EXECUTION VERSION
TEMPLE-INLAND INC.
, dated as of February 14, 2005
(this "Agreement") by and between TEMPLE-INLAND INC., a Delaware
corporation (the "Company"), JPMORGAN CHASE BANK, N.A., not
individually but solely as Purchase Contract Agent (the "Purchase
Contract Agent") and as attorney-in-fact of the Holders of
Purchase Contracts (as defined in the Purchase Contract Agreement
(as defined herein)), and Citigroup Global Markets Inc. and UBS
Securities LLC, as the Remarketing Agents (the "Remarketing
Agents").
WITNESSETH:
WHEREAS, the Company issued $345,000,000 aggregate
stated amount of its Upper DECS (the "Upper DECS") under the
Purchase Contract Agreement, dated as of May 1, 2002, by and
between the Purchase Contract Agent and the Company (the
"Purchase Contract Agreement"); and
WHEREAS, the Company issued concurrently in connection
with the issuance of the Upper DECS $345,000,000 aggregate
principal amount of 6.42% Senior Notes due 2007 (the "Notes") of
the Company; and
WHEREAS, the Notes forming a part of the Upper DECS
have been pledged pursuant to the Pledge Agreement (the "Pledge
Agreement"), dated as of May 1, 2002, by and among the Company,
X.X. Xxxxxx Trust Company, National Association (successor in
interest to Bank One Trust Company, N.A.), a national banking
association, as collateral agent (the "Collateral Agent"), and
the Purchase Contract Agent, to secure the obligations of Holders
of Upper DECS under the related Purchase Contract on the Stock
Purchase Date; and
WHEREAS, the Remarketing Agents will attempt on
February 14, 2005 (the "Remarketing Date") to remarket all of
(i) the Notes of Holders of Upper DECS, other than the Notes of
Holders of Upper DECS who elect not to participate in the
remarketing, and (ii) the Separate Notes of Holders who elect to
participate in the remarketing (collectively, the "Remarketing"),
pursuant respectively to the procedures set forth in
Section 5.4(b) of the Purchase Contract Agreement and
Section 4.5(d) of the Pledge Agreement (each of which Sections is
incorporated herein by reference); and
WHEREAS, in the event the remarketing on the
Remarketing Date is unsuccessful, the Remarketing Agents will
remarket the Notes to be included in the remarketing on each of
the two Business Days immediately following the Remarketing Date,
and, if necessary, will attempt to remarket such Notes on each of
the three Business Days immediately preceding April 6, 2005 and,
if necessary, will further attempt to remarket such Notes on each
of the three Business Days immediately preceding the Stock
Purchase Date; and
WHEREAS, in the event of a successful remarketing on
the Remarketing Date or any Subsequent Remarketing Date, as the
case may be, the applicable interest rate on the Notes will be
reset on such Remarketing Date or on any Subsequent Remarketing
Date to the Reset Rate to be determined by the Remarketing Agents
such that the then current aggregate market value of the Notes
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will equal at least 100.50% of the Remarketing Value (as
described in the Purchase Contract Agreement) as of such
Remarketing Date or Subsequent Remarketing Date, provided that in
the determination of such Reset Rate, the Company shall, if
applicable, limit the Reset Rate to the maximum rate permitted by
applicable law; and
WHEREAS, the Company has requested Citigroup Global
Markets Inc. and UBS Securities LLC to act as the Remarketing
Agents, and as such to perform the services described herein; and
WHEREAS, each of Citigroup Global Markets Inc. and UBS
Securities LLC is willing to act as a Remarketing Agent and as
such to perform such duties on the terms and conditions expressly
set forth herein;
NOW, THEREFORE, for and in consideration of the
covenants herein made, and subject to the conditions herein set
forth, the parties hereto agree as follows:
Section 1. Definitions.
Certain terms used herein are defined in Section 22
hereof. Capitalized terms used and not defined in this
Agreement, in the recitals hereto or in the paragraph preceding
such recitals shall have the meanings assigned to them in the
Purchase Contract Agreement or, if not therein defined, the
Pledge Agreement.
Section 2. Appointment and Obligations of the
Remarketing Agents.
(a) The Company hereby appoints each of Citigroup Global Markets
Inc. and UBS Securities LLC and each of Citigroup Global Markets
Inc. and UBS Securities LLC, acting severally and not jointly,
hereby accepts such appointment, (i) as exclusive Remarketing
Agents to determine, in consultation with the Company, in the
manner provided for herein, in the Indenture (as in effect on the
date of this ) with respect to the Notes,
and in the Purchase Contract Agreement, the Reset Rate that, in
the opinion of the Remarketing Agents, will be reasonable and
consistent with market practice at the time of remarketing, and,
when applied to the Notes (assuming, even if not true, that all
of the Notes are included in the remarketing), enable the then
current aggregate market value of the Notes to have a value equal
to at least 100.50% of the Remarketing Value as of the
Remarketing Date or as of any Subsequent Remarketing Date, as the
case may be, provided that the Company, by notice to the
Remarketing Agents prior to (A) the tenth Business Day preceding
the Remarketing Date, with respect to any remarketing to occur on
either the Remarketing Date or the two Business Days immediately
following such Remarketing Date, (B) the thirteenth Business Day
preceding April 6, 2005 with respect to any remarketing to occur
on any of the three Business Days immediately preceding April 6,
2005, or (C) the thirteenth Business Day preceding the Stock
Purchase Date with respect to any remarketing to occur on any of
the three Business Days immediately preceding such Stock Purchase
Date, shall, if applicable, limit the Reset Rate so that it does
not exceed the maximum rate permitted by applicable law, and
(ii) as the exclusive Remarketing Agents (subject to the right of
such Remarketing Agents to appoint additional remarketing agents
hereunder as described below) to remarket the Notes to be
included in the remarketing on the Remarketing Date or any
Subsequent Remarketing Date, as the case may be. The Company
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agrees that the Remarketing Agents shall have the right, on
15 Business Days notice to the Company, to appoint one or more
additional remarketing agents so long as any such additional
remarketing agents shall be reasonably acceptable to the Company.
Upon any such appointment, the parties shall enter into an
appropriate amendment to this Agreement to reflect the addition
of any such remarketing agent.
(b) Subject to the terms and conditions set forth herein, the
Remarketing Agents shall use reasonable efforts to (i) remarket
on the Remarketing Date the Notes that the Purchase Contract
Agent or the Custodial Agent shall have notified the Remarketing
Agents are to be remarketed at a Reset Rate such that the then
current aggregate market value of the Notes is equal to at least
100.50% of the Remarketing Value, and (ii) in the event the
Remarketing Agents cannot establish such a Reset Rate on the
Remarketing Date, attempt to remarket such Notes on each of the
two Business Days immediately following the Remarketing Date and,
if necessary, on each of the three Business Days immediately
preceding April 6, 2005, and, if necessary, on each of the three
Business Days immediately preceding the Stock Purchase Date, in
each case at a Reset Rate such that the then current aggregate
market value of the Notes is equal to at least 100.50% of the
Remarketing Value, and (iii) in the event of a Last Failed
Remarketing, promptly return the Separate Notes, if any, included
in such Last Failed Remarketing to the Collateral Agent to be
held by the Collateral Agent in accordance with Section 4.5(b) of
the Pledge Agreement (which Section is incorporated herein by
reference). After deducting the fee specified in Section 3
below, the remaining proceeds of any such remarketing, together
with the Agent-purchased Treasury Consideration, shall be
delivered to the Purchase Contract Agent in accordance with
Section 4.5(a) of the Pledge Agreement (which Section is
incorporated herein by reference) and Section 5.4(b) of the
Purchase Contract Agreement. The right of each Holder of Upper
DECS or Separate Notes to have Notes included in any remarketing
shall be limited to the extent that (i) the Remarketing Agents
conduct a remarketing on the Remarketing Date or on any
Subsequent Remarketing Date, as the case may be, pursuant to the
terms of this Agreement, (ii) the Notes included in a remarketing
have not been called for redemption pursuant to the Purchase
Contract Agreement, (iii) the Remarketing Agents are able to find
a purchaser or purchasers for the Notes included in a remarketing
at a Reset Rate such that the then current aggregate market value
of the Notes is equal to at least 100.50% of the Remarketing
Value, and (iv) such purchaser or purchasers deliver the purchase
price therefor to the Remarketing Agents as and when required.
(c) The Company and the Remarketing Agents agree that any
successful Remarketing of the Notes will settle no later than
10:00AM, New York City time on the third Business Day following
the Remarketing Date, or Subsequent Remarketing Date, as
applicable, which time may be postponed by agreement between the
Remarketing Agents and the Company (such date and time of
settlement for the Notes being herein called, the "Closing
Date").
(d) It is understood and agreed that the Remarketing Agents
shall not have any obligation whatsoever to purchase any Notes,
whether in a remarketing held on the Remarketing Date or on any
Subsequent Remarketing Date or otherwise, and shall in no way be
obligated to provide funds to make payment upon tender of Notes
for remarketing or to otherwise expend or risk their own funds or
incur or be exposed to financial liability in the performance of
their respective duties under this Agreement. The Company shall
not be obligated in any case to provide funds to make payment
upon delivery of Notes for remarketing.
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Section 3. Fees.
In the event of a successful remarketing, the
Remarketing Agents shall retain as a remarketing fee (the
"Remarketing Fee") an amount not exceeding 25 basis points
(0.25%) of the total proceeds received in connection with any
such remarketing in accordance with Section 5.4(b)(ii) of the
Purchase Contract Agreement.
Section 4. Representations and Warranties. The Company
represents and warrants to, and agrees with, each Remarketing
Agent (i) on and as of the date hereof, (ii) on and as of the
date any Remarketing Prospectus is first distributed in
connection with the Remarketing and (iii) on and as of the
Closing Date, that:
(a) The Company meets the requirements for use of Form S-3 under
the Act and has prepared and filed with the Commission a
registration statement (file number 333-84120) on Form S-3,
including the related Base Prospectus, for registration under the
Securities Act of the Remarketing of the Notes. The Company may
have filed one or more amendments thereto, including the related
Base Prospectus, each of which has previously been furnished to
you. The Company will next file with the Commission the
Remarketing Prospectus in accordance with Rules 430A and 424(b).
The Company has included in such registration statement, as
amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the
Remarketing Prospectus. As filed, the Remarketing Prospectus
shall contain all Rule 430A Information, together with all other
such required information, and, except to the extent the
Remarketing Agents shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you
prior to the Execution Time or, to the extent not completed at
the Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the
latest Preliminary Remarketing Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or
made therein.
(b) On the Effective Date, the Registration Statement did, and
when the Remarketing Prospectus is first filed (if required) in
accordance with Rule 424(b), and on the Closing Date, the
Remarketing Prospectus (and any supplement thereto) will, comply
in all material respects with the applicable requirements of the
Act and the Exchange Act and the respective rules thereunder; on
the Effective Date and at the Execution Time, the Registration
Statement 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, on the date of any filing pursuant
to Rule 424(b) and on the Closing Date and any settlement date,
the Remarketing Prospectus (together with any supplement thereto)
will not include 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 makes no representations or warranties as to the
information contained in or omitted from the Registration
Statement or the Remarketing Prospectus (or any supplement
thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of the
Remarketing Agents.
(c) Each of the Company and the subsidiaries listed on Schedule
I attached hereto (each a "Significant Subsidiary" and, together,
the "Significant Subsidiaries") has been duly incorporated and is
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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 or lease, as the case
may be, and to operate its properties and conduct its business as
described in the Remarketing Prospectus, and is duly qualified to
do business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such
qualification, except where the failure to so qualify or be in
good standing could not be reasonably expected to have a material
adverse effect on the condition (financial or otherwise),
prospects, earnings, business or properties of the Company and
its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business (a "Material
Adverse Effect").
(d) All the outstanding shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Remarketing Prospectus, all
outstanding shares of capital stock of the Significant
Subsidiaries are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected
security interest or any other security interests, claims, liens
or encumbrances.
(e) The Company's authorized equity capitalization is as set
forth in the Remarketing Prospectus; the capital stock of the
Company conforms in all material respects to the description
thereof contained in the Remarketing Prospectus; the Notes have
been duly and validly authorized, and constitute valid and
legally binding obligations of the Company, enforceable against
the Company in accordance with their terms, except as
enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or
other laws affecting creditors' rights generally from time to
time in effect and to general principles of equity (regardless of
whether enforceability is considered at law or in equity), and
entitled to the benefits of, the Indenture; and, except as set
forth in the Remarketing Prospectus (exclusive of any supplement
thereto), the Notes will be delivered free and clear of all
liens, encumbrances, equities and claims on the Closing Date; and
the Notes conform in all material respects to the description
thereof contained in the Remarketing Prospectus.
(f) There is no franchise, contract or other document of a
character required to be described in the Registration Statement
or Remarketing Prospectus, or to be filed as an exhibit thereto,
which is not described or filed as required.
(g) This has been duly authorized,
executed and delivered by the Company.
(h) The Indenture has been duly authorized, executed and
delivered by the Company and is a valid and legally binding
agreement of the Company, enforceable against the Company in
accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, reorganization, insolvency,
moratorium, fraudulent conveyance or other laws affecting
creditors' rights generally from time to time in effect and to
general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity), and conforms in all material respects to the description
thereof in the Remarketing Prospectus.
(i) The Company is not and, after giving effect to the
Remarketing of the Notes and the consummation of the transactions
contemplated by the Remarketing Prospectus, will not be an
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"investment company" as defined in the Investment Company Act of
1940, as amended.
(j) 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, the Exchange Act and the
Trust Indenture Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the Remarketing
of the Notes by the Remarketing Agents in the manner contemplated
herein and in the Remarketing Prospectus.
(k) Neither the Remarketing of the Notes 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 or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of
the Significant Subsidiaries pursuant to, (i) the charter or by-
laws of the Company or any of the Significant Subsidiaries,
(ii) the terms of any indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the
Company or any of the Significant Subsidiaries is a party or
bound or to which its or their property is subject, or (iii) any
statute, law, rule, regulation, judgment, order or decree
applicable to the Company or any of the Significant Subsidiaries
of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
jurisdiction over the Company or any of the Significant
Subsidiaries or any of its or their properties, except, with
respect to clauses (ii) or (iii) above, for such conflicts,
breaches, defaults, liens, charges, encumbrances or violations
that could not be reasonably be expected to result in a Material
Adverse Effect or to materially adversely affect the performance
of this Agreement or the consummation of the transactions
contemplated hereby.
(l) The consolidated historical financial statements of the
Company and its consolidated subsidiaries incorporated by
reference in the Remarketing Prospectus and the Registration
Statement present fairly in all material respects the financial
condition, results of operations and cash flows of the Company as
of the dates and for the periods indicated, comply as to form
with the applicable accounting requirements of the Act (other
than such changes to the form of presentation as may result from
the letters received by the Company from the SEC, dated January
27, 2005 and February 10, 2005, and related discussions) and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved (except as otherwise noted therein). The selected
financial data set forth under the caption "Capitalization" in
the Remarketing Prospectus fairly present, on the basis stated in
the Remarketing Prospectus, the information included therein.
(m) No 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 or its or their
property is pending or, to the best knowledge of the Company,
threatened that (i) could reasonably be expected to have a
material adverse effect on the performance of this Agreement or
the consummation of any of the transactions contemplated hereby
or (ii) could reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Remarketing
Prospectus (exclusive of any supplement thereto).
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(n) Each of the Company and each of the Significant Subsidiaries
owns or leases all such properties as are necessary to the
conduct of its operations as presently conducted.
(o) Neither the Company nor any Significant Subsidiary is in
violation or default of (i) any provision of its charter or
bylaws, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which
it is a party or bound or to which its property is subject, or
(iii) any statute, law, rule, regulation, judgment, order or
decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
jurisdiction over the Company or such Significant Subsidiary or
any of its properties, as applicable, except, with respect to
clauses (ii) and (iii) above, for such violations or defaults
that could not reasonably be expected to have a Material Adverse
Effect.
(p) Ernst & Young, LLP, who have audited certain financial
statements of the Company and its consolidated subsidiaries and
delivered their report with respect to the audited consolidated
financial statements and schedules incorporated by reference in
the Remarketing Prospectus, is an independent registered public
accounting firm as required by the Act and the rules and
regulations of the Commission thereunder.
(q) There are no material transfer taxes or other similar fees
or charges under Federal law or the laws of any state, or any
political subdivision thereof, required to be paid in connection
with the execution and delivery of this Agreement or the
Remarketing of the Notes.
(r) No labor problem or dispute with the employees of the
Company or any of its Significant Subsidiaries exists or, to the
knowledge of the Company, is threatened or imminent, except those
that could not be reasonably expected to result in a Material
Adverse Effect or to materially adversely affect the performance
of this or the consummation of the
transactions contemplated hereby.
(s) No Significant Subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to
the Company, from making any other distribution on such
subsidiary's capital stock, from repaying to the Company any
loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company, except as
described in or contemplated by the Remarketing Prospectus.
(t) The Company and its consolidated subsidiaries possess all
licenses, certificates, permits and other authorizations issued
by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, and
neither the Company nor any such subsidiary has received any
notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit which, singly or
in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would have a Material Adverse Effect, except
as set forth in or contemplated in the Remarketing Prospectus
(exclusive of any supplement thereto).
(u) The Company and each of its subsidiaries are in compliance
in all material respects with all applicable laws and regulations
administered by the Office of Thrift Supervision (the "OTS") and
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any other federal or state financial institution regulatory
authority with jurisdiction over the Company or any of its
subsidiaries (collectively with the OTS, "Bank Regulatory
Authorities"), other than where such failures to comply would not
have a Material Adverse Effect, except as described in the
Prospectus or any filing under the Exchange Act incorporated by
reference therein. Neither the Company nor any of its
subsidiaries is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter or
similar undertaking to, or is subject to any order or directive
by, or is a recipient of any extraordinary supervisory letter, or
has adopted any board resolutions at the request of, any Bank
Regulatory Authority which restricts materially the conduct of
its business, or in any manner relates to its capital adequacy,
credit policies, regulatory compliance, anti-money laundering
efforts or management, nor have any of them been advised by any
Bank Regulatory Authority that it is contemplating issuing or
requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment
letter or similar submission, except for the Consent Order
entered into with the OTS as described in the Company's Form 8-K
dated as of December 22, 2004 filed with the Commission and
submissions made to the OTS thereunder.
(v) The Company has not taken, directly or indirectly, any
action that has constituted or that was designed to or might
reasonably be expected to cause or result in, under the Exchange
Act or otherwise, the stabilization or manipulation of the price
of any security of the Company to facilitate the Remarketing of
the Notes.
(w) The Company and its Significant Subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental
Laws"), (ii) have received and are in compliance with all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) have not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in
the aggregate, have a Material Adverse Effect, except as set
forth in or contemplated in the Remarketing Prospectus (exclusive
of any supplement thereto).
(x) The Significant Subsidiaries are the only significant
subsidiaries of the Company as defined by Rule 1-02(w) of
Regulation S-X.
(y) Except as set forth in or contemplated in the Remarketing
Prospectus (exclusive of any supplement thereto) or publicly
announced, no "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the
Act) has (A) taken any action to, or to the Company's knowledge,
threatened to decrease the rating of any debt securities of the
Company or any of its subsidiaries or (B) given any notice 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.
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Any certificate signed by any officer of the Company and
delivered to the Remarketing Agents or counsel for the
Remarketing Agents in connection with the Remarketing of the
Notes shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Remarketing
Agent.
Section 5. Agreements. The Company agrees with the several
Remarketing Agents that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time,
and any amendment thereof, to become effective. Prior to the
termination of the Remarketing of the Notes, the Company will not
file any amendment of the Registration Statement or supplement to
the Remarketing Prospectus or any Rule 462(b) Registration
Statement unless the Company has furnished you a copy for your
review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject
to the foregoing sentence, if the Registration Statement has
become or becomes effective pursuant to Rule 430A, or filing of
the Remarketing Prospectus is otherwise required under
Rule 424(b), the Company will cause the Remarketing Prospectus,
properly completed, and any supplement thereto 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 the Remarketing Agents of such timely
filing. The Company will promptly advise the Remarketing Agents
(1) when the Registration Statement, if not effective at the
Execution Time, shall have become effective, (2) when the
Remarketing Prospectus, and any supplement thereto, shall have
been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have
been filed with the Commission, (3) when, prior to termination of
the Remarketing of the Notes, any amendment to the Registration
Statement shall have been filed or become effective, (4) of any
request by the Commission or its staff for any amendment of the
Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Remarketing Prospectus or
for any additional information, (5) 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 (6) of the receipt by the Company
of any notification with respect to the suspension of the
qualification of the Notes for Remarketing in any jurisdiction or
the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or the suspension of any such
qualification 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 Remarketing 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 circumstances under which they were made not
misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Remarketing Prospectus to comply with
the Act or the Exchange Act or the respective rules thereunder,
the Company promptly will (1) notify the Remarketing Agents of
such event, (2) prepare and file with the Commission, subject to
the second sentence of paragraph (a) of this Section 5, an
amendment or supplement which will correct such statement or
omission or effect such compliance and (3) supply any
supplemented Remarketing Prospectus to you in such quantities as
you may reasonably request.
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(c) As soon as practicable, the Company will make generally
available to its security holders and to the Remarketing Agents
an earnings statement or statements of the Company and its
subsidiaries that will satisfy the provisions of Section 11(a) of
the Act and Rule 158 under the Act.
(d) The Company will furnish to the Remarketing Agents and
counsel for the Remarketing Agents, without charge, so long as
delivery of a prospectus by a Remarketing Agent or a dealer may
be required by the Act, as many copies of each Preliminary
Remarketing Prospectus and the Remarketing Prospectus and any
supplement thereto as the Remarketing Agents may reasonably
request. The Company will pay the expenses of printing or other
production of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the
qualification of the Notes for the Remarketing under the laws of
such jurisdictions as the Remarketing Agents may designate, will
maintain such qualifications in effect so long as required for
the Remarketing of the Notes and will pay any fee of the National
Association of Securities Dealers, Inc., in connection with its
review of the offering; provided that in no event shall the
Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits,
other than those arising out of the Remarketing of the Notes, in
any jurisdiction where it is not now so subject.
(f) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act
or otherwise, in stabilization or manipulation of the price of
any security of the Company to facilitate the Remarketing of the
Notes.
(g) The Company agrees to pay the costs and expenses relating to
the following matters: (i) the preparation, printing or
reproduction and filing with the Commission of the Registration
Statement (including financial statements and exhibits thereto),
each Preliminary Remarketing Prospectus, the Remarketing
Prospectus and each amendment or supplement to any of them; (ii)
the printing (or reproduction) and delivery (including postage,
air freight charges and charges for counting and packaging) of
such copies of the Registration Statement, each Preliminary
Remarketing Prospectus, the Remarketing Prospectus and all
amendments or supplements to any of them, as may, in each case,
be reasonably requested for use in connection with the
Remarketing of the Notes; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the
Notes, including any stamp or transfer taxes in connection with
the Remarketing of the Notes; (iv) the printing (or reproduction)
and delivery of this Agreement, any blue sky memorandum and all
other agreements or documents printed (or reproduced) and
delivered in connection with the Remarketing of the Notes; (v)
the registration of the Notes under the Exchange Act; (vi) any
registration or qualification of the Notes for Remarketing under
the securities or blue sky laws of the several states (including
filing fees and the reasonable fees and expenses of counsel for
the Remarketing Agents relating to such registration and
qualification); (vii) any filings required to be made with the
National Association of Securities Dealers, Inc. (including
filing fees and the reasonable fees and expenses of counsel for
the Remarketing Agents relating to such filings); (viii) the
transportation and other expenses incurred by or on behalf of
Company representatives in connection with presentations to
prospective purchasers of the Notes; (ix) the fees and expenses
12
of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company; and (x)
all other costs and expenses incident to the performance by the
Company of its obligations hereunder.
Section 6. Conditions to the Obligations of the Remarketing
Agents. The obligations of the Remarketing Agents hereunder,
shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the
Execution Time and 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) The Notes to be included in the Remarketing have not been
called for redemption.
(b) The Remarketing Agents are able to find a purchaser or
purchasers for Notes included in the Remarketing at a price not
less than 100.50% of the Remarketing Value.
(c) The Purchase Contract Agent, the Collateral Agent, the
Custodial Agent, the Securities Intermediary, the Company and the
Trustee shall have performed their respective obligations in
connection with any remarketing pursuant hereunder and pursuant
to the Purchase Contract Agreement, the Pledge Agreement, the
Indenture, and this Agreement (including, without limitation, the
Purchase Contract Agent's and the Custodial Agent's giving the
Remarketing Agent notice of the aggregate principal amount of the
Notes to be remarketed, no later than 10:00 a.m., New York City
time, on the third Business Day preceding the Remarketing Date
and, in the case of the Collateral Agent and Custodial Agent,
delivering the Notes to be remarketed to the Remarketing Agents
by the times provided for in the Pledge Agreement).
(d) No Event of Default (as defined in the Indenture) shall have
occurred and be continuing. If at any time during the term of
this Agreement, any Event of Default or event that with the
passage of time or the giving of notice or both would become an
Event of Default has occurred and is continuing under the
Indenture, then the obligations and duties of the Remarketing
Agents under this Agreement shall be suspended until such default
or event has been cured. The Company will promptly give the
Remarketing Agents notice of all such defaults and events of
which the Company is aware.
(e) If filing of the Remarketing Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Remarketing
Prospectus, and any such supplement, will be 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.
(f) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel for the
Company, shall have furnished to the Remarketing Agents their
opinion or opinions, dated the Closing Date and addressed to the
Remarketing Agents, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by the Company;
12
(ii) the Indenture has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of
the Company, enforceable against the Company in accordance with
its terms, except as enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other laws affecting creditors' rights generally
from time to time in effect and to general principles of equity
(regardless of whether enforcement is sought in equity or at
law);
(iii) no governmental approval that has not been obtained or
taken and is not in full force and effect is required to be
obtained in connection with the execution and delivery of each of
this Agreement by the Company or the consummation by the Company
of the transactions contemplated hereby;
(iv) the Notes have been duly authorized by the Company, and,
when delivered by the Company against payment therefore in
accordance with this Agreement and the Indenture, and assuming
due authentication by the Trustee in accordance with the
Indenture of the global certificate representing the Notes, will
constitute valid and binding obligations of the Company entitled
to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except as enforceability
may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect and to general principles
of equity (regardless of whether enforcement is sought in equity
or at law);
(v) the Company is not and, solely after giving effect to the
Remarketing of the Notes and the consummation of the transactions
contemplated by the Remarketing Prospectus, will not be an
"investment company" as defined in the Investment Company Act of
1940, as amended;
(vi) to the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued,
and, to the best knowledge of such counsel, no proceedings for
that purpose have been instituted or are pending or threatened;
the Registration Statement and the Remarketing Prospectus (other
than the financial statements and other financial information
contained therein, as to which such counsel need express no
opinion) appeared on their face to be appropriately responsive in
all material respects to the applicable requirements of the Act
and the rules thereunder; and such counsel has no reason to
believe that on the Effective Date or the date the Registration
Statement was last deemed amended the Registration Statement
contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary to make the statements therein not misleading or that
the Remarketing Prospectus as of its date and on the Closing
Date, included or includes any untrue statement of a material
fact or omitted 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 information
contained therein, as to which such counsel need express no
opinion);
13
(vii) the Company has the corporate power and the corporate
authority to execute and deliver this Agreement and to consummate
the transactions contemplated thereby;
(viii) The statements in the Remarketing Prospectus set forth
under the caption "Description of the Remarketed Notes" (other
than "Book-Entry and Settlement") and the statements in the Base
Prospectus under the caption "Description of Debt Securities"
(other than "Registered Global Securities") insofar as such
statements purport to summarize certain provisions of the
documents referred to therein, fairly summarize such provisions
in all material respects;
(ix) although the discussion set forth in the Remarketing
Prospectus under the heading "Certain United States Federal
Income Tax Consequences" does not purport to discuss all possible
U.S. federal income tax consequences of the ownership and
disposition of the Notes acquired in the Remarketing, subject to
the qualifications and assumptions set forth therein, such
discussion constitutes, in all material respects, a fair and
accurate summary of the United States federal income tax
consequences of the ownership and disposition of the Notes
acquired in the Remarketing based upon current United States
federal income tax law; and
(x) the execution and delivery by the Company of this Agreement
and the consummation of the transactions contemplated herein have
not and will not violate or conflict with, or result in any
contravention of, any applicable law.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any
jurisdiction other than the State of New York, the State of
Delaware or the Federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon
the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel
for the Remarketing Agents and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible
officers of the Company and public officials. References to
the Remarketing Prospectus in this paragraph (b) include any
supplements thereto at the Closing Date.
(g) J. Xxxxxxx Xxxxxxxx, General Counsel for the Company, shall
have furnished to the Remarketing Agents his opinion, dated the
Closing Date and addressed to the Remarketing Agents, to the
effect that:
(i) each of the Company and each of the Significant 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 or lease, as the case may be, and to operate
its properties and conduct its business as described in the
Remarketing Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws of
each other jurisdiction that requires such qualification, except
where the failure to so qualify or be in good standing could not
reasonably be expected to result in a Material Adverse Effect;
14
(ii) all the outstanding shares of capital stock of each
Significant Subsidiary have been duly and validly authorized and
issued and are fully paid and nonassessable, and, except as
otherwise set forth in the Remarketing Prospectus, all
outstanding shares of capital stock of the Significant
Subsidiaries are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected
security interest and, to the knowledge of such counsel, after
due inquiry, any other security interest, claim, lien or
encumbrance;
(iii) 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 or its or their
property of a character required to be disclosed in the
Registration Statement or the Remarketing Prospectus which is not
adequately described as required, and there is no franchise,
contract or other document of a character required to be
described in the Registration Statement or Remarketing
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required; and
(iv) the Remarketing of the Notes, the execution, delivery and
performance of this Agreement, the consummation of the
transactions contemplated herein, and the fulfillment of the
terms or provisions hereof will not conflict with, result in a
breach or violation of or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or its
Significant Subsidiaries pursuant to, (i) the charter or by-laws
of the Company or its Significant Subsidiaries or (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which its or their property
is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or the
Significant Subsidiaries or any court, regulatory body,
administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company or the Significant
Subsidiaries or any of its or their properties, except, in the
case of clauses (ii) or (iii) above, for such conflicts,
breaches, defaults, liens, charges, encumbrances or violations
that could not reasonably be expected to result in a Material
Adverse Effect.
(h) The Remarketing Agents shall have received from Cleary,
Gottlieb, Xxxxx & Xxxxxxxx, counsel for the Remarketing Agents,
such opinion or opinions, dated the Closing Date, and addressed
to the Remarketing Agents, with respect to the Remarketing of the
Notes, the Registration Statement, the Remarketing Prospectus
(together with any supplement thereto) and other related matters
as the Remarketing Agents may reasonably require, and the Company
shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such
matters.
(i) The Company shall have furnished to the Remarketing Agents a
certificate of the Company, signed by the Chairman of the Board
or the Chief Administrative Officer and the principal financial
or accounting officer of the Company, dated the Closing Date, to
the effect that the signers of such certificate have carefully
examined the Registration Statement, the Remarketing Prospectus,
15
any supplements to the Remarketing Prospectus and this Agreement
and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct on and as of the Closing Date with
the same effect as if made on such date and the Company has
complied with all the agreements and satisfied all the conditions
on its part to be performed or satisfied at or prior to the
Closing Date
(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 Remarketing
Prospectus (exclusive of any supplement thereto), there has been
no material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the
Company and its 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 Remarketing
Prospectus (exclusive of any supplement thereto).
(j) Ernst & Young LLP shall have furnished to the Remarketing
Agents, at the Execution Time and at the Closing Date, letters,
dated respectively as of the Execution Time and as of the Closing
Date, in form and substance satisfactory to the Remarketing
Agents, to the effect set forth in Annex I hereto.
(k) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement
(exclusive of any amendment thereof) and the Remarketing
Prospectus (exclusive of any supplement thereto), there shall not
have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (m) of this Section 6 or
(ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise),
earnings, business or properties of the Company and its
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 Remarketing Prospectus (exclusive
of any supplement thereto) the effect of which, in any case
referred to in clause (i) above, is, in the sole judgment of the
Remarketing Agents, so material and adverse as to make it
impractical or inadvisable to proceed with the Remarketing of the
Notes as contemplated by the Registration Statement (exclusive of
any amendment thereof) and the Remarketing Prospectus (exclusive
of any supplement thereto).
(l) Subsequent to the Execution Time, there shall not have been
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.
16
(m) Prior to the Closing Date, the Company shall have furnished
to the Remarketing Agents such further information, certificates
and documents as the Remarketing Agents may reasonably request.
If any of the conditions specified in this Section 6
shall not have been fulfilled 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 reasonably
satisfactory in form and substance to the Remarketing Agents and
counsel for the Remarketing Agents, this Agreement and all
obligations of the Remarketing Agents hereunder may be canceled
at, or at any time prior to, the Closing Date, by the Remarketing
Agents, notwithstanding the terms set forth in Section 6. Notice
of such cancellation shall be given to the Company in writing or
by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section
6 shall be delivered at the office of Cleary, Gottlieb, Xxxxx &
Xxxxxxxx, counsel for the Remarketing Agents, at Xxx Xxxxxxx
Xxxxx, Xxx Xxxx, X.X. 00000 on the Closing Date.
Section 7. Replacement and Resignation of Remarketing Agents.
(a) The Company may in its absolute discretion replace Citigroup
Global Markets Inc and UBS Securities LLC as Remarketing Agent by
giving notice prior to 3:00 p.m., New York City time (i) on the
eleventh Business Day immediately prior to the Remarketing Date
in the case of a remarketing to occur on the Remarketing Date or
any of the two Business Days immediately following the
Remarketing Date, (ii) the fourteenth Business Day immediately
prior to April 6, 2005 in the case of a remarketing to occur on a
Subsequent Remarketing Date immediately following a Failed
Remarketing on any of the two Business Days immediately following
the Remarketing Date, or (iii) the fourteenth Business Day
immediately prior to the Stock Purchase Date in the case of a
remarketing to occur on any of the three Business Days
immediately prior to the Stock Purchase Date. Any such
replacements shall become effective upon the Company's
appointment of a successor to perform the services that would
otherwise be performed hereunder by the Remarketing Agents. Upon
providing such notice, the Company shall use all reasonable
efforts to appoint such a successor and to enter into a
with such successor as soon as reasonably
practicable.
(b) Citigroup Global Markets Inc or UBS Securities LLC may
resign at any time and be discharged from its duties and
obligations hereunder as a Remarketing Agent by giving notice
prior to 3:00 p.m., New York City time (i) on the eleventh
Business Day immediately prior to the Remarketing Date in the
case of a remarketing to occur on the Remarketing Date or any of
the two Business Days immediately following the Remarketing Date,
(ii) the fourteenth Business Day immediately prior to April 6,
2005 in the case of a remarketing to occur on a Subsequent
Remarketing Date immediately following a Failed Remarketing on
any of the two Business Days immediately following the
Remarketing Date, or (iii) the fourteenth Business Day
immediately prior to the Stock Purchase Date in the case of a
remarketing to occur on any of the three Business Days
immediately prior to the Stock Purchase Date. Any such
resignations shall become effective upon the Company's
appointment of a successor to perform the services that would
otherwise be performed hereunder by the Remarketing Agents. Upon
receiving notice from the Remarketing Agent that it wishes to
17
resign hereunder, the Company shall appoint such a successor and
enter into a with it as soon as reasonably
practicable.
(c) The Company shall give the Purchase Contract Agent and the
Trustee prompt written notice of any replacement of a Remarketing
Agent pursuant to this Section 7.
Section 8. Reimbursement of Remarketing Agents' Expenses.
If the remarketing of the Notes provided for herein is not
consummated because any condition to the obligations of the
Remarketing Agents set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 10
hereof or because of any refusal, inability or failure on the
part of the Company to perform any agreement herein or comply
with any provision hereof other than by reason of a default by
any of the Remarketing Agents, the Company will reimburse the
Remarketing Agents on demand for all out-of-pocket expenses
(including reasonable fees and disbursements of counsel) that
shall have been incurred by them in connection with the proposed
Remarketing.
Section 9. Dealing in the Securities.
Each of the Remarketing Agents, when acting hereunder
or when acting in its individual or any other capacity, may, to
the extent permitted by law, buy, sell, hold or deal in any of
the Notes, Stripped DECS, Upper DECS or any other securities of
the Company. With respect to any Notes, Stripped DECS, Upper
DECS or any other securities of the Company owned by it, each of
the Remarketing Agents may exercise any vote or join in any
action with like effect as if it did not act in any capacity
hereunder. Each Remarketing Agent, in its individual capacity,
either as principal or agent, may also engage in or have an
interest in any financial or other transaction with the Company
as freely as if it did not act in any capacity hereunder.
The Company or its affiliates may, to the extent
permitted by law, purchase any Notes that are remarketed by any
Remarketing Agent.
Section 10. Termination of .
(a) This Agreement shall terminate as to any Remarketing Agent
that is replaced on the effective date of its replacement
pursuant to Section 7(a) hereof or pursuant to Section 7(b)
hereof. Notwithstanding the foregoing, the obligations set forth
in Sections 3 and 8 hereof shall survive and remain in full force
and effect until all amounts payable under said Section 3 shall
have been paid in full; provided, however, that if any
Remarketing Agent resigns pursuant to Section 7(b), then the
obligations set forth in Sections 3 and 8 hereof shall not
survive the termination of this Agreement and no fee shall be
payable to such Remarketing Agent in such capacity. In addition,
each former Remarketing Agent shall be entitled to the rights and
benefits under Sections 11, 12 and 14(b) notwithstanding the
replacement of such Remarketing Agent.
(b) This Agreement shall be subject to termination in the
absolute discretion of the Remarketing Agents, by notice given to
the Company prior to the Closing Date, if at any time prior to
such time (i) trading in the Company's Common Stock shall have
been suspended by the Commission, the New York Stock Exchange or
the Pacific Exchange or trading in securities generally on the
18
New York Stock Exchange or the Pacific Exchange shall have been
suspended or limited or minimum prices shall have been
established on either of such exchanges, (ii) a banking
moratorium shall have been declared either by Federal or New York
State authorities or (iii) 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 sole judgment of the Remarketing Agents, impractical or
inadvisable to proceed with the Remarketing of the Notes as
contemplated by the Prospectus (exclusive of any supplement
thereto).
Section 11. Remarketing Agents' Performance; Duty of Care.
The duties and obligations of the Remarketing Agents
shall be determined solely by the express provisions hereunder.
No implied covenants or obligations of or against the Remarketing
Agents shall be read into this Agreement. In the absence of a
final judicial determination of willful misconduct, bad faith or
gross negligence on the part of the a Remarketing Agent, such
Remarketing Agent may conclusively rely upon any document
furnished to it which purports to conform to the requirements
hereunder as to the truth of the statements expressed therein.
Each of the Remarketing Agents shall be protected in acting upon
any document or communication reasonably believed by it to be
signed, presented or made by the proper party or parties. The
Remarketing Agents shall not have any obligation to determine
whether there is any limitation under applicable law on the Reset
Rate on the Notes or, if there is any such limitation, the
maximum permissible Reset Rate on the Notes, and they shall rely
solely upon timely written notice from the Company pursuant to
Section 2(a) hereof as to whether or not there is any such
limitation and, if so, the maximum permissible Reset Rate.
Neither Remarketing Agent shall incur any liability under this
Agreement to any beneficial owner or holder of Notes, or other
securities, either in its individual capacities or as Remarketing
Agent, as the case may be, for any action or failure to act in
connection with the Remarketing or otherwise in connection with
the transactions contemplated by this Agreement, except to the
extent that such liability has, by final judicial determination,
resulted from the willful misconduct, bad faith or gross
negligence of such Remarketing Agent or by its failure to fulfill
its express obligations hereunder. The provisions of this Section
11 shall survive any termination of this Agreement and shall also
continue to apply to every Remarketing Agent notwithstanding its
resignation or removal. The Remarketing Agents will act as the
agents of the Holders, and not as the agents of the Company.
Section 12. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Remarketing Agent, the directors, officers, employees and agents
of each Remarketing Agent and each person who controls any
Remarketing Agent within the meaning of either the Act or the
Exchange Act, against (1) any loss, liability or reasonable out-
of-pocket expense incurred without negligence, willful misconduct
or bad faith on its part, arising out of or in connection with
the acceptance or administration of its powers and duties under
this Agreement, and (2) any and all losses, claims, damages or
liabilities, joint or several, to which they or any of 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
19
contained in the registration statement for the registration of
the Notes as originally filed or in any amendment thereof, or in
any Preliminary Remarketing Prospectus or the Remarketing
Prospectus, 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 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 clause (2)
shall not apply and the Company will not be liable in any such
case described in clause (2) 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 or on behalf
of any Remarketing Agent specifically for inclusion therein.
(b) Each Remarketing Agent severally and not jointly 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 indemnity
contained in Section 12(a)(2) from the Company to each
Remarketing Agent, but only with reference to written information
relating to such Remarketing Agent furnished to the Company by or
on behalf of the Remarketing Agent specifically for inclusion in
the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which
any Remarketing Agent may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph
of the cover page regarding delivery of the Notes and, under the
heading "Remarketing," the paragraph related to stabilization,
syndicate covering transactions and penalty bids in any
Preliminary Remarketing Prospectus and the Remarketing Prospectus
constitute the only information furnished in writing by or on
behalf of the several Remarketing Agents for inclusion in any
Preliminary Remarketing Prospectus or the Remarketing Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 12 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 12, 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. 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); provided, however, that such counsel shall be
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),
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 a conflict of interest,
20
(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
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. 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 12 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Company and the
Remarketing Agents 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 the Remarketing Agents may be subject in such
proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and by the Remarketing
Agents on the other from the Remarketing of the Notes; provided,
however, that in no case shall any Remarketing Agent (except as
may be provided in any agreement among Remarketing Agents
relating to the Remarketing of the Notes) be responsible for any
amount in excess of the aggregate fees received by such
Remarketing Agent with respect to the Remarketing. If the
allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Remarketing
Agents severally shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and of the
Remarketing Agents on the other 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) received by it, and
benefits received by the Remarketing Agents shall be deemed to be
equal to the aggregate fees received by the Remarketing Agents
with respect to the Remarketing. Relative fault shall be
determined by reference to, among other things, whether any
untrue or any alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information provided by the Company on the one hand or the
Remarketing Agents on the other, the intent of the parties and
their relative knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The
Company and the Remarketing Agents 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 12, each person
who controls a Remarketing Agent within the meaning of either the
Act or the Exchange Act and each director, officer, employee and
agent of a Remarketing Agent shall have the same rights to
21
contribution as such Remarketing Agent, 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).
Section 13. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New
York without regard to principles of conflicts of laws.
Section 14. Term of Agreement.
(a) Notwithstanding any termination pursuant to Section 7 or 10
hereof, the obligations set forth in Section 8 heoreof shall
survive and remain in full force and effect until all amounts
payable under Section 8 shall have been paid in full. In
addition, each former Remarketing Agent shall be entitled to the
rights and benefits under Sections 11, 12 and 14(b)
notwithstanding the replacement of such Remarketing Agent.
(b) All representations and warranties included in this
Agreement or contained in certificates of officers of the Company
submitted pursuant hereto or thereto, shall remain operative and
in full force and effect, regardless of any investigation made by
or on behalf of the Remarketing Agents or any of their
controlling persons, or by or on behalf of the Company or the
Purchase Contract Agent, and shall survive the remarketing of the
Notes.
Section 15. Successors and Assigns.
The rights and obligations of the Company and the
Purchase Contract Agent (both in its capacity as Purchase
Contract Agent and as attorney-in-fact) hereunder may not be
assigned or delegated to any other person (except pursuant to
sections 7.9 and 7.10 of the Purchase Contract Agreement) without
the prior written consent of the Remarketing Agents, which
consent shall not be unreasonably withheld. The rights and
obligations of the Remarketing Agents hereunder may not be
assigned or delegated to any other person without the prior
written consent of the Company, except that the Remarketing
Agents shall have the right to appoint additional remarketing
agents as provided herein. This Agreement shall inure to the
benefit of and be binding upon the Company, the Purchase Contract
Agent and the Remarketing Agents and their respective successors
and assigns and the other indemnified parties (set forth in
Section 12 hereof) and the successors, assigns, heirs and legal
representatives of such indemnified parties. The terms
"successors" and "assigns" shall not include any purchaser of
Notes merely because of such purchase.
Section 16. Headings.
Section headings have been inserted in this Agreement
as a matter of convenience of reference only, and it is agreed
that such section headings are not a part of this Agreement and
will not be used in the interpretation of any provision of this
Agreement.
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Section 17. Severability.
If any provision of this Agreement shall be held or
deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all
jurisdictions because it conflicts with any provisions of any
constitution, statute, rule or public policy or for any other
reason, then, to the extent permitted by law, such circumstances
shall not have the effect of rendering the provision in question
invalid, inoperative or unenforceable in any other case,
circumstances or jurisdiction, or of rendering any other
provision or provisions of this Agreement, as the case may be,
invalid, inoperative or unenforceable to any extent whatsoever.
Section 18. Counterparts.
This Agreement may be executed in counterparts, each of
which shall be regarded as an original and all of which shall
constitute one and the same document.
Section 19. Amendments.
This Agreement may be amended by any instrument in
writing signed by the parties hereto.
Section 20. Notices.
Unless otherwise specified, any notices, requests,
consents or other communications given or made hereunder or
pursuant hereto shall be made in writing or transmitted by any
standard form of telecommunication, including telephone or
telecopy, and confirmed in writing. All written notices and
confirmations of notices by telecommunication shall be deemed to
have been validly given or made when delivered or mailed,
registered or certified mail, return receipt requested and
postage prepaid. All such notices, requests, consents or other
communications shall be addressed as follows: if to the Company,
to TEMPLE-INLAND INC., 0000 XxXxx Xxxxxxxxxx, Xxxxxx, Xxxxx
00000, Attention: General Counsel (fax no. (000) 000 0000), if to
the Remarketing Agents, to Citigroup Global Markets Inc. General
Counsel (fax no.: (000) 000 0000 and UBS Securities LLC,
Attention: Fixed Income Syndicate (fax no.: (000) 000 0000) and
confirmed to the General Counsel, Citigroup Global Markets Inc.,
at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel and to the General Counsel, UBS Securities LLC,
at 000 Xxxxxxxxxx Xxxx., Xxxxxxxx, XX, 00000, and if to the
Purchase Contract Agent, to JPMorgan Chase Bank, N.A., 0 Xxx Xxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Institutional Trust
Services, or to such other address as any of the above shall
specify to the other in writing.
Section 21. Information.
The Company agrees to furnish the Remarketing Agents
with such information and documents as the Remarketing Agents may
reasonably request in connection with the transactions
contemplated by this , and make reasonably
available to the Remarketing Agents and any accountant, attorney
or other advisor retained by the Remarketing Agents such
information that parties would customarily require in connection
with a due diligence investigation conducted in accordance with
applicable securities laws and cause the Company's officers,
directors, employees and accountants to participate in all such
discussions and to supply all such information reasonably
requested by any such person in connection with such
investigation.
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Section 22. Definitions. The terms which follow, when
used in this Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission
promulgated thereunder.
"Base Prospectus" shall mean the prospectus contained
in the Registration Statement at the Effective Date.
"Business Day" shall mean any day other than a
Saturday, a Sunday or a legal holiday or a day on which
banking institutions or trust companies are authorized or
obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange
Commission.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or
amendments thereto and any Rule 462(b) Registration
Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Preliminary Remarketing Prospectus" shall mean any
preliminary remarketing prospectus that omits Rule 430A
Information and which describes the Securities and the
offering thereof and is used prior to filing of the
Remarketing Prospectus, together with the Prospectus
Supplement and the Base Prospectus.
"Prospectus Supplement" shall mean the prospectus
supplement, dated April 25, 2002, relating to the Upper DECS
that was filed pursuant to Rule 424(b) in connection to the
issuance of the Upper DECS, together with the Base
Prospectus.
"Remarketing Prospectus" shall mean the remarketing
prospectus supplement relating to the Securities that was
first filed pursuant to Rule 424(b) after the Execution
Time, together with the Prospectus Supplement and the Base
Prospectus.
"Registration Statement" shall mean the registration
statement referred to in paragraph 1(a) above, including
exhibits and financial statements, as amended at the
Execution Time (or, if not effective at the Execution Time,
in the form in which it shall become effective) and, in the
event any post-effective amendment thereto or any
Rule 462(b) Registration Statement becomes effective prior
to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration
Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such
rules under the Act.
24
"Rule 430A Information" shall mean information with
respect to the Securities and the offering thereof permitted
to be omitted from the Registration Statement when it
becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a
registration statement and any amendments thereto filed
pursuant to Rule 462(b) relating to the offering covered by
the registration statement referred to in Section 3(a)
hereof.
"Trust Indenture Act" shall mean the Trust Indenture
Act of 1939, as amended, and the rules and regulations of
the Commission promulgated thereunder.
25
IN WITNESS WHEREOF, each of the Company, the Purchase
Contract Agent and the Remarketing Agents has caused this
Agreement to be executed in its name and on its behalf by one
of its duly authorized signatories as of the date first above
written.
TEMPLE-INLAND INC.
By
Name:
Title:
CITIGROUP GLOBAL MARKETS INC.
By:
Name:
Title:
UBS SECURITIES LLC
By:
Name:
Title:
CONFIRMED AND ACCEPTED:
JPMORGAN CHASE BANK, N.A.,
not individually but solely as Purchase Contract
Agent and as attorney-in-fact for the Holders of
the Purchase Contracts
By:
Name:
Title:
26
SCHEDULE I
Subsidiaries of Temple-Inland Inc.
TIN Inc.
Temple-Inland Financial Services Inc.
Guaranty Bank
Guaranty Holdings Inc. I
