Document:

10Q Q3 2003 EXHIBIT 10.1

Exhibit 10.1

THIRD AMENDMENT TO NEW LEASE 

This Third Amendment to New Lease (this "Amendment")
is entered into as of the __5th__ day of _February_, 2003 (the
"Execution Date"), by and between Metropolitan Life Insurance Company,
a New York corporation ("Landlord") and Pharmacyclics, Inc., a Delaware
corporation ("Tenant").

Recitals:

A.Landlord and Tenant entered into that certain Lease
and Lease Termination Agreement dated as of June 14, 2000 (the "New
Lease") and that certain First Amendment to New Lease dated as of April 10,
2001 (the "First Amendment") and that certain Second Amendment to New
Lease dated as of June 29, 2001 for the premises more particularly described
therein ("Original Premises").  The New Lease as amended by the First
Amendment is referred to herein as the "Existing Lease."

B.Tenant desires to provide for an extension of the Lease
Term, surrender a portion of the Original Premises and other amendments of the
Existing Lease as more particularly set forth below.

Agreement:

Now, therefore, Landlord and Tenant hereby agree as
follows:

1.Scope of Amendment; Defined Terms.  Except as
expressly provided in this Amendment, the Existing Lease shall remain in full
force and effect.  Should any inconsistency arise between this Amendment and the
Existing Lease as to the specific matters which are the subject of this
Amendment, the terms and conditions of this Amendment shall control.  The term
"Lease" as used herein shall refer to the Existing Lease as modified
by this Amendment, except as expressly provided in this Amendment.  All
capitalized terms used in this Amendment and not defined herein shall have the
meanings set forth in the Existing Lease unless the context clearly requires
otherwise.

2.Surrender of portion of Original Premises.

(a)   Surrender Date.  On or before 11:59
p.m. on the date that is sixty (60) days after the Execution Date (the
"Surrender Date"), Tenant shall vacate and deliver to Landlord exclusive
possession of that portion of the Original Premises, shown on Exhibit A
pursuant to the same provisions and requirements of the Existing Lease as would
apply to surrender of the Premises upon expiration of the Existing Lease (the
"Surrender Space"), including, but not limited to the cabling plant,
network room and/or telephone closets (patch panels, racks, punch blocks,
Category 3-6 Cabling, jacks, face plates, etc.) used for voice and data
communications which must be left intact and ready for reuse.  In the event
cubicles are to be removed from the Surrender Space, any ends of the cabling
shall be left uncut and shall not be damaged in any way.  In the event that
cutting of the cables is necessary, Landlord shall be notified two (2) business
days prior to such intent to cut cables.  Landlord or its representative shall
inspect cabling in the Surrender Space at any time prior to, during or after the
de-installation process.  All such cut cables shall preserve length up to the
jack and preserve cable station identification numbering and/or lettering.
After the Surrender Date, the Existing Lease shall continue in full force and
effect for the remainder of the Lease Term upon and subject to all of the terms
and provisions of the Existing Lease with the following modifications of the
Existing Lease:

(i)The rentable area of the Original Premises is reduced
by 15,000 rentable square feet ("RSF") and the total remaining
Premises is amended to be 64,776 RSF (the "Remaining Premises")
located at 995 and 999 Arques Avenue.  All references in the Lease from and
after the Execution Date to "Premises" shall mean the Remaining
Premises.

(b)   Obligations Until Surrender; Proration.  Except
for the obligation to pay Monthly Installments of rent, and except as otherwise
set forth herein, all of the terms, covenants, agreements and conditions of the
Existing Lease remain in full force and effect with respect to the Surrender
Space through the Surrender Date.  Tenant must continue to pay all other
monetary obligations, including, without limitation, Additional Rent and charges
as they become due and payable under the Existing Lease applicable to the
Surrender Space through and including the Surrender Date.  As of 11:59 p.m.
on the Surrender Date, the surrender of the Surrender Space will be deemed
effective and the monetary obligations with respect to the Surrender Space must
be prorated, billed and payable in the manner provided in the Existing Lease, in
the same manner as would apply if the term of the Existing Lease expired on the
Surrender Date with respect to the Surrender Space.  

(c)   Holding Over.  In the event that
Tenant fails timely to vacate and deliver exclusive possession of the Surrender
Space to Landlord by the Surrender Date as required under this Amendment and the
Existing Lease without Landlord's express written consent, then:

(i)Tenant shall be deemed to be holding over with respect
to the Surrender Space and shall be liable to Landlord for rent for the
Surrender Space at the holdover rate provided in the Existing Lease and shall
indemnify Landlord against loss or liability resulting from any delay of Tenant
in not surrendering the Surrender Space on the Surrender Date, including, but
not limited to, any amounts required to be paid to third parties who were to
have occupied the Surrender Space and any attorneys' fees related thereto;
and

(ii)Tenant shall pay to Landlord for each month or
portion thereof that Tenant retains possession of the Surrender Space, or any
portion thereof, after the Surrender Date One Hundred Fifty Percent (150%) of
the Monthly Installment of rent for the Surrender Space (Sixty One Thousand
Eight Hundred Seventy Five Dollars ($61,875.00) payable for the month
immediately preceding the holding over.

(d)   Surrender Fee.  Upon the Execution Date Tenant
shall pay to Landlord the amount of Five Hundred Twenty Thousand Four
Hundred Ninety Five Dollars ($520,495.00) in immediately available funds (the
"Surrender Fee").

(e)   Demising Wall & Related Construction &
Costs.

(i)Demising Wall.  Within sixty (60)
days after the Surrender Date, Landlord shall commence construction to remove
the door existing in the presently constructed demising wall and close up the
demising wall in the location shown and designated "Demising Wall" on Exhibit B
to this Amendment (the "Demising Wall") and related modifications to the
heating, ventilating and air conditioning distribution ("HVAC"), electrical
facilities and any other Building systems to the extent necessary in order to
separate the Surrender Space from the rest of the Premises.  Notwithstanding the
foregoing, the Demising Wall shall comply with all applicable building codes and
laws and restoration requirements pursuant to the Existing Lease.

(ii)Right of Entry; Tenant's
Responsibilities.  To the extent that design and construction of
any or all of the work pursuant to this Section 2(e) will require access, work
or construction within or through the Remaining Premises, Landlord and
Landlord's representatives and contractors shall have the right to enter the
Remaining Premises during normal business hours and at all times upon 24-hour
prior oral or written notice to perform such work, and Tenant agrees that such
entry and work shall not constitute an eviction of Tenant in whole or in part
and that Monthly Installments and other sums due and payable by Tenant under the
Existing Lease with respect to the Remaining Premises shall in no way be abated
or reduced by reason of inconvenience, annoyance, disturbance or injury to the
business of Tenant due to such access, work or construction.  Landlord agrees to
use good faith efforts not to interfere with the conduct of Tenant's business.
Tenant shall cooperate with Landlord and Landlord's contractors(s) to allow
design and construction during normal business hours upon 24-hour prior oral or
written notice.  In the course of such design and construction, Landlord shall
make good faith efforts to cooperate with Tenant so as not unreasonably to
disrupt Tenant's business. Tenant agrees to cooperate with Landlord in showing
the Surrender Space to prospective tenants and/or brokers.

(iii)Work at Landlord's Cost.  All of
the work pursuant to Section 2(e)(i) shall be designed and performed by Landlord
or its contractors and consultants at Landlord's sole cost and expense. 

(iv)General Provisions Re Construction.  
All improvements constructed by Landlord hereunder shall be the property of
Landlord.

(f)   No Release.  Notwithstanding any provision of
the foregoing to the contrary, neither this Amendment nor the acceptance
by Landlord of the Surrender Space shall in any way be deemed to excuse or
release Tenant from any obligation or liability with respect to the Surrender
Space (including, without limitation, any obligation or liability under
provisions of the Lease to indemnify, defend and hold harmless Landlord or other
parties, or with respect to any breach or breaches of the Lease) which
obligation or liability (i) first arises on or prior to the date on which Tenant
delivers to Landlord possession of the Surrender Space or (ii) arises out of or
is incurred in connection with events or other matters which took place on or
prior to such date, or (iii) affect any obligation under the Existing Lease
which by its terms is to survive the expiration or sooner termination of the
Existing Lease.

(g)   Right of Negotiation. 

(i)Landlord hereby grants Tenant an ongoing right of
negotiation to re-lease all or a portion of the Surrender Space (the
"Negotiation Space"), upon and subject to the terms and conditions of this
Section (the "Negotiation Right"), and provided that at the time of exercise of
such right:  (a) Tenant must be in occupancy of the entire Remaining Premises;
and (b) there has been no material adverse change in Tenant's financial position
from such position as of the Execution Date, as certified by Tenant's
independent certified public accountants, and as supported by Tenant's certified
financial statements, copies of which shall be delivered to Landlord with
Tenant's written notice exercising its right hereunder.  Without limiting the
generality of the foregoing, Landlord may reasonably conclude there has been a
material adverse change if Tenant's independent certified public accountants do
not certify there has been no such change.

(ii)Nothing herein shall be deemed to limit or prevent
Landlord from marketing, discussing or negotiating with any other party for a
lease of, or rights of any nature as to, all or any part of such space, but
before Landlord makes any written proposal to any other party for Negotiation
Space or written response to any proposal received by Landlord, or
contemporaneously with making or responding to any such proposal, Landlord shall
give Tenant written notice ("Landlord's Notice"), which notice identifies the
space to be leased or on which rights or options are to be granted.  For a
period of five (5) business days after Landlord gives Landlord's Notice (the
"Election Notice Period"), Tenant shall have the right to initiate negotiations
in good faith for the lease of all (and not less than all) the space identified
in Landlord's Notice by giving Landlord written notice ("Election Notice") of
Tenant's election to exercise its Negotiation Right to lease such space

(iii)If Tenant timely gives the Election Notice, Landlord
and Tenant shall, during the five (5) business day period following Landlord's
receipt of the Election Notice, negotiate in good faith for the lease of the
Negotiation Space.  Any lease by Tenant of the Negotiation Space shall be for a
term expiring on the Expiration Date of the Lease and upon and subject to all
the terms, covenants and conditions provided in the Lease except as otherwise
expressly negotiated by Landlord and Tenant, including the following terms to be
negotiated with respect to the applicable Negotiation Space:  (i) any
improvements or alterations or allowance therefor, if any, and if none are
agreed upon, the Negotiation Space shall be leased in its "AS-IS" condition
without any obligation of Landlord to improve or alter the Negotiation Space or
to provide Tenant any allowance therefor and (ii) Monthly Installment of rent.
The foregoing obligation of Landlord to negotiate with Tenant is an exclusive
right during the five (5) business day period following Landlord's receipt of
the Election Notice; thereafter, the right shall be non-exclusive and nothing
herein shall be deemed to prevent Landlord from negotiating with any other party
for the Negotiation Space, whether or not Landlord and Tenant continue
negotiating for the same. 

(iv)If Tenant either fails or elects not to exercise its
Negotiation Right as to the Negotiation Space covered by Landlord's Notice by
not giving its Election Notice within the Election Notice Period, or if Tenant
gives Tenant's Election Notice but Tenant and Landlord do not execute (i) a
written letter of intent reflecting the significant business terms for the lease
of the Negotiation Space within five (5) business days after delivery of the
Election Notice, and (ii) a corresponding form prepared by Landlord of lease or
amendment to the Lease within fifteen (15) business days after Landlord gives
Tenant such form, then in any such event Tenant's Negotiation Right shall be
null and void as to the particular space identified in the applicable Landlord's
Notice (but not as to any space subject to this Negotiation Right which has not
yet been covered by any Landlord's Notice), and at any time thereafter Landlord
shall be free to lease and/or otherwise grant options or rights to such space on
any terms and conditions whatsoever free and clear of the Negotiation Right.

(v)This Negotiation Right is personal to Pharmacyclics,
Inc. and Tenant Affiliate and may not be used by, and shall not be transferable
or assignable (voluntarily or involuntarily) to any person or entity.

(vi)Upon the occurrence of any of the following events,
Landlord shall have the option, exercisable at any time prior to the time the
Negotiation Space is to be added to the Premises, to terminate all of the
provisions of this Section with respect to the Negotiation Right, with the
effect of canceling and voiding any prior or subsequent exercise so this
Negotiation Right is of no force or effect:

(a)   Tenant's failure to timely exercise the Negotiation
Right in accordance with the provisions of this Section.

(b)   The existence at the time Tenant exercises the
Negotiation Right or at the time the Negotiation Space is to be added to the
Premises of any default, beyond any applicable notice and cure periods, on the
part of Tenant under the Lease or of any state of facts which with the passage
of time or the giving of notice, or both, would constitute such a default.

(c)   Tenant's third default under the Lease prior to the
date the Negotiation Space is to be added to the Premises, notwithstanding that
all such defaults may subsequently be cured.

(vii)Without limiting the generality of any provision of
the Lease, time shall specifically be of the essence with respect to all of the
provisions of this Section.

3.Extension of Term.  Landlord and
Tenant acknowledge and agree that notwithstanding any provision of the Existing
Lease to the contrary, the Lease Term of the Existing Lease will expire on
December 31, 2002, and that the Term is hereby extended for the "Extended Term"
commencing on January 1, 2003 (the "Extended Term Commencement Date") and
expiring sixty (60) months after the Extended Term Commencement Date, unless
sooner terminated pursuant to the terms of the Existing Lease.  This extension
is further upon and subject to the same conditions, terms, covenants and
agreements contained in the Existing Lease except as otherwise provided in this
Amendment.  Landlord and Tenant acknowledge and agree that this Amendment
provides all rights and obligations of the parties with respect to extension of
the current Lease Term, whether or not in accordance with any other provisions,
if any, of the Existing Lease regarding renewal or extension, and any such
provisions, options or rights for renewal or extension provided in the Existing
Lease are hereby deleted as of the Execution Date. 

4.Amendment of Monthly Installment for the Extended
Term.  

(a)   Notwithstanding any provision of the Existing Lease to
the contrary, effective on and after the Extended Term Commencement Date, the
amount of Monthly Installment due and payable by Tenant for the Remaining
Premises is hereby amended as follows:

	
Months (of Extended
Term)
	
Monthly Rate
	
Monthly Installment

	
01-12
	
$1.42/NNN
	
  $91,981.92

	
13-24
	
$1.47/NNN
	
  $95,220.72

	
25-36
	
$1.52/NNN
	
  $98,459.52

	
37-60
	
$1.57/NNN
	
$101,698.32

(b)   Landlord acknowledges that Tenant has paid the Monthly
Installment for January 2003 at the rate set forth in the Existing Lease prior
to the Execution Date in the amount of Two Hundred Sixty Two Thousand One
Hundred Twenty Two and 08/100 Dollars ($262,122.08).  Landlord agrees that upon
the Execution Date, the amount to be paid by Tenant to Landlord shall be
adjusted such that any amounts paid by Tenant for Monthly Installments of rent
after the Extended Term Commencement Date shall be credited towards the amount
due upon Execution Date.  For example, if the Execution Date occurs in January
2003, the Monthly Installment for initial year of the Extended Term is
$91,981.92 and the Surrender Fee is $520,495.00 for a total of $612,476.92.
Therefore, Tenant shall be credited with the total amount of $262,122.08 and the
balance due from Tenant shall be $350,354.84 plus any Additional Rent due from
Tenant pursuant to the Lease.

5.Security Deposit.  Landlord acknowledges that it currently holds
a Security Deposit composed of cash in the amount of Seventy Three Thousand Four
Hundred Ten Dollars ($73,410.00) and the letter of credit in the amount of Four
Hundred Fifty Thousand Dollars ($450,000.00) (the "Letter of Credit").
Upon the Execution Date, Tenant agrees to extend the Letter of Credit for the
benefit of Landlord for the Extended Term.

6.Construction; Other Provisions.
Notwithstanding any provision of the Existing Lease to the contrary, the
following provisions shall govern the Extended Term:

(a)   Condition; Construction.  Except to the extent
of any Landlord Work described below or Section 2(e)(i) above: (i) Tenant
acknowledges that is presently occupies the Premises and accepts the Premises in
its then AS IS condition, without any express or implied representations or
warranties of any kind by Landlord, its brokers, manager or agents, or the
employees of any of them; and (ii) Landlord shall not have any obligation to
construct or install any tenant improvements or alterations or to pay for any
such construction or installation.

(b)   Landlord Work.  At Landlord's option, (i)
Landlord will install a new roof, at Landlord's sole cost and expense (the
"Landlord Work"), to be amortized, as a Capital Expenditure as set
forth in the Lease, over the new roof's estimated useful life, as measured by
GAAP at the time the Landlord Work is completed, and passed through to Tenant
based on Tenant's pro-rata share of the rentable area of the Remaining Premises
covered by the new roof or (ii) Landlord will maintain the existing roof and all
costs of roof maintenance will be paid at Landlord's sole cost and expense, and
not passed through as an Operating Expense.

7.Tenant Affiliates.  Notwithstanding anything to
the contrary in the New Lease, Landlord agrees that Section 25(B)(2) of the New
Lease regarding excess rents to be paid in the case of a Transfer shall not
apply to any Transfer to a Tenant Affiliate. 

8.Brokers.  Notwithstanding any other provision of
the Existing Lease to the contrary, Tenant represents that Tenant's Broker is
CRESA Partners and except for Tenant's Broker and Landlord's Broker (defined
below), it has not dealt with any real estate broker, sales person, or finder in
connection with this Amendment, and no such person initiated or participated in
the negotiation of this Amendment, or showed the Premises to Tenant.  Tenant
hereby agrees to indemnify, protect, defend and hold Landlord and the Landlord's
Parties, harmless from and against any and all liabilities and claims for
commissions and fees arising out of a breach of the foregoing representation.
Landlord represents that Landlord's broker is South Bay Development Company
("Landlord's Broker") and, except for Landlord's Broker and Tenant's
Broker it has not dealt with any real estate broker, sales person, or finder in
connection with this Amendment, and no such person initiated or participated in
the negotiation of this Amendment.  Landlord agrees to pay the commission in the
amount of Five Hundred Sixty Five Thousand Six Hundred Twenty Four and 56/100
Dollars ($565,624.56) to which Landlord's Broker is entitled in connection with
this Amendment pursuant to Landlord's written agreement with such broker within
five (5) business days of receipt of a request for payment.  Tenant agrees that
any commission payable to Tenant's Broker shall be paid by Landlord's Broker to
the extent that Landlord's Broker and Tenant's Broker have entered into a
separate agreement between themselves to share the commission paid to Landlord's
Broker by Landlord. 

9.Applicable Law.  This Amendment shall be
governed and construed in accordance with the laws of the State of California
and each party hereby irrevocably submits to jurisdiction and service of process
of the California courts.  Landlord and Tenant agree that the provisions of this
Section 8 shall survive the expiration or earlier termination of the Lease.

10.Attorneys' Fees.  Each party to this
Amendment shall bear its own attorneys' fees and costs incurred in connection
with the discussions preceding, negotiations for and documentation of this
Amendment.  In the event any party brings any suit or other proceeding with
respect to the subject matter or enforcement of this Amendment or the Lease, the
prevailing party (as determined by the court, agency or other authority before
which such suit or proceeding is commenced) shall, in addition to such other
relief as may be awarded, be entitled to recover attorneys' fees, expenses and
costs of investigation as actually incurred, including court costs, expert
witness fees, costs and expenses of investigation, and all attorneys' fees,
costs and expenses in any such suit or proceeding (including in any action or
participation in or in connection with any case or proceeding under the
Bankruptcy Code, 11 United States Code Sections 101 et seq., or any
successor statutes, in establishing or enforcing the right to indemnification,
in appellate proceedings, or in connection with the enforcement or collection of
any judgment obtained in any such suit or proceeding).

11.Effect of Headings; Exhibits.  The
titles or headings of the various parts or sections hereof are intended solely
for convenience and are not intended and shall not be deemed to or in any way
be used to modify, explain or place any construction upon any of the
provisions of this Amendment.  Exhibits, schedules, plats and riders hereto
which are referred to herein are a part of this Amendment.

12.Entire Agreement; Amendment.  This
Amendment taken together with the Existing Lease, together with all exhibits,
schedules, riders and addenda to each, constitutes the full and complete
agreement and understanding between the parties hereto and shall supersede all
prior communications, representations, understandings or agreements, if any,
whether oral or written, concerning the subject matter contained in this
Amendment and the Existing Lease, as so amended, and no provision of the Lease
as so amended may be modified, amended, waived or discharged, in whole or in
part, except by a written instrument executed by all of the parties hereto. 

13.Authority.  Each party represents and warrants
to the other that it has full authority and power to enter into and perform its
obligations under this Amendment, that the person executing this Amendment is
fully empowered to do so, and that no consent or authorization is necessary from
any third party.

In witness whereof, the parties have executed this Amendment
as of the date first above written.

 
LANDLORD

METROPOLITAN LIFE INSURANCE COMPANY,

a New York corporation

By:/s/  JOEL R. REDMON

Name:Joel R. Redmon

Title:Assistant Vice-President

 

 

TENANT

PHARMACYCLICS, INC.,

a Delaware corporation

By:/s/  RICHARD A. MILLER

Name:Richard A. Miller

Title:President & CEO

 

 

 

By:/s/  LEIV LEA

Name:Leiv Lea

Title:VP, Finance & Administration and
CFO<PAGE>

                                                                    EXHIBIT 4.01

                  This Subordinated Note is a Global Security within the meaning
of the Indenture hereinafter referred to and is registered in the name of the
Depository named below or a nominee of the Depository. This Subordinated Note is
not exchangeable for Subordinated Notes registered in the name of a Person other
than the Depository or its nominee except in the limited circumstances described
herein and in the Indenture, and no transfer of this Subordinated Note (other
than a transfer of this Subordinated Note as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository) 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
"Depository"), 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 Depository (and any payment is made to Cede & Co. or to such other entity
as is requested by an authorized representative of the Depository), 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.

                  THE SUBORDINATED NOTES ARE NOT SAVINGS ACCOUNTS OR DEPOSITS
BUT ARE UNSECURED OBLIGATIONS OF CITIGROUP INC. THE SUBORDINATED NOTES ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER FEDERAL AGENCY
OR INSTRUMENTALITY.

                                 CITIGROUP INC.
                    4.875% SUBORDINATED NOTES DUE MAY 7, 2015

REGISTERED                                                            REGISTERED

                                                               CUSIP: 172967 BW0
                                                             ISIN: US172967 BW09
                                                          Common Code: 016822051

No. R-                                                                         $

                  CITIGROUP INC., a Delaware corporation (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 $ __________ on May 7, 2015 and to pay interest thereon from and including
May 7, 2003 or from the most recent Interest Payment Date to which interest has
been paid or duly provided for, semi-annually, on May 7 and November 7 of each
year, commencing November 7, 2003, at the rate of 4.875% per annum, until the
principal hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to 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 April 15 and October 15 (whether or not a Business
Day) immediately preceding such Interest Payment Date.

<PAGE>

                  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 to 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,
or be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Subordinated Notes of this
series may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in the Indenture.

                  Interest hereon will be calculated on the basis of a 360-day
 year comprised of twelve 30-day months.

                  If either an Interest Payment Date or the Maturity of the
Subordinated Notes falls on a day that is not a Business Day, such Interest
Payment Date or Maturity will be the next succeeding Business Day. 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. No interest will accrue on any amounts payable for the period
from and after the due date for payment of such principal or interest.

                  For these purposes, "Business Day" means any day which is a
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

<PAGE>

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

Dated: May 7, 2003

                                    CITIGROUP INC.

                                    By:__________________________________
                                    Title: Assistant Treasurer

ATTEST:

By:___________________________
Assistant Secretary

                                       3

<PAGE>

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

Dated: May 7, 2003

                                    BANK ONE TRUST COMPANY, N.A.
                                    as Trustee

                                    By:__________________________________
                                        Name:
                                        Title:

                                    -or-

                                    CITIBANK, N.A.,
                                    as Authenticating Agent

                                    By:__________________________________
                                        Name:
                                        Title:

                                       4

<PAGE>

                  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 (the
"Indenture"), between the Company 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 $750,000,000.

                  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) 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,

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

                                       5

<PAGE>

                           (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

                                       6

<PAGE>

Indenture, or (z) modify certain other provisions of the Indenture, as set forth
in Section 13.02 of the Indenture.

                  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.

                  This Subordinated Note is a Global Security registered in the
name of a nominee of the Depository. This Subordinated Note is exchangeable for
Subordinated Notes registered in the name of a person other than the Depository
or its nominee only in the limited circumstances hereinafter described. Unless
and until it is exchanged in whole or in part for definitive Subordinated Notes
in certificated form, this Subordinated Note may not be transferred except as a
whole by the Depository to a nominee of the Depository or by a nominee of the
Depository to the Depository or another nominee of the Depository.

                  The Subordinated Notes represented by this Global Security are
exchangeable for definitive Subordinated Notes in certificated form of like
tenor as such Subordinated Notes in denominations of $1,000 and integral
multiples thereof only if (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for the Subordinated Notes or (ii)
the Depository ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, or (iii) the Company in its sole discretion
decides to allow the Subordinated Notes to be exchanged for definitive
Subordinated Notes in registered form. Any Subordinated Notes that are
exchangeable pursuant to the preceding sentence are exchangeable for
certificated Subordinated Notes issuable in authorized denominations and
registered in such names as the Depository shall direct. 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. Subject to
the foregoing, this Subordinated Note is not exchangeable, except for a Global
Security or Global Securities of this issue of the same principal amount to be
registered in the name of the Depository or its nominee.

                  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

                                       7

<PAGE>

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 (13) 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:

                  (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 solely by reason of the beneficial owner being or
                  having been, any of the following (as these terms are defined
                  in the Internal Revenue Code of 1986, as amended):

                  (a)      personal holding company;

                  (b)      foreign personal holding company;

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

                  (d)      passive foreign investment company;

                  (e)      controlled foreign corporation or

                                       8

<PAGE>

                  (f)      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.

         (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

                                       9

<PAGE>

                  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;

                  (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 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 combination of
                  items (1) through (12) above.

                                       10

<PAGE>

         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.

         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 United States of America,
including the States of the United States of America and the District of
Columbia, but excluding its territories and 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 April 30,
                           2003 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 April 30, 2003, 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

                                       11

<PAGE>

                           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.

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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