EXHIBIT 4.3




                            TEMPLE-INLAND INC.,


                       BANK ONE TRUST COMPANY, N.A.,

                    as Collateral Agent, Custodial Agent
                        and Securities Intermediary


                                    AND


                            JPMORGAN CHASE BANK,

                         as Purchase Contract Agent





                              PLEDGE AGREEMENT





                          Dated as of May 1, 2002






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                             TABLE OF CONTENTS

                                                                                                               Page

                                 ARTICLE I

                                DEFINITIONS

<S>                     <C>                                                                                   <C>
SECTION 1.1              Definitions.............................................................................2

                                 ARTICLE II

                       PLEDGE; CONTROL AND PERFECTION

SECTION 2.1              The Pledge..............................................................................4
SECTION 2.2              Control and Perfection..................................................................5

                                ARTICLE III

                       PAYMENTS ON PLEDGED COLLATERAL

SECTION 3.1              Payments................................................................................7
SECTION 3.2              Application of Payments.................................................................8

                                 ARTICLE IV

          SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES

SECTION 4.1              Collateral Substitution and the Creation of Stripped DECS...............................9
SECTION 4.2              Collateral Substitution and the Re-Creation of Upper DECS...............................9
SECTION 4.3              Termination Event......................................................................10
SECTION 4.4              Early Settlement; Merger Early Settlement; Cash Settlement.............................11
SECTION 4.5              Remarketing; Application of Proceeds; Settlement.......................................11

                                 ARTICLE V

                           VOTING RIGHTS -- NOTES

SECTION 5.1              Exercise by Purchase Contract Agent....................................................13

                                 ARTICLE VI

                 RIGHTS AND REMEDIES; TAX EVENT REDEMPTION

SECTION 6.1              Rights and Remedies of the Collateral Agent............................................14
SECTION 6.2              Substitutions..........................................................................15
SECTION 6.3              Tax Event Redemption...................................................................15

                                ARTICLE VII

                 REPRESENTATIONS AND WARRANTIES; COVENANTS

SECTION 7.1              Representations and Warranties.........................................................16
SECTION 7.2              Covenants..............................................................................16

                                ARTICLE VIII

                            THE COLLATERAL AGENT

SECTION 8.1              Appointment, Powers and Immunities.....................................................17
SECTION 8.2              Instructions of the Company............................................................18
SECTION 8.3              Reliance...............................................................................19
SECTION 8.4              Rights in Other Capacities.............................................................19
SECTION 8.5              Non-Reliance on Collateral Agent.......................................................19
SECTION 8.6              Compensation and Indemnity.............................................................20
SECTION 8.7              Failure to Act.........................................................................20
SECTION 8.8              Resignation............................................................................21
SECTION 8.9              Right to Appoint Agent or Advisor......................................................22
SECTION 8.10             Survival...............................................................................22
SECTION 8.11             Exculpation............................................................................22

                                 ARTICLE IX

                                 AMENDMENT

SECTION 9.1              Amendment Without Consent of Holders...................................................22
SECTION 9.2              Amendment with Consent of Holders......................................................23
SECTION 9.3              Execution of Amendments................................................................23
SECTION 9.4              Effect of Amendments...................................................................24
SECTION 9.5              Reference to Amendments................................................................24

                                 ARTICLE X

                               MISCELLANEOUS

SECTION 10.1             No Waiver..............................................................................24
SECTION 10.2             Governing Law..........................................................................24
SECTION 10.3             Notices................................................................................25
SECTION 10.4             Successors and Assigns.................................................................25
SECTION 10.5             Counterparts...........................................................................25
SECTION 10.6             Severability...........................................................................25
SECTION 10.7             Expenses, Etc..........................................................................26
SECTION 10.8             Security Interest Absolute.............................................................26
SECTION 10.9             Waiver of Jury Trial...................................................................27

EXHIBIT A         Instruction from Purchase Contract Agent to Collateral Agent
EXHIBIT B         Instruction to Purchase Contract Agent
EXHIBIT C         Instruction to Custodial Agent Regarding Remarketing
EXHIBIT D         Instruction to Custodial Agent Regarding Withdrawal from Remarketing
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                              PLEDGE AGREEMENT

         PLEDGE AGREEMENT, dated as of May 1, 2002 (this "Agreement"),
among TEMPLE-INLAND INC., a Delaware corporation (the "Company"), Bank One
Trust Company, N.A., a national banking association, not individually but
solely as collateral agent (in such capacity, together with its successors
in such capacity, the "Collateral Agent"), as custodial agent (in such
capacity, together with its successors in such capacity, the "Custodial
Agent") and as "securities intermediary" as defined in Section 8-102(a)(14)
of the Code (as defined herein) (in such capacity, together with its
successors in such capacity, the "Securities Intermediary"), and JPMorgan
Chase Bank, a New York banking corporation, not individually but solely as
purchase contract agent and as attorney-in-fact of the Holders from time to
time of the Upper DECS and Stripped DECS (in such capacity, together with
its successors in such capacity, the "Purchase Contract Agent") under the
Purchase Contract Agreement (as defined herein).

                                  RECITALS

         WHEREAS, the Company and the Purchase Contract Agent are parties
to the Purchase Contract Agreement, dated as of the date hereof (as
modified and supplemented and in effect from time to time, the "Purchase
Contract Agreement"), pursuant to which there may be issued 6,000,000 Upper
DECS of the Company (or 6,900,000 Upper DECS if the Underwriters exercise
their over-allotment option in full) each having a Stated Amount of $50.

         WHEREAS, each Upper DECS will be comprised of (a) a Purchase
Contract and (b) either beneficial ownership of (i) a Note, (ii) following
the successful remarketing of the Notes in accordance with the Purchase
Contract Agreement and the Remarketing Agreement, the appropriate Treasury
Consideration or (iii) following a Tax Event Redemption in accordance with
the Purchase Contract Agreement, any Applicable Ownership Interest in the
Treasury Portfolio.

         WHEREAS, in accordance with the terms of the Purchase Contract
Agreement, a holder of Upper DECS may separate the Notes or the appropriate
Treasury Consideration or Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, from the related Purchase Contracts by
substituting for such Notes or the appropriate Treasury Consideration or
Applicable Ownership Interest in the Treasury Portfolio, as the case may
be, Treasury Securities that will pay in the aggregate an amount equal to
the aggregate principal amount of such Upper DECS. Upon such separation,
the Upper DECS will become Stripped DECS. Each Stripped DECS will be
comprised of (a) a Purchase Contract and (b) a 1/20 undivided beneficial
interest in a Treasury Security.

         WHEREAS, pursuant to the terms of the Purchase Contract Agreement
and the Purchase Contracts, the Holders, from time to time, of the Upper
DECS and Stripped DECS have irrevocably authorized the Purchase Contract
Agent, as attorney-in-fact of such Holders, among other things, to execute
and deliver this Agreement on behalf of such Holders and to grant the
pledge provided hereby of the Notes, any Treasury Consideration, any
Treasury Securities and any Applicable Ownership Interest in the Treasury
Portfolio delivered in exchange therefor to secure each Holder's
obligations under the related Purchase Contract, as provided herein and
subject to the terms hereof.

         NOW, THEREFORE, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company, the
Collateral Agent, the Securities Intermediary, the Custodial Agent and the
Purchase Contract Agent, on its own behalf and as attorney-in-fact of the
Holders from time to time of the Upper DECS and Stripped DECS, agree as
follows:

Article I

                                DEFINITIONS

SECTION 1.1       Definitions.
                  -----------

         For all purposes of this agreement, except as otherwise expressly
provided or unless the context otherwise requires:

         (a) capitalized terms used but not defined herein are used as
defined in the Purchase Contract Agreement;

         (b) the defined terms in this Agreement have the meanings assigned
to them in this Article and include the plural as well as the singular; and

         (c) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision.

         "Agreement" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions
hereof.

         "Code" has the meaning specified in Section 6.1(a) hereof.

         "Collateral" has the meaning specified in Section 2.1(a) hereof.

         "Collateral Account" means the securities account (number
2600048200) maintained at Bank One Trust Company, N.A. in the name
"JPMorgan Chase Bank, a New York banking corporation, as Purchase Contract
Agent on behalf of the holders of certain securities of Temple-Inland Inc.,
Collateral Account subject to the security interest of Bank One Trust
Company, N.A., as Collateral Agent, for the benefit of Temple-Inland Inc.,
as pledgee" and any successor account.

         "Collateral Agent" has the meaning specified in the first
paragraph of this Agreement.

         "Company" means the Person named as the "Company" in the first
paragraph of this Agreement until a successor shall have become such
pursuant to the applicable provisions of the Purchase Contract Agreement,
and thereafter "Company" shall mean such successor.

         "Custodial Agent" has the meaning specified in the first paragraph
of this Agreement.

         "Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.

         "Pledge" has the meaning specified in Section 2.1 hereof.

         "Pledged Applicable Ownership Interest in the Treasury Portfolio"
has the meaning specified in Section 2.1(c) hereof.

         "Pledged Notes" has the meaning specified in Section 2.1(c)
hereof.

         "Pledged Treasury Consideration" has the meaning specified in
Section 2.1(c) hereof.

         "Pledged Treasury Securities" has the meaning specified in Section
2.1(c) hereof.

         "Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of the
Code) and other property from time to time received, receivable or
otherwise distributed upon the sale, exchange, collection or disposition of
the Collateral or any proceeds thereof.

         "Purchase Contract Agent" has the meaning specified in the first
paragraph of this Agreement.

         "Purchase Contract Agreement" has the meaning specified in the
Recitals.

         "Securities Intermediary" has the meaning specified in the first
paragraph of this Agreement.

         "Security Entitlement" has the meaning set forth in Section
8-102(a) (17) of the Code.

         "Separate Notes" means any Notes that are not Pledged Notes.

         "Tax Event Redemption Date" means the date upon which a Tax Event
Redemption is to occur.

         "TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended
from time to time. Unless otherwise defined herein, all terms defined in
the TRADES Regulations are used herein as therein defined.

         "Transfer" means, with respect to the Collateral and in accordance
with the instructions of the Collateral Agent, the Purchase Contract Agent
or the Holder, as applicable:

                  (i) in the case of Collateral consisting of securities
         which cannot be delivered by book-entry or which the parties agree
         are to be delivered in physical form, delivery in appropriate
         physical form to the recipient accompanied by any duly executed
         instruments of transfer, assignments in blank, transfer tax stamps
         and any other documents necessary to constitute a legally valid
         transfer to the recipient;

                  (ii) in the case of Collateral consisting of securities
         maintained in book-entry form by causing a "securities
         intermediary" (as defined in Section 8-102(a)(14) of the Code) to
         (a) credit a "security entitlement" (as defined in Section
         8-102(a)(17) of the Code) with respect to such securities to a
         "securities account" (as defined in Section 8-501(a) of the Code)
         maintained by or on behalf of the recipient and (b) to issue a
         confirmation to the recipient with respect to such credit. In the
         case of Collateral to be delivered to the Collateral Agent, the
         securities intermediary shall be the Securities Intermediary and
         the securities account shall be the Collateral Account. In
         addition, any Transfer of Treasury Securities and Treasury
         Consideration hereunder shall be made in accordance with the
         TRADES Regulations and other applicable law.

                                Article II

                       PLEDGE; CONTROL AND PERFECTION

SECTION 2.1       The Pledge.
                  ----------

         (a) The Holders from time to time acting through the Purchase
Contract Agent, as their attorney-in-fact, and the Purchase Contract Agent,
as such attorney-in-fact and as nominal owner of the Collateral, hereby
pledge and grant to the Collateral Agent, for the benefit of the Company,
as collateral security for the performance when due by such Holders of
their respective obligations under the related Purchase Contracts, a
security interest in all of the right, title and interest of the Purchase
Contract Agent and such Holders in:

                  (i) (A) the Notes, Treasury Consideration, Treasury
         Securities and any Applicable Ownership Interest in the Treasury
         Portfolio constituting a part of the Upper DECS or Stripped DECS,
         (B) any Treasury Securities delivered in exchange for any Notes,
         Treasury Consideration or any Applicable Ownership Interest in the
         Treasury Portfolio, as applicable, in accordance with Section 4.1
         hereof, and (C) any Notes, Treasury Consideration or any
         Applicable Ownership Interest in the Treasury Portfolio, as
         applicable, delivered in exchange for any Treasury Securities in
         accordance with Section 4.2 hereof, in each case that have been
         Transferred to or otherwise received by the Collateral Agent and
         not released by the Collateral Agent to such Holders under the
         provisions of this Agreement;

                  (ii) the Collateral Account and all securities, financial
         assets, security entitlements, cash and other property credited
         thereto and all Security Entitlements related thereto; and

                  (iii) all Proceeds of the foregoing (all of the
         foregoing, collectively, the "Collateral").

         (b) Prior to or concurrently with the execution and delivery of
this Agreement, the Purchase Contract Agent, on behalf of the initial
Holders of the Upper DECS, shall cause the Notes comprising a part of the
Upper DECS to be Transferred to the Securities Intermediary for credit to
the Collateral Account.

         (c) The pledge provided in this Section 2.1 is herein referred to
as the "Pledge" and the Notes (or the Notes that are delivered pursuant to
Section 6.2 hereof), Treasury Consideration, Treasury Securities or
Applicable Ownership Interest in the Treasury Portfolio subject to the
Pledge, excluding any Notes, Treasury Consideration, Treasury Securities or
Applicable Ownership Interest in the Treasury Portfolio released from the
Pledge as provided in Sections 4.1 and 4.2 hereof, respectively, are
hereinafter referred to as "Pledged Notes," "Pledged Treasury
Consideration," "Pledged Treasury Securities" or "Pledged Applicable
Ownership Interest in the Treasury Portfolio," respectively. Subject to the
Pledge and the provisions of Section 2.2 hereof, the Holders from time to
time shall have full beneficial ownership of the Collateral. For purposes
of perfecting the Pledge under applicable law, including, to the extent
applicable, the TRADES Regulations or the Uniform Commercial Code as
adopted and in effect in any applicable jurisdiction, the Collateral Agent
shall be the agent of the Company as provided herein. Whenever directed by
the Collateral Agent acting on behalf of the Company, the Securities
Intermediary shall have the right to re-register in its name the Notes or
any other securities held in physical form.

         (d) Except as may be required in order to release Notes or
Treasury Consideration, as applicable, in connection with a Tax Event
Redemption or with a Holder's election to convert its investment from an
Upper DECS to a Stripped DECS, or except as otherwise required to release
Notes as specified herein, neither the Collateral Agent, the Custodial
Agent nor the Securities Intermediary shall relinquish physical possession
of any certificate evidencing a Note prior to the termination of this
Agreement. If it becomes necessary for the Securities Intermediary to
relinquish physical possession of a certificate in order to release a
portion of the Notes evidenced thereby from the Pledge, the Company or the
Purchase Contract Agent shall use its best efforts to obtain physical
possession of a replacement certificate evidencing any Notes remaining
subject to the Pledge hereunder registered to the Securities Intermediary
or endorsed in blank within fifteen days of the date the Securities
Intermediary relinquished possession. The Securities Intermediary shall
promptly notify the Company and the Collateral Agent of the Securities
Intermediary's failure to obtain possession of any such replacement
certificate as required hereby.

SECTION 2.2       Control and Perfection.
                  ----------------------

         (a) In connection with the Pledge granted in Section 2.1, and
subject to the other provisions of this Agreement, the Holders from time to
time acting through the Purchase Contract Agent, as their attorney-in-fact,
and the Purchase Contract Agent as nominal owner of the Collateral hereby
authorize and direct the Securities Intermediary (without the necessity of
obtaining the further consent of the Purchase Contract Agent or any of the
Holders), and the Securities Intermediary agrees, to comply with and follow
any instructions and entitlement orders (as defined in Section 8-102(a)(8)
of the Code) that the Collateral Agent may deliver with respect to the
Collateral Account, the Collateral credited thereto and any Security
Entitlements with respect to any thereof. In the event the Securities
Intermediary receives from the Holders or the Purchase Contract Agent
entitlement orders which conflict with entitlement orders received from the
Collateral Agent, the Securities Intermediary shall follow the entitlement
orders received from the Collateral Agent. Such instructions and
entitlement orders may, without limitation, direct the Securities
Intermediary to transfer, redeem, assign, or otherwise deliver the Notes,
the Treasury Consideration, the Treasury Securities, any Applicable
Ownership Interest in the Treasury Portfolio and any Security Entitlements
with respect thereto or sell, liquidate or dispose of such assets through a
broker designated by the Company, and to pay and deliver any income,
proceeds or other funds derived therefrom to the Company. The Holders from
time to time acting through the Purchase Contract Agent hereby further
authorize and direct the Collateral Agent, as agent of the Company, to
itself issue instructions and entitlement orders, and to otherwise take
action, with respect to the Collateral Account, the Collateral credited
thereto and any Security Entitlements with respect thereto, pursuant to the
terms and provisions hereof, all without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders. The
Collateral Agent shall be the agent of the Company and shall act only in
accordance with the terms hereof or as otherwise directed in writing by the
Company. Without limiting the generality of the foregoing, the Collateral
Agent shall issue entitlement orders to the Securities Intermediary as
directed in writing by the Company. (b) The Securities Intermediary hereby
confirms and agrees that:

                  (i) all securities or other property underlying any
         financial assets credited to the Collateral Account shall be
         registered in the name of the Securities Intermediary, or its
         nominee, indorsed to the Securities Intermediary, or its nominee,
         or in blank or credited to another Collateral Account maintained
         in the name of the Securities Intermediary and in no case will any
         financial asset credited to the Collateral Account be registered
         in the name of the Purchase Contract Agent, the Collateral Agent,
         the Company or any Holder, or payable to the order of, or
         specially indorsed to, the Purchase Contract Agent, the Collateral
         Agent, the Company or any Holder except to the extent the
         foregoing have been specially indorsed to the Securities
         Intermediary or in blank;

                  (ii) all property delivered to the Securities
         Intermediary pursuant to this Pledge Agreement (including, without
         limitation, any Notes, Treasury Consideration, Treasury Securities
         or any Applicable Ownership Interest in the Treasury Portfolio)
         will be promptly credited to the Collateral Account;

                  (iii) the Collateral Account is an account to which
         financial assets are or may be credited, and the Securities
         Intermediary shall, subject to the terms of this Agreement, treat
         the Purchase Contract Agent as entitled to exercise the rights of
         any financial asset credited to the Collateral Account;

                  (iv) the Securities Intermediary has not entered into,
         and until the termination of this Agreement will not enter into,
         any agreement with any other Person relating to the Collateral
         Account and/or any financial assets credited thereto pursuant to
         which it has agreed to comply with entitlement orders (as defined
         in Section 8-102(a)(8) of the Code) of such other Person;

                  (v) the Securities Intermediary has not entered into, and
         until the termination of this Agreement will not enter into, any
         agreement with the Company, the Collateral Agent or the Purchase
         Contract Agent purporting to limit or condition the obligation of
         the Securities Intermediary to comply with entitlement orders as
         set forth in this Section 2.2 hereof;

                  (vi) the Securities Intermediary hereby agrees that each
         item of property (whether investment property, financial asset,
         security, instrument or cash) credited to the Collateral Account
         shall be treated as a "financial asset" within the meaning of
         Section 8-102(a)(9) of the Code; and

                  (vii) in the event of any conflict between this Agreement
         (or any portion thereof) and any other agreement now existing or
         hereafter entered into, the terms of this Agreement shall prevail.

         (c) The Purchase Contract Agent hereby irrevocably constitutes and
appoints the Collateral Agent and the Company, with full power of
substitution, as the Purchase Contract Agent's attorney-in-fact to take on
behalf of, and in the name, place and stead of, the Purchase Contract Agent
and the Holders, any action necessary or desirable to perfect and to keep
perfected the security interest in the Collateral referred to in Section
2.1. The grant of such power-of-attorney shall not be deemed to require of
the Collateral Agent any specific duties or obligations not otherwise
assumed by the Collateral Agent hereunder. Notwithstanding the foregoing,
in no event shall the Collateral Agent or Securities Intermediary be
responsible for the preparation or filing of any financing or continuation
statements in the appropriate jurisdictions or responsible for maintenance
or perfection of any security interest hereunder.

                                Article III

                       PAYMENTS ON PLEDGED COLLATERAL

SECTION 3.1       Payments.
                  --------

         So long as the Purchase Contract Agent is the registered owner of
the Pledged Notes, Pledged Treasury Consideration, Pledged Applicable
Ownership Interest in the Treasury Portfolio or Pledged Treasury
Securities, it shall receive all payments thereon. If the Pledged Notes are
reregistered, such that the Collateral Agent becomes the registered holder,
all payments of the principal of, or interest on, the Pledged Notes and all
payments of the principal of, or cash distributions on, any Pledged
Treasury Consideration, Pledged Treasury Securities or any Pledged
Applicable Ownership Interest in the Treasury Portfolio, that are received
by the Collateral Agent and that are properly payable hereunder, shall be
paid by the Collateral Agent by wire transfer in same day funds:

                  (i) in the case of (A) quarterly cash distributions on
         Upper DECS that include Pledged Notes, Pledged Treasury
         Consideration or any Pledged Applicable Ownership Interest in the
         Treasury Portfolio, any interest payments with respect to the
         Pledged Notes, Pledged Treasury Consideration or the appropriate
         Pledged Applicable Ownership Interest in the Treasury Portfolio
         (as specified in clause (B) of the definition of Applicable
         Ownership Interest), as the case may be, and (B) any payments of
         principal or, if applicable, the appropriate Applicable Ownership
         Interest in the Treasury Portfolio (as specified in clause (A) of
         the definition of such term) with respect to any Notes, Treasury
         Consideration or the appropriate Applicable Ownership Interest in
         the Treasury Portfolio, as the case may be, that have been
         released from the Pledge pursuant to Section 4.3 hereof, to the
         Purchase Contract Agent, for the benefit of the relevant Holders
         of the Upper DECS, to the account designated by the Purchase
         Contract Agent for such purpose, no later than 11:00 a.m., New
         York City time, on the Business Day such payment is received by
         the Collateral Agent (provided that in the event such payment is
         received by the Collateral Agent on a day that is not a Business
         Day or after 9:00 a.m., New York City time, on a Business Day,
         then such payment shall be made no later than 9:30 a.m., New York
         City time, on the next succeeding Business Day);

                  (ii) in the case of any payments with respect to any
         Treasury Securities that have been released from the Pledge
         pursuant to Section 4.3 hereof, to the Holders of the Stripped
         DECS to the accounts designated by them in writing for such
         purpose no later than 2:00 p.m., New York City time, on the
         Business Day such payment is received by the Collateral Agent
         (provided that in the event such payment is received by the
         Collateral Agent on a day that is not a Business Day or after 10
         a.m., New York City time, on a Business Day, then such payment
         shall be made no later than 10:00 a.m., New York City time, on the
         next succeeding Business Day); and

                  (iii) in the case of payments in respect of any Pledged
         Notes, Pledged Treasury Consideration, Pledged Treasury Securities
         or the appropriate Pledged Applicable Ownership Interest in the
         Treasury Portfolio (as specified in clause (A) of the definition
         of such term), as the case may be, to be paid upon settlement of
         such Holder's obligations to purchase Common Stock under the
         Purchase Contract, to the Company on the Stock Purchase Date in
         accordance with the procedure set forth in Section 4.5(a) or
         4.5(b) hereof, in full satisfaction of the respective obligations
         of the Holders under the related Purchase Contracts.

SECTION 3.2       Application of Payments.
                  -----------------------

         All payments received by the Purchase Contract Agent as provided
herein shall be applied by the Purchase Contract Agent pursuant to the
provisions of the Purchase Contract Agreement. If, notwithstanding the
foregoing, the Purchase Contract Agent shall receive any payments of
principal on account of any Note, Treasury Consideration or the appropriate
Applicable Ownership Interest in the Treasury Portfolio (as specified in
clause (A) of the definition of such term), as applicable, that, at the
time of such payment, is a Pledged Note, Treasury Consideration or the
appropriate Applicable Ownership Interest in the Treasury Portfolio (as
specified in clause (A) of the definition of such term), as the case may
be, or a Holder of a Stripped DECS shall receive any payments of principal
on account of any Treasury Securities that, at the time of such payment,
are Pledged Treasury Securities, the Purchase Contract Agent or such Holder
shall hold the same as trustee of an express trust for the benefit of the
Company (and promptly deliver the same over to the Company) for application
to the obligations of the Holders under the related Purchase Contracts, and
the Holders shall acquire no right, title or interest in any such payments
of principal so received.

                                Article IV

          SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES

SECTION 4.1 Collateral Substitution and the Creation of Stripped DECS.

         At any time on or prior to the second Business Day immediately
preceding the Stock Purchase Date, a Holder of Upper DECS shall have the
right to substitute Treasury Securities for the Pledged Notes, Pledged
Treasury Consideration or Pledged Applicable Ownership Interest in the
Treasury Portfolio, as the case may be, securing such Holder's obligations
under the Purchase Contracts comprising a part of such Upper DECS, in
integral multiples of 20 Upper DECS, or after a remarketing of the Notes
pursuant to the Purchase Contract Agreement or a Tax Event Redemption, in
integral multiples of Upper DECS such that Treasury Securities to be
deposited and the applicable Treasury Consideration or the Applicable
Ownership Interest in the Treasury Portfolio to be released are in integral
multiples of $1,000, by (a) Transferring to the Collateral Agent Treasury
Securities having an aggregate principal amount equal to the aggregate
Stated Amount of such Upper DECS and (b) delivering such Upper DECS to the
Purchase Contract Agent, accompanied by a notice, substantially in the form
of Exhibit B hereto, to the Purchase Contract Agent stating that such
Holder has Transferred Treasury Securities to the Collateral Agent pursuant
to clause (a) above (stating the principal amount and the CUSIP numbers of
the Treasury Securities Transferred by such Holder) and requesting that the
Purchase Contract Agent instruct the Collateral Agent to release from the
Pledge the Pledged Notes, Pledged Treasury Consideration or Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the case may
be, related to such Upper DECS, whereupon the Purchase Contract Agent shall
promptly give such instruction in writing to the Collateral Agent in the
form provided in Exhibit A hereto; provided that, such Holder may not
substitute such Treasury Securities for such Pledged Notes, Pledged
Treasury Consideration or Pledged Applicable Ownership Interest in the
Treasury Portfolio pursuant to this Section 4.1 during the period from four
Business Days prior to any Remarketing Period until the expiration of three
Business Days after the end of such Remarketing Period. Upon receipt of
Treasury Securities from a Holder of Upper DECS and the related written
instruction from the Purchase Contract Agent, the Collateral Agent shall
release the Pledged Notes, Pledged Treasury Consideration or the Pledged
Applicable Ownership Interest in the Treasury Portfolio, as the case may
be, and shall promptly Transfer such Pledged Notes, Pledged Treasury
Consideration or Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, free and clear of any lien, pledge or
security interest created hereby, to the Purchase Contract Agent. All items
Transferred and/or substituted by any Holder pursuant to this Section 4.1,
Section 4.2 or any other Section of this Agreement shall be Transferred
and/or substituted free and clear of all liens, claims and encumbrances.

SECTION 4.2 Collateral Substitution and the Re-Creation of Upper DECS.

         At any time on or prior to the second Business Day immediately
preceding the Stock Purchase Date, a Holder of Stripped DECS shall have the
right to reestablish Upper DECS (a) consisting of the Purchase Contracts
and Notes in integral multiples of 20 Stripped DECS, or (b) after a
remarketing of the Notes pursuant to the Purchase Contract Agreement or a
Tax Event Redemption, consisting of the Purchase Contracts and the
appropriate Treasury Consideration (identified and calculated by reference
to the Treasury Consideration then comprising Upper DECS) or the
appropriate portion of the Treasury Portfolio in integral multiples of
Stripped DECS such that the Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio to be deposited and the Treasury
Securities to be released are in integral multiples of $1,000, by (x)
Transferring to the Collateral Agent Notes or the appropriate Treasury
Consideration or the Applicable Ownership Interest in the Treasury
Portfolio (as defined in clause (A) of the definition of such term), as the
case may be, then comprising such number of Upper DECS as is equal to such
Stripped DECS and (y) delivering such Stripped DECS to the Purchase
Contract Agent, accompanied by a notice, substantially in the form of
Exhibit B hereto, to the Purchase Contract Agent stating that such Holder
has Transferred Notes, Treasury Consideration or Applicable Ownership
Interest in the Treasury Portfolio to the Collateral Agent pursuant to
clause (a) above and requesting that the Purchase Contract Agent instruct
the Collateral Agent to release from the Pledge the Pledged Treasury
Securities related to such Stripped DECS, whereupon the Purchase Contract
Agent shall give such instruction to the Collateral Agent in the form
provided in Exhibit A hereto; provided that, such Holder of Stripped DECS
shall not have the right to reestablish Upper DECS pursuant to this Section
4.2 during the period from four Business Days prior to any Remarketing
Period until the expiration of three Business Days after the end of such
Remarketing Period. Upon receipt of the Notes or the appropriate Treasury
Consideration or Applicable Ownership Interest in the Treasury Portfolio,
as the case may be, from such Holder and the instruction from the Purchase
Contract Agent, the Collateral Agent shall release the Pledged Treasury
Securities and shall promptly Transfer such Pledged Treasury Securities,
free and clear of any lien, pledge or security interest created hereby, to
the Purchase Contract Agent.

SECTION 4.3       Termination Event.
                  -----------------

         (a) Upon receipt by the Collateral Agent of written notice from
the Company or the Purchase Contract Agent that there has occurred a
Termination Event, the Collateral Agent shall release all Collateral from
the Pledge and shall promptly Transfer any Pledged Notes, Pledged Treasury
Consideration or Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be, and Pledged Treasury Securities to the
Purchase Contract Agent for the benefit of the Holders of the Upper DECS
and the Stripped DECS, respectively, free and clear of any lien, pledge or
security interest or other interest created hereby.

         (b) If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code, and if the Collateral Agent
shall for any reason fail promptly to effectuate the release and Transfer
of all Pledged Notes, Pledged Treasury Consideration, Pledged Applicable
Ownership Interest in the Treasury Portfolio, or Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3, the
Purchase Contract Agent shall:

                  (i) use its best efforts to obtain at the expense of the
         Company an opinion of a nationally recognized law firm reasonably
         acceptable to the Collateral Agent to the effect that, as a result
         of the Company's being the debtor in such a bankruptcy case, the
         Collateral Agent will not be prohibited from releasing or
         Transferring the Collateral as provided in this Section 4.3, and
         shall deliver such opinion to the Collateral Agent within ten days
         after the occurrence of such Termination Event, and if (y) the
         Purchase Contract Agent shall be unable to obtain such opinion
         within ten days after the occurrence of such Termination Event or
         (z) the Collateral Agent shall continue, after delivery of such
         opinion, to refuse to effectuate the release and Transfer of all
         Pledged Notes, Pledged Treasury Consideration, Pledged Applicable
         Ownership Interest in the Treasury Portfolio or Pledged Treasury
         Securities, as the case may be, as provided in this Section 4.3,
         then the Purchase Contract Agent shall within fifteen days after
         the occurrence of such Termination Event commence an action or
         proceeding in the court with jurisdiction of the Company's case
         under the Bankruptcy Code seeking an order requiring the
         Collateral Agent to effectuate the release and transfer of all
         Pledged Notes, Pledged Treasury Consideration, Pledged Applicable
         Ownership Interest in the Treasury Portfolio or Pledged Treasury
         Securities, as the case may be, as provided by this Section 4.3 or

                  (ii) commence an action or proceeding like that described
         in subsection (i)(z) hereof within ten days after the occurrence
         of such Termination Event.

SECTION 4.4       Early Settlement; Merger Early Settlement; Cash Settlement.
                  ----------------------------------------------------------

         Upon written notice to the Collateral Agent by the Purchase
Contract Agent that one or more Holders of Upper DECS or Stripped DECS have
elected to effect Early Settlement, Merger Early Settlement or Cash
Settlement of their respective obligations under the Purchase Contracts
forming a part of such Upper DECS or Stripped DECS in accordance with the
terms of the Purchase Contracts and the Purchase Contract Agreement
(setting forth the number of such Purchase Contracts as to which such
Holders have elected to effect Early Settlement, Merger Early Settlement or
Cash Settlement), and that the Purchase Contract Agent has received from
such Holders, and paid to the Company, as confirmed to the Collateral Agent
in writing by the Company, the related Early Settlement Amounts, Merger
Early Settlement Amounts or the Purchase Prices in the case of the Cash
Settlement, as the case may be, pursuant to the terms of the Purchase
Contracts and the Purchase Contract Agreement and that all conditions to
such Early Settlement, Merger Early Settlement or Cash Settlement, as the
case may be, have been satisfied, then the Collateral Agent shall release
from the Pledge (a) Pledged Notes, Pledged Treasury Consideration or
Pledged Applicable Ownership Interest in the Treasury Portfolio, as the
case may be, in the case of a Holder of Upper DECS or (b) Pledged Treasury
Securities, in the case of a Holder of Stripped DECS, relating to such
Purchase Contracts as to which such Holders have elected to effect Early
Settlement, Merger Early Settlement or Cash Settlement, and shall Transfer
all such Pledged Notes, Pledged Treasury Consideration, Pledged Applicable
Ownership Interest in the Treasury Portfolio or Pledged Treasury
Securities, as the case may be, free and clear of the Pledge created
hereby, to the Purchase Contract Agent for the benefit of such Holders.

SECTION 4.5       Remarketing; Application of Proceeds; Settlement.
                  ------------------------------------------------

         (a) Pursuant to the Purchase Contract Agreement, the Purchase
Contract Agent shall notify, by 10:00 a.m., New York City time, on the
third Business Day preceding the Remarketing Date or any Subsequent
Remarketing Date, as the case may be, the Remarketing Agent and the
Collateral Agent of the aggregate principal amount of Notes comprising part
of Upper DECS to be remarketed. The Collateral Agent shall, by 10:00 a.m.,
New York City time, on the Business Day immediately preceding the first day
of any Remarketing Period or any Subsequent Remarketing Period, as the case
may be, without any instruction from Holders of Upper DECS, deliver the
Pledged Notes to be remarketed to the Remarketing Agent for remarketing.
After deducting as the remarketing fee an amount not exceeding 25 basis
points (0.25%) of the total proceeds of such remarketing of Pledged Notes,
the Remarketing Agent will deliver the Agent-purchased Treasury
Consideration (as defined in the Purchase Contract Agreement) purchased
from the proceeds of the remarketing to the Purchase Contract Agent, which
shall thereupon deliver such Agent-purchased Treasury Consideration to the
Collateral Agent. Upon receipt of the Agent-purchased Treasury
Consideration from the Purchase Contract Agent following a successful
remarketing, (i) the Collateral Agent, for the benefit of the Company,
shall thereupon hold in the Collateral Account such Agent-Purchased
Treasury Consideration to secure the obligations under the Purchase
Contracts of Holders of Upper DECS participating in the successful
remarketing and to fund the quarterly interest payment due to such Holders
of Upper DECS on the Stock Purchase Date, and (ii) the remaining portion,
if any, of the proceeds of such successful remarketing shall be distributed
by the Remarketing Agent to the Purchase Contract Agent for payment to such
Holders of Upper DECS participating in such remarketing. On the Stock
Purchase Date, the Collateral Agent shall, at the direction of the Company,
(i) apply that portion of the payments received in respect of the Pledged
Treasury Consideration equal to the aggregate Stated Amount of the related
Upper DECS to satisfy in full the obligations of such Holders of Upper DECS
to pay the Purchase Price under the related Purchase Contracts and (ii)
apply the remaining portion to pay the quarterly interest payment due to
such Holders of Upper DECS on such Stock Purchase Date, which such
quarterly interest payment shall be paid on the Pledged Notes in an amount
equal to the Coupon Rate for such quarterly interest payment.

         (b) Within three Business Days following the Last Failed
Remarketing, if any, the Notes delivered to the Remarketing Agent pursuant
to Section 4.5(a) hereof shall be returned to the Collateral Agent,
together with written notice from the Remarketing Agent of the Last Failed
Remarketing. The Collateral Agent, for the benefit of the Company, shall
thereupon hold such Notes to secure the obligations of Holders of Upper
DECS under the Purchase Contracts. The Remarketing Agent shall make one or
more attempts to remarket the Notes in accordance with the procedures set
forth in the Purchase Contract Agreement and the Remarketing Agreement,
provided that the requirements of Section 5.4(b)(ii) of the Purchase
Contract Agreement have been met. If by 4:00 p.m., New York City time, on
the Business Day immediately preceding the Stock Purchase Date, the
Remarketing Agent has failed to remarket the Notes at 100.50% of the
Remarketing Value (as described in the Purchase Contract Agreement), the
Last Failed Remarketing shall be deemed to have occurred. In this case, the
Remarketing Agent shall advise the Collateral Agent in writing that it
cannot remarket the related Pledged Notes of such Holders of Upper DECS,
and the Holders of Upper DECS that have not made a Cash Settlement, Early
Settlement or Merger Early Settlement of the Purchase Contracts underlying
their Upper DECS shall be deemed to have directed the Company to retain or
dispose of the Pledged Notes in satisfaction of their obligations under the
Purchase Contracts. The Collateral Agent, for the benefit of the Company
will, at the written direction of the Company, retain or dispose of the
Pledged Notes in accordance with applicable law and satisfy in full, from
any such disposition or retention, such Holders' obligations to pay the
Purchase Price for the Common Stock; provided, that if upon a Failed
Remarketing, the Collateral Agent exercises such rights for the benefit of
the Company with respect to such Notes, any accrued and unpaid interest on
such Notes will become payable by the Company to the Purchase Contract
Agent for payment to the Holder of the Upper DECS to which such Notes
relate in accordance with the Purchase Contract Agreement.

         (c) In the event a Holder of Stripped DECS has not made a Cash
Settlement, Early Settlement or Merger Early Settlement of the Purchase
Contracts underlying its Stripped DECS, such Holder shall be deemed to have
elected to pay for the shares of Common Stock to be issued under such
Purchase Contracts from the payments received in respect of the related
Pledged Treasury Securities. Without receiving any instruction from any
such Holder, the Collateral Agent shall apply such payments to the
settlement of such Purchase Contracts on the Stock Purchase Date. In the
event the payments received in respect of the related Pledged Treasury
Securities are in excess of the aggregate Purchase Price of the Purchase
Contracts being settled thereby, the Collateral Agent shall distribute such
excess, when received, to the Purchase Contract Agent for the benefit of
such Holders of Stripped DECS.

         (d) On or prior to the fourth Business Day preceding the first day
of any Remarketing Period, but no earlier than the Payment Date immediately
preceding February 17, 2005, holders of Separate Notes may elect to have
their Separate Notes remarketed by delivering their Separate Notes,
together with a notice of such election, substantially in the form of
Exhibit C hereto, to the Custodial Agent. On the third Business Day prior
to the first day of any Remarketing Period, by 10:00 a.m., New York City
time, the Custodial Agent shall notify the Remarketing Agent of the number
of such Separate Notes to be remarketed. The Custodial Agent will hold such
Separate Notes in an account separate from the Collateral Account. A holder
of Separate Notes electing to have its Separate Notes remarketed will also
have the right to withdraw such election by written notice to the Custodial
Agent, substantially in the form of Exhibit D hereto, on or prior to the
fifth Business Day immediately preceding the first day of any Remarketing
Period and any Subsequent Remarketing Period, upon which notice the
Custodial Agent will return such Separate Notes to such holder. On the
third Business Day immediately preceding the first day of any Remarketing
Period and any Subsequent Remarketing Period, the Custodial Agent at the
written direction of the Remarketing Agent will deliver to the Remarketing
Agent for remarketing all Separate Notes delivered to the Custodial Agent
pursuant to this Section 4.5(d) and not withdrawn pursuant to the terms
hereof prior to such date. The portion of the proceeds from such
remarketing equal to the amount calculated in respect of such Separate
Notes as set forth in Section 5.4(b) of the Purchase Contract Agreement
will automatically be remitted by the Remarketing Agent to the Custodial
Agent for the benefit of the holders of such Separate Notes. In addition,
after deducting as the remarketing fee an amount not exceeding 25 basis
points (0.25%) of the total proceeds of such remarketing of such Separate
Notes, the Remarketing Agent will remit to the Custodial Agent the
remaining portion of the proceeds, if any, for the benefit of such holders
of such Separate Notes. If, despite using its reasonable best efforts, the
Remarketing Agent advises the Custodial Agent in writing that there has
been a Failed Remarketing, the Remarketing Agent will promptly return such
Separate Notes to the Custodial Agent for redelivery to such holders of
such Separate Notes.

                                 Article V

                           VOTING RIGHTS -- NOTES

SECTION 5.1       Exercise by Purchase Contract Agent.
                  -----------------------------------

         The Purchase Contract Agent may exercise, or refrain from
exercising, any and all voting and other consensual rights pertaining to
the Pledged Notes or any part thereof for any purpose not inconsistent with
the terms of this Agreement and in accordance with the terms of the
Purchase Contract Agreement; provided, that the Purchase Contract Agent
shall not exercise or, as the case may be, shall not refrain from
exercising such right if, in the judgment of the Company, such action would
impair or otherwise have a material adverse effect on the value of all or
any of the Pledged Notes; and provided, further, that the Purchase Contract
Agent shall give the Company and the Collateral Agent at least five days
prior written notice of the manner in which it intends to exercise, or its
reasons for refraining from exercising, any such right. Upon receipt of any
notices and other communications in respect of any Pledged Notes, including
notice of any meeting at which holders of Notes are entitled to vote or
solicitation of consents, waivers or proxies of holders of Notes, the
Collateral Agent shall use reasonable efforts to send promptly to the
Purchase Contract Agent such notice or communication, and as soon as
reasonably practicable after receipt of a written request therefor from the
Purchase Contract Agent, execute and deliver to the Purchase Contract Agent
such proxies and other instruments in respect of such Pledged Notes (in
form and substance satisfactory to the Collateral Agent) as are prepared by
the Purchase Contract Agent with respect to the Pledged Notes.

                                Article VI

                 RIGHTS AND REMEDIES; TAX EVENT REDEMPTION

SECTION 6.1       Rights and Remedies of the Collateral Agent.
                  -------------------------------------------

         (a) In addition to the rights and remedies available at law or in
equity, after an event of default under the Purchase Contracts, the
Collateral Agent shall have all of the rights and remedies with respect to
the Collateral of a secured party under the Uniform Commercial Code (or any
successor thereto) as in effect in the State of New York from time to time
(the "Code") (whether or not the Code is in effect in the jurisdiction
where the rights and remedies are asserted) and the TRADES Regulations and
such additional rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights and remedies
hereunder may be asserted. Wherever reference is made in this Agreement to
any section of the Code, such reference shall be deemed to include a
reference to any provision of the Code that is a successor to, or amendment
of, such section. Without limiting the generality of the foregoing, such
remedies may include, to the extent permitted by applicable law, (i)
retention of the Pledged Notes or other Collateral in full satisfaction of
the Holders' obligations under the Purchase Contracts or (ii) sale of the
Pledged Notes or other Collateral in one or more public or private sales,
in each case at the written direction of the Company.

         (b) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, in the event the Collateral Agent
is unable to make payments to the Company on account of any Pledged Notes,
Pledged Treasury Consideration, Pledged Applicable Ownership Interest in
the Treasury Portfolio or Pledged Treasury Securities as provided in
Article III hereof in satisfaction of the obligations of the Holders of
Upper DECS or Stripped DECS of which such Pledged Notes, Pledged Treasury
Consideration, Pledged Applicable Ownership Interest in the Treasury
Portfolio or Pledged Treasury Securities, as applicable, is a part under
the related Purchase Contracts, the inability to make such payments shall
constitute an event of default under the Purchase Contracts and the
Collateral Agent shall have and may exercise, with reference to such
Pledged Notes, Pledged Treasury Securities, Pledged Applicable Ownership
Interest in the Treasury Portfolio or Pledged Treasury Consideration, as
applicable, and such obligations of such Holder, any and all of the rights
and remedies available to a secured party under the Code and the TRADES
Regulations after default by a debtor, and as otherwise granted herein or
under any other law.

         (c) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, the Collateral Agent is hereby
irrevocably authorized to receive and collect all payments of (i) the
principal amount of, or interest on, the Pledged Notes, or (ii) the
principal amount of, or interest (if any) on, the Pledged Treasury
Consideration, Pledged Applicable Ownership Interest of the Treasury
Portfolio or Pledged Treasury Securities, subject, in each case, to the
provisions of Article III, and as otherwise granted herein.

         (d) The Purchase Contract Agent, individually and as
attorney-in-fact for each Holder of Upper DECS and Stripped DECS, agrees
that, from time to time, upon the written request of the Company or the
Collateral Agent (acting upon the written request of the Company), the
Purchase Contract Agent or such Holder shall execute and deliver such
further documents and do such other acts and things as the Company or the
Collateral Agent (acting upon the written request of the Company) may
reasonably request in order to maintain the Pledge, and the perfection and
priority thereof, and to confirm the rights of the Collateral Agent
hereunder. The Purchase Contract Agent shall have no liability to any
Holder for executing any documents or taking any such acts requested by the
Company or the Collateral Agent (acting upon the written request of the
Company) hereunder, except for liability for its own negligent act, its own
negligent failure to act, its bad faith or its own willful misconduct.

SECTION 6.2       Substitutions.
                  -------------

         Whenever a Holder has the right to substitute Treasury Securities,
Notes, Treasury Consideration or the appropriate Applicable Ownership
Interest in the Treasury Portfolio, as the case may be, for Collateral held
by the Collateral Agent, such substitution shall not constitute a novation
of the security interest created hereby.

SECTION 6.3       Tax Event Redemption.
                  --------------------

         Upon the occurrence of a Tax Event Redemption prior to a
successful remarketing of the Pledged Notes, the aggregate Redemption Price
payable on the Tax Event Redemption Date with respect to such Pledged Notes
shall be delivered to the Collateral Agent by the Trustee on or prior to
12:00 p.m., New York City time, by wire transfer in immediately available
funds at such place and at such account as may be designated by the
Collateral Agent in exchange for the Pledged Notes. In the event the
Collateral Agent receives such Redemption Price, the Collateral Agent will,
at the written direction of the Company, apply an amount, out of such
Redemption Price, equal to the aggregate Redemption Amount with respect to
the Pledged Notes to purchase from the Quotation Agent the Treasury
Portfolio and promptly remit the remaining portion of such Redemption Price
to the Purchase Contract Agent for payment to the Holders of Upper DECS.
The Collateral Agent shall Transfer the Treasury Portfolio to the
Collateral Account to secure the obligation of all Holders of Upper DECS to
purchase Common Stock of the Company under the Purchase Contracts
constituting a part of such Upper DECS, in substitution for the Pledged
Notes. Thereafter the Collateral Agent shall have such security interests,
rights and obligations with respect to the Treasury Portfolio as it had in
respect of the Pledged Notes as provided in Articles II, III, IV, V and VI,
and any reference herein to the Notes shall be deemed to be reference to
such Treasury Portfolio, and any reference herein to interest on the Notes
shall be deemed to be a reference to distributions on such Treasury
Portfolio.

                                Article VII

                 REPRESENTATIONS AND WARRANTIES; COVENANTS

SECTION 7.1       Representations and Warranties.
                  ------------------------------

         The Holders from time to time, acting through the Purchase
Contract Agent as their attorney-in-fact (it being understood that the
Purchase Contract Agent shall not be liable for any representation or
warranty made by or on behalf of a Holder), hereby represent and warrant to
the Collateral Agent, which representations and warranties shall be deemed
repeated on each day a Holder Transfers Collateral that:

         (a) such Holder has the power to grant a security interest in and
lien on the Collateral;

         (b) such Holder is the sole beneficial owner of the Collateral
and, in the case of Collateral delivered in physical form, is the sole
holder of such Collateral and is the sole beneficial owner of, or has the
right to Transfer, the Collateral it Transfers to the Collateral Agent,
free and clear of any security interest, lien, encumbrance, call, liability
to pay money or other restriction other than the security interest and lien
granted under Section 2.1 hereof;

         (c) upon the Transfer of the Collateral to the Collateral Account,
the Collateral Agent, for the benefit of the Company, will have a valid and
perfected first priority security interest therein (assuming that any
central clearing operation or any Intermediary or other entity not within
the control of the Holder involved in the Transfer of the Collateral,
including the Collateral Agent, gives the notices and takes the action
required of it hereunder and under applicable law for perfection of that
interest and assuming the establishment and exercise of control pursuant to
Section 2.2 hereof); and

         (d) the execution and performance by the Holder of its obligations
under this Agreement will not result in the creation of any security
interest, lien or other encumbrance on the Collateral other than the
security interest and lien granted under Section 2.1 hereof or violate any
provision of any existing law or regulation applicable to it or of any
mortgage, charge, pledge, indenture, contract or undertaking to which it is
a party or which is binding on it or any of its assets.

SECTION 7.2       Covenants.
                  ---------

         The Holders from time to time, acting through the Purchase
Contract Agent as their attorney-in-fact (it being understood that the
Purchase Contract Agent shall not be liable for any covenant made by or on
behalf of a Holder), hereby covenant to the Collateral Agent that for so
long as the Collateral remains subject to the Pledge:

         (a) neither the Purchase Contract Agent nor such Holders will
create or purport to create or allow to subsist any mortgage, charge, lien,
pledge or any other security interest whatsoever over the Collateral or any
part of it other than pursuant to this Agreement; and

         (b) neither the Purchase Contract Agent nor such Holders will sell
or otherwise dispose (or attempt to dispose) of the Collateral or any part
of it except for the beneficial interest therein, subject to the pledge
hereunder, transferred in connection with the Transfer of the Upper DECS
and Stripped DECS.

                                Article VIII

                            THE COLLATERAL AGENT

SECTION 8.1       Appointment, Powers and Immunities.
                  ----------------------------------

         (a) The Collateral Agent shall act as agent for the Company
hereunder with such powers as are specifically vested in the Collateral
Agent by the terms of this Agreement, together with such other powers as
are reasonably incidental thereto. Each of the Collateral Agent, the
Custodial Agent and the Securities Intermediary:

                  (i) shall have no duties or responsibilities except those
         expressly set forth in this Agreement and no implied covenants or
         obligations shall be inferred from this Agreement against any of
         them, nor shall any of them be bound by the provisions of any
         agreement by any party hereto beyond the specific terms hereof;

                  (ii) shall not be responsible for any recitals contained
         in this Agreement, or in any certificate or other document
         referred to or provided for in, or received by it under, this
         Agreement, the Upper DECS or Stripped DECS or the Purchase
         Contract Agreement, or for the value, validity, effectiveness,
         genuineness, enforceability or sufficiency of this Agreement
         (other than as against the Collateral Agent), the Upper DECS or
         Stripped DECS or the Purchase Contract Agreement or any other
         document referred to or provided for herein or therein or for any
         failure by the Company or any other Person (except the Collateral
         Agent, the Custodial Agent or the Securities Intermediary, as the
         case may be) to perform any of its obligations hereunder or
         thereunder or for the perfection, priority or, except as expressly
         required hereby, existence, validity, perfection or maintenance of
         any security interest created hereunder;

                  (iii) shall not be required to initiate or conduct any
         litigation or collection proceedings hereunder (except in the case
         of the Collateral Agent, pursuant to written directions furnished
         under Section 8.2 hereof, subject to Section 8.6 hereof);

                  (iv) shall not be responsible for any action taken or
         omitted to be taken by it hereunder or under any other document or
         instrument referred to or provided for herein or in connection
         herewith or therewith, except for its own gross negligence, bad
         faith or willful misconduct; and

                  (v) shall not be required to advise any party as to
         selling or retaining, or taking or refraining from taking any
         action with respect to, the Upper DECS or Stripped DECS or other
         property deposited hereunder.

         Subject to the foregoing, during the term of this Agreement, the
Collateral Agent shall take all reasonable action in connection with the
safekeeping and preservation of the Collateral hereunder.

         (b) No provision of this Agreement shall require the Collateral
Agent, the Custodial Agent or the Securities Intermediary to expend or risk
its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder. In no event shall the Collateral Agent, the
Custodial Agent or the Securities Intermediary be liable for any amount in
excess of the value of the Collateral or for any special, indirect,
individual, consequential damages or lost profits or loss of business,
arising in connection with this Agreement even if the Collateral Agent, the
Custodial Agent or the Securities Intermediary has been advised of the
likelihood of such loss or damage being incurred and regardless of the form
of action. Notwithstanding the foregoing, the Collateral Agent, the
Custodial Agent, the Purchase Contract Agent and Securities Intermediary,
each in its individual capacity, hereby waive any right of setoff, bankers
lien, liens or perfection rights as securities intermediary or any
counterclaim with respect to any of the Collateral.

         (c) The Collateral Agent, Custodial Agent and Securities
Intermediary shall have no liability whatsoever for the action or inaction
of any Clearing Agency or any book-entry system thereof. In no event shall
any Clearing Agency or any book-entry system thereof be deemed an agent or
subcustodian of the Collateral Agent, Custodial Agent and Securities
Intermediary. The Collateral Agent, Custodial Agent and Securities
Intermediary shall not be responsible or liable for any failure or delay in
the performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable
control, including, without limitation, acts of God; earthquakes; fires;
floods; war (whether declared or undeclared); terrorism; civil or military
disturbances; sabotage; epidemics; riots; interruptions, loss or
malfunctions of utilities, computer (hardware or software) or
communications service; accidents; labor disputes; acts of civil or
military authority; governmental actions; or inability to obtain labor,
material, equipment or transportation.

SECTION 8.2       Instructions of the Company.
                  ---------------------------

         The Company shall have the right, by one or more instruments in
writing executed and delivered to the Collateral Agent, the Custodial Agent
or the Securities Intermediary, as the case may be, to direct the time,
method and place of conducting any proceeding for the realization of any
right or remedy available to the Collateral Agent, or of exercising any
power conferred on the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, or to direct the taking or
refraining from taking of any action authorized by this Agreement;
provided, however, that (i) such direction shall not conflict with the
provisions of any law or of this Agreement and (ii) the Collateral Agent,
the Custodial Agent and the Securities Intermediary shall each receive
indemnity reasonably satisfactory to it as provided herein. Nothing in this
Section 8.2 shall impair the right of the Collateral Agent in its
discretion to take any action or omit to take any action which it deems
proper and which is not inconsistent with such direction.

SECTION 8.3       Reliance.
                  --------

         Each of the Securities Intermediary, the Custodial Agent and the
Collateral Agent shall be entitled conclusively to rely upon any
certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone or facsimile)
reasonably believed by it to be genuine and correct and to have been signed
or sent by or on behalf of the proper Person or Persons (without being
required to determine the correctness of any fact stated therein), and upon
advice and statements of legal counsel and other experts selected by the
Collateral Agent, the Custodial Agent or the Securities Intermediary, as
the case may be. As to any matters not expressly provided for by this
Agreement, the Collateral Agent, the Custodial Agent and the Securities
Intermediary shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions given by
the Company in accordance with this Agreement.

SECTION 8.4       Rights in Other Capacities.
                  --------------------------

         The Collateral Agent, the Custodial Agent and the Securities
Intermediary and their affiliates may (without having to account therefor
to the Company) accept deposits from, lend money to, make their investments
in and generally engage in any kind of banking, trust or other business
with the Purchase Contract Agent, any Holder of Upper DECS or Stripped DECS
and any holder of Separate Notes (and any of their respective subsidiaries
or affiliates) as if it were not acting as the Collateral Agent, the
Custodial Agent or the Securities Intermediary, as the case may be, and the
Collateral Agent, the Custodial Agent and the Securities Intermediary and
their affiliates may accept fees and other consideration from the Purchase
Contract Agent, any Holder of Upper DECS or Stripped DECS or any holder of
Separate Notes without having to account for the same to the Company;
provided that each of the Securities Intermediary, the Custodial Agent and
the Collateral Agent covenants and agrees with the Company that, except as
provided in this Agreement, it shall not accept, receive or permit there to
be created in favor of itself (and waives any right of set-off or banker's
lien with respect to) and shall take no affirmative action to permit there
to be created in favor of any other Person, any security interest, lien or
other encumbrance of any kind in or upon the Collateral and the Collateral
shall not be commingled with any other assets of any such Person.

SECTION 8.5       Non-Reliance on Collateral Agent.
                  --------------------------------

         None of the Securities Intermediary, the Custodial Agent or the
Collateral Agent shall be required to keep itself informed as to the
performance or observance by the Purchase Contract Agent or any Holder of
Upper DECS or Stripped DECS of this Agreement, the Purchase Contract
Agreement, the Upper DECS or Stripped DECS or any other document referred
to or provided for herein or therein or to inspect the properties or books
of the Purchase Contract Agent or any Holder of Upper DECS or Stripped
DECS. The Collateral Agent, the Custodial Agent and the Securities
Intermediary shall not have any duty or responsibility to provide the
Company or the Remarketing Agent with any credit or other information
concerning the affairs, financial condition or business of the Purchase
Contract Agent, any Holder of Upper DECS or Stripped DECS or any holder of
Separate Notes (or any of their respective subsidiaries or affiliates) that
may come into the possession of the Collateral Agent, the Custodial Agent
or the Securities Intermediary or any of their respective affiliates.

SECTION 8.6       Compensation and Indemnity.
                  --------------------------

         The Company agrees:

         (a) to pay each of the Collateral Agent, the Custodial Agent and
the Securities Intermediary from time to time such compensation as shall be
agreed in writing between the Company and the Collateral Agent, Custodial
Agent or the Securities Intermediary, as the case may be, for all services
rendered by each of them hereunder, and

         (b) to indemnify the Collateral Agent, the Custodial Agent, the
Securities Intermediary and their officers, directors and agents for, and
to hold each of them harmless from and against, any loss, liability or
reasonable out-of-pocket expense incurred without gross negligence, bad
faith or willful misconduct on its part, arising out of or in connection
with the acceptance or administration of its powers and duties under this
Agreement, including the out-of-pocket costs and expenses (including fees
and expenses of counsel) of defending itself against any claim or liability
in connection with the exercise or performance of such powers and duties or
collecting such amounts. The Collateral Agent, the Custodial Agent and the
Securities Intermediary shall each promptly notify the Company of any third
party claim that may give rise to the indemnity hereunder and give the
Company the opportunity to participate in the defense of such claim with
counsel reasonably satisfactory to the indemnified party, and no such claim
shall be settled without the written consent of the Company, which consent
shall not be unreasonably withheld. The provisions of this Section 8.6
shall survive the resignation or removal of the Collateral Agent, the
Custodial Agent and the Securities Intermediary or the termination of this
Agreement.

SECTION 8.7       Failure to Act.
                  --------------

         In the event of any ambiguity in the provisions of this Agreement
or any dispute between or conflicting claims by or among the parties hereto
or any other Person with respect to any funds or property deposited
hereunder, the Collateral Agent, Custodial Agent and the Securities
Intermediary shall be entitled, after prompt notice to the Company and the
Purchase Contract Agent, at its sole option, to refuse to comply with any
and all claims, demands or instructions with respect to such property or
funds so long as such dispute or conflict shall continue, and none of the
Collateral Agent, Custodial Agent or the Securities Intermediary shall be
or become liable in any way to any of the parties hereto for its failure or
refusal to comply with such conflicting claims, demands or instructions.
The Collateral Agent, Custodial Agent and the Securities Intermediary shall
be entitled to refuse to act until either (i) such conflicting or adverse
claims or demands shall have been finally determined by a court of
competent jurisdiction or settled by agreement between the conflicting
parties as evidenced in a writing, reasonably satisfactory to the
Collateral Agent, Custodial Agent or the Securities Intermediary, as the
case may be, or (ii) the Collateral Agent, the Custodial Agent or the
Securities Intermediary, as the case may be, shall have received security
or an indemnity reasonably satisfactory to the Collateral Agent, Custodial
Agent or the Securities Intermediary, as the case may be, sufficient to
save the Collateral Agent, Custodial Agent or the Securities Intermediary,
as the case may be, harmless from and against any and all loss, liability
or reasonable out-of-pocket expense that the Collateral Agent, Custodial
Agent or the Securities Intermediary, as the case may be, may incur by
reason of its acting without willful misconduct or gross negligence. The
Collateral Agent, Custodial Agent or the Securities Intermediary may in
addition elect to commence an interpleader action or seek other judicial
relief or orders as the Collateral Agent, Custodial Agent or the Securities
Intermediary, as the case may be, may deem necessary. Notwithstanding
anything contained herein to the contrary, none of the Collateral Agent,
Custodial Agent or the Securities Intermediary shall be required to take
any action that is in its opinion contrary to law or to the terms of this
Agreement, or which would in its opinion subject it or any of its officers,
employees or directors to liability.

SECTION 8.8       Resignation.
                  -----------

         Subject to the appointment and acceptance of a successor
Collateral Agent, Custodial Agent or Securities Intermediary, as provided
below, (a) the Collateral Agent, Custodial Agent and the Securities
Intermediary may resign at any time by giving notice thereof to the Company
and the Purchase Contract Agent as attorney-in-fact for the Holders of
Upper DECS and Stripped DECS, (b) the Collateral Agent, Custodial Agent and
the Securities Intermediary may be removed at any time by the Company and
(c) if the Collateral Agent, Custodial Agent or the Securities Intermediary
fails to perform any of its material obligations hereunder in any material
respect for a period of not less than 20 days after receiving written
notice of such failure by the Purchase Contract Agent and such failure
shall be continuing, the Collateral Agent, Custodial Agent or the
Securities Intermediary may be removed by the Purchase Contract Agent. The
Purchase Contract Agent shall promptly notify the Company of any removal of
the Collateral Agent, the Custodial Agent or the Securities Intermediary
pursuant to clause (c) of the immediately preceding sentence. The Company
shall promptly notify the Purchase Contract Agent of any removal of the
Collateral Agent, the Custodial Agent or the Securities Intermediary
pursuant to clause (b) of the second preceding sentence. Upon any such
resignation or removal, the Company shall have the right to appoint a
successor Collateral Agent, Custodial Agent or Securities Intermediary, as
the case may be. If no successor Collateral Agent, Custodial Agent or
Securities Intermediary, as the case may be, shall have been so appointed
and shall have accepted such appointment within 30 days after the retiring
Collateral Agent's, Custodial Agent's or Securities Intermediary's giving
of notice of resignation or such removal, then the retiring Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be, may
at the Company's expense petition any court of competent jurisdiction for
the appointment of a successor Collateral Agent, Custodial Agent or
Securities Intermediary, as the case may be. Each of the Collateral Agent,
Custodial Agent and the Securities Intermediary shall be a bank which has
an office in New York, New York with a combined capital and surplus of at
least $50,000,000. Upon the acceptance of any appointment as Collateral
Agent, Custodial Agent or Securities Intermediary, as the case may be,
hereunder by a successor Collateral Agent, Custodial Agent or Securities
Intermediary, as the case may be, such successor shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Collateral Agent, Custodial Agent or Securities Intermediary, as
the case may be, and the retiring Collateral Agent, Custodial Agent or
Securities Intermediary, as the case may be, shall take all appropriate
action to transfer any money and property held by it hereunder (including
the Collateral) to such successor after the payment of any outstanding
fees, expenses and indemnities due and owing to such remaining party. The
retiring Collateral Agent, Custodial Agent or Securities Intermediary
shall, upon such succession, be discharged from its duties and obligations
as Collateral Agent, Custodial Agent or Securities Intermediary hereunder.
After any retiring Collateral Agent's, Custodial Agent's or Securities
Intermediary's resignation hereunder as Collateral Agent, Custodial Agent
or Securities Intermediary, the provisions of this Section 8.8, and Section
8.6 hereof, shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the
Collateral Agent, Custodial Agent or Securities Intermediary. Any
resignation or removal of the Collateral Agent hereunder shall be deemed
for all purposes of this Agreement as the simultaneous resignation or
removal of the Custodial Agent and the Securities Intermediary hereunder.

SECTION 8.9       Right to Appoint Agent or Advisor.
                  ---------------------------------

         The Collateral Agent shall have the right to appoint or consult
with agents or advisors in connection with any of its duties hereunder, and
the Collateral Agent shall not be liable for any action taken or omitted
by, or in reliance upon the advice of, such agents or advisors selected in
good faith. The appointment of agents (other than legal counsel) pursuant
to this Section 8.9 shall be subject to prior consent of the Company, which
consent shall not be unreasonably withheld.

SECTION 8.10      Survival.
                  --------

         The provisions of this Article VIII shall survive termination of
this Agreement and the resignation or removal of the Collateral Agent, the
Custodial Agent or the Securities Intermediary.

SECTION 8.11      Exculpation.
                  -----------

         Anything in this Agreement to the contrary notwithstanding, in no
event shall any of the Collateral Agent, the Custodial Agent or the
Securities Intermediary or their officers, employees or agents be liable
under this Agreement to any third party for indirect, special, punitive or
consequential loss or damage of any kind whatsoever, including lost
profits, whether or not the likelihood of such loss or damage was known to
the Collateral Agent, the Custodial Agent or the Securities Intermediary,
or any of them.

                                 Article IX

                                 AMENDMENT

SECTION 9.1       Amendment Without Consent of Holders.
                  ------------------------------------
         Without the consent of any Holders or the holders of any Separate
Notes, the Company, when authorized by a Board Resolution, the Collateral
Agent, the Custodial Agent, the Securities Intermediary and the Purchase
Contract Agent, at any time and from time to time, may amend this
Agreement, in form satisfactory to the Company, the Collateral Agent, the
Custodial Agent, the Securities Intermediary and the Purchase Contract
Agent, for any of the following purposes:

                  (i) to evidence the succession of another Person to the
         Company, and the assumption by any such successor of the covenants
         of the Company;

                  (ii) to add to the covenants of the Company for the
         benefit of the Holders, or to surrender any right or power herein
         conferred upon the Company so long as such covenants or such
         surrender do not adversely affect the validity, perfection or
         priority of the security interests granted or created hereunder;

                  (iii) to evidence and provide for the acceptance of
         appointment hereunder by a successor Collateral Agent, Custodial
         Agent, Securities Intermediary or Purchase Contract Agent; or

                  (iv) to cure any ambiguity, to correct or supplement any
         provisions herein which may be inconsistent with any other such
         provisions herein, or to make any other provisions with respect to
         such matters or questions arising under this Agreement, provided
         such action shall not adversely affect the interests of the
         Holders.

SECTION 9.2       Amendment with Consent of Holders.
                  ---------------------------------

         With the consent of the Holders of not less than a majority of the
Purchase Contracts at the time outstanding, by Act of said Holders
delivered to the Company, the Purchase Contract Agent or the Collateral
Agent, as the case may be, the Company, when duly authorized by a Board
Resolution, the Purchase Contract Agent, the Collateral Agent, the
Custodial Agent and the Securities Intermediary may amend this Agreement
for the purpose of modifying in any manner the provisions of this Agreement
or the rights of the Holders in respect of the Upper DECS or Stripped DECS;
provided, however, that no such supplemental agreement shall, without the
consent of the Holder of each Outstanding DECS adversely affected thereby,

                  (i) change the amount or type of Collateral underlying an
         Upper DECS or Stripped DECS (except for the rights of holders of
         Upper DECS to substitute the Treasury Securities for the Pledged
         Notes, Pledged Treasury Consideration or the appropriate Pledged
         Applicable Ownership Interest in the Treasury Portfolio, as the
         case may be, or the rights of Holders of Stripped DECS to
         substitute Notes or the appropriate Treasury Consideration or the
         appropriate Applicable Ownership Interest in the Treasury
         Portfolio, as applicable, for the Pledged Treasury Securities),
         impair the right of the Holder of any Upper DECS or Stripped DECS
         to receive distributions on the underlying Collateral or otherwise
         adversely affect the Holder's rights in or to such Collateral; or

                  (ii) otherwise effect any action that would require the
         consent of the Holder of each Outstanding DECS affected thereby
         pursuant to the Purchase Contract Agreement if such action were
         effected by an agreement supplemental thereto; or

                  (iii) reduce the percentage of Purchase Contracts the
         consent of whose Holders is required for any such amendment.

         It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such Act shall approve the substance thereof.

SECTION 9.3       Execution of Amendments.
                  -----------------------

         In executing any amendment permitted by this Section, the
Collateral Agent, the Custodial Agent, the Securities Intermediary and the
Purchase Contract Agent shall receive and (subject to Section 8.1 hereof,
with respect to the Collateral Agent, and Section 7.1 of the Purchase
Contract Agreement, with respect to the Purchase Contract Agent) shall be
fully protected in relying upon, an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement
and that all conditions precedent, if any, to the execution and delivery of
such amendment have been satisfied and, in the case of an amendment
pursuant to Section 9.1, that such amendment does not adversely affect the
validity, perfection or priority of the security interests granted or
created hereunder.

SECTION 9.4       Effect of Amendments.
                  --------------------

         Upon the execution of any amendment under this Article IX, this
Agreement shall be modified in accordance therewith, and such amendment
shall form a part of this Agreement for all purposes; and every Holder of
Certificates theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered under the Purchase Contract Agreement shall be
bound thereby.

SECTION 9.5       Reference to Amendments.
                  -----------------------

         Certificates authenticated, executed on behalf of the Holders and
delivered after the execution of any amendment pursuant to this Section
may, and shall if required by the Collateral Agent or the Purchase Contract
Agent, bear a notation in form approved by the Purchase Contract Agent and
the Collateral Agent as to any matter provided for in such amendment. If
the Company shall so determine, new Certificates so modified as to conform,
in the opinion of the Collateral Agent, the Purchase Contract Agent and the
Company, to any such amendment may be prepared and executed by the Company
and authenticated, executed on behalf of the Holders and delivered by the
Purchase Contract Agent in accordance with the Purchase Contract Agreement
and without charge or expense to the Holders in exchange for outstanding
Certificates.

                                 Article X

                               MISCELLANEOUS

SECTION 10.1      No Waiver.
                  ---------

         No failure on the part of any party hereto or any of its agents to
exercise, and no course of dealing with respect to, and no delay in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by any party hereto or
any of its agents of any right, power or remedy hereunder preclude any
other or further exercise thereof or the exercise of any other right, power
or remedy. The remedies herein are cumulative and are not exclusive of any
remedies provided by law.

SECTION 10.2      Governing Law.
                  -------------

         THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ITS PRINCIPLES OF
CONFLICTS OF LAWS. Without limiting the foregoing, the above choice of law
is expressly agreed to by the Securities Intermediary, the Collateral
Agent, the Custodial Agent and the Holders from time to time acting through
the Purchase Contract Agent, as their attorney-in-fact, in connection with
the establishment and maintenance of the Collateral Account, which law, for
purposes of the Code, shall be deemed to be the law governing all Security
Entitlements related thereto. In addition, such parties agree that, for
purposes of the Code, New York shall be the Securities Intermediary's
jurisdiction. The Company, the Collateral Agent and the Holders from time
to time of the Upper DECS and Stripped DECS, acting through the Purchase
Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District
of New York and of any New York state court sitting in New York City for
the purposes of all legal proceedings arising out of or relating to this
Agreement or the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the Upper DECS and
Stripped DECS, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the
laying of the venue of any such proceeding brought in such a court and any
claim that any such proceeding brought in such a court has been brought in
an inconvenient forum.

SECTION 10.3      Notices.
                  -------

         Unless otherwise stated herein, all notices, requests, consents
and other communications provided for herein (including, without
limitation, any modifications of, or waivers or consents under, this
Agreement) shall be given or made in writing (including, without
limitation, by telecopy) delivered to the intended recipient at the
"Address for Notices" specified below its name on the signature pages
hereof or, as to any party, at such other address as shall be designated by
such party in a notice to the other parties. Except as otherwise provided
in this Agreement, all such communications shall be deemed to have been
duly given when personally delivered or, in the case of a mailed notice or
notice transmitted by telecopier, upon receipt, in each case given or
addressed as aforesaid.

SECTION 10.4      Successors and Assigns.
                  ----------------------

         This Agreement shall be binding upon and inure to the benefit of
the respective successors and assigns of the Company, the Collateral Agent,
the Custodial Agent, the Securities Intermediary and the Purchase Contract
Agent, and the Holders from time to time of the Upper DECS or Stripped
DECS, by their acceptance of the same, shall be deemed to have agreed to be
bound by the provisions hereof and to have ratified the agreements of, and
the grant of the Pledge hereunder by, the Purchase Contract Agent.

SECTION 10.5      Counterparts.
                  ------------

         This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one and the same instrument, and
any of the parties hereto may execute this Agreement by signing any such
counterpart.

SECTION 10.6      Severability.
                  ------------

         If any provision hereof is invalid and unenforceable in any
jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such provision in any
other jurisdiction.

SECTION 10.7      Expenses, Etc.

         The Company agrees to reimburse the Collateral Agent, the
Securities Intermediary and the Custodial Agent for:

         (a) all reasonable costs and all reasonable expenses of the
Collateral Agent, the Custodial Agent and the Securities Intermediary
(including, without limitation, the reasonable fees and expenses of counsel
to the Collateral Agent, the Custodial Agent and the Securities
Intermediary), in connection with (i) the negotiation, preparation,
execution and delivery or performance of this Agreement and (ii) any
modification, supplement or waiver of any of the terms of this Agreement;

         (b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation, reasonable fees and expenses of counsel) in
connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Upper DECS or Stripped DECS to
satisfy its obligations under the Purchase Contracts forming a part of the
Upper DECS and Stripped DECS and (ii) the enforcement of this Section 10.7;
and

         (c) all transfer, stamp, documentary or other similar taxes,
assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any other document referred to herein and all
costs, expenses, taxes, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any
security interest contemplated hereby.

SECTION 10.8      Security Interest Absolute.
                  --------------------------

         All rights of the Collateral Agent and security interests
hereunder, and all obligations of the Holders from time to time hereunder,
shall be absolute and unconditional irrespective of:

         (a) any lack of validity or enforceability of any provision of the
Purchase Contracts or the Upper DECS or Stripped DECS or any other
agreement or instrument relating thereto;

         (b) any change in the time, manner or place of payment of, or any
other term of, or any increase in the amount of, all or any of the
obligations of Holders of Upper DECS or Stripped DECS under the related
Purchase Contracts, or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Purchase Contract
Agreement or any Purchase Contract or any other agreement or instrument
relating thereto; or

         (c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.

SECTION 10.9      Waiver of Jury Trial.
                  --------------------

         EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

                          [SIGNATURE PAGE FOLLOWS]





         IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed as of the day and year first above written.

                          TEMPLE-INLAND INC.
                          By: /s/ M. Richard Warner
                             -------------------------------------------
                              Name:  M. Richard Warner
                              Title: Vice President and Chief Administrative
                                     Officer

                          Address for Notices:
                          303 South Temple Drive
                          Diboll, Texas 75941
                          Attention:  General Counsel
                          Telecopy:  936-829-3333


                          JPMORGAN CHASE BANK, as Purchase Contract
                          Agent and as attorney-in-fact of the Holders
                          from time to time of the Upper DECS and
                          Stripped DECS


                          By: /s/ William B. Keenan
                             -------------------------------------------
                              Name:  William B. Keenan
                              Title: Assistant Vice President

                          Address for Notices:
                          450 West 33rd Street
                          New York, New York  10001
                          Attention:  Institutional Trust Services
                          Telecopy:  212-946-8160


                          BANK ONE TRUST COMPANY, N.A., as Collateral
                          Agent, Custodial Agent and Securities
                          Intermediary


                          By: /s/ J. Morand
                             -------------------------------------------
                              Name: J. Morand
                              Title:   Vice President

                          Address for Notices:
                          1 Bank One Plaza
                          Chicago, Illinois  60670
                          Attention:  Corporate Trust Administration
                          Telecopy:  312-336-8840/1




                                 EXHIBIT A

                     INSTRUCTION FROM PURCHASE CONTRACT
                         AGENT TO COLLATERAL AGENT

Bank One Trust Company, N.A.,
as Collateral Agent
1 Bank One Plaza
Chicago, Illinois  60670

Re:          Upper DECS of TEMPLE-INLAND INC. (the "Company")

            ----------------------------------------------------

         We hereby notify you in accordance with Section [4.1] [4.2] of the
Pledge Agreement, dated as of May 1, 2002 (the "Pledge Agreement") among
the Company, you, as Collateral Agent, Custodial Agent and Securities
Intermediary and us, as Purchase Contract Agent and as attorney-in-fact for
the holders of [Upper DECS] [Stripped DECS] from time to time, that the
holder of Upper DECS or Stripped DECS listed below (the "Holder") has
elected to substitute [$_____ aggregate principal amount of Treasury
Securities (CUSIP No. _________)] [$_______ aggregate principal amount of
Notes or $_____ aggregate principal amount of Treasury Consideration (CUSIP
No. _____) or the Applicable Ownership Interest of the Treasury Portfolio,
as the case may be,] in exchange for the related [Pledged Notes, Pledged
Treasury Consideration or the appropriate Pledged Applicable Ownership
Interest in the Treasury Portfolio, as the case may be,] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Notes, the Treasury Consideration or the appropriate
Applicable Ownership Interest in the Treasury Portfolio, as the case may
be,] to you, as Collateral Agent. We hereby instruct you, upon receipt of
such [Pledged Treasury Securities] [Pledged Notes, Pledged Treasury
Consideration or the appropriate Pledged Applicable Ownership Interest in
the Treasury Portfolio, as the case may be,], and upon the payment by such
Holder of any applicable fees, to release the [Notes, the Treasury
Consideration or the appropriate Applicable Ownership Interest in the
Treasury Portfolio, as the case may be,] [Treasury Securities] related to
such [Upper DECS] [Stripped DECS] to us in accordance with the Holder's
instructions. Capitalized terms used herein but not defined shall have the
meaning set forth in the Pledge Agreement.




Date:  _____________________

                                              JPMORGAN CHASE BANK, as
                                              Purchase Contract Agent


                                              By:______________________________
                                                 Name:
                                                 Title:


Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Notes, Treasury Consideration or the appropriate
Applicable Ownership Interest in the Treasury Portfolio] for the [Pledged
Notes, Pledged Treasury Consideration or the appropriate Pledged Applicable
Ownership Interest in the Treasury Portfolio] [Pledged Treasury
Securities]:

Name:
Social Security or other Taxpayer
Identification Number, if any:
Address:




                                 EXHIBIT B

                   INSTRUCTION TO PURCHASE CONTRACT AGENT

JPMorgan Chase Bank,
as Purchase Contract Agent
450 West 33rd Street
New York, New York  10001
Attn:  Institutional Trust Services
Telecopy:  212-946-8160

Re:          Upper DECS of TEMPLE-INLAND INC. (the "Company")
         The undersigned Holder hereby notifies you that it has delivered
to Bank One Trust Company, N.A., as Collateral Agent, Custodial Agent and
Securities Intermediary [$_______ aggregate principal amount of Treasury
Securities (CUSIP No. _________)] [$_______ aggregate principal amount of
Notes or $_____ principal amount of Treasury Consideration (CUSIP No.
_____) or the appropriate Applicable Ownership Interest in the Treasury
Portfolio, as the case may be] in exchange for the related [Pledged Notes,
Pledged Treasury Consideration or the appropriate Pledged Applicable
Ownership Interest in the Treasury Portfolio, as the case may be] [Pledged
Treasury Securities] held by the Collateral Agent, in accordance with
Section [4.1] [4.2] of the Pledge Agreement, dated May 1, 2002 (the "Pledge
Agreement"), among you, the Company and the Collateral Agent. The
undersigned Holder has paid the Collateral Agent all applicable fees
relating to such exchange. The undersigned Holder hereby instructs you to
instruct the Collateral Agent to release to you on behalf of the
undersigned Holder the [Pledged Notes, Pledged Treasury Consideration or
the appropriate Pledged Applicable Ownership Interest in the Treasury
Portfolio, as the case may be] [Pledged Treasury Securities] related to
such [Upper DECS] [Stripped DECS]. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.

Date:  ___________________          Signature:_______________________________

                                    Signature Guarantee:_____________________

Please print name and address of Registered Holder:

Name:

Social Security or other Taxpayer Identification Number, if any:

Address:




                                 EXHIBIT C

            INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING

Bank One Trust Company, N.A.,
as Custodial Agent
1 Bank One Plaza
Chicago, Illinois  60670

Re:      Notes of TEMPLE-INLAND INC. (the "Company")

         The undersigned hereby notifies you in accordance with Section
4.5(d) of the Pledge Agreement, dated as of May 1, 2002 (the "Pledge
Agreement"), among the Company, yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent, and JPMorgan Chase Bank, as Purchase
Contract Agent and as attorney-in-fact for the Holders of Upper DECS and
Stripped DECS from time to time, that the undersigned elects to deliver
$__________ aggregate principal amount of Notes for delivery to the
Remarketing Agent on the fourth Business Day immediately preceding the
first day of any Remarketing Period or any Subsequent Remarketing Period
for remarketing pursuant to Section 4.5(d) of the Pledge Agreement. The
undersigned will, upon request of the Remarketing Agent, execute and
deliver any additional documents deemed by the Remarketing Agent or by the
Company to be necessary or desirable to complete the sale, assignment and
transfer of the Notes tendered hereby.

         The undersigned hereby instructs you, upon receipt of the proceeds
of such remarketing from the Remarketing Agent, net of amounts payable to
the Remarketing Agent in accordance with the Pledge Agreement, to deliver
such proceeds to the undersigned in accordance with the instructions
indicated herein under "A. Payment Instructions." The undersigned hereby
instructs you, in the event of a Failed Remarketing, upon receipt of the
Notes tendered herewith from the Remarketing Agent, to be delivered to the
person(s) and the address(es) indicated herein under "B. Delivery
Instructions."

         With this notice, the undersigned hereby (i) represents and
warrants that the undersigned has full power and authority to tender, sell,
assign and transfer the Notes tendered hereby and that the undersigned is
the record owner of any Notes tendered herewith in physical form or a
participant in The Depository Trust Company ("DTC") and the beneficial
owner of any Notes tendered herewith by book-entry transfer to your account
at DTC and (ii) agrees to be bound by the terms and conditions of Section
4.5(d) of the Pledge Agreement. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.

Date:  ___________________              Signature:____________________________

                                        Signature Guarantee:__________________
Name:

Social Security or other Taxpayer Identification Number, if any:

Address:

A.       PAYMENT INSTRUCTIONS

Proceeds of the remarketing should be paid by check in the name of the
person(s) set forth below and mailed to the address set forth below.

Name(s):          __________________________________

                         (Please Print)
Address:          __________________________________
                         (Please Print)
(Zip Code)
(Tax Identification or Social Security Number):

B.       DELIVERY INSTRUCTIONS

In the event of a Failed Remarketing, Notes which are in physical form
should be delivered to the person(s) set forth below and mailed to the
address set forth below.

Name(s):          __________________________________

                         (Please Print)
Address:          __________________________________
                         (Please Print)
(Zip Code)
(Tax Identification or Social Security Number):

In the event of a Failed Remarketing, Notes which are in book-entry form
should be credited to the account at The Depository Trust Company set forth
below.

Name of Account Party:                                       DTC Account Number:




                                 EXHIBIT D

                  INSTRUCTION TO CUSTODIAL AGENT REGARDING

                        WITHDRAWAL FROM REMARKETING

Bank One Trust Company, N.A.,
as Custodial Agent
1 Bank One Plaza
Chicago, Illinois  60670

Re:          Notes of TEMPLE-INLAND INC. (the "Company")

         The undersigned hereby notifies you in accordance with Section
4.5(d) of the Pledge Agreement, dated as of May 1, 2002 (the "Pledge
Agreement"), among the Company, yourselves, as Collateral Agent, Securities
Intermediary and Custodial Agent and JPMorgan Chase Bank, as Purchase
Contract Agent and as attorney-in-fact for the Holders of Upper DECS and
Stripped DECS from time to time, that the undersigned elects to withdraw
the $_____ aggregate principal amount of Notes delivered to the Custodial
Agent on ___________, 2005 for remarketing pursuant to Section 4.5(d) of
the Pledge Agreement. The undersigned hereby instructs you to return such
Notes to the undersigned in accordance with the undersigned's instructions.
With this notice, the Undersigned hereby agrees to be bound by the terms
and conditions of Section 4.5(d) of the Pledge Agreement. Capitalized terms
used herein but not defined shall have the meaning set forth in the Pledge
Agreement.

Date:  ___________________              Signature:___________________________

                                        Signature Guarantee:_________________
Name:

Social Security or other Taxpayer Identification Number, if any:

Address:

A.       DELIVERY INSTRUCTIONS

In the event of a Failed Remarketing, Notes which are in physical form
should be delivered to the person(s) set forth below and mailed to the
address set forth below.

Name(s):          __________________________________

                         (Please Print)
Address:          __________________________________
                         (Please Print)
(Zip Code)
(Tax Identification or Social Security Number):

In the event of a Failed Remarketing, Notes which are in book-entry form
should be credited to the account at The Depository Trust Company set forth
below.

Name of Account Party:                                      DTC Account Number: