-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CzRXbohPBaWg90h+L/hMaWvjYdulvkhUwUcD4NTyVU8UlvMLnlXYwD01muqPfpdW xSB/3FxbSaU91uIUMxzQQA== 0000950103-97-000039.txt : 19970123 0000950103-97-000039.hdr.sgml : 19970123 ACCESSION NUMBER: 0000950103-97-000039 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970122 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970122 SROS: CSX SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNION CARBIDE CORP /NEW/ CENTRAL INDEX KEY: 0000100790 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 131421730 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01463 FILM NUMBER: 97509028 BUSINESS ADDRESS: STREET 1: 39 OLD RIDGEBURY RD CITY: DANBURY STATE: CT ZIP: 06817-0001 BUSINESS PHONE: 2037942000 MAIL ADDRESS: STREET 1: 39 OLD RIDGEBURY RD CITY: DANBURY STATE: CT ZIP: 06817-0001 FORMER COMPANY: FORMER CONFORMED NAME: UNION CARBIDE CORP DATE OF NAME CHANGE: 19890806 FORMER COMPANY: FORMER CONFORMED NAME: UNION CARBIDE & CARBON CORP DATE OF NAME CHANGE: 19710317 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, C.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) January 22, 1997 UNION CARBIDE CORPORATION (Exact name of registrant as specified in its charter) New York (State or other jurisdiction of incorporation) 1-1463 13-1421730 (Commission File Number) (IRS Employer Identification No.) 39 Old Ridgebury Rd, Danbury, CT 06817-0001 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code 203-794-2000 Total number of sequentially numbered pages in this filing, including exhibits hereto: 67 Item 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 1.2 Distribution Agreement dated January 22, 1997 among Registrant, Credit Suisse First Boston Corporation, Morgan Stanley & Co. Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation. A distribution agreement in similar form may be used with one or more other distributors. 4.1.2.1 Medium-Term Notes Bond Resolution of Union Carbide Corporation. 4.2.1 Forms of Fixed and Floating Rate Medium-Term Notes (See Exhibits A and B to Exhibit 4.1.2.1 above). Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Dated: January 22, 1997 UNION CARBIDE CORPORATION By /s/ J. MACDONALD ----------------------- J. Macdonald Assistant Secretary EXHIBIT INDEX Exhibit Number 1.2 Distribution Agreement dated January 22, 1997 among Registrant, Credit Suisse First Boston Corporation, Morgan Stanley & Co. Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation. A distribution agreement in similar form may be used with one or more other distributors. 4.1.2.1 Medium-Term Notes Bond Resolution of Union Carbide Corporation. 4.2.1 Forms of Fixed and Floating Rate Medium-Term Notes (See Exhibits A and B to Exhibit 4.1.2.1 above). EX-1.2 2 Exhibit 1.2 $500,000,000 Union Carbide Corporation Medium-Term Notes DISTRIBUTION AGREEMENT January 22, 1997 Credit Suisse First Boston Corporation 11 Madison Avenue New York, NY 10010 Morgan Stanley & Co. Incorporated 1585 Broadway New York, NY 10036 Donaldson, Lufkin & Jenrette Securities Corporation 277 Park Avenue New York, NY 10172 Ladies and Gentlemen: 1. Introduction. Union Carbide Corporation, a New York corporation (the "Issuer"), confirms its agreement with each of you (individually, a "Distributor" and collectively, the "Distributors") with respect to the issue and sale from time to time by the Issuer of its Medium-Term Notes registered under the registration statements referred to in Section 2(a) (any such Medium-Term Notes being hereinafter referred to as the "Notes", which expression shall, if the context so admits, include any permanent global Note). Notes may be offered and sold pursuant to Section 3 of this Agreement in an aggregate amount not to exceed the amount of Registered Securities (as defined in Section 2(a) hereof) registered pursuant to such registration statements reduced by the aggregate amount of any other Registered Securities sold otherwise than pursuant to Section 3 of this Agreement. The Notes will be issued under the indenture dated as of June 1, 1995 (the "Indenture"), between the Issuer and The Chase Manhattan Bank (formerly Chemical Bank), as trustee (the "Trustee"). The Notes shall have the terms described in the Prospectus referred to in Section 2(a) as it may be amended or supplemented from time to time, including any supplement to the Prospectus that sets forth only the terms of a particular issue of the Notes (a "Pricing Supplement"). Notes will be issued, and the terms thereof established, from time to time by the Issuer in accordance with the Indenture and the Procedures (as defined in Section 3(d) hereof). 2. Representation and Warranties of the Issuer. The Issuer represents and warrants to, and agrees with, each Distributor as follows: (a) Registration statements (Nos. 33-60705 and 333-17309), relating to $700,000,000 initial offering price of debt securities of the Issuer (the "Registered Securities"), including a prospectus which, as supplemented from time to time, shall be used in connection with sales of the Notes, have been filed with the Securities and Exchange Commission (the "Commission") and have been declared effective under the Securities Act of 1933, as amended (the "Act"). Such registration statements, as amended as of the Closing Date (as defined in Section 3(e) hereof), are hereinafter collectively referred to as the "Registration Statement", and the prospectus included in the Registration Statement, as supplemented as of the Closing Date, including all material incorporated by reference therein, is hereinafter referred to as the "Prospectus". Any reference in this agreement to amending or supplementing the Prospectus shall be deemed to include the filing of materials incorporated by reference in the Prospectus after the Closing Date and any reference in this Agreement to any amendment or supplement to the Prospectus shall be deemed to include any such materials incorporated by reference in the Prospectus after the Closing Date. (b) On the effective date of each part of the Registration Statement, such part of the Registration Statement conformed in all respects to the requirements of the Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"), the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and the rules and regulations of the Commission under the Act, the Exchange Act and the Trust Indenture Act ("Rules and Regulations") and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and on the Closing Date, at each of the times of acceptance and delivery referred to in Section 6(a) hereof and at each of the times of amendment or supplement to the Registration Statement or the Prospectus (other than by a Pricing Supplement; the Closing Date and each such time being herein sometimes referred to as a "Representation Date"), each part of the Registration Statement and the Prospectus as then amended or supplemented will conform in all respects to the requirements of the Act, the Exchange Act, the Trust Indenture Act and the Rules and Regulations, and neither will omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, except that the foregoing does not apply to statements in or omissions from any of such documents based upon written information furnished to the Issuer by any Distributor specifically for use therein. (c) The Issuer has been duly incorporated, is validly existing as a corporation in good standing under the laws of the State of New York, and has the corporate power and authority to own its property and to conduct its business as described in the Prospectus, as amended or supplemented. (d) Each significant subsidiary (as defined in Regulation S-X under the Act) of the Issuer has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation and has the corporate power and authority to own its property and to conduct its business as described in the Prospectus, as amended or supplemented. (e) This Agreement and any applicable Terms Agreement (as defined in Section 3(b) hereof) have been duly authorized, executed and delivered by the Issuer. (f) The Indenture has been duly authorized, executed and delivered by the Issuer and is a valid and binding agreement of the Issuer, enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by fraudulent transfer, bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability. The Indenture has been duly qualified under the Trust Indenture Act. (g) The Notes have been duly authorized and established in conformity with the Indenture and, when the terms of a particular Note and of the issue and sale thereof have been duly authorized and established by all necessary corporate action in conformity with the Indenture and such Note has been duly completed, executed, authenticated and issued in accordance with the Indenture and delivered against payment therefor as contemplated by this Agreement and any applicable Terms Agreement, such Note will be entitled to the benefits of the Indenture and will be a valid and binding obligation of the Issuer, enforceable in accordance with its terms except as (i) the enforceability thereof may be limited by fraudulent transfer, bankruptcy, insolvency or similar laws affecting creditors' rights generally and (ii) the availability of equitable remedies may be limited by equitable principles of general applicability. (h) The execution and delivery by the Issuer of, and the performance by the Issuer of its obligations under, this Agreement, any applicable Terms Agreement, the Indenture and the Notes do not violate any provision of applicable law or the certificate of incorporation or by-laws of the Issuer or any agreement or other instrument that is binding upon the Issuer or any of its subsidiaries and is material to the Issuer and its subsidiaries, taken as a whole, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Issuer or any of its subsidiaries, and no consent, approval, authorization or order of or qualification with any governmental body or agency is required for the performance by the Issuer of its obligations under this Agreement, any applicable Terms Agreement, the Notes or the Indenture, except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes. (i) There has not been any material adverse change in the condition, financial or otherwise, or in the earnings, business or operations of the Issuer and its subsidiaries, taken as a whole, from that set forth in the Prospectus. (j) The Issuer is not an "investment company" or an entity "controlled" by an "investment company," as such terms are defined in the Investment Company Act of 1940, as amended. (k) There are no legal or governmental proceedings pending or, to the knowledge of the Issuer, threatened to which the Issuer or any of its subsidiaries is a party or to which any of the properties of the Issuer or any of its subsidiaries is subject that are required to be described in the Registration Statement or the Prospectus and are not so described or any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed or incorporated by reference as exhibits to the Registration Statement that are not described, filed or incorporated as required. (l) The consolidated financial statements included in the Registration Statement and Prospectus present fairly, in all material respects, the financial position of the Issuer and its subsidiaries as of the dates shown and their results of operations and cash flows for the periods shown, in conformity with generally accepted accounting principles in the United States; and the schedules included in the Registration Statement present fairly the information required to be stated therein. (m) Immediately after any sale of Notes by the Issuer hereunder or under any Terms Agreement, the aggregate amount of Notes which shall have been issued and sold by the Issuer hereunder or under any Terms Agreement and of any debt securities of the Issuer (other than such Notes) that shall have been issued and sold pursuant to the Registration Statement will not exceed the amount of debt securities registered under the Registration Statement. (n) The statements in the Prospectus under the captions "Description of Securities" and "Description of Notes", insofar as such statements constitute summaries of the documents referred to therein, fairly summarize the information set forth in such documents. 3. Appointment as Distributors; Agreement of Distributors; Solicitations. (a) Subject to the terms and conditions stated herein, the Issuer hereby appoints each of the Distributors as a non-exclusive agent of the Issuer for the purpose of soliciting or receiving offers to purchase the Notes from the Issuer by others during any Marketing Time. For purposes of this Agreement "Marketing Time" shall mean any time when no suspension of solicitation of offers to purchase Notes pursuant to Section 3(b) or Section 4(b) shall be in effect and any time when either any Distributor shall own any Notes with the intention of reselling them or the Issuer has accepted an offer to purchase Notes but the related settlement has not occurred. Without limiting the Issuer's rights to deal with others, the Issuer from time to time may (i) sell Registered Securities, including the Notes, in a firm commitment underwriting, (ii) sell Notes directly to investors, (iii) accept offers to purchase Notes solicited by a dealer other than the Distributors, (iv) appoint additional Distributors hereunder without obtaining the prior consent of any of the Distributors, provided that the Issuer shall notify each of the Distributors prior to making such an appointment and any additional Distributor shall agree to be bound by and subject to the terms and conditions of this Agreement binding on the Distributors, and (v) solicit other dealers to make offers for the purchase of Notes on such terms and conditions as the Issuer may agree to. As with the Distributors, other dealers may act as agent or purchase Notes from the Issuer as principal for resale. Each Distributor is authorized to engage the services of any other broker or dealer in connection with the offer or sale of Notes purchased by such Distributor as principal for resale to others and may reallow a portion of the commission, but such Distributor is not authorized to appoint sub-agents. (b) On the basis of the representations and warranties contained herein, but subject to the terms and conditions herein set forth, each Distributor agrees, as an agent of the Issuer, to use reasonable efforts when requested by the Issuer to solicit offers to purchase the Notes upon the terms and conditions set forth in the Prospectus, as from time to time amended or supplemented. No Distributor shall have any responsibility for maintaining records with respect to the aggregate principal amount of Notes sold, or otherwise monitoring the availability of securities for sale under the Registration Statement. In placing any Notes pursuant to an offer accepted by the Issuer, the Distributor that solicited or received such offer (the "Presenting Distributor") may act as agent or purchase such Notes from the Issuer as principal for resale. Upon acceptance by the Issuer of an offer by the Presenting Distributor to purchase Notes as principal, the Presenting Distributor may complete a Terms Agreement substantially in the form of Exhibit A hereto and transmit the completed Terms Agreement to the Issuer by hand or by facsimile or other similar means of telecommunication. Upon acceptance by the Issuer of an offer to purchase Notes, unless the Issuer and the Presenting Distributor otherwise agree in writing, any such Terms Agreement or other written confirmation or communication transmitted by the Presenting Distributor to the Issuer or, in the absence of a Terms Agreement or other written confirmation or communication from the Presenting Distributor, the oral agreement with respect to the terms of the Notes and of their offer and sale evidenced by the offer communicated by the Presenting Distributor and accepted by the Issuer, in each case together with the provisions of this Agreement, shall constitute an agreement (a "Terms Agreement") between the Presenting Distributor and the Issuer for the sale and purchase of such Notes (whether or not any written confirmation or communication shall have been executed by the Issuer or the Presenting Distributor). Upon receipt of notice from the Issuer as contemplated by Section 4(b) hereof, each Distributor shall suspend its solicitation of offers to purchase Notes until such time as the Issuer shall have furnished it with an amendment or supplement to the Registration Statement or the Prospectus, as the case may be, contemplated by Section 4(b) hereof and shall have advised such Distributor that such solicitation may be resumed. The Issuer reserves the right, in its sole discretion, to suspend solicitation of offers to purchase the Notes commencing at any time for any period of time or permanently. Upon receipt of at least one Business Day's prior notice from the Issuer, the Distributors will forthwith suspend solicitation of offers to purchase Notes from the Issuer until such time as the Issuer has advised the Distributors that such solicitation may be resumed. For the purpose of the foregoing sentence, "Business Day" shall mean any day that is not a Saturday or Sunday, and that in The City of New York is not a day on which banking institutions generally are authorized or obligated by law or executive order to close. The Distributors are authorized to solicit offers to purchase Notes as described in the Prospectus, as amended or supplemented, and only in a minimum aggregate amount of U.S.$1,000 (or the equivalent thereof in one or more currencies or currency units other than U.S. dollars). Each Distributor shall communicate to the Issuer, orally or in writing, each reasonable offer to purchase Notes received by it as agent. The Issuer shall have the sole right to accept offers to purchase the Notes and may reject any such offer, in whole or in part. Each Distributor shall have the right, in its discretion reasonably exercised, without notice to the Issuer, to reject any offer to purchase Notes received by it, in whole or in part, and any such rejection shall not be deemed a breach of its agreement contained herein. No Note which the Issuer has agreed to sell pursuant to this Agreement shall be deemed to have been purchased and paid for, or sold by the Issuer, until such Note shall have been delivered to the purchaser thereof against payment by such purchaser. (c) At the time of delivery of, and payment for, any Notes sold by the Issuer as a result of a solicitation made by, or offer to purchase received by, a Distributor, acting on an agency basis, the Issuer agrees to pay such Distributor a commission in accordance with the schedule set forth in Exhibit B hereto unless otherwise agreed. The Issuer agrees that each Distributor that purchases Notes as principal for resale shall receive such compensation, in the form of a discount or otherwise, as shall be agreed to between such Distributor and the Issuer at the time the Issuer accepts an offer to purchase such Notes, or, if no such compensation is agreed to, a commission in accordance with Exhibit B hereto. Unless otherwise specified in a Terms Agreement, a Distributor purchasing Notes may resell such Notes to other dealers on the terms set forth in, or determined as described in, the Prospectus (including, if applicable, the Pricing Supplement). (d) Administrative procedures respecting the sale of Notes (the "Procedures") shall be agreed upon from time to time by the Distributors and the Issuer. The initial Procedures, which are set forth in Exhibit C hereto, shall remain in effect until changed by agreement among the Issuer and the Distributors. Each Distributor and the Issuer agree to perform the respective duties and obligations specifically provided to be performed by each of them herein and in the Procedures. The Issuer will furnish to the Trustee a copy of the Procedures as from time to time in effect. (e) The documents required to be delivered by Section 5 hereof shall be delivered at the office of Davis Polk & Wardwell, 450 Lexington Avenue, New York, N.Y. 10017, not later than 10:00 A.M., New York City time, on the date of this Agreement or at such later time as may be mutually agreed by the Issuer and the Distributors, which in no event shall be later than the time at which the Distributors commence solicitation for purchases of Notes hereunder, such time and date being herein called the "Closing Date". 4. Certain Agreements of the Issuer. The Issuer agrees with the Distributors that it will furnish to Davis Polk & Wardwell, counsel for the Distributors, one signed copy of the Registration Statement, including all exhibits, in the form it became effective and of all amendments thereto and that, in connection with each offering of Notes: (a) The Issuer will if appropriate and if time permits afford the Distributors a reasonable opportunity to comment on any proposed amendment or supplement to the Registration Statement or the Prospectus in respect of the Notes (other than any Pricing Supplement) prior to the filing thereof. The Issuer will promptly advise each Distributor of the filing and effectiveness of any such amendment or supplement and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement or of any part thereof and will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued. (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 amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or if it is necessary at any such time to amend the Prospectus to comply with the Act, the Issuer will promptly notify each Distributor to suspend solicitation of offers to purchase the Notes and, if the Issuer shall decide to amend or supplement the Registration Statement or the Prospectus, it will promptly advise each Distributor by telephone (with confirmation in writing) and, subject to the provisions of subsection (a) of this Section, will promptly prepare and file with the Commission an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance. Notwithstanding the foregoing, if, at the time any such event occurs or it becomes necessary to amend the Prospectus to comply with the Act, any Distributor shall own any of the Notes with the intention of reselling them, or the Issuer has accepted an offer to purchase Notes but the related settlement has not occurred, the Issuer, subject to the provisions of subsection (a) of this Section, will promptly prepare and file with the Commission an amendment or supplement which will correct such statement or omission or an amendment which will effect such compliance. Neither the Distributors' consent to, nor their delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 5 hereof. (c) The Issuer will file promptly all documents required to be filed with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act. The Issuer will furnish promptly each Distributor with copies of all Forms 8-K, 10-Q and 10-K, proxy statements, annual reports to stockholders and all press releases. The Issuer will immediately notify each Distributor of any downgrading in the rating of any debt securities of the Issuer or any proposal to downgrade the rating of any debt securities of the Issuer by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act), or any public announcement that any such organization has under surveillance or review its rating of any debt securities of the Issuer (other than an announcement with positive implications of a possible upgrading, and no implication of a possible downgrading of such rating), as soon as the Issuer learns of such downgrading, proposal to downgrade or public announcement. (d) As soon as practicable, but not later than 16 months, after the date of each acceptance by the Issuer of an offer to purchase Notes hereunder, the Issuer will make generally available to its security holders an earnings statement which will satisfy the provisions of Section 11(a) of the Act. (e) The Issuer will furnish to each Distributor copies of any preliminary prospectus relating to the Notes, any preliminary prospectus supplement relating to the Notes, the Prospectus and all amendments and supplements to such documents relating to the Notes (except that any Pricing Supplement will be furnished only to the Distributors acting as such in respect of the Notes described therein), in each case as soon as available and in such quantities as are reasonably requested. (f) The Issuer will arrange for the qualification of the Notes for sale under the laws of such jurisdictions as the Distributors designate and will continue such qualifications in effect so long as required for the distribution; provided that the Issuer shall not be required to qualify to do business in any jurisdiction where it is not now qualified or to file a general consent to service of process in any jurisdiction. (g) Unless otherwise agreed, the Issuer will pay, or reimburse each Distributor for, all expenses incident to the performance of its obligations under this Agreement and will reimburse each Distributor for any expenses (including fees and disbursements of counsel) incurred by it in connection with qualification of the Notes for sale under the laws of such jurisdictions as such Distributor may designate and the printing of memoranda relating thereto, for any fees charged by investment rating agencies for the rating of the Notes, for any filing fee of the National Association of Securities Dealers, Inc. relating to the Notes, for expenses incurred by each Distributor in distributing the Prospectus and all supplements thereto (including any Pricing Supplement), any preliminary prospectuses and any preliminary prospectus supplements to such Prospectus and for each Distributor's reasonable out-of-pocket expenses (including the reasonable fees and disbursements of counsel to the Distributors) incurred in connection with the establishment or maintenance of the program contemplated by this Agreement or otherwise in connection with the activities of the Distributors under this Agreement. (h) Unless otherwise agreed, between the date on which any Distributor agrees to purchase Notes from the Issuer as principal for resale and the date of delivery of such Notes, the Issuer will not offer or sell, or enter into any agreement to sell, any of its debt securities (other than such Notes) in the United States, other than borrowings under the Issuer's revolving credit agreements and lines of credit, private placements of its securities and issuances of its commercial paper. 5. Conditions of Obligations. The obligations of each Distributor, as agent of the Issuer, under this Agreement at any time to solicit offers to purchase the Notes and to purchase Notes from the Issuer as principal is subject to the accuracy, on the date hereof, on each Representation Date and on the date of each such solicitation, of the representations and warranties of the Issuer herein, to the accuracy, on each such date, of the statements of the Issuer's officers made pursuant to the provisions hereof, to the performance, on or prior to each such date, by the Issuer of its obligations hereunder, and to each of the following additional conditions precedent: (a) The Prospectus, as amended or supplemented as of any Representation Date or date of such solicitation, as the case may be, shall have been filed with the Commission in accordance with the Rules and Regulations and no stop order suspending the effectiveness of the Registration Statement or of any part thereof shall have been issued and no proceeding for that purpose shall have been instituted or, to the knowledge of the Issuer or any Distributor, shall be contemplated by the Commission. (b) Neither the Registration Statement nor the Prospectus, as amended or supplemented as of any Representation Date or date of such solicitation, as the case may be, shall contain any untrue statement of fact which, in the opinion of any Distributor, is material or omits to state a fact which, in the opinion of any Distributor, is material and is required to be stated therein or is necessary to make the statements therein not misleading. (c) There shall not have occurred: (i) any material adverse change in the condition, financial or otherwise, or in the earnings, business or operations, of the Issuer and its subsidiaries, taken as a whole, from that set forth in the Prospectus; (ii) any downgrading in, or notice of any proposal to downgrade, the rating of the Issuer's debt securities by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act) or any public announcement that any such organization has under surveillance or review with negative implications or without indicating the direction of the possible change in the rating of the Issuer's debt securities; (iii) any suspension or limitation of trading in securities generally on or by the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, or any setting of minimum prices for trading on any such exchange; (iv) any suspension of trading of any securities of the Issuer on any exchange; (v) any banking moratorium declared by Federal or New York authorities; or (vi) the outbreak or escalation of hostilities involving the United States or the declaration by the United States of a national emergency or war, if the effect of any such event set forth in (i) through (vi), in the judgment of the Distributors, makes it impractical or inadvisable to proceed with solicitations of offers to purchase, or sales of, Notes. (d) With respect to any Note denominated in a currency other than U.S. dollars, more than one currency or a composite currency or any Security the principal or interest of which is indexed to such currency, currencies or composite currency, there shall not have occurred a suspension or material limitation in foreign exchange trading in such currency, currencies or composite currency by a major international bank, a general moratorium on commercial banking activities in the country or countries issuing such currency, currencies or composite currency, the outbreak or escalation of hostilities involving, the occurrence of any material adverse change in the existing financial, political or economic conditions of, or the declaration of war or a national emergency by, the country or countries issuing such currency, currencies or composite currency or the imposition or proposal of exchange controls by any government authority in the country or countries issuing such currency, currencies or composite currency; (e) At the Closing Date the Distributors and, if specified in a Terms Agreement, if any, at the time of delivery of the Notes described in such Terms Agreement the Distributors purchasing such Notes (collectively, if more than one, the "Purchasing Distributor"), shall have received written opinions, dated the Closing Date, or such date of delivery, as the case may be, of (i) Phyllis Savage, Chief Finance and Securities Counsel of the Issuer, or other counsel to the Issuer acceptable to the Distributors or the Purchasing Distributor, as the case may be, substantially in the form of Schedule I hereto and (ii) Sullivan & Cromwell, special tax counsel to the Issuer, or other tax counsel to the Issuer acceptable to the Distributors or the Purchasing Distributor, as the case may be, substantially in the form of Schedule II hereto. Provided, however, that, in the case of each such opinion delivered pursuant to a Terms Agreement, to the extent applicable to such opinion, (x) the statements contained in such opinion relating to the Registration Statement or the Prospectus shall relate to the Registration Statement or the Prospectus, as the case may be, as amended or supplemented as of the time of delivery of such Notes; (y) such opinion shall relate to the Notes being delivered on the date of such opinion; and (z) in lieu of the opinion set forth in clause (iv) of Schedule I hereto, such opinion shall state that the Notes being delivered on the date of such opinion, when authenticated in accordance with the Indenture and delivered to and duly paid for by the Purchasing Distributor pursuant to this Agreement, such Notes will have been duly authorized and executed, and will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Issuer, enforceable in accordance with their terms, subject to the qualifications set forth as to fraudulent transfer, bankruptcy, insolvency and similar laws affecting creditors' rights generally and equitable principles of general applicability, and will conform to the description thereof contained in the Prospectus as amended or supplemented at such date of delivery. (f) At the Closing Date the Distributors and, if specified in a Terms Agreement, if any, at the time of delivery of the Notes described in such Terms Agreement the Purchasing Distributor shall have received a certificate, dated the Closing Date or such date of delivery, as the case may be, of the Chairman, the President, any Vice President or the Treasurer of the Issuer in which such officer, to the best of such officers' knowledge after reasonable investigation, shall state that (i) the representations and warranties of the Issuer in this Agreement are true and correct in all material respects, (ii) the Issuer has complied in all material respects with all agreements and satisfied in all material respects all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date or such date of delivery, as the case may be, (iii) no stop order suspending the effectiveness of the Registration Statement or of any part thereof has been issued and no proceedings for that purpose have been instituted or are contemplated by the Commission, and (iv) subsequent to the date of the most recent consolidated financial statements included in the Prospectus, there has been no material adverse change on a consolidated basis in the financial position of the Issuer and its subsidiaries, their results of operations or cash flows, except as set forth in or contemplated by the Prospectus or as described in such certificate. In the case of each such certificate delivered pursuant to a Terms Agreement, the statements contained in such certificate relating to the Registration Statement or the Prospectus shall relate to the Registration Statement or the Prospectus, as the case may be, as amended or supplemented as of the time of delivery of such Notes. (g) At the Closing Date the Distributors and, if specified in a Terms Agreement, if any, at the time of delivery of the Notes described in such Terms Agreement the Purchasing Distributor shall have received a letter, dated the Closing Date or such date of delivery, as the case may be, of KPMG Peat Marwick LLP, confirming that they are independent public accountants within the meaning of the Act and the applicable published Rules and Regulations thereunder and stating substantially as set forth in Schedule III hereto. In the case of each such letter delivered pursuant to a Terms Agreement, the statements contained in such letter relating to the Registration Statement or the Prospectus shall relate to the Registration Statement or the Prospectus, as the case may be, as amended or supplemented as of the time of delivery of such Notes. (h) At the Closing Date the Distributors and, if specified in a Terms Agreement, if any, at the time of delivery of the Notes described in such Terms Agreement the Purchasing Distributor, as the case may be, shall have received from Davis Polk & Wardwell, counsel for the Distributors, such opinion or opinions, substantially as set forth in Schedule IV hereto, and the Issuer shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters; provided, however, that in the case of each such opinion delivered pursuant to a Terms Agreement, (i) the statements contained in such opinion relating to the Registration Statement on the Prospectus shall relate to the Registration Statement or the Prospectus, as the case may be, as amended or supplemented as of the time of delivery of such Notes; (ii) such opinion shall relate to the Notes being delivered on the date of such opinion; and (iii) in lieu of the opinion set forth in clause (ii) of Schedule IV hereto, such opinion shall state that the Notes being delivered on the date of such opinion have been duly authorized and established in conformity with the provisions of the Indenture and, when such Notes have been executed by the Issuer and authenticated by the Trustee in accordance with the provisions of the Indenture and delivered to and duly paid for by the Purchasing Distributor pursuant to the Terms Agreement, they will be entitled to the benefits of the Indenture and will be valid and binding obligations of the Issuer, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency or similar laws affecting creditors' rights generally and equitable principles of general applicability. (i) The Issuer shall have furnished to the Distributors or the Purchasing Distributor (as applicable) and their counsel such further certificates and documents as the Distributors or the Purchasing Distributors (as applicable) or such counsel request. The Issuer will furnish the Distributors with such conformed copies of such opinions, certificates, letters and documents as they reasonably request. 6. Additional Covenants of the Issuer. The Issuer agrees that: (a) Each acceptance by the Issuer of an offer for the purchase of Notes shall be deemed to be an affirmation that its representations and warranties contained in this Agreement are true and correct in all material respects at the time of such acceptance and a covenant that such representations and warranties will be true and correct in all materials respects at the time of delivery to the purchaser of such Notes as though made at and as of each such time, it being understood that such representations and warranties shall relate to the Registration Statement and the Prospectus as amended or supplemented at each such time. Each such acceptance by the Issuer of an offer to purchase Notes shall be deemed to constitute an additional representation, warranty and agreement by the Issuer that, as of the date of delivery of such Notes to the purchaser thereof, after giving effect to the issuance of such Notes, of any other Notes to be issued on or prior to such delivery date and of any other Registered Securities to be issued and sold by the Issuer on or prior to such delivery date, the aggregate amount of Registered Securities (including any Notes) which have been issued and sold by the Issuer will not exceed the amount of Registered Securities registered pursuant to the Registration Statement. (b) At each date selected by the Issuer within 10 days after each filing by the Issuer of any Form 10-K (a "Representation Date referred to in Section 6(b)"), the Issuer shall furnish the Distributors with a certificate, dated the date of delivery thereof, of the Chairman, the President, any Vice President or the Treasurer of the Issuer, in form satisfactory to the Distributors, to the effect that the statements contained in the certificate covering the matters set forth in Section 5(f) hereof which was last furnished to the Distributors pursuant to Section 5(f) or this Section 6(b) are true and correct in all material respects at the date thereof, as though made at and as of such time or, in lieu of such certificate, a certificate of the same tenor as the certificate referred to in Section 5(f); provided, however, that any certificate furnished under this Section 6(b) shall relate to the Registration Statement and the Prospectus as amended or supplemented at the time of delivery of such certificate and, in the case of the matters set forth in clause (ii) of Section 5(f), to the date of delivery of such certificate. (c) At each Representation Date referred to in Section 6(b), the Issuer shall furnish the Distributors with a written opinion or opinions, dated the date of such Representation Date, of counsel for the Issuer, in form satisfactory to the Distributors, to the effect referred to in Section 5(e)(i) hereof; provided, however, that to the extent appropriate such opinion or opinions may reconfirm matters set forth in a prior opinion or opinions delivered at the Closing Date or under this Section 6(c); provided, further, however, that any opinion or opinions furnished under this Section 6(c) shall relate to the Registration Statement and the Prospectus as amended or supplemented at such Representation Date and shall state that the Notes sold in the relevant Applicable Period (as defined below) have been duly executed, authenticated, issued and delivered and constitute valid and legally binding obligations of the Issuer enforceable in accordance with their terms, subject only to the qualifications set forth in Schedule I hereto as to fraudulent transfer, bankruptcy, insolvency and similar laws affecting creditors' rights generally and equitable principles of general applicability, and conform to the description thereof contained in the Prospectus as amended or supplemented at the relevant date or dates for the delivery of such Notes to the purchaser or purchasers thereof. For the purpose of this Section 6(c), "Applicable Period" shall mean with respect to any opinion delivered on a Representation Date the period commencing on the date as of which the most recent prior opinion delivered at the Closing Date or under this Section 6(c) speaks and ending on such Representation Date. (d) At each date selected by the Issuer within 10 days after each filing by the Issuer of any Form 10-Q and at each Representation Date referred to in Section 6(b), the Issuer shall cause KPMG Peat Marwick LLP to furnish the Distributors with a letter, addressed jointly to the Issuer and the Distributors and dated such date, in form and substance satisfactory to the Distributors, to the effects referred to in Section 5(g) hereof; provided, however, that to the extent appropriate such letter may reconfirm matters set forth in a prior letter delivered at the Closing Date or pursuant to this Section 6(d); provided further, however, that any letter furnished under this Section 6(d) shall relate to the Registration Statement and the Prospectus as amended or supplemented at such date, with such changes as may be necessary to reflect changes in the financial statements and other information derived from the accounting records of the Issuer. (e) On each date for the delivery of Notes to the purchaser thereof, the Issuer shall, if requested by the Distributor that solicited or received the offer to purchase any Notes being delivered on such settlement date, furnish such Distributor with a written opinion or opinions, dated the date of delivery thereof, of counsel for the Issuer, in form satisfactory to such Distributor, to the effect set forth in clauses (i), (ii), (iii), (iv) and (x) of Schedule I hereto; provided, however, that any opinion furnished under this Section 6(e) shall relate to the Prospectus as amended or supplemented at such delivery date and shall state that the Notes being sold by the Issuer on such delivery date, when delivered against payment therefor as contemplated by this Agreement, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Issuer enforceable in accordance with their terms, subject only to the qualifications set forth in Schedule I hereto as to fraudulent transfer, bankruptcy, insolvency and similar laws affecting creditors' rights generally and equitable principles of general applicability, and will conform to the description thereof contained in the Prospectus as amended or supplemented at such settlement date. (f) The Issuer agrees that any obligation of a person who has agreed to purchase Notes to make payment for and take delivery of such Notes shall be subject to (i) the accuracy, on the related settlement date fixed pursuant to the Procedures, of the Issuer's representation and warranty deemed to be made to the Distributors pursuant to the last sentence of subsection (a) of this Section 6, and (ii) the satisfaction, on such settlement date, of each of the conditions set forth in Section 5(a), (b) and (c) hereof, it being understood that under no circumstances shall any Distributor have any duty or obligation to exercise the judgment permitted under Section 5(b) or (c) hereof on behalf of any such person. 7. Indemnification and Contribution. (a) The Issuer will indemnify and hold harmless each Distributor against any losses, claims, damages or liabilities, joint or several, to which such Distributor may become subject, under the Act 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 any material fact contained in the Registration Statement, the Prospectus, or any amendment or supplement thereto, or any related preliminary prospectus or preliminary prospectus supplement, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Distributor for any legal or other expenses reasonably incurred by such Distributor in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Issuer will not be liable to such Distributor in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in any of such documents in reliance upon and in conformity with written information furnished to the Issuer by such Distributor specifically for use therein, unless such loss, claim, damage or liability arises out of the offer or sale of Notes occurring after the Distributor has notified the Issuer in writing that such information should no longer be used therein, it being understood and agreed that the only such information furnished by any Distributor consists of the information described as such in subsection (b) below. (b) Each Distributor will severally and not jointly indemnify and hold harmless the Issuer against any losses, claims, damages or liabilities to which the Issuer may become subject, under the Act 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 any material fact contained in the Registration Statement, the Prospectus or any amendment or supplement thereto, or any related preliminary prospectus or preliminary prospectus supplement thereto, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Issuer by such Distributor specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Issuer in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, unless such loss, claim, damage or liability arises out of the offer or sale of Notes occurring after the Distributor has notified the Issuer in writing that such information should no longer be used therein, it being understood and agreed that the only such information furnished by any Distributor consists of the following information in the Prospectus furnished on behalf of each Distributor: the first sentence of the last paragraph at the bottom of the cover page concerning the terms of the offering by the Distributors; the legend concerning stabilization and over-allotment on the inside front cover page; and the fifth through eighth sentences inclusive of the first paragraph of text under the caption "Plan of Distribution of Notes" concerning the terms of the offering of the Securities by the Distributors. (c) Promptly after receipt by an indemnified party under this Section 7 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 subsection (a) or (b) above, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party under this Section 7 for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party unless such settlement includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action. (d) If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuer on the one hand and any Distributor on the other from the offering pursuant to this Agreement of the Securities which are the subject of the action or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Issuer on the one hand and any Distributor on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Issuer on the one hand and any Distributor on the other shall be deemed to be in the same proportions as the total net proceeds from the offering pursuant to this Agreement of the Notes which are the subject of the action (before deducting expenses) received by the Issuer bear to the total discounts and commissions received by such Distributor from the offering of such Notes pursuant to this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer or such Distributor and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Distributor shall be required to contribute any amount in excess of the amount by which the total price at which the Notes which are the subject of the action and which were distributed to the public through it pursuant to this Agreement or upon resale of Notes purchased by it from the Issuer exceeds the amount of any damages which such Distributor has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 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. The obligations of each Distributor in this subsection (d) to contribute are several, in the same proportion which the amount of the Securities which are the subject of the action and which were distributed to the public through such Distributor pursuant to this Agreement bears to the total amount of such Notes distributed to the public through all of the Distributors pursuant to this Agreement, and not joint. (e) The obligations of the Issuer under this Section 7 shall be in addition to any liability which the Issuer may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Distributor within the meaning of the Act; and the obligations of each Distributor under this Section 7 shall be in addition to any liability which such Distributor may otherwise have and shall extend, upon the same terms and conditions, to each director of the Issuer, to each officer of the Issuer who has signed the Registration Statement and to each person, if any, who controls the Issuer within the meaning of the Act. 8. Status of Each Distributor. In soliciting offers to purchase the Notes from the Issuer pursuant to this Agreement and in assuming its other obligations hereunder (other than any obligation to purchase Notes pursuant to Section 3 hereof), each Distributor is acting individually and not jointly and is acting solely as agent for the Issuer and not as principal. In connection with the placement of any Notes by a Distributor, acting as agent, (a) the Distributor will make reasonable efforts to assist the Issuer in obtaining performance by each purchaser whose offer to purchase Notes from the Issuer has been solicited by such Distributor and accepted by the Issuer, but such Distributor shall have no liability to the Issuer in the event any such purchase is not consummated for any reason; and (b) if the Issuer shall default on its obligations to deliver Notes to a purchaser whose offer it has accepted, the Issuer (i) shall hold the Distributors harmless against any loss, claim or damage arising from or as a result of such default by the Issuer, and (ii) in particular, shall pay to the Distributors any commission to which they would be entitled in connection with such sale. 9. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Issuer or its officers and of the Distributors set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Distributor, the Issuer or any of their respective representatives, officers or directors or any controlling person and will survive delivery of and payment for the Notes. If this Agreement is terminated pursuant to Section 10 hereof or for any other reason or if for any reason the sale of Notes described in a confirmation or Terms Agreement referred to in Section 3 hereof by the Issuer to a Distributor is not consummated, the Issuer shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 4(h) hereof and the obligations of the Issuer under Sections 4(d) hereof and 4(g) hereof and the respective obligations of the Issuer and the Distributors pursuant to Section 7 hereof shall remain in effect. In addition, if any such termination of this Agreement shall occur either (i) at a time when any Distributor shall own any of the Notes with the intention of reselling them or (ii) after the Issuer has accepted an offer to purchase Notes and prior to the related settlement, the obligations of the Issuer under the second sentence of Section 4(b)hereof, under Sections 4(a), 4(c), 4(e), 4(f) and 4(i) hereof and, in the case of a termination occurring as described in (ii) above, under Sections 3(c), 6(a), 6(e) and 6(f) hereof and under the last sentence of Section 8 hereof, shall also remain in effect. 10. Termination. This Agreement may be terminated for any reason at any time by the Issuer as to any Distributor or, in the case of any Distributor, by such Distributor insofar as this Agreement relates to such Distributor, upon the giving of one Business Day's written notice of such termination to the other parties hereto; provided, however, that this Agreement may not be terminated with respect to a Distributor by the giving of such notice following receipt by the Issuer of a confirmation or Terms Agreement referred to in Section 3 hereof relating to the purchase of Notes by the Distributor and prior to delivery of the Notes described in such confirmation or Terms Agreement, unless the sale and purchase of Notes contemplated thereby is rejected by the Issuer in accordance with Section 3 hereof. Any settlement with respect to Notes placed by a Distributor on an agency basis occurring after termination of this Agreement shall be made in accordance with the Procedures and each Distributor agrees, if requested by the Issuer, to take the steps therein provided to be taken by such Distributor in connection with such settlement. 11. Sales of Notes Denominated in a Currency Other Than U.S. Dollars or of Indexed Notes. If at any time the Issuer and any Distributor shall determine to issue and sell Notes denominated in a currency other than U.S. dollars, which other currency may include a currency unit, or with respect to which an index is used to determine the amounts of payments of principal and any premium and interest, the Issuer and such Distributor may execute and deliver a supplement to this Agreement for the purpose of making any appropriate additions to and modifications of the terms of this Agreement (and the Procedures) applicable to such Notes and the offer and sale thereof. The Distributors are authorized to solicit offers to purchase Notes with respect to which an index is used to determine the amounts of payments of principal and any premium and interest, and the Issuer shall agree to any sales of such Notes (whether offered on an agency or principal basis), only in a minimum aggregate amount of $2,500,000. The Issuer will not issue Notes denominated in Yen otherwise than in compliance with applicable Japanese laws, regulations and policies. In particular, the Issuer or its designated agent shall submit such reports or information as may be required from time to time by applicable law, regulations and guidelines promulgated by Japanese governmental and regulatory authorities in the case of the issue and purchase of the Notes and the Issuer shall ensure that each such Note shall have a minimum denomination of Yen1,000,000 and a minimum maturity of one year or such other minimum denomination and maturity as may be allowed from time to time by Japanese governmental and regulatory authorities. 12. Notices. Except as otherwise provided herein, all notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to Credit Suisse First Boston Corporation shall be directed to it at 11 Madison Avenue, New York, New York 10010, Attention: Short and Medium-Term Finance; notices to Morgan Stanley & Co. Incorporated shall be addressed to it at 1585 Broadway, New York, New York 10036, Attention: Manager Continuously Offered Products (2nd Floor) with a copy directed to it at the same address, Attention: Peter Cooper - Investment Banking Information Center; notices to Donaldson, Lufkin & Jenrette Securities Corporation shall be addressed to it at 277 Park Avenue, New York, New York 10172, Attention: Syndicate Department / Carlos Sanchez; and notices to the Issuer shall be directed to it at 39 Old Ridgebury Road, Danbury, Connecticut 06817-001, Attention: Treasurer; or in the case of any party hereto, to such other address or person as such party shall specify to each other party by a notice given in accordance with the provisions of this Section 12. Any such notice shall take effect at the time of receipt. 13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, their respective successors, the officers and directors and controlling persons referred to in Section 7 hereof and, to the extent provided in Section 6(f)hereof, any person who has agreed to purchase Securities from the Issuer, and no other person will have any right or obligation hereunder. 14. Governing Law; Counterparts. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such executed counterparts shall together constitute one and the same Agreement. If the foregoing correctly sets forth our agreement, please indicate your acceptance hereof in the space provided for that purpose below. Very truly yours, UNION CARBIDE CORPORATION By: ----------------------------- Name: Title: CONFIRMED AND ACCEPTED, as of the date first above written: CREDIT SUISSE FIRST BOSTON CORPORATION By: -------------------------- Name: Title: MORGAN STANLEY & CO. INCORPORATED By: -------------------------- Name: Title: DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION By: -------------------------- Name: Title: Schedule I ---------- [FORM OF OPINION OF COMPANY COUNSEL] [Date] [Names and Addresses of Distributor(s)] Dear Sirs: I have acted as counsel for Union Carbide Corporation, a New York corporation (the "Issuer"), in connection with the proposed issuance from time to time of up to $500,000,000 aggregate initial offering price of its Medium-Term Notes (the "Notes") pursuant to the Distribution Agreement dated January 22, 1997 (the "Distribution Agreement") between you and the Issuer [and the Terms Agreement[s] dated ________ (the "Terms Agreement") between you and the Issuer]. The Notes are to be issued pursuant to the Indenture dated as of June 1, 1995 (the "Indenture") among the Issuer and The Chase Manhattan Bank, as Trustee (the "Trustee"). I have examined originals or copies, certified or otherwise identified to my satisfaction, of all such documents and corporate records of the Issuer and its subsidiaries and all such agreements, certificates of public officials, certificates of officers and representatives of the Issuer and its subsidiaries and such other documents as I have deemed relevant and necessary as a basis for the opinions hereinafter expressed. In such examinations, I have assumed the genuineness of all signatures on original documents and the conformity to the originals of all copies submitted to me as conformed or photocopies. As to various questions of fact material to my opinion, I have relied upon representations, statements or certificates of public officials, officers and representatives of the Issuer and its subsidiaries and others. I am familiar with the registration statements on Form S-3 (Registration Nos. 33-60705 and 333-17309) and amendments thereto filed by the Issuer with the Securities and Exchange Commission (the "Commission") pursuant to the provisions of the Securities Act of 1933, as amended (the "Act"), registering $700,000,000 aggregate initial offering price of debt securities to be issued from time to time by the Issuer. In addition, I have examined evidence that the registration statements were declared effective under the Act and that the Indenture was qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Such registration statements as amended at the date hereof (including the documents incorporated by reference therein) are herein collectively referred to as the "Registration Statement" and the related prospectus dated December 11, 1996 (including the documents incorporated by reference therein) together with the prospectus supplement dated January 22, 1997 specifically relating to the Securities, as filed with the Commission pursuant to Rule 424(b) under the Act, is herein referred to as the "Prospectus". I have assumed conformity of the documents filed with the Commission via the Electronic Date Gathering, Analysis and Retrieval System ("EDGAR"), except for required EDGAR formatting changes, to physical copies of the documents reviewed by me. I have also assumed that none of the terms of any Note, nor the issuance and delivery of such Note, nor the compliance by the Issuer with the terms of such Note will result in a violation of any agreement or other instrument then binding upon the Issuer or any of its subsidiaries, or violate any applicable law, judgment, order, decree or restriction then imposed by any legislature, governmental body, agency or court having jurisdiction over the Issuer or any of its subsidiaries. Based upon the foregoing, I am of the opinion that: (i) The Issuer has been duly incorporated, is validly existing as a corporation under the laws of the State of New York, and has the corporate power and authority to own its property and to conduct its business as described in the Prospectus. (ii) The Distribution Agreement [and the Terms Agreement] has [have] been duly authorized, executed and delivered by the Issuer. (iii) The Indenture has been duly qualified under the Trust Indenture Act and has been duly authorized, executed and delivered by the Issuer and is a valid and binding agreement of the Issuer, enforceable in accordance with its terms. (iv) The Notes have been duly authorized and established in conformity with the Indenture and, when the terms of a particular Note and of the issue and sale thereof have been duly authorized and established by all necessary corporate action in conformity with the Indenture and such Note has been duly completed, executed, authenticated and issued in accordance with the Indenture and delivered against payment therefor as contemplated by the Distribution Agreement [and the Terms Agreement], such Note will be entitled to the benefits of the Indenture and will be a valid and binding obligation of the Issuer, enforceable in accordance with its terms. (v) The execution and delivery by the Issuer of, and the performance by the Issuer of its obligations under, the Distribution Agreement, [the Terms Agreement,] the Notes and the Indenture do not violate as of the date hereof any applicable law or the certificate of incorporation or by-laws of the Issuer or any agreement or other instrument now in existence that is binding upon the Issuer or any of its subsidiaries and is material to the Issuer and its subsidiaries, taken as a whole, or, to my knowledge, any judgment, order or decree now in existence of any governmental body, agency or court having jurisdiction over the Issuer or any of its subsidiaries. (vi) No consent, approval, authorization or order of or qualification with any governmental body or agency is required for the performance by the Issuer of its obligations under the Distribution Agreement, [the Terms Agreement,] the Notes or the Indenture except such as may be required by the securities or Blue Sky laws of the various states in connection with the offer and sale of the Notes. (vii) The statements in the Prospectus under the caption "Description of Securities", insofar as such statements constitute summaries of the documents referred to therein, fairly summarize the information set forth in such documents. (viii) The documents which have been filed pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated by reference in the Prospectus (other than the financial statements, related schedules and statistical information of a financial nature contained or incorporated therein, as to which I have not been asked to, and do not, express any opinion), when they became effective or were filed with the Commission, as the case may be, complied as to form in all material respects with the requirements of the Act and the Exchange Act, as applicable, and the rules and regulations promulgated thereunder. (ix) The Registration Statement, as of its effective date, and the Registration Statement and the Prospectus, as of the date hereof (other than any Statement of Eligibility on Form T-1 included in the Registration Statement and the financial statements, related schedules and statistical information of a financial nature contained or incorporated by reference therein, as to which I have not been asked to, and do not, express any opinion), complied as to form in all material respects with the requirements of the Act and the rules and regulations promulgated thereunder. The opinions set forth in paragraphs (iii) and (iv) above are qualified insofar as enforceability may be limited by fraudulent transfer, bankruptcy, insolvency or similar laws affecting creditors' rights generally and the availability of equitable remedies may be limited by equitable principles of general applicability. I have assumed, in connection with my opinion set forth in paragraph (iv) above, that at or prior to the time of the delivery of each Note the authorization of the Notes will not have been modified or rescinded and, with respect to each Note, that such Note will conform to one of the forms set forth as exhibits to the Issuer's Certificate of Assistant Secretary delivered to you today. In rendering my opinion set forth in paragraph (iv) above, I note that, as of the date hereof, a judgment for money in any action based on Notes denominated in foreign currencies or currency units in a federal or state court in the United States ordinarily would be enforced in the United States only in United States dollars and that the date used to determine the rate of conversion of the foreign currency or currency unit in which a particular Note is denominated into United States dollars will depend upon various factors, including which court renders the judgment. I also wish to point out that paragraph (iv) does not address any application of the Commodity Exchange Act, as amended, or the rules, regulations or interpretations of the Commodity Futures Trading Commission to the payments of principal or interest on which will be determined by reference to one or more currency exchange rates, commodity prices, equity indices or other factors. Although I am not passing upon and do not assume any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and Prospectus, I advise you that (relying as to materiality to a large extent upon the opinions of officers and other representatives of the Issuer), no facts have come to my attention which lead me to believe that at the time the Registration Statement became effective it contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or that the Prospectus as of the date hereof contains an untrue statement of a material fact or omits 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 (it being understood that I have not been asked to, and do not, comment on the financial statements, related schedules or statistical information of a financial nature contained or incorporated therein or on any of the information contained in the Statement of Eligibility on Form T-1 of the Trustee). This opinion is limited to the Federal laws of the United States and the laws of the State of New York. [This opinion may contain such different or additional qualifications and exceptions as are acceptable to the Distributor(s).] This opinion is rendered solely to you in connection with the above matter. This opinion may not be relied upon for any other purpose or relied upon by or furnished to any other person without my prior written consent. Very truly yours, Schedule II ----------- [FORM OF OPINION OF COMPANY TAX COUNSEL] [Date] [Names and Addresses of Distributor(s)] Ladies and Gentlemen: We have acted as the tax counsel of Union Carbide Corporation (the "Issuer") in connection with the preparation of the Prospectus Supplement dated January 22, 1997 relating to the Issuer's Medium-Term Notes (the "Prospectus Supplement") and the Prospectus dated December 11, 1996, both of which relate to the registration statements on Form S-3 (Registration Nos. 33-60705 and 333-17309) of the Issuer filed with the Securities and Exchange Commission. In our opinion, the statements set forth under the heading "Certain Federal Income Tax Considerations" in the Prospectus Supplement are accurate in all material respects insofar as they relate to matters of United States Federal income tax law and legal conclusions. Very truly yours, Schedule III ------------ Form of Letter from KPMG Peat Marwick LLP ----------------------------------------- (i) In our opinion, the financial statements and schedules and summary of earnings examined by us and included in the Prospectus comply in form in all material respects with the applicable accounting requirements of the Act and the related published rules and regulations thereunder; we have performed the procedures specified by the American Institute of Certified Public Accountants for a review of interim financial information as described in Statement of Auditing Standards No. 71, Interim Financial Information, on any unaudited financial statements included in the Registration Statement. (ii) On the basis of the review, referred to in clause (i) above, a reading of the latest available interim financial statements of the Issuer, inquiries of officials of the Issuer who have responsibility for financial and accounting matters and other specified procedures, nothing came to their attention that caused them to believe that: (A) any unaudited financial statements and summary of earnings included in the Prospectus do not comply in form in all material respects with the applicable accounting requirements of the Act and the related published rules and regulations or any material modifications should be made to such unaudited financial statements and summary of earnings for them to be in conformity with generally accepted accounting principles; (B) at the date of the latest available balance sheet read by us, or at a subsequent specified date not more than five days prior to the date of this letter, there was any change in the capital stock or any increase in short-term indebtedness or long-term debt of the Issuer and its consolidated subsidiaries or, at the date of the latest available balance sheet read by such accountants, there was any decrease in consolidated net current assets or net assets, as compared with amounts shown on the latest balance sheet included in the Prospectus; or (C) for the period from the closing date of the latest income statement included in the Prospectus to the closing date of the latest available income statement read by such accountants there were any decreases, as compared with the corresponding period of the previous year in consolidated net sales or net operating income or consolidated income before extraordinary items or net income or in the ratio of earnings to fixed charges; except in all cases set forth in clauses (A), (B) and (C) above, for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter. (iii) We have compared specified dollar amounts (or percentages derived from such dollar amounts) and other financial information contained in the Registration Statement (in each case to the extent that such dollar amounts, percentages and other financial information are derived from the general accounting records of the Issuer and its subsidiaries subject to the internal controls of the Issuer's accounting system or are derived directly from such records by analysis or computation) with the results obtained from inquiries, a reading of such general accounting records and other procedures specified in such letter and have found such dollar amounts, percentages and other financial information to be in agreement with such results, except as otherwise specified in this letter. All financial statements and schedules included in material incorporated by reference into the Prospectus shall be deemed included in the Prospectus for purposes of this letter. Schedule IV ----------- [FORM OF OPINION OF COUNSEL FOR THE UNDERWRITERS] [Date] [Names and Addresses of Distributor(s)] Dear Sirs: We have acted as counsel to you (the "Distributors") in connection with the proposed placements from time to time by you pursuant to the Distribution Agreement dated January 22, 1997 (the "Distribution Agreement") between you and Union Carbide Corporation, a New York corporation (the "Issuer"), [and the Terms Agreement(s) dated _________ (the "Terms Agreement") between you and the Issuer,] of up to $500,000,000 initial offering price of its Medium-Term Notes (the "Notes"). The Notes will be issued pursuant to the Indenture dated as of June 1, 1995 (the "Indenture"), between the Issuer and The Chase Manhattan Bank, as Trustee (the "Trustee"). We have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and other instruments as we have deemed necessary or advisable for the purpose of rendering this opinion, including those relating to the authorization, execution and delivery by the Issuer of the Indenture and the Distribution Agreement, and the authorization of the Notes by the Issuer. We have reviewed the registration statements on Form S-3 (Registration Nos. 33-60705 and 333-17309), filed by the Issuer with the Securities and Exchange Commission (the "Commission") pursuant to the provisions of the Securities Act of 1933, as amended (the "Act"), and the documents incorporated by reference in the prospectus included therein (the "Incorporated Documents"). In addition, we have examined evidence that the registration statements were declared effective under the Act and that the Indenture was qualified under the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Such registration statements (including the Incorporated Documents), as amended at the date hereof, are herein collectively referred to as the "Registration Statement" and the related prospectus dated December 11, 1996 (including the Incorporated Documents), together with the prospectus supplement dated January 22, 1997 specifically relating to the Notes, as filed with the Commission pursuant to Rule 424(b) under the Act, is herein referred to as the "Prospectus". We have assumed the conformity of the documents filed with the Commission via the Electronic Data Gathering, Analysis and Retrieval System ("EDGAR"), except for required EDGAR formatting changes, to physical copies of the documents delivered to the Underwriters and submitted for our examination. Based upon the foregoing, we are of the opinion that: (i) The Indenture has been duly qualified under the Trust Indenture Act and has been duly authorized, executed and delivered by the Issuer and is a valid and binding agreement of the Issuer, enforceable in accordance with its terms, subject to bankruptcy, insolvency or similar laws affecting creditors' rights generally and equitable principles of general applicability; (ii) The Notes have been duly authorized and established in conformity with the provisions of the Indenture and, when the terms of a particular Note and of the issue and sale thereof has been duly authorized and established by all necessary corporate action in conformity with the Indenture and such Note has been duly completed, executed, authenticated and issued in accordance with the Indenture and delivered against payment therefor as contemplated by the Distribution Agreement [and the Terms Agreement], such Note will be entitled to the benefits of the Indenture and will be a valid and binding obligation of the Issuer, enforceable in accordance with its terms, subject to bankruptcy, insolvency or similar laws affecting creditors' rights generally and equitable principles of general applicability; and (iii) The Distribution Agreement [and the Terms Agreement] has been duly authorized, executed and delivered by the Issuer. We have assumed, in connection with our opinion set forth in paragraph (ii) above, that at or prior to the time of the delivery of each Note the authorization of the Notes will not have been modified or rescinded and, with respect to each Note, that such Note will conform to one of the forms set forth as exhibits to the Issuer's Certificate of Assistant Secretary delivered to you today. We have also assumed that none of the terms of any Note, nor the issuance and delivery of such Note, nor the compliance by the Issuer with the terms of such Note will result in a violation of any agreement or instrument then binding upon the Issuer, or violate any applicable law or any restriction then imposed by any court or governmental body having jurisdiction over the Issuer. In rendering our opinion set forth in paragraph (ii) above, we note that, as of the date hereof, a judgment for money in any action based on Notes denominated in foreign currencies or currency units in a Federal or state court in the United States ordinarily would be enforced in the United States only in United States dollars and that the date used to determine the rate of conversion of the foreign currency or currency unit in which a particular Note is denominated into United States dollars will depend upon various factors, including which court renders the judgment. We also wish to point out that paragraph (ii) does not address any application of the Commodity Exchange Act, as amended, or the rules, regulations or interpretations of the Commodity Futures Trading Commission to Notes the payments of principal or interest on which will be determined by reference to one or more currency exchange rates, commodity prices, equity indices or other factors. We have considered the matters required to be included in the Registration Statement and Prospectus and the information contained therein. We are of the opinion that the statements in the Prospectus under the captions "Description of Securities", "Plan of Distribution" and "Plan of Distribution of Notes", insofar as such statements constitute summaries of the documents referred to therein, fairly summarize the information set forth in such documents. We have not ourselves checked the accuracy or completeness of, or otherwise verified, the information furnished with respect to other matters in the Registration Statement or the Prospectus, but we have generally reviewed and discussed with your representatives and with certain officers and employees of, and counsel and independent public accountants for, the Issuer the information furnished, whether or not subject to our check and verification. On the basis of such consideration, review and discussion, but without independent check or verification, except as stated, (a) we are of the opinion that the Registration Statement and Prospectus (except for the financial statements, related schedules and statistical information of a financial nature contained or incorporated therein, as to which we do not express any opinion, and any Statement of Eligibility on Form T-1 included in the Registration Statement) comply as to form in all material respects with the Act and the applicable rules and regulations of the Commission thereunder, and (b) no facts came to our attention which lead us to believe that (except for the financial statements, related schedules and statistical information of a financial nature contained or incorporated therein, as to which we do not express any belief, and except for any Statement of Eligibility on Form T-1 included in the Registration Statement) the Registration Statement, when it became effective, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Prospectus, as of the date hereof, contains any untrue statement of a material fact or omits 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. We have examined the opinions dated the date hereof of Phyllis Savage, Chief Finance and Securities Counsel for the Issuer, delivered to you pursuant to Section 5(e)(i) of the Distribution Agreement, and of Sullivan & Cromwell, tax counsel to the Issuer, delivered to you pursuant to Section 5(e)(ii) of the Distribution Agreement; we believe that such opinions are responsive to the requirements of the Distribution Agreement. We have also examined the letter dated the date hereof of KPMG Peat Marwick LLP relating to certain financial statements and other information contained or incorporated by reference in the Registration Statement and the other matters referred to in such letter, delivered to you pursuant to Section 5(g) of the Distribution Agreement. We participated in discussions with your representatives and representatives of KPMG Peat Marwick LLP relating to the form of such letter, and we believe that it is substantially in the form agreed to. We are members of the Bar of the State of New York and the foregoing opinion is limited to the laws of the State of New York and the Federal laws of the United States. This opinion is rendered solely to you pursuant to the Distribution Agreement. This opinion may not be relied upon by or furnished to any other person without our prior written consent. Very truly yours, EXHIBIT A UNION CARBIDE CORPORATION MEDIUM-TERM NOTES TERMS AGREEMENT , 19 ------------------- -- UNION CARBIDE CORPORATION (the "Issuer") 39 Old Ridgebury Road Danbury, CT 06817 Attention: Treasurer Re: Distribution Agreement dated January 22, 1997 (the "Distribution Agreement") ------------------------------------------------ Dear Sirs: Subject to the applicable terms and conditions of the Distribution Agreement, which is incorporated herein by reference, the undersigned Distributor (terms defined in the Distribution Agreement shall have such defined meanings herein) hereby agrees to purchase the aggregate principal amount of Notes having terms as follows: Principal Amount: Specified Currency (if other than U.S. dollars): Equivalent to $1,000 minimum denomination: Issue Date: Interest Accrual Date (if other than Issue Date): Stated Maturity: Price to Public (if other than 100%): _______% of Principal Amount or $ ____________ Distributor's Commissions: ______% of Principal Amount or $_______ Proceeds to Issuer: _____% of Principal Amount or $_______ Interest Payment Dates (if other than January 1 and July 1): Record Dates (if other than the close of business on the 15th calendar day preceding each Interest Payment Date): Initial Interest Payment Date: If Fixed Rate Note-- Rate of interest per annum (360-day year of twelve 30-day months basis): If Floating Rate Note: Interest rate formula: [ ] Commercial Paper Rate [ ] Prime Rate [ ] CD Rate [ ] Federal Funds Rate [ ] LIBOR [ ] Treasury Rate [ ] Other, specify: Index Maturity: Spread: +/- Spread Multiplier: x Minimum interest rate limitation: not less than ___% Maximum interest rate limitation: not more than ___% Initial Interest Rate: ___% Interest Reset Dates: Interest Determination Dates: Calculation Agent (if other than The Chase Manhattan Bank): Calculation Dates: If redeemable at option of Issuer -- Initial Redemption Date: Initial Redemption Percentage: Annual Redemption Percentage Reduction: If repayable at option of Holder -- Optional Repayment Dates: If Original Issue Discount Note: Terms: Tax Legend: If Indexed Note -- Terms: If Specified Currency other than U.S. dollars -- Exchange Rate Agent (if other than The Chase Manhattan Bank): The number of participant accounts to be maintained by DTC on behalf of the Purchasing Distributor and the Trustee: Other Terms -- Unless specified to the contrary above under "Other Terms --", such Notes will settle at 10:00 A.M. New York City time on the third Business Day following the Issue Date, at the office of the undersigned Distributor designated for notices in the Distribution Agreement, by delivery of such Notes in book-entry form through The Depository Trust Company to the account of such Distributor against payment in immediately available funds by Federal wire to such account of the Issuer at a bank which receives such wires as the Issuer shall designate to such Distributor not less than one Business Day prior thereto. The following conditions set forth in Section 5 of the Distribution Agreement shall be satisfied at the time of delivery of the Notes: [ ] (e)(i) opinion of Phyllis Savage, Chief Finance and Securities Counsel of the Issuer, or other counsel satisfactory to the Distributor [ ] (e)(ii) opinion of Sullivan & Cromwell, special tax counsel to the Issuer, or other counsel satisfactory to the Distributor [ ] (f) officer's certificate [ ] (g) letter of KPMG Peat Marwick LLP [ ] (h) opinion of Davis Polk & Wardwell, Distributors' counsel [ ] other matters: Very truly yours, [NAME OF RELEVANT DISTRIBUTOR] By ------------------------ Title: Accepted: UNION CARBIDE CORPORATION By ---------------------------------- Title: EXHIBIT B UNION CARBIDE CORPORATION MEDIUM-TERM NOTES COMMISSION SCHEDULE The Issuer agrees to pay each Distributor a commission equal to the following percentage of the principal amount of Notes sold to purchasers solicited by such Distributor: Commission Rate (as a percentage of Term principal amount) - ----------------------------------------- -------------------------- 9 months to less than 12 months .125% 12 months to less than 18 months .150 18 months to less than 24 months .200 24 months to less than 30 months .250 30 months to less than 3 years .300 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 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 or more to be negotiated EXHIBIT C UNION CARBIDE CORPORATION MEDIUM-TERM NOTES ADMINISTRATIVE PROCEDURES ------------------------------------- Explained below are certain administrative procedures applicable to the offering of Medium-Term Notes (the "Notes") on a continuous basis by Union Carbide Corporation (the "Issuer") pursuant to the Distribution Agreement dated January 22, 1997 (the "Distribution Agreement") among the Issuer and Credit Suisse First Boston Corporation, Morgan Stanley & Co. Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation (the "Distributors"). The Notes will be issued under the Indenture dated as of June 1, 1995 (the "Indenture") between the Issuer and The Chase Manhattan Bank (formerly Chemical Bank), as Trustee (the "Trustee"). In the Distribution Agreement, the Distributors have agreed to use reasonable efforts to solicit purchases of the Notes, and the administrative procedures explained below will govern the issuance and settlement of any Notes sold through a Distributor, as agent of the Issuer. A Distributor, as principal, may also purchase Notes for its own account pursuant to a Terms Agreement (a "Terms Agreement"), as contemplated by the Distribution Agreement. These administrative procedures will govern the issuance and settlement of any Notes purchased by a Distributor, as principal, unless otherwise specified in the applicable Terms Agreement. The Notes are generally described in the Issuer's Prospectus Supplement dated January 22, 1997 to its Prospectus dated December 11, 1996. Specific Notes will be described in an applicable Pricing Supplement thereto, which will supersede any inconsistent provision hereof. Terms defined in the Prospectus Supplement, the Distribution Agreement and any Pricing Supplement are used with such defined meanings in these Administrative Procedures unless otherwise indicated. The Issuer and the Distributors will supplement these Administrative Procedures to the extent necessary, prior to the issuance of Foreign Currency Notes, Indexed Notes or Original Issue Discount Notes. All Notes having the same Issue Date and terms (a "Tranche") will be issued in the form of one or more permanent global Notes ("Global Notes") delivered to the Trustee, as custodian for The Depository Trust Company ("DTC"), with beneficial interests in such Global Notes credited in the book-entry system maintained by DTC ("Book-Entry Notes"), unless the applicable Pricing Supplement indicates that such Notes are to be issued in definitive, certificated form to Holders ("Certificated Notes"). Except as set forth in the Indenture, Global Notes will not be exchangeable into Certificated Notes. Book-Entry Notes, which currently may be payable only in U.S. dollars, will be issued in accordance with the administrative procedures set forth in Part I hereof as they may subsequently be amended as the result of changes in DTC'S operating procedures (in addition to any amendments made by the Issuer and Distributors pursuant to the Distribution Agreement). Certificated Notes will be issued in accordance with the administrative procedures set forth in Part II hereof. The Issuer will advise the Distributors in writing of the employees of the Issuer with whom the Distributors are to communicate regarding offers to purchase Notes and the related settlement details. The Issuer will obtain and furnish to the Trustee an adequate supply of CUSIP numbers for the Notes and an adequate supply of executed Fixed Rate Notes and Floating Rate Notes in the forms of Global Notes (bearing all required DTC legends) and Certificated Notes, to be completed and authenticated by the Trustee. The Issuer will also advise the Trustee of the bank and account information needed for the Issuer to receive immediately available funds on settlements. PART I: ADMINISTRATIVE PROCEDURES FOR BOOK-ENTRY NOTES In connection with the qualification of Global Notes for eligibility in the book-entry system maintained by DTC, the Trustee will perform the custodial, document control and administrative functions described below, in accordance with its respective obligations under the Letter of Representations from the Issuer and the Trustee to DTC dated January 22, 1997 and a Medium-Term Note Certificate Agreement between the Trustee and DTC, dated as of December 2, 1988 (the "MTN Certificate Agreement"), and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS"). Issuance: On any date of settlement for the Book-Entry Notes of any Tranche, the Issuer will issue one Global Note representing the aggregate principal amount of such Notes, registered in the name of Cede & Co. and dated the date of its authentication by the Trustee or the Authenticating Agent. Pricing Supplement: If any offer to purchase Book-Entry Notes of any Tranche is accepted by or on behalf of the Issuer, the Issuer will prepare and file with the Commission a Pricing Supplement reflecting the terms of such Notes. The Issuer will, as soon as possible after such filing, deliver such number of copies of such Pricing Supplement to the Purchasing Distributor as such Distributor shall request and one copy to the Trustee. The Purchasing Distributor will affix the Pricing Supplement to the Prospectus Supplement prior to the delivery thereof to purchasers of such Notes. Outdated Pricing Supplements (other than those retained for files) will be destroyed. Settlement All offers accepted by the Issuer with Procedures: respect to Book-Entry Notes of any Tranche pursuant to the Distribution Agreement (unless otherwise provided in a Terms Agreement) will be settled on the third Business Day next succeeding the date of acceptance pursuant to the procedures set forth below, unless the Issuer and the purchaser agree to settlement on another day, which shall be no earlier than the next Business Day, or to different procedures: A. The Purchasing Distributor will advise the Issuer by telephone or fax that such Notes are to be Book-Entry Notes and of the following settlement information in respect of such Notes: 1. Principal amount. 2. Issue Date and Interest Accrual Date (if different from Issue Date). 3. Stated Maturity. 4. Price to Public (if other than 100%) expressed as a percentage of principal amount and in U.S. dollars. 5. Purchasing Distributor's Commission expressed as a percentage of principal amount and in U.S. dollars. 6. Proceeds to Issuer expressed as a percentage of principal amount and in U.S. dollars. 7. Interest Payment Dates (if other than January 1 and July 1). 8. Record Dates (if other than the close of business on the 15th calendar day preceding each Interest Payment Date). 9. Initial Interest Payment Date. 10. If Fixed Rate Notes, the rate of interest per annum (based on a 360-day year of 12 30-day months). 11. If Floating Rate Notes, the interest rate formula, Index Maturity, Spread, Spread Multiplier, minimum and maximum interest rate limitations, Initial Interest Rate, Interest Reset Dates, Interest Determination Dates, Calculation Agent (if other than The Chase Manhattan Bank) and Calculation Dates. 12. If redeemable at the option of the Issuer, the Initial Redemption Date, the Initial Redemption Percentage and the Annual Redemption Percentage Reduction . 13. If repayable at the option of the Holders, the Optional Repayment Date or Dates. 14. If Original Issue Discount Notes, the terms thereof and any tax legend required thereon. 15. If Indexed Notes, the terms thereof. 16. Any other terms applicable to such Notes. 17. The number of participant accounts to be maintained by DTC on behalf of the Purchasing Distributor and the Trustee. B. The Issuer will advise the Purchasing Distributor by telephone or fax of its receipt of and agreement with the information set forth pursuant to Settlement Procedure "A" above and will forward such information to the Trustee. The Trustee will then assign a CUSIP number to such Notes and will notify the Issuer and the Purchasing Distributor of such CUSIP number by telephone or fax as soon as practicable. C. The Trustee will enter a pending deposit message through DTC's Participant Terminal System, providing the following settlement information with respect to such Notes to DTC, the relevant Distributor and Standard & Poor's Rating Services: 1. The information set forth pursuant to Settlement Procedure "A". 2. The Initial Interest Payment Date, the number of days by which such date succeeds the related DTC Record Date (which, unless otherwise specified in the applicable Pricing Supplement, in the case of Floating Rate Notes which reset daily or weekly, shall be the date five calendar days immediately preceding the Initial Interest Payment Date and, in the case of all other Notes, shall be the Record Date) and, if known, the amount of interest payable on such Initial Interest Payment Date. 3. The CUSIP number. 4. Whether such Global Note will represent any other Book-Entry Notes (to the extent known at such time). 5. The number of participant accounts to be maintained by DTC on behalf of the Purchasing Distributor and the Trustee. D. The Trustee will complete and authenticate the Global Note representing such Book-Entry Notes. E. DTC will credit such Note to the Trustee's participant account at DTC. F. The Trustee will enter an SDFS deliver order through DTC'S Participant Terminal System instructing DTC to (i) debit such Notes to the Trustee's participant account and credit such Notes to the relevant Distributor's participant account and (ii) debit such Distributor's settlement account and credit the Trustee's settlement account for an amount equal to the price of such Notes less any Distributor's commission. The entry of such a deliver order shall constitute a representation and warranty by the Trustee to DTC that (a) the Global Note representing such Book-Entry Notes has been issued and authenticated and (b) the Trustee is holding such Global Note pursuant to the MTN Certificate Agreement. G. Unless the Purchasing Distributor is the end purchaser of such Notes, such Distributor will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Note to such Distributor's participant account and credit such Notes to the participant accounts of the participants with respect to such Notes and (ii) to debit the settlement accounts of such participants and credit the settlement account of such Distributor for an amount equal to the price of such Notes. H. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures "F" and "G" will be settled in accordance with SDFS operating procedures in effect on the settlement date. I. The Trustee will credit to the account of the Issuer, at such bank and account as the Issuer shall from time to time instruct the Trustee in writing, immediately available funds in the amount credited to the Trustee's settlement account in accordance with Settlement Procedure "F". J. Unless the Purchasing Distributor is the end purchaser of such Notes, such Distributor will be responsible in accordance with its normal procedures to confirm the purchase of such Notes to the purchasers either by confirmation orders through DTC's institutional delivery system or by mailing written confirmations to such purchasers. Settlement For sales by the Issuer of Book-Entry Procedures Notes to or through a Distributor (unless otherwise Timetable: specified pursuant to a Terms Agreement) for settlement on the first Business Day after the sale date, Settlement Procedures "A" through "J" set forth above shall be completed as soon as possible but not later than the respective times in New York City set forth below: Settlement Procedure (Time) --------- ---- A 11:00 A.M. on sale date B 12:00 Noon on sale date C 2:00 P.M. on sale date D 9:00 A.M. on settlement date E 10:00 A.M. on settlement date F-G 2:00 P.M. on settlement date H 4:45 P.M. on settlement date I-J 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., 12:00 Noon and 2:00 P.M., respectively, on the first Business Day after the sale date. If the Initial Interest Rate for a Floating Rate 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 first Business Day before the settlement date. Settlement Procedure "H" is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in the SDFS operating procedures in effect on the settlement date. If settlement of a Book-Entry Note is rescheduled or cancelled, the Trustee, after receiving notice from the Issuer or the Purchasing Distributor, will deliver to DTC, through DTC's Participant Terminal System, a cancellation message to such effect by no later than 2:00 P.M. on the Business Day immediately preceding the scheduled settlement date. Failure to Settle: If the Trustee fails to enter an SDFS deliver order with respect to a Book-Entry Note pursuant to Settlement Procedure "F", the Trustee may deliver to DTC, through DTC's Participant Terminal System, as soon as practicable a withdrawal message instructing DTC to debit such Notes to the Trustee's participant account, provided that the Trustee's participant account contains a principal amount of such Notes 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 Note, the Trustee will mark such Global Note "cancelled", make appropriate entries in the Trustee's records and destroy such cancelled Global Note in accordance with its usual procedures. The CUSIP number assigned to such Global Note shall, in accordance with the procedures of the CUSIP Service Bureau of Standard & Poor's Ratings Services, be cancelled 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 Note, the Trustee will exchange such Global Note for two Global Notes with the same CUSIP number, one of which shall represent such Book-Entry Notes referred to in the withdrawal message and shall be cancelled immediately after issuance and the other of which shall represent the remaining Book-Entry Notes previously represented by the exchanged Global Note. 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 Purchasing Distributor may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant to Settlement Procedures "F" and "G", respectively. Thereafter, the Trustee will deliver the withdrawal message and take the related actions described in the preceding paragraph. 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 Note, the Trustee will provide, in accordance with Settlement Procedures "D" and "F", for the authentication and issuance of a Global Note representing the Book-Entry Notes to be represented by such Global Note and will make appropriate entries in its records. PART II: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED NOTES Issuance: Each Certificated Note will be dated the date of its authentication by the Trustee or the Authenticating Agent. Pricing If any offer to purchase a Certificated Supplement: Note accepted by or on behalf of the Issuer, the Issuer will prepare and file with the Commission a Pricing Supplement reflecting the terms of such Note. The Issuer will, as soon as possible after such filing, deliver such number of copies of such Pricing Supplement to the Purchasing Distributor as such Distributor shall request and a copy to the Trustee. The Purchasing Distributor will affix the Pricing Supplement to the Prospectus Supplement prior to the delivery thereof to purchasers of such Notes. Outdated Pricing Supplements (other than those retained for files) will be destroyed. Settlement All offers accepted by the Issuer with Procedures: respect to any Certificated Note pursuant to the Distribution Agreement (unless otherwise provided pursuant to a Terms Agreement) will be settled on the third Business Day next succeeding the date of acceptance pursuant to the procedures set forth below, unless the Issuer and the purchaser agree to settlement on another day, which shall be no earlier than the next Business Day, or to different procedures. A. The Purchasing Distributor will advise the Issuer by telephone that such Note is a Certificated Note and of the following settlement information: 1. Name in which such 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 and Specified Currency (if other than U.S. dollars). 5. Issue Date and Interest Accrual Date (if different from Issue Date). 6. Stated Maturity. 7. Price to Public (if other than 100%) expressed as a percentage of principal amount and in the Specified Currency. 8. Purchasing Distributor's Commission expressed as a percentage of principal amount and in the Specified Currency. 9. Proceeds to Issuer expressed as a percentage of principal amount and in the Specified Currency. 10. Interest Payment Date (if other than January 1 and July 1). 11. Record Dates (if other than the close of business on the 15th calendar day preceding each Interest Payment Date). 12. Initial Interest Payment Date. 13. If a Fixed Rate Note, the rate of interest per annum (based on a 360-day year of 12 30-day months). 14. If a Floating Rate Note, the interest rate formula, Index Maturity, Spread, Spread Multiplier, minimum and maximum interest rate limitations, Initial Interest Rate, Interest Reset Dates, Interest Determination Date, Calculation Agent (if other than The Chase Manhattan Bank) and Calculation Dates. 15. If redeemable at the option of the Issuer, the Initial Redemption Date, the Initial Redemption Percentage and the Annual Redemption Percentage Reduction. 16. If repayable at the option of the Holder, the Optional Repayment Date or Dates. 17. If an Original Issue Discount Note, the terms hereof and any tax legend required thereon. 18. If an Indexed Note, the terms thereof. 19. Any other terms applicable to such Note. B. The Issuer will advise the Purchasing Distributor by telephone or fax of its receipt of and agreement with the information set forth in Settlement Procedure "A" above and forward such information to the Trustee. C. The Issuer will have delivered to the Trustee a pre-printed four-ply packet for such Note, which packet will contain the following documents in forms that have been approved by the Issuer, the Purchasing Distributor and the Trustee: 1. Certificated Note. 2. Stub One - For the Trustee. 3. Stub Two - For the relevant Distributor. 4. Stub Three - For the Issuer. D. The Trustee will complete and authenticate such Note and deliver it (with a customer confirmation) and Stubs One, Two and Three to the Purchasing Distributor, and such Distributor will acknowledge receipt of such Note, by stamping or otherwise marking Stubs One and Three, and returning them to the Trustee. Such delivery will be made only against such acknowledgment of receipt. E. Unless the Purchasing Distributor is the end purchaser of such Note, such Distributor will deliver such Note (with confirmation) to the customer against payment in immediately available funds. Such Distributor will obtain the acknowledgment of receipt of such Note by its customer on Stub Two and retain same. F. The Trustee will send Stub Three to the Issuer by first-class mail. Settlement For sales by the Issuer of Certificated Procedures Notes to or through a Distributor (unless Timetable: otherwise specified pursuant to a Terms Agreement), Settlement Procedures "A" through "F" set forth above shall be completed on or before the respective times in New York City set forth below: Settlement Procedure Time --------- ---- A 2:00 P.M. on day before settlement date B 3:00 P.M. on day before settlement date C-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 Settle: If a purchaser fails to accept delivery of and make payment for any Certificated Note, the Purchasing Distributor will notify the Issuer and the Trustee by telephone and return such Note to the Trustee. Upon receipt of such notice, the Issuer will immediately wire transfer to the account of such Distributor an amount equal to the price of such Note less such Distributor's commission in respect of such Note (if any). 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 such Distributor in the performance of its obligations hereunder and under the Distribution Agreement, then the Issuer will reimburse such Distributor or the Trustee, 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 Issuer. Immediately upon receipt of the Certificated Note in respect of which such failure occurred, the Trustee will mark such Note "cancelled," make appropriate entries in the Trustee records and send such Note to the Issuer. EX-4.1.2.1 3 Exhibit 4.1.2.1 MEDIUM-TERM NOTES BOND RESOLUTION OF UNION CARBIDE CORPORATION The actions described below are taken by the undersigned this January 22, 1997 pursuant to the resolutions of the Board of Directors of Union Carbide Corporation (the "Company") adopted on December 3, 1996, and Section 2.01 of the Indenture dated as of June 1, 1995 (the "Indenture"), between the Company and The Chase Manhattan Bank (formerly Chemical Bank), Trustee. Terms used herein and not defined have the same meaning as in the Company's Prospectus Supplement dated January 22, 1997 (the "Prospectus Supplement") or the Indenture. RESOLVED, that a new series of Securities is authorized as follows: (1) The title of the series is "Medium-Term Notes Due 9 Months or More from Date of Issue" (the "Notes"). (2) The aggregate principal amount of the Notes is such amount as results from an aggregate offering price not to exceed $500,000,000. (3) The interest rate on any Note will either be fixed or variable, determined by reference to an interest rate formula which may be adjusted by any Spread or Spread Multiplier and subject to any minimum and maximum limitation and which will be the Commercial Paper Rate, the Prime Rate, the CD Rate, the Federal Funds Rate, LIBOR, the Treasury Rate or another interest rate formula, all as determined with respect to any Note by any two of the Chairman, the President, the Chief Financial Officer, the Vice President and General Counsel or the Treasurer of the Company (the "Authorized Officers") and set forth in an Officers' Certificate (as defined in the Indenture) delivered to the Trustee. Such determination so evidenced with respect to any Note is referred to as the "Determination." (4) Each interest-bearing Note will bear interest from and including the later of its Interest Accrual Date (which will be its Issue Date unless otherwise specified in the Determination) or the most recent Interest Payment Date with respect to which interest on such Note (or any predecessor Note) has been paid or duly provided for to but excluding the relevant Interest Payment Date, subject to the Determination. (5) The Record Date for any Interest Payment Date will be the close of business on the fifteenth calendar day preceding such Interest Payment Date, subject to the Determination. (6) Interest will be payable on each Interest Payment Date provided for in the Determination (or on each January 1 and July 1 if not so provided) and at Maturity. (7) Interest will be payable generally to the person in whose name a Note (or any predecessor Note) is registered at the close of business on the Record Date next preceding each Interest Payment Date and may be paid by check mailed to the address of the person entitled thereto at such address as shall appear in the Security Register, subject to the Determination. (8) Payments of principal and interest will be made at the office of the Paying Agent, The Chase Manhattan Bank in New York, New York, except as provided in clause (7) and in the Determination. (9) The Registrar, Transfer Agent and Paying Agent is The Chase Manhattan Bank, unless otherwise provided in the Determination (10) No Note will be subject to mandatory or optional redemption by the Company prior to its Stated Maturity, unless otherwise specified in the Determination. (11) No Note will be repayable or redeemable by the Company at the option of the Holders thereof prior to its Stated Maturity, unless specified in the Determination. (12) The Notes will be issuable only in denominations of U.S. $1,000 and integral multiples thereof, unless otherwise specified in the Determination. (13) The Notes will be issuable only as Registered Securities, unless otherwise provided in the Determination. (14) No bearer Notes will be issued, unless otherwise so provided. (15) All Notes of like tenor and having the same Issue Date will be represented by a single Global Note, unless otherwise so provided. (16) The Depository Trust Company will act as depositary (the "Depositary") for the Notes. No Global Note may be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary. A Global Note is exchangeable for Certificated Notes registered in the name of a Holder other than the Depositary only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as Depositary for such Global Note, or the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, and a successor depositary is not appointed by the Company within 90 calendar days or (ii) the Company in its sole discretion instructs the Trustee that such Global Note shall be so exchangeable or (iii) an event shall have happened and be continuing which, after notice or lapse of time, or both, would be an Event of Default with respect to the Notes. Notes issued in exchange for a Global Note shall be registered in the name or names of such person or persons as the Company shall instruct the Trustee. The Determination may change any provisions of this clause (16). (17) No tax indemnity will be applicable to the Notes, unless otherwise provided in the Determination. (18) Payments of principal and interest on the Notes shall be in U.S. dollars, unless otherwise so provided. (19) The Determination will provide for any applicable conversion of currencies. (20) The terms of the Notes described in the Prospectus Supplement related to the determination of principal or interest by reference to an index, formula or other method shall be the terms of the Notes, unless otherwise provided in the Determination. (21) The Notes shall not be issued in electronic or uncertificated form, unless otherwise so provided. (22) The whole principal amount of the Notes will be payable upon the acceleration of the Notes, unless otherwise so provided. (23) The "Events of Default" applicable to the Notes are those set forth in the Indenture, unless otherwise so provided. (24) The defeasance provisions of Article 8 of the Indenture shall be applicable to the Notes, unless otherwise so provided. (25) The Fixed Rate Notes shall be substantially in the form of Exhibit A hereto and the Floating Rate Notes shall be substantially in the form of Exhibit B hereto, except as otherwise so provided. (26) The Notes shall have such other terms as are set forth in the Determination. RESOLVED, that each of the Authorized Officers is authorized to execute and deliver on behalf of the Company the Distribution Agreement dated January 22, 1997, between the Company and Credit Suisse First Boston Corporation, Morgan Stanley & Co. Incorporated and Donaldson, Lufkin & Jenrette Securities Corporation and the Calculation Agent Agreement dated as of January 22, 1997, between the Company and The Chase Manhattan Bank, in such forms as the Authorized Officers executing the same may approve, such approval to be conclusively evidenced by such execution thereof. RESOLVED, that the proper officers of the Company are authorized and directed to execute or cause to be executed such agreements, documents, certificates, instruments and other writings and to take or do or cause to be taken or done such other actions and things as may be necessary or desirable to establish and maintain the Company's Medium-Term Note program. ___________________________________ Name: Title: ___________________________________ Name: Title: Exhibit A Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the same 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. CUSIP 90558P2 ---- No. $ --- ---------- UNION CARBIDE CORPORATION Fixed Rate Medium-Term Note Principal Amount: Specified Currency (if other than U.S. dollars): Equivalent to U.S. $1,000 minimum denomination: Issue Date: Interest Accrual Date (if other than Issue Date): Stated Maturity: Interest Payment Dates (if other than January 1 and July 1): Record Dates (if other than the close of business on 15th calendar day preceding each Interest Payment Date): Initial Interest Payment Date: Rate of interest per annum (360-day year of twelve 30-day months basis): If redeemable at option of Company-- Initial Redemption Date: Initial Redemption Percentage: Annual Redemption Percentage Reduction: If repayable at option of Holder -- Optional Repayment Dates: If Original Issue Discount Note -- Terms: Tax Legend: If Indexed Note -- Terms: If Specified Currency other than U.S. dollars -- Exchange Rate Agent (if other than The Chase Manhattan Bank): Other terms -- Union Carbide Corporation promises to pay to Cede & Co. or registered assigns the Principal Amount set forth above on the Stated Maturity set forth above, subject to any applicable Terms set forth above under "If Indexed Note --".. Dated: UNION CARBIDE CORPORATION by Authenticated: ------------------------------ John K. Wulff THE CHASE MANHATTAN BANK, Vice President, Chief Financial Officer and Controller - ------------------------------ ------------------------------ Authorized Officer John W. Fitzpatrick Assistant Treasurer UNION CARBIDE CORPORATION Fixed Rate Medium-Term Note 1. Interest. Union Carbide Corporation (the "Company"), a New York corporation, promises to pay interest on the Principal Amount of this Security set forth on the face hereof at the rate per annum, if any, set forth on the face hereof. The Company will pay any such interest on the Interest Payment Dates set forth on the face hereof each year commencing on the Initial Interest Payment Date set forth on the face hereof. Any such interest will accrue from the most recent Interest Payment Date to which any such interest on this Security (or any predecessor Security) has been paid or duly provided for or, if no such interest has been paid or duly provided for, from the Interest Accrual Date set forth on the face hereof until the Principal Amount hereof is paid or duly provided for. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. Method of Payment. The Company will pay interest on this Security to the person who is the registered Holder of this Security at the Record Date, set forth on the face hereof, next preceding each Interest Payment Date, except that any interest payable at Stated Maturity or any earlier redemption or acceleration ("Maturity") shall be payable to the person to whom principal shall be payable. Holders must surrender Securities to the Paying Agent to collect principal payments. Unless the Principal Amount hereof is stated in a Specified Currency other than U.S. dollars (see Section 17), the Company will pay principal and any premium and interest in immediately available funds of the United States that at the time of payment are legal tender for payment of public and private debts at the office of the Paying Agent, except that the Company may pay interest by check mailed to a Holder's registered address. 3. Agents. Initially, The Chase Manhattan Bank will act as Registrar, Paying Agent and Transfer Agent. The Company may change any such Agent without notice. The Company or any Affiliate may act in any such capacity. Subject to certain conditions, the Company may change the Trustee. 4. Indenture. The Company is issuing its Medium-Term Notes, including this Security, under an Indenture dated as of June 1, 1995 ("Indenture") between the Company and The Chase Manhattan Bank (formerly Chemical Bank), as Trustee ("Trustee"). The Indenture provides for the issuance of an unlimited amount of the Company's debt securities from time-to-time in series. This Security and all other Medium-Term Notes constitute one such series (the "Securities") unless the terms of any particular Medium-Term Note specify that it is not part of such series. The terms of this Security include those stated in the Indenture, in the Bond Resolution creating the Securities and in the action establishing the terms of this Security and those made part of the Indenture by the Trust Indenture Act of 1939, as amended (15 U.S. Code Section Section 77aaa - 77bbbb). Securityholders are referred to the Indenture, the Bond Resolution, such action and the Act for a statement of such terms. 5. Redemption at Option of Company. This Security will not be redeemable prior to Stated Maturity, pursuant to any mandatory redemption (except to the extent, if any, set forth under "Other Terms" on the face hereof), or at the option of the Company (except to the extent specified on the face hereof under "If redeemable at option of Company --"). To the extent specified on the face hereof, this Security will be subject to redemption at the option of the Company on any date on and after the Initial Redemption Date specified on the face hereof in whole or in part in increments of U.S. $1,000 or equivalent Specified Currency indicated on the face hereof or whole multiples thereof at the applicable Redemption Price (as hereinafter defined), together with any unpaid interest accrued to the date of redemption, on notice given not more than 60 nor less than 20 calendar days prior to the date of redemption and in accordance with the provisions of the Indenture. "Redemption Price", means an amount equal to the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual Redemption Percentage Reduction, if applicable, specified on the face hereof) multiplied by the unpaid Principal Amount hereof (or, if the face hereof indicates that this Security is an Original Issue Discount Note, the portion hereof which would then be due upon acceleration) to be redeemed. The Initial Redemption Percentage, if any, applicable to this Security shall decline at each anniversary of the Initial Redemption Date by an amount equal to the applicable Annual Redemption Percentage Reduction, if any, until the Redemption Price is equal to 100% of the unpaid Principal Amount hereof (or, if the face hereof indicates that this Security is an Original Issue Discount Note, the portion thereof that would then be due upon acceleration) to be redeemed. 6. Repayment at Option of Holder. This Security will not be repayable at the option of the Holder (except to the extent, if any, set forth under "If repayable at option of Holder --" on the face hereof). If one or more Optional Repayment Dates are specified on the face hereof, this Security will be subject to repayment at the option of the Holder hereof on any Optional Repayment Date in whole or in part in increments of U.S. $1,000 or equivalent Specified Currency indicated on the face hereof or whole multiples thereof, at a repayment price equal to 100% of the unpaid Principal Amount (or, if the face hereof indicates that this Security is an Original Issue Discount Note, the portion hereof which would then be due upon acceleration) to be repaid, together with any unpaid interest accrued to the date of repayment. To exercise such repayment right, this Security must be received, together with the form hereon entitled "Option to Elect Repayment" duly completed, by the Trustee not more than 60 nor less than 20 calendar days prior to the date of repayment. Exercise of such repayment option by the Holder will be irrevocable. 7. Denomination, Transfer, Exchange. The Securities are in registered form without coupons in denominations of U.S. $1,000 or the equivalent Specified Currency indicated on the face hereof and whole multiples thereof. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Transfer Agent may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or the Indenture. Notwithstanding the foregoing, this Security may be transferred or exchanged (except as contemplated by the legend on the face hereof) only if DTC notifies the Company that it is unable or unwilling to continue as depositary for this Security or it ceases to be a clearing agency registered under the Securities Exchange Act of 1934 and no seccessor depositary for this Security is appointed by the Company within 90 calendar days or the Company in its sole discretion instructs the Trustee that this Security shall be so transferable and exchangeable or an event shall have happened and be continuing which, after notice or lapse of time, or both, would be an Event of Default. 8. Persons Deemed Owners. The registered Holder of a Security may be treated as its owner for all purposes. 9. Amendments and Waivers. Subject to certain exceptions, the Indenture or the Securities may be amended with the consent of the Holders of a majority in principal amount of the Securities of all series affected by the amendment. Subject to certain exception, a default on a series may be waived with the consent of the Holders of a majority in principal amount of the series. Without the consent of any Securityholder, the Indenture or the Securities may be amended, among other things, to cure any ambiguity, omission, defect or inconsistency; to provide for assumption of Company obligations to Securityholders; or to make any change that does not materially adversely affect the rights of any Securityholder. 10. Restrictive Covenants. The Securities are unsecured general obligations of the Company. The Indenture does not limit other unsecured debt. It does limit certain mortgages and sale-leaseback transactions if the property mortgaged or leased is a manufacturing facility in the United States (excluding its territories and possessions) that is of material importance to the Company's consolidated business. The limitations are subject to a number of important qualifications and exceptions. 11. Successors. When a successor assumes all the obligations of the Company under the Securities and the Indenture, the Company will be released from those obligations. 12. Defeasance Prior to Maturity. Subject to certain conditions, the Company at any time may terminate some or all of its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal of and any premium and interest on the Securities to redemption or maturity. U.S. Government Obligations are securities backed by the full faith and credit of the United States of America or certificates representing an ownership interest in such Obligations. 13. Defaults and Remedies. An Event of Default includes: default for 10 days in payment of interest on the Securities, default in payment of principal on the Securities, default by the Company for a specified period after notice to it in the performance of any of its other agreements applicable to the Securities and certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Securities may declare the principal of all the Securities to be due and payable immediately, except that only such portions of the principal of Securities that are Original Issue Discount Notes as are specified in the Terms on the faces thereof may be declared due and payable immediately. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Company must furnish annual compliance certificates to the Trustee. 14. Trustee Dealings with Company. The Chase Manhattan Bank, the Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with those persons, as it if were not Trustee. 15. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 16. Authentication. This Security shall not be valid until authenticated by a manual signature of the Trustee. 17. Foreign Currency. If the Principal Amount set forth on the face hereof is stated in a Specified Currency other than U.S. dollars, the provisions of this Section apply to this Security and supersede any inconsistent provision hereof, and all payments of principal of and any premium and interest on this Security will be made in such Specified Currency (or, if such Specified Currency is not at the time of such payment legal tender for the payment of public and private debts, in such other coin or currency of the political entity which issued such Specified Currency as at the time of such payment is legal tender for the payment of such debts). Any such amounts paid by the Company will be converted by the Exchange Rate Agent named on the face hereof to U.S. dollars, unless the Holder hereof elects to receive such payments in such Specified Currency. Such U.S. dollar amount will be based on the highest bid quotation in The City of New York received by the Exchange Rate Agent at approximately 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date from three recognized foreign exchange dealers selected by the Exchange Rate Agent and approved by the Company for the purchase by the quoting dealer of such Specified Currency for U.S. dollars for settlement on such payment date in the aggregate amount of such Specified Currency payable to all Holders of Securities then scheduled to receive U.S. dollar payments and at which the applicable dealer commits to execute a contract. If such bid quotations are not available, payments will be made in such Specified Currency. All currency exchange costs will be borne by the Holder hereof by deductions from such payments. The Holder hereof may elect to receive any payment or all payments of or on this Security in the Specified Currency indicated on the face hereof by transmitting a written request (by mail, hand delivery or facsimile transmission) for such payment to the Paying Agent on or prior to the Record Date or at least sixteen days prior to Maturity, as the case may be. Such election will remain in effect until revoked by written notice to the Paying Agent received on or prior to the relevant Record Date or at least sixteen days prior to Maturity, as the case may be. Principal of, and any premium and interest on, this Security paid in U.S. dollars will be paid in the manner specified in Section 2 hereof. Interest hereon paid in such Specified Currency will be paid by check mailed to the registered address of the Holder entitled thereto. All checks payable in a Specified Currency will be drawn on a bank office located outside the United States. Payments hereof and hereon in such Specified Currency at Maturity will be made in immediately available funds to such account with a bank located in the country of the Specified Currency as shall have been designated at least sixteen days prior to Maturity by the Holder, provided that this Security is presented to the Paying Agent in time for the Paying Agent to make such payments in such funds in accordance with its normal procedures. If a Specified Currency is not available for any payment due to the imposition of exchange controls or other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligations to the Holder hereof by making such payment in U.S. dollars on the basis of the Market Exchange Rate on the second Business Day prior to such payment or, if such Market Exchange Rate is not then available, on the basis of the most recently available Market Exchange Rate. The principal amount of any Security payable in a Specified Currency other than U.S. dollars, for purposes of any consent, waiver, notice or other action by Holders of Securities, shall be the amount thereof in U.S. dollars on the basis of the Market Exchange Rate in effect on the issue date therefor or the closest date prior to such issue date for which the Market Exchange Rate is available. "Business Day" means any day that in The City of New York is not a Saturday, Sunday or day on which banking institutions are required to be closed and that in the principal financial center of the country of the Specified Currency (other than European Currency Units ("ECUs")) is not a day on which banking institutions are required to be closed and, if the Specified Currency is ECUs, is generally regarded in the ECU interbank market as a day on which payments in ECUs are made. "Market Exchange Rate" for any Specified Currency means the noon buying rate in The City of New York for cable transfers for such Specified Currency as certified for customs purposes by (or if not so certified as otherwise determined by) the Federal Reserve Bank of New York. --------------------------------- Option to Elect Repayment The undersigned Holder hereof hereby irrevocably elects to receive repayment as described in Section 6 above on __________ (an Optional Redemption Date) as to U.S. $_______ (or ________ Specified Currency) of the Principal Amount hereof ($1,000 minimum or Specified Currency equivalent set forth on the face hereof and multiples thereof). ------------------------- Exact name of registered Holder Signature guaranteed by "eligible financial institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, if applicable: - -------------------------------- Exhibit B Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the same 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. CUSIP 90558P2 ----- No. $ ---- ---------- UNION CARBIDE CORPORATION Floating Rate Medium-Term Note Principal Amount: Specified Currency (if other than U.S. dollars): Equivalent to U.S. $1,000 minimum denomination: Issue Date: Interest Accrual Date (if other than Issue Date): Stated Maturity: Interest Payment Dates (if other than January 1 and July 1): Record Dates (if other than the close of business on 15th calendar day preceding each Interest Payment Date): Initial Interest Payment Date: Interest rate formula: [ ] Commercial Paper Rate [ ] Prime Rate [ ] CD Rate [ ] Federal Funds Rate [ ] LIBOR [ ] Treasury Rate [ ] Other, specify: Index Maturity: Spread: +/- Spread Multiplier: x Minimum interest rate limitation: not less than _____% Maximum interest rate limitation: not less than _____% Initial Interest Rate: _____% Interest Reset Dates: Interest Determination Dates: Calculation Agent (if other than The Chase Manhattan Bank): Calculation Dates: If redeemable at option of Company -- Initial Redemption Date: Initial Redemption Percentage: Annual Redemption Percentage Reduction: If repayable at option of Holder -- Optional Repayment Dates: If Original Issue Discount Note -- Terms: Tax Legend: If Indexed Note -- Terms: If Specified Currency other than U.S. dollars -- Exchange Rate Agent (if other than The Chase Manhattan Bank): Other terms -- Union Carbide Corporation promises to pay to Cede & Co. or registered assigns the Principal Amount set forth above on the Stated Maturity set forth above, subject to any applicable Terms set forth above under "If Indexed Note --". Dated: UNION CARBIDE CORPORATION by Authenticated: ------------------------------ John K. Wulff THE CHASE MANHATTAN BANK, Vice President, Chief Financial as Trustee Officer and Controller - ------------------------------ ------------------------------ Authorized Officer John W. Fitzpatrick Assistant Treasurer UNION CARBIDE CORPORATION Floating Rate Medium-Term Note 1. Interest. Union Carbide Corporation (the "Company"), a New York corporation, promises to pay interest on the Principal Amount of this Security set forth on the face hereof in accordance with the following provisions which include certain terms defined at the end of this Section. The face of this Security designates an interest rate formula determined by reference to one or more of the following: (a) the Commercial Paper Rate, in which case this Security is a Commercial Paper Rate Note, (b) the Prime Rate, in which case this Security is a Prime Rate Note, (c) the CD Rate, in which case this Security is a CD Rate Note, (d) the Federal Funds Rate, in which case this Security is a Federal Funds Rate Note, (e) LIBOR, in which case this Security is a LIBOR Note, (f) the Treasury Rate, in which case this Security is a Treasury Rate Note or (g) such other interest rate formula as is set forth on the face hereof, in which case this Security shall include such provisions as to interest as so set forth. The rate of interest on this Security in effect on any day will be (i) if such day is an Interest Reset Date specified on the face hereof, the interest rate determined as of the Interest Determination Date specified on the face hereof pertaining to such Interest Reset Date or (ii) 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 Interest Accrual Date specified on the face hereof (or any predecessor Security hereto) to but excluding the first Interest Reset Date will be the Initial Interest Rate specified on the face hereof. The rate of interest on this Security will be reset daily, weekly, monthly, quarterly, semi-annually or annually (each an "Interest Reset Date") as specified under "Interest Reset Dates" on the face hereof. If not otherwise set forth on the face hereof, if this Security so designates that the Interest Reset Date is: daily, the Interest Reset Date will be each Business Day; weekly, the Wednesday of each week (but if this Security is a Treasury Rate Note which resets weekly, except as provided in the following paragraph, the Tuesday of each week); monthly, the third Wednesday of each month; quarterly, the third Wednesday of March, June, September and December; semi-annually, the third Wednesday of the two months of each year specified on the face hereof; and annually, the third Wednesday of one month of each year specified on the face hereof. If any Interest Reset Date would otherwise be a day that is not a Business Day with respect hereto, such Interest Reset Date shall be the next succeeding Business Day with respect hereto, except that if this 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. The Interest Determination Date pertaining to an Interest Reset Date will be the second Business Day preceding the Interest Reset Date if this Security is a Commercial Paper Rate Note (the "Commercial Paper Rate Interest Determination Date"), a Prime Rate Note (the "Prime Rate Interest Determination Date"), a CD Rate Note (the "CD Rate Interest Determination Date") or a Federal Funds Rate Note (the "Federal Funds Rate Interest Determination Date"). If this Security is a LIBOR Note, the Interest Determination Date pertaining to an Interest Reset Date (the "LIBOR Interest Determination Date") will be the second London Business Day preceding such Interest Reset Date. If this Security is a Treasury Rate Note, the Interest Determination Date pertaining to an Interest Reset Date (the "Treasury Rate Interest Determination Date") will be the day on which Treasury bills are auctioned for the week in which such Interest Reset Date falls, or if no auction is held for such week, the Monday of such week (or if Monday is a legal holiday, the next succeeding Business Day) and the Interest Reset Date will be the Business Day immediately following such Treasury Rate Interest Determination Date. 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 an auction for such week is held on Monday or the preceding Friday, such Monday or preceding Friday shall be the Treasury Rate Interest Determination Date for such week, and the Interest Reset Date for such week shall be the Tuesday of such week (or, if such Tuesday is not a Business Day, the next succeeding Business Day). If the auction for such week is held on any day of such week other than Monday, then such day shall be the Treasury Rate Interest Determination Date and the Interest Reset Date for such week shall be the next succeeding Business Day. The rate of interest on this Security is subject to one or more of the following to the extent indicated on the face hereof: (a) a maximum numerical interest rate limitation, or ceiling, on the rate of interest which may accrue during any interest period; or (b) a minimum numerical interest rate limitation, or floor, on the rate of interest which may accrue during any interest period; or (c) a Spread which shall be added to (or subtracted from) the rate as otherwise determined; or (d) a Spread Multiplier by which the rate as otherwise determined shall be multiplied. Unless otherwise indicated on the face hereof and except as provided below, the Interest Payment Dates will be: if this Security resets daily, weekly or monthly, the third Wednesday of each month or on the third Wednesday of March, June, September and December of each year as indicated on the face hereof; if this Security resets quarterly, the third Wednesday of March, June, September and December of each year; if this Security resets semi-annually, the third Wednesday of the two months of each year specified on the face hereof; and if this Security resets annually, the third Wednesday of the month specified on the face hereof; and, in each case, at Maturity. If, pursuant to the preceding sentence, an Interest Payment Date (other than at Maturity) would otherwise be a day that is not a Business Day, such Interest Payment Date shall be the next succeeding Business Day, except that if this Security is a LIBOR Note and the next succeeding Business Day falls in the next succeeding calendar month, such Interest Payment Date (other than at Maturity) shall be the immediately preceding Business Day. If Maturity falls on a day that is not a Business Day, the payment of principal, premium, if any, and interest will be made on the next succeeding Business Day, and no interest on such payment shall accrue for the period from and after such Maturity. The interest accrued hereon is 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 Issue Date set forth on the face hereof (or the Interest Accrual Date if it is set forth on the face hereof), 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. The interest factor (expressed as a decimal rounded upwards, if necessary, as described below) for each such day is computed by dividing the interest rate (expressed as a decimal rounded upwards, if necessary, as described below) applicable to such date by 360, or, if this Security is a Treasury Rate Note, by the actual number of days in the year. All percentages resulting from any calculation of accrued interest will be rounded, if necessary, to the nearest one-hundred thousandth of a percentage point, with five one-millionths of a percentage point rounded upwards (e.g., 7.876545% (or .07876545) being rounded to 7.87655% or (.0787655) and 7.876544% (or .07876544) being rounded to 7.87654% (or .0787654)), and all amounts used in or resulting from such calculations will be rounded to the nearest cent in the case of U.S. dollars or the nearest unit of any other Specified Currency (with one-half cent or five one- thousandths of a unit being rounded upwards). Commercial Paper Rate. "Commercial Paper Rate" means, with respect to any Commercial Paper Rate Interest Determination Date, the Money Market Yield (calculated as described below) of the rate on such date for commercial paper having the Index Maturity specified on the face hereof as published in H.15(519) under the heading "Commercial Paper". In the event that such rate is not published prior to 9:00 A.M., New York City time, on the Calculation Date pertaining to such Commercial Paper Rate Interest Determination Date, then the Commercial Paper Rate shall be the Money Market Yield of the rate on such Commercial Paper Rate Interest Determination Date for commercial paper having such Index Maturity 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 Rate 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 Rate Interest Determination Date, of three leading dealers of commercial paper in The City of New York selected by the Calculation Agent and approved by the Company for commercial paper having such Index Maturity 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 are quoting as mentioned in this sentence, the Commercial Paper Rate will be the Commercial Paper Rate in effect on such Commercial Paper Rate Interest Determination Date. "Money Market Yield" shall be a yield 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. Prime Rate. "Prime Rate" means, with respect to any Prime Rate Interest Determination Date, the rate set forth in H.15(519) for such date under the heading "Bank Prime Loan". In the event that such rate is not published prior to 9:00 A.M., New York City time, on the Calculation Date pertaining to such Prime Rate Interest Determination Date, then the Prime Rate will be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIME 1 Page as such bank's prime rate or base lending rate as in effect for that Prime Rate Interest Determination Date. If fewer than four such rates appear on the Reuters Screen USPRIME 1 Page for such Prime Rate Interest Determination Date, then the Prime Rate will be the arithmetic mean, as calculated by the Calculation Agent on such Calculation Date, of the prime rates quoted on the basis of the actual number of days in the year divided by a 360-day year as of the close of business on such Prime Rate Interest Determination Date by two major money center banks in The City of New York selected by the Calculation Agent and approved by the Company or if fewer than two such quotations are so provided by such banks, if any, and one or two substitute banks or trust companies organized and doing business under the laws of the United States, or any State thereof, each having total equity capital of at least $500 million and being subject to supervision or examination by Federal or state authority, selected by the Calculation Agent and approved by the Company to provide such rate or rates; provided, however, that if two banks or trust companies selected as aforesaid are not quoting as mentioned in this sentence, the Prime Rate will be the Prime Rate in effect on such Prime Rate Interest Determination Date. CD Rate. "CD Rate" means, with respect to any CD Rate Interest Determination Date, the rate on such date for negotiable certificates of deposit having the Index Maturity specified on the face hereof as published in H.15(519) under the heading "CDs a. (Secondary Market)". In the event that such rate is not published prior to 9:00 A.M., New York City time, on the Calculation Date pertaining to such CD Rate Interest Determination Date, then the CD Rate shall be the rate on such CD Rate Interest Determination Date for negotiable certificates of deposit having the Index Maturity specified on the face hereof as published in 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, the CD Rate for that CD Rate Interest Determination Date shall be calculated by the Calculation Agent and shall be the arithmetic mean of the secondary market offered rates as of 10:00 A.M., New York City time, on that CD Rate 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 and approved by the Company for negotiable certificates of deposit of major United States money market banks with a remaining maturity closest to the Index Maturity specified on the face hereof in a denomination of $5,000,000, provided, however, that if the dealers selected as aforesaid are not quoting as mentioned in this sentence, the CD Rate will be the CD Rate in effect on such CD Rate Interest Determination Date. Federal Funds Rate. "Federal Funds Rate" means, with respect to any Federal Funds Rate Interest Determination Date, the rate on such date for Federal funds as published in H.15(519) under the heading "Federal Funds (Effective)". In the event that such rate is not published prior to 9:00 A.M., New York City time, on the Calculation Date pertaining to such Federal Funds Rate Interest Determination Date, then the Federal Funds Rate will be the rate on such Federal Funds Rate 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, the Federal Funds Rate for that Federal Funds Rate Interest Determination Date shall be the arithmetic mean, as calculated by the Calculation Agent on such Calculation Date, of the rates, as of 9:00 A.M., New York City time, on that Federal Funds Rate Interest Determination Date, for the last transaction in overnight Federal funds arranged by three leading brokers of Federal funds transactions in The City of New York selected by the Calculation Agent and approved by the Company; provided, however, that if the brokers selected as aforesaid are not quoting as mentioned in this sentence, the Federal Funds Rate will be the Federal Funds Rate in effect on such Federal Funds Rate Interest Determination Date. LIBOR. "LIBOR" will be determined by the Calculation Agent in accordance with the following provisions: On each LIBOR Interest Determination Date, LIBOR will be determined on the basis of the offered rate for deposits in U.S. dollars having the Index Maturity specified on the face hereof, commencing on the second London Business Day immediately following such LIBOR Interest Determination Date, which appears on Telerate Page 3750, as of 11:00 A.M., London time, on that LIBOR Interest Determination Date. If such rate does not so appear on Telerate Page 3750, the rate in respect of such LIBOR Interest Determination Date will be determined on the basis of the rates at which deposits in U.S. dollars are offered by two major banks in the London interbank market selected by the Calculation Agent and approved by the Company at approximately 11:00 A.M., London Time, on the LIBOR Interest Determination Date next preceding the relevant Interest Reset Date to prime banks in the London interbank market for a period of such Index Maturity commencing on that Interest Reset Date and in a principal amount equal to an amount not less than U.S. $1,000,000 that is representative for a single transaction in such market at such time. In such case, the Calculation Agent will request the principal London office of each of the aforesaid major banks to provide a quotation of such rate. If at least two such quotations are provided in respect of such LIBOR Interest Determination Date, the rate for that Interest Reset Date will be the arithmetic mean of the quotations, and, if fewer than two quotations are provided as requested in respect of such LIBOR Interest Determination Date, the rate for that Interest Reset Date will be the arithmetic mean of the rates quoted by three major banks in The City of New York, selected by the Calculation Agent and approved by the Company, at approximately 11:00 A.M., New York City time, on that LIBOR Interest Determination Date for loans in U.S. dollars to leading European banks for a period of such Index Maturity commencing on that Interest Reset Date and in a principal amount equal to an amount not less than U.S. $1,000,000 that is representative for a single transaction in such market at such time; provided, however, if the banks selected as aforesaid are not quoting as mentioned in this sentence, LIBOR will be LIBOR in effect on such LIBOR Interest Determination Date. Treasury Rate. "Treasury Rate" means, with respect to any Treasury Rate Interest Determination Date, 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 9:00 A.M., New York City time, on the Calculation Date pertaining to such Treasury Rate Interest Determination Date, the auction average rate on such Treasury Rate Interest Determination Date (expressed as a bond equivalent 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. In the event that the results of the auction of Treasury bills having such Index Maturity are not published or reported as provided above by 3:00 P.M., New York City time, on such date, or if no such auction is held on such Treasury Rate Interest Determination Date, 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". In the event that neither such rate is 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 on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) calculated using the arithmetic mean of the secondary market bid rates as of approximately 3:30 P.M., New York City time, on such Treasury Rate Interest Determination Date, of three leading primary United States government securities dealers selected by the Calculation Agent and approved by the Company, for the issue of Treasury bills with a remaining maturity closest to such Index Maturity; provided, however, that if the dealers selected as aforesaid are not quoting as mentioned in this sentence, the Treasury Rate will be the Treasury Rate in effect on such Treasury Rate Interest Determination Date. "Business Day" means (a) with respect to any Security (unless otherwise provided in this definition), any day that in The City of New York is not a Saturday, Sunday or a day on which banking institutions are required to be closed and (b) with respect to LIBOR Notes only, any day described in clause (a) and on which dealings in deposits in U.S. dollars are transacted in London interbank market and (c) with respect to any Security denominated in any currency or currency unit other than U.S. dollars or European Currency Units ("ECUs") only, any day described in clause (a) and that in the principal financial center of the country of the such currency is not a day on which banking institutions are required to be closed and (d) with respect to any Security denominated in ECUs only, any day described in clause (a) and that is generally regarded in the ECU interbank market as a day on which payments in ECU's are made. "Calculation Agent" means The Chase Manhattan Bank or any other entity named as such on the face hereof, appointed by the Company to calculate interest rates for this Security. "Calculation Date" means the date on which the Calculation Agent is to calculate an interest rate for this Security, which is the applicable date set forth below, unless otherwise specified on the face hereof: (a) If this Security is a Commercial Paper Rate Note -- The earlier of (i) the tenth day after the related Commercial Paper Rate Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day; and (ii) the Business Day next preceding the relevant Interest Payment Date or date of Stated Maturity, as the case may be. (b) If this Security is a Prime Rate Note --The earlier of (i) the tenth day after the related Prime Rate Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day; and (ii) the Business Day next preceding the relevant Interest Payment Date or date of Stated Maturity, as the case may be. (c) If this Security is a CD Rate Note -- The earlier of (i) the tenth day after the related CD Rate Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day; and (ii) the Business Day next preceding the relevant Interest Payment Date or date of Stated Maturity, as the case may be. (d) If this Security is a Federal Funds Rate Note -- The earlier of (i) the tenth day after the related Federal Funds Rate Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day; and (ii) the Business Day next preceding the relevant Interest Payment Date or date of Stated Maturity, as the case may be. (e) If this Security is a LIBOR Note -- The LIBOR Interest Determination Date. (f) If this Security is a Treasury Rate Note -- The earlier of (i) the tenth day after the related Treasury Rate Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day; and (ii) the Business Day next preceding the relevant Interest Payment Date or date of Stated Maturity, as the case may be. "Composite Quotations" means the daily statistical release entitled "Composite 3:30 P.M. Quotations for U.S. Government Securities", or any successor publication, published by the Federal Reserve Bank of New York. "Exchange Rate Agent" means the agent appointed by the Company to convert principal and any premium and interest payments in respect of Securities the Principal Amount of which is designated in a Specified Currency other than U.S. dollars into U.S. dollars. Unless otherwise provided on the face hereof, the Exchange Rate Agent will be The Chase Manhattan Bank. "H.15(519)" means the weekly statistical release entitled "Statistical Release H.15(519), Selected Interest Rates", or any successor publication, published by the Board of Governors of the Federal Reserve System. "Index Maturity" means the period to maturity of the instrument or obligation on which the interest rate formula is based, as set forth on the face hereof. "Initial Interest Rate" means the rate, as set forth on the face hereof, at which this Security will bear interest from its Interest Accrual Date (or that of a predecessor Security), as set forth on the face hereof, to but excluding the first Interest Reset Date, as set forth on the face hereof. "Interest Determination Date" means the date as of which the interest rate for this Security is to be calculated, to be effective as of the following Interest Reset Date and calculated on the related Calculation Date as set forth herein and on the face hereof. "Interest Reset Date" means the date on which this Security will begin to bear interest at the variable interest rate determined as of any Interest Determination Date as set forth herein and on the face hereof. "London Business Day" means any day on which dealings in deposits in U.S. dollars are transacted in the London interbank market. "Market Exchange Rate" for any Specified Currency means the noon buying rate in The City of New York for cable transfers for such Specified Currency as certified for customs purposes by (or if not so certified as otherwise determined by) the Federal Reserve Bank of New York. "Maturity" means the date on which the principal of this Security becomes due and payable, whether at Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "Reuters Screen USPRIME 1 Page" means the display designated as page "USPRIME 1" on the Reuters Monitor Money Rates Service (or such other page as may replace the USPRIME 1 page on that service for the purpose of displaying prime rates or base lending rates of major United Stated banks). "Specified Currency" means the currency or currency unit in which this Security is denominated as specified on the face hereof. "Spread" means the number of basis points specified on the face hereof, if any, as being applicable to the interest rate for this Security. "Spread Multiplier" means the percentage, specified on the face hereof, if any, as being applicable to the interest rate for this Security. "Telerate Page 3750" means the display designated as page "3750" on the Dow Jones Telerate Service (or such other page as may replace that page for the purpose of displaying London interbank offered rates for U.S. dollar deposits). 2. Method of Payment. The Company will pay interest on this Security to the person who is the registered Holder of this Security at the Record Date, set forth on the face hereof, next preceding each Interest Payment Date, except that any interest payable at Stated Maturity or any earlier redemption or acceleration ("Maturity") shall be payable to the person to whom principal shall be payable. Holders must surrender Securities to the Paying Agent to collect principal payments. Unless the Principal Amount hereof is stated in a Specified Currency other than U.S. dollars (see Section 17), the Company will pay principal and any premium and interest in immediately available funds of the United States that at the time of payment are legal tender for payment of public and private debts at the office of the Paying Agent, except that the Company may pay interest by check mailed to a Holder's registered address. 3. Agents. Initially, The Chase Manhattan Bank will act as Registrar, Paying Agent and Transfer Agent. The Company may change any such Agent without notice. The Company or any Affiliate may act in any such capacity. Subject to certain conditions, the Company may change the Trustee. 4. Indenture. The Company is issuing its Medium-Term Notes, including this Security, under an Indenture dated as of June 1, 1995 ("Indenture") between the Company and The Chase Manhattan Bank (formerly Chemical Bank), as Trustee ("Trustee"). The Indenture provides for the issuance of an unlimited amount of the Company's debt securities from time to time in series. This Security and all other Medium-Term Notes constitute one such series (the "Securities") unless the terms of any particular Medium-Term Note specify that it is not part of such series. The terms of this Security include those stated in the Indenture, in the Bond Resolution creating the Securities and in the action establishing the terms of this Security and those made part of the Indenture by the Trust Indenture Act of 1939, as amended (15 U.S. Code Section Section 77aaa - 77bbbb). Securityholders are referred to the Indenture, the Bond Resolution, such action and the Act for a statement of such terms. 5. Redemption at Option of Company. This Security will not be redeemable prior to Stated Maturity, pursuant to any mandatory redemption (except to the extent, if any, set forth under "Other Terms" on the face hereof), or at the option of the Company (except to the extent specified on the face hereof under "If redeemable at option of Company --"). To the extent specified on the face hereof, this Security will be subject to redemption at the option of the Company on any date on and after the Initial Redemption Date specified on the face hereof in whole or in part in increments of U.S. $1,000 or equivalent Specified Currency indicated on the face hereof or whole multiples thereof at the applicable Redemption Price (as hereinafter defined), together with any unpaid interest accrued to the date of redemption, on notice given not more than 60 nor less than 20 calendar days prior to the date of redemption and in accordance with the provisions of the Indenture. "Redemption Price", means an amount equal to the Initial Redemption Percentage specified on the face hereof (as adjusted by the Annual Redemption Percentage Reduction, if applicable, specified on the face hereof) multiplied by the unpaid Principal Amount hereof (or, if the face hereof indicates that this Security is an Original Issue Discount Note, the portion thereof that would then be due upon acceleration) to be redeemed. The Initial Redemption Percentage, if any, applicable to this Security shall decline at each anniversary of the Initial Redemption Date by an amount equal to the applicable Annual Redemption Percentage Reduction, if any, until the Redemption Price is equal to 100% of the unpaid Principal Amount hereof (or, if the face hereof indicates that this Security is an Original Issue Discount Note, the portion thereof that would then be due upon acceleration) to be redeemed. 6. Repayment at Option of Holder. This Security will not be repayable at the option of the Holder (except to the extent, if any, set forth under "If repayable at option of Holder --" on the face hereof). If one or more Optional Repayment Dates are specified on the face hereof, this Security will be subject to repayment at the option of the Holder hereof on any Optional Repayment Date in whole or in part in increments of U.S. $1,000 or equivalent Specified Currency indicated on the face hereof or whole multiples thereof, at a repayment price equal to 100% of the unpaid Principal Amount (or, if the face hereof indicates that this Security is an Original Issue Discount Note, the portion hereof which would then be due upon acceleration) to be repaid, together with any unpaid interest accrued to the date of repayment. To exercise such repayment right, this Security must be received, together with the form hereon entitled "Option to Elect Repayment" duly completed, by the Trustee not more than 60 nor less than 20 calendar days prior to the date of repayment. Exercise of such repayment option by the Holder will be irrevocable. 7. Denomination, Transfer, Exchange. The Securities are in registered form without coupons in denominations of U.S. $1,000 or the equivalent Specified Currency indicated on the face hereof and whole multiples thereof. The transfer of Securities may be registered and Securities may be exchanged as provided in the Indenture. The Transfer Agent may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or the Indenture. Notwithstanding the foregoing, this Security may be transferred or exchanged (except as contemplated by the legend on the face hereof) only if DTC notifies the Company that it is unable or unwilling to continue as depositary for this Security or it ceases to be a clearing agency registered under the Securities Exchange Act of 1934 and no successor depositary for this Security is appointed by the Company within 90 calendar days or the Company in its sole discretion instructs the Trustee that this Security shall be so transferable and exchangeable or an event shall have happened and be continuing which, after notice or lapse of time, or both, would be an Event of Default. 8. Persons Deemed Owners. The registered Holder of a Security may be treated as its owner for all purposes. 9. Amendments and Waivers. Subject to certain exceptions, the Indenture or the Securities may be amended with the consent of the Holders of a majority in principal amount of the Securities of all series affected by the amendment. Subject to certain exception, a default on a series may be waived with the consent of the Holders of a majority in principal amount of the series. Without the consent of any Securityholder, the Indenture or the Securities may be amended, among other things, to cure any ambiguity, omission, defect or inconsistency; to provide for assumption of Company obligations to Securityholders; or to make any change that does not materially adversely affect the rights of any Securityholder. 10. Restrictive Covenants. The Securities are unsecured general obligations of the Company. The Indenture does not limit other unsecured debt. It does limit certain mortgages and sale-leaseback transactions if the property mortgaged or leased is a manufacturing facility in the United States (excluding its territories and possessions) that is of material importance to the Company's consolidated business. The limitations are subject to a number of important qualifications and exceptions. 11. Successors. When a successor assumes all the obligations of the Company under the Securities and the Indenture, the Company will be released from those obligations. 12. Defeasance Prior to Maturity. Subject to certain conditions, the Company at any time may terminate some or all of its obligations under the Securities and the Indenture if the Company deposits with the Trustee money or U.S. Government Obligations for the payment of principal of and any premium and interest on the Securities to redemption or maturity. U.S. Government Obligations are securities backed by the full faith and credit of the United States of America or certificates representing an ownership interest in such Obligations. 13. Defaults and Remedies. An Event of Default includes: default for 10 days in payment of interest on the Securities, default in payment of principal on the Securities, default by the Company for a specified period after notice to it in the performance of any of its other agreements applicable to the Securities and certain events of bankruptcy or insolvency. If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the Securities may declare the principal of all the Securities to be due and payable immediately, except that only such portions of the principal of Securities that are Original Issue Discount Notes as are specified in the Terms on the faces thereof may be declared due and payable immediately. Securityholders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture or the Securities. Subject to certain limitations, Holders of a majority in principal amount of the Securities may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Securityholders notice of any continuing default (except a default in payment of principal or interest) if it determines that withholding notice is in their interests. The Company must furnish annual compliance certificates to the Trustee. 14. Trustee Dealings with Company. The Chase Manhattan Bank, the Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with those persons, as it if were not Trustee. 15. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Company shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. Each Securityholder by accepting a Security waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities. 16. Authentication. This Security shall not be valid until authenticated by a manual signature of the Trustee. 17. Foreign Currency. If the Principal Amount set forth on the face hereof is stated in a Specified Currency other than U.S. dollars, the provisions of this Section apply to this Security and supersede any inconsistent provision hereof, and all payments of principal of and any premium and interest on this Security will be made in such Specified Currency (or, if such Specified Currency is not at the time of such payment legal tender for the payment of public and private debts, in such other coin or currency of the political entity which issued such Specified Currency as at the time of such payment is legal tender for the payment of such debts). Any such amounts paid by the Company will be converted by the Exchange Rate Agent named on the face hereof to U.S. dollars, unless the Holder hereof elects to receive such payments in such Specified Currency. Such U.S. dollar amount will be based on the highest bid quotation in The City of New York received by the Exchange Rate Agent at approximately 11:00 A.M., New York City time, on the second Business Day preceding the applicable payment date from three recognized foreign exchange dealers selected by the Exchange Rate Agent and approved by the Company for the purchase by the quoting dealer of such Specified Currency for U.S. dollars for settlement on such payment date in the aggregate amount of such Specified Currency payable to all Holders of Securities then scheduled to receive U.S. dollar payments and at which the applicable dealer commits to execute a contract. If such bid quotations are not available, payments will be made in such Specified Currency. All currency exchange costs will be borne by the Holder hereof by deductions from such payments. The Holder hereof may elect to receive any payment or all payments of or on this Security in the Specified Currency indicated on the face hereof by transmitting a written request (by mail, hand delivery or facsimile transmission) for such payment to the Paying Agent on or prior to the Record Date or at least sixteen days prior to Maturity, as the case may be. Such election will remain in effect until revoked by written notice to the Paying Agent received on or prior to the relevant Record Date or at least sixteen days prior to Maturity, as the case may be. Principal of, and any premium and interest on, this Security paid in U.S. dollars will be paid in the manner specified in Section 2 hereof. Interest hereon paid in such Specified Currency will be paid by check mailed to the registered address of the Holder entitled thereto. All checks payable in a Specified Currency will be drawn on a bank office located outside the United States. Payments hereof and hereon in such Specified Currency at Maturity will be made in immediately available funds to such account with a bank located in the country of the Specified Currency as shall have been designated at least sixteen days prior to Maturity by the Holder, provided that this Security is presented to the Paying Agent in time for the Paying Agent to make such payments in such funds in accordance with its normal procedures. If a Specified Currency is not available for any payment due to the imposition of exchange controls or other circumstances beyond the control of the Company, the Company will be entitled to satisfy its obligations to the Holder hereof by making such payment in U.S. dollars on the basis of the Market Exchange Rate on the second Business Day prior to such payment or, if such Market Exchange Rate is not then available, on the basis of the most recently available Market Exchange Rate. The principal amount of any Security payable in a Specified Currency other than U.S. dollars, for purposes of any consent, waiver, notice or other action by Holders of Securities, shall be the amount thereof in U.S. dollars on the basis of the Market Exchange Rate in effect on the issue date therefor or the closest date prior to such issue date for which the Market Exchange Rate is available. --------------------------------- Option to Elect Repayment The undersigned Holder hereof hereby irrevocably elects to receive repayment as described in Section 6 above on __________ (an Optional Redemption Date) as to U.S. $_______ (or ________ Specified Currency) of the Principal Amount hereof ($1,000 minimum or Specified Currency equivalent set forth on the face hereof and multiples thereof). ------------------------- Exact name of registered Holder Signature guaranteed by "eligible financial institution" as defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, if applicable: - ------------------------ -----END PRIVACY-ENHANCED MESSAGE-----