additional Amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any tax, assessment or other governmental charge that is collected or imposed by
any method other than by withholding from a payment on a Subordinated Note by the Company or a paying agent.

 

		(8)	Additional Amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld by
reason of a change in law, regulation, or administrative or judicial interpretation that becomes effective more than 15 days after
the payment becomes due or is duly provided for, whichever occurs later.

 

		(9)	Additional Amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any tax, assessment or other governmental charge that is imposed or withheld by
reason of the presentation by the beneficial owner of a Subordinated Note for payment more than 30 days after the date on
which such payment becomes due or is duly provided for, whichever occurs later.

 

		(10)	Additional Amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any:

 

		(a)	estate tax;

		(b)	inheritance tax;

 

    	9

    	 

    

 

		(c)	gift tax;

		(d)	sales tax;

		(e)	excise tax;

		(f)	transfer tax;

		(g)	wealth tax;

		(h)	personal property tax or

		(i)	any similar tax, assessment, withholding, deduction or
other governmental charge.

 

		(11)	Additional Amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any tax, assessment, or other governmental charge required to be withheld by any
paying agent from a payment of principal or interest on a Subordinated Note if such payment can be made without such withholding
by any other paying agent.

 

		(12)	Additional amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any tax, assessment or other governmental charge that is required to be made pursuant
to any European Union directive on the taxation of savings income or any law implementing or complying with, or introduced to
conform to, any such directive.

 

		(13)	Additional amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any withholding, deduction, tax, duty assessment or other governmental charge that
would not have been imposed but for a failure by the holder or beneficial owner of a Subordinated Note (or any financial institution
through which the holder or beneficial owner holds the Subordinated Note or through which payment on the Subordinated Note is
made) to take any action (including entering into an agreement with the Internal Revenue Service, or a governmental authority
of another jurisdiction if the holder is entitled to the benefits of an intergovernmental agreement between that jurisdiction
and the United States) or to comply with any applicable certification, documentation, information or other reporting requirement
or agreement concerning accounts maintained by the holder or beneficial owner (or any such financial institution), or concerning
ownership of the holder or beneficial owner, or any substantially similar requirement or agreement.

 

		(14)	Additional Amounts will not be payable if a payment on
a Subordinated Note is reduced as a result of any combination of items (1) through (13) above.

 

Except as specifically
provided herein, the Company will not be required to make any payment of any tax, assessment or other governmental charge imposed
by any government or a political subdivision or taxing authority of such government.

 

    	10

    	 

    

 

As used in this Subordinated
Note, "United States person" means:

 

		(a)	any individual who is a citizen or resident of the United
States;

		(b)	any corporation, partnership or other entity created
or organized in or under the laws of the United States;

		(c)	any estate if the income of such estate falls within
the federal income tax jurisdiction of the United States regardless of the source of such income and

		(d)	any trust if a United States court is able to exercise
primary supervision over its administration and one or more United States persons have the authority to control all of the substantial
decisions of the trust.

 

Additionally, "non-United
States person" means a person who is not a United States person, and "United States" means the states of the United
States of America and the District of Columbia, but excluding its territories and its possessions.

 

Except as provided
below, the Subordinated Notes may not be redeemed prior to maturity.

 

		(1)	The Company may, at its option, redeem the Subordinated
Notes if:

 

		(a)	the Company becomes or will become obligated to pay Additional
Amounts as described above;

		(b)	the obligation to pay Additional Amounts arises as a
result of any change in the laws, regulations or rulings of the United States, or an official position regarding the application
or interpretation of such laws, regulations or rulings, which change is announced or becomes effective on or after February 5,
2013 and

		(c)	the Company determines, in its business judgment, that
the obligation to pay such Additional Amounts cannot be avoided by the use of reasonable measures available to it, other than
substituting the obligor under the Subordinated Notes or taking any action that would entail a material cost to the Company.

 

		(2)	The Company may also redeem the Subordinated Notes, at
its option, if:

 

		(a)	any act is taken by a taxing authority of the United
States on or after February 5, 2013, whether or not such act is taken in relation to the Company or any affiliate, that results
in a substantial probability that the Company will or may be required to pay Additional Amounts as described above;

		(b)	the Company determines, in its business judgment, that
the obligation to pay such Additional Amounts cannot be avoided by the use of reasonable measures available to it, other than
substituting the obligor under the Subordinated Notes or taking any action that would entail a material cost to the Company and

		(c)	the Company receives an opinion of independent counsel
to the effect that an act taken by a taxing authority of the United States results in a substantial probability that the Company
will or may be required to pay the Additional Amounts described above, and delivers to the Trustee a certificate, signed by a
duly authorized officer, stating that based on such opinion the Company is entitled to redeem the Subordinated Notes pursuant
to their terms.

 

    	11

    	 

    

 

Any redemption of the Subordinated Notes
as set forth in clauses (1) or (2) above shall be in whole, and not in part, and will be made at a redemption price equal to 100%
of the principal amount of the Subordinated Notes Outstanding plus accrued interest thereon to the date of redemption. Holders
shall be given not less than 30 days nor more than 60 days’ prior notice by the Trustee of the date fixed for such redemption.

 

All terms used in this Subordinated Note
which are defined in the Indenture shall have the meanings assigned to them in the Indenture. The Subordinated Notes are governed
by the laws of the State of New York.

 

    	12

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