Exhibit 1.1
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Temple-Inland Inc.
$500,000,000
6.375% Senior Notes due 2016
6.625% Senior Notes due 2018
Underwriting Agreement
New York, New York
December 2, 2005
Citigroup Global Markets Inc.
Xxxxxxx, Xxxxx & Co.,
as Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Temple-Inland Inc., a corporation organized under the laws of the
State of Delaware (the "Company"), proposes to sell to the several underwriters
named in Schedule I hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, the principal amount of its
securities identified in Schedule I hereto (the "Securities"), to be issued
under an indenture, dated as of September 1, 1986, between the Company and
JPMorgan Chase Bank, N.A. (formerly known as The Chase Manhattan Bank and
Chemical Bank), as Trustee (the "Trustee"), 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 (as so amended, the "Indenture").
To the extent there are no additional Underwriters listed on Schedule
I other than you, the term Representatives as used herein shall mean you, as
Underwriters, and the terms Representatives and Underwriters shall mean either
the singular or plural as the context requires. Any reference herein to the
Registration Statement, the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 that were
filed under the Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and any reference herein
to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the filing of any document under the
Exchange Act deemed to be incorporated therein by reference or any filing of a
Preliminary Final Prospectus or Final Prospectus, in each case after the
Effective Date of the Registration Statement, or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as the
case may be. Certain terms used herein are defined in Section 19 hereof.
1. Representations and Warranties. The Company represents and warrants
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to, and agrees with, each Underwriter as set forth below in this Section 1.
(a) The Company meets the requirements for use of Form S-3 under
the Act and has prepared and filed with the Commission an automatic
shelf registration statement, as defined in Rule 405 (the file number
of which is set forth in Schedule I hereto) on Form S-3, including a
related basic prospectus, for registration under the Act of the
offering and sale of the Securities. Such Registration Statement,
including any amendments thereto filed prior to the Execution Time
became effective upon filing. The Company may have filed with the
Commission, as part of an amendment to the Registration Statement or
pursuant to Rule 424(b), one or more Preliminary Final Prospectuses,
each of which has previously been furnished to you. The Company will
file with the Commission a final prospectus supplement relating to the
Securities in accordance with Rule 424(b). As filed, such final
prospectus supplement shall contain all information required by the
Act and the rules thereunder, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the Basic
Prospectus and any Preliminary Final 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 Final Prospectus is first filed (if required) in accordance
with Rule 424(b) and on the Closing Date (as defined herein), the
Final Prospectus (and any supplement thereto) will, comply in all
material respects with the applicable requirements of the Act, the
Exchange Act and the Trust Indenture Act and the respective rules
thereunder; on the Effective Date and at the Execution Time, the
Registration Statement did 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 Effective Date and on the Closing Date the
Indenture did or will comply in all material respects with the
applicable requirements of the Trust Indenture Act and the rules
thereunder; on the date of any filing pursuant to Rule 424(b) and on
the Closing Date, the Final 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
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no representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement of
Eligibility and Qualification (T-1) under the Trust Indenture Act or
(ii) the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing
to the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration
Statement or the Final Prospectus (or any supplement thereto), it
being understood and agreed that the only such information furnished
by or on behalf of any Underwriters consists of the information
described as such in Section 9 hereof.
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(c) The Disclosure Package does not contain any untrue statement
of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions from
the Disclosure Package based upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and
agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 9
hereof.
(d) (i) At the time of filing the Registration Statement, (ii) at
the time of the most recent amendment thereto for the purposes of
complying with Section 10(a)(3) of the Act (whether such amendment was
by post-effective amendment, incorporated report filed pursuant to
Sections 13 or 15(d) of the Exchange Act or form of prospectus), (iii)
at the time the Company or any person acting on its behalf (within the
meaning, for this clause only, of Rule 163(c)) made any offer relating
to the Securities in reliance on the exemption in Rule 163, and (iv)
at the Execution Time (with such date being used as the determination
date for purposes of this clause (iv)), the Company was or is (as the
case may be) a "well-known seasoned issuer" as defined in Rule 405.
The Company agrees to pay the fees required by the Commission relating
to the Securities within the time required by Rule 456(b)(1) without
regard to the proviso therein and otherwise in accordance with Rules
456(b) and 457(r).
(e) (i) At the earliest time after the filing of the Registration
Statement that the Company or another offering participant made a bona
fide offer (within the meaning of Rule 164(h)(2)) of the Securities
and (ii) as of the Execution Time (with such date being used as the
determination date for purposes of this clause (ii)), the Company was
not and is not an Ineligible Issuer (as defined in Rule 405), without
taking account of any determination by the Commission pursuant to Rule
405 that it is not necessary that the Company be considered an
Ineligible Issuer.
(f) Each Issuer Free Writing Prospectus does not include any
information that conflicts with the information contained in the
Registration Statement, including any document incorporated therein
and any prospectus supplement deemed to be a part thereof that has not
been superseded or modified. If there occurs an event or development
as a result of which the Disclosure Package would include an untrue
statement of a material fact or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, the Company will notify
promptly the Representatives so that any use of the Disclosure Package
may cease until it is amended or supplemented. The foregoing two
sentences do not apply to statements in or omissions from the
Disclosure Package based upon and in conformity with written
information furnished to the Company by any Underwriter through the
Representatives specifically for use therein, it being understood and
agreed that the only such information furnished by or on behalf of any
Underwriter consists of the information described as such in Section 9
hereof.
(g) Each of the Company and the subsidiaries listed on Schedule
III attached hereto (each a "Significant Subsidiary" and, together,
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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
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").
(h) 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 Disclosure Package and the Final 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.
(i) The Company's authorized equity capitalization is as set
forth in the Disclosure Package and the Final Prospectus; the
Securities conform in all material respects to the description thereof
contained in the Final Prospectus; and the Securities have been duly
and validly authorized, and when duly executed, authenticated and
delivered, will 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 will
be in the form contemplated by, and will be entitled to the benefits
of, the Indenture.
(j) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or
Final Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required.
(k) This Agreement has been duly authorized, executed and
delivered by the Company.
(l) 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 will conform in all material respects to the description
thereof in the Preliminary Final Prospectus and the Final Prospectus.
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(m) 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 Final Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(n) 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 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
Underwriters in the manner contemplated herein and in the Preliminary
Final Prospectus and the Final Prospectus.
(o) Neither 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 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.
(p) No holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(q) The historical consolidated financial statements of the
Company and its consolidated subsidiaries incorporated by reference in
the Preliminary Final Prospectus, the Final Prospectus and the
Registration Statement present fairly in all material respects the
consolidated financial position, results of operations and cash flows
of the Company and its consolidated subsidiaries as of the dates and
for the periods indicated, comply as to form with the applicable
accounting requirements of the Act 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).
(r) 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
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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 Disclosure Package and the Final Prospectus.
(s) 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.
(t) 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.
(u) Ernst & Xxxxx, LLP, who have audited certain historical
consolidated financial statements of the Company and its consolidated
subsidiaries and delivered their report with respect to the audited
historical consolidated financial statements incorporated by reference
in the Disclosure Package and the Final Prospectus, is an independent
registered public accounting firm as required by the Act and the rules
and regulations of the Commission thereunder.
(v) There are no 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 issuance by the
Company or sale by the Company of the Securities.
(w) 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 for such problems or
disputes that could not 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.
(x) 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
Disclosure Package and the Final Prospectus.
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(y) 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 Disclosure
Package and the Final Prospectus.
(z) 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 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 Disclosure Package and the Final Prospectus. 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.
(aa) The Company maintains a system of internal control over
financial reporting (as such term is defined in Rule 13a-15(f) of the
Exchange Act) that complies with the requirements of the Exchange Act
and has been designed by the Company's principal executive officer and
principal financial officer, or under their supervision, to provide
reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. The
Company's internal control over financial reporting is effective and
the Company is not aware of any material weaknesses in its internal
control over financial reporting.
(bb) 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 sale or resale of the
Securities.
(cc) 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
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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 Disclosure Package and
the Final Prospectus.
(dd) There is and has been no material failure on the part of the
Company and any of the Company's directors or officers, in their
capacities as such, to comply with any provision of the Sarbanes Oxley
Act of 2002 and the rules and regulations promulgated in connection
therewith, including Section 402 related to loans and Sections 302 and
906 related to certifications.
(ee) The Significant Subsidiaries are the only significant
subsidiaries of the Company as defined by Rule 1-02(w) of Regulation
S-X.
(ff) Except as set forth in or contemplated in the Disclosure
Package and the Final Prospectus 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.
Any certificate signed by any officer of the Company and delivered to
the Representatives or counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale. Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto the principal amount thereof, the aggregate principal amount
of the Securities set forth opposite such Underwriter's name in Schedule II
hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
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shall be made on the date and at the time specified in Schedule I hereto or at
such time on such later date not more than three Business Days after the
foregoing date as the Representatives shall designate, which date and time may
be postponed by agreement between the Representatives and the Company or as
provided in Section 10 hereof (such date and time of delivery and payment for
the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Representatives for the respective accounts of
the several Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
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the Company. Delivery of the Securities shall be made through the facilities of
The Depository Trust Company unless the Representatives shall otherwise
instruct.
4. Offering by Underwriters. It is understood that the several
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Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
5. Agreements. The Company agrees with the several Underwriters that:
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(a) Prior to the termination of the offering of the Securities, the
Company will not file any amendment of the Registration Statement or
supplement (including the Final Prospectus or any Preliminary Final
Prospectus) to the Basic Prospectus 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. The Company will
cause a final term sheet to be filed in a form approved by the
Representatives with the Commission pursuant to Rule 433(d) within the time
period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed in a
form approved by the Representatives with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representatives of such timely
filing. The Company will promptly advise the Representatives (1) when the
final term sheet shall have been filed with the Commission pursuant to Rule
433(d), (2) when the Final Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule 424(b),
(3) when, prior to termination of the offering of the Securities, 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 Final 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 of any
notice that would prevent its use 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
Securities for sale 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, including, if necessary, by filing an amendment to the
Registration Statement or a new registration statement and using its best
efforts to have such amendment or new registration statement declared
effective.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act (including in circumstances where
such requirement may be satisfied pursuant to Rule 172), any event occurs
as a result of which the Final 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
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necessary to amend the Registration Statement, file a new registration
statement or supplement the Final Prospectus to comply with the Act or the
Exchange Act or the respective rules thereunder, including in connection
with use or delivery of the Final Prospectus, the Company promptly will (1)
notify the Representatives 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 or new registration statement which will
correct such statement or omission or effect such compliance, (3) use its
best efforts to have any amendment to the Registration Statement or new
registration statement declared effective as soon as practicable in order
to avoid any disruption in use of the Final Prospectus and (4) supply any
supplemented Final Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, but in any event not later than 16 months
after the date hereof, the Company will make generally available to its
securityholders and the Representatives an earnings statement of the
Company covering a period of at least 12 months beginning after the date
hereof and otherwise satisfying Section 11(a) of the Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, signed (but not original) copies of the
Registration Statement (including exhibits thereto) and to each other
Underwriter a copy of the Registration Statement (without exhibits thereto)
and, so long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act (including in circumstances where such requirement may
be satisfied pursuant to Rule 172), as many copies of each Preliminary
Final Prospectus, the Final Prospectus and each Issuer Free Writing
Prospectuses and any supplement thereto as the Representatives 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 Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities 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 offering
or sale of the Securities, in any jurisdiction where it is not now so
subject.
(f) The Company agrees that, unless it obtains the prior written
consent of the Representatives, and each Underwriter, severally and not
jointly, agrees with the Company that, unless it has obtained or will
obtain, as the case may be, the prior written consent of the Company, it
has not made and will not make any offer relating to the Securities that
would constitute an Issuer Free Writing Prospectus or that would otherwise
constitute a "free writing prospectus" (as defined in Rule 405) required to
be filed by the Company with the Commission or retained by the Company
under Rule 433; provided that the prior written consent of the parties
hereto shall be deemed to have been given in respect of the Free Writing
Prospectuses included in Schedule IV hereto. Any such free writing
prospectus consented to by the Representatives or the Company is
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hereinafter referred to as a "Permitted Free Writing Prospectus." The
Company agrees that (x) it has treated and will treat, as the case may be,
each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus
and (y) it has complied and will comply, as the case may be, with the
requirements of Rules 164 and 433 applicable to any Permitted Free Writing
Prospectus, including in respect of timely filing with the Commission,
legending and record keeping.
(g) The Company will not, without the prior written consent of
Citigroup Global Markets Inc. and Xxxxxxx, Xxxxx & Co., offer, sell,
contract to sell, pledge, or otherwise dispose of, (or enter into any
transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by the Company or
any affiliate of the Company or any person in privity with the Company or
any affiliate of the Company) directly or indirectly, including the filing
(or participation in the filing) of a registration statement with the
Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any debt securities issued or
guaranteed by the Company (other than the Securities) or publicly announce
an intention to effect any such transaction, for a period from the
Execution Time through the Closing Date, inclusive.
(h) 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 sale or resale of the Securities.
(i) 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), any Preliminary Final Prospectus, the
Final 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, any Preliminary Final Prospectus, the Final
Prospectus and all amendments or supplements to any of them, as may, in
each case, be reasonably requested for use in connection with the offering
and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities,
including any stamp or transfer taxes in connection with the original
issuance and sale of the Securities; (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 offering of the Securities; (v) the registration of the Securities
under the Exchange Act; (vi) any registration or qualification of the
Securities for offer and sale under the securities or blue sky laws of the
several states (including filing fees and the reasonable fees and expenses
of counsel for the Underwriters 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 Underwriters relating to
such filings); (viii) the transportation and other expenses incurred by or
11
on behalf of Company representatives in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses 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.
6. Conditions to the Obligations of the Underwriters. The obligations
-------------------------------------------------
of the Underwriters to purchase the Securities 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 the 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 Final Prospectus, and any supplement thereto, 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 or
any notice that would prevent its use shall have been issued and no
proceedings for that purpose shall have been instituted or threatened.
(b) The Company shall have requested and Skadden, Arps, Slate, Xxxxxxx
& Xxxx LLP, counsel for the Company, shall have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by the Company;
(ii) the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act, 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 the
Underwriting Agreement by the Company or the consummation by the
Company of the transactions contemplated thereby;
(iv) the Securities have been duly authorized by the Company,
and, when duly executed, issued and delivered by the Company against
payment therefor in accordance with this Agreement and the Indenture,
will constitute valid and binding obligations of the Company entitled
to the benefits of the Indenture and enforceable in accordance with
their terms, except as enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other laws affecting creditors' rights generally from
12
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
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;
(vi) the Indenture has been qualified under the Trust Indenture
Act and the Registration Statement has become effective under the Act;
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 Final 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 Exchange Act and the respective 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 Final 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);
(vii) such counsel has no reason to believe that the documents
specified in a schedule to such counsel's letter, consisting of those
included in the Disclosure Package and the list of Underwriters and
their respective participation in the sale of the Securities and the
sentences related to concessions and reallowances as set forth in the
section entitled "Underwriting" in the Final Prospectus, when taken
together as a whole, contained any untrue statement of a material fact
or omitted to state any material fact necessary in order to make the
statements therein, in the light of circumstances under which they
were made, not misleading;
(viii) each of the Company and the Significant Subsidiaries have
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;
(ix) the Company has the corporate power and the corporate
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby; and
13
(x) the execution and delivery by the Company of this Agreement
and the consummation of the transactions contemplated herein and
therein, including the issuance and sale of the Securities 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 Underwriters 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
Final Prospectus in this paragraph (b) include any supplements thereto at
the Closing Date.
(c) The Company shall have requested and caused X. Xxxxxxx Xxxxxxxx,
General Counsel for the Company, to have furnished to the Representatives
his opinion, dated the Closing Date and addressed to the Representatives,
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 Disclosure Package and the
Final 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;
(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 Disclosure Package and the Final 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 Final 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 Final
Prospectus, or to be filed as an exhibit thereto, which is not
described or filed as required;
14
(iv) the issue and sale of the Securities, the execution,
delivery and performance of this Agreement and the Indenture, the
consummation of the transactions contemplated therein, and the
fulfillment of the terms or provisions thereof 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;
(v) Temple-Inland Financial Services, Inc. is an exempt savings
and loan holding company under the Home Owners' Loan Act of 1933, as
amended (the "Home Owners' Loan Act"), and Guaranty Bank is a
federally chartered savings bank under the Home Owners' Loan Act; and
(vi) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
(d) The Representatives shall have received from Xxxxxx Xxxxxxxx Xxxxx
& Xxxxxxxx LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date and addressed to the Representatives, with respect
to the issuance and sale of the Securities, the Indenture, the Registration
Statement, the Disclosure Package, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives 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.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President or any Vice President 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 Final Prospectus, the Disclosure Package and any supplements
or amendments thereto 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 the Closing 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;
15
(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 historical consolidated
financial statements included or incorporated by reference in the
Disclosure Package and the Final 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 Disclosure
Package and Final Prospectus (exclusive of any supplement thereto).
(f) The Company shall have requested and Ernst & Young LLP shall have
furnished to the Representatives, 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 Representatives, to
the effect set forth in Annex I hereto.
(g) 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), the Disclosure Package, the Final Prospectus (exclusive
of any supplement thereto), or any Issuer Free Writing 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 (g) 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 Disclosure Package or the Final Prospectus (exclusive of any supplement
thereto) the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Representatives, so material and
adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Disclosure
Package and the Final Prospectus (exclusive of any supplement thereto).
(h) 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.
(i) Prior to the Closing Date, the Company shall have furnished to the
Representatives such further information, certificates and documents as the
Representatives 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
16
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancelation 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 Xxxxxx Xxxxxxxx Xxxxx & Xxxxxxxx LLP, counsel for the
Underwriters, at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, X.X. 10006 on the Closing Date.
7. Each Underwriter represents and agrees that:
(a) In relation to each Relevant Member State, with effect from and
including the Relevant Implementation Date, it has not made and will not
make an offer of the Securities to the public in that Relevant Member State
prior to the publication of a prospectus in relation to the Securities
which has been approved by the competent authority in that Relevant Member
State or, where appropriate, approved in another Relevant Member State and
notified to the competent authority in that Relevant Member State, all in
accordance with the Prospectus Directive, except that it may, with effect
from and including the Relevant Implementation Date, make an offer of the
Securities to the public in that Relevant Member State at any time:
(i) to legal entities which are authorized or regulated to
operate in the financial markets or, if not so authorized or
regulated, whose corporate purpose is solely to invest in securities;
(ii) to any legal entity which has two or more of (1) an average
of at least 250 employees during the last financial year; (2) a total
balance sheet of more than (euro)43,000,000 and (3) an annual net
turnover of more than (euro)50,000,000, as shown in its last annual or
consolidated accounts; or
(iii) in any other circumstances which do not require the
publication by the Company of a prospectus pursuant to Article 3 of
the Prospectus Directive.
For the purposes of this provision, the expression an "offer of the
Securities to the public" in relation to any Securities in any Relevant
Member State means the communication in any form and by any means of
sufficient information on the terms of the offer and the Securities to be
offered so as to enable an investor to decide to purchase the Securities,
as the same may be varied in that Relevant Member State by any measure
implementing the Prospectus Directive in that Relevant Member State.
(b) It has only communicated or caused to be communicated and will
only communicate or cause to be communicated an invitation or inducement to
engage in investment activity (within the meaning of Section 21 of the
FSMA) received by it in connection with the issue or sale of the Securities
in circumstances in which Section 21(1) of the FSMA would not apply to the
Company and it has complied and will comply with all applicable provisions
17
of the FSMA with respect to anything done by it in relation to the
Securities in, from or otherwise involving the United Kingdom.
8. Reimbursement of Underwriters' Expenses. If the sale of the
---------------------------------------
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 11 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 Underwriters, the Company will reimburse the Underwriters
severally through the Representatives 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 purchase and sale of the
Securities.
9. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Underwriter, the directors, officers,
employees and agents of each Underwriter and each person who controls any
Underwriter 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 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
contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus, the Final Prospectus or any
Issuer Free Writing Prospectus, or in any amendment thereof or supplement
thereto, or any "issuer information" filed or required to be filed pursuant
to Rule 433(d), 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 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 or on
behalf of any Underwriter through the Representatives specifically for
inclusion therein. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Underwriter 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 foregoing indemnity from the Company to each Underwriter, but
only with reference to written information relating to such Underwriter
furnished to the Company by or on behalf of such Underwriter through the
Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to
any liability which any Underwriter may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the
cover page regarding delivery of the Securities and, under the heading
18
"Underwriting," (i) the list of Underwriters and their respective
participation in the sale of the Securities, (ii) the sentences related to
concessions and reallowances and (iii) the paragraph related to
stabilization, syndicate covering transactions and penalty bids in any
Preliminary Final Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Final Prospectus or the Final
Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
9 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 9, 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, (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 9 is unavailable to or insufficient to hold harmless an
19
indemnified party for any reason, the Company and the Underwriters
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 Underwriters 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 Underwriters on the other from
the offering of the Securities; provided, however, that in no case shall
-------- -------
any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for
any amount in excess of the underwriting discount or commission applicable
to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and the Underwriters 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 Underwriters 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 Underwriters shall
be deemed to be equal to the total underwriting discounts and commissions,
in each case as set forth on the cover page of the Final Prospectus.
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 Underwriters 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 Underwriters 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 9, each person who controls
an Underwriter within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, 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).
10. Default by an Underwriter. If any one or more Underwriters shall
-------------------------
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
20
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate
-------- -------
amount of Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase shall exceed 10% of the aggregate amount of Securities set
forth in Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 10, the Closing Date shall be postponed for such period,
not exceeding five Business Days, as the Representatives shall determine in
order that the required changes in the Registration Statement and the Prospectus
or in any other documents or arrangements may be effected. Nothing contained in
this Agreement shall relieve any defaulting Underwriter of its liability, if
any, to the Company and any nondefaulting Underwriter for damages occasioned by
its default hereunder.
11. Termination. This Agreement shall be subject to termination in the
-----------
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, 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 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 Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Final Prospectus
(exclusive of any supplement thereto).
12. Representations and Indemnities to Survive. The respective
------------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters 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 any Underwriter or the Company or any of
the officers, directors, employees, agents or controlling persons referred to in
Section 9 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 8 and 9 hereof shall survive the termination or
cancelation of this Agreement.
13. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (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; or, if sent to the Company, will be mailed, delivered or
telefaxed to Temple-Inland Inc., General Counsel (Fax no.: (000) 000-0000) and
confirmed to it at Temple-Inland Inc., General Counsel, 0000 XxXxx Xxxxxxxxxx
Xxxxx, Xxxxxx, XX 00000.
14. Successors. This Agreement will inure to the benefit of and be
----------
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 9 hereof, and no other person will have any right or obligation
hereunder.
21
15. No fiduciary duty. The Company hereby acknowledges that (a) the
-----------------
purchase and sale of the Securities pursuant to this Agreement is an
arm's-length commercial transaction between the Company, on the one hand, and
the Underwriters and any affiliates through which they may be acting, on the
other, (b) the Underwriters are acting as principals and not as agents or
fiduciaries of the Company and (c) the Company's engagement of the Underwriters
in connection with the offering and the process leading up to the offering is as
independent contractors and not in any other capacity. Furthermore, the Company
agrees that it is solely responsible for making its own judgments in connection
with the offering (irrespective of whether any of the Underwriters has advised
or is currently advising the Company on related or other matters). The Company
agrees that it will not claim that the Underwriters have rendered advisory
services of any nature or respect, or owe an agency, fiduciary or similar duty
to the Company, in connection with such transaction or the process leading
thereto.
16. Applicable Law. This Agreement will be governed by and construed
--------------
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
17. Counterparts. This Agreement may be signed in one or more
------------
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
18. Headings. The section headings used herein are for convenience
--------
only and shall not affect the construction hereof.
19. 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.
"Basic Prospectus" shall mean the prospectus referred to in paragraph
1(a) above 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.
"Disclosure Package" shall mean (i) the Basic Prospectus, as amended
and supplemented to the Execution Time, (ii) the final term sheet as
prepared and filed pursuant to Section 5(a) hereto, (iii) the Issuer Free
Writing Prospectuses, if any, identified in Schedule IV hereto, and (iv)
any other Free Writing Prospectus that the parties hereto shall hereafter
expressly agree in writing to treat as part of the Disclosure Package.
"Effective Date" shall mean each date and time that the Registration
Statement and any post-effective amendment or amendments thereto became or
become effective.
22
"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.
"Final Prospectus" shall mean the prospectus supplement relating to
the Securities that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus.
"Free Writing Prospectus" shall mean a free writing prospectus, as
defined in Rule 405.
"FSMA" shall mean the Financial Services and Markets Act 2000 of the
United Kingdom.
"Issuer Free Writing Prospectus" shall mean an issuer free writing
prospectus, as defined in Rule 433.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus,
together with the Basic Prospectus.
"Prospectus Directive" shall mean Directive 2003/71/EC of the European
Economic Area and includes any relevant implementing measure in each
Relevant Member State.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements and any prospectus supplement relating to the Securities that is
filed with the Commission pursuant to Rule 424(b) and deemed part of such
registration statement pursuant to Rule 430B, as amended at the Execution
Time and, in the event any post-effective amendment thereto becomes
effective prior to the Closing Date, shall also mean such registration
statement as so amended.
"Relevant Implementation Date" shall mean the date on which the
Prospectus Directive is implemented in each Relevant Member State.
"Relevant Member State" shall mean a member state of the European
Economic Area which has implemented the Prospectus Directive.
"Rule 158", "Rule 163", "Rule 164", "Rule 172", "Rule 405", "Rule
415", "Rule 424", "Rule 430B" and "Rule 433" refer to such rules under the
Act.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended and the rules and regulations of the Commission promulgated
thereunder.
23
"Well-Known Seasoned Issuer" shall mean a well-known seasoned issuer,
as defined in Rule 405.
24
If the foregoing is in accordance with your understanding 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 the several Underwriters.
Very truly yours,
Temple-Inland Inc.
By: /s/ Xxxxxxx X. Xxxx
--------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Financial Officer
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above written.
Citigroup Global Markets Inc.
Xxxxxxx, Xxxxx & Co.
By: Citigroup Global Markets Inc.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
By: Xxxxxxx, Xxxxx & Co.
By: /s/ Xxxxxxx, Xxxxx & Co.
-------------------------------
(Xxxxxxx, Xxxxx & Co.)
For themselves and the other
several Underwriters
named in Schedule II to the
foregoing Agreement.
SCHEDULE I
----------
Underwriting Agreement dated December 1, 2005
Registration Statement No. 333-130034
Representatives: Citigroup Global Markets Inc. and Xxxxxxx, Xxxxx & Co.
Title, Purchase Price and Description of Securities:
Title: 6.375% Senior Notes due 2016
6.625% Senior Notes due 2018
Principal amount: 6.375% Senior Notes due 2016: $250,000,000
6.625% Senior Notes due 2018: $250,000,000
Purchase price (include accrued
interest or amortization, if any): 6.375% Senior Notes due 2016:$246,985,000
6.625% Senior Notes due 2018:$246,760,000
Sinking fund provisions: None
Redemption provisions:Optional redemption at a "make whole" redemption price
Closing Date, Time and Location: December 7, 2005 at 10:00 a.m. at Xxxxxx
Xxxxxxxx Xxxxx & Xxxxxxxx LLP, Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000
Type of Offering: Non-delayed
S-I-1
SCHEDULE II
-----------
Aggregate Principal Aggregate Principal
Amount of 6.375% Amount of 6.625%
Notes due 2016 to be Notes due 2018 to be
Underwriters Purchased Purchased
------------ --------- ---------
Citigroup Global Markets Inc. $100,000,000 $100,000,000
Xxxxxxx, Xxxxx & Co. $100,000,000 $100,000,000
BNP Paribas Securities Corp. $8,000,000 $8,000,000
Calyon Securities (USA) Inc. $8,000,000 $8,000,000
X.X. Xxxxxx Securities Inc. $8,000,000 $8,000,000
Scotia Capital (USA) Inc. $8,000,000 $8,000,000
UBS Securities LLC $8,000,000 $8,000,000
Banc of America Securities LLC $5,000,000 $5,000,000
TD Securities (USA) LLC $5,000,000 $5,000,000
------------ ------------
Total ....................................................... $250,000,000 $250,000,000
============ ============
S-II-1
SCHEDULE III
------------
Significant Subsidiaries of Temple-Inland Inc.
TIN Inc.
Temple-Inland Financial Services, Inc.
Guaranty Bank
Guaranty Holdings Inc. I
S-III-1
SCHEDULE IV
-----------
Schedule of Free Writing Prospectuses included in the Disclosure Package
1. Final term sheet as prepared and filed pursuant to Section 5(a) hereto.
S-IV-1
ANNEX I
-------
Form of Auditor Letter
We have audited the consolidated balance sheets of Temple Inland, Inc. and
subsidiaries (the "Company") as of January 1, 2005 and January 3, 2004 and the
consolidated statements of income, shareholders' equity, and cash flows for each
of the three years in the period ended January 1, 2005, included in the
Company's Annual Report on Form 10-K for the year ended January 1, 2005 and
incorporated by reference in the Registration Statement (No. 333-xxxxx) on Form
S-3 filed by the Company under the Securities Act of 1933 (the "Act"), as
updated by the Preliminary Prospectus Supplement dated December 1, 2005, herein
referred to as the "Registration Statement"; our report with respect thereto is
also incorporated by reference in the Registration Statement.
In connection with the Registration Statement:
1. We are an independent registered public accounting firm with respect
to the Company within the meaning of the Act and the applicable rules
and regulations thereunder adopted by the Securities and Exchange
Commission (SEC) and the Public Company Accounting Oversight Board
(United States) (PCAOB).
2. In our opinion, the consolidated financial statements audited by us
and included in the Company's Annual Report on Form 10-K at January 1,
2005 and incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable
accounting requirements of the Act and the Securities Exchange Act of
1934 (the "Exchange Act") and the related rules and regulations
adopted by the SEC.
3. We have not audited any financial statements of the Company as of any
date or for any period subsequent to January 1, 2005. The purpose (and
therefore the scope) of our audit for the year ended January 1, 2005
was to enable us to express our opinion on the consolidated financial
statements at January 1, 2005 and for the year then ended, but not on
the financial statements for any interim period within such year.
Therefore, we are unable to express and do not express an opinion on:
the unaudited consolidated balance sheets at April 2, 2005, July 2,
2005, and October 1, 2005, the unaudited consolidated statements of
income for the three-month periods ended April 2, 2005 and April 3,
2004, July 2, 2005 and July 3, 2004, and October 1, 2005 and October
2, 2004, the six-month periods ended July 2, 2005 and July 3, 2004,
and the nine-month periods ended October 1, 2005 and October 2, 2004,
or the unaudited consolidated statements of cash flows for the
three-month periods ended April 2, 2005 and April 3, 2004, the
six-month periods ended July 2, 2005 and July 3, 2004, and the
nine-month periods ended October 1, 2005 and October 2, 2004, all
incorporated by reference in the Registration Statement from the
Company's Quarterly Reports on Form 10-Q for the quarters ended April
2, 2005, July 2, 2005, and October 1, 2005; or on the financial
position, results of operations, or cash flows as of any date or for
any period subsequent to January 1, 2005.
A-1
4. For purposes of this letter, we have read the minutes of the 2005
meetings of the shareholders and the Board of Directors of the Company
as set forth in the minute books through November 3, 2005, officials
of the Company having advised us that the minutes of all such meetings
through that date were set forth therein, except for the meetings of
the Board of Directors held on October 31, 2005 and November 3, 2005,
for which minutes have not been approved. With respect to the meetings
held on October 31, 2005 and November 3, 2005, we have obtained from
the Company agendas and summaries of actions. We have carried out
other procedures to November 28, 2005 as follows (our work does not
extend to the period from November 29, 2005 to December 1, 2005
inclusive):
a. With respect to the three-month periods ended April 2, July 2,
and October 1, 2005 and April 3, July 3, and October 2, 2004, the
six-month periods ended July 2, 2005 and July 3, 2004, and the
nine-month periods ended October 1, 2005 and October 2, 2004, we
have:
(1) performed the procedures specified by the PCAOB for a review
of interim financial information as described in AU 722,
Interim Financial Information, on the unaudited consolidated
financial statements for these periods, described in 3.
above, included in the Company's Quarterly Reports on Form
10-Q for the quarters ended April 2, 2005, July 2, 2005, and
October 1, 2005 incorporated by reference in the
Registration Statement; and
(2) inquired of certain officials of the Company who have
responsibility for financial and accounting matters as to
whether the unaudited consolidated financial statements
referred to under a.(1) comply as to form in all material
respects with the applicable accounting requirements of the
Exchange Act as it applies to Form 10-Q and the related
rules and regulations adopted by the SEC.
The foregoing procedures do not constitute an audit conducted in
accordance with the standards of the PCAOB. Also, they would not
necessarily reveal matters of significance with respect to the
comments in the following paragraph. Accordingly, we make no
representations as to the sufficiency of the foregoing procedures
for your purposes.
5. Nothing came to our attention as a result of the foregoing procedures
that caused us to believe that:
a. any material modifications should be made to the unaudited
consolidated financial statements described in 3. above,
incorporated by reference in the Registration Statement, for them
to be in conformity with U.S. generally accepted accounting
principles;
A-2
b. the unaudited consolidated financial statements discussed in 3.
above do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act as it
applies to Form 10-Q and the related rules and regulations
adopted by the SEC.
6. Company officials have advised us that no consolidated financial
statements as of any date or for any period subsequent to October 1,
2005 are available; accordingly, the procedures carried out by us with
respect to changes in financial statement items after October 1, 2005
have, of necessity, been limited. We have inquired of certain
officials of the Company who have responsibility for financial and
accounting matters as to whether: at November 28, 2005 there was any
change in common stock outstanding or increase in long-term debt of
the consolidated Company as compared with the amounts shown on the
October 1, 2005 unaudited consolidated balance sheet incorporated by
reference in the Registration Statement. On the basis of these
inquiries and our reading of the minutes as described in 4. above,
nothing came to our attention that caused us to believe that there was
any such change in common stock outstanding or increase in long-term
debt, except in all instances for changes or increases that the
Registration Statement discloses have occurred or may occur and except
as described in the following sentence. We have been informed by
officials of the Company that at November 28, 2005 there was an
increase in long-term debt as compared with the amount shown on the
October 1, 2005, unaudited consolidated balance sheet as estimated by
the Company below.
(In thousands) October 1, 2005 November 28, 2005
--------------- -----------------
Long-Term Debt $ 1,684,000 $ 1,706,000
7. At your request, we have inquired of certain Company officials who
have responsibility for financial and accounting matters whether, for
the period from October 2, 2005 to November 28, 2005, there were any
decreases, as compared with the corresponding period in the preceding
year, in consolidated total revenues or in the total or per-share
amounts of consolidated net income. Company officials have advised us
that no consolidated financial statements as of any date or for any
period subsequent to October 1, 2005 are available.
8. At your request, we have also read the items identified by you on the
attached selected pages of the Company's Form 10-K for the year ended
January 1, 2005, the Company's Quarterly Reports on Forms 10-Q for the
quarters ended April 2, 2005, July 2, 2005, and October 1, 2005, and
the Registration Statement (Prospectus) and have performed the
following procedures, which were applied as indicated with respect to
the symbols explained below:
A Compared the dollar amounts either to the amounts in the audited
consolidated financial statements described in the introductory
paragraph of this letter, or to the amounts in the unaudited
consolidated financial statements described in paragraph 3
above, to the extent such amounts are included in or can be
derived from such statements and found them to be in agreement.
A-3
B Compared the dollar and other amounts not derived directly from
audited or unaudited consolidated financial statements to amounts
in the Company's accounting records to the extent such amounts
could be so compared directly and found them to be in agreement.
C Compared the dollar and other amounts not derived directly from
audited or unaudited consolidated financial statements, or that
could not be compared directly to the Company's accounting
records, to amounts in analyses prepared by the Company from its
accounting records and found them to be in agreement.
D Proved arithmetic accuracy of the percentages or amounts based
on the data in the above-mentioned financial statements,
accounting records, and analyses.
With respect to the application of the above symbols to "Management's
Discussion and Analysis of the Results of Operations" in the Company's
Form 10-K and Form 10-Q, we make no comment as to the reasons for the
period-to-period changes.
For purposes of reporting our findings, if compared amounts disagreed
only due to rounding or to the designation of amounts as approximates,
we have nonetheless stated that we found the compared, recomputed or
recalculated amounts to be in agreement.
We make no representation as to whether the transaction will take
place.
9. Our audits of the consolidated financial statements for the periods
referred to in the introductory paragraph of this letter were comprised
of audit tests and procedures deemed necessary for the purpose of
expressing an opinion on such financial statements taken as a whole.
For neither the periods referred to therein nor any other period did we
perform audit tests for the purpose of expressing an opinion on
individual balances of accounts or summaries of selected transactions
such as those enumerated above and, accordingly, we do not express an
opinion thereon.
10. It should be understood that we make no representations as to questions
of legal interpretation or as to the sufficiency for your purposes of
the procedures enumerated in paragraphs 7 and 8; also, such procedures
would not necessarily reveal any material misstatement of the
information identified in paragraphs 7 and 8. Further, we have
addressed ourselves solely to the foregoing data as set forth in the
Registration Statement and make no representations as to the adequacy
of disclosure or as to whether any material facts have been omitted.
11. This letter is solely for the information of the addressees and to
assist the remarketing agents in conducting and documenting their
investigation of the affairs of the Company in connection with the
offering of the securities covered by the Registration Statement, and
is not to be used, circulated, quoted or otherwise referred to within
or without the remarketing group for any other purpose, including, but
not limited to, the registration, purchase, or sale of securities, nor
is it to be filed with or referred to in whole or in part in the
Registration Statement or any other document, except that reference may
be made to it in the remarketing agreement or any list of closing
A-4
documents pertaining to the offering of securities covered by the
Registration Statement.
A-5
