-----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, PJUv8exgTrmBBh306QJ1I6c/ZKCHSQpF9G6zugDCbowSNJMCZo9v97KlvT3r4kcp HbLHjKYuzQY4Xj4QOiXv5Q== 0000731939-98-000010.txt : 19980603 0000731939-98-000010.hdr.sgml : 19980603 ACCESSION NUMBER: 0000731939-98-000010 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980602 ITEM INFORMATION: FILED AS OF DATE: 19980602 SROS: NYSE SROS: PCX FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEMPLE INLAND INC CENTRAL INDEX KEY: 0000731939 STANDARD INDUSTRIAL CLASSIFICATION: PAPERBOARD MILLS [2631] IRS NUMBER: 751903917 STATE OF INCORPORATION: DE FISCAL YEAR END: 1230 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-08634 FILM NUMBER: 98641141 BUSINESS ADDRESS: STREET 1: 303 S TEMPLE DR STREET 2: PO DRAWER N CITY: DIBOLL STATE: TX ZIP: 75941 BUSINESS PHONE: 4098297729 MAIL ADDRESS: STREET 1: 303 SOUTH TEMPLE DR CITY: DIBOLL STATE: TX ZIP: 75941 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): June 2, 1998 TEMPLE-INLAND INC. - ------------------------------------------------------------------------ (Exact Name of Registrant as Specified in Charter) Delaware 001-08634 75-1903917 - ------------------------------------------------------------------------ (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 303 South Temple Drive Diboll, Texas 75941 - ------------------------------------------------------------------------ (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (409) 829-5511 Not applicable - ----------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 2 ITEM 5. OTHER EVENTS. On June 2, 1998, the Company amended its existing shelf registration (Registration No. 333-52189) and entered into a Selling Agency Agreement with Salomon Brothers Inc and SBC Warburg Dillon Read Inc., relating to the possible issuance and sale of up to $500,000,000 aggregate principal amount of Medium-Term Notes, Series F (the "Notes"). The Company filed a Prospectus Supplement for the Notes with the Securities and Exchange Commission on June 2, 1998. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. The following exhibits, as required by Item 601 of Regulation S-K, are attached to this Current Report: Exhibit No. Description - ------- ----------- 1.01 Form of Selling Agency Agreement dated June 2, 1998 between Temple-Inland Inc., Salomon Brothers Inc and SBC Warburg Dillon Read Inc. 4.05 Form of Fixed-Rate Medium-Term Note, Series F. 4.06 Form of Floating-Rate Medium-Term Note, Series F. 12.01 Statements re: Computation of Ratios of Earnings to Fixed Charges. -2- 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. TEMPLE-INLAND INC. By: /s/ David H. Dolben ------------------------------- Name: David H. Dolben Title: Vice President and Chief Accounting Officer Dated: June 2, 1998 -3- 4 EXHIBIT INDEX Exhibit No. Description - ------- ----------- 1.01 Form of Selling Agency Agreement dated June 2, 1998 between Temple-Inland Inc., Salomon Brothers Inc and SBC Warburg Dillon Read Inc. 4.05 Form of Fixed-Rate Medium-Term Note, Series F. 4.06 Form of Floating-Rate Medium-Term Note, Series F. 12.01 Statements re: Computation of Ratios of Earnings to Fixed Charges. EX-1 2 Temple-Inland Inc. U.S. $500,000,000 Medium-Term Notes, Series F Due Nine Months of More From Date of Issue Selling Agency Agreement , 1998 New York, New York Salomon Brothers Inc Seven World Trade Center New York, N.Y. 10048 SBC Warburg Dillon Read Inc. 535 Madison Avenue New York, NY 10022 Dear Sirs: Temple-Inland Inc., a Delaware corporation (the "Company"), confirms its agreement with each of you with respect to the issue and sale by the Company of up to U.S. $[ 500],000,000 aggregate principal amount of its Medium-Term Notes Due Nine Months or More from Date of Issue (the "Notes"). The Notes will be issued under an indenture dated as of September 1, 1986, as amended by the First Supplemental Indenture, dated as of April 15, 1988, the Second Supplemental Indenture, dated as of December 27, 1990, and the Third Supplemental Indenture, dated as of May 9, 1991 (such indenture, as amended, the "Indenture"), between the Company and The Chase Manhattan Bank, formerly known as Chemical Bank, as trustee (the "Trustee"). Unless otherwise specifically provided for and set forth in a Pricing Supplement (as defined below), the Notes will be issued in minimum denomina- tions of $1,000 and in denominations exceeding such amount by integral multiples of $1,000 and, unless otherwise specified in the applicable Pricing Supplement, the authorized denominations of Notes denominated in a Specified Currency other than U.S. dollars ("Foreign Currency Notes") will be the equivalent, as determined by the Federal Reserve Bank of New York, of the noon buying rate in The City of New York for cable transfers in foreign currencies as certified for customs purposes for such Specified Currency (the "Exchange Rate"), on the applicable issue date, of $1,000 (rounded down to an integral multiple of 1,000 units of such Specified Currency), and any larger amount that is an integral multiple of 1,000 units of such Specified Currency and will be issued only in fully registered form and will have the interest rates, maturities and, if applicable, other terms set forth in such Pricing Supplement. The Notes will be issued, and the terms thereof established, in accordance with the Indenture and the Medium-Term Notes Administrative Procedures attached hereto as Exhibit A (the "Procedures") (unless a written Terms Agreement (as defined in Section 2(b)) modifies or otherwise supersedes such Procedures with respect to the Notes issued pursuant to such Terms Agreement). The Procedures may be amended only by written agreement of the Company and you after notice to, and with the approval of, the Trustee. For the purposes of this Agreement and subject to Section 12 hereof, the term "Agent" shall refer to any of you acting solely in the capacity as agent for the Company pursuant to Section 2(a) and not as principal (collectively, the "Agents"), the term "Purchaser" shall refer to one of you acting solely as principal pursuant to Section 2(b) and not as agent, and the term "you" shall refer to you collectively whether at any time any of you is acting in both such capacities or in either such capacity. In acting under this Agreement, in whatever capacity, each of you is acting individually and not jointly. 1. Representations and Warranties. The Company represents and warrants to, and agrees with, you as set forth below in this Section 1. Certain terms used in this Section 1 are defined in paragraph (d) hereof. (a) The Company has complied with the requirements for use of Form S-3 under the Securities Act of 1933 (the "Act") and has filed with the Securities and Exchange Commission (the "Commission") a registration statement on such Form (File Number: 333-52189), including a basic prospectus, which has become effective, for the registration under the Act of $500,000,000 aggregate principal amount of debt securities (the "Securities"), including the Notes. Such registration statement, as amended at the date of this Agreement, meets the requirements set forth in Rule 415(a)(1)(ix) or (x) under the Act and complies in all other material respects with said Rule. The Company has included in such registration statement, or has filed or will file with the Commission pursuant to the applicable paragraph of Rule 424(b) under the Act, a supplement to the form of prospectus included in such registration statement relating to the Notes and the plan of distribution thereof (the "Prospectus Supplement"). In connection with the sale of the Notes, the Company proposes to file with the Commission pursuant to the applicable paragraph of Rule 424(b) under the Act further supplements to the Prospectus Supplement (each a "Pricing Supplement") specify- ing the interest rates, maturity dates and, if appropriate, other similar terms of the Notes sold pursuant hereto or the offering thereof. (b) As of the Execution Time, on the Effective Date, when any supplement to the Prospectus is filed with the Commission, as of the date of a Terms Agreement and at the date of delivery by the Company of any Notes sold hereunder (a "Closing Date"), (i) the Registration Statement, as amended as of any such time, and the Prospectus, as supplemented as of any such time, and the Indenture will comply in all material respects with the applicable requirements of the Act, [the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"),] and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the respective rules thereunder; (ii) the Registration Statement, as amended as of any such time, did not or will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and (iii) the Prospectus, as supplemented as of any such time, will not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that the Company does not make any representations or warranties as to (i) that part of the Registration Statement which shall constitute the Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of the Trustee or (ii) the information contained in or omitted from the Registration Statement or the Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Company by any of you specifically for inclusion in the Registration Statement or the Prospectus (or any supplement thereto). (c) As of the time any Notes are issued and sold hereunder, (a) the Indenture (assuming due execution and delivery thereof by the Trustee) will constitute a legal, valid and binding instrument enforceable against the Company in accordance with its terms subject to the effect of (i) general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law, (ii) any applicable bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to or affecting creditors' rights generally, and such Notes will have been duly authorized, executed, authenticated and, when paid for by the purchasers thereof, will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture, and (iii) requirements that a claim with respect to any Notes denominated other than in United States dollars (or a judgment denominated other than in United States dollars in respect of such claim) be converted into United States dollars at a rate of exchange prevailing on a date determined pursuant to applicable law and (iv) governmental authority to limit, delay or prohibit the making of payments outside the United States or in a foreign currency or composite currency, and (b) the Notes (when authenticated in accordance with the terms of the Indenture and paid for by the purchaser thereof) will be entitled to the benefits of the Indenture, subject to the expectations set forth in clauses (i) through (iv) of this subsection (c). (d) The terms which follow, when used in this Agreement, shall have the meanings indicated. The term "the Effective Date" shall mean each date that the Registration Statement and any post-effective amendment or amendments thereto became or become effective and each date after the date hereof on which a document incorporated by reference in the Registration Statement is filed. "Execution Time" shall mean the date and time that this Agreement is executed and delivered by the parties hereto. "Basic Prospectus" shall mean the form of basic prospectus relating to the Securities contained in the Registration Statement at the Effective Date. "Prospectus" shall mean the Basic Prospectus as supplemented by the Prospectus Supplement. "Registration Statement" shall mean the registration statement referred to in paragraph (a) above, including incorporated documents, exhibits and financial statements, as amended at the Execution Time. "Rule 415" and "Rule 424" refer to such rules under the Act. Any reference herein to the Registration Statement, the Basic Prospectus , the Prospectus Supplement or the Prospectus shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3, which were filed under the Exchange Act on or before the Effective Date of the Registration Statement or the issue date of the Basic Prospectus, the Prospectus Supplement or the Prospectus, as the case may be; and any reference herein to the terms "amend", "amendment" or "supplement" with respect to the Registration Statement, the Basic Prospectus, the Prospectus Supplement or the Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act after the Effective Date of the Registration Statement or the issue date of the Basic Prospectus, the Prospectus Supplement or the Prospectus, as the case may be, deemed to be incorporated therein by reference. 2. Appointment of Agents; Solicitation by the Agents of Offers to Purchase; Sales of Notes to a Purchaser. (a) Subject to the terms and conditions set forth herein, the Company hereby authorizes each of the Agents to act as its agent to solicit offers for the purchase of all or part of the Notes from the Company. On the basis of the representations and warranties, and subject to the terms and conditions set forth herein, each of the Agents agrees, as agent of the Company, to use its reasonable efforts to solicit offers to purchase the Notes from the Company upon the terms and conditions set forth in the Prospectus (and any supplement thereto) and in the Procedures. Each Agent shall use its reasonable efforts to assist the Company in obtaining performance by each purchaser whose offer to purchase Notes has been solicited by such Agent and accepted by the Company, but such Agent shall not, except as otherwise provided in this Agreement, be obligated to disclose the identity of any purchaser or have any liability to the Company in the event any such purchase is not consummated for any reason. Except as provided in Section 2(b), under no circumstances will any Agent be obligated to purchase any Notes for its own account. It is understood and agreed, however, that any Agent may purchase Notes as principal pursuant to Section 2(b). The Company reserves the right, in its sole discretion, to instruct the Agents to suspend at any time, for any period of time or permanently, the solicitation of offers to purchase Notes. Upon receipt of instructions from the Company, the Agents will forthwith suspend solicitation of offers to purchase Notes from the Company until such time as the Company has advised them that such solicitation may be resumed. The Company agrees to pay each Agent a commission, on the Closing Date with respect to each sale of Notes by the Company as a result of a solicitation made by such Agent, in an amount equal to that percentage specified in Schedule I hereto of the aggregate principal amount of the Notes sold by the Company. Such commission shall be payable as specified in the Procedures. Subject to the provisions of this Section and to the Procedures, offers for the purchase of Notes may be solicited by an Agent as agent for the Company at such time and in such amounts as such Agent deems advisable. In connection with the solicitation of offers to Purchase Notes, the Agents are not authorized to provide any written information relating to the Company to any prospective purchaser other than the Prospectus, the Prospectus Supplement, any documents incorporated by reference in the Registration Statement, and publicly available information, provided that any such provision of information is not inconsistent with the Act. The Company may from time to time offer Notes for sale otherwise than through an Agent; provided, however, that, subject to Section 12 hereof, so long as this Agreement is in effect the Company shall not actively solicit other agents to act as its agent to solicit offers to purchase Notes. Subject to the preceding sentence, the Company may accept offers to purchase Notes through any agent other than an Agent; provided, however, that the acceptance of such offer shall be on terms substantially similar (including the same commission schedule) to those set forth in Schedule I hereto. The Company shall give the Agents prompt notice of any acceptance of any such offer to purchase Notes. At any time you offer to purchase any Notes as Purchaser, you shall notify the Company that you are acting as principal. [If the Company shall default in its obligations to deliver Notes to a purchaser whose offer it has accepted, the Company shall indemnify and hold each of you harmless against any loss, claim or damage arising from or as a result of such default by the Company.] (b) Subject to the terms and conditions stated herein, whenever the Company and any of you determines that the Company shall sell Notes directly to any of you as principal, each such sale of Notes shall be made in accordance with the terms of this Agreement and a supplemental agreement relating to such sale. Each such supplemental agreement (which may be either an oral or written agreement) is herein referred to as a "Terms Agreement". Each Terms Agreement shall describe the Notes to be purchased by the Purchaser pursuant thereto and shall specify the aggregate principal amount of such Notes, the currency or currency unit in which such Notes shall be denominated, the price to be paid to the Company for such Notes, the maturity date of such Notes, the rate at which interest will be paid on such Notes, whether such rate of interest shall be fixed or floating, the dates on which interest will be paid on such Notes and the record date with respect to each such payment of interest, the Closing Date for the purchase of such Notes, the place of delivery of the Notes and payment therefor, the method of payment and any requirements for the delivery of opinions of counsel, certificates from the Company or its officers or a letter from the Company's independent public accountants as described in Section 6(b). Any such Terms Agreement may also specify the period of time referred to in Section 4(m). Any written Terms Agreement may be in the form attached hereto as Exhibit B. The Purchaser's commitment to purchase Notes shall be deemed to have been made on the basis of the representations and warranties of the Company herein con- tained and shall be subject to the terms and conditions herein set forth. Delivery of the certificates for Notes sold to the Purchaser pursuant to a Terms Agreement shall be made not later than the Closing Date agreed to in such Terms Agreement, against payment of funds to the Company in the net amount due to the Company for such Notes by the method and in the form set forth in the Procedures unless otherwise agreed to between the Company and the Purchaser in such Terms Agreement. Unless otherwise agreed to between the Company and the Purchaser in a Terms Agreement, any Note sold to a Purchaser (i) shall be purchased by such Purchaser at a price equal to 100% of the principal amount thereof less a percentage equal to the commission applicable to an agency sale of a Note of identical maturity and (ii) may be resold by such Purchaser at varying prices from time to time or, if set forth in the applicable Terms Agreement and Pricing Supplement, at a fixed public offering price. In connection with any resale of Notes purchased, a Purchaser may use a selling or dealer group and may reallow to any broker or dealer any portion of the discount or commission payable pursuant hereto. 3. Offering and Sale of Notes. Each Agent and the Company agree to perform the respective duties and obligations specifically provided to be performed by them in the Procedures. 4. Agreements. The Company agrees with you that: (a) Prior to the termination of the offering of the Notes (including by way of resale by a Purchaser of Notes), the Company will not file any amendment of the Registration Statement or supplement to the Prospectus (except for (i) periodic or current reports filed under the Exchange Act, (ii )a supplement relating to any offering of Notes providing solely for the specification of or a change in the maturity dates, interest rates, issuance prices or other similar terms of any Notes or (iii) a supplement relating to an offering of Securities other than the Notes) unless the Company has furnished each of you a copy for your review prior to filing and given each of you a reasonable opportunity to comment on any such proposed amendment or supplement. Subject to the foregoing sentence, the Company will cause each supplement to the Prospectus to be filed with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to you of such filing. The Company will promptly advise each of you (i) when the Prospectus, and any supplement thereto, shall have been filed with the Commission pursuant to Rule 424(b), (ii) when, prior to termination of any offering of Notes, any amendment of the Registration Statement shall have been filed or become effective, (iii) of any request by the Commission for any amendment of the Registration Statement or supplement to the Prospectus or for any additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Notes for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose. The Company will use its best efforts to prevent the issuance of any such stop order and, if issued, to obtain as soon as possible the withdrawal thereof. (b) If, at any time when a prospectus relating to the Notes is required to be delivered under the Act, any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circum- stances under which they were made, not misleading, or if it shall be necessary to amend the Registration Statement or to supplement the Prospectus to comply with the Act or the Exchange Act or the respective rules thereunder, the Company promptly will notify each of you to suspend solicitation of offers to purchase Notes (and, if so notified by the Company, each of you shall forthwith suspend such solicitation and cease using the Prospectus as then supple- mented) and, upon such notification, your obligation to solicit offers to purchase Notes hereunder shall cease. In the event that the Company desires you to thereafter commence solicitations of offers to purchase Notes, or in the event that any of you are holding Notes for resale, the Company shall (i) prepare and file with the Commission, subject to the first sentence of paragraph (a) of this Section 4, an amendment or supplement which will correct such statement or omission or effect such compliance and (ii) supply any supplemented Prospectus to each of you in such quantities as you may reasonably request. If such amendment or supplement, and any documents, certificates and opinions furnished to each of you pursuant to paragraph (g) of this Section 4 in connection with the preparation or filing of such amendment or supplement are satisfactory in all respects to you, you will, upon the filing of such amendment or supplement with the Commission and upon the effectiveness of an amendment to the Registration Statement, if such an amendment is required, resume your obligation to solicit offers to purchase Notes hereunder. (c) The Company, during the period when a prospectus relating to the Notes is required to be delivered under the Act, will file promptly all documents required to be filed with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act and will furnish to each of you copies of such documents. In addition, on or prior to the date on which the Company makes any announcement to the general public concerning earnings or concerning any other event which is required to be described, or which the Company proposes to describe, in a document filed pursuant to the Exchange Act, the Company will furnish to each of you the information contained or to be contained in such announcement. The Company will notify each of you as soon as practicable of (i) any decrease in the rating of the Notes or any other debt securities of the Company by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act) or (ii) any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change, as soon as the Company learns of any such decrease or notice. (d) As soon as practicable after the filing thereof with the Commission, the Company will make generally available to its security holders and to each of you an earnings statement or statements of the Company and its subsidiaries which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act. (e) The Company will furnish to each of you and your counsel, without charge, copies of the Registration Statement (including exhibits thereto) and, so long as delivery of a prospectus may be required by the Act, as many copies of the Prospectus and any supplement thereto as you may reasonably request. (f) The Company will arrange for the qualification of the Notes for sale under the laws of such jurisdictions as any of you may reasonably designate, will maintain such qualifications in effect so long as required for the distribution of the Notes (provided that the Company shall not be required in connection therewith to qualify as a foreign corporation or to execute a general consent to service of process in any state), and will arrange for the determination of the legality of the Notes for purchase by institutional investors. (g) The Company shall furnish to each of you such information, documents, certificates of officers of the Company and opinions of counsel for the Company relating to the business, operations and affairs of the Company, the Registration Statement, the Prospectus, and any amendments thereof or supplements thereto, the Indenture, the Notes, this Agreement, the Procedures and the performance by the Company and you of its and your respective obligations hereunder and thereunder as any of you may from time to time and at any time prior to the termination of this Agreement reasonably request. (h) The Company shall, whether or not any sale of the Notes is consummated, (i) pay all expenses incident to the performance of its obligations under this Agreement and any Terms Agreement, including the fees and disbursements of its accountants and counsel, the cost of printing or other production and delivery of the Registration Statement, the Prospectus, all amendments thereof and supplements thereto, the Indenture, this Agreement, any Terms Agreement and all other documents relating to the offering, the cost of preparing, printing, packaging and delivering the Notes, the fees and disbursements, including fees of counsel, incurred in compliance with Section 4(f), the fees and disbursements of the Trustee and the fees of any agency that rates the Notes, (ii) reimburse each of you as requested (but not more frequently than monthly) for all reasonable out-of-pocket expenses (including without limitation advertising expenses), if any, incurred by you in connection with this Agreement and (iii) pay the reasonable fees and expenses of your counsel incurred in connection with this Agreement and incurred from time to time in connection with the transactions contemplated hereby. (i) Each acceptance by the Company of an offer to purchase Notes will be deemed to be an affirmation that the representations and warranties of the Company contained in this Agreement are true and correct at the time of such acceptance, as though made at and as of such time, and a covenant that such representations and warranties will be true and correct at the time of delivery to the purchaser of the Notes relating to such acceptance, as though made at and as of such time (it being understood that for purposes of the foregoing affirmation and covenant such representations and warranties shall relate to the Registration Statement and Prospectus as amended or supplemented at each such time). Each such acceptance by the Company of an offer for the purchase of Notes shall be deemed to constitute an additional representation, warranty and agreement by the Company that, as of the settlement date for the sale of such Notes, after giving effect to the issuance of such Notes, of any other Notes to be issued on or prior to such settlement date and of any other Securities to be issued and sold by the Company on or prior to such settlement date, the aggregate amount of Securities (including any Notes) which have been issued and sold by the Company will not exceed the amount of Securities registered pursuant to the Registration Statement. The Company will inform you promptly upon your request of the aggregate amount of Securities registered under the Registration Statement which remain unsold. (j) Each time that the Registration Statement or the Prospectus is amended or supplemented (other than by an amendment or supplement relating to any offering of Securities other than the Notes or providing solely for the specification of or a change in the maturity dates, the interest rates, the issuance prices or other similar terms of any Notes sold pursuant hereto) [excluding (a) any change in the formula by which interest rates on the Notes may be determined and (b) any information relating to Specified Currencies other than U.S. dollars)], the Company will deliver or cause to be delivered promptly to each of you a certificate of the Company, signed by the Chief Executive Officer, the President, or any Vice President and the principal financial officer, Treasurer, or principal accounting officer of the Company, dated the date of the effectiveness of such amendment or the date of the filing of such supplement, in form reasonably satisfactory to you, of the same tenor as the certificate referred to in Section 5(d) but modified to relate to the last day of the fiscal quarter for which financial statements of the Company were last filed with the Commission and to the Registration Statement and the Prospectus as amended and supplemented to the time of the effectiveness of such amendment or the filing of such supplement. (k) Each time that the Registration Statement or the Prospectus is amended or supplemented (other than by an amendment or supplement (i) relating to any offering of Securities other than the Notes or (ii) providing solely for the specification of or a change in the maturity dates, the interest rates, the issuance prices or other similar terms of any Notes sold pursuant hereto) [(excluding (a) any change in the formula by which interest rates on the Notes may be determined and (b) any information relating to Specified Currencies other than U.S. dollars) or (iii) setting forth or incorporating by reference financial statements or other information as of and for a fiscal quarter, unless, in the case of clause (iii) above, in the reasonable judgment of any of you, such financial statements or other information are of such a nature that an opinion of counsel should be furnished)], the Company shall furnish or cause to be furnished promptly to each of you a written opinion of counsel of the Company satisfactory to each of you, dated the date of the effectiveness of such amendment or the date of the filing of such supplement, in form satisfactory to each of you, of the same tenor as the opinion referred to in Section 5(b) but modified to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of the effectiveness of such amendment or the filing of such supplement or, in lieu of such opinion, counsel last furnishing such an opinion to you may furnish each of you with a letter to the effect that you may rely on such last opinion to the same extent as though it were dated the date of such letter authorizing reliance (except that statements in such last opinion will be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented to the time of the effectiveness of such amendment or the filing of such supplement). (l) Each time that the Registration Statement or the Prospectus is amended or supplemented to include or incorporate amended or supplemental financial information, the Company shall cause its independent public accountants promptly to furnish each of you a letter, dated the date of the effectiveness of such amendment or the date of the filing of such supplement, in form satisfactory to each of you, of the same tenor as the letter referred to in Section 5(e) with such changes as may be necessary to reflect the amended and supplemental financial information included or incorporated by reference in the Registration Statement and the Prospectus, as amended or supplemented to the date of such letter; provided, however, that, if the Registration Statement or the Prospectus is amended or supplemented solely to include or incorporate by reference financial information as of and for a fiscal quarter, the Company's independent public accountants may limit the scope of such letter, which shall be satisfactory in form to each of you, to the unaudited financial statements, the related "Management's Discussion and Analysis of Financial Condition and Results of Operations" and any other information of an accounting, financial or statistical nature included in such amendment or supplement, unless, in the reasonable judgment of any of you, such letter should cover other information or changes in specified financial statement line items. (m) During the period, if any, specified (whether orally or in writing) in any Terms Agreement, the Company shall not, without the prior consent of the Purchaser thereunder, offer, sell or contract to sell, or otherwise dispose of, directly or indirectly, or announce the offering of, any debt securities issued or guaranteed by the Company substantially similar to the Securities sold pursuant to such Terms Agreement other than borrowings under its revolving credit agreements and lines of credit and issuances of its commercial paper. (n) The Company shall not be required to comply with the provisions of subsections (j), (k) or (l) of this Section during any period from the time (i) the Agents shall have suspended solicitation of purchases of the Notes pursuant to a request from the Company and (ii) the Agents shall not then hold any Notes purchased as principal pursuant hereto, until the time the Company shall determine that solicitation of purchases of the Notes should be resumed or you shall subsequently purchase Notes from the Company as principal. 5. Conditions to the Obligations of the Agents. The obligations of each Agent to solicit offers to purchase the Notes shall be subject to the accuracy of the representations and warranties on the part of the Company contained herein as of the Execution Time, on the Effective Date, when any supplement to the Prospectus is filed with the Commission and as of each Closing Date, to the accuracy of the statements of the Company made in any certificates pursuant to the provisions hereof, to the performance by the Company of its obligations hereunder and to the following additional conditions: (a) If filing of the Prospectus, or any supplement thereto, is required pursuant to Rule 424(b), the Prospectus, and any such supplement, shall have been filed in the manner and within the time period required by Rule 424(b); and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or threatened. (b) The Company shall have furnished to each Agent the opinion of M. Richard Warner, General Counsel for the Company, dated the Execution Time, to the effect that: (i) each of the Company and Temple-Inland Forest Products Corporation, Inland Container Corporation I, Inland Paperboard and Packaging, Inc., Temple-Inland Financial Services Inc., Guaranty Holdings Inc. I, Guaranty Federal Bank, F.S.B., MBHC Inc., and Temple-Inland Mortgage Corporation (individually a "Subsidiary" and collectively the "Subsidiaries") has been duly incorporated and is validly existing as a corporation in good standing under the laws of the jurisdiction in which it is chartered or organized, with full corporate power and authority to own its material properties and conduct its business as described in the Prospectus, and is duly qualified to do business as a foreign corporation and is in good standing under the laws of each jurisdiction in which its ownership of property or conduct of business requires such qualification, except where the failure to be so qualified would not have a material adverse effect. (ii) all the outstanding shares of capital stock of each Subsidiary have been duly and validly authorized and issued and are fully paid and nonassessable, and, except as set forth in the Company's filings with the Commission, all outstanding shares of capital stock of the Subsidiaries are owned by the Company either directly or through wholly owned subsidiaries free and clear, to the knowledge of such counsel, after due inquiry, of any perfected security interest and any other security interests, claims, liens or encumbrances; (iii) the Notes conform in all material respects to the description thereof contained in the Prospectus subject to the insertion in the Notes of the maturity dates, the interest rates and other similar terms thereof which will be described in supplements to the Prospectus as contemplated by the fourth sentence of Section 1(a) of this Agreement; (iv) the Indenture has been duly authorized, executed and delivered by the Company, has been duly qualified under the Trust Indenture Act, and constitutes a legal, valid and binding instrument enforceable against the Company in accordance with its terms (subject, as to enforcement of remedies, to (a) applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting creditors' rights generally from time to time in effect), (b) the qualification that general principles of equity may limit the availability of equitable remedies, (c) requirements that a claim with respect to any Notes denominated other than in U.S. dollars (or a judgment denominated other than in U.S. dollars in respect of such claim) be converted into U.S. dollars at a rate of exchange prevailing on a date determined pursuant to applicable law, and (d) governmental authority to limit, delay, or prohibit the making of payments outside the U.S. or in a foreign currency or composite currency, subject to the exceptions set forth in clauses (a) through (d) above; and the Notes have been duly authorized and, when executed and authenticated in accordance with the provisions of the Indenture and delivered to and paid for by the purchasers thereof pursuant to this Agreement, will constitute legal, valid and binding obligations of the Company entitled to the benefits of the Indenture, subject to the exceptions set forth in clauses (a) through (d) above; (v) to the knowledge of such counsel, there is no pending or threatened action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries, of a character required to be disclosed in the Registration Statement which is not adequately disclosed in the Prospectus, and there is no franchise, contract or other document of a character required to be described in the Registration Statement or Prospectus, or to be filed as an exhibit thereto, which is not described or filed as required; and the statements included or incorporated in the Prospectus describing any legal proceedings or material contracts or agreements relating to the Company fairly summarize such matters; (vi) the Registration Statement has become effective under the Act; any required filing of the Prospectus, and any supplements thereto, pursuant to Rule 424(b) has been made in the manner and within the time period required by Rule 424(b); to the knowledge of such counsel, no stop order suspending the effec- tiveness of the Registration Statement has been issued, no proceedings for that purpose have been instituted or threatened, and the Registration Statement and the Prospectus (other than the financial statements and other financial or statistical information contained therein, as to which such counsel need express no opinion) comply as to form in all material respects with the applicable requirements of Form S-3 of the Act, the Exchange Act and the Trust Indenture Act and the respective rules thereunder; and no facts have come to the attention of such counsel which leads it to reasonably believe that on the Effective Date or at the Execution Time the Registration Statement contains or contained any untrue statement of a material fact or omitted or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus includes any untrue statement of a material fact or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (in each case, other than the financial statements and other financial or statistical information contained therein, as to which such counsel need express no opinion); (vii) this Agreement has been duly authorized, executed and delivered by the Company; (viii) the Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof as described in the Prospectus, will not be an "investment company" as defined in the Investment Company Act of 1940, as amended; (ix) [to the best knowledge of such counsel, after due inquiry,] no consent, approval, authorization, filing with or order of any court or governmental agency or body is required in connection with the transactions contemplated herein, except such as have been obtained under the Act and qualification of the Indenture under the Trust Indenture Act and such as may be required under the blue sky laws of any jurisdiction in connection with the purchase and distribution of the Securities by the Agents in the manner contemplated in this Agreement and in the Prospectus; (x) neither [the execution and delivery of the Indenture,] the issue and sale of the Securities, nor the consummation of any other of the transactions herein contemplated nor the fulfillment of the terms hereof will conflict with, result in a breach or violation of, or result in the imposition of any lien, charge or encumbrance upon any property or assets of the Company or its Subsidiaries pursuant to, (i) the charter or by-laws of the Company or any of its Subsidiaries, or (ii) to the knowledge of such counsel, after due inquiry, the terms of any material indenture, contract, lease, mortgage, deed of trust, note agreement, loan agreement or other material agreement, obligation, condition, covenant or instrument and to which the Company or any of its Subsidiaries is a party or bound or to which their property is subject or (iii) any statute, law, rule or regulation, or any judgment, order or decree known to such counsel after due inquiry, applicable to the Company or any of its Subsidiaries of any court, regulatory body or adminis- trative agency, governmental body, arbitrator or other authority having jurisdiction over the Company or any of its Subsidiaries or any of its or their properties; and (xi) to the knowledge of such counsel, no holders of securities of the Company have rights to the registration of such securities under the Registration Statement. In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdic- tion other than the State of Texas or the Federal laws of the United States, to the extent deemed proper and specified in such opinion, upon the opinion of other counsel of good standing believed to be reliable and who are satisfactory to counsel for the Agents and (B) as to matters of fact, to the extent deemed proper, on certificates of responsible officers of the Company and public officials. References to the Prospectus in this paragraph (b) include any supplements thereto at the Closing Date. (c) The Company shall have furnished to the Agents and the Trustee the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, special counsel for the Company, dated the Closing Date, to the effect set forth in paragraph (i) (with respect to the Company in its state of incorporation only), (iii), (iv), [(v),] (vi) (in such form as such special counsel to the Company and the Representatives may agree), and (x) (with respect to the charter and by-laws) of Section 6(b) and to the effect that statements in the Final Prospectus under the heading "United States Taxation" fairly summarize such matters. In rendering such opinion, such counsel may rely (A) as to matters involving the application of laws of any jurisdictions other than the laws of jurisdiction in which they are admitted or the Federal laws of the United States, to the extent deemed proper and specified in such opinion, upon the opinion of other counsel of good standing believed to be reliable and who are satisfactory to your counsel and (B) as to matters of fact, to the extent deemed proper, on certificates of responsible officers of the Company and public officials. (d) Each Agent shall have received from Cravath, Swaine & Moore, counsel for the Agents, such opinion or opinions, dated the date hereof, with respect to the issuance and sale of the Notes, the Indenture, the Regis- tration Statement, the Prospectus (together with any supplement thereto) and other related matters as the Agents may reasonably require, and the Company shall have furnished to such counsel such documents as they reasonably request for the purpose of enabling them to pass upon such matters. (e) The Company shall have furnished to each Agent a certificate of the Company, signed by the Chairman of the Board, the Chief Executive Officer, the President or any Vice President and Chief Financial Officer, the principal financial officer, Treasurer or principal accounting officer of the Company, dated the Execution Time, to the effect that to the best of their knowledge based upon reasonable investigation: (i) the representations and warranties of the Company in this Agreement are true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied as a condition to the obligation of the Agents to solicit offers to purchase the Notes; (ii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to the Company's knowledge, threatened; and (iii) since the date of the most recent financial statements included or incorporated by reference in the Prospectus (exclusive of any supplement thereto), there has been no material adverse change in the condition (financial or other), earnings, business or properties of the Company and its consolidated Subsidiaries taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Prospectus (exclusive of any supplement thereto). (f) At the Execution Time, Ernst & Young LLP shall have furnished to each Agent a letter or letters (which may refer to letters previously delivered to the Agents), dated as of the Execution Time, in form and substance satisfactory to the Agents, confirming that they are independent auditors within the meaning of the Act and the Exchange Act and the respective applicable published rules and regulations thereunder and stating in effect that: (i) in their opinion the audited financial statements and financial statement schedules and any pro forma financial statements included or incorporated in the Registration Statement and the Prospectus and reported on by them comply in form in all material respects with the applicable accounting requirements of the Act and the Exchange Act and the related published rules and regulations; (ii) on the basis of a reading of the latest unaudited financial statements made available by the Company and its Subsidiaries; their limited review, in accordance with standards established under Statement on Auditing Standards No. 71, carrying out certain specified procedures (but not an examination in accordance with generally accepted auditing standards) which would not necessarily reveal matters of significance with respect to the comments set forth in such letter; a reading of the minutes of the meetings of the stockholders, directors and audit committee of the Company and its Subsidiaries; and inquiries of certain officials of the Company who have responsibility for financial and accounting matters of the Company and its Subsidiaries as to transactions and events subsequent to the date of the most recent audited financial statements in or incorporated in the Registration Statement and Prospectus, nothing came to their attention which caused them to believe that: (1) any unaudited financial statements included or incorporated in the Registration Statement and the Prospectus do not comply in form in all material respects with applicable accounting requirements of the Act and with the published rules and regulations of the Commission with respect to financial statements included or incorporated by reference in quarterly reports on Form 10-Q under the Exchange Act; and said unaudited financial statements are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included or incorporated by reference in the Registration Statement and the Prospectus; (2) with respect to the period subsequent to the date of the most recent financial statements (other than any capsule information), audited or unaudited, included or incorporated by reference in the Registration Statement and the Prospectus, there were any changes, at a specified date not more than five business days prior to the date of the letter, in the consolidated long-term debt of the Company or capital stock of the Company or decreases in the stockholders' equity or working capital of the Company as compared with the amounts shown on the most recent consolidated balance sheet included or incorporated by reference in the Registration Statement and the Prospectus, or for the period from the date of the most recent financial statements included or incorporated by reference in the Registration Statement and the Prospectus to such specified date there were any decreases, as compared with the corresponding period in the preceding year in manufacturing net sales, net revenues, operating income or income before income taxes or in total or per share amounts of net income of the Company and its Subsidiaries, except in all instances for changes or decreases set forth in such letter, in which case the letter shall be accompanied by an explanation by the Company as to the significance thereof unless said explanation is not deemed necessary by the Agents; and (3) the information included or incorporated by reference in the Registration Statement and Prospectus in response to Regulation S-K, Item 301 (Selected Financial Data), Item 302 (Supplementary Financial Information), and Item 503(d) (Ratio of Earnings to Fixed Charges) is not in conformity with the applicable disclosure requirements of Regulation S-K; (iii) they have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Company and its Subsidiaries) set forth in the Registration Statement and the Prospectus and in Exhibit 12 to the Registration Statement, including the information included or incorporated by reference in Items 1, 2, 6, 7 and 11 of the Company's Annual Report on Form 10-K, incorporated in the Registration Statement and the Prospectus, and the information included in the "Management's Discussion and Analysis of Financial Condition and Results of Operations" included or incorporated by reference in the Company's Quarterly Reports on Form 10-Q, incorporated in the Registration Statement and the Prospectus, agrees with the accounting records of the Company and its Subsidiaries, excluding any questions of legal interpretation. References to the Prospectus in this paragraph (e) include any supplement thereto at the date of the letter. (f) Prior to the Execution Time, the Company shall have furnished to each Agent such further information, documents, certificates and opinions of counsel as the Agents may reasonably request. If any of the conditions specified in this Section 5 shall not have been fulfilled in all material respects when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be in all material respects reasonably satisfactory in form and substance to such Agents and counsel for the Agents, this Agreement and all obligations of any Agent hereunder may be canceled at any time by the Agents. Notice of such cancelation shall be given to the Company in writing or by telephone or telecopier confirmed in writing. The documents required to be delivered by this Section 5 shall be delivered at the office of Cravath, Swaine & Moore, counsel for the Agents, at Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the Execution Date. 6. Conditions to the Obligations of a Purchaser. The obligations of a Purchaser to purchase any Notes will be subject to the accuracy of the representations and warranties on the part of the Company herein as of the date of the related Terms Agreement and as of the Closing Date for such Notes, to the performance and observance by the Company of all covenants and agreements herein contained on its part to be performed and observed and to the following additional conditions precedent: (a) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or threatened. (b) To the extent agreed to between the Company and the Purchaser in a Terms Agreement, the Purchaser shall have received, appropriately updated, (i) a certificate of the Company, dated as of the Closing Date, to the effect set forth in Section 5(e) (except that references to the Prospectus shall be to the Prospectus as supplemented as of the date of such Terms Agreement), (ii) the opinion of M. Richard Warner, General Counsel of the Company, dated as of the Closing Date, to the effect set forth in Section 5(b), (iii) the opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the Company, dated as of the Closing Date, to the effect set forth in Section 5(c), (iv) the opinion of Cravath, Swaine & Moore, counsel for the Purchaser, dated as of the Closing Date, to the effect set forth in Section 5(d), and (v) letter of Ernst & Young LLP, independent accountants for the Company, dated as of the Closing Date, to the effect set forth in Section 5(f). (c) Prior to the Closing Date, the Company shall have furnished to the Purchaser such further information, certificates and documents as the Purchaser may reasonably request. If any of the conditions specified in this Section 6 shall not have been fulfilled in all material respects when and as provided in this Agreement and the applicable Terms Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement or such Terms Agreement and required to be delivered to the Purchaser pursuant to the terms hereof and thereof shall not be in all material respects reasonably satisfactory in form and substance to the Purchaser and its counsel, such Terms Agreement and all obligations of the Purchaser thereunder and with respect to the Notes subject thereto may be canceled at, or at any time prior to, the respective Closing Date by the Purchaser. Notice of such cancelation shall be given to the Company in writing or by telephone or telecopier confirmed in writing. 7. Right of Person Who Agreed to Purchase to Refuse to Purchase. (a) The Company agrees that any person who has agreed to purchase and pay for any Note pursuant to a solicitation by any of the Agents shall have the right to refuse to purchase such Note if, at the Closing Date therefor, any condition set forth in Section 5 or 6, as applicable, shall not be satisfied. (b) The Company agrees that any person who has agreed to purchase and pay for any Note pursuant to a solicitation by any of the Agents shall have the right to refuse to purchase such Note if, subsequent to the agreement to purchase such Note, any change, condition or development specified in any of Sections 9(b)(i) through (v) shall have occurred (with the judgment of the Agent which presented the offer to purchase such Note being substituted for any judgment of a Purchaser required therein) the effect of which is, in the judgment of the Agent which presented the offer to purchase such Note, so material and adverse as to make it impractical or inadvisable to proceed with the sale and delivery of such Note (it being understood that under no circumstance shall any such Agent have any duty or obligation to the Company or to any such person to exercise the judgment permitted to be exercised under this Section 7(b) and Section 9(b)). 8. Indemnification and Contribution. (a) The Company agrees to indemnify and hold harmless each of you, the directors, officers, employees and agents of each of you and each person who controls each of you within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which you, they or any of you or them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement for the registration of the Securities as originally filed or in any amendment thereof, or in the Prospectus or any preliminary Pros- pectus, or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances when made, not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by any of you specifically for inclusion therein and, provided, further, that the foregoing indemnity agreement with respect to any preliminary Prospectus shall not inure to the benefit of any Agent, the directors, partners, officers, employees and agents of each Agent and each person who controls such Agent within the meaning of either the Act or the Exchange Act from whom the person asserting any such loss, claim, damage, liability or action purchased securities if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of Securities to such person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such loss, claim, damage, liability or action. This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) Each of you agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signs the Registration Statement and each person who controls the Company within the meaning of either the Act or the Exchange Act, to the same extent as the foregoing indemnity from the Company to you, but only with reference to written information relating to such of you furnished to the Company by such of you specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which you may otherwise have. The Company acknowledges that the statements set forth in the last paragraph of the cover page, and under the heading "Plan of Distribution", of the Prospectus Supplement constitute the only information furnished in writing by any of you for inclusion in the documents referred to in the foregoing indemnity, and you confirm that such state- ments are correct. (c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. In case any such action is brought against any indemnified party, it shall notify the indemnifying party of the commencement thereof, and the indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provid- ed, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), which in the case of either (i) or (ii) below shall be reasonably satisfactory to the indemnified party, and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with an actual conflict of interest, (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties which are different from or additional to those available to the indemnifying party. (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party; provided, however that in no event shall the indemnifying party be liable for legal fees or expenses of more than one primary firm representing the indemnified parties or more than one local counsel in each state or jurisdiction in which an action in which indemnification is available has been brought for all such Agents and controlling persons, which firms should be designated in writing by Salomon Brothers Inc and shall be reasonably satisfactory to the Company. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. (d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Company and each of you severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "Losses") to which the Company and one or more of you may be subject in such proportion as is appropriate to reflect the relative benefits received by the Company and by each of you from the offering of the Notes from which such Losses arise; provided, however, that in no case shall any of you be responsible for any amount in excess of the commissions received by such of you in connection with the sale of Notes from which such Losses arise (or, in the case of Notes sold pursuant to a Terms Agreement, the aggregate commissions that would have been received by such of you if such commissions had been payable). If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and each of you severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and of each of you in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the offering (before deducting expenses) of the Notes from which such Losses arise, and benefits received by each of you shall be deemed to be equal to the total commissions received by such of you in connection with the sale of Notes from which such Losses arise (or, in the case of Notes sold pursuant to a Terms Agreement, the aggregate commissions that would have been received by such of you if such commissions had been payable). Relative fault shall be determined by reference to whether any alleged untrue statement or omission relates to information provided by the Company or any of you. The Company and each of you agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who controls any of you within the meaning of the Act or the Exchange Act and each director, officer, employee and agent of any of you shall have the same rights to contribution as you and each person who controls the Company within the meaning of either the Act or the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this paragraph (d). 9. Termination. (a) This Agreement will continue in effect until terminated as provided in this Section 9. This Agreement may be terminated either by the Company as to any Agent or by any of you insofar as this Agreement relates to any Agent, by giving written notice of such termination to such Agent or the Company, as the case may be. This Agreement shall so terminate at the close of business on the first business day following the receipt of such notice by the party to whom such notice is given. In the event of such termination, no party shall have any liability to the other party hereto, except as provided in the fourth paragraph of Section 2(a), Section 4(h), Section 8 and Section 10. (b) Each Terms Agreement shall be subject to termination in the absolute discretion of the Purchaser, by notice given to the Company prior to delivery of any payment for any Note to be purchased thereunder, if prior to such time (i) there shall have occurred, subsequent to the agreement to purchase such Note, any change, or any development involving a prospective change, in or affecting the business or properties of the Company and its consolidated subsidiaries taken as a whole the effect of which is, in the judgment of the Purchaser, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of such Note, (ii) there shall have been, subsequent to the agreement to purchase such Note, any decrease in the rating of any of the Company's debt securities by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act) or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change, (iii) trading of any of the Company's securities shall have been suspended by the Commission or the New York Stock Exchange or trading in securities generally on the New York Stock Exchange shall have been suspended or limited or minimum prices shall have been established on such Exchange, (iv) a banking moratorium shall have been declared by either Federal or New York State authorities or (v) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war or other calamity or crisis the effect of which on financial markets is such as to make it, in the judgment of the Purchaser, impracticable or inadvisable to proceed with the offering or delivery of such Notes as contemplated by the Prospectus (exclusive of any supplement thereto). 10. Survival of Certain Provisions. The respective agreements, representations, warranties, indemnities and other statements of the Company or its officers and of you set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of you or the Company or any of the directors, officers, employees, agents or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Notes. The provisions of Sections 4(h) and 8 hereof shall survive the termination or cancelation of this Agreement. The provisions of this Agreement (including without limitation Section 7 hereof) applicable to any purchase of a Note for which an agreement to purchase exists prior to the termination hereof shall survive any termination of this Agreement. [If at the time of termination of this Agreement any Purchaser shall own any Notes with the intention of selling them, the provisions of Section 4 shall remain in effect until such Notes are sold by the Purchaser.] 11. Notices. All communications hereunder will be in writing and effective only on receipt, and, if sent to any of you, will be mailed, delivered or telecopied and confirmed to such of you, at the address specified in Schedule I hereto; or, if sent to the Company, will be mailed, delivered or telecopied and confirmed to it at 303 South Temple Drive, Diboll, TX 75941, facsimile number [ 409-829-3333], attention of the General Counsel. 12. Amendments. This Agreement may be amended or supplemented if, but only if, such amendment or supplement is in writing and is signed by the Company and each Agent; providedthat the Company may from time to time, on seven days prior written notice to the Agents but without the consent of any Agent, amend this Agreement to add as a party hereto one or more additional firms registered under the Exchange Act, whereupon each such firm shall become an Agent hereunder on the same terms and conditions as the other Agents that are parties hereto. The Agents shall sign any amendment or supplement giving effect to the addition of any such firm as an Agent under this Agreement. 13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, their respective successors, the directors, officers, employees, agents and controlling persons referred to in Section 8 hereof and, to the extent provided in Section 7, any person who has agreed to purchase Notes, and no other person will have any right or obligation hereunder. 14. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO PRINCIPLES OF CONFLICTS OF LAW. If the foregoing is in accordance with your under- standing of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Company and you. Very truly yours, TEMPLE-INLAND INC. By: ___________________________ Name: David H. Dolben Title: Vice President The foregoing Agreement is hereby confirmed and accepted as of the date hereof. Salomon Brothers Inc By: _____________________ Name: Title: SBC Warburg Dillon Read Inc. By: _____________________ Name: Title: SCHEDULE I Commissions: The Company agrees to pay each Agent a commission equal to the following percentage of the principal amount of each Note sold on an agency basis by such Agent: Maturity Commission Rate 9 months to less than 12 months .125% 12 months to less than 18 months .150% 18 months to less than 2 years .200% 2 years to less than 3 years .250% 3 years to less than 4 years .350% 4 years to less than 5 years .450% 5 years to less than 6 years .500% 6 years to less than 7 years .550% 7 years to less than 8 years .600% 8 years to less than 9 years .600% 9 years to less than 10 years .600% 10 years to less than 15 years .625% 15 years to less than 20 years .700% 20 years to less than 30 years .750% 30 years and beyond to be negotiated Unless otherwise specified in the applicable Terms Agreement, the discount or commission payable to a Purchaser shall be determined on the basis of the commission schedule set forth above. Address for Notice to you: Notices to Salomon Brothers Inc shall be directed to it at Seven World Trade Center, New York, New York 10048, Attention of the Medium-Term Note Department. Notices to SBC Warburg Dillon Read Inc. shall be directed to it at 677 Washington Boulevard, Stamford, CT 06912, Attention of A. Peter Foote. EXHIBIT B Temple-Inland Inc. Medium Term Notes Due More Than Nine Months from Date of Issue TERMS AGREEMENT , 199 Attention: Subject in all respects to the terms and conditions of the Selling Agency Agreement (the "Agreement") dated June 2, 1998, between Salomon Brothers Inc, SBC Warburg Dillon Read Inc., and you, the undersigned agrees to purchase the following Notes of Temple-Inland Inc.: [Add additional terms as may be needed to identify Notes.] [Specified Currency]: Aggregate Principal Amount: $ Interest Rate: Date of Maturity: Interest Payment Dates: Regular Record Dates: Discount or Commission: % of Principal Amount Purchase Price: % of Principal Amount [plus accrued interest from , 199 ] Purchase Date and Time: Place for Delivery of Notes and Payment Therefor: Method of Payment: Modification, if any, in the requirements to deliver the documents specified in Section 6(b) of the Agreement: Period during which additional Notes may not be sold pursuant to Section 4(m) of the Agreement: [Purchaser] By:____________________ Accepted: Temple-Inland Inc. By: _______________________ Title: [Form of Reverse Inquiry Letter] [Trade Date] [Dealer] [Address] [Address] Re: $__,000,000 Medium-Term Notes Pricing Supplement Number:________ Settlement Date:__________________ (See attached Term Sheet) Dear [Dealer]: Reference is made to the Selling Agency Agreement dated _______________, 1998 (the "Agreement") pertaining to up to $500,000,000 aggregate principal amount of Medium-Term Notes (the "Notes") to be offered from time to time by Temple-Inland Inc. (the "Company"). The provisions of the Agreement (a copy of which has been previously provided to you) are hereby incorporated by reference and each of the representations and warranties set forth therein shall be deemed to be made to you as of the date hereof. Subject to the terms set forth therein, the Company hereby appoints you as an Agent (as such term is defined in the Agreement) of the Company for purposes of soliciting one offer to purchase Notes from the Company containing the terms as set forth in the above referenced Pricing Supplement. This appointment is effective as to and extends only to the one transaction which you are presenting to the Company (see attached Term Sheet) and the Agreement shall automatically be terminated as to you upon the earlier to occur of (i) payment made in full to the Company for the Notes sold pursuant to the offer presented or (ii) the Company or you determine not to proceed with the transaction. Upon such termination of the Agreement by the Company, neither you nor the Company shall have any liability to the other except as provided in those sections of the Agreement referenced in Section 10 thereof. You agree to be bound by, and comply with, all of the provisions of the Agreement applicable to the Agents thereunder. *[As a condition precedent to your obligation to consummate the transaction referred to above, you shall receive the following: (i) the opinions of counsel, dated __________ [recent date or most recent periodic update [pursuant to Sections ___ and ____ of the Agreement; (ii) an Officer's Certificate dated _______ [recent date], pursuant to Section ___ of the Agreement; (iii) a letter from Ernst & Young LLP dated ________ [most recent date or most recent periodic update] delivered pursuant to Section ___ of the Agreement; and (iv) a copy of the resolutions adopted by the Company with respect to the Form of Note evidencing the securities described in the above referenced Pricing Supplement, certified by an appropriate officer of the Company.] This letter shall be governed by and construed in accordance with the laws of the State of New York. If the foregoing is in accordance with your understanding, please sign and return to us two counterparts hereof, whereupon this letter shall constitute a binding agreement between the Company and you in accordance with its terms. Very truly yours, By:_____________________________ Name: Title: Agreed and Accepted as of the date hereof: [Dealer] By:________________________ Name: Title: *This language is to be negotiated between the Issuer and the Reverse Inquiry Agent at the time of the trade. EXHIBIT A TEMPLE-INLAND INC. Medium-Term Note Administrative Procedures June 2, 1998 The Medium-Term Notes, Series F, Due from Nine Months or More from Date of Issue (the "Notes") of Temple-Inland Inc. (the "Company") are to be offered on a continuing basis. Salomon Brothers Inc and SBC Warburg Dillon Read Inc., as agents (each an "Agent"), have agreed to solicit purchases of Notes issued in fully registered form. The Agents will not be obligated to purchase Notes for their own account. The Notes are being sold pursuant to a Selling Agency Agreement between the Company and the agents named therein (including the Agents) dated the date hereof (the "Agency Agreement"). The Notes will rank equally with all other unsecured and unsubordinated debt of the Company and have been registered with the Securities and Exchange Commission (the "Commission"). The Notes will be issued under an indenture dated as of September 1, 1986, as amended by the First Supplemental Indenture, dated as of April 15, 1988, the Second Supplemental Indenture, dated as of December 27, 1990, and the Third Supplemental Indenture, dated as of May 9, 1991 (such indenture, as amended, the "Indenture"), between the Company and The Chase Manhattan Bank, formerly known as Chemical Bank, as trustee (the "Trustee"). The Agency Agreement provides that Notes may also be purchased by an Agent acting solely as principal and not as agent. In the event of any such purchase, the functions of both the Agent and the beneficial owner under the administrative procedures set forth below shall be performed by such Agent acting solely as principal, unless otherwise agreed to between the Company and such Agent acting as principal. Each Note will be represented by either a Global Security (as defined hereinafter) delivered to The Chase Manhattan Bank ("Chase), as agent for The Depository Trust Company ("DTC"), and recorded in the book-entry system maintained by DTC (a "Book-Entry Note") or a certificate delivered to the Holder thereof or a Person designated by such Holder (a "Certificated Note"). An owner of a Book-Entry Note will not be entitled to receive a certificate representing such Note. The procedures to be followed during, and the specific terms of, the solicitation of orders by the Agents and the sale as a result thereof by the Company are explained below. Administrative and record-keeping responsibilities will be handled for the Company by its Treasurer. The Company will advise the Agents and the Trustee in writing of those persons handling administrative responsibilities with whom the Agents and the Trustee are to communicate regarding orders to purchase Notes and the details of their delivery. Administrative procedures and specific terms of the offering are explained below. Book-Entry Notes will be issued in accordance with the administrative procedures set forth in Part I hereof, as adjusted in accordance with changes in DTC's operating requirements, and Certificated Notes will be issued in accordance with the administrative procedures set forth in Part II hereof. Unless otherwise defined herein, terms defined in the Indenture and the Notes shall be used herein as therein defined. Notes for which interest is calculated on the basis of a fixed interest rate, which may be zero, are referred to herein as "Fixed Rate Notes". Notes for which interest is calculated on the basis of a floating interest rate are referred to herein as "Floating Rate Notes". To the extent the procedures set forth below conflict with the provisions of the Notes, the Indenture, DTC's operating requirements or the Agency Agreement, the relevant provisions of the Notes, the Indenture, DTC's operating requirements and the Agency Agreement shall control. PART I Administrative Procedures for Book-Entry Notes In connection with the qualification of the Book-Entry Notes for eligibility in the book-entry system maintained by DTC, Chase will perform the custodial, document control and administrative functions described below, in accordance with its respective obligations under a Letter of Representations from the Company and Chase to DTC dated as of the date hereof and a Medium-Term Note Certificate Agreement between Chase and DTC and its obligations as a participant in DTC, including DTC's Same-Day Funds Settlement system ("SDFS"). Issuance: On any date of settlement (as defined under "Settlement" below) for one or more Book- Entry Notes, the Company will issue a single global security in fully registered form without coupons (a "Global Security") representing up to $200,000,000 principal amount of all such Book-Entry Notes that have the same original issue date, original issue discount provisions, if any, Interest Payment Dates, Regular Record Dates, Interest Payment Period, redemption, repayment and extension provisions, if any, Maturity Date, and, in the case of Fixed Rate Notes, interest rate, or, in the case of Floating Rate Notes, initial interest rate, Base Rate, Index Maturity, Interest Reset Period, Interest Reset Dates, Spread or Spread Multiplier, if any, minimum interest rate, if any, and maximum interest rate, if any (collectively, the "Terms"). Each Global Security will be dated and is- sued as of the date of its authentication by the Trustee. Each Global Security will bear an original issue date, which will be (i) with respect to an original Global Security (or any portion thereof), the original issue date specified in such Global Security and (ii) following a consolidation of Global Securities, with respect to the Global Security resulting from such consolidation, the most recent Interest Payment Date to which interest has been paid or duly provided for on the predecessor Global Securities, regardless of the date of authentication of such resulting Global Security. No Global Secu- rity will represent (i) both Fixed Rate and Floating Rate Book-Entry Notes or (ii) any Certificated Note. Identification The Company has arranged with the Numbers: CUSIP Service Bureau of Standard & Poor's Corporation (the "CUSIP Service Bureau") for the reservation of a series of CUSIP numbers, which series consists of approximately 900 CUSIP numbers and relates to Global Securities representing Book- Entry Notes and book-entry medium-term notes issued by the Company with other series designations. The Company has obtained from the CUSIP Service Bureau, and has delivered to Chase and DTC, a written list of such reserved CUSIP numbers. The Company will assign CUSIP numbers to Global Securities as described below under Settle- ment Procedure "B". DTC will notify the CUSIP Service Bureau periodically of the CUSIP numbers that the Company has assigned to Global Securities. Chase will notify the Company at any time when fewer than 100 of the reserved CUSIP numbers remain unas- signed to Global Securities, and, if it deems necessary, the Company will reserve additional CUSIP numbers for assignment to Global Securities. Upon obtaining such additional CUSIP numbers, the Company shall deliver a list of such additional CUSIP numbers to Chase and DTC. Registration: Global Securities will be issued only in fully registered form without coupons. Each Global Security will be registered in the name of CEDE & CO., as nominee for DTC, on the securities register for the Notes maintained under the Indenture. The beneficial owner of a Book-Entry Note (or one or more indirect participants in DTC designated by such owner) will designate one or more participants in DTC (with respect to such Book-Entry Note, the "Participants") to act as agent or agents for such owner in connection with the book- entry system maintained by DTC, and DTC will record in book-entry form, in accordance with instructions provided by such Participants, a credit balance with respect to such beneficial owner in such Book-Entry Note in the account of such Participants. The ownership interest of such beneficial owner (or such participant) in such Book-Entry Note will be recorded through the records of such Participants or through the separate records of such Participants and one or more indirect participants in DTC. Transfers: Transfers of a Book-Entry Note will be accomplished by book entries made by DTC and, in turn, by Participants (and in certain cases, one or more indirect participants in DTC) acting on behalf of beneficial transferors and transferees of such Note. Exchanges: Chase may deliver to DTC and the CUSIP Service Bureau at any time a written notice of consolidation (a copy of which shall be attached to the resulting Global Security described below) specifying (i) the CUSIP numbers of two or more outstanding Global Securities that represent (A) Fixed Rate Book-Entry Notes having the same Terms and for which interest has been paid to the same date or (B) Floating Rate Book-Entry Notes having the same Terms and for which interest has been paid to the same date, (ii) a date, occurring at least thirty days after such written notice is delivered and at least thirty days before the next In- terest Payment Date for such Book-Entry Notes, on which such Global Securities shall be exchanged for a single replacement Global Security and (iii) a new CUSIP number, obtained from the Company, to be assigned to such replacement Global Security. Upon receipt of such a notice, DTC will send to its participants (including Chase) a written reorganization notice to the effect that such exchange will occur on such date. Prior to the specified exchange date, Chase will deliver to the CUSIP Service Bureau a written notice setting forth such exchange date and such new CUSIP number and stating that, as of such exchange date, the CUSIP numbers of the Global Securities to be exchanged will no longer be valid. On the specified ex- change date, Chase will exchange such Global Securities for a single Global Security bearing the new CUSIP number and the CUSIP numbers of the exchanged Global Securities will, in accordance with CUSIP Service Bureau procedures, be canceled and not immediately reassigned. Not- withstanding the foregoing, if the Global Securities to be exchanged exceed $200,000,000 in aggregate principal amount, one Global Security will be authenticated and issued to represent each $200,000,000 of principal amount of the exchanged Global Securities and an additional Global Security will be authenticated and issued to represent any remaining principal amount of such Global Securities (see "Denominations" below). Maturities: Each Book-Entry Note will mature on a date not less than nine months after the Original Issue Date for such Note. A Floating Rate Book-Entry Note will mature only on an Interest Payment Date for such Note. Any Note denominated in Japanese yen will mature on a date not less than one year from the Original Issue Date (as defined below) for such Note. Any Note denominated in Pounds Sterling will mature on a date not less than one year, nor more than five years, after its Original Issue Date. Denominations: Book-Entry Notes will be issued in principal amounts of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. Global Securities will be denominated in principal amounts not in excess of $200,000,000. If one or more Book-Entry Notes having an aggregate prin- cipal amount in excess of $200,000,000 would, but for the preceding sentence, be represented by a single Global Security, then one Global Security will be authenticated and issued to represent each $200,000,000 principal amount of such Book- Entry Note or Notes and an additional Global Security will be authenticated and issued to represent any remaining principal amount of such Book-Entry Note or Notes. In such a case, each of the Global Securities representing such Book-Entry Note or Notes shall be assigned the same CUSIP number. Interest: General. Interest, if any, on each Book- Entry Note will accrue from the original issue date for the first interest period or the last date to which interest has been paid, if any, for each subsequent interest period, on the Global Security representing such Book-Entry Note, and will be calculat- ed and paid in the manner described in such Book-Entry Note and in the Prospectus (as defined in the Agency Agreement), as supplemented by the applicable Pricing Supplement. Unless otherwise specified therein, each payment of interest on a Book Entry Note will include interest accrued to but excluding the Interest Payment Date or to but excluding Maturity (other than a Maturity of a Fixed Rate BookEntry Note occurring on the 31st day of a month, in which case such payment of interest will include interest accrued to but excluding the 30th day of such month). Interest payable at the Maturity of a Book- Entry Note will be payable to the Person to whom the principal of such Note is payable. Standard & Poor's Corporation will use the information received in the pending deposit message described under Settlement Proce- dure "C" below in order to include the amount of any interest payable and certain other information regarding the related Global Security in the appropriate (daily or weekly) bond report published by Standard & Poor's Corporation. Regular Record Dates. The Regular Record Date with respect to any Interest Payment Date for Floating Rate Notes shall be the date fifteen calendar days immediately pre- ceding such Interest Payment Date and, for Fixed Rate Notes, shall be November 15 or May 15 (in each case, whether or not a Business Date). Interest Payment Dates on Fixed Rate Book- Entry Notes. Unless otherwise specified pursuant to Settlement Procedure "A" below, interest payments on Fixed Rate Book-Entry Notes will be made semiannually on June 1 and December 1 of each year and at Matu- rity; provided, however, that if an Interest Payment Date for a Fixed Rate Book-Entry Note is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Interest Payment Date; provided further, that in the case of a Fixed Rate Book-Entry Note issued between a Regular Record Date and an Interest Payment Date, the first interest payment will be made on the Interest Payment Date following the next succeeding Regular Record Date. Interest Payment Dates on Floating Rate Book-Entry Notes. Interest payments will be made on Floating Rate Book-Entry Notes monthly, quarterly, semi-annually or annually. Unless otherwise agreed upon, interest will be payable, in the case of Floating Rate Book-Entry Notes with a monthly Interest Payment Period, on the third Wednesday of each month; with a quar- terly Interest Payment Period, on the third Wednesday of March, June, September and December of each year; with a semi-annual Interest Payment Period on the third Wednesday of the two months specified pursuant to Settlement Procedure "A" below; and with an annual Interest Payment Period, on the third Wednesday of the month spec- ified pursuant to Settlement Procedure "A" below; provided, however, that if an Interest Payment Date for a Floating Rate Book-Entry Note would otherwise be a day that is not a Business Day with respect to such Floating Rate Book-Entry Note, such Interest Payment Date will be the next succeeding Business Day with respect to such Floating Rate Book-Entry Note, except in the case of a Floating Rate Book-Entry Note for which the Base Rate is LIBOR, if such Business Day is in the next succeeding calendar month, such Interest Payment Date will be the immediately preceding Business Day; and provided further, that in the case of a Floating Rate Book-Entry Note issued between a Regular Record Date and an Interest Payment Date, the first interest payment will be made on the Interest Payment Date following the next succeeding Regular Record Date. Notice of Interest Payment and Regular Record Dates. On the first Business Day of January, April, July and October of each year, Chase will deliver to the Company and DTC a written list of Regular Record Dates and Interest Payment Dates that will occur with respect to Book-Entry Notes during the six-month period beginning on such first Business Day. Promptly after each Interest Determination Date for Floating Rate Book- Entry Notes, Chase, as Calculation Agent, will notify Standard & Poor's Corporation of the interest rates determined on such Interest Determination Date. Calculation of Fixed Rate Book-Entry Notes. Interest Interest: on Fixed Rate Book-Entry Notes (including interest for partial periods) will be calculated on the basis of a 360-day year of twelve 30-day months. Floating Rate Book-Entry Notes. Interest rates on Floating Rate Book-Entry Notes will be determined as set forth in the form of Notes. Interest on Floating Rate Book- Entry Notes, except as otherwise set forth therein, will be calculated on the basis of actual days elapsed and a year of 360 days, except that in the case of a Floating Rate Book-Entry Note for which the Base Rate is Treasury Rate or CMT Rate, interest will be calculated on the basis of the actual number of days in the year. Payments of Payment of Interest Only. Promptly Principal and after each Regular Record Date, Interest Chase will deliver to the Company and DTC a written notice setting forth, by CUSIP number, the amount of interest to be paid on each Global Security (if then ascertainable) on the following Interest Payment Date (other than an Interest Payment Date coinciding with Maturity) and the total of such amounts. DTC will confirm the amount payable on each Global Security on such Interest Payment Date by reference to the appropriate (daily or weekly) bond reports published by Standard & Poor's Corporation. The Company will pay to Chase, as paying agent, the total amount of interest due on such Interest Payment Date (other than at Maturity), and Chase will pay such amount to DTC, at the times and in the manner set forth below under "Manner of Payment". Payments at Maturity. On or about the first Business Day of each month, Chase will deliver to the Company and DTC a written list of principal and interest (if then ascertainable) to be paid on each Global Security maturing (on a Maturity or Redemption Date or otherwise) in the following month. Chase, the Company and DTC will confirm the amounts of such principal and interest payments with respect to each such Global Security on or about the fifth Business Day preceding the Maturity of such Global Security. On or before Maturity, the Company will pay to Chase, as paying agent, the principal amount of such Global Security, together with interest due at such Maturity. Chase will pay such amount to DTC at the times and in the manner set forth below under "Manner of Payment". If any Maturity of a Global Security representing Book-Entry Notes is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Maturity. Promptly after payment to DTC of the principal and interest due at Maturity of such Global Security, Chase will cancel such Global Security in accordance with the Indenture and so advise the Company. If the Maturity of a Book-Entry Note is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Maturity. Manner of Payment. The total amount of any principal and interest due on Global Securities on any Interest Payment Date or at Maturity shall be paid by the Company to Chase in immediately available funds no later than 9:30 A.M. (New York City time) on such date. The Company will make such payment on such Global Securities by instructing Chase to withdraw funds from an account maintained by the Company at Chase or by wire transfer to Chase. The Company will confirm any such instructions in writ- ing to Chase. Prior to 10 A.M. (New York City time) on the date of Maturity or as soon as possible thereafter, Chase will pay by separate wire transfer (using Fedwire message entry instructions in a form previously specified by DTC) to an account at the Federal Reserve Bank of New York previously specified by DTC, in funds available for immediate use by DTC, each payment of principal (together with interest thereon) due on a Global Security on such date. On each Interest Payment Date (other than at Maturity), interest payments shall be made to DTC, in funds available for immediate use by DTC, in accordance with existing arrangements between Chase and DTC. On each such date, DTC will pay, in accordance with its SDFS operating procedures then in effect, such amounts in funds available for immediate use to the respective Participants in whose names the Book-Entry Notes represented by such Global Securities are recorded in the book-entry system maintained by DTC. None of the Company (as issuer or as paying agent) or Chase shall have any direct responsibility or liability for the payment by DTC to such Participants of the prin- cipal of and interest on the Book-Entry Notes. Withholding Taxes. The amount of any taxes required under applicable law to be withheld from any interest payment on a Book-Entry Note will be determined and withheld by the Participant, indirect participant in DTC or other Person responsible for forwarding payments and materials directly to the beneficial owner of such Note. Procedures Company Notice to Trustee Regarding Upon Company's Exercise of Optional Reset. Not Exercise of less than 50 or more than 60 days Optional Reset before an Optional Reset Date as or Optional set forth in a Book-Entry Note, the Extension of Company will notify Chase whether it is Maturity: exercising its option to reset the Interest Rate or Spread or Spread Multiplier, as the case may be, for such Book-Entry Note, and if so, (i) the new Interest Rate or Spread or Spread Multiplier, as the case may be, for such Book-Entry Note during the period from such Optional Reset Date to the next Optional Reset Date as set forth in such Book-Entry Note or, if there is no such next Optional Reset Date, to the Stated Maturity of such Book-Entry Note (the "Subsequent Interest Period"); and (ii) the provisions, if any, for redemption of such Book-Entry Note during such Subsequent Interest Period, including the date or dates on which or the period or periods during which such redemption may occur during such Subsequent Interest Period. Company Notice to Trustee Regarding Exercise of Optional Extension of Maturity. If the Company elects to exercise an option, as set forth in a Book-Entry Note, to extend the Stated Maturity of such Note, it will so notify Chase no less than 50 or more than 60 days before the Stated Maturity of such Book-Entry Note, and will further indicate (i) the new Stated Maturity; (ii) the Interest Rate or Spread or Spread Multiplier, as the case may be, and (iii) the provisions, if any, for redemption of such Book-Entry Note during such extension period, including the date or dates on which or the period or periods during which such redemption may occur during such extension period. Trustee Notice to DTC Regarding Company's Exercise of Optional Extension or Reset. Upon receipt of notice from the Company regarding the Company's exercise of either an optional extension of maturity or an optional reset, Chase will hand-deliver a notice to DTC not less than 40 days before the Optional Reset Date (in which case a "Reset Notice") or the Stated Maturity (in which case an "Extension Notice"), as the case may be, which Reset Notice or Extension Notice shall identify such Book- Entry Note by CUSIP number and shall contain the information required by the terms of the Book-Entry Note. Trustee Notice to Company Regarding Option to be Repaid. If, after receipt of either a Reset Notice or an Extension Notice, DTC exercises the option for repayment by tendering the Global Security representing the Book-Entry Note to be repaid as set forth in such Note, Chase shall give notice to the Company not less than 22 days before the Optional Reset Date or the old Stated Maturity, as the case may be, of the principal amount of Book-Entry Notes to be repaid on such Optional Reset Date or old Stated Maturity, as the case may be. Company Notice Regarding New Interest Rate or New Spread or Spread Multiplier. If the Company elects to revoke the Interest Rate or Spread or Spread Multiplier and establish a higher interest rate or Spread or Spread Multiplier for an Optional Reset Period or extension period, as the case may be, it shall, not less than 20 days before such Optional Reset Date or old Stated Maturity, so notify Chase. Chase will immediately thereafter notify DTC of the new Interest Rate or Spread or Spread Multiplier applicable to such Book-Entry Note. Trustee Notice to Company Regarding DTC Revocation of Option to be Repaid. If, after DTC has tendered any Book-Entry Notes for repayment pursuant to an Extension Notice or an Optional Reset Notice, DTC then revokes such tender for repayment, Chase shall give notice to the Company not less than five days prior to the Stated Maturity or Optional Reset Date, as the case may be, of such revocation and of the principal amount of Book-Entry Notes for which tender for repayment has been revoked. Deposit of Repayment Price. On or before any old Stated Maturity where the Maturity has been extended, and on or before an Optional Reset Date, the Company shall deposit with Chase an amount of money sufficient to pay the principal amount, plus interest accrued to such old Stated Maturity or Optional Reset Date, as the case may be, for all the Book-Entry Notes or portions thereof which are to be repaid on such old Stated Maturity or Optional Reset Date, as the case may be. Chase will use such money to repay such Book- Entry Notes pursuant to the terms set forth in such Notes. Procedures Company Notice to Trustee Regarding Upon Company's Exercise of Optional Redemption. Exercise of At least 45 days prior to the date on Optional which it intends to redeem a Book- Redemption: Entry Note, the Company will notify Chase that it is exercising such option with respect to such Book-Entry Note on such date. Trustee Notice to DTC Regarding Company's Exercise of Optional Redemption. After receipt of notice that the Company is exercising its option to redeem a Book- Entry Note, Chase will, at least 30 days before the redemption date for such Book- Entry Note, hand deliver to DTC a notice identifying such Book-Entry Note by CUSIP number and informing DTC of the Company's exercise of such option with respect to such Book-Entry Note. Deposit of Redemption Price. On or before any redemption date, the Company shall deposit with Chase an amount of money sufficient to pay the redemption price, plus interest accrued to such redemption date, for all the Book-Entry Notes or portions thereof which are to be repaid on such redemption date. Chase will use such money to repay such Book-Entry Notes pursuant to the terms set forth in such Notes. Payments of Trustee Notice to Company of Option Principal and to be Repaid. Upon receipt of notice Interest upon of exercise of the option for Exercise of repayment and the Global Securities Optional Repay-representing the Book-Entry Notes so ment (Except to be repaid as set forth in such Pursuant to Notes, Chase shall (unless such Company's notice was received pursuant to the Exercise of Company's exercise of an optional reset or Optional Reset an optional extension of maturity, in each or Optional of which cases the relevant procedures set Extension): forth above are to be followed) give notice to the Company not less than 20 days prior to each Optional Repayment Date of such Optional Repayment Date and of the principal amount of Book-Entry Notes to be repaid on such Optional Repayment Date. Deposit of Repayment Price. On or prior to any Optional Repayment Date, the Company shall deposit with Chase an amount of money sufficient to pay the optional repayment price, and accrued interest thereon to such date, of all the Book-Entry Notes or portions thereof which are to be repaid on such date. Chase will use such money to repay such Book-Entry Notes pursuant to the terms set forth in such Notes. Procedure for The Company and the Agents will Rate Setting discuss from time to time the and Posting: aggregate principal amount of, the issuance price of, and the interest rates to be borne by, Book-Entry Notes that may be sold as a result of the solicitation of orders by the Agents. If the Company decides to set prices of, and rates borne by, any Book-Entry Notes in respect of which the Agents are to solicit orders (the setting of such prices and rates to be referred to herein as "posting") or if the Company decides to change prices or rates previously posted by it, it will promptly advise the Agents of the prices and rates to be posted. Acceptance and Unless otherwise instructed by the Rejection of Company, each Agent will advise the Orders: Company promptly by telephone of all orders to purchase Book-Entry Notes received by such Agent, other than those rejected by it in whole or in part in the reasonable exercise of its discretion. Unless otherwise agreed by the Company and the Agents, the Company has the right to accept orders to purchase Book-Entry Notes and may reject any such orders in whole or in part. Preparation of If any order to purchase a Book-Entry Pricing Note is accepted by or on behalf of Supplement: the Company, the Company will prepare a pricing supplement (a "Pricing Supplement") reflecting the applicable interest rates and other terms of such Book-Entry Note and will arrange to have ten copies thereof filed with the Commission in accordance with the applicable paragraph of Rule 424(b) under the Act and will supply at least ten copies thereof (and additional copies if requested) to the Agent which presented the order (the "Presenting Agent"). The Presenting Agent will cause a Prospectus and Pricing Supplement to be delivered to the purchaser of such Book- Entry Note. In each instance that a Pricing Supplement is prepared, the Presenting Agent will affix the Pricing Supplement to Pros- pectuses prior to their use. Outdated Pricing Supplements (other than those retained for files) will be destroyed. Suspension of The Company reserves the right, in its Solicitation; sole discretion, to instruct the Amendment or Agents to suspend at any time, for any Supplement: period of time or permanently, the solici- tation of orders to purchase Book-Entry Notes. Upon receipt of such instructions, the Agents will forthwith suspend solicitation until such time as the Company has advised them that such solicitation may be resumed. In the event that at the time the Company suspends solicitation of purchases there shall be any orders outstanding for settlement, the Company will promptly advise the Agents and Chase whether such orders may be settled and whether copies of the Prospectus as in effect at the time of the suspension, together with the appro- priate Pricing Supplement, may be delivered in connection with the settlement of such orders. The Company will have the sole responsibility for such decision and for any arrangements that may be made in the event that the Company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered. If the Company decides to amend or supplement the Registration Statement (as defined in the Agency Agreement) or the Prospectus, it will promptly advise the Agents and furnish the Agents with the proposed amendment or supplement and with such certificates and opinions as are required, all to the extent required by and in accordance with the terms of the Agency Agreement. Subject to the provisions of the Agency Agreement, the Company may file with the Commission any such supplement to the Prospectus relating to the Notes. The Company will provide the Agents and Chase with copies of any such supplement, and confirm to the Agents that such supplement has been filed with the Commission pursuant to the applicable paragraph of Rule 424(b). Procedures For When the Company has determined to Rate Changes: change the interest rates of Book-Entry Notes being offered, it will promptly advise the Agents and the Agents will forthwith suspend solicitation of orders. The Agents will telephone the Company with recommendations as to the changed interest rates. At such time as the Company has advised the Agents of the new interest rates, the Agents may resume solicitation of orders. Until such time only "indica- tions of interest" may be recorded. Delivery of A copy of the Prospectus and a Pricing Prospectus: Supplement relating to a Book-Entry Note must accompany or precede the earliest of any written offer of such Book-Entry Note, confirmation of the purchase of such Book- Entry Note and payment for such Book-Entry Note by its purchaser. If notice of a change in the terms of the Book-Entry Notes is received by the Agents between the time an order for a Book-Entry Note is placed and the time written confirmation thereof is sent by the Presenting Agent to a customer or his agent, such confirmation shall be accompanied by a Prospectus and Pricing Supplement setting forth the terms in effect when the order was placed. Subject to "Suspension of Solicitation; Amendment or Supplement" above, the Presenting Agent will deliver a Prospectus and Pricing Supplement as herein described with respect to each Book-Entry Note sold by it. The Company will make such delivery if such Book-Entry Note is sold directly by the Company to a purchaser (other than an Agent). Confirmation: For each order to purchase a Book-Entry Note solicited by any Agent and accepted by or on behalf of the Company, the Presenting Agent will issue a confirmation to the purchaser, with a copy to the Company, setting forth the details set forth above and delivery and payment instructions. Settlement: The receipt by the Company of immediately available funds in payment for a Book-Entry Note and the authentication and issuance of the Global Security representing such Book- Entry Note shall constitute "settlement" with respect to such Book-Entry Note. All orders accepted by the Company will be settled on the third Business Day following the date of sale of such Book-Entry Note pursuant to the timetable for settlement set forth below unless the Company and the purchaser agree to settlement on another day which shall be no earlier than the next Business Day following the date of sale. Settlement Settlement Procedures with regard to Procedures: each Book-Entry Note sold by the Company through any Agent, as agent, shall be as follows: A. The Presenting Agent will advise the Company by telephone of the following settlement information: 1. Principal amount. 2. Maturity Date. 3. In the case of a Fixed Rate Book- Entry Note, the interest rate or, in the case of a Floating Rate Book-Entry Note, the Base Rate, initial interest rate (if known at such time), Index Maturity, Inter- est Reset Period, Interest Reset Dates, Spread or Spread Multiplier (if any), Minimum Interest Rate (if any) and Maximum Interest Rate (if any). 4. Interest Payment Dates and the Interest Payment Period. 5. Redemption, repayment and extension provisions, if any. 6. Settlement date. 7. Price. 8. Presenting Agent's commission, determined as provided in Section 2 of the Agency Agreement. 9. Whether such Book-Entry Note is issued at an original issue discount and, if so, the total amount of OID, the yield to maturity and the initial accrual period OID. 10. All other information needed to complete a Book-Entry Note. B. The Company will assign a CUSIP number to the Global Security representing such Book-Entry Note and then advise Chase by telephone (confirmed in writing at any time on the same date) or electronic (or facsimile) trans- mission of the information set forth in Settlement Procedure "A" above, such CUSIP number and the name of the Presenting Agent. The Company will also notify the Presenting Agent by telephone of such CUSIP number as soon as practicable. Each such communication by the Company shall constitute a representation and warranty by the Company to Chase and the Presenting Agent that (i) such Note is then, and at the time of issuance and sale thereof will be, duly authorized for issuance and sale by the Company, (ii) such Note, and the Global Security representing such Note, will conform with the terms of the Indenture for such Note, and (iii) upon authentication and delivery of such Global Security, the aggregate initial offering price of all Notes issued under the Indenture will not exceed the amount registered pursuant to the Registration Statement (except for Book-Entry Notes represented by Global Securities authenticated and delivered in exchange for or in lieu of Global Securities pursuant to the Indenture and except for Certificated Notes authenticated and delivered upon registration of transfer of, in exchange for, or in lieu of Certificated Notes pursuant to any such Section). C. Chase will enter a pending deposit message through DTC's Participant Terminal System providing the following settlement information to DTC (which shall route such information to Standard & Poor's Corporation), the Presenting Agent and, upon request, the Trustee: 1. The information set forth in Settlement Procedure "A". 2. Identification as a Fixed Rate Book-Entry Note or a Floating Rate Book-Entry Note. 3. Initial Interest Payment Date for such Book-Entry Note, number of days by which such date succeeds the related Regular Record Date and amount of interest payable on such Interest Payment Date. 4. The Interest Payment Period. 5. CUSIP number of the Global Security representing such Book-Entry Note. 6. Whether such Global Security will represent any other Book-Entry Note (to the extent known at such time). D. To the extent the Company has not already done so, the Company will deliver to Chase a Global Security in a form that has been approved by the Company, the Agents and the Trustee. E. Chase will complete such Book-Entry Note, stamp the appropriate legend, as instructed by DTC, if not already set forth thereon, and, as Trustee, authenticate the Global Security repre- senting such Book-Entry Note. F. DTC will credit such Book-Entry Note to Chase's participant account at DTC. G. Chase will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC to (i) debit such Book-Entry Note to Chase's participant account and credit such Book-Entry Note to the Presenting Agent's participant account and (ii) debit the Presenting Agent's settlement account and credit Chase's settlement account for an amount equal to the price of such Book-Entry Note less the Presenting Agent's commission. The entry of such a deliver order shall constitute a representation and warranty by Chase to DTC that (i) the Global Security representing such Book- Entry Note has been issued and authenticated and (ii) Chase is holding such Global Security pursuant to the Medium-Term Note Certificate Agreement between Chase and DTC. H. The Presenting Agent will enter an SDFS deliver order through DTC's Participant Terminal System instructing DTC (i) to debit such Book-Entry Note to the Presenting Agent's participant account and credit such Book-Entry Note to the participant accounts of the Par- ticipants with respect to such Book- Entry Note and (ii) to debit the settlement accounts of such Participants and credit the settlement account of the Presenting Agent for an amount equal to the price of such Book- Entry Note. I. Transfers of funds in accordance with SDFS deliver orders described in Settlement Procedures "G" and "H" will be settled in accordance with SDFS operating procedures in effect on the settlement date. J. Chase will, upon receipt of funds from the Presenting Agent in accordance with Settlement Procedure "G", [credit to an account of the Company maintained at Chase] [wire transfer to the account of the Company maintained at [bank name, city, state]] funds available for imme- diate use in the amount transferred to Chase in accordance with Settlement Procedure "G". K. The Presenting Agent will confirm the purchase of such Book-Entry Note to the purchaser either by transmitting to the Participants with respect to such Book- Entry Note a confirmation order or orders through DTC's institutional delivery system or by mailing a written confirmation to such purchaser. Settlement For orders of Book-Entry Notes Procedures solicited by any Agent and accepted by Timetable: the Company for settlement on the first Business Day after the sale date, Settlement Procedures "A" through "K" set forth above shall be completed as soon as possible but not later than the respective times (New York City time) set forth below: Settlement Procedure Time A 11:00 A.M. on the sale date B 12:00 Noon on the sale date C 2:00 P.M. on the sale date D 3.00 P.M. on the Business Day before settlement E 9:00 A.M. on settlement date F 10:00 A.M. on settlement date G-H 2:00 P.M. on settlement date I 4:45 P.M. on settlement date J-K 5:00 P.M. on settlement date If a sale is to be settled more than one Business Day after the sale date, Settlement Procedures "A", "B" and "C" shall be completed as soon as practicable but no later than 11:00 A.M. and 12:00 Noon on the first Business Day after the sale date and no later than 2:00 P.M. on the Business Day before the settlement date, respectively. If the initial interest rate for a Floating Rate Book-Entry Note has not been determined at the time that Settlement Procedure "A" is completed, Settlement Procedures "B" and "C" shall be completed as soon as such rate has been determined but no later than 12:00 Noon and 2:00 P.M., respectively, on the Business Day before the settlement date. Settlement Proce- dure "I" is subject to extension in accordance with any extension of Fedwire closing deadlines and in the other events specified in SDFS operating procedures in effect on the settlement date. If settlement of a Book-Entry Note is rescheduled or canceled, Chase will deliver to DTC, through DTC's Participant Terminal System, a cancelation message to such effect by no later than 2:00 P.M. on the Business Day immediately preceding the scheduled settlement date, provided that Chase has received notice of such rescheduling or cancellation by 12:00 p.m. on such Business Day. Failure to Settle: If Chase fails to enter an SDFS deliver order with respect to a Book-Entry Note pursuant to Settlement Procedure "G", Chase may deliver to DTC, through DTC's Participant Terminal System, as soon as practicable, a withdrawal message instructing DTC to debit such Book-Entry Note to Chase's participant account. DTC will process the withdrawal message, provided that Chase's participant account contains a principal amount of the Global Security representing such Book-Entry Note that is at least equal to the principal amount to be debited. If a withdrawal message is processed with respect to all the Book-Entry Notes represented by a Global Security, the Trustee will cancel such Global Security in accordance with the Indenture and so advise the Company and Chase, and Chase will make appropriate en- tries in its records. The CUSIP number assigned to such Global Security shall, in accordance with CUSIP Service Bureau proce- dures, be canceled and not immediately reassigned. If a withdrawal message is processed with respect to one or more, but not all, of the Book-Entry Notes represented by a Global Security, Chase will exchange such Book-Entry Note for two Global Securities, one of which shall represent such Book-Entry Notes and shall be canceled immediately after issuance and the other of which shall represent the other Book-Entry Notes previously represented by the surrendered Global Security and shall bear the CUSIP number of the surrendered Global Security. If the purchase price for any Book-Entry Note is not timely paid to the Participants with respect to such Note by the beneficial purchaser thereof (or a Person, including an indirect participant in DTC, acting on behalf of such purchaser), such Participants and, in turn, the Presenting Agent may enter SDFS deliver orders through DTC's Participant Terminal System reversing the orders entered pursuant to Settlement Procedures "H" and "G", respectively. Thereafter, Chase will deliver the withdrawal message and take the related actions described in the preceding paragraph. If such failure shall have occurred for any reason other than a default by the Presenting Agent or Chase in the performance of its obligations hereunder and under the Agency Agreement, then the Company will reimburse the Presenting Agent or Chase, as applicable, on an equitable basis for the loss of the use of the funds during the period when they were credited to the account of the Company. Notwithstanding the foregoing, upon any failure to settle with respect to a Book- Entry Note, DTC may take any actions in accordance with its SDFS operating procedures then in effect. In the event of a failure to settle with respect to one or more, but not all, of the Book-Entry Notes to have been represented by a Global Security, Chase will provide, in accordance with Settlement Procedure "E", for the au- thentication and issuance of a Global Security representing the other Book-Entry Notes to have been represented by such Global Security and will make appropriate entries in its records. Trustee and Chase Nothing herein shall be deemed to Not to Risk require the Trustee or Chase to risk Funds: or expend its own funds in connection with any payment to the Company, DTC, the Agents or the purchaser, it being understood by all parties that payments made by the Trustee or Chase to the Company, DTC, the Agents or the purchaser shall be made only to the extent that funds are provided to the Trustee or Chase for such purpose. Authenticity The Company will cause the Trustee to of Signatures: furnish the Agents from time to time with the specimen signatures of each of the Trustee's officers, employees or agents who has been authorized by the Trustee to authenticate Book-Entry Notes, but no Agent will have any obligation or liability to the Company or the Trustee in respect of the authenticity of the signature of any officer, employee or agent of the Company or the Trustee on any Book-Entry Note. Payment of Each Agent shall forward to the Expenses: Company, on a monthly basis, a statement of the out-of-pocket expenses incurred by such Agent during that month that are reimbursable to it pursuant to the terms of the Agency Agreement. The Company will remit payment to the Agents currently on a monthly basis. Advertising The Company will determine with the Costs: Agents the amount of advertising that may be appropriate in soliciting offers to purchase the Book-Entry Notes. Advertising expenses will be paid by the Company. Periodic Periodically, Chase will send to Statements the Company a statement setting forth the Chase: principal amount of Book-Entry Notes Outstanding as of that date and setting forth a brief description of any sales of Book-Entry Notes which the Company has advised Chase but which have not yet been settled. PART II Administrative Procedures for Certificated Notes Chase will serve as registrar and transfer agent in connection with the Certificated Notes. Issuance: Each Certificated Note will be dated and issued as of the date of its authentication by Chase. Each Certificated Note will bear an Original Issue Date, which will be (i) with respect to an original Certificated Note (or any portion thereof), its original issuance date (which will be the settlement date) and (ii) with respect to any Certificated Note (or portion thereof) issued subsequently upon transfer or exchange of a Certificated Note or in lieu of a destroyed, lost or stolen Certificated Note, the Original Issue Date of the predecessor Certificated Note, regardless of the date of authentication of such subsequently issued Certificated Note. Registration: Certificated Notes will be issued only in fully registered form without coupons. Transfers and A Certificated Note may be presented for Exchanges: for transfer or exchange at the principal corporate trust office in the City of New York of Chase. Certificated Notes will be exchangeable for other Certificated Notes having identical terms but different authorized denominations without service charge. Certificated Notes will not be ex- changeable for Book-Entry Notes. Maturities: Each Certificated Note will mature on a date not less than nine months after the settlement date for such Note. A Floating Rate Certificated Note will mature only on an Interest Payment Date for such Note. Any Note denominated in Japanese yen will mature on a date not less than one year from the Original Issue Date (as defined below) for such Note. Any Note denominated in Pounds Sterling will mature on a date not less than one year, nor more than five years, after its Original Issue Date. Denominations: The denomination of any Certificated Note denominated in U.S. dollars will be a minimum of $1,000 or any amount in excess thereof that is an integral multiple of $1,000. The authorized denominations of Certificated Notes denominated in any other currency will be specified pursuant to "Settlement Procedures" below. Interest: General. Interest, if any, on each Certificated Note will accrue from the original issue date for the first interest period or the last date to which interest has been paid, if any, for each subsequent interest period, and will be calculated and paid in the manner described in such Note and in the Prospectus, as supplemented by the applicable Pricing Supplement. Unless otherwise specified therein, each payment of interest on a Certificated Note will include interest accrued to but excluding the Interest Payment Date or to but excluding Maturity (other than a Maturity of a Fixed Rate Certificated Note occurring on the 31st day of a month, in which case such payment of interest will include interest accrued to but excluding the 30th day of such month). Regular Record Dates. The Regular Record Dates with respect to any Interest Payment Date for Floating Rate Notes shall be the date fifteen calendar days immediately pre- ceding such Interest Payment Date and for fixed Rate Notes, shall be November 15 or May 15 (in each case, whether or not a Business Day). Fixed Rate Certificated Notes. Unless otherwise specified pursuant to Settlement Procedure "A" below, interest payments on Fixed Rate Certificated Notes will be made semiannually on June 1 and December 1 of each year and at Maturity; provided, however, that if any Interest Payment Date for a Fixed Rate Certificated Note is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Interest Payment Date; provided further, that in the case of a Fixed Rate Certificated Note issued between a Regular Record Date and an Interest Payment Date, the first interest payment will be made on the Interest Payment Date following the next succeeding Regular Record Date. Floating Rate Certificated Notes. Interest payments will be made on Floating Rate Certificated Notes monthly, quarterly, semi-annually or annually. Interest will be payable, in the case of Floating Rate Certificated Notes with a monthly Interest Payment Period, on the third Wednesday of each month; with a quarterly interest Pay- ment Period, on the third Wednesday of March, June, September and December of each year; with a semi-annual Interest Payment Period, on the third Wednesday of the two months specified pursuant to Settlement Procedure "A" below; and with an annual Interest Payment Period, on the third Wednesday of the month specified pursuant to Settlement Procedure "A" below; provided, however, that if an Interest Payment Date for a Floating Rate Certificated Note would otherwise be a day that is not a Business Day with respect to such Floating Rate Certificated Note, such Interest Payment Date will be the next succeeding Business Day with respect to such Floating Rate Certificated Note, except in the case of a Floating Rate Certificated Note for which the Base Rate is LIBOR, if such Business Day is in the next succeeding calendar month, such Interest Payment Date will be the immediately preceding Business Day; and provided further, that in the case of a Floating Rate Certificated Note issued between a Regular Record Date and an interest Payment Date, the first interest payment will be made on the Interest Payment Date following the next succeeding Regular Record Date. Calculation of Fixed Rate Certificated Note. Interest: Interest on Fixed Rate Certificated Notes (including interest for partial periods) will be calculated on the basis of a 360-day year of twelve 30-day months. Floating Rate Certificated Notes. Interest rates on Floating Rate Certificated Notes will be determined as set forth in the form of Notes. Interest on Floating Rate Certificated Notes, except as otherwise set forth therein, will be calculated on the basis of actual days elapsed and a year of 360 days, except that in the case of a Floating Rate Certificated Note for which the Base Rate is Treasury Rate or CMT Rate, interest will be calculated on the basis of the actual number of days in the year. Payments of Interest, if any, on each Certificated Principal and Note will be calculated and paid in Interest: the manner described in such Note and in the Prospectus, as supplemented by the applicable Pricing Supplement. Unless otherwise provided in the Indenture or the Certificated Note, the first payment of interest on any Certificated Note originally issued between a Record Date and an Interest Payment Date will be made on the next succeeding Interest Payment Date. Interest payable at the Maturity of a Certificated Note will be payable to the Person to whom the principal of such Note is payable. Unless other arrangements are made, all interest payments (excluding interest payments made on the Maturity Date) will be made by check mailed to the person entitled thereto as provided above; provided, however, that the holder of $10,000,000 (or the equivalent thereof in other currencies) or more of Certificated Notes with similar tenor and terms will be entitled to receive payment by wire transfer in U.S. dollars. Within 10 days following each Record Date, Chase will inform the Company of the total amount of the interest payments (if then ascertainable) to be made by the Company on the next succeeding Interest Payment Date. Chase will provide monthly to the Company a list of the principal and interest (if then ascertainable) to be paid on Certificated Notes maturing in the next succeeding month. Chase will be responsible for withholding taxes on interest paid on Certificated Notes as required by applicable law. If the Maturity of a Certificated Note is not a Business Day, the payment due on such day shall be made on the next succeeding Business Day and no interest shall accrue on such payment for the period from and after such Maturity. Procedures Company Notice to Trustee Regarding Upon Company's Exercise of Optional Reset. Not Exercise of less than 50 or more than 60 days Optional Reset before an Optional Reset Date as or Optional set forth in a Certificated Note, the Extension of Company will notify Chase whether it is Maturity: exercising its option to reset the Interest Rate or Spread or Spread Multiplier, as the case may be, for such Certificated Note, and if so, (i) the new Interest Rate or Spread or Spread Multiplier, as the case may be, for such Certificated Note during the period from such Optional Reset Date to the next Optional Reset Date as set forth in such Certificated Note or, if there is no such next Optional Reset Date, to the Maturity Date of such Certificated Note (the "Subsequent Interest Period"); and (ii) the provisions, if any, for redemption of such Certificated Note during such Subsequent Interest Period, including the date or dates on which or the period or periods during which such redemption may occur during such Subsequent Interest Period. Company Notice to Trustee Regarding Exercise of Optional Extension of Maturity. If the Company elects to exercise an option, as set forth in a Certificated Note, to extend the Maturity Date of such Note, it will so notify Chase no less than 50 or more than 60 days before the Maturity Date of such Certificated Note, and will further indicate (i) the new Maturity Date; (ii) the Interest Rate or Spread or Spread Multiplier, as the case may be, and (iii) the provisions, if any, for redemption of such Certificated Note during such extension period, including the date or dates on which or the period or periods during which such redemption may occur during such extension period. Trustee Notice to Holders Regarding Company's Exercise of Optional Extension or Reset. Upon receipt of notice from the Company regarding the Company's exercise of either an optional extension of maturity or an optional reset, Chase will mail a notice, first class, postage prepaid, to the Holder not less than 40 days before the Optional Reset Date (in which case a "Reset Notice") or the Maturity Date (in which case an "Extension Notice"), as the case may be, which Reset Notice or Extension Notice shall contain the information required by the terms of the Certificated Note. Trustee Notice to Company Regarding Option to be Repaid. If, after receipt of either a Reset Notice or an Extension Notice, any Holder of a Certificated Note exercises the option for repayment by tendering the Certificated Note to be repaid as set forth in the Certificated Note, Chase shall give notice to the Company not less than 22 days before the Optional Reset Date or the old Maturity Date, as the case may be, of the principal amount of Certificated Notes to be repaid on such Optional Reset Date or old Maturity Date, as the case may be. Company Notice Regarding New Interest Rate or New Spread or Spread Multiplier. If the Company elects to revoke the Interest Rate or Spread or Spread Multiplier and establish a higher interest rate or Spread or Spread Multiplier for an Optional Reset Period or extension period, as the case may be, it shall, not less than 20 days before such Optional Reset Date or old Maturity Date, so notify Chase. Chase will immediately thereafter notify the Holder of such Certificated Note, by first class mail, postage prepaid of the new Interest Rate or Spread or Spread Multiplier applicable to such Certificated Note. Trustee Notice to Company Regarding Holders Revocation of Option to be Repaid. If, after the Holder has tendered any Certificated Notes for repayment pursuant to an Extension Notice or an Optional Reset Notice, such Holder then revokes such tender for repayment, Chase shall give notice to the Company not less than five days prior to the Maturity Date or Optional Reset Date, as the case may be, of such revocation and of the principal amount of Certificated Notes for which tender for repayment has been revoked. Deposit of Repayment Price. On or before any old Maturity Date where the Maturity has been extended, and on or before an Optional Reset Date, the Company shall deposit with Chase an amount of money sufficient to pay the principal amount, plus interest accrued to such old Maturity Date or Optional Reset Date, as the case may be, for all the Certificated Notes or portions thereof which are to be repaid on such old Maturity Date or Optional Reset Date, as the case may be. Chase will use such money to repay such Certificated Notes pursuant to the terms set forth in such Notes. Procedures Company Notice to Trustee Regarding Upon Company's Exercise of Optional Redemption. Exercise of At least 45 days prior to the date on Optional which it intends to redeem a Redemption: Certificated Note, the Company will notify Chase that it is exercising such option with respect to such Certificated Note on such date. Trustee Notice to Holders Regarding Company's Exercise of Optional Redemption. After receipt of notice that the Company is exercising its option to redeem a Certificated Note, Chase will, at least 30 days before the redemption date for such Certificated Note, mail a notice, first class, postage prepaid, to the Holder of such Certificated Note informing such Holder of the Company's exercise of such option with respect to such Certificated Note. Deposit of Redemption Price. On or before any redemption date, the Company shall deposit with Chase an amount of money sufficient to pay the redemption price, plus interest accrued to such redemption date, for all the Certificated Notes or portions thereof and which are to be repaid on such redemption date. Chase will use such money to repay such Certificated Notes pursuant to the terms set forth in such Notes. Payments of Trustee Notice to Company of Option Principal and to be Repaid. Upon receipt of notice Interest Upon of exercise of the option for repayment and the Exercise of Certificated Notes so to be repaid as set forth Optional Re- in such Notes, Chase shall(unless payment such notice was received pursuant (Except to the Company's exercise of an optional Pursuant to reset or an optional extension of maturity, Company's in each of which cases the relevant Exercise procedures set forth above are to be of Optional followed) give notice to the Company not Reset or less than 20 days prior to each Optional Optional Repayment Date of such Optional Repayment Extension): Date and of the principal amount of Certificated Notes to be repaid on such Optional Repayment Date. Deposit of Repayment Price. On or prior to any Optional Repayment Date, the Company shall deposit with Chase an amount of money sufficient to pay the optional repayment price, and accrued interest thereon to such date, of all the Certificated Notes or portions thereof which are to be repaid on such date. Chase will use such money to repay such Certificated Notes pursuant to the terms set forth in such Notes. Procedure for The Company and the Agents will Rate Setting discuss from time to time the and Posting: aggregate principal amount of, the issuance price of, and the interest rates to be borne by, Notes that may be sold as a result of the solicitation of orders by the Agents. If the Company decides to set prices of, and rates borne by, any Notes in respect of which the Agents are to solicit orders (the setting of such prices and rates to be referred to herein as "posting") or if the Company decides to change prices or rates previously posted by it, it will promptly advise the Agents of the prices and rates to be posted. Acceptance and Unless otherwise instructed by the Rejection of Company, each Agent will advise the Company Orders: promptly by telephone of all orders to purchase Certificated Notes received by such Agent, other than those rejected by it in whole or in part in the reasonable exercise of its discretion. Unless otherwise agreed by the Company and the Agents, the Company has the sole right to accept orders to purchase Certificated Notes and may reject any such orders in whole or in part. Before accepting any order to purchase a Certificated Note to be settled in less than three Business Days, the Company shall verify that Chase will have adequate time to prepare and authenticate such Note. Preparation of If any order to purchase a Pricing Certificated Note is accepted by or on Supplement: behalf of the Company, the Company will prepare a pricing supplement (a "Pricing Supplement") reflecting the interest rates and other terms of such Certified Note and will arrange to have ten copies thereof filed with the Commission in accordance with the applicable paragraph of Rule 424(b) under the Act and will supply at least ten copies thereof (and additional copies if requested) to the Agent which presented the order (the "Presenting Agent"). The Presenting Agent will cause a Prospectus and Pricing Supplement to be delivered to the purchaser of such Certificated Note. In each instance that a Pricing Supplement is prepared, the Presenting Agent will affix the Pricing Supplement to Pros- pectuses prior to their use. Outdated Pricing Supplements (other than those retained for files) will be destroyed. Suspension of The Company reserves the right, in Solicitation; its sole discretion, to instruct the Amendment or Agents to suspend at any time for any Supplement: period of time or permanently, the solicitation of orders to purchase Certificated Notes. Upon receipt of such instructions, the Agents will forthwith suspend solicitation until such time as the Company has advised them that such solicitation may be resumed. In the event that at the time the Company suspends solicitation of purchases there shall be any orders outstanding for settlement, the Company will promptly advise the Agents and Chase whether such orders may be settled and whether copies of the Prospectus as in effect at the time of the suspension, together with the appro- priate Pricing Supplement, may be delivered in connection with the settlement of such orders. The Company will have the sole responsibility for such decision and for any arrangements that may be made in the event that the Company determines that such orders may not be settled or that copies of such Prospectus may not be so delivered. If the Company decides to amend or supplement the Registration Statement or the Prospectus, it will promptly advise the Agents and furnish the Agents with the proposed amendment or supplement and with such certificates and opinions as are required, all to the extent required by and in accordance with the terms of the Agency Agreement. Subject to the provisions of the Agency Agreement, the Company may file with the Commission any supplement to the Prospectus relating to the Notes. The Company will provide the Agents and Chase with copies of any such supplement, and confirm to the Agents that such supplement has been filed with the Commission pursuant to the applicable paragraph of Rule 424(b). Procedure for When the Company has determined to Rate Changes: change the interest rates of Certificated Notes being offered, it will promptly advise the Agents and the Agents will forthwith suspend solicitation of orders. The Agents will telephone the Company with recommendations as to the changed interest rates. At such time as the Company has advised the Agents of the new interest rates, the Agents may resume solicitation of orders. Until such time only "indica- tions of interest" may be recorded. Delivery of A copy of the Prospectus and a Pricing Prospectus: Supplement relating to a Certificated Note must accompany or precede the earliest of any written offer of such Certificated Note, confirmation of the purchase of such Certificated Note and payment for such Certificated Note by its purchaser. If notice of a change in the terms of the Certificated Notes is received by the Agents between the time an order for a Certificated Note is placed and the time written confirmation thereof is sent by the Presenting Agent to a customer or his agent, such confirmation shall be accompanied by a Prospectus and Pricing Supplement setting forth the terms in effect when the order was placed. Subject to "Suspension of Solicitation; Amendment or Supplement" above, the Presenting Agent will deliver a Prospectus and Pricing Supplement as herein described with respect to each Certificated Note sold by it. The Company will make such delivery if such Certificated Note is sold directly by the Company to a purchaser (other than any Agent). Confirmation: For each order to purchase a Certificated Note solicited by any Agent and accepted by or on behalf of the Company, the Presenting Agent will issue a confirmation to the purchaser, with a copy to the Company, setting forth the details set forth above and delivery and payment instructions. Settlement: The receipt by the Company of immediately available funds in exchange for an authenticated Certificated Note delivered to the Presenting Agent and the Presenting Agent's delivery of such Certificated Note against receipt of immediately available funds shall, with respect to such Certificated Note, constitute "settlement". All orders accepted by the Company will be settled on the third Business Day following the date of sale pursuant to the timetable for settlement set forth below, unless the Company and the purchaser agree to settlement on another day which shall be no earlier than the next Business Day following the date of sale. Settlement Settlement Procedures with regard to Procedures: each Certificated Note sold by the Company through any Agent, as agent, shall be as follows: A. The Presenting Agent will advise the Company by telephone of the following settlement information, in time for Chase to prepare and authenticate the required Note: 1. Name in which such Certificated Note is to be registered ("Registered Owner"). 2. Address of the Registered Owner and address for payment of principal and interest. 3. Taxpayer identification number of the Registered Owner (if available). 4. Principal amount. 5. Maturity Date. 6. In the case of a Fixed Rate Certificated Note, the interest rate or, in the case of a Floating Rate Certificated Note, the initial interest rate (if known at such time), Base Rate, Index Maturity, Interest Reset Period, Interest Reset Dates, Spread or Spread Multiplier (if any), Minimum Interest Rate (if any) and Maximum Interest Rate (if any). 7. Interest Payment Dates and the Interest Payment Period. 8. Specified Currency and whether the option to elect payment in a Specified Currency applies and if the Specified Currency is not U.S. dollars, the authorized denominations. 9. Redemption, repayment or extension provisions, if any. 10. Settlement date. 11. Price (including currency). 12. Presenting Agent's commission, determined as provided in Section 2 of the Agency Agreement. 13. Whether such Certificated Note is issued at an original issue discount, and, if so, the total amount of OID, the yield to maturity and the initial accrual period OID. 14. All other information needed to complete a Certificated Note. B. The Company will advise Chase by telephone (confirmed in writing at any time on the sale date) or electronic transmission of the information set forth in Settlement Procedure "A" above and the name of the Presenting Agent. C. The Company will deliver to Chase a pre-printed four-ply packet for such Certificated Note, which packet will contain the following documents in forms that have been approved by Company, the Agents and the Trustee: 1. Certificated Note with customer confirmation. 2. Stub One - For Trustee. 3. Stub Two - For the Presenting Agent. 4. Stub Three - For the Company. D. Chase will complete such Certificated Note and, as Trustee, will authenticate such Certificated Note and deliver it (with the confirmation) and Stubs One and Two to the Presenting Agent, all in accordance with the written directions (or oral instructions confirmed in writing on the next Business Day) of the Company, and the Presenting Agent will acknowledge receipt of the Note by stamping or otherwise marking Stub One and returning it to Chase. Such delivery will be made only against such acknowledgment of receipt. In the event that the instructions given by the Presenting Agent for payment to the account of the Company are revoked, the Company will as promptly as possible wire transfer to the account of the Presenting Agent an amount of immediately available funds equal to the amount of such payment made. E. The Presenting Agent will deliver such Certificated Note (with the confirma- tion) to the customer against payment in immediately payable funds. The Presenting Agent will obtain the acknowledgement of receipt of such Cer- tificated Note by retaining Stub Two. F. Chase will send Stub Three to the Company by first-class mail. Settlement For orders of Certificated Notes Procedures solicited by any Agent, as agent, and Timetable: accepted by the Company, Settlement Procedures "A" through "F" set forth above shall be completed on or before the respective times (New York City time) set forth below: Settlement Procedure Time A 2:00 P.M. on the Business Day before settlement B-C 3:00 P.M. on the Business Day before settlement D 2:15 P.M. on settlement date E 3:00 P.M. on settlement date F 5:00 P.M. on settlement date Failure to If a purchaser fails to accept Settle: delivery of and make payment for any Certificated Note, the Presenting Agent will notify the Company and Chase by tele- phone and return such Certificated Note to the Trustee. Upon receipt of such notice, the Company will immediately wire transfer to the account of the Presenting Agent an amount equal to the amount previously cre- dited to the account of Company in respect of such Certificated Note. Such wire transfer will be made on the settlement date, if possible, and in any event not later than the Business Day following the settlement date. If the failure shall have occurred for any reason other than a default by the Presenting Agent or Chase in the performance of its obligations hereunder and under the Agency Agreement, then the Company will reimburse the Presenting Agent or Chase, as appropriate, on an equitable basis for its loss of the use of the funds during the period when they were credited to the account of the Company. Immediately upon receipt of the Certificated Note in respect of which such failure occurred, the Trustee will cancel such Certificated Note in accordance with the Indenture and so advise the Company and Chase, and Chase will make appropriate entries in its records. Trustee Not to Nothing herein shall be deemed to Risk Funds: require the Trustee or Chase to risk or expend its own funds in connection with any payment to the Company, the Agents or the purchaser, it being understood by all parties that payments made by the Trustee or Chase to the Company, the Agents or the purchaser shall be made only to the extent that funds are provided to the Trustee or Chase for such purpose. Authenticity The Company will cause the Trustee to of Signatures: furnish the Agents from time to time with the specimen signatures of each of the Trustee's officers, employees or agents who has been authorized by the Trustee to authenticate Certificated Notes, but no Agent will have any obligation or liability to the Company or the Trustee in respect of the authenticity of the signature of any officer, employee or agent of the Company or the Trustee on any Certificated Note. Payment of Each Agent shall forward to the Expenses: Company, on a monthly basis, a statement of the out-of-pocket expenses incurred by such Agent during that month that are reimbursable to it pursuant to the terms of the Agency Agreement. The Company will remit payment to the Agents currently on a monthly basis. Advertising The Company will determine with the Agents Costs: the amount of advertising that may be appropriate in soliciting orders to purchase the Certificated Notes. Advertising expenses will be paid by the Company. Periodic Periodically, Chase will send to Statements the Company a statement setting forth the from Chase: principal amount of Certificated Notes Outstanding as of that date and setting forth a brief description of any sales of Certificated Notes which the Company has advised Chase but which have not yet been settled. EX-4 3 NOTE NUMBER FX- AGENT'S NAME TEMPLE-INLAND INC. PRINCIPAL AMOUNT AND ORIGINAL ISSUE SPECIFIED CURRENCY TRADE DATE AGENT'S COMMISSION DATE MATURITY DATE PRICE INTEREST RATE TAXPAYER ID (100% UNLESS OR SOC. SEC. OTHERWISE INDICATED) NO OF PURCHASER TRANSFERRED NAME AND ADDRESS OF REGISTEREED OWNER FIXED RATE MEDIUM-TERM NOTE CONFIRMATION Trustee The Chase Manhattan Bank CUSTOMER'S COPY RETAIN FOR TAX PURPOSES THE TIME OF THE TRANSACTON WILL BE FURNISHED UPON REQUEST OF THE CUSTOMER PLEASE SIGN AND RETURN THE ENCLOSED RECEIPT SEE REVERSE SIDE - ----------------------------------------------------------------------------- UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. REGISTERED TEMPLE-INLAND INC. PRINCIPAL AMOUNT No. FX- CUSIP: MEDIUM-TERM NOTE, SERIES F Due from Nine Months or More from Date of Issue IF APPLICABLE THE "TOTAL AMOUNT OF OID", "YIELD TO MATURITY" AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. Issue Price: Total Amount of OID: Specified Currency Interest Rate: Yield to Maturity: [] U.S. Dollars Original Issue Date: Initial Accrual Period (OID): [] Austrian Dollars (plus or minus) Maturity Date: Option to receive payments in [] Canadian Dollars U.S. Dollars: Yes [] No [] (Only applicable if Specified Currency is other than U.S. Dollars) Initial Redemption Other Provisions : [] Danish Kroner Date: [] Italian Lire [] New Zealand Dollars [] European Currency Units [] Other: If an Initial Redemption Date is set forth above, the Optional Redemption Price shall initially be % of the principal amount of this Note to be redeemed and shall decline at each anniversary of the Initial Redemption Date by % of the principal amount to be redeemed until the Optional Redemption Price is 100% of such principal amount. TEMPLE-INLAND INC. , a Delaware corporation (herein called the "Company"), for value received, hereby promises to pay to , or registered assigns, the principal sum of________________________________ Principal Amount on the Maturity Date specified above at the office or agency of the Company in the Borough of Manhattan, The City of New York, State of New York, and such other location or locations as may be provided for pursuant to the Indenture referred to on the reverse hereof, in such coin or currency specified above as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest semi-annually on and of each year and on the Maturity Date (each an "Interest Payment Date"), commencing on the next Interest Payment Date succeeding the Original Issue Date specified above on said principal sum at the Interest Rate specified above from the most recent date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for, from the Original Issue Date, until the principal hereof is paid or duly provided for; provided, however, that any payment of principal or interest to be made on an Interest Payment Date or on the Maturity Date that is not a Business Day shall be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date or on the Maturity Date, as the case may be, and no additional interest shall accrue as a result of such delayed payment. For purposes of this Note, "Business Day" means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in New York, New York or, if this Note is denominated in a currency other than U.S. dollars, ________________________________________________________ (or if this Note is Principal Financial Center of Country of Specified Currency denominated in European Currency Units, Brussels, Belgium). The interest so payable, and punctually paid or duly provided for, on any _________ or ________ will be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the _______ or ___________ (whether or not a Business Day) next preceding such or (a "Record Date") and interest payable on the Maturity Date will be payable to the person to whom principal is payable, except that in the case this Note is issued between a Record Date and the initial Interest Payment Date relating to such Record Date, interest for the period beginning on the Original Issue Date and ending on such initial Interest Payment Date shall be paid on the Interest Payment Date following the next succeeding Record Date to the Holder on such next succeeding Record Date. Payment of the principal of and interest on this Note due at Maturity will be paid, upon presentation of this Note, in immediately available funds (unless this Note is denominated in a currency other than U.S. dollars and the person in whose name this Note is registered has not made appropriate arrangements). At the option of the Company, payment of interest on this Note due on any other Interest Payment Date will be made by check and mailed to the address of the person entitled thereto as such address shall appear in the Security Register. Payment of the principal of and interest on this Note may also be made by wire transfer to an account maintained by the Depository for such purpose. A Holder of $10,000,000 or more in aggregate principal amount of Certificated Notes of like tenor and terms will be entitled to receive payment by wire transfer of immediately available funds, but only if appropriate wire transfer instructions shall have been received in writing by the Trustee no later than 10 Business Days prior to the applicable Interest Payment Date. At the option of the Company, payment of interest not punctually paid or duly provided for shall be payable as provided in the Indenture referred to on the reverse hereof. Interest will be computed on the basis of a 360-day year of twelve 30-day months. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE. This Note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by or on behalf of the Trustee under the Indenture referred to on the reverse hereof. IN WITNESS WHEREOF, Temple-Inland Inc. has caused this instrument to be signed in its name by the facsimile signatures of its duly authorized officers, and has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon. Dated: TRUSTEE'S CERTIFICATE OF AUTHENTICATION TEMPLE-INLAND INC. This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture By: THE CHASE MANHATTAN BANK President As Trustee By: Attest: Authorized Officer Secretary ICN 0001- [FORM OF REVERSE OF NOTE] TEMPLE-INLAND INC. MEDIUM-TERM NOTE, SERIES F This note is one of a duly authorized issue of debentures, notes, bonds, or other evidences of indebtedness of the Company (herein called the "Securities") of the series hereinafter specified, all issued or to be issued under and pursuant to an indenture dated as of September 1, 1986, as amended and supplemented (herein called the "Indenture"), duly executed and delivered by the Company to The Chase Manhattan Bank, formerly known as Chemical Bank, as Trustee (hereinafter called the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties, and immunities thereunder of the Trustee, the Company and the Holders of the Securities. The Securities may be issued in one or more series, which different series (and which Securities issued within each series) may be issued in various aggregate principal amounts, may mature at different times, may bear interest, if any, at different rates, may be subject to different redemption provisions, if any, may be subject to different sinking, purchase, or analogous funds, if any, and may otherwise vary as in the Indenture provided. This Note is one of a series designated as "Medium-Term Notes, Series F, due from nine months to thirty years from date of issue" of the Company, limited in aggregate principal amount to U.S. $500,000,000, or the substantial equivalent thereof in the Specified Currency. References herein to "Notes" shall mean the Notes of Series F. In case an Event of Default, as defined in the Indenture, with respect to the Notes shall have occurred and be continuing, the principal hereof (or, if this Note is an Original Issue Discount Security, such portion of the principal amount as may be specified pursuant to the Indenture) and accrued interest hereon, may be declared and upon such declaration shall become due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of a majority in principal amount at maturity of the Securities at the time outstanding of each series to be affected, evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or modifying in any manner the rights of the Holders of the Securities; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each outstanding Security affected thereby, (i) change the Maturity of the principal of, or the Stated Maturity of any premium on, or any installment of interest on, any Security, or reduce the principal amount thereof or the interest or any premium thereon, or change the method of computing the amount of principal thereof or interest thereon on any date, or change any Place of Payment, or the coin or currency or currency unit in which any Security or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Maturity or the Stated Maturity thereof (or, in the case of redemption or repayment, on or after the Redemption Date or the Repayment Date), or (ii) reduce the percentage in principal amount of the outstanding Securities of any series, the consent of the Holders of which is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver, or (iii) modify certain other provisions of the Indenture. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, the Holders of a majority in principal amount at Maturity of the Securities of such series at the time outstanding may on behalf of the Holders of all of the Securities of such series waive any past default or Event of Default and its consequences, except a default in the payment of the principal of (or premium, if any) or interest on any Security of such series or in respect of certain other covenants or provisions of the Indenture. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not any notation of such consent or waiver is made upon this Note or such other Notes. No reference herein to the Indenture and no reference to any provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest, if any, on this Note at the place, at the respective times, at the rate and (except as provided in the Indenture in the case of Securities payable in currencies other than U.S. Dollars that are not available to the Company due to circumstances beyond its control) in the currency herein prescribed. The Notes are issuable in registered form without coupons in the minimum denomination of U.S. $1,000 and in integral multiples of U.S. $1,000 in excess thereof or 1,000 units of the Specified Currency. This Note may be exchanged by the Holder hereof without charge except for any tax or other governmental charge imposed in connection therewith, for a like aggregate principal amount of Notes of other authorized denominations, having the same terms as this Note, in the manner and subject to the limitations provided in the Indenture at the Corporate Trust Office. If an Initial Redemption Date is specified on the face hereof, this Note may be redeemed at the option of the Company as a whole, or from time to time in part, on any date, if any, after the Initial Redemption Date specified on the face hereof and prior to the Maturity Date, upon mailing a notice of such redemption not less than thirty nor more than sixty days prior to the date fixed for redemption to the Holders of Notes at their last registered addresses, all as provided in the Indenture, at the Optional Redemption Prices, if any, specified on the face hereof (expressed in percentages of the principal amount) together in each case with accrued interest to the date fixed for redemption. If so specified on the face hereof, the Holder of this Note shall be entitled to receive payment in U.S. Dollars at the Exchange Rate determined as set forth in the Indenture by notifying the Trustee at the time and in the manner described therein. Costs, if any, associated with the conversion of the Specified Currency into U.S. dollars shall be borne by such Holder through deduction from payments required to be made to such Holder on this Note. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the registered Holder hereof as the owner of this Note for the purpose of receiving payment of the principal hereof (and premium, if any), and (subject to certain provisions relating to interest) interest hereon and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company nor the Trustee nor any agent of the Company or the Trustee shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of (or premium, if any) or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer, director or employee, as such, past, present or future, of the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as a part of the consideration for the issue hereof, expressly waived and released. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them therein. This Note shall be governed by and construed in accordance with the law of the State of New York. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE _____________________________________________________________________________ PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCUDING ZIP CODE OF ASSIGNEE _____________________________________________________________________________ the within Note and all rights thereunder, hereby irrevocably constituting and appointing _____________________________________________________________________________ to transfer said Note on the books of the Company, with full power of substitution in the premises. Dated: _________________ Signature: _____________________________ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement, or any change whatever. EX-4 4 NOTE NUMBER FL:- AGENT'S NAME TEMPLE-INLAND INC. PRINCIPAL AMOUNT AND ORIGINAL ISSUE SPECIFIED CURRENCY TRADE DATE AGENT'S COMMISSION DATE MATURITY DATE PRICE BASE RATE AND TAXPAYER ID OR (100% UNLESS INDEX MATURITY SOC. SEC. NO. OTHERWISE INDICATED) OF PURCHASER TRANSFERRED NAME AND ADDRESS OF REGISTEREED OWNER FLOATING RATE MEDIUM-TERM NOTE CONFIRMATION Trustee The Chase Manhattan Bank CUSTOMER'S COPY RETAIN FOR TAX PURPOSES THE TIME OF THE TRANSACTON WILL BE FURNISHED UPON REQUEST OF THE CUSTOMER PLEASE SIGN AND RETURN THE ENCLOSED RECEIPT SEE REVERSE SIDE - -------------------------------------------------------------------------------- UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. REGISTERED TEMPLE-INLAND INC. PRINCIPAL AMOUNT No. FL- CUSIP: MEDIUM-TERM NOTE, SERIES F Due from Nine Months or More from Date of Issue IF APPLICABLE THE "TOTAL AMOUNT OF OID", "YIELD TO MATURITY" AND "INITIAL ACCRUAL PERIOD OID" (COMPUTED UNDER THE APPROXIMATE METHOD) BELOW WILL BE COMPLETED SOLELY FOR THE PURPOSES OF APPLYING THE FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES. Issue Price: Initial Interest Rate: Original Issue Specified Currency Discount: Index Maturity: Base Rate: Maturity Date: [] U.S. Dollars Spread Total Amount of OID: Initial (plus or minus): Redemption Date: [] Austrian Dollars Interest Payment Yield to Maturity: Spread Multiplier: [] Canadian Dollars Period: Interest Reset Initial Accrual Maximum Interest Rate: [] Danish Kroner Period: Period OID: Interest Payment Option to receive payments in Minimum Interest Rate: Dates: U.S. Dollars: Yes [] No [] (Only applicable if Specified Currency is other than U.S. Dollars) [] Italian Lire Interest Determination Dates: Interest Reset Dates: [] New Zealand Dollars Calculation Agent: Reporting Service: Index Currency: [] European Currency Units Other provisons: [] Other: If an Initial Redemption Date is set forth above, the Optional Redemption Price shall initially be % of the principal amount of this Note to be redeemed and shall decline at each anniversary of the Initial Redemption Date by % of the principal amount to be redeemed until the Optional Redemption Price is 100% of such principal amount. TEMPLE-INLAND INC. , a Delaware corporation (herein called the "Company"), for value received, hereby promises to pay to , or registered assigns, the principal sum of __________________________________ Principal Amount on the Maturity Date specified above at the office or agency of the Company in the Borough of Manhattan, The City of New York, State of New York, and such other location or locations as may be provided for pursuant to the Indenture referred to on the reverse hereof, in such coin or currency specified above as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest at a rate per annum equal to the Initial Interest Rate specified above from the Original Issue Date until the first Interest Reset Date specified above following the Original Issue Date specified above and thereafter at a rate determined in accordance with the provisions on the reverse hereof under the heading "Determination of Commercial Paper Rate," Determination of LIBOR," or "Determination of Treasury Rate" or as otherwise provided herein depending upon whether the Base Rate specified above is the Commercial Paper Rate, LIBOR, the Treasury Rate, or another Base Rate, respectively, until the principal hereof is paid or duly provided for. The Company will pay interest as specified above under "Interest Payment Period," commencing with the first Interest Payment Date specified above next succeeding the Original Issue Date, and on the Maturity Date. If any Interest Payment Date (other that the Maturity Date) would otherwise be a day that is not a Business Day, such Interest Payment Date will be postponed to the next succeeding day that is a Business Day, except that in the case of a LIBOR Note, if such Business Day falls in the next succeeding calendar month, such Interest Payment date will be the immediately preceding Business Day. If the Maturity Date falls on a day that is not a Business Day, the required payment of principal, premium, if any, and/or interest will be made on the next succeeding Business Day as if made on the date such payment was due, and no interest shall accrue on such payment for the period from and after the Maturity Date to the date of such payment on the next succeeding Business Day. For purposes of this Note, "Business Day" means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in New York, New York or, if this Note is denominated in a currency other than U.S. dollars, _______________________________________________________________ (or, if the Base Principal Financial Center of Country of Specified Currency Rate is LIBOR, the City of London or, if this Note is denominated in European Currency Units, Brussels, Belgium). Notwithstanding the foregoing, if the Base Rate in respect of this Note is LIBOR, as specified above, and such next succeeding Business Day falls in the next calendar month, such Interest Payment Date shall be the next preceding Business Day. Except as provided above and in the Indenture referred to on the reverse hereof, interest payments will be made on the Interest Payment Dates specified above. Interest on this Note will accrue from the most recent date to which interest has been paid or duly provided for or, if no interest has been paid or duly provided for, from the Original Issue Date, until the principal hereof is paid or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the person in whose name this Note (or one or more predecessor Notes) is registered at the close of business on the fifteenth calendar day (whether or not a Business Day) next preceding such Interest Payment Date (a "Record Date") and interest payable on the Maturity Date will be payable to the person to whom principal is payable, except that in the case this Note is issued between a Record Date and the initial Interest Payment Date relating to such Record Date, interest for the period beginning on the Original Issue Date and ending on such initial Interest Payment Date shall be paid on the Interest Payment Date following the next succeeding Record Date to the Holder on such next succeeding Record Date. Payment of the principal of and interest on this Note due at Maturity will be paid, upon presentation of this Note, in immediately available funds (unless this Note is denominated in a currency other than U.S. dollars and the person in whose name this Note is registered has not made appropriate arrangements). At the option of the Company, payment of interest on this Note due on any other Interest Payment Date will be made by check and mailed to the address of the person entitled thereto as such address shall appear in the Security Register. Payment of the principal of and interest on this Note may also be made by wire transfer to an account maintained by the Depository for such purpose. A Holder of $10,000,000 or more in aggregate principal amount of Certificated Notes of like tenor and terms will be entitled to receive payment by wire transfer of immediately available funds, but only if appropriate wire transfer instructions shall have been received in writing by the Trustee no later than 10 Business Days prior to the applicable Interest Payment Date. Any interest not punctually paid or duly provided for shall be payable as provided in the Indenture referred to on the reverse hereof. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF AND SUCH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS THOUGH FULLY SET FORTH AT THIS PLACE. This note shall not be valid or become obligatory for any purpose until the certificate of authentication hereon shall have been manually signed by or on behalf of the Trustee under the Indenture referred to on the reverse hereof. IN WITNESS WHEREOF, Temple-Inland Inc. has caused this instrument to be signed in its name by the facsimile signatures of its duly authorized officers, and has caused a facsimile of its corporate seal to be affixed hereunto or imprinted hereon. Dated: TRUSTEE'S CERTIFICATE OF AUTHENTICATION TEMPLE-INLAND INC. This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture By: THE CHASE MANHATTAN BANK President As Trustee By: Attest: Authorized Officer Secretary ICN 0001- [FORM OF REVERSE OF NOTE] TEMPLE-INLAND INC. MEDIUM-TERM NOTE, SERIES F This note is one of a duly authorized issue of debentures, notes, bonds or other evidences of indebtedness of the Company (herein called the "Securities") of the series hereinafter specified, all issued or to be issued under and pursuant to an indenture dated as of September 1, 1986, as amended and supplemented (herein called the "Indenture"), duly executed and delivered by the Company to The Chase Manhattan Bank, formerly known as Chemical Bank, as Trustee (hereinafter called the "Trustee"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities. The Securities may be issued in one or more series, which different series (and which Securities issued within each series) may be issued in various aggregate principal amounts, may mature at different times, may bear interest, if any, at different rates, may be subject to different redemption provisions, if any, may be subject to different sinking, purchase or analogous funds, if any, and may otherwise vary as in the Indenture provided. This Note is one of a series designated as "Medium-Term Notes, Series F, due from nine months to thirty years from date of issue" of the Company, limited in aggregate principal amount to U.S. $500,000,000, or the substantial equivalent thereof in the Specified Currency. References herein to "Notes" shall mean the Notes of Series F. The interest payable hereon on each Interest Payment Date will include accrued interest from and including the Original Issue Date or from and including the last date to which interest has been paid, as the case may be, to but excluding such Interest Payment Date; provided, however, that if the interest rate is reset weekly, interest payments shall be the amount of interest accrued from and including the Original Issue Date or from and excluding the last date to which interest has been paid, as the case may be, to and including the Record Date immediately preceding such Interest Payment Date, except that at Maturity, the interest payable will include interest accrued to, but excluding the Maturity Date or date of redemption. Accrued interest will be calculated by multiplying the principal amount hereof by an accrued interest factor. Such accrued interest factor is computed by adding the interest factor calculated for each day in such period from and including the date of issue, or from and including the last date to which interest has been paid or duly provided for, to but excluding the date for which accrued interest is being calculated. Unless otherwise specified on the face hereof, the interest factor (expressed as a decimal rounded upwards, if necessary, to the nearest one hundred-thousandth of a percent, with five one-millionths of a percentage point rounded upward) for each such day is computed by dividing the interest rate applicable to such date by 360 (or, in the case of the Treasury Rate Notes, by the actual number of days in the year). The rate of interest in effect on any date will be (a) if such day is an Interest Reset Date, the interest rate pertaining to such Interest Reset Date, or (b) if such day is not an Interest Reset Date, the interest rate determined as of the Interest Determination Date pertaining to the immediately preceding Interest Reset Date; provided, however, that the interest rate in effect from the Original Issue Date to but excluding the first Interest Reset Date will be the Initial Interest Rate. Notwithstanding the foregoing, the interest rate hereon shall not be greater than the Maximum Interest Rate, if any, or less than the Minimum Interest Rate, if any, shown on the face hereof. In addition, the interest rate hereon shall in no event be higher than the maximum rate permitted by New York law as the same may be modified by United States law of general application. Commencing with the first Interest Reset Date specified on the face hereof following the Original Issue Date and thereafter upon each succeeding Interest Reset Date specified on the face hereof the rate at which interest on this Note is payable shall be adjusted as provided herein; provided, however, that if any Interest Reset Date would otherwise be a day that is not a Business Day, such Interest Reset Date shall be the next succeeding Business Day, except that if such Note is a LIBOR Note and the next succeeding Business Day falls in the next succeeding calendar month, such Interest Reset Date shall be the immediately preceding Business Day. Subject to applicable provisions of law and except as specified herein, on each Interest Reset Date, the rate of interest shall be the rate determined in accordance with the provisions of the applicable heading below. Unless otherwise specified on the face hereof, the "Calculation Date," if applicable, pertaining to any Interest Determination Date will be the earlier of (i) the tenth calendar day after such Interest Determination Date or, if such day is not a Business Day, the next succeeding Business Day or (ii) the Business Day immediately preceding the applicable Interest Payment Date or the date of Maturity, as the case may be. Determination of CD Rate. If the Base Rate is the CD Rate, as indicated on the face hereof the "CD Rate" for each Interest Reset Period shall be the rate on the CD Rate Interest Determination Date for negotiable certificates of deposit having the Index Maturity designated on the face hereof as published by the Board of Governors of the Federal Reserve System in "Statistical Release H.15(519), Selected Interest Rates" ("H.15(519)"), or any successor publication of the Board of Governors of the Federal Reserve System, under the heading "CDs (Secondary Market)." If such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date pertaining to such Interest Determination Date, then the "CD Rate" for such Interest Reset Period will be the rate on such Interest Rate Determination Date for negotiable certificates of deposit of the Index Maturity designated on the face hereof as published by the Federal Reserve Bank of New York in its daily statistical release, "Composite 3:30 p.m. Quotations for U.S. Government Securities" ("Composite Quotations") under the heading "Certificates of Deposit." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or Composite Quotations, then the "CD Rate" for such Interest Reset Period will be calculated by the Calculation Agent and will be the arithmetic mean of the secondary market offered rates as of 10:00 a.m., New York City time, on such Interest Determination Date of three leading nonbank dealers in negotiable U.S. dollar certificates of deposit in The City of New York selected by the Calculation Agent for negotiable certificates of deposit of major United States money center banks of the highest credit standing (in the market for negotiable certificates of deposit) with a remaining maturity closest to the Index Maturity designated on the face hereof in a denomination of $5,000,000; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting offered rates as mentioned in this sentence, the "CD Rate" for such Interest Reset Period will be the same as the CD Rate for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). The interest rate for each Interest Reset Date shall be the CD Rate applicable to such Interest Reset Date plus or minus the Spread or Spread Multiplier, if any, as indicated on the face hereof; provided, however, that the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate. For a CD Rate Note, the CD Rate Interest Determination Date will be the second Business Day preceding the Interest Reset Date. Determination of Commercial Paper Rate. If the Base Rate is the Commercial Paper Rate, as indicated on the face hereof, the "Commercial Paper Rate," with respect to any Commercial Paper Interest Determination Date, shall be the Money Market Yield (calculated as described below) of the rate on such date for paper having the Index Maturity specified in on the face hereof as published in "H.15(519)," under the heading "Commercial Paper - Financial." If such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date pertaining to such Commercial Paper Interest Determination Date, then the Commercial Paper Rate shall be the Money Market Yield of the rate on such Commercial Paper Interest Determination Date for commercial paper having the Index Maturity specified on the face hereof as published in "Composite Quotations" under the heading "Commercial Paper." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or Composite Quotations, the Commercial Paper Rate for that Commercial Paper Interest Determination Date shall be the Money Market Yield of the arithmetic mean, as calculated by the Calculation Agent on such Calculation Date, of the offered rates, as of 11:00 a.m., New York City time, on that Commercial Paper Interest Determination Date, of three leading dealers of commercial paper in The City of New York selected by the Calculation Agent for commercial paper having the Index Maturity specified on the face hereof placed for an industrial issuer whose bond rating is "AA," or the equivalent, from a nationally recognized rating agency; provided, however, that if fewer than three dealers selected as aforesaid by the Calculation Agent are quoting as mentioned in this sentence, the Commercial Paper Rate will be the Commercial Paper Rate in effect on such Commercial Paper Interest Determination Date. "Money Market Yield" shall be a yield (expressed as a percentage rounded upwards, if necessary, to the next higher one hundred thousandth of a percentage point) calculated in accordance with the following formula: Money Market Yield = D x 360 -------------------- x 100 360 - (D x M) where "D" refers to the per annum rate for commercial paper quoted on a bank discount basis and expressed as a decimal; and "M" refers to the actual number of days in the interest period for which interest is being calculated. The interest rate for each Interest Reset Date shall be the Commercial Paper Rate applicable to such Interest Reset Date plus or minus the Spread or Spread Multiplier, if any, as indicated on the face hereof; provided, however, that the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate. For a Commercial Paper Rate Note, the Commercial Paper Interest Determination Date will be the second Business Day preceding the Interest Reset Date. Determination of Federal Funds Rate. If the Base Rate is the Federal Funds Rate, as specified on the face hereof, the "Federal Funds Rate" for each Interest Reset Period shall be the effective rate on the Federal Funds Rate Interest Determination Date for Federal Funds as published in H.15(519) under the heading "Federal Funds (Effective)." If such rate is not published prior to 3:00 p.m., New York City time, on the Calculation Date pertaining to such Interest Determination Date, the "Federal Funds Rate" for such Interest Reset Period shall be the rate on such Interest Determination Date as published in Composite Quotations under the heading "Federal Funds/Effective Rate." If by 3:00 p.m., New York City time, on such Calculation Date such rate is not yet published in either H.15(519) or Composite Quotations, then the "Federal Funds Rate" for such Interest Reset Period shall be the rate on such Interest Determination Date made publicly available by the Federal Reserve Bank of New York which is equivalent to the rate that appears in H.15(519) under the heading "Federal Funds (Effective);" provided, however, that if such rate is not made publicly available by the Federal Reserve Bank of New York by 3:00 p.m., New York City time, on such Calculation Date, the "Federal Funds Rate" for such Interest Reset Period will be the same as the Federal Funds Rate in effect for the immediately preceding Interest Reset Period (or, if there was no such Interest Reset Period, the Initial Interest Rate). In the case of a Federal Funds Rate Note that resets daily, the interest rate on such Note for the period from and including a Monday to but excluding the succeeding Monday will be reset by the Calculation Agent for such Note on such second Monday (or, if not a Business Day, on the next succeeding Business Day) to a rate equal to the average of the Federal Funds Rates in effect with respect to each such day in such week. The interest rate for each Interest Reset Date shall be the Federal Funds Rate applicable to such Interest Reset Date plus or minus the Spread or Spread Multiplier, if any, as indicated on the face hereof; provided, however, that the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate. For a Federal Funds Rate Note, the Federal Funds Rate Interest Determination Date will be the second Business Day preceding the Interest Reset Date. Determination of LIBOR. If the Base Rate is LIBOR, as specified on the face hereof, "LIBOR" for each Interest Reset Date will be determined by the Calculation Agent as follows: (i) With respect to a LIBOR Interest Determination Date, LIBOR will be either: (A) if "LIBOR Telerate" is specified on the face hereof as the Reporting Service or if a source for LIBOR is not specified, the rate for deposits in the London interbank market in the Index Currency designated on the face hereof having the Index Maturity designated on the face hereof commencing on such Interest Reset Date that appears on the Designated LIBOR Page as of 11:00 a.m., London time, on such LIBOR Interest Determination Date, or (B) if "LIBOR Reuters" is specified on the face hereof as the Reporting Service, the arithmetic mean of the offered rates (unless the specified Designated LIBOR Page by its terms provides only for a single rate, in which case such single rate shall be used) for deposits in the London interbank market in the Index Currency having the Index Maturity designated on the face hereof and commencing on the Interest Reset Date that appear on the Designated LIBOR Page as of 11:00 a.m., London time, on such LIBOR Interest Determination Date, if at least two such offered rates appear (unless, as aforesaid, only a single rate is required) on such Designated LIBOR Page. If no rate appears on the Designated LIBOR Page (or, in the case of clause (i)(B) above, if the Designated LIBOR Page by its terms provides for more than a single rate but fewer than two offered rates appear on such Page), LIBOR in respect of such Interest Determination Date will be determined as if the parties had specified the rate described in clause (ii) below. (ii) With respect to a LIBOR Interest Determination Date to which the last sentence of clause (i) above applies, the Calculation Agent will request the principal London offices of each of four major reference banks in the London interbank market, as selected by the Calculation Agent, to provide the Calculation Agent with its offered quotation for deposits in the Index Currency for the period of the Index Maturity designated on the face hereof commencing on the Interest Reset Date to prime banks in the London interbank market at approximately 11:00 a.m., London time, on such LIBOR Interest Determination Date and in a principal amount that is representative for a single transaction in such Index Currency in such market at such time. If at least two such quotations are provided, LIBOR determined on such LIBOR Interest Determination Date will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR determined on such LIBOR Interest Determination Date will be the arithmetic mean of the rates quoted at approximately 11:00 a.m. (or such other time specified on the face hereof), in the applicable Principal Financial Center, on such LIBOR Interest Determination Date for loans made in the Index Currency to leading European banks having the Index Maturity designated on the face hereof commencing on the Interest Reset Date and in a principal amount that is representative for a single transaction in such Index Currency in such market at such time by three major banks in such Principal Financial Center selected by the Calculation Agent; provided, however, that if the banks so selected by the Calculation Agent are not quoting as mentioned in this sentence, LIBOR with respect to such LIBOR Interest Determination Date will be LIBOR in effect on such LIBOR Interest Determination Date. "Designated LIBOR Page" means either (a) if "LIBOR Reuters" is designated as the Reporting Service on the face hereof, the display designated as page "LIBO" with respect to the applicable Index Currency on the Reuters Monitor Money Rates Service (or such other page as may replace page "LIBO" on such service for the purpose of displaying the London interbank rates of major banks for the applicable Index Currency), or (b) if "LIBOR Telerate" is designated as the Reporting Service on the face hereof, the display designated as page "3750" with respect to the applicable Index Currency on the Dow Jones Market Service (or such other page as may replace page "3750" on such service or such other service as may be nominated by the British Bankers' Association for the purpose of displaying the London interbank rates of major banks for the applicable Index Currency). If neither LIBOR Reuters nor LIBOR Telerate is specified as the Reporting Service on the face hereof, LIBOR for the applicable Index Currency will be determined as if LIBOR Telerate (and, if the U.S. Dollar is the Index Currency, page 3750) had been specified. "Index Currency" means the Currency specified on the face hereof as the Currency with respect to which LIBOR shall be calculated. If no such Currency is specified on the face hereof, the Index Currency shall be U.S. dollars. "Principal Financial Center" will be, for the purpose of clause (ii) above, the principal financial center of the country of the specified Index Currency, which is generally the capital city of such country, except that with respect to U.S. Dollars, Deutsche Marks, and ECUs, the Principal Financial Center shall be The City of New York, Frankfurt, and Brussels, respectively. The interest rate for each Interest Reset Date shall be LIBOR applicable to such Interest Reset Date plus or minus the Spread or Spread Multiplier, if any, as indicated on the face hereof; provided, however, that the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate. For a LIBOR Note, the LIBOR Interest Determination Date will be the second London Banking Day immediately preceding the Interest Reset Date with respect to such Note. Determination of Treasury Rate. If the Base Rate is the Treasury Rate, as indicated on the face hereof, the "Treasury Rate," with respect to any Treasury Interest Determination Date, shall be the rate for the most recent auction of direct obligations of the United States ("Treasury bills") having the Index Maturity specified on the face hereof as published in H.15(519) under the heading "U.S. Government Securities - Treasury bills -- Auction Average (Investment)" or, if not so published by 3:00 p.m., New York City time, on the Calculation Date pertaining to such Treasury Interest Determination Date, the auction average rate (expressed as a bond equivalent, rounded, upwards if necessary, to the next higher one hundred thousandth of a percentage point, on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) for such auction as otherwise announced by the United States Department of the Treasury. If the results of the auction of Treasury bills having the Index Maturity specified on the face hereof are not published or reported as provided above by 3:00 p.m., New York City time, on such Calculation Date, or if no such auction is held in a particular week, then the Treasury Rate shall be the rate as published in H.15(519) under the heading "U.S. Government Securities - - Treasury Bills Secondary Market." If such rate is not so published by 3:00 p.m., New York City time, on such Calculation Date, then the Treasury Rate shall be calculated by the Calculation Agent and shall be a yield to maturity (expressed as a bond equivalent rounded, upwards if necessary, to the next higher one hundred thousandth of a percentage point, on the basis of a year of 365 or 366 days, as applicable, and applied on a daily basis) of the arithmetic mean, as calculated by the Calculation Agent on such Calculation Date, of the secondary market bid rates as of approximately 3:30 p.m., New York City time, on such Treasury Interest Determination Date, of three leading primary United States government securities dealers in The City of New York selected by the Calculation Agent, for the issue of Treasury bills with a remaining maturity closest to the specified Index Maturity; provided, however, that if the dealers selected as aforesaid by the Calculation Agent are not quoting as mentioned in this sentence, the Treasury Rate will be the Treasury Rate in effect on such Treasury Interest Determination Date. The interest rate for each Interest Reset Date shall be the Treasury Rate applicable to such Interest Reset Date plus or minus the Spread or Spread Multiplier, if any, as indicated on the face hereof; provided, however, that the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate. For a Treasury Rate Note, the Treasury Interest Determination Date will be the day of the week on which Treasury bills (as defined below) would normally be auctioned in the week in which such Interest Reset Date falls. Treasury bills are usually sold at auction on Monday of each week, unless that day is a legal holiday, in which case the auction is usually held on the following Tuesday, except that such auction may be held on the preceding Friday. If, as the result of a legal holiday, an auction is so held on the preceding Friday, such Friday will be the Treasury Interest Determination Date pertaining to an Interest Reset Date occurring in the next succeeding week. If an auction date shall fall on a day thar would otherwise be an Interest Reset Date for a Treasury Rate Note, then such Interest Reset Date shall instead be the first Business Day immediately following such auction date. Determination of Prime Rate. If the Base Rate is the Prime Rate, as indicated on the face hereof, the "Prime Rate," with respect to any Prime Rate Interest Determination Date, shall be the rate on such date as published in H.15(519) under the heading "Bank Prime Loan." If such rate is not published by 9:00 a.m., New York City time, on the Calculation Date pertaining to such Interest Determination Date, then the Prime Rate will be determined by the Calculation Agent and will be the arithmetic mean of the rates of interest publicly announced by each bank that appears on the Reuters Screen USPRIMe1 Page (as defined below) as such bank's prime rate or base lending rate as in effect for that Interest Determination Date. "Reuters Screen USPRIME1 Page" means the display designated as page "USPRIME1" on the Reuters Monitor Money Rates Service (or such other page as may replace the USPRIME1 page on that service for the purpose of displaying prime rates or base lending rates of major United States banks). If fewer than four such rates but more than one such rate appear on the Reuters Screen USPRIME1 Page for such Interest Determination Date, the Prime Rate shall be determined by the Calculation Agent and will be the arithmetic mean of the prime rates quoted on the basis of actual number of days in the year divided by 360 as of the close of business on such Interest Determination Date by at least two major money center banks in New York City selected by the Calculation Agent (after consulting with the Company). If fewer than two such rates appear on the Reuters Screen USPRIME1 Page, the Prime Rate will be determined by the Calculation Agent and will be the arithmetic mean of the prime rates furnished in New York City by three substitute banks or trust companies organized and doing business under the laws of the United States, or any State thereof, in each case having total equity capital of at least U.S. $500,000,000 and being subject to supervision or examination by Federal or State authority, selected by the Calculation Agent (after consulting with the Company) to provide such rate or rates; provided, however, that if the banks selected as aforesaid are not quoting as mentioned in this sentence, the Prime Rate will remain the Prime Rate in effect on such Interest Determination Date. The interest rate for each Interest Reset Date shall be the Prime Rate applicable to such Interest Reset Date plus or minus the Spread or Spread Multiplier, if any, as indicated on the face hereof; provided, however, that the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate. For a Prime Rate Note, the Prime Rate Interest Determination Date will be the second Business Day preceding the Interest Reset Date. Determination of CMT Rate. If the Base Rate is the CMT Rate, as indicated on the face hereof, the "CMT Rate," with respect to any CMT Rate Interest Determination Date, shall be the rate displayed on the Designated CMT Telerate Page under the caption "Treasury Constant Maturities--Federal Reserve Board release H.15--Mondays approximately 3:45 P.M.," under the column for the Designated CMT Maturity Index (as defined below) for (i) if the Designated Telerate Page is 7055, the rate on such Interest Determination Date, and (ii) if the Designated CMT Telerate Page is 7052, the week, or the month, as applicable, ended immediately preceding the week in which the related Interest Determination Date occurs. If such rate is no longer displayed on the relevant page, or if not displayed by 3:00 p.m., New York City time, on the related Calculation Date, then the CMT Rate for such Interest Determination Date will be such Treasury constant maturity rate for the Designated CMT Maturity Index as published in H.15(519). If such rate is no longer published, or if not published by 3:00 p.m., New York City time, on the related Calculation Date, then the CMT Rate for such Interest Determination Date will be such Treasury constant maturity rate for the designated CMT Maturity Index (or other United States Treasury rate for the Designated CMT Maturity Index) for the Interest Determination Date with respect to such Interest Reset Date as may then be published by either the Board of Governors of the Federal Reserve System or the United States Department of the Treasury that the Calculation Agent determines to be comparable to the rate formerly displayed on the Designated CMT Telerate Page and published in the relevant H.15(519). If such information is not provided by 3:00 p.m., New York City time, on the related Calculation Date, then the CMT Rate for such Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity, based on the arithmetic mean of the secondary market closing side offer prices as of approximately 3:30 p.m., New York City time, on the Interest Determination Date reported, according to their written records, by three leading primary United States government securities dealers (each, a "Reference Dealer") in the City of New York selected by the Calculation Agent (from five such Reference Dealers selected by the Calculation Agent and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for the most recently issued direct noncallable fixed rate obligations of the United States ("Treasury Notes") with an original maturity of approximately the Designated CMT Maturity Index and a remaining term to maturity of not less than such Designated CMT Maturity Index minus one year. If the Calculation Agent cannot obtain three such Treasury Note quotations, the CMT Rate for such Interest Determination Date will be calculated by the Calculation Agent and will be a yield to maturity based on the arithmetic mean of the secondary market offer side prices as of approximately 3:30 p.m., New York City time, on the Interest Determination Date of three Reference Dealers in the City of New York (from five such Reference Dealers selected by the Calculation Agent and eliminating the highest quotation (or, in the event of equality, one of the highest) and the lowest quotation (or, in the event of equality, one of the lowest)), for such Treasury Notes with an original maturity of the number of years that is the next highest to the Designated CMT Maturity Index and a remaining term to maturity closest to the Designated CMT Maturity Index in an amount of at least U.S. $100 million. If three or four (and not five) of such Reference Dealers are quoting as described above, then the CMT Rate will be based on the arithmetic mean of the offer prices obtained and neither the highest nor the lowest of such quotes will be eliminated; provided however, that if fewer than three Reference Dealers selected by the Calculation Agent are quoting as described herein, the CMT Rate will be the CMT Rate in effect on such Interest Determination Date. If two Treasury Notes with an original maturity as described in the third preceding sentence have remaining terms to maturity equally close to the Designated CMT Maturity Index, the quotes for the CMT Rate Note with the shorter remaining term to maturity will be used. "Designated CMT Telerate Page" means the display on the Dow Jones Market Service designated on the face hereof for the purpose of displaying Treasury Constant Maturities as reported in H.15(519) (or any other page as may replace such page on that service for the purpose of displaying Treasury Constant Maturities as reported in H.15(519)). If no such page is specified on the face hereof, the Designated CMT Telerate Page shall be 7052 for the most recent week. "Designated CMT Maturity Index" means the original period to maturity of the U.S. Treasury securities (either 1, 2, 3, 5, 7, 10, 20, or 30 years) specified on the face hereof with respect to which the CMT Rate will be calculated. If no such maturity is specified on the face hereof, the Designated CMT Maturity Index shall be 2 years. The interest rate for each Interest Reset Date shall be the CMT Rate applicable to such Interest Reset Date plus or minus the Spread or Spread Multiplier, if any, as indicated on the face hereof; provided, however, that the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate. For a CMT Rate Note, the CMT Rate Interest Determination Date will be the second Business Day preceding the Interest Reset Date. Determination of Eleventh District Cost Of Funds Rate. If the Base Rate is the Eleventh District Cost Of Funds Rate as specified on the face hereof, the "Eleventh District Cost of Funds Rate," with respect to an Eleventh District Cost of Funds Interest Determination Date, shall be the rate equal to the monthly weighted average cost of funds for the calendar month immediately preceding the month in which such Interest Determination Date falls, as set forth under the caption "11th district" on Telerate Page 7058 (as defined below) as of 11:00 a.m., San Francisco time, on such Interest Determination Date. If such rate does not appear on Telerate Page 7058 on such Interest Determination Date, then the Eleventh District Cost of Funds Rate on such Interest Determination Date will be the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank District that was most recently announced (the "Eleventh District Index") by the FHLB of San Francisco as such cost of funds for the calendar month immediately preceding the date of such announcement. If the FHLB of San Francisco fails to announce such rate for the calendar month immediately preceding such Interest Determination Date, then the Eleventh District Cost of Funds Rate determined as of such Interest Determination Date will be the Eleventh District Cost of Funds Rate in effect on such Interest Determination Date. "Telerate Page 7058" means the display designated as page "7058" on the Dow Jones Market Service (or such other page as may replace the 7058 page on that service for the purpose of displaying the monthly weighted average cost of funds paid by member institutions of the Eleventh Federal Home Loan Bank district). The interest rate for each Interest Reset Date shall be the Eleventh District Cost of Funds Rate applicable to such Interest Reset Date plus or minus the Spread or Spread Multiplier, if any, as indicated on the face hereof; provided, however, that the interest rate in effect for the period from the Original Issue Date to the first Interest Reset Date will be the Initial Interest Rate. For an Eleventh District Cost of Funds Rate Note, the Eleventh District Cost of Funds Interest Determination Date will be the last working day of the month immediately preceding the applicable Interest Reset Date on which the FHLB of San Francisco publishes the Eleventh District Index. The Chase Manhattan Bank shall be the Calculation Agent, unless another Calculation Agent is specified on the face hereof. At the request of the Holder hereof, the Calculation Agent will provide the interest rate then in effect and, if determined, the interest rate that will become effective on the next Interest Reset Date. In case an Event of Default, as defined in the Indenture, with respect to the Notes shall have occurred and be continuing, the principal hereof (or, if this Note is an Original Issue Discount Security, such portion of the principal amount as may be specified pursuant to the Indenture) and accrued interest hereon, may be declared and upon such declaration shall become due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture contains provisions permitting the Company and the Trustee, with the consent of the Holders of a majority in principal amount at maturity of the Securities at the time outstanding of each series to be affected, evidenced as in the Indenture provided, to execute supplemental indentures adding any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or modifying in any manner the rights of the Holders of the Securities; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each outstanding Security affected thereby, (i) change the Maturity of the principal of, or the Stated Maturity of any premium on, or any installment of interest on, any Security, or reduce the principal amount thereof or the interest or any premium thereon, or change the method of computing the amount of principal thereof or interest thereon on any date, or change any Place of Payment, or the coin or currency or currency unit in which any Security or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Maturity or the Stated Maturity thereof (or, in the case of redemption or repayment, on or after the Redemption Date or the Repayment Date), or (ii) reduce the percentage in principal amount of the outstanding Securities of any series, the consent of the Holders of which is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver, or (iii) modify certain other provisions of the Indenture. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, the Holders of a majority in principal amount at Maturity of the Securities of such series at the time outstanding may on behalf of the Holders of all of the Securities of such series waive any past default or Event of Default and its consequences, except a default in the payment of the principal of (or premium, if any) or interest on any Security of such series or in respect of certain other covenants or provisions of the Indenture. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not any notation of such consent or waiver is made upon this Note or such other Notes. No reference herein to the Indenture and no reference to any provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest, if any, on this Note at the place, at the respective times, at the rate and (except as provided in the Indenture in the case of Securities payable in currencies other than U.S. Dollars that are not available to the Company due to circumstances beyond its control) in the currency herein prescribed. The Notes are issuable in registered form without coupons in the minimum denomination of U.S. $1,000 and in integral multiples of U.S. $1,000 in excess thereof or if denominated in a Specified Currency other than U.S. Dollars, the equivalent of $1,000 (rounded down to an integral multiple of 1,000 units of the Specified Currency) and any larger amount that is an integral multiple of 1,000 units of such specified Currency. This Note may be exchanged by the Holder hereof without charge except for any tax or other governmental charge imposed in connection therewith, for a like aggregate principal amount of Notes of other authorized denominations, having the same terms as this Note, in the manner and subject to the limitations provided in the Indenture at the Corporate Trust Office. If an Initial Redemption Date is specified on the face hereof, this Note may be redeemed at the option of the Company as a whole, or from time to time in part, on any date, if any, after the Initial Redemption Date specified on the face hereof and prior to the Maturity Date, upon mailing a notice of such redemption not less than thirty nor more than sixty days prior to the date fixed for redemption to the Holders of Notes at their last registered addresses, all as provided in the Indenture, at the Optional Redemption Prices, if any, specified on the face hereof (expressed in percentages of the principal amount) together in each case with accrued interest to the date fixed for redemption. If so specified on the face hereof, the Holder of this Note shall be entitled to receive payment in U.S. Dollars at the Exchange Rate determined as set forth in the Indenture by notifying the Trustee at the time and in the manner described therein. Costs, if any, associated with the conversion of the Specified Currency into U.S. dollars shall be borne by such Holder through deduction from payments required to be made to such Holder on this Note. Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the registered Holder hereof as the owner of this Note for the purpose of receiving payment of the principal hereof (and premium, if any), and (subject to certain provisions relating to interest) interest hereon and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company nor the Trustee nor any agent of the Company or the Trustee shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of (or premium, if any) or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture or any indenture supplemental thereto, against any incorporator, stockholder, officer, director or employee, as such, past, present or future, of the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as a part of the consideration for the issue hereof, expressly waived and released. All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them therein. This Note shall be governed by and construed in accordance with the law of the State of New York. ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ________________________________________________________________________________ PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCUDING ZIP CODE OF ASSIGNEE ________________________________________________________________________________ the within Note and all rights thereunder, hereby irrevocably constituting and appointing ________________________________________________________________________________ to transfer said Note on the books of the Company, with full power of substitution in the premises. Dated: _______________________ Signature: _______________________________ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement, or any change whatever. EX-12 5 Exhibit 12.01 TEMPLE-INLAND INC. RATIO OF EARNINGS TO FIXED CHARGES-WITHOUT TIFS DEPOSIT INTEREST (dollars in millions) Three Month Fiscal Year ------------ --------------------------------- 1998 1997 1997 1996 1995 1994 1993 ---- ----- ---- ---- ---- ---- ---- Fixed Charges: Interest expense 26.80 28.20 112.30 112.90 111.30 94.80 81.90 TIFS interest on borrowings 32.00 35.00 157.00 127.00 121.00 81.00 99.00 Interest capitalized during period 0.50 0.40 2.00 3.00 39.00 28.00 13.00 Portion of rent expense representative of interest 0.83 1.22 4.88 4.10 3.43 3.32 3.03 ------ ------ ------ ------ ------ ------ ------ Total fixed charges 60.13 64.82 276.18 247.00 274.73 207.12 196.93 ===== ====== ====== ====== ====== ====== ====== Earnings: Pretax income from continuing operations 44.80 21.70 95.00 155.90 431.00 193.30 96.20 Add: Fixed charges from above 60.13 64.82 276.18 247.00 274.73 207.12 196.93 Less interest capitalized during period (0.50) (0.40) (2.00) (3.00) (39.00)(28.00) (13.00) Current period amortization of interest capitalized in prior periods 2.12 2.12 8.47 8.66 6.51 5.82 5.44 ----- ----- ------ ----- ----- ------ ----- 106.54 88.24 377.64 408.56 673.24 378.24 285.57 ====== ===== ====== ====== ====== ====== ====== Ratio of Earnings to Fixed Charges 1.77 1.36 1.37 1.65 2.45 1.83 1.45 ====== ===== ====== ===== ===== ===== ===== Exhibit 12.01 (continued) TEMPLE-INLAND INC. RATIO OF EARNINGS TO FIXED CHARGES-WITH TIFS INTEREST EXPENSE (dollars in millions) Three Months Fiscal Year ------------- ---------------------------------- 1998 1997 1997 1996 1995 1994 1993 Fixed Charges: Interest expense - Parent Company 26.80 28.20 112.30 112.90 111.30 94.80 81.90 Interest expense - Borrowed Funds (TIFS) 32.00 35.00 157.00 127.00 121.00 81.00 99.00 Interest on Deposits (TIFS) 89.00 75.00 331.00 308.00 313.00 254.00 237.00 Interest capitalized during period 0.50 0.40 2.00 3.00 39.00 28.00 13.00 Portion of rent expense representative of interest 0.83 1.22 4.88 4.10 3.43 3.32 3.03 ----- ----- ----- ----- ----- ----- ----- Total fixed charges 149.13 139.82 607.18 555.00 587.73 461.12 433.93 ====== ====== ====== ====== ====== ====== ====== Earnings: Pretax income from continuing operations 44.80 21.70 95.00 155.90 431.00 193.30 96.20 Add: Fixed charges from above 149.13 139.82 607.18 555.00 587.73 461.12 433.93 Less interest capitalized during period (0.50) (0.40) (2.00) (3.00) (39.00) (28.00) (13.00) Current period amortization of interest capitalized in prior periods 2.12 2.12 8.47 8.66 6.51 5.82 5.44 ----- ---- ---- ----- ----- ----- ----- 195.54 163.24 708.6 716.56 986.24 632.24 522.57 ====== ====== ====== ====== ====== ====== ====== Ratio of Earnings to Fixed Charges 1.31 1.17 1.17 1.29 1.68 1.37 1.20 ======= ===== ===== ===== ===== ===== ===== Exhibit 12.01 (continued) TEMPLE-INLAND INC. RATIO OF EARNINGS TO FIXED CHARGES-PARENT COMPANY (dollars in millions) Three Months Fiscal Year ------------ ----------------------------------- 1998 1997 1997 1996 1995 1994 1993 ---- ---- ---- ---- ---- ---- ---- Fixed Charges: Interest expense 26.80 28.20 112.30 112.90 111.30 94.80 81.90 Interest capitalized during period 0.50 0.40 2.00 3.30 38.60 27.70 12.50 Portion of rent expense representative of interest 0.50 0.87 3.49 3.09 2.39 2.07 1.96 ------ ----- ----- ----- ------ ----- ----- Total fixed charges 27.80 29.47 117.79 119.29 152.29 124.57 96.36 ===== ===== ======= ====== ======= ====== ====== Earnings: Pretax income from continuing operations 44.80 21.70 95.00 155.90 431.00 193.30 96.20 Less: TIFS income before tax (36.70) (29.50) (132.10) (63.10) (98.10) (56.30) (67.50) Add: Dividends from TIFS - ignore contributions to TIFS - - 275.00 50.00 50.00 30.00 42.00 Pretax income from continuing operations adjusted for equity method investee (TIFS) 8.10 (7.80) 237.90 142.80 382.90 167.00 70.70 Add: Fixed charges from above 27.80 29.47 117.79 119.29 152.29 124.57 96.36 Less interest capitalized during period (0.50) (0.40) (2.00) (3.30) (38.60)(27.70) (12.50) Current period amortization of interest capitalized in prior periods 2.12 2.12 8.47 8.66 6.51 5.82 5.44 ----- ----- ----- ----- ----- ----- ---- 37.52 23.39 362.15 267.45 503.10 269.69 160.00 ====== ===== ====== ====== ====== ====== ====== Ratio of Earnings to Fixed Charges 1.35 0.79 3.07 2.24 3.30 2.16 1.66 ===== ==== ===== ==== ===== ===== ===== -----END PRIVACY-ENHANCED MESSAGE-----