SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 2, 1998
TEMPLE-INLAND INC.
- ------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 001-08634 75-1903917
- ------------------------------------------------------------------------
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
303 South Temple Drive
Diboll, Texas 75941
- ------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (409) 829-5511
Not applicable
- -----------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>2
ITEM 5. OTHER EVENTS.
On June 2, 1998, the Company amended its existing shelf registration
(Registration No. 333-52189) and entered into a Selling Agency Agreement with
Salomon Brothers Inc and SBC Warburg Dillon Read Inc., relating to the
possible issuance and sale of up to $500,000,000 aggregate principal amount
of Medium-Term Notes, Series F (the "Notes"). The Company filed a Prospectus
Supplement for the Notes with the Securities and Exchange Commission on June
2, 1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
The following exhibits, as required by Item 601 of Regulation S-K, are
attached to this Current Report:
Exhibit
No. Description
- ------- -----------
1.01 Form of Selling Agency Agreement dated June 2, 1998
between Temple-Inland Inc., Salomon Brothers Inc and
SBC Warburg Dillon Read Inc.
4.05 Form of Fixed-Rate Medium-Term Note, Series F.
4.06 Form of Floating-Rate Medium-Term Note, Series F.
12.01 Statements re: Computation of Ratios of Earnings
to Fixed Charges.
-2-
<PAGE>3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
TEMPLE-INLAND INC.
By: /s/ David H. Dolben
-------------------------------
Name: David H. Dolben
Title: Vice President and
Chief Accounting Officer
Dated: June 2, 1998
-3-
<PAGE>4
EXHIBIT INDEX
Exhibit
No. Description
- ------- -----------
1.01 Form of Selling Agency Agreement dated June 2, 1998
between Temple-Inland Inc., Salomon Brothers Inc and
SBC Warburg Dillon Read Inc.
4.05 Form of Fixed-Rate Medium-Term Note, Series F.
4.06 Form of Floating-Rate Medium-Term Note, Series F.
12.01 Statements re: Computation of Ratios of Earnings
to Fixed Charges.
Temple-Inland Inc.
U.S. $500,000,000 Medium-Term Notes, Series F
Due Nine Months of More
From Date of Issue
Selling Agency Agreement
, 1998
New York, New York
Salomon Brothers Inc
Seven World Trade Center
New York, N.Y. 10048
SBC Warburg Dillon Read Inc.
535 Madison Avenue
New York, NY 10022
Dear Sirs:
Temple-Inland Inc., a Delaware corporation (the
"Company"), confirms its agreement with each of you with respect
to the issue and sale by the Company of up to U.S. $[
500],000,000 aggregate principal amount of its Medium-Term Notes
Due Nine Months or More from Date of Issue (the "Notes"). The
Notes will be issued under an indenture dated as of September 1,
1986, as amended by the First Supplemental Indenture, dated as of
April 15, 1988, the Second Supplemental Indenture, dated as of
December 27, 1990, and the Third Supplemental Indenture, dated as
of May 9, 1991 (such indenture, as amended, the "Indenture"),
between the Company and The Chase Manhattan Bank, formerly known
as Chemical Bank, as trustee (the "Trustee"). Unless otherwise
specifically provided for and set forth in a Pricing Supplement
(as defined below), the Notes will be issued in minimum denomina-
tions of $1,000 and in denominations exceeding such amount by
integral multiples of $1,000 and, unless otherwise specified in
the applicable Pricing Supplement, the authorized denominations
of Notes denominated in a Specified Currency other than U.S.
dollars ("Foreign Currency Notes") will be the equivalent, as
determined by the Federal Reserve Bank of New York, of the noon
buying rate in The City of New York for cable transfers in
foreign currencies as certified for customs purposes for such
Specified Currency (the "Exchange Rate"), on the applicable issue
date, of $1,000 (rounded down to an integral multiple of 1,000
units of such Specified Currency), and any larger amount that is
an integral multiple of 1,000 units of such Specified Currency
and will be issued only in fully registered form and will have
the interest rates, maturities and, if applicable, other terms
set forth in such Pricing Supplement. The Notes will be issued,
and the terms thereof established, in accordance with the
Indenture and the Medium-Term Notes Administrative Procedures
attached hereto as Exhibit A (the "Procedures") (unless a written
Terms Agreement (as defined in Section 2(b)) modifies or
otherwise supersedes such Procedures with respect to the Notes
issued pursuant to such Terms Agreement). The Procedures may be
amended only by written agreement of the Company and you after
notice to, and with the approval of, the Trustee. For the
purposes of this Agreement and subject to Section 12 hereof, the
term "Agent" shall refer to any of you acting solely in the
capacity as agent for the Company pursuant to Section 2(a) and
not as principal (collectively, the "Agents"), the term
"Purchaser" shall refer to one of you acting solely as principal
pursuant to Section 2(b) and not as agent, and the term "you"
shall refer to you collectively whether at any time any of you is
acting in both such capacities or in either such capacity. In
acting under this Agreement, in whatever capacity, each of you is
acting individually and not jointly.
1. Representations and Warranties. The Company
represents and warrants to, and agrees with, you as set forth
below in this Section 1. Certain terms used in this Section 1
are defined in paragraph (d) hereof.
(a) The Company has complied with the requirements for
use of Form S-3 under the Securities Act of 1933 (the "Act")
and has filed with the Securities and Exchange Commission
(the "Commission") a registration statement on such Form
(File Number: 333-52189), including a basic prospectus,
which has become effective, for the registration under the
Act of $500,000,000 aggregate principal amount of debt
securities (the "Securities"), including the Notes. Such
registration statement, as amended at the date of this
Agreement, meets the requirements set forth in
Rule 415(a)(1)(ix) or (x) under the Act and complies in all
other material respects with said Rule. The Company has
included in such registration statement, or has filed or
will file with the Commission pursuant to the applicable
paragraph of Rule 424(b) under the Act, a supplement to the
form of prospectus included in such registration statement
relating to the Notes and the plan of distribution thereof
(the "Prospectus Supplement"). In connection with the sale
of the Notes, the Company proposes to file with the
Commission pursuant to the applicable paragraph of
Rule 424(b) under the Act further supplements to the
Prospectus Supplement (each a "Pricing Supplement") specify-
ing the interest rates, maturity dates and, if appropriate,
other similar terms of the Notes sold pursuant hereto or the
offering thereof.
(b) As of the Execution Time, on the Effective Date,
when any supplement to the Prospectus is filed with the
Commission, as of the date of a Terms Agreement and at the
date of delivery by the Company of any Notes sold hereunder
(a "Closing Date"), (i) the Registration Statement, as
amended as of any such time, and the Prospectus, as
supplemented as of any such time, and the Indenture will
comply in all material respects with the applicable
requirements of the Act, [the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"),] and the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and
the respective rules thereunder; (ii) the Registration
Statement, as amended as of any such time, did not or will
not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein not
misleading; and (iii) the Prospectus, as supplemented as of
any such time, will not contain any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
provided, however, that the Company does not make any
representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement
of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information
contained in or omitted from the Registration Statement or
the Prospectus (or any supplement thereto) in reliance upon
and in conformity with information furnished in writing to
the Company by any of you specifically for inclusion in the
Registration Statement or the Prospectus (or any supplement
thereto).
(c) As of the time any Notes are issued and sold
hereunder, (a) the Indenture (assuming due execution and
delivery thereof by the Trustee) will constitute a legal,
valid and binding instrument enforceable against the Company
in accordance with its terms subject to the effect of
(i) general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at
law, (ii) any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter
in effect relating to or affecting creditors' rights
generally, and such Notes will have been duly authorized,
executed, authenticated and, when paid for by the purchasers
thereof, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the
Indenture, and (iii) requirements that a claim with respect
to any Notes denominated other than in United States dollars
(or a judgment denominated other than in United States
dollars in respect of such claim) be converted into United
States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law and (iv) governmental
authority to limit, delay or prohibit the making of payments
outside the United States or in a foreign currency or
composite currency, and (b) the Notes (when authenticated in
accordance with the terms of the Indenture and paid for by
the purchaser thereof) will be entitled to the benefits of
the Indenture, subject to the expectations set forth in
clauses (i) through (iv) of this subsection (c).
(d) The terms which follow, when used in this
Agreement, shall have the meanings indicated. The term "the
Effective Date" shall mean each date that the Registration
Statement and any post-effective amendment or amendments
thereto became or become effective and each date after the
date hereof on which a document incorporated by reference in
the Registration Statement is filed. "Execution Time" shall
mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Basic Prospectus" shall
mean the form of basic prospectus relating to the Securities
contained in the Registration Statement at the Effective
Date. "Prospectus" shall mean the Basic Prospectus as
supplemented by the Prospectus Supplement. "Registration
Statement" shall mean the registration statement referred to
in paragraph (a) above, including incorporated documents,
exhibits and financial statements, as amended at the
Execution Time. "Rule 415" and "Rule 424" refer to such
rules under the Act. Any reference herein to the
Registration Statement, the Basic Prospectus , the
Prospectus Supplement or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3, which were filed
under the Exchange Act on or before the Effective Date of
the Registration Statement or the issue date of the Basic
Prospectus, the Prospectus Supplement or the Prospectus, as
the case may be; and any reference herein to the terms
"amend", "amendment" or "supplement" with respect to the
Registration Statement, the Basic Prospectus, the Prospectus
Supplement or the Prospectus shall be deemed to refer to and
include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement or
the issue date of the Basic Prospectus, the Prospectus
Supplement or the Prospectus, as the case may be, deemed to
be incorporated therein by reference.
2. Appointment of Agents; Solicitation by the Agents
of Offers to Purchase; Sales of Notes to a Purchaser.
(a) Subject to the terms and conditions set forth herein, the
Company hereby authorizes each of the Agents to act as its agent
to solicit offers for the purchase of all or part of the Notes
from the Company.
On the basis of the representations and warranties, and
subject to the terms and conditions set forth herein, each of the
Agents agrees, as agent of the Company, to use its reasonable
efforts to solicit offers to purchase the Notes from the Company
upon the terms and conditions set forth in the Prospectus (and
any supplement thereto) and in the Procedures. Each Agent shall
use its reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes has
been solicited by such Agent and accepted by the Company, but
such Agent shall not, except as otherwise provided in this
Agreement, be obligated to disclose the identity of any purchaser
or have any liability to the Company in the event any such
purchase is not consummated for any reason. Except as provided
in Section 2(b), under no circumstances will any Agent be
obligated to purchase any Notes for its own account. It is
understood and agreed, however, that any Agent may purchase Notes
as principal pursuant to Section 2(b).
The Company reserves the right, in its sole discretion,
to instruct the Agents to suspend at any time, for any period of
time or permanently, the solicitation of offers to purchase
Notes. Upon receipt of instructions from the Company, the Agents
will forthwith suspend solicitation of offers to purchase Notes
from the Company until such time as the Company has advised them
that such solicitation may be resumed.
The Company agrees to pay each Agent a commission, on
the Closing Date with respect to each sale of Notes by the
Company as a result of a solicitation made by such Agent, in an
amount equal to that percentage specified in Schedule I hereto of
the aggregate principal amount of the Notes sold by the Company.
Such commission shall be payable as specified in the Procedures.
Subject to the provisions of this Section and to the
Procedures, offers for the purchase of Notes may be solicited by
an Agent as agent for the Company at such time and in such
amounts as such Agent deems advisable. In connection with the
solicitation of offers to Purchase Notes, the Agents are not
authorized to provide any written information relating to the
Company to any prospective purchaser other than the Prospectus,
the Prospectus Supplement, any documents incorporated by
reference in the Registration Statement, and publicly available
information, provided that any such provision of information is
not inconsistent with the Act. The Company may from time to time
offer Notes for sale otherwise than through an Agent; provided,
however, that, subject to Section 12 hereof, so long as this
Agreement is in effect the Company shall not actively solicit
other agents to act as its agent to solicit offers to purchase
Notes. Subject to the preceding sentence, the Company may accept
offers to purchase Notes through any agent other than an Agent;
provided, however, that the acceptance of such offer shall be on
terms substantially similar (including the same commission
schedule) to those set forth in Schedule I hereto. The Company
shall give the Agents prompt notice of any acceptance of any such
offer to purchase Notes. At any time you offer to purchase any
Notes as Purchaser, you shall notify the Company that you are
acting as principal.
[If the Company shall default in its obligations to
deliver Notes to a purchaser whose offer it has accepted, the
Company shall indemnify and hold each of you harmless against any
loss, claim or damage arising from or as a result of such default
by the Company.]
(b) Subject to the terms and conditions stated herein,
whenever the Company and any of you determines that the Company
shall sell Notes directly to any of you as principal, each such
sale of Notes shall be made in accordance with the terms of this
Agreement and a supplemental agreement relating to such sale.
Each such supplemental agreement (which may be either an oral or
written agreement) is herein referred to as a "Terms Agreement".
Each Terms Agreement shall describe the Notes to be purchased by
the Purchaser pursuant thereto and shall specify the aggregate
principal amount of such Notes, the currency or currency unit in
which such Notes shall be denominated, the price to be paid to
the Company for such Notes, the maturity date of such Notes, the
rate at which interest will be paid on such Notes, whether such
rate of interest shall be fixed or floating, the dates on which
interest will be paid on such Notes and the record date with
respect to each such payment of interest, the Closing Date for
the purchase of such Notes, the place of delivery of the Notes
and payment therefor, the method of payment and any requirements
for the delivery of opinions of counsel, certificates from the
Company or its officers or a letter from the Company's
independent public accountants as described in Section 6(b). Any
such Terms Agreement may also specify the period of time referred
to in Section 4(m). Any written Terms Agreement may be in the
form attached hereto as Exhibit B. The Purchaser's commitment to
purchase Notes shall be deemed to have been made on the basis of
the representations and warranties of the Company herein con-
tained and shall be subject to the terms and conditions herein
set forth.
Delivery of the certificates for Notes sold to the
Purchaser pursuant to a Terms Agreement shall be made not later
than the Closing Date agreed to in such Terms Agreement, against
payment of funds to the Company in the net amount due to the
Company for such Notes by the method and in the form set forth in
the Procedures unless otherwise agreed to between the Company and
the Purchaser in such Terms Agreement.
Unless otherwise agreed to between the Company and the
Purchaser in a Terms Agreement, any Note sold to a Purchaser
(i) shall be purchased by such Purchaser at a price equal to 100%
of the principal amount thereof less a percentage equal to the
commission applicable to an agency sale of a Note of identical
maturity and (ii) may be resold by such Purchaser at varying
prices from time to time or, if set forth in the applicable Terms
Agreement and Pricing Supplement, at a fixed public offering
price. In connection with any resale of Notes purchased, a
Purchaser may use a selling or dealer group and may reallow to
any broker or dealer any portion of the discount or commission
payable pursuant hereto.
3. Offering and Sale of Notes. Each Agent and the
Company agree to perform the respective duties and obligations
specifically provided to be performed by them in the Procedures.
4. Agreements. The Company agrees with you that:
(a) Prior to the termination of the offering of the
Notes (including by way of resale by a Purchaser of Notes),
the Company will not file any amendment of the Registration
Statement or supplement to the Prospectus (except for
(i) periodic or current reports filed under the Exchange
Act, (ii )a supplement relating to any offering of Notes
providing solely for the specification of or a change in the
maturity dates, interest rates, issuance prices or other
similar terms of any Notes or (iii) a supplement relating to
an offering of Securities other than the Notes) unless the
Company has furnished each of you a copy for your review
prior to filing and given each of you a reasonable
opportunity to comment on any such proposed amendment or
supplement. Subject to the foregoing sentence, the Company
will cause each supplement to the Prospectus to be filed
with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will
provide evidence satisfactory to you of such filing. The
Company will promptly advise each of you (i) when the
Prospectus, and any supplement thereto, shall have been
filed with the Commission pursuant to Rule 424(b),
(ii) when, prior to termination of any offering of Notes,
any amendment of the Registration Statement shall have been
filed or become effective, (iii) of any request by the
Commission for any amendment of the Registration Statement
or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the
Company of any notification with respect to the suspension
of the qualification of the Notes for sale in any
jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Company will use its best
efforts to prevent the issuance of any such stop order and,
if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the
Notes is required to be delivered under the Act, any event
occurs as a result of which the Prospectus as then
supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circum-
stances under which they were made, not misleading, or if it
shall be necessary to amend the Registration Statement or to
supplement the Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, the Company
promptly will notify each of you to suspend solicitation of
offers to purchase Notes (and, if so notified by the
Company, each of you shall forthwith suspend such
solicitation and cease using the Prospectus as then supple-
mented) and, upon such notification, your obligation to
solicit offers to purchase Notes hereunder shall cease. In
the event that the Company desires you to thereafter
commence solicitations of offers to purchase Notes, or in
the event that any of you are holding Notes for resale, the
Company shall (i) prepare and file with the Commission,
subject to the first sentence of paragraph (a) of this
Section 4, an amendment or supplement which will correct
such statement or omission or effect such compliance and
(ii) supply any supplemented Prospectus to each of you in
such quantities as you may reasonably request. If such
amendment or supplement, and any documents, certificates and
opinions furnished to each of you pursuant to paragraph (g)
of this Section 4 in connection with the preparation or
filing of such amendment or supplement are satisfactory in
all respects to you, you will, upon the filing of such
amendment or supplement with the Commission and upon the
effectiveness of an amendment to the Registration Statement,
if such an amendment is required, resume your obligation to
solicit offers to purchase Notes hereunder.
(c) The Company, during the period when a prospectus
relating to the Notes is required to be delivered under the
Act, will file promptly all documents required to be filed
with the Commission pursuant to Section 13(a), 13(c) or
15(d) of the Exchange Act and will furnish to each of you
copies of such documents. In addition, on or prior to the
date on which the Company makes any announcement to the
general public concerning earnings or concerning any other
event which is required to be described, or which the
Company proposes to describe, in a document filed pursuant
to the Exchange Act, the Company will furnish to each of you
the information contained or to be contained in such
announcement. The Company will notify each of you as soon
as practicable of (i) any decrease in the rating of the
Notes or any other debt securities of the Company by any
"nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or
(ii) any notice given of any intended or potential decrease
in any such rating or of a possible change in any such
rating that does not indicate the direction of the possible
change, as soon as the Company learns of any such decrease
or notice.
(d) As soon as practicable after the filing thereof
with the Commission, the Company will make generally
available to its security holders and to each of you an
earnings statement or statements of the Company and its
subsidiaries which will satisfy the provisions of
Section 11(a) of the Act and Rule 158 under the Act.
(e) The Company will furnish to each of you and your
counsel, without charge, copies of the Registration
Statement (including exhibits thereto) and, so long as
delivery of a prospectus may be required by the Act, as many
copies of the Prospectus and any supplement thereto as you
may reasonably request.
(f) The Company will arrange for the qualification of
the Notes for sale under the laws of such jurisdictions as
any of you may reasonably designate, will maintain such
qualifications in effect so long as required for the
distribution of the Notes (provided that the Company shall
not be required in connection therewith to qualify as a
foreign corporation or to execute a general consent to
service of process in any state), and will arrange for the
determination of the legality of the Notes for purchase by
institutional investors.
(g) The Company shall furnish to each of you such
information, documents, certificates of officers of the
Company and opinions of counsel for the Company relating to
the business, operations and affairs of the Company, the
Registration Statement, the Prospectus, and any amendments
thereof or supplements thereto, the Indenture, the Notes,
this Agreement, the Procedures and the performance by the
Company and you of its and your respective obligations
hereunder and thereunder as any of you may from time to time
and at any time prior to the termination of this Agreement
reasonably request.
(h) The Company shall, whether or not any sale of the
Notes is consummated, (i) pay all expenses incident to the
performance of its obligations under this Agreement and any
Terms Agreement, including the fees and disbursements of its
accountants and counsel, the cost of printing or other
production and delivery of the Registration Statement, the
Prospectus, all amendments thereof and supplements thereto,
the Indenture, this Agreement, any Terms Agreement and all
other documents relating to the offering, the cost of
preparing, printing, packaging and delivering the Notes, the
fees and disbursements, including fees of counsel, incurred
in compliance with Section 4(f), the fees and disbursements
of the Trustee and the fees of any agency that rates the
Notes, (ii) reimburse each of you as requested (but not more
frequently than monthly) for all reasonable out-of-pocket
expenses (including without limitation advertising
expenses), if any, incurred by you in connection with this
Agreement and (iii) pay the reasonable fees and expenses of
your counsel incurred in connection with this Agreement and
incurred from time to time in connection with the
transactions contemplated hereby.
(i) Each acceptance by the Company of an offer to
purchase Notes will be deemed to be an affirmation that the
representations and warranties of the Company contained in
this Agreement are true and correct at the time of such
acceptance, as though made at and as of such time, and a
covenant that such representations and warranties will be
true and correct at the time of delivery to the purchaser of
the Notes relating to such acceptance, as though made at and
as of such time (it being understood that for purposes of
the foregoing affirmation and covenant such representations
and warranties shall relate to the Registration Statement
and Prospectus as amended or supplemented at each such
time). Each such acceptance by the Company of an offer for
the purchase of Notes shall be deemed to constitute an
additional representation, warranty and agreement by the
Company that, as of the settlement date for the sale of such
Notes, after giving effect to the issuance of such Notes, of
any other Notes to be issued on or prior to such settlement
date and of any other Securities to be issued and sold by
the Company on or prior to such settlement date, the
aggregate amount of Securities (including any Notes) which
have been issued and sold by the Company will not exceed the
amount of Securities registered pursuant to the Registration
Statement. The Company will inform you promptly upon your
request of the aggregate amount of Securities registered
under the Registration Statement which remain unsold.
(j) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an
amendment or supplement relating to any offering of
Securities other than the Notes or providing solely for the
specification of or a change in the maturity dates, the
interest rates, the issuance prices or other similar terms
of any Notes sold pursuant hereto) [excluding (a) any change
in the formula by which interest rates on the Notes may be
determined and (b) any information relating to Specified
Currencies other than U.S. dollars)], the Company will
deliver or cause to be delivered promptly to each of you a
certificate of the Company, signed by the Chief Executive
Officer, the President, or any Vice President and the
principal financial officer, Treasurer, or principal
accounting officer of the Company, dated the date of the
effectiveness of such amendment or the date of the filing of
such supplement, in form reasonably satisfactory to you, of
the same tenor as the certificate referred to in
Section 5(d) but modified to relate to the last day of the
fiscal quarter for which financial statements of the Company
were last filed with the Commission and to the Registration
Statement and the Prospectus as amended and supplemented to
the time of the effectiveness of such amendment or the
filing of such supplement.
(k) Each time that the Registration Statement or the
Prospectus is amended or supplemented (other than by an
amendment or supplement (i) relating to any offering of
Securities other than the Notes or (ii) providing solely for
the specification of or a change in the maturity dates, the
interest rates, the issuance prices or other similar terms
of any Notes sold pursuant hereto) [(excluding (a) any
change in the formula by which interest rates on the Notes
may be determined and (b) any information relating to
Specified Currencies other than U.S. dollars) or
(iii) setting forth or incorporating by reference financial
statements or other information as of and for a fiscal
quarter, unless, in the case of clause (iii) above, in the
reasonable judgment of any of you, such financial statements
or other information are of such a nature that an opinion of
counsel should be furnished)], the Company shall furnish or
cause to be furnished promptly to each of you a written
opinion of counsel of the Company satisfactory to each of
you, dated the date of the effectiveness of such amendment
or the date of the filing of such supplement, in form
satisfactory to each of you, of the same tenor as the
opinion referred to in Section 5(b) but modified to relate
to the Registration Statement and the Prospectus as amended
and supplemented to the time of the effectiveness of such
amendment or the filing of such supplement or, in lieu of
such opinion, counsel last furnishing such an opinion to you
may furnish each of you with a letter to the effect that you
may rely on such last opinion to the same extent as though
it were dated the date of such letter authorizing reliance
(except that statements in such last opinion will be deemed
to relate to the Registration Statement and the Prospectus
as amended and supplemented to the time of the effectiveness
of such amendment or the filing of such supplement).
(l) Each time that the Registration Statement or the
Prospectus is amended or supplemented to include or
incorporate amended or supplemental financial information,
the Company shall cause its independent public accountants
promptly to furnish each of you a letter, dated the date of
the effectiveness of such amendment or the date of the
filing of such supplement, in form satisfactory to each of
you, of the same tenor as the letter referred to in
Section 5(e) with such changes as may be necessary to
reflect the amended and supplemental financial information
included or incorporated by reference in the Registration
Statement and the Prospectus, as amended or supplemented to
the date of such letter; provided, however, that, if the
Registration Statement or the Prospectus is amended or
supplemented solely to include or incorporate by reference
financial information as of and for a fiscal quarter, the
Company's independent public accountants may limit the scope
of such letter, which shall be satisfactory in form to each
of you, to the unaudited financial statements, the related
"Management's Discussion and Analysis of Financial Condition
and Results of Operations" and any other information of an
accounting, financial or statistical nature included in such
amendment or supplement, unless, in the reasonable judgment
of any of you, such letter should cover other information or
changes in specified financial statement line items.
(m) During the period, if any, specified (whether
orally or in writing) in any Terms Agreement, the Company
shall not, without the prior consent of the Purchaser
thereunder, offer, sell or contract to sell, or otherwise
dispose of, directly or indirectly, or announce the offering
of, any debt securities issued or guaranteed by the Company
substantially similar to the Securities sold pursuant to
such Terms Agreement other than borrowings under its
revolving credit agreements and lines of credit and
issuances of its commercial paper.
(n) The Company shall not be required to comply with
the provisions of subsections (j), (k) or (l) of this
Section during any period from the time (i) the Agents shall
have suspended solicitation of purchases of the Notes
pursuant to a request from the Company and (ii) the Agents
shall not then hold any Notes purchased as principal
pursuant hereto, until the time the Company shall determine
that solicitation of purchases of the Notes should be
resumed or you shall subsequently purchase Notes from the
Company as principal.
5. Conditions to the Obligations of the Agents. The
obligations of each Agent to solicit offers to purchase the Notes
shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the
Execution Time, on the Effective Date, when any supplement to the
Prospectus is filed with the Commission and as of each Closing
Date, to the accuracy of the statements of the Company made in
any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to
the following additional conditions:
(a) If filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, shall have been filed
in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness
of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have furnished to each Agent the
opinion of M. Richard Warner, General Counsel for the
Company, dated the Execution Time, to the effect that:
(i) each of the Company and Temple-Inland Forest
Products Corporation, Inland Container Corporation I,
Inland Paperboard and Packaging, Inc., Temple-Inland
Financial Services Inc., Guaranty Holdings Inc. I,
Guaranty Federal Bank, F.S.B., MBHC Inc., and
Temple-Inland Mortgage Corporation (individually a
"Subsidiary" and collectively the "Subsidiaries") has
been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized,
with full corporate power and authority to own its
material properties and conduct its business as
described in the Prospectus, and is duly qualified to
do business as a foreign corporation and is in good
standing under the laws of each jurisdiction in which
its ownership of property or conduct of business
requires such qualification, except where the failure
to be so qualified would not have a material adverse
effect.
(ii) all the outstanding shares of capital stock of
each Subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and,
except as set forth in the Company's filings with the
Commission, all outstanding shares of capital stock of
the Subsidiaries are owned by the Company either
directly or through wholly owned subsidiaries free and
clear, to the knowledge of such counsel, after due
inquiry, of any perfected security interest and any
other security interests, claims, liens or
encumbrances;
(iii) the Notes conform in all material respects to
the description thereof contained in the Prospectus
subject to the insertion in the Notes of the maturity
dates, the interest rates and other similar terms
thereof which will be described in supplements to the
Prospectus as contemplated by the fourth sentence of
Section 1(a) of this Agreement;
(iv) the Indenture has been duly authorized,
executed and delivered by the Company, has been duly
qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its
terms (subject, as to enforcement of remedies, to
(a) applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights
generally from time to time in effect), (b) the
qualification that general principles of equity may
limit the availability of equitable remedies,
(c) requirements that a claim with respect to any Notes
denominated other than in U.S. dollars (or a judgment
denominated other than in U.S. dollars in respect of
such claim) be converted into U.S. dollars at a rate of
exchange prevailing on a date determined pursuant to
applicable law, and (d) governmental authority to
limit, delay, or prohibit the making of payments
outside the U.S. or in a foreign currency or composite
currency, subject to the exceptions set forth in
clauses (a) through (d) above; and the Notes have been
duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and
delivered to and paid for by the purchasers thereof
pursuant to this Agreement, will constitute legal,
valid and binding obligations of the Company entitled
to the benefits of the Indenture, subject to the
exceptions set forth in clauses (a) through (d) above;
(v) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or
before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of
its Subsidiaries, of a character required to be
disclosed in the Registration Statement which is not
adequately disclosed in the Prospectus, and there is no
franchise, contract or other document of a character
required to be described in the Registration Statement
or Prospectus, or to be filed as an exhibit thereto,
which is not described or filed as required; and the
statements included or incorporated in the Prospectus
describing any legal proceedings or material contracts
or agreements relating to the Company fairly summarize
such matters;
(vi) the Registration Statement has become
effective under the Act; any required filing of the
Prospectus, and any supplements thereto, pursuant to
Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); to the knowledge
of such counsel, no stop order suspending the effec-
tiveness of the Registration Statement has been issued,
no proceedings for that purpose have been instituted or
threatened, and the Registration Statement and the
Prospectus (other than the financial statements and
other financial or statistical information contained
therein, as to which such counsel need express no
opinion) comply as to form in all material respects
with the applicable requirements of Form S-3 of the
Act, the Exchange Act and the Trust Indenture Act and
the respective rules thereunder; and no facts have come
to the attention of such counsel which leads it to
reasonably believe that on the Effective Date or at the
Execution Time the Registration Statement contains or
contained any untrue statement of a material fact or
omitted or omits to state any material fact required to
be stated therein or necessary to make the statements
therein not misleading or that the Prospectus includes
any untrue statement of a material fact or omits to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which
they were made, not misleading (in each case, other
than the financial statements and other financial or
statistical information contained therein, as to which
such counsel need express no opinion);
(vii) this Agreement has been duly authorized,
executed and delivered by the Company;
(viii) the Company is not and, after giving effect
to the offering and sale of the Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as
amended;
(ix) [to the best knowledge of such counsel, after
due inquiry,] no consent, approval, authorization,
filing with or order of any court or governmental
agency or body is required in connection with the
transactions contemplated herein, except such as have
been obtained under the Act and qualification of the
Indenture under the Trust Indenture Act and such as may
be required under the blue sky laws of any jurisdiction
in connection with the purchase and distribution of the
Securities by the Agents in the manner contemplated in
this Agreement and in the Prospectus;
(x) neither [the execution and delivery of the
Indenture,] the issue and sale of the Securities, nor
the consummation of any other of the transactions
herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or
violation of, or result in the imposition of any lien,
charge or encumbrance upon any property or assets of
the Company or its Subsidiaries pursuant to, (i) the
charter or by-laws of the Company or any of its
Subsidiaries, or (ii) to the knowledge of such counsel,
after due inquiry, the terms of any material indenture,
contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other material agreement,
obligation, condition, covenant or instrument and to
which the Company or any of its Subsidiaries is a party
or bound or to which their property is subject or
(iii) any statute, law, rule or regulation, or any
judgment, order or decree known to such counsel after
due inquiry, applicable to the Company or any of its
Subsidiaries of any court, regulatory body or adminis-
trative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or any
of its Subsidiaries or any of its or their properties;
and
(xi) to the knowledge of such counsel, no holders
of securities of the Company have rights to the
registration of such securities under the Registration
Statement.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdic-
tion other than the State of Texas or the Federal laws of
the United States, to the extent deemed proper and specified
in such opinion, upon the opinion of other counsel of good
standing believed to be reliable and who are satisfactory to
counsel for the Agents and (B) as to matters of fact, to the
extent deemed proper, on certificates of responsible
officers of the Company and public officials. References to
the Prospectus in this paragraph (b) include any supplements
thereto at the Closing Date.
(c) The Company shall have furnished to the Agents and
the Trustee the opinion of Skadden, Arps, Slate, Meagher &
Flom LLP, special counsel for the Company, dated the Closing
Date, to the effect set forth in paragraph (i) (with respect
to the Company in its state of incorporation only), (iii),
(iv), [(v),] (vi) (in such form as such special counsel to
the Company and the Representatives may agree), and
(x) (with respect to the charter and by-laws) of
Section 6(b) and to the effect that statements in the Final
Prospectus under the heading "United States Taxation" fairly
summarize such matters. In rendering such opinion, such
counsel may rely (A) as to matters involving the application
of laws of any jurisdictions other than the laws of
jurisdiction in which they are admitted or the Federal laws
of the United States, to the extent deemed proper and
specified in such opinion, upon the opinion of other counsel
of good standing believed to be reliable and who are
satisfactory to your counsel and (B) as to matters of fact,
to the extent deemed proper, on certificates of responsible
officers of the Company and public officials.
(d) Each Agent shall have received from Cravath,
Swaine & Moore, counsel for the Agents, such opinion or
opinions, dated the date hereof, with respect to the
issuance and sale of the Notes, the Indenture, the Regis-
tration Statement, the Prospectus (together with any
supplement thereto) and other related matters as the Agents
may reasonably require, and the Company shall have furnished
to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to each Agent a
certificate of the Company, signed by the Chairman of the
Board, the Chief Executive Officer, the President or any
Vice President and Chief Financial Officer, the principal
financial officer, Treasurer or principal accounting officer
of the Company, dated the Execution Time, to the effect that
to the best of their knowledge based upon reasonable
investigation:
(i) the representations and warranties of the
Company in this Agreement are true and correct in all
material respects on and as of the date hereof with the
same effect as if made on the date hereof and the
Company has complied with all the agreements and
satisfied all the conditions on its part to be
performed or satisfied as a condition to the obligation
of the Agents to solicit offers to purchase the Notes;
(ii) no stop order suspending the effectiveness of
the Registration Statement has been issued and no
proceedings for that purpose have been instituted or,
to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus (exclusive of any supplement thereto), there
has been no material adverse change in the condition
(financial or other), earnings, business or properties
of the Company and its consolidated Subsidiaries taken
as a whole, whether or not arising from transactions in
the ordinary course of business, except as set forth in
or contemplated in the Prospectus (exclusive of any
supplement thereto).
(f) At the Execution Time, Ernst & Young LLP shall
have furnished to each Agent a letter or letters (which may
refer to letters previously delivered to the Agents), dated
as of the Execution Time, in form and substance satisfactory
to the Agents, confirming that they are independent
auditors within the meaning of the Act and the Exchange Act
and the respective applicable published rules and
regulations thereunder and stating in effect that:
(i) in their opinion the audited financial
statements and financial statement schedules and any
pro forma financial statements included or incorporated
in the Registration Statement and the Prospectus and
reported on by them comply in form in all material
respects with the applicable accounting requirements of
the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the
Company and its Subsidiaries; their limited review, in
accordance with standards established under Statement
on Auditing Standards No. 71, carrying out certain
specified procedures (but not an examination in
accordance with generally accepted auditing standards)
which would not necessarily reveal matters of
significance with respect to the comments set forth in
such letter; a reading of the minutes of the meetings
of the stockholders, directors and audit committee of
the Company and its Subsidiaries; and inquiries of
certain officials of the Company who have
responsibility for financial and accounting matters of
the Company and its Subsidiaries as to transactions and
events subsequent to the date of the most recent
audited financial statements in or incorporated in the
Registration Statement and Prospectus, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements
included or incorporated in the Registration
Statement and the Prospectus do not comply in form
in all material respects with applicable
accounting requirements of the Act and with the
published rules and regulations of the Commission
with respect to financial statements included or
incorporated by reference in quarterly reports on
Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in
conformity with generally accepted accounting
principles applied on a basis substantially
consistent with that of the audited financial
statements included or incorporated by reference
in the Registration Statement and the Prospectus;
(2) with respect to the period subsequent to
the date of the most recent financial statements
(other than any capsule information), audited or
unaudited, included or incorporated by reference
in the Registration Statement and the Prospectus,
there were any changes, at a specified date not
more than five business days prior to the date of
the letter, in the consolidated long-term debt of
the Company or capital stock of the Company or
decreases in the stockholders' equity or working
capital of the Company as compared with the
amounts shown on the most recent consolidated
balance sheet included or incorporated by
reference in the Registration Statement and the
Prospectus, or for the period from the date of the
most recent financial statements included or
incorporated by reference in the Registration
Statement and the Prospectus to such specified
date there were any decreases, as compared with
the corresponding period in the preceding year in
manufacturing net sales, net revenues, operating
income or income before income taxes or in total
or per share amounts of net income of the Company
and its Subsidiaries, except in all instances for
changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an
explanation by the Company as to the significance
thereof unless said explanation is not deemed
necessary by the Agents; and
(3) the information included or incorporated
by reference in the Registration Statement and
Prospectus in response to Regulation S-K, Item 301
(Selected Financial Data), Item 302 (Supplementary
Financial Information), and Item 503(d) (Ratio of
Earnings to Fixed Charges) is not in conformity
with the applicable disclosure requirements of
Regulation S-K;
(iii) they have performed certain other specified
procedures as a result of which they determined that
certain information of an accounting, financial or
statistical nature (which is limited to accounting,
financial or statistical information derived from the
general accounting records of the Company and its
Subsidiaries) set forth in the Registration Statement
and the Prospectus and in Exhibit 12 to the
Registration Statement, including the information
included or incorporated by reference in Items 1, 2, 6,
7 and 11 of the Company's Annual Report on Form 10-K,
incorporated in the Registration Statement and the
Prospectus, and the information included in the
"Management's Discussion and Analysis of Financial
Condition and Results of Operations" included or
incorporated by reference in the Company's Quarterly
Reports on Form 10-Q, incorporated in the Registration
Statement and the Prospectus, agrees with the
accounting records of the Company and its Subsidiaries,
excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (e)
include any supplement thereto at the date of the letter.
(f) Prior to the Execution Time, the Company shall
have furnished to each Agent such further information,
documents, certificates and opinions of counsel as the
Agents may reasonably request.
If any of the conditions specified in this Section 5
shall not have been fulfilled in all material respects when and
as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form
and substance to such Agents and counsel for the Agents, this
Agreement and all obligations of any Agent hereunder may be
canceled at any time by the Agents. Notice of such cancelation
shall be given to the Company in writing or by telephone or
telecopier confirmed in writing.
The documents required to be delivered by this
Section 5 shall be delivered at the office of Cravath, Swaine &
Moore, counsel for the Agents, at Worldwide Plaza, 825 Eighth
Avenue, New York, New York, on the Execution Date.
6. Conditions to the Obligations of a Purchaser. The
obligations of a Purchaser to purchase any Notes will be subject
to the accuracy of the representations and warranties on the part
of the Company herein as of the date of the related Terms
Agreement and as of the Closing Date for such Notes, to the
performance and observance by the Company of all covenants and
agreements herein contained on its part to be performed and
observed and to the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or
threatened.
(b) To the extent agreed to between the Company and
the Purchaser in a Terms Agreement, the Purchaser shall have
received, appropriately updated, (i) a certificate of the
Company, dated as of the Closing Date, to the effect set
forth in Section 5(e) (except that references to the
Prospectus shall be to the Prospectus as supplemented as of
the date of such Terms Agreement), (ii) the opinion of M.
Richard Warner, General Counsel of the Company, dated as of
the Closing Date, to the effect set forth in Section 5(b),
(iii) the opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, counsel for the Company, dated as of the Closing Date,
to the effect set forth in Section 5(c), (iv) the opinion
of Cravath, Swaine & Moore, counsel for the Purchaser, dated
as of the Closing Date, to the effect set forth in Section
5(d), and (v) letter of Ernst & Young LLP, independent
accountants for the Company, dated as of the Closing Date,
to the effect set forth in Section 5(f).
(c) Prior to the Closing Date, the Company shall have
furnished to the Purchaser such further information,
certificates and documents as the Purchaser may reasonably
request.
If any of the conditions specified in this Section 6
shall not have been fulfilled in all material respects when and
as provided in this Agreement and the applicable Terms Agreement,
or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement or such Terms Agreement and required
to be delivered to the Purchaser pursuant to the terms hereof and
thereof shall not be in all material respects reasonably
satisfactory in form and substance to the Purchaser and its
counsel, such Terms Agreement and all obligations of the
Purchaser thereunder and with respect to the Notes subject
thereto may be canceled at, or at any time prior to, the
respective Closing Date by the Purchaser. Notice of such
cancelation shall be given to the Company in writing or by
telephone or telecopier confirmed in writing.
7. Right of Person Who Agreed to Purchase to Refuse to
Purchase. (a) The Company agrees that any person who has agreed
to purchase and pay for any Note pursuant to a solicitation by
any of the Agents shall have the right to refuse to purchase such
Note if, at the Closing Date therefor, any condition set forth in
Section 5 or 6, as applicable, shall not be satisfied.
(b) The Company agrees that any person who has agreed
to purchase and pay for any Note pursuant to a solicitation by
any of the Agents shall have the right to refuse to purchase such
Note if, subsequent to the agreement to purchase such Note, any
change, condition or development specified in any of
Sections 9(b)(i) through (v) shall have occurred (with the
judgment of the Agent which presented the offer to purchase such
Note being substituted for any judgment of a Purchaser required
therein) the effect of which is, in the judgment of the Agent
which presented the offer to purchase such Note, so material and
adverse as to make it impractical or inadvisable to proceed with
the sale and delivery of such Note (it being understood that
under no circumstance shall any such Agent have any duty or
obligation to the Company or to any such person to exercise the
judgment permitted to be exercised under this Section 7(b) and
Section 9(b)).
8. Indemnification and Contribution. (a) The Company
agrees to indemnify and hold harmless each of you, the directors,
officers, employees and agents of each of you and each person who
controls each of you within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which you, they or any of you
or them may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the
registration of the Securities as originally filed or in any
amendment thereof, or in the Prospectus or any preliminary Pros-
pectus, or in any amendment thereof or supplement thereto, or
arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances when made, not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by any of you
specifically for inclusion therein and, provided, further, that
the foregoing indemnity agreement with respect to any preliminary
Prospectus shall not inure to the benefit of any Agent, the
directors, partners, officers, employees and agents of each Agent
and each person who controls such Agent within the meaning of
either the Act or the Exchange Act from whom the person asserting
any such loss, claim, damage, liability or action purchased
securities if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given to such person, if
required by law so to have been delivered, at or prior to the
written confirmation of the sale of Securities to such person,
and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such loss, claim, damage,
liability or action. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each of you agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who
signs the Registration Statement and each person who controls the
Company within the meaning of either the Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company to
you, but only with reference to written information relating to
such of you furnished to the Company by such of you specifically
for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any
liability which you may otherwise have. The Company acknowledges
that the statements set forth in the last paragraph of the cover
page, and under the heading "Plan of Distribution", of the
Prospectus Supplement constitute the only information furnished
in writing by any of you for inclusion in the documents referred
to in the foregoing indemnity, and you confirm that such state-
ments are correct.
(c) Promptly after receipt by an indemnified party
under this Section 8 of notice of the commencement of any action,
such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 8,
notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b)
above unless and to the extent it did not otherwise learn of such
action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b)
above. In case any such action is brought against any
indemnified party, it shall notify the indemnifying party of the
commencement thereof, and the indemnifying party shall be
entitled to appoint counsel of the indemnifying party's choice at
the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible
for the fees and expenses of any separate counsel retained by the
indemnified party or parties except as set forth below); provid-
ed, however, that such counsel shall be reasonably satisfactory
to the indemnified party. Notwithstanding the indemnifying
party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to
employ separate counsel (including local counsel), which in the
case of either (i) or (ii) below shall be reasonably satisfactory
to the indemnified party, and the indemnifying party shall bear
the reasonable fees, costs and expenses of such separate counsel
if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with
an actual conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which
are different from or additional to those available to the
indemnifying party. (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after
notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party; provided,
however that in no event shall the indemnifying party be liable
for legal fees or expenses of more than one primary firm
representing the indemnified parties or more than one local
counsel in each state or jurisdiction in which an action in which
indemnification is available has been brought for all such Agents
and controlling persons, which firms should be designated in
writing by Salomon Brothers Inc and shall be reasonably
satisfactory to the Company. An indemnifying party will not,
without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties
are actual or potential parties to such claim or action) unless
such settlement, compromise or consent includes an unconditional
release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in
paragraph (a) or (b) of this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party for any
reason, the Company and each of you severally agree to contribute
to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively
"Losses") to which the Company and one or more of you may be
subject in such proportion as is appropriate to reflect the
relative benefits received by the Company and by each of you from
the offering of the Notes from which such Losses arise; provided,
however, that in no case shall any of you be responsible for any
amount in excess of the commissions received by such of you in
connection with the sale of Notes from which such Losses arise
(or, in the case of Notes sold pursuant to a Terms Agreement, the
aggregate commissions that would have been received by such of
you if such commissions had been payable). If the allocation
provided by the immediately preceding sentence is unavailable for
any reason, the Company and each of you severally shall
contribute in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of the
Company and of each of you in connection with the statements or
omissions which resulted in such Losses as well as any other
relevant equitable considerations. Benefits received by the
Company shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses) of the Notes from
which such Losses arise, and benefits received by each of you
shall be deemed to be equal to the total commissions received by
such of you in connection with the sale of Notes from which such
Losses arise (or, in the case of Notes sold pursuant to a Terms
Agreement, the aggregate commissions that would have been
received by such of you if such commissions had been payable).
Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information
provided by the Company or any of you. The Company and each of
you agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions
of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, each person who controls any of you within the
meaning of the Act or the Exchange Act and each director,
officer, employee and agent of any of you shall have the same
rights to contribution as you and each person who controls the
Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the
Registration Statement and each director of the Company shall
have the same rights to contribution as the Company, subject in
each case to the applicable terms and conditions of this
paragraph (d).
9. Termination. (a) This Agreement will continue in
effect until terminated as provided in this Section 9. This
Agreement may be terminated either by the Company as to any Agent
or by any of you insofar as this Agreement relates to any Agent,
by giving written notice of such termination to such Agent or the
Company, as the case may be. This Agreement shall so terminate
at the close of business on the first business day following the
receipt of such notice by the party to whom such notice is given.
In the event of such termination, no party shall have any
liability to the other party hereto, except as provided in the
fourth paragraph of Section 2(a), Section 4(h), Section 8 and
Section 10.
(b) Each Terms Agreement shall be subject to
termination in the absolute discretion of the Purchaser, by
notice given to the Company prior to delivery of any payment for
any Note to be purchased thereunder, if prior to such time
(i) there shall have occurred, subsequent to the agreement to
purchase such Note, any change, or any development involving a
prospective change, in or affecting the business or properties of
the Company and its consolidated subsidiaries taken as a whole
the effect of which is, in the judgment of the Purchaser, so
material and adverse as to make it impractical or inadvisable to
proceed with the offering or delivery of such Note, (ii) there
shall have been, subsequent to the agreement to purchase such
Note, any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the
Act) or any notice given of any intended or potential decrease in
any such rating or of a possible change in any such rating that
does not indicate the direction of the possible change,
(iii) trading of any of the Company's securities shall have been
suspended by the Commission or the New York Stock Exchange or
trading in securities generally on the New York Stock Exchange
shall have been suspended or limited or minimum prices shall have
been established on such Exchange, (iv) a banking moratorium
shall have been declared by either Federal or New York State
authorities or (v) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis the effect
of which on financial markets is such as to make it, in the
judgment of the Purchaser, impracticable or inadvisable to
proceed with the offering or delivery of such Notes as
contemplated by the Prospectus (exclusive of any supplement
thereto).
10. Survival of Certain Provisions. The respective
agreements, representations, warranties, indemnities and other
statements of the Company or its officers and of you set forth in
or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of
you or the Company or any of the directors, officers, employees,
agents or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the Notes. The
provisions of Sections 4(h) and 8 hereof shall survive the
termination or cancelation of this Agreement. The provisions of
this Agreement (including without limitation Section 7 hereof)
applicable to any purchase of a Note for which an agreement to
purchase exists prior to the termination hereof shall survive any
termination of this Agreement. [If at the time of termination of
this Agreement any Purchaser shall own any Notes with the
intention of selling them, the provisions of Section 4 shall
remain in effect until such Notes are sold by the Purchaser.]
11. Notices. All communications hereunder will be in
writing and effective only on receipt, and, if sent to any of
you, will be mailed, delivered or telecopied and confirmed to
such of you, at the address specified in Schedule I hereto; or,
if sent to the Company, will be mailed, delivered or telecopied
and confirmed to it at 303 South Temple Drive, Diboll, TX 75941,
facsimile number [ 409-829-3333], attention of the General
Counsel.
12. Amendments. This Agreement may be amended or
supplemented if, but only if, such amendment or supplement is in
writing and is signed by the Company and each Agent; providedthat
the Company may from time to time, on seven days prior
written notice to the Agents but without the consent of any
Agent, amend this Agreement to add as a party hereto one or more
additional firms registered under the Exchange Act, whereupon
each such firm shall become an Agent hereunder on the same terms
and conditions as the other Agents that are parties hereto. The
Agents shall sign any amendment or supplement giving effect to
the addition of any such firm as an Agent under this Agreement.
13. Successors. This Agreement will inure to the
benefit of and be binding upon the parties hereto, their
respective successors, the directors, officers, employees, agents
and controlling persons referred to in Section 8 hereof and, to
the extent provided in Section 7, any person who has agreed to
purchase Notes, and no other person will have any right or
obligation hereunder.
14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW.
If the foregoing is in accordance with your under-
standing of our agreement, please sign and return to us the enclosed
duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement among the Company
and you.
Very truly yours,
TEMPLE-INLAND INC.
By: ___________________________
Name: David H. Dolben
Title: Vice President
The foregoing Agreement is
hereby confirmed and accepted
as of the date hereof.
Salomon Brothers Inc
By:
_____________________
Name:
Title:
SBC Warburg Dillon Read Inc.
By:
_____________________
Name:
Title:
SCHEDULE I
Commissions:
The Company agrees to pay each Agent a commission equal to the
following percentage of the principal amount of each Note sold on
an agency basis by such Agent:
Maturity Commission Rate
9 months to less than 12 months .125%
12 months to less than 18 months .150%
18 months to less than 2 years .200%
2 years to less than 3 years .250%
3 years to less than 4 years .350%
4 years to less than 5 years .450%
5 years to less than 6 years .500%
6 years to less than 7 years .550%
7 years to less than 8 years .600%
8 years to less than 9 years .600%
9 years to less than 10 years .600%
10 years to less than 15 years .625%
15 years to less than 20 years .700%
20 years to less than 30 years .750%
30 years and beyond to be negotiated
Unless otherwise specified in the applicable Terms Agreement,
the discount or commission payable to a Purchaser shall be
determined on the basis of the commission schedule set forth above.
Address for Notice to you:
Notices to Salomon Brothers Inc shall be directed to it at
Seven World Trade Center, New York, New York 10048, Attention of
the Medium-Term Note Department.
Notices to SBC Warburg Dillon Read Inc. shall be directed to
it at 677 Washington Boulevard, Stamford, CT 06912, Attention of
A. Peter Foote.
EXHIBIT B
Temple-Inland Inc.
Medium Term Notes
Due More Than Nine Months
from Date of Issue
TERMS AGREEMENT
, 199
Attention:
Subject in all respects to the terms and conditions of the
Selling Agency Agreement (the "Agreement") dated June 2, 1998,
between Salomon Brothers Inc, SBC Warburg Dillon Read Inc., and
you, the undersigned agrees to purchase the following Notes of
Temple-Inland Inc.:
[Add additional terms as may be needed to identify Notes.]
[Specified Currency]:
Aggregate Principal Amount: $
Interest Rate:
Date of Maturity:
Interest Payment Dates:
Regular Record Dates:
Discount or Commission: % of Principal Amount
Purchase Price: % of Principal Amount [plus
accrued interest from
, 199 ]
Purchase Date and Time:
Place for Delivery of Notes
and Payment Therefor:
Method of Payment:
Modification, if any, in
the requirements to
deliver the documents
specified in Section 6(b)
of the Agreement:
Period during which additional
Notes may not be sold pursuant
to Section 4(m) of the Agreement:
[Purchaser]
By:____________________
Accepted:
Temple-Inland Inc.
By:
_______________________
Title:
[Form of Reverse Inquiry Letter]
[Trade Date]
[Dealer]
[Address]
[Address]
Re: $__,000,000 Medium-Term Notes
Pricing Supplement Number:________
Settlement Date:__________________
(See attached Term Sheet)
Dear [Dealer]:
Reference is made to the Selling Agency Agreement dated
_______________, 1998 (the "Agreement") pertaining to up to
$500,000,000 aggregate principal amount of Medium-Term Notes (the
"Notes") to be offered from time to time by Temple-Inland Inc.
(the "Company"). The provisions of the Agreement (a copy of
which has been previously provided to you) are hereby
incorporated by reference and each of the representations and
warranties set forth therein shall be deemed to be made to you as
of the date hereof. Subject to the terms set forth therein, the
Company hereby appoints you as an Agent (as such term is defined
in the Agreement) of the Company for purposes of soliciting one
offer to purchase Notes from the Company containing the terms as
set forth in the above referenced Pricing Supplement. This
appointment is effective as to and extends only to the one
transaction which you are presenting to the Company (see attached
Term Sheet) and the Agreement shall automatically be terminated
as to you upon the earlier to occur of (i) payment made in full
to the Company for the Notes sold pursuant to the offer presented
or (ii) the Company or you determine not to proceed with the
transaction. Upon such termination of the Agreement by the
Company, neither you nor the Company shall have any liability to
the other except as provided in those sections of the Agreement
referenced in Section 10 thereof. You agree to be bound by, and
comply with, all of the provisions of the Agreement applicable to
the Agents thereunder.
*[As a condition precedent to your obligation to consummate
the transaction referred to above, you shall receive the
following: (i) the opinions of counsel, dated __________ [recent
date or most recent periodic update [pursuant to Sections ___
and ____ of the Agreement; (ii) an Officer's Certificate dated
_______ [recent date], pursuant to Section ___ of the Agreement;
(iii) a letter from Ernst & Young LLP dated ________ [most
recent date or most recent periodic update] delivered pursuant
to Section ___ of the Agreement; and (iv) a copy of the
resolutions adopted by the Company with respect to the Form of
Note evidencing the securities described in the above referenced
Pricing Supplement, certified by an appropriate officer of the
Company.]
This letter shall be governed by and construed in accordance
with the laws of the State of New York.
If the foregoing is in accordance with your understanding,
please sign and return to us two counterparts hereof, whereupon
this letter shall constitute a binding agreement between the
Company and you in accordance with its terms.
Very truly yours,
By:_____________________________
Name:
Title:
Agreed and Accepted as of the date hereof:
[Dealer]
By:________________________
Name:
Title:
*This language is to be negotiated between the Issuer and the
Reverse Inquiry Agent at the time of the trade.
EXHIBIT A
TEMPLE-INLAND INC.
Medium-Term Note Administrative Procedures
June 2, 1998
The Medium-Term Notes, Series F, Due from Nine Months
or More from Date of Issue (the "Notes") of Temple-Inland Inc.
(the "Company") are to be offered on a continuing basis. Salomon
Brothers Inc and SBC Warburg Dillon Read Inc., as agents (each an
"Agent"), have agreed to solicit purchases of Notes issued in
fully registered form. The Agents will not be obligated to
purchase Notes for their own account. The Notes are being sold
pursuant to a Selling Agency Agreement between the Company and
the agents named therein (including the Agents) dated the date
hereof (the "Agency Agreement"). The Notes will rank equally
with all other unsecured and unsubordinated debt of the Company
and have been registered with the Securities and Exchange
Commission (the "Commission"). The Notes will be issued under an
indenture dated as of September 1, 1986, as amended by the First
Supplemental Indenture, dated as of April 15, 1988, the Second
Supplemental Indenture, dated as of December 27, 1990, and the
Third Supplemental Indenture, dated as of May 9, 1991 (such
indenture, as amended, the "Indenture"), between the Company and
The Chase Manhattan Bank, formerly known as Chemical Bank, as
trustee (the "Trustee").
The Agency Agreement provides that Notes may also be
purchased by an Agent acting solely as principal and not as
agent. In the event of any such purchase, the functions of both
the Agent and the beneficial owner under the administrative
procedures set forth below shall be performed by such Agent
acting solely as principal, unless otherwise agreed to between
the Company and such Agent acting as principal.
Each Note will be represented by either a Global
Security (as defined hereinafter) delivered to The Chase
Manhattan Bank ("Chase), as agent for The Depository Trust
Company ("DTC"), and recorded in the book-entry system maintained
by DTC (a "Book-Entry Note") or a certificate delivered to the
Holder thereof or a Person designated by such Holder (a
"Certificated Note"). An owner of a Book-Entry Note will not be
entitled to receive a certificate representing such Note.
The procedures to be followed during, and the specific
terms of, the solicitation of orders by the Agents and the sale
as a result thereof by the Company are explained below.
Administrative and record-keeping responsibilities will be
handled for the Company by its Treasurer. The Company will
advise the Agents and the Trustee in writing of those persons
handling administrative responsibilities with whom the Agents and
the Trustee are to communicate regarding orders to purchase Notes
and the details of their delivery.
Administrative procedures and specific terms of the
offering are explained below. Book-Entry Notes will be issued in
accordance with the administrative procedures set forth in Part I
hereof, as adjusted in accordance with changes in DTC's operating
requirements, and Certificated Notes will be issued in accordance
with the administrative procedures set forth in Part II hereof.
Unless otherwise defined herein, terms defined in the Indenture
and the Notes shall be used herein as therein defined. Notes for
which interest is calculated on the basis of a fixed interest
rate, which may be zero, are referred to herein as "Fixed Rate
Notes". Notes for which interest is calculated on the basis of a
floating interest rate are referred to herein as "Floating Rate
Notes". To the extent the procedures set forth below conflict
with the provisions of the Notes, the Indenture, DTC's operating
requirements or the Agency Agreement, the relevant provisions of
the Notes, the Indenture, DTC's operating requirements and the
Agency Agreement shall control.
PART I
Administrative Procedures for
Book-Entry Notes
In connection with the qualification of the Book-Entry
Notes for eligibility in the book-entry system maintained by DTC,
Chase will perform the custodial, document control and
administrative functions described below, in accordance with its
respective obligations under a Letter of Representations from the
Company and Chase to DTC dated as of the date hereof and a
Medium-Term Note Certificate Agreement between Chase and DTC and
its obligations as a participant in DTC, including DTC's Same-Day
Funds Settlement system ("SDFS").
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-
Entry Notes, the Company will issue a
single global security in fully registered
form without coupons (a "Global Security")
representing up to $200,000,000 principal
amount of all such Book-Entry Notes that
have the same original issue date, original
issue discount provisions, if any, Interest
Payment Dates, Regular Record Dates,
Interest Payment Period, redemption,
repayment and extension provisions, if any,
Maturity Date, and, in the case of Fixed
Rate Notes, interest rate, or, in the case
of Floating Rate Notes, initial interest
rate, Base Rate, Index Maturity, Interest
Reset Period, Interest Reset Dates, Spread
or Spread Multiplier, if any, minimum
interest rate, if any, and maximum interest
rate, if any (collectively, the "Terms").
Each Global Security will be dated and is-
sued as of the date of its authentication
by the Trustee. Each Global Security will
bear an original issue date, which will be
(i) with respect to an original Global
Security (or any portion thereof), the
original issue date specified in such
Global Security and (ii) following a
consolidation of Global Securities, with
respect to the Global Security resulting
from such consolidation, the most recent
Interest Payment Date to which interest has
been paid or duly provided for on the
predecessor Global Securities, regardless
of the date of authentication of such
resulting Global Security. No Global Secu-
rity will represent (i) both Fixed Rate and
Floating Rate Book-Entry Notes or (ii) any
Certificated Note.
Identification The Company has arranged with the
Numbers: CUSIP Service Bureau of Standard & Poor's
Corporation (the "CUSIP Service Bureau")
for the reservation of a series of CUSIP
numbers, which series consists of
approximately 900 CUSIP numbers and relates
to Global Securities representing Book-
Entry Notes and book-entry medium-term
notes issued by the Company with other
series designations. The Company has
obtained from the CUSIP Service Bureau, and
has delivered to Chase and DTC, a written
list of such reserved CUSIP numbers. The
Company will assign CUSIP numbers to Global
Securities as described below under Settle-
ment Procedure "B". DTC will notify the
CUSIP Service Bureau periodically of the
CUSIP numbers that the Company has assigned
to Global Securities. Chase will notify
the Company at any time when fewer than 100
of the reserved CUSIP numbers remain unas-
signed to Global Securities, and, if it
deems necessary, the Company will reserve
additional CUSIP numbers for assignment to
Global Securities. Upon obtaining such
additional CUSIP numbers, the Company shall
deliver a list of such additional CUSIP
numbers to Chase and DTC.
Registration: Global Securities will be issued only in
fully registered form without coupons.
Each Global Security will be registered in
the name of CEDE & CO., as nominee for DTC,
on the securities register for the Notes
maintained under the Indenture. The
beneficial owner of a Book-Entry Note (or
one or more indirect participants in DTC
designated by such owner) will designate
one or more participants in DTC (with
respect to such Book-Entry Note, the
"Participants") to act as agent or agents
for such owner in connection with the book-
entry system maintained by DTC, and DTC
will record in book-entry form, in
accordance with instructions provided by
such Participants, a credit balance with
respect to such beneficial owner in such
Book-Entry Note in the account of such
Participants. The ownership interest of
such beneficial owner (or such participant)
in such Book-Entry Note will be recorded
through the records of such Participants or
through the separate records of such
Participants and one or more indirect
participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
accomplished by book entries made by DTC
and, in turn, by Participants (and in
certain cases, one or more indirect
participants in DTC) acting on behalf of
beneficial transferors and transferees of
such Note.
Exchanges: Chase may deliver to DTC and the CUSIP
Service Bureau at any time a written notice
of consolidation (a copy of which shall be
attached to the resulting Global Security
described below) specifying (i) the CUSIP
numbers of two or more outstanding Global
Securities that represent (A) Fixed Rate
Book-Entry Notes having the same Terms and
for which interest has been paid to the
same date or (B) Floating Rate Book-Entry
Notes having the same Terms and for which
interest has been paid to the same date,
(ii) a date, occurring at least thirty days
after such written notice is delivered and
at least thirty days before the next In-
terest Payment Date for such Book-Entry
Notes, on which such Global Securities
shall be exchanged for a single replacement
Global Security and (iii) a new CUSIP
number, obtained from the Company, to be
assigned to such replacement Global
Security. Upon receipt of such a notice,
DTC will send to its participants
(including Chase) a written reorganization
notice to the effect that such exchange
will occur on such date. Prior to the
specified exchange date, Chase will deliver
to the CUSIP Service Bureau a written
notice setting forth such exchange date and
such new CUSIP number and stating that, as
of such exchange date, the CUSIP numbers of
the Global Securities to be exchanged will
no longer be valid. On the specified ex-
change date, Chase will exchange such
Global Securities for a single Global
Security bearing the new CUSIP number and
the CUSIP numbers of the exchanged Global
Securities will, in accordance with CUSIP
Service Bureau procedures, be canceled and
not immediately reassigned. Not-
withstanding the foregoing, if the Global
Securities to be exchanged exceed
$200,000,000 in aggregate principal amount,
one Global Security will be authenticated
and issued to represent each $200,000,000
of principal amount of the exchanged Global
Securities and an additional Global
Security will be authenticated and issued
to represent any remaining principal amount
of such Global Securities (see
"Denominations" below).
Maturities: Each Book-Entry Note will mature on a date
not less than nine months after the
Original Issue Date for such Note. A
Floating Rate Book-Entry Note will mature
only on an Interest Payment Date for such
Note. Any Note denominated in Japanese yen
will mature on a date not less than one
year from the Original Issue Date (as
defined below) for such Note. Any Note
denominated in Pounds Sterling will mature
on a date not less than one year, nor more
than five years, after its Original Issue
Date.
Denominations: Book-Entry Notes will be issued in
principal amounts of $1,000 or any amount
in excess thereof that is an integral
multiple of $1,000. Global Securities will
be denominated in principal amounts not in
excess of $200,000,000. If one or more
Book-Entry Notes having an aggregate prin-
cipal amount in excess of $200,000,000
would, but for the preceding sentence, be
represented by a single Global Security,
then one Global Security will be
authenticated and issued to represent each
$200,000,000 principal amount of such Book-
Entry Note or Notes and an additional
Global Security will be authenticated and
issued to represent any remaining principal
amount of such Book-Entry Note or Notes.
In such a case, each of the Global
Securities representing such Book-Entry
Note or Notes shall be assigned the same
CUSIP number.
Interest: General. Interest, if any, on each Book-
Entry Note will accrue from the original
issue date for the first interest period or
the last date to which interest has been
paid, if any, for each subsequent interest
period, on the Global Security representing
such Book-Entry Note, and will be calculat-
ed and paid in the manner described in such
Book-Entry Note and in the Prospectus (as
defined in the Agency Agreement), as
supplemented by the applicable Pricing
Supplement. Unless otherwise specified
therein, each payment of interest on a
Book Entry Note will include interest
accrued to but excluding the Interest
Payment Date or to but excluding Maturity
(other than a Maturity of a Fixed Rate
BookEntry Note occurring on the 31st day
of a month, in which case such payment of
interest will include interest accrued to
but excluding the 30th day of such month).
Interest payable at the Maturity of a Book-
Entry Note will be payable to the Person to
whom the principal of such Note is payable.
Standard & Poor's Corporation will use the
information received in the pending deposit
message described under Settlement Proce-
dure "C" below in order to include the
amount of any interest payable and certain
other information regarding the related
Global Security in the appropriate (daily
or weekly) bond report published by
Standard & Poor's Corporation.
Regular Record Dates. The Regular Record
Date with respect to any Interest Payment
Date for Floating Rate Notes shall be the
date fifteen calendar days immediately pre-
ceding such Interest Payment Date and, for
Fixed Rate Notes, shall be November 15 or
May 15 (in each case, whether or not a
Business Date).
Interest Payment Dates on Fixed Rate Book-
Entry Notes. Unless otherwise specified
pursuant to Settlement Procedure "A" below,
interest payments on Fixed Rate Book-Entry
Notes will be made semiannually on June 1
and December 1 of each year and at Matu-
rity; provided, however, that if an
Interest Payment Date for a Fixed Rate
Book-Entry Note is not a Business Day, the
payment due on such day shall be made on
the next succeeding Business Day and no
interest shall accrue on such payment for
the period from and after such Interest
Payment Date; provided further, that in the
case of a Fixed Rate Book-Entry Note issued
between a Regular Record Date and an
Interest Payment Date, the first interest
payment will be made on the Interest
Payment Date following the next succeeding
Regular Record Date.
Interest Payment Dates on Floating Rate
Book-Entry Notes. Interest payments will
be made on Floating Rate Book-Entry Notes
monthly, quarterly, semi-annually or
annually. Unless otherwise agreed upon,
interest will be payable, in the case of
Floating Rate Book-Entry Notes with a
monthly Interest Payment Period, on the
third Wednesday of each month; with a quar-
terly Interest Payment Period, on the third
Wednesday of March, June, September and
December of each year; with a semi-annual
Interest Payment Period on the third
Wednesday of the two months specified
pursuant to Settlement Procedure "A" below;
and with an annual Interest Payment Period,
on the third Wednesday of the month spec-
ified pursuant to Settlement Procedure "A"
below; provided, however, that if an
Interest Payment Date for a Floating Rate
Book-Entry Note would otherwise be a day
that is not a Business Day with respect to
such Floating Rate Book-Entry Note, such
Interest Payment Date will be the next
succeeding Business Day with respect to
such Floating Rate Book-Entry Note, except
in the case of a Floating Rate Book-Entry
Note for which the Base Rate is LIBOR, if
such Business Day is in the next succeeding
calendar month, such Interest Payment Date
will be the immediately preceding Business
Day; and provided further, that in the case
of a Floating Rate Book-Entry Note issued
between a Regular Record Date and an
Interest Payment Date, the first interest
payment will be made on the Interest
Payment Date following the next succeeding
Regular Record Date.
Notice of Interest Payment and Regular
Record Dates. On the first Business Day of
January, April, July and October of each
year, Chase will deliver to the Company and
DTC a written list of Regular Record Dates
and Interest Payment Dates that will occur
with respect to Book-Entry Notes during the
six-month period beginning on such first
Business Day. Promptly after each Interest
Determination Date for Floating Rate Book-
Entry Notes, Chase, as Calculation Agent,
will notify Standard & Poor's Corporation
of the interest rates determined on such
Interest Determination Date.
Calculation of Fixed Rate Book-Entry Notes. Interest
Interest: on Fixed Rate Book-Entry Notes (including
interest for partial periods) will be
calculated on the basis of a 360-day year
of twelve 30-day months.
Floating Rate Book-Entry Notes. Interest
rates on Floating Rate Book-Entry Notes
will be determined as set forth in the form
of Notes. Interest on Floating Rate Book-
Entry Notes, except as otherwise set forth
therein, will be calculated on the basis of
actual days elapsed and a year of 360 days,
except that in the case of a Floating Rate
Book-Entry Note for which the Base Rate is
Treasury Rate or CMT Rate, interest will be
calculated on the basis of the actual
number of days in the year.
Payments of Payment of Interest Only. Promptly
Principal and after each Regular Record Date,
Interest Chase will deliver to the Company
and DTC a written notice setting forth, by
CUSIP number, the amount of interest to be
paid on each Global Security (if then
ascertainable) on the following Interest
Payment Date (other than an Interest
Payment Date coinciding with Maturity) and
the total of such amounts. DTC will
confirm the amount payable on each Global
Security on such Interest Payment Date by
reference to the appropriate (daily or
weekly) bond reports published by
Standard & Poor's Corporation. The Company
will pay to Chase, as paying agent, the
total amount of interest due on such
Interest Payment Date (other than at
Maturity), and Chase will pay such amount
to DTC, at the times and in the manner set
forth below under "Manner of Payment".
Payments at Maturity. On or about the
first Business Day of each month, Chase
will deliver to the Company and DTC a
written list of principal and interest (if
then ascertainable) to be paid on each
Global Security maturing (on a Maturity or
Redemption Date or otherwise) in the
following month. Chase, the Company and
DTC will confirm the amounts of such
principal and interest payments with
respect to each such Global Security on or
about the fifth Business Day preceding the
Maturity of such Global Security. On or
before Maturity, the Company will pay to
Chase, as paying agent, the principal
amount of such Global Security, together
with interest due at such Maturity. Chase
will pay such amount to DTC at the times
and in the manner set forth below under
"Manner of Payment". If any Maturity of a
Global Security representing Book-Entry
Notes is not a Business Day, the payment
due on such day shall be made on the next
succeeding Business Day and no interest
shall accrue on such payment for the period
from and after such Maturity. Promptly
after payment to DTC of the principal and
interest due at Maturity of such Global
Security, Chase will cancel such Global
Security in accordance with the Indenture
and so advise the Company. If the Maturity
of a Book-Entry Note is not a Business Day,
the payment due on such day shall be made
on the next succeeding Business Day and no
interest shall accrue on such payment for
the period from and after such Maturity.
Manner of Payment. The total amount of any
principal and interest due on Global
Securities on any Interest Payment Date or
at Maturity shall be paid by the Company to
Chase in immediately available funds no
later than 9:30 A.M. (New York City time)
on such date. The Company will make such
payment on such Global Securities by
instructing Chase to withdraw funds from an
account maintained by the Company at Chase
or by wire transfer to Chase. The Company
will confirm any such instructions in writ-
ing to Chase. Prior to 10 A.M. (New York
City time) on the date of Maturity or as
soon as possible thereafter, Chase will pay
by separate wire transfer (using Fedwire
message entry instructions in a form
previously specified by DTC) to an account
at the Federal Reserve Bank of New York
previously specified by DTC, in funds
available for immediate use by DTC, each
payment of principal (together with
interest thereon) due on a Global Security
on such date. On each Interest Payment
Date (other than at Maturity), interest
payments shall be made to DTC, in funds
available for immediate use by DTC, in
accordance with existing arrangements
between Chase and DTC. On each such date,
DTC will pay, in accordance with its SDFS
operating procedures then in effect, such
amounts in funds available for immediate
use to the respective Participants in whose
names the Book-Entry Notes represented by
such Global Securities are recorded in the
book-entry system maintained by DTC. None
of the Company (as issuer or as paying
agent) or Chase shall have any direct
responsibility or liability for the payment
by DTC to such Participants of the prin-
cipal of and interest on the Book-Entry
Notes.
Withholding Taxes. The amount of any taxes
required under applicable law to be
withheld from any interest payment on a
Book-Entry Note will be determined and
withheld by the Participant, indirect
participant in DTC or other Person
responsible for forwarding payments and
materials directly to the beneficial owner
of such Note.
Procedures Company Notice to Trustee Regarding
Upon Company's Exercise of Optional Reset. Not
Exercise of less than 50 or more than 60 days
Optional Reset before an Optional Reset Date as
or Optional set forth in a Book-Entry Note, the
Extension of Company will notify Chase whether it is
Maturity: exercising its option to reset the Interest
Rate or Spread or Spread Multiplier, as the
case may be, for such Book-Entry Note, and
if so, (i) the new Interest Rate or Spread
or Spread Multiplier, as the case may be,
for such Book-Entry Note during the period
from such Optional Reset Date to the next
Optional Reset Date as set forth in such
Book-Entry Note or, if there is no such
next Optional Reset Date, to the Stated
Maturity of such Book-Entry Note (the
"Subsequent Interest Period"); and (ii) the
provisions, if any, for redemption of such
Book-Entry Note during such Subsequent
Interest Period, including the date or
dates on which or the period or periods
during which such redemption may occur
during such Subsequent Interest Period.
Company Notice to Trustee Regarding
Exercise of Optional Extension of Maturity.
If the Company elects to exercise an
option, as set forth in a Book-Entry Note,
to extend the Stated Maturity of such Note,
it will so notify Chase no less than 50 or
more than 60 days before the Stated
Maturity of such Book-Entry Note, and will
further indicate (i) the new Stated
Maturity; (ii) the Interest Rate or Spread
or Spread Multiplier, as the case may be,
and (iii) the provisions, if any, for
redemption of such Book-Entry Note during
such extension period, including the date
or dates on which or the period or periods
during which such redemption may occur
during such extension period.
Trustee Notice to DTC Regarding Company's
Exercise of Optional Extension or Reset.
Upon receipt of notice from the Company
regarding the Company's exercise of either
an optional extension of maturity or an
optional reset, Chase will hand-deliver a
notice to DTC not less than 40 days before
the Optional Reset Date (in which case a
"Reset Notice") or the Stated Maturity (in
which case an "Extension Notice"), as the
case may be, which Reset Notice or
Extension Notice shall identify such Book-
Entry Note by CUSIP number and shall
contain the information required by the
terms of the Book-Entry Note.
Trustee Notice to Company Regarding Option
to be Repaid. If, after receipt of either
a Reset Notice or an Extension Notice, DTC
exercises the option for repayment by
tendering the Global Security representing
the Book-Entry Note to be repaid as set
forth in such Note, Chase shall give notice
to the Company not less than 22 days before
the Optional Reset Date or the old Stated
Maturity, as the case may be, of the
principal amount of Book-Entry Notes to be
repaid on such Optional Reset Date or old
Stated Maturity, as the case may be.
Company Notice Regarding New Interest Rate
or New Spread or Spread Multiplier. If the
Company elects to revoke the Interest Rate
or Spread or Spread Multiplier and
establish a higher interest rate or Spread
or Spread Multiplier for an Optional Reset
Period or extension period, as the case may
be, it shall, not less than 20 days before
such Optional Reset Date or old Stated
Maturity, so notify Chase. Chase will
immediately thereafter notify DTC of the
new Interest Rate or Spread or Spread
Multiplier applicable to such Book-Entry
Note.
Trustee Notice to Company Regarding DTC
Revocation of Option to be Repaid. If,
after DTC has tendered any Book-Entry Notes
for repayment pursuant to an Extension
Notice or an Optional Reset Notice, DTC
then revokes such tender for repayment,
Chase shall give notice to the Company not
less than five days prior to the Stated
Maturity or Optional Reset Date, as the
case may be, of such revocation and of the
principal amount of Book-Entry Notes for
which tender for repayment has been
revoked.
Deposit of Repayment Price. On or before
any old Stated Maturity where the Maturity
has been extended, and on or before an
Optional Reset Date, the Company shall
deposit with Chase an amount of money
sufficient to pay the principal amount,
plus interest accrued to such old Stated
Maturity or Optional Reset Date, as the
case may be, for all the Book-Entry Notes
or portions thereof which are to be repaid
on such old Stated Maturity or Optional
Reset Date, as the case may be. Chase
will use such money to repay such Book-
Entry Notes pursuant to the terms set forth
in such Notes.
Procedures Company Notice to Trustee Regarding
Upon Company's Exercise of Optional Redemption.
Exercise of At least 45 days prior to the date on
Optional which it intends to redeem a Book-
Redemption: Entry Note, the Company will notify Chase
that it is exercising such option with
respect to such Book-Entry Note on such
date.
Trustee Notice to DTC Regarding Company's
Exercise of Optional Redemption. After
receipt of notice that the Company is
exercising its option to redeem a Book-
Entry Note, Chase will, at least 30 days
before the redemption date for such Book-
Entry Note, hand deliver to DTC a notice
identifying such Book-Entry Note by CUSIP
number and informing DTC of the Company's
exercise of such option with respect to
such Book-Entry Note.
Deposit of Redemption Price. On or before
any redemption date, the Company shall
deposit with Chase an amount of money
sufficient to pay the redemption price,
plus interest accrued to such redemption
date, for all the Book-Entry Notes or
portions thereof which are to be repaid on
such redemption date. Chase will use such
money to repay such Book-Entry Notes
pursuant to the terms set forth in such
Notes.
Payments of Trustee Notice to Company of Option
Principal and to be Repaid. Upon receipt of notice
Interest upon of exercise of the option for
Exercise of repayment and the Global Securities
Optional Repay-representing the Book-Entry Notes so
ment (Except to be repaid as set forth in such
Pursuant to Notes, Chase shall (unless such
Company's notice was received pursuant to the
Exercise of Company's exercise of an optional reset or
Optional Reset an optional extension of maturity, in each
or Optional of which cases the relevant procedures set
Extension): forth above are to be followed) give notice
to the Company not less than 20 days prior
to each Optional Repayment Date of such
Optional Repayment Date and of the
principal amount of Book-Entry Notes to be
repaid on such Optional Repayment Date.
Deposit of Repayment Price. On or prior to
any Optional Repayment Date, the Company
shall deposit with Chase an amount of
money sufficient to pay the optional
repayment price, and accrued interest
thereon to such date, of all the Book-Entry
Notes or portions thereof which are to be
repaid on such date. Chase will use such
money to repay such Book-Entry Notes
pursuant to the terms set forth in such
Notes.
Procedure for The Company and the Agents will
Rate Setting discuss from time to time the
and Posting: aggregate principal amount of, the
issuance price of, and the interest rates
to be borne by, Book-Entry Notes that may
be sold as a result of the solicitation of
orders by the Agents. If the Company
decides to set prices of, and rates borne
by, any Book-Entry Notes in respect of
which the Agents are to solicit orders (the
setting of such prices and rates to be
referred to herein as "posting") or if the
Company decides to change prices or rates
previously posted by it, it will promptly
advise the Agents of the prices and rates
to be posted.
Acceptance and Unless otherwise instructed by the
Rejection of Company, each Agent will advise the
Orders: Company promptly by telephone of all orders
to purchase Book-Entry Notes received by
such Agent, other than those rejected by it
in whole or in part in the reasonable
exercise of its discretion. Unless
otherwise agreed by the Company and the
Agents, the Company has the right to accept
orders to purchase Book-Entry Notes and may
reject any such orders in whole or in part.
Preparation of If any order to purchase a Book-Entry
Pricing Note is accepted by or on behalf of
Supplement: the Company, the Company will prepare a
pricing supplement (a "Pricing Supplement")
reflecting the applicable interest rates
and other terms of such Book-Entry Note and
will arrange to have ten copies thereof
filed with the Commission in accordance
with the applicable paragraph of
Rule 424(b) under the Act and will supply
at least ten copies thereof (and additional
copies if requested) to the Agent which
presented the order (the "Presenting
Agent"). The Presenting Agent will cause a
Prospectus and Pricing Supplement to be
delivered to the purchaser of such Book-
Entry Note.
In each instance that a Pricing Supplement
is prepared, the Presenting Agent will
affix the Pricing Supplement to Pros-
pectuses prior to their use. Outdated
Pricing Supplements (other than those
retained for files) will be destroyed.
Suspension of The Company reserves the right, in its
Solicitation; sole discretion, to instruct the
Amendment or Agents to suspend at any time, for any
Supplement: period of time or permanently, the solici-
tation of orders to purchase Book-Entry
Notes. Upon receipt of such instructions,
the Agents will forthwith suspend
solicitation until such time as the Company
has advised them that such solicitation may
be resumed.
In the event that at the time the Company
suspends solicitation of purchases there
shall be any orders outstanding for
settlement, the Company will promptly
advise the Agents and Chase whether such
orders may be settled and whether copies of
the Prospectus as in effect at the time of
the suspension, together with the appro-
priate Pricing Supplement, may be delivered
in connection with the settlement of such
orders. The Company will have the sole
responsibility for such decision and for
any arrangements that may be made in the
event that the Company determines that such
orders may not be settled or that copies of
such Prospectus may not be so delivered.
If the Company decides to amend or
supplement the Registration Statement (as
defined in the Agency Agreement) or the
Prospectus, it will promptly advise the
Agents and furnish the Agents with the
proposed amendment or supplement and with
such certificates and opinions as are
required, all to the extent required by and
in accordance with the terms of the Agency
Agreement. Subject to the provisions of
the Agency Agreement, the Company may file
with the Commission any such supplement to
the Prospectus relating to the Notes. The
Company will provide the Agents and Chase
with copies of any such supplement, and
confirm to the Agents that such supplement
has been filed with the Commission pursuant
to the applicable paragraph of Rule 424(b).
Procedures For When the Company has determined to Rate
Changes: change the interest rates of Book-Entry
Notes being offered, it will promptly
advise the Agents and the Agents will
forthwith suspend solicitation of orders.
The Agents will telephone the Company with
recommendations as to the changed interest
rates. At such time as the Company has
advised the Agents of the new interest
rates, the Agents may resume solicitation
of orders. Until such time only "indica-
tions of interest" may be recorded.
Delivery of A copy of the Prospectus and a Pricing
Prospectus: Supplement relating to a Book-Entry Note
must accompany or precede the earliest of
any written offer of such Book-Entry Note,
confirmation of the purchase of such Book-
Entry Note and payment for such Book-Entry
Note by its purchaser. If notice of a
change in the terms of the Book-Entry Notes
is received by the Agents between the time
an order for a Book-Entry Note is placed
and the time written confirmation thereof
is sent by the Presenting Agent to a
customer or his agent, such confirmation
shall be accompanied by a Prospectus and
Pricing Supplement setting forth the terms
in effect when the order was placed.
Subject to "Suspension of Solicitation;
Amendment or Supplement" above, the
Presenting Agent will deliver a Prospectus
and Pricing Supplement as herein described
with respect to each Book-Entry Note sold
by it. The Company will make such delivery
if such Book-Entry Note is sold directly by
the Company to a purchaser (other than an
Agent).
Confirmation: For each order to purchase a Book-Entry
Note solicited by any Agent and accepted by
or on behalf of the Company, the Presenting
Agent will issue a confirmation to the
purchaser, with a copy to the Company,
setting forth the details set forth above
and delivery and payment instructions.
Settlement: The receipt by the Company of immediately
available funds in payment for a Book-Entry
Note and the authentication and issuance of
the Global Security representing such Book-
Entry Note shall constitute "settlement"
with respect to such Book-Entry Note. All
orders accepted by the Company will be
settled on the third Business Day following
the date of sale of such Book-Entry Note
pursuant to the timetable for settlement
set forth below unless the Company and the
purchaser agree to settlement on another
day which shall be no earlier than the next
Business Day following the date of sale.
Settlement Settlement Procedures with regard to
Procedures: each Book-Entry Note sold by the
Company through any Agent, as agent, shall
be as follows:
A. The Presenting Agent will advise the
Company by telephone of the following
settlement information:
1. Principal amount.
2. Maturity Date.
3. In the case of a Fixed Rate Book-
Entry Note, the interest rate or,
in the case of a Floating Rate
Book-Entry Note, the Base Rate,
initial interest rate (if known at
such time), Index Maturity, Inter-
est Reset Period, Interest Reset
Dates, Spread or Spread Multiplier
(if any), Minimum Interest Rate (if
any) and Maximum Interest Rate (if
any).
4. Interest Payment Dates and the
Interest Payment Period.
5. Redemption, repayment and extension
provisions, if any.
6. Settlement date.
7. Price.
8. Presenting Agent's commission,
determined as provided in Section 2
of the Agency Agreement.
9. Whether such Book-Entry Note is
issued at an original issue
discount and, if so, the total
amount of OID, the yield to
maturity and the initial accrual
period OID.
10. All other information needed to
complete a Book-Entry Note.
B. The Company will assign a CUSIP number
to the Global Security representing
such Book-Entry Note and then advise
Chase by telephone (confirmed in
writing at any time on the same date)
or electronic (or facsimile) trans-
mission of the information set forth in
Settlement Procedure "A" above, such
CUSIP number and the name of the
Presenting Agent. The Company will
also notify the Presenting Agent by
telephone of such CUSIP number as soon
as practicable. Each such
communication by the Company shall
constitute a representation and
warranty by the Company to Chase and
the Presenting Agent that (i) such Note
is then, and at the time of issuance
and sale thereof will be, duly
authorized for issuance and sale by the
Company, (ii) such Note, and the Global
Security representing such Note, will
conform with the terms of the Indenture
for such Note, and (iii) upon
authentication and delivery of such
Global Security, the aggregate initial
offering price of all Notes issued
under the Indenture will not exceed the
amount registered pursuant to the
Registration Statement (except for
Book-Entry Notes represented by Global
Securities authenticated and delivered
in exchange for or in lieu of Global
Securities pursuant to the Indenture
and except for Certificated Notes
authenticated and delivered upon
registration of transfer of, in
exchange for, or in lieu of
Certificated Notes pursuant to any such
Section).
C. Chase will enter a pending deposit
message through DTC's Participant
Terminal System providing the following
settlement information to DTC (which
shall route such information to
Standard & Poor's Corporation), the
Presenting Agent and, upon request,
the Trustee:
1. The information set forth in
Settlement Procedure "A".
2. Identification as a Fixed Rate
Book-Entry Note or a Floating Rate
Book-Entry Note.
3. Initial Interest Payment Date for
such Book-Entry Note, number of
days by which such date succeeds
the related Regular Record Date and
amount of interest payable on such
Interest Payment Date.
4. The Interest Payment Period.
5. CUSIP number of the Global Security
representing such Book-Entry Note.
6. Whether such Global Security will
represent any other Book-Entry Note
(to the extent known at such time).
D. To the extent the Company has not
already done so, the Company will
deliver to Chase a Global Security in a
form that has been approved by the
Company, the Agents and the Trustee.
E. Chase will complete such Book-Entry
Note, stamp the appropriate legend, as
instructed by DTC, if not already set
forth thereon, and, as Trustee, authenticate
the Global Security repre-
senting such Book-Entry Note.
F. DTC will credit such Book-Entry Note to
Chase's participant account at DTC.
G. Chase will enter an SDFS deliver order
through DTC's Participant Terminal
System instructing DTC to (i) debit
such Book-Entry Note to Chase's
participant account and credit such
Book-Entry Note to the Presenting
Agent's participant account and
(ii) debit the Presenting Agent's
settlement account and credit Chase's
settlement account for an amount equal
to the price of such Book-Entry Note
less the Presenting Agent's commission.
The entry of such a deliver order shall
constitute a representation and
warranty by Chase to DTC that (i) the
Global Security representing such Book-
Entry Note has been issued and
authenticated and (ii) Chase is holding
such Global Security pursuant to the
Medium-Term Note Certificate Agreement
between Chase and DTC.
H. The Presenting Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to
debit such Book-Entry Note to the
Presenting Agent's participant account
and credit such Book-Entry Note to the
participant accounts of the Par-
ticipants with respect to such Book-
Entry Note and (ii) to debit the
settlement accounts of such
Participants and credit the settlement
account of the Presenting Agent for an
amount equal to the price of such Book-
Entry Note.
I. Transfers of funds in accordance with
SDFS deliver orders described in
Settlement Procedures "G" and "H" will
be settled in accordance with SDFS
operating procedures in effect on the
settlement date.
J. Chase will, upon receipt of funds from
the Presenting Agent in accordance with
Settlement Procedure "G", [credit to an
account of the Company maintained at
Chase] [wire transfer to the account of
the Company maintained at [bank name,
city, state]] funds available for imme-
diate use in the amount transferred to
Chase in accordance with Settlement
Procedure "G".
K. The Presenting Agent will confirm the
purchase of such Book-Entry Note to the
purchaser either by transmitting to the
Participants with respect to such Book-
Entry Note a confirmation order or
orders through DTC's institutional
delivery system or by mailing a written
confirmation to such purchaser.
Settlement For orders of Book-Entry Notes
Procedures solicited by any Agent and accepted by
Timetable: the Company for settlement on the first
Business Day after the sale date,
Settlement Procedures "A" through "K" set
forth above shall be completed as soon as
possible but not later than the respective
times (New York City time) set forth below:
Settlement
Procedure Time
A 11:00 A.M. on the sale
date
B 12:00 Noon on the sale
date
C 2:00 P.M. on the sale
date
D 3.00 P.M. on the Business
Day before
settlement
E 9:00 A.M. on settlement
date
F 10:00 A.M. on settlement
date
G-H 2:00 P.M. on settlement
date
I 4:45 P.M. on settlement
date
J-K 5:00 P.M. on settlement
date
If a sale is to be settled more than one
Business Day after the sale date,
Settlement Procedures "A", "B" and "C"
shall be completed as soon as practicable
but no later than 11:00 A.M. and 12:00 Noon
on the first Business Day after the sale
date and no later than 2:00 P.M. on the
Business Day before the settlement date,
respectively. If the initial interest rate
for a Floating Rate Book-Entry Note has not
been determined at the time that Settlement
Procedure "A" is completed, Settlement
Procedures "B" and "C" shall be completed
as soon as such rate has been determined
but no later than 12:00 Noon and 2:00 P.M.,
respectively, on the Business Day before
the settlement date. Settlement Proce-
dure "I" is subject to extension in
accordance with any extension of Fedwire
closing deadlines and in the other events
specified in SDFS operating procedures in
effect on the settlement date.
If settlement of a Book-Entry Note is
rescheduled or canceled, Chase will deliver
to DTC, through DTC's Participant Terminal
System, a cancelation message to such
effect by no later than 2:00 P.M. on the
Business Day immediately preceding the
scheduled settlement date, provided that
Chase has received notice of such
rescheduling or cancellation by 12:00 p.m.
on such Business Day.
Failure to
Settle: If Chase fails to enter an SDFS deliver
order with respect to a Book-Entry Note
pursuant to Settlement Procedure "G", Chase
may deliver to DTC, through DTC's
Participant Terminal System, as soon as
practicable, a withdrawal message
instructing DTC to debit such Book-Entry
Note to Chase's participant account. DTC
will process the withdrawal message,
provided that Chase's participant account
contains a principal amount of the Global
Security representing such Book-Entry Note
that is at least equal to the principal
amount to be debited. If a withdrawal
message is processed with respect to all
the Book-Entry Notes represented by a
Global Security, the Trustee will cancel
such Global Security in accordance with the
Indenture and so advise the Company and
Chase, and Chase will make appropriate en-
tries in its records. The CUSIP number
assigned to such Global Security shall, in
accordance with CUSIP Service Bureau proce-
dures, be canceled and not immediately
reassigned. If a withdrawal message is
processed with respect to one or more, but
not all, of the Book-Entry Notes
represented by a Global Security, Chase
will exchange such Book-Entry Note for two
Global Securities, one of which shall
represent such Book-Entry Notes and shall
be canceled immediately after issuance and
the other of which shall represent the
other Book-Entry Notes previously
represented by the surrendered Global
Security and shall bear the CUSIP number of
the surrendered Global Security.
If the purchase price for any Book-Entry
Note is not timely paid to the Participants
with respect to such Note by the beneficial
purchaser thereof (or a Person, including
an indirect participant in DTC, acting on
behalf of such purchaser), such
Participants and, in turn, the Presenting
Agent may enter SDFS deliver orders through
DTC's Participant Terminal System reversing
the orders entered pursuant to Settlement
Procedures "H" and "G", respectively.
Thereafter, Chase will deliver the
withdrawal message and take the related
actions described in the preceding
paragraph. If such failure shall have
occurred for any reason other than a
default by the Presenting Agent or Chase in
the performance of its obligations
hereunder and under the Agency Agreement,
then the Company will reimburse the
Presenting Agent or Chase, as applicable,
on an equitable basis for the loss of the
use of the funds during the period when
they were credited to the account of the
Company.
Notwithstanding the foregoing, upon any
failure to settle with respect to a Book-
Entry Note, DTC may take any actions in
accordance with its SDFS operating
procedures then in effect. In the event of
a failure to settle with respect to one or
more, but not all, of the Book-Entry Notes
to have been represented by a Global
Security, Chase will provide, in accordance
with Settlement Procedure "E", for the au-
thentication and issuance of a Global
Security representing the other Book-Entry
Notes to have been represented by such
Global Security and will make appropriate
entries in its records.
Trustee and
Chase Nothing herein shall be deemed to
Not to Risk require the Trustee or Chase to risk
Funds: or expend its own funds in connection with
any payment to the Company, DTC, the Agents
or the purchaser, it being understood by
all parties that payments made by the
Trustee or Chase to the Company, DTC, the
Agents or the purchaser shall be made only
to the extent that funds are provided to
the Trustee or Chase for such purpose.
Authenticity The Company will cause the Trustee to
of Signatures: furnish the Agents from time to time with
the specimen signatures of each of the
Trustee's officers, employees or agents who
has been authorized by the Trustee to
authenticate Book-Entry Notes, but no Agent
will have any obligation or liability to
the Company or the Trustee in respect of
the authenticity of the signature of any
officer, employee or agent of the Company
or the Trustee on any Book-Entry Note.
Payment of Each Agent shall forward to the
Expenses: Company, on a monthly basis, a statement of
the out-of-pocket expenses incurred by such
Agent during that month that are
reimbursable to it pursuant to the terms of
the Agency Agreement. The Company will
remit payment to the Agents currently on a
monthly basis.
Advertising The Company will determine with the Costs:
Agents the amount of advertising that may
be appropriate in soliciting offers to
purchase the Book-Entry Notes. Advertising
expenses will be paid by the Company.
Periodic Periodically, Chase will send to
Statements the Company a statement setting forth the
Chase: principal amount of Book-Entry Notes
Outstanding as of that date and setting
forth a brief description of any sales of
Book-Entry Notes which the Company has
advised Chase but which have not yet been
settled.
PART II
Administrative Procedures for Certificated Notes
Chase will serve as registrar and transfer
agent in connection with the Certificated Notes.
Issuance: Each Certificated Note will be dated and
issued as of the date of its authentication
by Chase. Each Certificated Note will bear
an Original Issue Date, which will be
(i) with respect to an original
Certificated Note (or any portion thereof),
its original issuance date (which will be
the settlement date) and (ii) with respect
to any Certificated Note (or portion
thereof) issued subsequently upon transfer
or exchange of a Certificated Note or in
lieu of a destroyed, lost or stolen
Certificated Note, the Original Issue Date
of the predecessor Certificated Note,
regardless of the date of authentication of
such subsequently issued Certificated Note.
Registration: Certificated Notes will be issued only in
fully registered form without coupons.
Transfers and A Certificated Note may be presented
for Exchanges: for transfer or exchange at the principal
corporate trust office in the City of New
York of Chase. Certificated Notes will be
exchangeable for other Certificated Notes
having identical terms but different
authorized denominations without service
charge. Certificated Notes will not be ex-
changeable for Book-Entry Notes.
Maturities: Each Certificated Note will mature on a
date not less than nine months after the
settlement date for such Note. A Floating
Rate Certificated Note will mature only on
an Interest Payment Date for such Note.
Any Note denominated in Japanese yen will
mature on a date not less than one year
from the Original Issue Date (as defined
below) for such Note. Any Note denominated
in Pounds Sterling will mature on a date
not less than one year, nor more than five
years, after its Original Issue Date.
Denominations: The denomination of any Certificated Note
denominated in U.S. dollars will be a
minimum of $1,000 or any amount in excess
thereof that is an integral multiple of
$1,000. The authorized denominations of
Certificated Notes denominated in any other
currency will be specified pursuant to
"Settlement Procedures" below.
Interest: General. Interest, if any, on each
Certificated Note will accrue from the
original issue date for the first interest
period or the last date to which interest
has been paid, if any, for each subsequent
interest period, and will be calculated and
paid in the manner described in such Note
and in the Prospectus, as supplemented by
the applicable Pricing Supplement. Unless
otherwise specified therein, each payment
of interest on a Certificated Note will
include interest accrued to but excluding
the Interest Payment Date or to but
excluding Maturity (other than a Maturity
of a Fixed Rate Certificated Note occurring
on the 31st day of a month, in which case
such payment of interest will include
interest accrued to but excluding the 30th
day of such month).
Regular Record Dates. The Regular Record
Dates with respect to any Interest Payment
Date for Floating Rate Notes shall be the
date fifteen calendar days immediately pre-
ceding such Interest Payment Date and for
fixed Rate Notes, shall be November 15 or
May 15 (in each case, whether or not a
Business Day).
Fixed Rate Certificated Notes. Unless
otherwise specified pursuant to Settlement
Procedure "A" below, interest payments on
Fixed Rate Certificated Notes will be made
semiannually on June 1 and December 1 of
each year and at Maturity; provided,
however, that if any Interest Payment Date
for a Fixed Rate Certificated Note is not a
Business Day, the payment due on such day
shall be made on the next succeeding
Business Day and no interest shall accrue
on such payment for the period from and
after such Interest Payment Date; provided
further, that in the case of a Fixed Rate
Certificated Note issued between a Regular
Record Date and an Interest Payment Date,
the first interest payment will be made on
the Interest Payment Date following the
next succeeding Regular Record Date.
Floating Rate Certificated Notes. Interest
payments will be made on Floating Rate
Certificated Notes monthly, quarterly,
semi-annually or annually. Interest will
be payable, in the case of Floating Rate
Certificated Notes with a monthly Interest
Payment Period, on the third Wednesday of
each month; with a quarterly interest Pay-
ment Period, on the third Wednesday of
March, June, September and December of each
year; with a semi-annual Interest Payment
Period, on the third Wednesday of the two
months specified pursuant to Settlement
Procedure "A" below; and with an annual
Interest Payment Period, on the third
Wednesday of the month specified pursuant
to Settlement Procedure "A" below;
provided, however, that if an Interest
Payment Date for a Floating Rate
Certificated Note would otherwise be a day
that is not a Business Day with respect to
such Floating Rate Certificated Note, such
Interest Payment Date will be the next
succeeding Business Day with respect to
such Floating Rate Certificated Note,
except in the case of a Floating Rate
Certificated Note for which the Base Rate
is LIBOR, if such Business Day is in the
next succeeding calendar month, such
Interest Payment Date will be the
immediately preceding Business Day; and
provided further, that in the case of a
Floating Rate Certificated Note issued
between a Regular Record Date and an
interest Payment Date, the first interest
payment will be made on the Interest
Payment Date following the next succeeding
Regular Record Date.
Calculation of Fixed Rate Certificated Note.
Interest: Interest on Fixed Rate Certificated Notes
(including interest for partial periods)
will be calculated on the basis of a
360-day year of twelve 30-day months.
Floating Rate Certificated Notes. Interest
rates on Floating Rate Certificated Notes
will be determined as set forth in the form
of Notes. Interest on Floating Rate
Certificated Notes, except as otherwise set
forth therein, will be calculated on the
basis of actual days elapsed and a year of
360 days, except that in the case of a
Floating Rate Certificated Note for which
the Base Rate is Treasury Rate or CMT Rate,
interest will be calculated on the basis of
the actual number of days in the year.
Payments of Interest, if any, on each Certificated
Principal and Note will be calculated and paid in
Interest: the manner described in such Note and in
the Prospectus, as supplemented by the
applicable Pricing Supplement. Unless
otherwise provided in the Indenture or the
Certificated Note, the first payment of
interest on any Certificated Note
originally issued between a Record Date and
an Interest Payment Date will be made on
the next succeeding Interest Payment Date.
Interest payable at the Maturity of a
Certificated Note will be payable to the
Person to whom the principal of such Note
is payable. Unless other arrangements are
made, all interest payments (excluding
interest payments made on the Maturity
Date) will be made by check mailed to the
person entitled thereto as provided above;
provided, however, that the holder of
$10,000,000 (or the equivalent thereof in
other currencies) or more of Certificated
Notes with similar tenor and terms will be
entitled to receive payment by wire
transfer in U.S. dollars.
Within 10 days following each Record Date,
Chase will inform the Company of the total
amount of the interest payments (if then
ascertainable) to be made by the Company on
the next succeeding Interest Payment Date.
Chase will provide monthly to the Company a
list of the principal and interest (if then
ascertainable) to be paid on Certificated
Notes maturing in the next succeeding
month.
Chase will be responsible for withholding
taxes on interest paid on Certificated
Notes as required by applicable law.
If the Maturity of a Certificated Note is
not a Business Day, the payment due on such
day shall be made on the next succeeding
Business Day and no interest shall accrue
on such payment for the period from and
after such Maturity.
Procedures Company Notice to Trustee Regarding
Upon Company's Exercise of Optional Reset. Not
Exercise of less than 50 or more than 60 days
Optional Reset before an Optional Reset Date as
or Optional set forth in a Certificated Note, the
Extension of Company will notify Chase whether it is
Maturity: exercising its option to reset the Interest
Rate or Spread or Spread Multiplier, as the
case may be, for such Certificated Note,
and if so, (i) the new Interest Rate or
Spread or Spread Multiplier, as the case
may be, for such Certificated Note during
the period from such Optional Reset Date to
the next Optional Reset Date as set forth
in such Certificated Note or, if there is
no such next Optional Reset Date, to the
Maturity Date of such Certificated Note
(the "Subsequent Interest Period"); and
(ii) the provisions, if any, for redemption
of such Certificated Note during such
Subsequent Interest Period, including the
date or dates on which or the period or
periods during which such redemption may
occur during such Subsequent Interest
Period.
Company Notice to Trustee Regarding
Exercise of Optional Extension of Maturity.
If the Company elects to exercise an
option, as set forth in a Certificated
Note, to extend the Maturity Date of such
Note, it will so notify Chase no less than
50 or more than 60 days before the Maturity
Date of such Certificated Note, and will
further indicate (i) the new Maturity Date;
(ii) the Interest Rate or Spread or Spread
Multiplier, as the case may be, and
(iii) the provisions, if any, for
redemption of such Certificated Note during
such extension period, including the date
or dates on which or the period or periods
during which such redemption may occur
during such extension period.
Trustee Notice to Holders Regarding
Company's Exercise of Optional Extension or
Reset. Upon receipt of notice from the
Company regarding the Company's exercise of
either an optional extension of maturity or
an optional reset, Chase will mail a
notice, first class, postage prepaid, to
the Holder not less than 40 days before the
Optional Reset Date (in which case a "Reset
Notice") or the Maturity Date (in which
case an "Extension Notice"), as the case
may be, which Reset Notice or Extension
Notice shall contain the information
required by the terms of the Certificated
Note.
Trustee Notice to Company Regarding Option
to be Repaid. If, after receipt of either
a Reset Notice or an Extension Notice, any
Holder of a Certificated Note exercises the
option for repayment by tendering the
Certificated Note to be repaid as set forth
in the Certificated Note, Chase shall give
notice to the Company not less than 22 days
before the Optional Reset Date or the old
Maturity Date, as the case may be, of the
principal amount of Certificated Notes to
be repaid on such Optional Reset Date or
old Maturity Date, as the case may be.
Company Notice Regarding New Interest Rate
or New Spread or Spread Multiplier. If the
Company elects to revoke the Interest Rate
or Spread or Spread Multiplier and
establish a higher interest rate or Spread
or Spread Multiplier for an Optional Reset
Period or extension period, as the case may
be, it shall, not less than 20 days before
such Optional Reset Date or old Maturity
Date, so notify Chase. Chase will
immediately thereafter notify the Holder of
such Certificated Note, by first class
mail, postage prepaid of the new Interest
Rate or Spread or Spread Multiplier
applicable to such Certificated Note.
Trustee Notice to Company Regarding Holders
Revocation of Option to be Repaid. If,
after the Holder has tendered any
Certificated Notes for repayment pursuant
to an Extension Notice or an Optional Reset
Notice, such Holder then revokes such
tender for repayment, Chase shall give
notice to the Company not less than five
days prior to the Maturity Date or Optional
Reset Date, as the case may be, of such
revocation and of the principal amount of
Certificated Notes for which tender for
repayment has been revoked.
Deposit of Repayment Price. On or before
any old Maturity Date where the Maturity
has been extended, and on or before an
Optional Reset Date, the Company shall
deposit with Chase an amount of money
sufficient to pay the principal amount,
plus interest accrued to such old Maturity
Date or Optional Reset Date, as the case
may be, for all the Certificated Notes or
portions thereof which are to be repaid on
such old Maturity Date or Optional Reset
Date, as the case may be. Chase will use
such money to repay such Certificated Notes
pursuant to the terms set forth in such
Notes.
Procedures Company Notice to Trustee Regarding
Upon Company's Exercise of Optional Redemption.
Exercise of At least 45 days prior to the date on
Optional which it intends to redeem a
Redemption: Certificated Note, the Company will notify
Chase that it is exercising such option
with respect to such Certificated Note on
such date.
Trustee Notice to Holders Regarding
Company's Exercise of Optional Redemption.
After receipt of notice that the Company is
exercising its option to redeem a
Certificated Note, Chase will, at least
30 days before the redemption date for such
Certificated Note, mail a notice, first
class, postage prepaid, to the Holder of
such Certificated Note informing such
Holder of the Company's exercise of such
option with respect to such Certificated
Note.
Deposit of Redemption Price. On or before
any redemption date, the Company shall
deposit with Chase an amount of money
sufficient to pay the redemption price,
plus interest accrued to such redemption
date, for all the Certificated Notes or
portions thereof and which are to be repaid
on such redemption date. Chase will use
such money to repay such Certificated Notes
pursuant to the terms set forth in such
Notes.
Payments of Trustee Notice to Company of Option
Principal and to be Repaid. Upon receipt of notice
Interest Upon of exercise of the option for repayment and the
Exercise of Certificated Notes so to be repaid as set forth
Optional Re- in such Notes, Chase shall(unless
payment such notice was received pursuant
(Except to the Company's exercise of an optional
Pursuant to reset or an optional extension of maturity,
Company's in each of which cases the relevant
Exercise procedures set forth above are to be
of Optional followed) give notice to the Company not
Reset or less than 20 days prior to each Optional
Optional Repayment Date of such Optional Repayment
Extension): Date and of the principal amount of
Certificated Notes to be repaid on such
Optional Repayment Date.
Deposit of Repayment Price. On or prior to
any Optional Repayment Date, the Company
shall deposit with Chase an amount of
money sufficient to pay the optional
repayment price, and accrued interest
thereon to such date, of all the
Certificated Notes or portions thereof
which are to be repaid on such date.
Chase will use such money to repay such
Certificated Notes pursuant to the terms
set forth in such Notes.
Procedure for The Company and the Agents will
Rate Setting discuss from time to time the
and Posting: aggregate principal amount of, the issuance
price of, and the interest rates to be
borne by, Notes that may be sold as a
result of the solicitation of orders by the
Agents. If the Company decides to set
prices of, and rates borne by, any Notes in
respect of which the Agents are to solicit
orders (the setting of such prices and
rates to be referred to herein as
"posting") or if the Company decides to
change prices or rates previously posted by
it, it will promptly advise the Agents of
the prices and rates to be posted.
Acceptance and Unless otherwise instructed by the
Rejection of Company, each Agent will advise the Company
Orders: promptly by telephone of all orders to
purchase Certificated Notes received by
such Agent, other than those rejected by it
in whole or in part in the reasonable
exercise of its discretion. Unless
otherwise agreed by the Company and the
Agents, the Company has the sole right to
accept orders to purchase Certificated
Notes and may reject any such orders in
whole or in part. Before accepting any
order to purchase a Certificated Note to be
settled in less than three Business Days,
the Company shall verify that Chase will
have adequate time to prepare and
authenticate such Note.
Preparation of If any order to purchase a
Pricing Certificated Note is accepted by or on
Supplement: behalf of the Company, the Company will
prepare a pricing supplement (a "Pricing
Supplement") reflecting the interest rates
and other terms of such Certified Note and
will arrange to have ten copies thereof
filed with the Commission in accordance
with the applicable paragraph of
Rule 424(b) under the Act and will supply
at least ten copies thereof (and additional
copies if requested) to the Agent which
presented the order (the "Presenting
Agent"). The Presenting Agent will cause a
Prospectus and Pricing Supplement to be
delivered to the purchaser of such
Certificated Note.
In each instance that a Pricing Supplement
is prepared, the Presenting Agent will
affix the Pricing Supplement to Pros-
pectuses prior to their use. Outdated
Pricing Supplements (other than those
retained for files) will be destroyed.
Suspension of The Company reserves the right, in
Solicitation; its sole discretion, to instruct the
Amendment or Agents to suspend at any time for any
Supplement: period of time or permanently, the
solicitation of orders to purchase
Certificated Notes. Upon receipt of such
instructions, the Agents will forthwith
suspend solicitation until such time as the
Company has advised them that such
solicitation may be resumed.
In the event that at the time the Company
suspends solicitation of purchases there
shall be any orders outstanding for
settlement, the Company will promptly
advise the Agents and Chase whether such
orders may be settled and whether copies of
the Prospectus as in effect at the time of
the suspension, together with the appro-
priate Pricing Supplement, may be delivered
in connection with the settlement of such
orders. The Company will have the sole
responsibility for such decision and for
any arrangements that may be made in the
event that the Company determines that such
orders may not be settled or that copies of
such Prospectus may not be so delivered.
If the Company decides to amend or
supplement the Registration Statement or
the Prospectus, it will promptly advise the
Agents and furnish the Agents with the
proposed amendment or supplement and with
such certificates and opinions as are
required, all to the extent required by and
in accordance with the terms of the Agency
Agreement. Subject to the provisions of
the Agency Agreement, the Company may file
with the Commission any supplement to the
Prospectus relating to the Notes. The
Company will provide the Agents and Chase
with copies of any such supplement, and
confirm to the Agents that such supplement
has been filed with the Commission pursuant
to the applicable paragraph of Rule 424(b).
Procedure for When the Company has determined to
Rate Changes: change the interest rates of Certificated
Notes being offered, it will promptly
advise the Agents and the Agents will
forthwith suspend solicitation of orders.
The Agents will telephone the Company with
recommendations as to the changed interest
rates. At such time as the Company has
advised the Agents of the new interest
rates, the Agents may resume solicitation
of orders. Until such time only "indica-
tions of interest" may be recorded.
Delivery of A copy of the Prospectus and a Pricing
Prospectus: Supplement relating to a Certificated Note
must accompany or precede the earliest of
any written offer of such Certificated
Note, confirmation of the purchase of such
Certificated Note and payment for such
Certificated Note by its purchaser. If
notice of a change in the terms of the
Certificated Notes is received by the
Agents between the time an order for a
Certificated Note is placed and the time
written confirmation thereof is sent by the
Presenting Agent to a customer or his
agent, such confirmation shall be
accompanied by a Prospectus and Pricing
Supplement setting forth the terms in
effect when the order was placed. Subject
to "Suspension of Solicitation; Amendment
or Supplement" above, the Presenting Agent
will deliver a Prospectus and Pricing
Supplement as herein described with respect
to each Certificated Note sold by it. The
Company will make such delivery if such
Certificated Note is sold directly by the
Company to a purchaser (other than any
Agent).
Confirmation: For each order to purchase a Certificated
Note solicited by any Agent and accepted by
or on behalf of the Company, the Presenting
Agent will issue a confirmation to the
purchaser, with a copy to the Company,
setting forth the details set forth above
and delivery and payment instructions.
Settlement: The receipt by the Company of immediately
available funds in exchange for an
authenticated Certificated Note delivered
to the Presenting Agent and the Presenting
Agent's delivery of such Certificated Note
against receipt of immediately available
funds shall, with respect to such
Certificated Note, constitute "settlement".
All orders accepted by the Company will be
settled on the third Business Day following
the date of sale pursuant to the timetable
for settlement set forth below, unless the
Company and the purchaser agree to
settlement on another day which shall be no
earlier than the next Business Day
following the date of sale.
Settlement Settlement Procedures with regard to
Procedures: each Certificated Note sold by the Company
through any Agent, as agent, shall be as
follows:
A. The Presenting Agent will advise the
Company by telephone of the following
settlement information, in time for
Chase to prepare and authenticate the
required Note:
1. Name in which such Certificated
Note is to be registered
("Registered Owner").
2. Address of the Registered Owner and
address for payment of principal
and interest.
3. Taxpayer identification number of
the Registered Owner (if available).
4. Principal amount.
5. Maturity Date.
6. In the case of a Fixed Rate
Certificated Note, the interest
rate or, in the case of a Floating
Rate Certificated Note, the initial
interest rate (if known at such
time), Base Rate, Index Maturity,
Interest Reset Period, Interest
Reset Dates, Spread or Spread
Multiplier (if any), Minimum
Interest Rate (if any) and Maximum
Interest Rate (if any).
7. Interest Payment Dates and the
Interest Payment Period.
8. Specified Currency and whether the
option to elect payment in a
Specified Currency applies and if
the Specified Currency is not U.S.
dollars, the authorized denominations.
9. Redemption, repayment or extension
provisions, if any.
10. Settlement date.
11. Price (including currency).
12. Presenting Agent's commission,
determined as provided in Section 2
of the Agency Agreement.
13. Whether such Certificated Note is
issued at an original issue
discount, and, if so, the total
amount of OID, the yield to
maturity and the initial accrual
period OID.
14. All other information needed to
complete a Certificated Note.
B. The Company will advise Chase by
telephone (confirmed in writing at any
time on the sale date) or electronic
transmission of the information set
forth in Settlement Procedure "A" above
and the name of the Presenting Agent.
C. The Company will deliver to Chase a
pre-printed four-ply packet for such
Certificated Note, which packet will
contain the following documents in
forms that have been approved by
Company, the Agents and the Trustee:
1. Certificated Note with customer
confirmation.
2. Stub One - For Trustee.
3. Stub Two - For the Presenting
Agent.
4. Stub Three - For the Company.
D. Chase will complete such Certificated
Note and, as Trustee, will authenticate
such Certificated Note and deliver it
(with the confirmation) and Stubs One
and Two to the Presenting Agent, all in
accordance with the written directions
(or oral instructions confirmed in
writing on the next Business Day) of
the Company, and the Presenting Agent
will acknowledge receipt of the Note by
stamping or otherwise marking Stub One
and returning it to Chase. Such
delivery will be made only against such
acknowledgment of receipt. In the
event that the instructions given by
the Presenting Agent for payment to the
account of the Company are revoked, the
Company will as promptly as possible
wire transfer to the account of the
Presenting Agent an amount of immediately
available funds equal to the amount of such
payment made.
E. The Presenting Agent will deliver such
Certificated Note (with the confirma-
tion) to the customer against payment
in immediately payable funds. The
Presenting Agent will obtain the
acknowledgement of receipt of such Cer-
tificated Note by retaining Stub Two.
F. Chase will send Stub Three to the
Company by first-class mail.
Settlement For orders of Certificated Notes
Procedures solicited by any Agent, as agent, and
Timetable: accepted by the Company, Settlement
Procedures "A" through "F" set forth above
shall be completed on or before the
respective times (New York City time) set
forth below:
Settlement
Procedure Time
A 2:00 P.M. on the Business Day
before settlement
B-C 3:00 P.M. on the Business Day
before settlement
D 2:15 P.M. on settlement
date
E 3:00 P.M. on settlement
date
F 5:00 P.M. on settlement
date
Failure to If a purchaser fails to accept
Settle: delivery of and make payment for any
Certificated Note, the Presenting Agent
will notify the Company and Chase by tele-
phone and return such Certificated Note to
the Trustee. Upon receipt of such notice,
the Company will immediately wire transfer
to the account of the Presenting Agent an
amount equal to the amount previously cre-
dited to the account of Company in respect
of such Certificated Note. Such wire
transfer will be made on the settlement
date, if possible, and in any event not
later than the Business Day following the
settlement date. If the failure shall have
occurred for any reason other than a
default by the Presenting Agent or Chase in
the performance of its obligations
hereunder and under the Agency Agreement,
then the Company will reimburse the
Presenting Agent or Chase, as appropriate,
on an equitable basis for its loss of the
use of the funds during the period when
they were credited to the account of the
Company. Immediately upon receipt of the
Certificated Note in respect of which such
failure occurred, the Trustee will cancel
such Certificated Note in accordance with
the Indenture and so advise the Company and
Chase, and Chase will make appropriate
entries in its records.
Trustee Not to Nothing herein shall be deemed to
Risk Funds: require the Trustee or Chase to risk or
expend its own funds in connection with any
payment to the Company, the Agents or the
purchaser, it being understood by all
parties that payments made by the Trustee
or Chase to the Company, the Agents or the
purchaser shall be made only to the extent
that funds are provided to the Trustee or
Chase for such purpose.
Authenticity The Company will cause the Trustee to
of Signatures: furnish the Agents from time to time with
the specimen signatures of each of the
Trustee's officers, employees or agents who
has been authorized by the Trustee to
authenticate Certificated Notes, but no
Agent will have any obligation or liability
to the Company or the Trustee in respect
of the authenticity of the signature of any
officer, employee or agent of the Company
or the Trustee on any Certificated Note.
Payment of Each Agent shall forward to the
Expenses: Company, on a monthly basis, a statement of
the out-of-pocket expenses incurred by such
Agent during that month that are
reimbursable to it pursuant to the terms of
the Agency Agreement. The Company will
remit payment to the Agents currently on a
monthly basis.
Advertising The Company will determine with the Agents
Costs: the amount of advertising that may be
appropriate in soliciting orders to
purchase the Certificated Notes.
Advertising expenses will be paid by the
Company.
Periodic Periodically, Chase will send to
Statements the Company a statement setting forth the
from Chase: principal amount of Certificated Notes
Outstanding as of that date and setting
forth a brief description of any sales of
Certificated Notes which the Company has
advised Chase but which have not yet been
settled.
NOTE NUMBER
FX- AGENT'S NAME TEMPLE-INLAND INC.
PRINCIPAL AMOUNT AND ORIGINAL ISSUE
SPECIFIED CURRENCY TRADE DATE AGENT'S COMMISSION DATE
MATURITY DATE PRICE INTEREST RATE TAXPAYER ID
(100% UNLESS OR SOC. SEC.
OTHERWISE INDICATED) NO OF PURCHASER
TRANSFERRED
NAME AND ADDRESS OF REGISTEREED OWNER
FIXED RATE
MEDIUM-TERM
NOTE
CONFIRMATION
Trustee
The Chase
Manhattan Bank
CUSTOMER'S COPY RETAIN FOR TAX PURPOSES
THE TIME OF THE TRANSACTON WILL BE FURNISHED UPON REQUEST OF THE CUSTOMER
PLEASE SIGN AND RETURN THE ENCLOSED RECEIPT
SEE REVERSE SIDE
- -----------------------------------------------------------------------------
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE FOR NOTES IN CERTIFICATED FORM, THIS
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 OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER 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 DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
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.
REGISTERED TEMPLE-INLAND INC. PRINCIPAL
AMOUNT
No. FX-
CUSIP:
MEDIUM-TERM NOTE, SERIES F
Due from Nine Months or More from Date of Issue
IF APPLICABLE THE "TOTAL AMOUNT OF OID", "YIELD TO MATURITY" AND "INITIAL
ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL BE
COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.
Issue Price: Total Amount of OID: Specified Currency
Interest Rate: Yield to Maturity: [] U.S. Dollars
Original Issue Date: Initial Accrual Period (OID): [] Austrian Dollars
(plus or minus)
Maturity Date: Option to receive payments in [] Canadian Dollars
U.S. Dollars: Yes [] No []
(Only applicable if Specified
Currency is other than U.S. Dollars)
Initial Redemption Other Provisions : [] Danish Kroner
Date:
[] Italian Lire
[] New Zealand Dollars
[] European Currency
Units
[] Other:
If an Initial Redemption Date is set forth above, the Optional
Redemption Price shall initially be % of the principal amount of this Note
to be redeemed and shall decline at each anniversary of the Initial Redemption
Date by % of the principal amount to be redeemed until the Optional
Redemption Price is 100% of such principal amount.
TEMPLE-INLAND INC. , a Delaware corporation (herein called the
"Company"), for value received, hereby promises to pay to
, or registered assigns, the principal sum of________________________________
Principal Amount
on the Maturity Date specified above at the office or agency of the Company in
the Borough of Manhattan, The City of New York, State of New York, and such
other location or locations as may be provided for pursuant to the Indenture
referred to on the reverse hereof, in such coin or currency specified above as
at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest semi-annually on and
of each year and on the Maturity Date (each an "Interest Payment Date"),
commencing on the next Interest Payment Date succeeding the Original Issue Date
specified above on said principal sum at the Interest Rate specified above from
the most recent date to which interest has been paid or duly provided for, or,
if no interest has been paid or duly provided for, from the Original Issue Date,
until the principal hereof is paid or duly provided for; provided, however, that
any payment of principal or interest to be made on an Interest Payment Date or
on the Maturity Date that is not a Business Day shall be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date or on the Maturity Date, as the case may be, and no
additional interest shall accrue as a result of such delayed payment. For
purposes of this Note, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
are authorized or required by law or regulation to close in New York, New York
or, if this Note is denominated in a currency other than U.S. dollars,
________________________________________________________ (or if this Note is
Principal Financial Center of Country of Specified Currency
denominated in European Currency Units, Brussels, Belgium). The interest so
payable, and punctually paid or duly provided for, on any _________ or ________
will be paid to the person in whose name this Note (or one or more predecessor
Notes) is registered at the close of business on the _______ or ___________
(whether or not a Business Day) next preceding such or (a
"Record Date") and interest payable on the Maturity Date will be payable to the
person to whom principal is payable, except that in the case this Note is issued
between a Record Date and the initial Interest Payment Date relating to such
Record Date, interest for the period beginning on the Original Issue Date and
ending on such initial Interest Payment Date shall be paid on the Interest
Payment Date following the next succeeding Record Date to the Holder on such
next succeeding Record Date. Payment of the principal of and interest on this
Note due at Maturity will be paid, upon presentation of this Note, in
immediately available funds (unless this Note is denominated in a currency other
than U.S. dollars and the person in whose name this Note is registered has not
made appropriate arrangements). At the option of the Company, payment of
interest on this Note due on any other Interest Payment Date will be made by
check and mailed to the address of the person entitled thereto as such address
shall appear in the Security Register. Payment of the principal of and interest
on this Note may also be made by wire transfer to an account maintained by the
Depository for such purpose. A Holder of $10,000,000 or more in aggregate
principal amount of Certificated Notes of like tenor and terms will be entitled
to receive payment by wire transfer of immediately available funds, but only if
appropriate wire transfer instructions shall have been received in writing by
the Trustee no later than 10 Business Days prior to the applicable Interest
Payment Date. At the option of the Company, payment of interest not punctually
paid or duly provided for shall be payable as provided in the Indenture referred
to on the reverse hereof.
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH
ON THE REVERSE HEREOF AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by or
on behalf of the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, Temple-Inland Inc. has caused this instrument to be
signed in its name by the facsimile signatures of its duly authorized officers,
and has caused a facsimile of its corporate seal to be affixed hereunto or
imprinted hereon.
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION TEMPLE-INLAND INC.
This is one of the Securities of the
series designated herein referred to in
the within-mentioned Indenture By:
THE CHASE MANHATTAN BANK
President
As Trustee
By: Attest:
Authorized Officer
Secretary
ICN 0001-
[FORM OF REVERSE OF NOTE]
TEMPLE-INLAND INC.
MEDIUM-TERM NOTE, SERIES F
This note is one of a duly authorized issue of debentures, notes, bonds,
or other evidences of indebtedness of the Company (herein called the
"Securities") of the series hereinafter specified, all issued or to be issued
under and pursuant to an indenture dated as of September 1, 1986, as amended and
supplemented (herein called the "Indenture"), duly executed and delivered by the
Company to The Chase Manhattan Bank, formerly known as Chemical Bank, as Trustee
(hereinafter called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties, and immunities thereunder of the
Trustee, the Company and the Holders of the Securities. The Securities may be
issued in one or more series, which different series (and which Securities
issued within each series) may be issued in various aggregate principal amounts,
may mature at different times, may bear interest, if any, at different rates,
may be subject to different redemption provisions, if any, may be subject to
different sinking, purchase, or analogous funds, if any, and may otherwise vary
as in the Indenture provided. This Note is one of a series designated as
"Medium-Term Notes, Series F, due from nine months to thirty years from date of
issue" of the Company, limited in aggregate principal amount to U.S.
$500,000,000, or the substantial equivalent thereof in the Specified Currency.
References herein to "Notes" shall mean the Notes of Series F.
In case an Event of Default, as defined in the Indenture, with respect to
the Notes shall have occurred and be continuing, the principal hereof (or, if
this Note is an Original Issue Discount Security, such portion of the principal
amount as may be specified pursuant to the Indenture) and accrued interest
hereon, may be declared and upon such declaration shall become due and payable,
in the manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of a majority in principal amount at maturity of
the Securities at the time outstanding of each series to be affected, evidenced
as in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or modifying in any manner the rights of the Holders of the
Securities; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each outstanding Security affected thereby,
(i) change the Maturity of the principal of, or the Stated Maturity of any
premium on, or any installment of interest on, any Security, or reduce the
principal amount thereof or the interest or any premium thereon, or change the
method of computing the amount of principal thereof or interest thereon on any
date, or change any Place of Payment, or the coin or currency or currency unit
in which any Security or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Maturity
or the Stated Maturity thereof (or, in the case of redemption or repayment, on
or after the Redemption Date or the Repayment Date), or (ii) reduce the
percentage in principal amount of the outstanding Securities of any series, the
consent of the Holders of which is required for any such supplemental indenture,
or the consent of whose Holders is required for any waiver, or (iii) modify
certain other provisions of the Indenture. It is also provided in the Indenture
that, with respect to certain defaults or Events of Default regarding the
Securities of any series, the Holders of a majority in principal amount at
Maturity of the Securities of such series at the time outstanding may on behalf
of the Holders of all of the Securities of such series waive any past default or
Event of Default and its consequences, except a default in the payment of the
principal of (or premium, if any) or interest on any Security of such series or
in respect of certain other covenants or provisions of the Indenture. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not any notation of such consent or waiver is made upon this
Note or such other Notes.
No reference herein to the Indenture and no reference to any provision of
this 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
premium, if any) and interest, if any, on this Note at the place, at the
respective times, at the rate and (except as provided in the Indenture in the
case of Securities payable in currencies other than U.S. Dollars that are not
available to the Company due to circumstances beyond its control) in the
currency herein prescribed.
The Notes are issuable in registered form without coupons in the minimum
denomination of U.S. $1,000 and in integral multiples of U.S. $1,000 in excess
thereof or 1,000 units of the Specified Currency. This Note may be exchanged by
the Holder hereof without charge except for any tax or other governmental charge
imposed in connection therewith, for a like aggregate principal amount of Notes
of other authorized denominations, having the same terms as this Note, in the
manner and subject to the limitations provided in the Indenture at the Corporate
Trust Office.
If an Initial Redemption Date is specified on the face hereof, this Note
may be redeemed at the option of the Company as a whole, or from time to time in
part, on any date, if any, after the Initial Redemption Date specified on the
face hereof and prior to the Maturity Date, upon mailing a notice of such
redemption not less than thirty nor more than sixty days prior to the date fixed
for redemption to the Holders of Notes at their last registered addresses, all
as provided in the Indenture, at the Optional Redemption Prices, if any,
specified on the face hereof (expressed in percentages of the principal amount)
together in each case with accrued interest to the date fixed for redemption.
If so specified on the face hereof, the Holder of this Note shall be
entitled to receive payment in U.S. Dollars at the Exchange Rate determined as
set forth in the Indenture by notifying the Trustee at the time and in the
manner described therein. Costs, if any, associated with the conversion of the
Specified Currency into U.S. dollars shall be borne by such Holder through
deduction from payments required to be made to such Holder on this Note.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
registered Holder hereof as the owner of this Note for the purpose of receiving
payment of the principal hereof (and premium, if any), and (subject to certain
provisions relating to interest) interest hereon and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Company nor the
Trustee nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of (or premium,
if any) or the interest on this Note, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any incorporator, stockholder, officer,
director or employee, as such, past, present or future, of the Company or any
successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as a part of the consideration for
the issue hereof, expressly waived and released.
All terms used in this Note that are defined in the Indenture shall have
the meanings assigned to them therein.
This Note shall be governed by and construed in accordance with the law of the
State of New York.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
_____________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCUDING ZIP CODE OF ASSIGNEE
_____________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
_____________________________________________________________________________
to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated: _________________ Signature: _____________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement, or any change whatever.
NOTE NUMBER
FL:- AGENT'S NAME TEMPLE-INLAND INC.
PRINCIPAL AMOUNT AND ORIGINAL ISSUE
SPECIFIED CURRENCY TRADE DATE AGENT'S COMMISSION DATE
MATURITY DATE PRICE BASE RATE AND TAXPAYER ID OR
(100% UNLESS INDEX MATURITY SOC. SEC. NO.
OTHERWISE INDICATED) OF PURCHASER
TRANSFERRED
NAME AND ADDRESS OF REGISTEREED OWNER
FLOATING RATE
MEDIUM-TERM
NOTE
CONFIRMATION
Trustee
The Chase
Manhattan Bank
CUSTOMER'S COPY RETAIN FOR TAX PURPOSES
THE TIME OF THE TRANSACTON WILL BE FURNISHED UPON REQUEST OF THE CUSTOMER
PLEASE SIGN AND RETURN THE ENCLOSED RECEIPT
SEE REVERSE SIDE
- --------------------------------------------------------------------------------
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE FOR NOTES IN CERTIFICATED FORM, THIS
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 OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER 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 DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), 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.
REGISTERED TEMPLE-INLAND INC. PRINCIPAL
AMOUNT
No. FL-
CUSIP:
MEDIUM-TERM NOTE, SERIES F
Due from Nine Months or More from Date of Issue
IF APPLICABLE THE "TOTAL AMOUNT OF OID", "YIELD TO MATURITY" AND "INITIAL
ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL BE
COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL
ISSUE DISCOUNT ("OID") RULES.
Issue Price: Initial Interest Rate: Original Issue Specified Currency
Discount:
Index Maturity: Base Rate: Maturity Date: [] U.S. Dollars
Spread Total Amount of OID: Initial
(plus or minus): Redemption Date: [] Austrian Dollars
Interest Payment Yield to Maturity: Spread Multiplier: [] Canadian Dollars
Period:
Interest Reset Initial Accrual Maximum Interest Rate: [] Danish Kroner
Period: Period OID:
Interest Payment Option to receive payments in Minimum Interest Rate:
Dates: U.S. Dollars: Yes [] No []
(Only applicable if Specified
Currency is other than U.S. Dollars) [] Italian Lire
Interest
Determination Dates: Interest Reset Dates: [] New Zealand Dollars
Calculation
Agent: Reporting Service: Index Currency: [] European Currency
Units
Other provisons: [] Other:
If an Initial Redemption Date is set forth above, the Optional Redemption Price
shall initially be % of the principal amount of this Note to be redeemed
and shall decline at each anniversary of the Initial Redemption Date by %
of the principal amount to be redeemed until the Optional Redemption Price is
100% of such principal amount.
TEMPLE-INLAND INC. , a Delaware corporation (herein called the
"Company"), for value received, hereby promises to pay to
, or registered assigns, the principal sum of __________________________________
Principal Amount
on the Maturity Date specified above at the office or agency of the Company in
the Borough of Manhattan, The City of New York, State of New York, and such
other location or locations as may be provided for pursuant to the Indenture
referred to on the reverse hereof, in such coin or currency specified above as
at the time of payment shall be legal tender for the payment of public and
private debts, and to pay interest at a rate per annum equal to the Initial
Interest Rate specified above from the Original Issue Date until the first
Interest Reset Date specified above following the Original Issue Date specified
above and thereafter at a rate determined in accordance with the provisions on
the reverse hereof under the heading "Determination of Commercial Paper Rate,"
Determination of LIBOR," or "Determination of Treasury Rate" or as otherwise
provided herein depending upon whether the Base Rate specified above is the
Commercial Paper Rate, LIBOR, the Treasury Rate, or another Base Rate,
respectively, until the principal hereof is paid or duly provided for. The
Company will pay interest as specified above under "Interest Payment Period,"
commencing with the first Interest Payment Date specified above next succeeding
the Original Issue Date, and on the Maturity Date. If any Interest Payment Date
(other that the Maturity Date) would otherwise be a day that is not a Business
Day, such Interest Payment Date will be postponed to the next succeeding day
that is a Business Day, except that in the case of a LIBOR Note, if such
Business Day falls in the next succeeding calendar month, such Interest Payment
date will be the immediately preceding Business Day. If the Maturity Date falls
on a day that is not a Business Day, the required payment of principal, premium,
if any, and/or interest will be made on the next succeeding Business Day as if
made on the date such payment was due, and no interest shall accrue on such
payment for the period from and after the Maturity Date to the date of such
payment on the next succeeding Business Day. For purposes of this Note,
"Business Day" means any day, other than a Saturday or Sunday, that is neither
a legal holiday nor a day on which banking institutions are authorized or
required by law or regulation to close in New York, New York or, if this Note is
denominated in a currency other than U.S. dollars,
_______________________________________________________________ (or, if the Base
Principal Financial Center of Country of Specified Currency
Rate is LIBOR, the City of London or, if this Note is denominated in European
Currency Units, Brussels, Belgium). Notwithstanding the foregoing, if the Base
Rate in respect of this Note is LIBOR, as specified above, and such next
succeeding Business Day falls in the next calendar month, such Interest Payment
Date shall be the next preceding Business Day. Except as provided above and in
the Indenture referred to on the reverse hereof, interest payments will be made
on the Interest Payment Dates specified above. Interest on this Note will
accrue from the most recent date to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for, from the
Original Issue Date, until the principal hereof is paid or duly provided for.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will be paid to the person in whose name this Note (or one
or more predecessor Notes) is registered at the close of business on the
fifteenth calendar day (whether or not a Business Day) next preceding such
Interest Payment Date (a "Record Date") and interest payable on the Maturity
Date will be payable to the person to whom principal is payable, except that in
the case this Note is issued between a Record Date and the initial Interest
Payment Date relating to such Record Date, interest for the period beginning on
the Original Issue Date and ending on such initial Interest Payment Date shall
be paid on the Interest Payment Date following the next succeeding Record Date
to the Holder on such next succeeding Record Date. Payment of the principal of
and interest on this Note due at Maturity will be paid, upon presentation of
this Note, in immediately available funds (unless this Note is denominated in a
currency other than U.S. dollars and the person in whose name this Note is
registered has not made appropriate arrangements). At the option of the
Company, payment of interest on this Note due on any other Interest Payment Date
will be made by check and mailed to the address of the person entitled thereto
as such address shall appear in the Security Register. Payment of the principal
of and interest on this Note may also be made by wire transfer to an account
maintained by the Depository for such purpose. A Holder of $10,000,000 or more
in aggregate principal amount of Certificated Notes of like tenor and terms will
be entitled to receive payment by wire transfer of immediately available funds,
but only if appropriate wire transfer instructions shall have been received in
writing by the Trustee no later than 10 Business Days prior to the applicable
Interest Payment Date. Any interest not punctually paid or duly provided for
shall be payable as provided in the Indenture referred to on the reverse hereof.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH
ON THE REVERSE HEREOF AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE
THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE.
This note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by or
on behalf of the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, Temple-Inland Inc. has caused this instrument to be
signed in its name by the facsimile signatures of its duly authorized officers,
and has caused a facsimile of its corporate seal to be affixed hereunto or
imprinted hereon.
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION TEMPLE-INLAND INC.
This is one of the Securities of the
series designated herein referred to in
the within-mentioned Indenture By:
THE CHASE MANHATTAN BANK
President
As Trustee
By: Attest:
Authorized Officer
Secretary
ICN 0001-
[FORM OF REVERSE OF NOTE]
TEMPLE-INLAND INC.
MEDIUM-TERM NOTE, SERIES F
This note is one of a duly authorized issue of debentures, notes, bonds or
other evidences of indebtedness of the Company (herein called the "Securities")
of the series hereinafter specified, all issued or to be issued under and
pursuant to an indenture dated as of September 1, 1986, as amended and
supplemented (herein called the "Indenture"), duly executed and delivered by the
Company to The Chase Manhattan Bank, formerly known as Chemical Bank, as Trustee
(hereinafter called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the Holders of the Securities. The Securities may be
issued in one or more series, which different series (and which Securities
issued within each series) may be issued in various aggregate principal amounts,
may mature at different times, may bear interest, if any, at different rates,
may be subject to different redemption provisions, if any, may be subject to
different sinking, purchase or analogous funds, if any, and may otherwise vary
as in the Indenture provided. This Note is one of a series designated as
"Medium-Term Notes, Series F, due from nine months to thirty years from date of
issue" of the Company, limited in aggregate principal amount to U.S.
$500,000,000, or the substantial equivalent thereof in the Specified Currency.
References herein to "Notes" shall mean the Notes of Series F.
The interest payable hereon on each Interest Payment Date will include
accrued interest from and including the Original Issue Date or from and
including the last date to which interest has been paid, as the case may be, to
but excluding such Interest Payment Date; provided, however, that if the
interest rate is reset weekly, interest payments shall be the amount of interest
accrued from and including the Original Issue Date or from and excluding the
last date to which interest has been paid, as the case may be, to and including
the Record Date immediately preceding such Interest Payment Date, except that at
Maturity, the interest payable will include interest accrued to, but excluding
the Maturity Date or date of redemption. Accrued interest will be calculated by
multiplying the principal amount hereof by an accrued interest factor. Such
accrued interest factor is computed by adding the interest factor calculated for
each day in such period from and including the date of issue, or from and
including the last date to which interest has been paid or duly provided for, to
but excluding the date for which accrued interest is being calculated. Unless
otherwise specified on the face hereof, the interest factor (expressed as a
decimal rounded upwards, if necessary, to the nearest one hundred-thousandth of
a percent, with five one-millionths of a percentage point rounded upward) for
each such day is computed by dividing the interest rate applicable to such date
by 360 (or, in the case of the Treasury Rate Notes, by the actual number of days
in the year). The rate of interest in effect on any date will be (a) if such day
is an Interest Reset Date, the interest rate pertaining to such Interest Reset
Date, or (b) if such day is not an Interest Reset Date, the interest rate
determined as of the Interest Determination Date pertaining to the immediately
preceding Interest Reset Date; provided, however, that the interest rate in
effect from the Original Issue Date to but excluding the first Interest Reset
Date will be the Initial Interest Rate. Notwithstanding the foregoing, the
interest rate hereon shall not be greater than the Maximum Interest Rate, if
any, or less than the Minimum Interest Rate, if any, shown on the face hereof.
In addition, the interest rate hereon shall in no event be higher than the
maximum rate permitted by New York law as the same may be modified by United
States law of general application. Commencing with the first Interest Reset
Date specified on the face hereof following the Original Issue Date and
thereafter upon each succeeding Interest Reset Date specified on the face hereof
the rate at which interest on this Note is payable shall be adjusted as provided
herein; provided, however, that if any Interest Reset Date would otherwise be a
day that is not a Business Day, such Interest Reset Date shall be the next
succeeding Business Day, except that if such Note is a LIBOR Note and the next
succeeding Business Day falls in the next succeeding calendar month, such
Interest Reset Date shall be the immediately preceding Business Day. Subject to
applicable provisions of law and except as specified herein, on each Interest
Reset Date, the rate of interest shall be the rate determined in accordance with
the provisions of the applicable heading below.
Unless otherwise specified on the face hereof, the "Calculation Date," if
applicable, pertaining to any Interest Determination Date will be the earlier of
(i) the tenth calendar day after such Interest Determination Date or, if such
day is not a Business Day, the next succeeding Business Day or (ii) the Business
Day immediately preceding the applicable Interest Payment Date or the date of
Maturity, as the case may be.
Determination of CD Rate. If the Base Rate is the CD Rate, as indicated
on the face hereof the "CD Rate" for each Interest Reset Period shall be the
rate on the CD Rate Interest Determination Date for negotiable certificates of
deposit having the Index Maturity designated on the face hereof as published by
the Board of Governors of the Federal Reserve System in "Statistical Release
H.15(519), Selected Interest Rates" ("H.15(519)"), or any successor publication
of the Board of Governors of the Federal Reserve System, under the heading "CDs
(Secondary Market)." If such rate is not published prior to 3:00 p.m., New York
City time, on the Calculation Date pertaining to such Interest Determination
Date, then the "CD Rate" for such Interest Reset Period will be the rate on such
Interest Rate Determination Date for negotiable certificates of deposit of the
Index Maturity designated on the face hereof as published by the Federal Reserve
Bank of New York in its daily statistical release, "Composite 3:30 p.m.
Quotations for U.S. Government Securities" ("Composite Quotations") under the
heading "Certificates of Deposit." If by 3:00 p.m., New York City time, on such
Calculation Date such rate is not yet published in either H.15(519) or Composite
Quotations, then the "CD Rate" for such Interest Reset Period will be calculated
by the Calculation Agent and will be the arithmetic mean of the secondary market
offered rates as of 10:00 a.m., New York City time, on such Interest
Determination Date of three leading nonbank dealers in negotiable U.S. dollar
certificates of deposit in The City of New York selected by the Calculation
Agent for negotiable certificates of deposit of major United States money center
banks of the highest credit standing (in the market for negotiable certificates
of deposit) with a remaining maturity closest to the Index Maturity designated
on the face hereof in a denomination of $5,000,000; provided, however, that if
the dealers selected as aforesaid by the Calculation Agent are not quoting
offered rates as mentioned in this sentence, the "CD Rate" for such Interest
Reset Period will be the same as the CD Rate for the immediately preceding
Interest Reset Period (or, if there was no such Interest Reset Period, the
Initial Interest Rate).
The interest rate for each Interest Reset Date shall be the CD Rate
applicable to such Interest Reset Date plus or minus the Spread or Spread
Multiplier, if any, as indicated on the face hereof; provided, however, that the
interest rate in effect for the period from the Original Issue Date to the first
Interest Reset Date will be the Initial Interest Rate. For a CD Rate Note, the
CD Rate Interest Determination Date will be the second Business Day preceding
the Interest Reset Date.
Determination of Commercial Paper Rate. If the Base Rate is the
Commercial Paper Rate, as indicated on the face hereof, the "Commercial Paper
Rate," with respect to any Commercial Paper Interest Determination Date, shall
be the Money Market Yield (calculated as described below) of the rate on such
date for paper having the Index Maturity specified in on the face hereof as
published in "H.15(519)," under the heading "Commercial Paper - Financial." If
such rate is not published prior to 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Commercial Paper Interest Determination
Date, then the Commercial Paper Rate shall be the Money Market Yield of the rate
on such Commercial Paper Interest Determination Date for commercial paper having
the Index Maturity specified on the face hereof as published in "Composite
Quotations" under the heading "Commercial Paper." If by 3:00 p.m., New York City
time, on such Calculation Date such rate is not yet published in either
H.15(519) or Composite Quotations, the Commercial Paper Rate for that Commercial
Paper Interest Determination Date shall be the Money Market Yield of the
arithmetic mean, as calculated by the Calculation Agent on such Calculation
Date, of the offered rates, as of 11:00 a.m., New York City time, on that
Commercial Paper Interest Determination Date, of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent for
commercial paper having the Index Maturity specified on the face hereof placed
for an industrial issuer whose bond rating is "AA," or the equivalent, from a
nationally recognized rating agency; provided, however, that if fewer than three
dealers selected as aforesaid by the Calculation Agent are quoting as mentioned
in this sentence, the Commercial Paper Rate will be the Commercial Paper Rate in
effect on such Commercial Paper Interest Determination Date.
"Money Market Yield" shall be a yield (expressed as a percentage rounded
upwards, if necessary, to the next higher one hundred thousandth of a percentage
point) calculated in accordance with the following formula:
Money Market Yield = D x 360
-------------------- x 100
360 - (D x M)
where "D" refers to the per annum rate for commercial paper quoted on a bank
discount basis and expressed as a decimal; and "M" refers to the actual number
of days in the interest period for which interest is being calculated.
The interest rate for each Interest Reset Date shall be the Commercial
Paper Rate applicable to such Interest Reset Date plus or minus the Spread or
Spread Multiplier, if any, as indicated on the face hereof; provided, however,
that the interest rate in effect for the period from the Original Issue Date to
the first Interest Reset Date will be the Initial Interest Rate. For a
Commercial Paper Rate Note, the Commercial Paper Interest Determination Date
will be the second Business Day preceding the Interest Reset Date.
Determination of Federal Funds Rate. If the Base Rate is the Federal
Funds Rate, as specified on the face hereof, the "Federal Funds Rate" for each
Interest Reset Period shall be the effective rate on the Federal Funds Rate
Interest Determination Date for Federal Funds as published in H.15(519) under
the heading "Federal Funds (Effective)." If such rate is not published prior to
3:00 p.m., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, the "Federal Funds Rate" for such Interest Reset
Period shall be the rate on such Interest Determination Date as published in
Composite Quotations under the heading "Federal Funds/Effective Rate." If by
3:00 p.m., New York City time, on such Calculation Date such rate is not yet
published in either H.15(519) or Composite Quotations, then the "Federal Funds
Rate" for such Interest Reset Period shall be the rate on such Interest
Determination Date made publicly available by the Federal Reserve Bank of New
York which is equivalent to the rate that appears in H.15(519) under the heading
"Federal Funds (Effective);" provided, however, that if such rate is not made
publicly available by the Federal Reserve Bank of New York by 3:00 p.m., New
York City time, on such Calculation Date, the "Federal Funds Rate" for such
Interest Reset Period will be the same as the Federal Funds Rate in effect for
the immediately preceding Interest Reset Period (or, if there was no such
Interest Reset Period, the Initial Interest Rate).
In the case of a Federal Funds Rate Note that resets daily, the interest
rate on such Note for the period from and including a Monday to but excluding
the succeeding Monday will be reset by the Calculation Agent for such Note on
such second Monday (or, if not a Business Day, on the next succeeding Business
Day) to a rate equal to the average of the Federal Funds Rates in effect with
respect to each such day in such week.
The interest rate for each Interest Reset Date shall be the Federal Funds
Rate applicable to such Interest Reset Date plus or minus the Spread or Spread
Multiplier, if any, as indicated on the face hereof; provided, however, that the
interest rate in effect for the period from the Original Issue Date to the first
Interest Reset Date will be the Initial Interest Rate. For a Federal Funds Rate
Note, the Federal Funds Rate Interest Determination Date will be the second
Business Day preceding the Interest Reset Date.
Determination of LIBOR. If the Base Rate is LIBOR, as specified on the
face hereof, "LIBOR" for each Interest Reset Date will be determined by the
Calculation Agent as follows:
(i) With respect to a LIBOR Interest Determination Date, LIBOR will be
either: (A) if "LIBOR Telerate" is specified on the face hereof as the Reporting
Service or if a source for LIBOR is not specified, the rate for deposits in the
London interbank market in the Index Currency designated on the face hereof
having the Index Maturity designated on the face hereof commencing on such
Interest Reset Date that appears on the Designated LIBOR Page as of 11:00 a.m.,
London time, on such LIBOR Interest Determination Date, or (B) if "LIBOR
Reuters" is specified on the face hereof as the Reporting Service, the
arithmetic mean of the offered rates (unless the specified Designated LIBOR Page
by its terms provides only for a single rate, in which case such single rate
shall be used) for deposits in the London interbank market in the Index Currency
having the Index Maturity designated on the face hereof and commencing on the
Interest Reset Date that appear on the Designated LIBOR Page as of 11:00 a.m.,
London time, on such LIBOR Interest Determination Date, if at least two such
offered rates appear (unless, as aforesaid, only a single rate is required) on
such Designated LIBOR Page. If no rate appears on the Designated LIBOR Page
(or, in the case of clause (i)(B) above, if the Designated LIBOR Page by its
terms provides for more than a single rate but fewer than two offered rates
appear on such Page), LIBOR in respect of such Interest Determination Date will
be determined as if the parties had specified the rate described in clause (ii)
below.
(ii) With respect to a LIBOR Interest Determination Date to which the last
sentence of clause (i) above applies, the Calculation Agent will request the
principal London offices of each of four major reference banks in the London
interbank market, as selected by the Calculation Agent, to provide the
Calculation Agent with its offered quotation for deposits in the Index Currency
for the period of the Index Maturity designated on the face hereof commencing on
the Interest Reset Date to prime banks in the London interbank market at
approximately 11:00 a.m., London time, on such LIBOR Interest Determination Date
and in a principal amount that is representative for a single transaction in
such Index Currency in such market at such time. If at least two such
quotations are provided, LIBOR determined on such LIBOR Interest Determination
Date will be the arithmetic mean of such quotations. If fewer than two
quotations are provided, LIBOR determined on such LIBOR Interest Determination
Date will be the arithmetic mean of the rates quoted at approximately 11:00 a.m.
(or such other time specified on the face hereof), in the applicable Principal
Financial Center, on such LIBOR Interest Determination Date for loans made in
the Index Currency to leading European banks having the Index Maturity
designated on the face hereof commencing on the Interest Reset Date and in a
principal amount that is representative for a single transaction in such Index
Currency in such market at such time by three major banks in such Principal
Financial Center selected by the Calculation Agent; provided, however, that if
the banks so selected by the Calculation Agent are not quoting as mentioned in
this sentence, LIBOR with respect to such LIBOR Interest Determination Date will
be LIBOR in effect on such LIBOR Interest Determination Date.
"Designated LIBOR Page" means either (a) if "LIBOR Reuters" is designated
as the Reporting Service on the face hereof, the display designated as page
"LIBO" with respect to the applicable Index Currency on the Reuters Monitor
Money Rates Service (or such other page as may replace page "LIBO" on such
service for the purpose of displaying the London interbank rates of major banks
for the applicable Index Currency), or (b) if "LIBOR Telerate" is designated as
the Reporting Service on the face hereof, the display designated as page "3750"
with respect to the applicable Index Currency on the Dow Jones Market Service
(or such other page as may replace page "3750" on such service or such other
service as may be nominated by the British Bankers' Association for the purpose
of displaying the London interbank rates of major banks for the applicable Index
Currency). If neither LIBOR Reuters nor LIBOR Telerate is specified as the
Reporting Service on the face hereof, LIBOR for the applicable Index Currency
will be determined as if LIBOR Telerate (and, if the U.S. Dollar is the Index
Currency, page 3750) had been specified.
"Index Currency" means the Currency specified on the face hereof as the
Currency with respect to which LIBOR shall be calculated. If no such Currency is
specified on the face hereof, the Index Currency shall be U.S. dollars.
"Principal Financial Center" will be, for the purpose of clause (ii)
above, the principal financial center of the country of the specified Index
Currency, which is generally the capital city of such country, except that with
respect to U.S. Dollars, Deutsche Marks, and ECUs, the Principal Financial
Center shall be The City of New York, Frankfurt, and Brussels, respectively.
The interest rate for each Interest Reset Date shall be LIBOR applicable
to such Interest Reset Date plus or minus the Spread or Spread Multiplier, if
any, as indicated on the face hereof; provided, however, that the interest rate
in effect for the period from the Original Issue Date to the first Interest
Reset Date will be the Initial Interest Rate. For a LIBOR Note, the LIBOR
Interest Determination Date will be the second London Banking Day immediately
preceding the Interest Reset Date with respect to such Note.
Determination of Treasury Rate. If the Base Rate is the Treasury Rate, as
indicated on the face hereof, the "Treasury Rate," with respect to any Treasury
Interest Determination Date, shall be the rate for the most recent auction of
direct obligations of the United States ("Treasury bills") having the Index
Maturity specified on the face hereof as published in H.15(519) under the
heading "U.S. Government Securities - Treasury bills -- Auction Average
(Investment)" or, if not so published by 3:00 p.m., New York City time, on the
Calculation Date pertaining to such Treasury Interest Determination Date, the
auction average rate (expressed as a bond equivalent, rounded, upwards if
necessary, to the next higher one hundred thousandth of a percentage point, on
the basis of a year of 365 or 366 days, as applicable, and applied on a daily
basis) for such auction as otherwise announced by the United States Department
of the Treasury. If the results of the auction of Treasury bills having the
Index Maturity specified on the face hereof are not published or reported as
provided above by 3:00 p.m., New York City time, on such Calculation Date, or if
no such auction is held in a particular week, then the Treasury Rate shall be
the rate as published in H.15(519) under the heading "U.S. Government Securities
- - Treasury Bills Secondary Market." If such rate is not so published by 3:00
p.m., New York City time, on such Calculation Date, then the Treasury Rate shall
be calculated by the Calculation Agent and shall be a yield to maturity
(expressed as a bond equivalent rounded, upwards if necessary, to the next
higher one hundred thousandth of a percentage point, on the basis of a year of
365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic
mean, as calculated by the Calculation Agent on such Calculation Date, of the
secondary market bid rates as of approximately 3:30 p.m., New York City time, on
such Treasury Interest Determination Date, of three leading primary United
States government securities dealers in The City of New York selected by the
Calculation Agent, for the issue of Treasury bills with a remaining maturity
closest to the specified Index Maturity; provided, however, that if the dealers
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, the Treasury Rate will be the Treasury Rate in effect on such
Treasury Interest Determination Date.
The interest rate for each Interest Reset Date shall be the Treasury Rate
applicable to such Interest Reset Date plus or minus the Spread or Spread
Multiplier, if any, as indicated on the face hereof; provided, however, that the
interest rate in effect for the period from the Original Issue Date to the first
Interest Reset Date will be the Initial Interest Rate. For a Treasury Rate
Note, the Treasury Interest Determination Date will be the day of the week on
which Treasury bills (as defined below) would normally be auctioned in the week
in which such Interest Reset Date falls. Treasury bills are usually sold at
auction on Monday of each week, unless that day is a legal holiday, in which
case the auction is usually held on the following Tuesday, except that such
auction may be held on the preceding Friday. If, as the result of a legal
holiday, an auction is so held on the preceding Friday, such Friday will be the
Treasury Interest Determination Date pertaining to an Interest Reset Date
occurring in the next succeeding week. If an auction date shall fall on a day
thar would otherwise be an Interest Reset Date for a Treasury Rate Note, then
such Interest Reset Date shall instead be the first Business Day immediately
following such auction date.
Determination of Prime Rate. If the Base Rate is the Prime Rate, as
indicated on the face hereof, the "Prime Rate," with respect to any Prime Rate
Interest Determination Date, shall be the rate on such date as published in
H.15(519) under the heading "Bank Prime Loan." If such rate is not published by
9:00 a.m., New York City time, on the Calculation Date pertaining to such
Interest Determination Date, then the Prime Rate will be determined by the
Calculation Agent and will be the arithmetic mean of the rates of interest
publicly announced by each bank that appears on the Reuters Screen USPRIMe1 Page
(as defined below) as such bank's prime rate or base lending rate as in effect
for that Interest Determination Date. "Reuters Screen USPRIME1 Page" means the
display designated as page "USPRIME1" on the Reuters Monitor Money Rates Service
(or such other page as may replace the USPRIME1 page on that service for the
purpose of displaying prime rates or base lending rates of major United States
banks). If fewer than four such rates but more than one such rate appear on the
Reuters Screen USPRIME1 Page for such Interest Determination Date, the Prime
Rate shall be determined by the Calculation Agent and will be the arithmetic
mean of the prime rates quoted on the basis of actual number of days in the year
divided by 360 as of the close of business on such Interest Determination Date
by at least two major money center banks in New York City selected by the
Calculation Agent (after consulting with the Company). If fewer than two such
rates appear on the Reuters Screen USPRIME1 Page, the Prime Rate will be
determined by the Calculation Agent and will be the arithmetic mean of the prime
rates furnished in New York City by three substitute banks or trust companies
organized and doing business under the laws of the United States, or any State
thereof, in each case having total equity capital of at least U.S. $500,000,000
and being subject to supervision or examination by Federal or State authority,
selected by the Calculation Agent (after consulting with the Company) to provide
such rate or rates; provided, however, that if the banks selected as aforesaid
are not quoting as mentioned in this sentence, the Prime Rate will remain the
Prime Rate in effect on such Interest Determination Date.
The interest rate for each Interest Reset Date shall be the Prime Rate
applicable to such Interest Reset Date plus or minus the Spread or Spread
Multiplier, if any, as indicated on the face hereof; provided, however, that the
interest rate in effect for the period from the Original Issue Date to the first
Interest Reset Date will be the Initial Interest Rate. For a Prime Rate Note,
the Prime Rate Interest Determination Date will be the second Business Day
preceding the Interest Reset Date.
Determination of CMT Rate. If the Base Rate is the CMT Rate, as indicated
on the face hereof, the "CMT Rate," with respect to any CMT Rate Interest
Determination Date, shall be the rate displayed on the Designated CMT Telerate
Page under the caption "Treasury Constant Maturities--Federal Reserve Board
release H.15--Mondays approximately 3:45 P.M.," under the column for the
Designated CMT Maturity Index (as defined below) for (i) if the Designated
Telerate Page is 7055, the rate on such Interest Determination Date, and (ii) if
the Designated CMT Telerate Page is 7052, the week, or the month, as applicable,
ended immediately preceding the week in which the related Interest Determination
Date occurs. If such rate is no longer displayed on the relevant page, or if not
displayed by 3:00 p.m., New York City time, on the related Calculation Date,
then the CMT Rate for such Interest Determination Date will be such Treasury
constant maturity rate for the Designated CMT Maturity Index as published in
H.15(519).
If such rate is no longer published, or if not published by 3:00 p.m., New
York City time, on the related Calculation Date, then the CMT Rate for such
Interest Determination Date will be such Treasury constant maturity rate for the
designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the Interest Determination Date with respect
to such Interest Reset Date as may then be published by either the Board of
Governors of the Federal Reserve System or the United States Department of the
Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in the
relevant H.15(519). If such information is not provided by 3:00 p.m., New York
City time, on the related Calculation Date, then the CMT Rate for such Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market closing
side offer prices as of approximately 3:30 p.m., New York City time, on the
Interest Determination Date reported, according to their written records, by
three leading primary United States government securities dealers (each, a
"Reference Dealer") in the City of New York selected by the Calculation Agent
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent cannot obtain three such Treasury Note quotations, the CMT
Rate for such Interest Determination Date will be calculated by the Calculation
Agent and will be a yield to maturity based on the arithmetic mean of the
secondary market offer side prices as of approximately 3:30 p.m., New York City
time, on the Interest Determination Date of three Reference Dealers in the City
of New York (from five such Reference Dealers selected by the Calculation Agent
and eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for such Treasury Notes with an original maturity of the number of
years that is the next highest to the Designated CMT Maturity Index and a
remaining term to maturity closest to the Designated CMT Maturity Index in an
amount of at least U.S. $100 million. If three or four (and not five) of such
Reference Dealers are quoting as described above, then the CMT Rate will be
based on the arithmetic mean of the offer prices obtained and neither the
highest nor the lowest of such quotes will be eliminated; provided however, that
if fewer than three Reference Dealers selected by the Calculation Agent are
quoting as described herein, the CMT Rate will be the CMT Rate in effect on such
Interest Determination Date. If two Treasury Notes with an original maturity as
described in the third preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the quotes for the CMT Rate
Note with the shorter remaining term to maturity will be used.
"Designated CMT Telerate Page" means the display on the Dow Jones Market
Service designated on the face hereof for the purpose of displaying Treasury
Constant Maturities as reported in H.15(519) (or any other page as may replace
such page on that service for the purpose of displaying Treasury Constant
Maturities as reported in H.15(519)). If no such page is specified on the face
hereof, the Designated CMT Telerate Page shall be 7052 for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of the
U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years) specified
on the face hereof with respect to which the CMT Rate will be calculated. If no
such maturity is specified on the face hereof, the Designated CMT Maturity Index
shall be 2 years.
The interest rate for each Interest Reset Date shall be the CMT Rate
applicable to such Interest Reset Date plus or minus the Spread or Spread
Multiplier, if any, as indicated on the face hereof; provided, however, that the
interest rate in effect for the period from the Original Issue Date to the first
Interest Reset Date will be the Initial Interest Rate. For a CMT Rate Note, the
CMT Rate Interest Determination Date will be the second Business Day preceding
the Interest Reset Date.
Determination of Eleventh District Cost Of Funds Rate. If the Base Rate
is the Eleventh District Cost Of Funds Rate as specified on the face hereof, the
"Eleventh District Cost of Funds Rate," with respect to an Eleventh District
Cost of Funds Interest Determination Date, shall be the rate equal to the
monthly weighted average cost of funds for the calendar month immediately
preceding the month in which such Interest Determination Date falls, as set
forth under the caption "11th district" on Telerate Page 7058 (as defined below)
as of 11:00 a.m., San Francisco time, on such Interest Determination Date. If
such rate does not appear on Telerate Page 7058 on such Interest Determination
Date, then the Eleventh District Cost of Funds Rate on such Interest
Determination Date will be the monthly weighted average cost of funds paid by
member institutions of the Eleventh Federal Home Loan Bank District that was
most recently announced (the "Eleventh District Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding the
date of such announcement.
If the FHLB of San Francisco fails to announce such rate for the calendar
month immediately preceding such Interest Determination Date, then the Eleventh
District Cost of Funds Rate determined as of such Interest Determination Date
will be the Eleventh District Cost of Funds Rate in effect on such Interest
Determination Date. "Telerate Page 7058" means the display designated as page
"7058" on the Dow Jones Market Service (or such other page as may replace the
7058 page on that service for the purpose of displaying the monthly weighted
average cost of funds paid by member institutions of the Eleventh Federal Home
Loan Bank district).
The interest rate for each Interest Reset Date shall be the Eleventh
District Cost of Funds Rate applicable to such Interest Reset Date plus or minus
the Spread or Spread Multiplier, if any, as indicated on the face hereof;
provided, however, that the interest rate in effect for the period from the
Original Issue Date to the first Interest Reset Date will be the Initial
Interest Rate. For an Eleventh District Cost of Funds Rate Note, the Eleventh
District Cost of Funds Interest Determination Date will be the last working day
of the month immediately preceding the applicable Interest Reset Date on which
the FHLB of San Francisco publishes the Eleventh District Index.
The Chase Manhattan Bank shall be the Calculation Agent, unless another
Calculation Agent is specified on the face hereof. At the request of the Holder
hereof, the Calculation Agent will provide the interest rate then in effect and,
if determined, the interest rate that will become effective on the next Interest
Reset Date.
In case an Event of Default, as defined in the Indenture, with respect to
the Notes shall have occurred and be continuing, the principal hereof (or, if
this Note is an Original Issue Discount Security, such portion of the principal
amount as may be specified pursuant to the Indenture) and accrued interest
hereon, may be declared and upon such declaration shall become due and payable,
in the manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of a majority in principal amount at maturity of
the Securities at the time outstanding of each series to be affected, evidenced
as in the Indenture provided, to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or modifying in any manner the rights of the Holders of the
Securities; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each outstanding Security affected thereby,
(i) change the Maturity of the principal of, or the Stated Maturity of any
premium on, or any installment of interest on, any Security, or reduce the
principal amount thereof or the interest or any premium thereon, or change the
method of computing the amount of principal thereof or interest thereon on any
date, or change any Place of Payment, or the coin or currency or currency unit
in which any Security or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Maturity
or the Stated Maturity thereof (or, in the case of redemption or repayment, on
or after the Redemption Date or the Repayment Date), or (ii) reduce the
percentage in principal amount of the outstanding Securities of any series, the
consent of the Holders of which is required for any such supplemental indenture,
or the consent of whose Holders is required for any waiver, or (iii) modify
certain other provisions of the Indenture. It is also provided in the Indenture
that, with respect to certain defaults or Events of Default regarding the
Securities of any series, the Holders of a majority in principal amount at
Maturity of the Securities of such series at the time outstanding may on behalf
of the Holders of all of the Securities of such series waive any past default or
Event of Default and its consequences, except a default in the payment of the
principal of (or premium, if any) or interest on any Security of such series or
in respect of certain other covenants or provisions of the Indenture. Any such
consent or waiver by the Holder of this Note shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not any notation of such consent or waiver is made upon this
Note or such other Notes.
No reference herein to the Indenture and no reference to any provision of
this 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
premium, if any) and interest, if any, on this Note at the place, at the
respective times, at the rate and (except as provided in the Indenture in the
case of Securities payable in currencies other than U.S. Dollars that are not
available to the Company due to circumstances beyond its control) in the
currency herein prescribed.
The Notes are issuable in registered form without coupons in the minimum
denomination of U.S. $1,000 and in integral multiples of U.S. $1,000 in excess
thereof or if denominated in a Specified Currency other than U.S. Dollars, the
equivalent of $1,000 (rounded down to an integral multiple of 1,000 units of the
Specified Currency) and any larger amount that is an integral multiple of 1,000
units of such specified Currency. This Note may be exchanged by the Holder
hereof without charge except for any tax or other governmental charge imposed in
connection therewith, for a like aggregate principal amount of Notes of other
authorized denominations, having the same terms as this Note, in the manner and
subject to the limitations provided in the Indenture at the Corporate Trust
Office.
If an Initial Redemption Date is specified on the face hereof, this Note
may be redeemed at the option of the Company as a whole, or from time to time in
part, on any date, if any, after the Initial Redemption Date specified on the
face hereof and prior to the Maturity Date, upon mailing a notice of such
redemption not less than thirty nor more than sixty days prior to the date fixed
for redemption to the Holders of Notes at their last registered addresses, all
as provided in the Indenture, at the Optional Redemption Prices, if any,
specified on the face hereof (expressed in percentages of the principal amount)
together in each case with accrued interest to the date fixed for redemption.
If so specified on the face hereof, the Holder of this Note shall be
entitled to receive payment in U.S. Dollars at the Exchange Rate determined as
set forth in the Indenture by notifying the Trustee at the time and in the
manner described therein. Costs, if any, associated with the conversion of the
Specified Currency into U.S. dollars shall be borne by such Holder through
deduction from payments required to be made to such Holder on this Note.
Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
registered Holder hereof as the owner of this Note for the purpose of receiving
payment of the principal hereof (and premium, if any), and (subject to certain
provisions relating to interest) interest hereon and for all other purposes
whatsoever, whether or not such Note be overdue, and neither the Company nor the
Trustee nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary.
No recourse shall be had for the payment of the principal of (or premium,
if any) or the interest on this Note, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture or any
indenture supplemental thereto, against any incorporator, stockholder, officer,
director or employee, as such, past, present or future, of the Company or any
successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as a part of the consideration for
the issue hereof, expressly waived and released.
All terms used in this Note that are defined in the Indenture shall have
the meanings assigned to them therein.
This Note shall be governed by and construed in accordance with the law of the
State of New York.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCUDING ZIP CODE OF ASSIGNEE
________________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
________________________________________________________________________________
to transfer said Note on the books of the Company, with full power of
substitution in the premises.
Dated: _______________________ Signature: _______________________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within instrument in every particular, without
alteration or enlargement, or any change whatever.
Exhibit 12.01
TEMPLE-INLAND INC.
RATIO OF EARNINGS TO FIXED CHARGES-WITHOUT TIFS DEPOSIT INTEREST
(dollars in millions)
Three Month Fiscal Year
------------ ---------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ----- ---- ---- ---- ---- ----
Fixed Charges:
Interest expense 26.80 28.20 112.30 112.90 111.30 94.80 81.90
TIFS interest on
borrowings 32.00 35.00 157.00 127.00 121.00 81.00 99.00
Interest capitalized
during period 0.50 0.40 2.00 3.00 39.00 28.00 13.00
Portion of rent
expense representative
of interest 0.83 1.22 4.88 4.10 3.43 3.32 3.03
------ ------ ------ ------ ------ ------ ------
Total fixed charges 60.13 64.82 276.18 247.00 274.73 207.12 196.93
===== ====== ====== ====== ====== ====== ======
Earnings:
Pretax income from
continuing operations 44.80 21.70 95.00 155.90 431.00 193.30 96.20
Add:
Fixed charges
from above 60.13 64.82 276.18 247.00 274.73 207.12 196.93
Less interest capitalized
during period (0.50) (0.40) (2.00) (3.00) (39.00)(28.00) (13.00)
Current period amortization
of interest capitalized
in prior periods 2.12 2.12 8.47 8.66 6.51 5.82 5.44
----- ----- ------ ----- ----- ------ -----
106.54 88.24 377.64 408.56 673.24 378.24 285.57
====== ===== ====== ====== ====== ====== ======
Ratio of Earnings to
Fixed Charges 1.77 1.36 1.37 1.65 2.45 1.83 1.45
====== ===== ====== ===== ===== ===== =====
Exhibit 12.01
(continued)
TEMPLE-INLAND INC.
RATIO OF EARNINGS TO FIXED CHARGES-WITH TIFS INTEREST EXPENSE
(dollars in millions)
Three Months Fiscal Year
------------- ----------------------------------
1998 1997 1997 1996 1995 1994 1993
Fixed Charges:
Interest expense - Parent
Company 26.80 28.20 112.30 112.90 111.30 94.80 81.90
Interest expense - Borrowed
Funds (TIFS) 32.00 35.00 157.00 127.00 121.00 81.00 99.00
Interest on Deposits
(TIFS) 89.00 75.00 331.00 308.00 313.00 254.00 237.00
Interest capitalized
during period 0.50 0.40 2.00 3.00 39.00 28.00 13.00
Portion of rent expense
representative
of interest 0.83 1.22 4.88 4.10 3.43 3.32 3.03
----- ----- ----- ----- ----- ----- -----
Total fixed charges 149.13 139.82 607.18 555.00 587.73 461.12 433.93
====== ====== ====== ====== ====== ====== ======
Earnings:
Pretax income from
continuing
operations 44.80 21.70 95.00 155.90 431.00 193.30 96.20
Add:
Fixed charges
from above 149.13 139.82 607.18 555.00 587.73 461.12 433.93
Less interest capitalized
during period (0.50) (0.40) (2.00) (3.00) (39.00) (28.00) (13.00)
Current period amortization
of interest capitalized
in prior periods 2.12 2.12 8.47 8.66 6.51 5.82 5.44
----- ---- ---- ----- ----- ----- -----
195.54 163.24 708.6 716.56 986.24 632.24 522.57
====== ====== ====== ====== ====== ====== ======
Ratio of Earnings
to Fixed Charges 1.31 1.17 1.17 1.29 1.68 1.37 1.20
======= ===== ===== ===== ===== ===== =====
Exhibit 12.01
(continued)
TEMPLE-INLAND INC.
RATIO OF EARNINGS TO FIXED CHARGES-PARENT COMPANY
(dollars in millions)
Three Months Fiscal Year
------------ -----------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
Fixed Charges:
Interest expense 26.80 28.20 112.30 112.90 111.30 94.80 81.90
Interest capitalized during
period 0.50 0.40 2.00 3.30 38.60 27.70 12.50
Portion of rent expense
representative
of interest 0.50 0.87 3.49 3.09 2.39 2.07 1.96
------ ----- ----- ----- ------ ----- -----
Total fixed charges 27.80 29.47 117.79 119.29 152.29 124.57 96.36
===== ===== ======= ====== ======= ====== ======
Earnings:
Pretax income from
continuing operations 44.80 21.70 95.00 155.90 431.00 193.30 96.20
Less: TIFS income
before tax (36.70) (29.50) (132.10) (63.10) (98.10) (56.30) (67.50)
Add: Dividends from TIFS -
ignore contributions
to TIFS - - 275.00 50.00 50.00 30.00 42.00
Pretax income from
continuing operations
adjusted for equity
method investee (TIFS) 8.10 (7.80) 237.90 142.80 382.90 167.00 70.70
Add:
Fixed charges
from above 27.80 29.47 117.79 119.29 152.29 124.57 96.36
Less interest capitalized
during period (0.50) (0.40) (2.00) (3.30) (38.60)(27.70) (12.50)
Current period amortization
of interest capitalized
in prior periods 2.12 2.12 8.47 8.66 6.51 5.82 5.44
----- ----- ----- ----- ----- ----- ----
37.52 23.39 362.15 267.45 503.10 269.69 160.00
====== ===== ====== ====== ====== ====== ======
Ratio of Earnings
to Fixed Charges 1.35 0.79 3.07 2.24 3.30 2.16 1.66
===== ==== ===== ==== ===== ===== =====
