Original Electronically Transmitted
to the Securities and Exchange Commission
on October 30, 1995
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported) October 30, 1995.
INTERNATIONAL BUSINESS MACHINES CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-2360 13-0871985
(State of Incorporation) (Commission (I.R.S. Employer
File Number) Identification No.)
Armonk, New York 10504
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: 914-765-1900
<PAGE>
Item 7. Financial Information, Pro Forma Financial Information
and Exhibits.
This Current Report on Form 8-K is being filed to incorporate by
reference into Registration Statement No. 33-50537 on Form S-3, effective
October 26, 1993, the documents included as Exhibits 1, 2 and 3 hereto,
relating to $1,000,000,000 aggregate principal amount of debt securities of
the Registrant.
The following exhibits are hereby filed with this report:
Exhibit
Number Description
(1) Underwriting Agreement dated October 25, 1995,
among International Business Machines
Corporation, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, CS First Boston Corporation,
Goldman, Sachs & Co., J.P. Morgan Securities
Inc., Morgan Stanley & Co. Incorporated and
Salomon Brothers Inc.
(2) Form of 7% Debenture due 2025.
(3) Form of 7% Debenture due 2045.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
INTERNATIONAL BUSINESS MACHINES CORPORATION
(Registrant)
By:
/s/ John E. Hickey
-------------------------------------------
Name: John E. Hickey
Title: Secretary
Date: October 30, 1995
<PAGE>
Exhibit Index
Page in
Sequentially
Exhibit Numbered
Number Description Copy
(1) -- Underwriting Agreement dated
October 25, 1995, among
International Business
Machines Corporation,
Merrill Lynch, Pierce,
Fenner & Smith Incorporated,
CS First Boston Corporation,
Goldman, Sachs & Co.,
J.P. Morgan Securities Inc.,
Morgan Stanley & Co.
Incorporated and Salomon
Brothers Inc.
(2) -- Form of 7% Debenture due
2025.
(3) -- Form of 7% Debenture due
2045
<PAGE>
INTERNATIONAL BUSINESS MACHINES CORPORATION
Debt Securities
$600,000,000 7% Debentures due 2025
$150,000,000 7% Debentures due 2045
UNDERWRITING AGREEMENT
New York, New York
To the Representatives named in Schedule I hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
International Business Machines Corporation, a New York corporation
(the "Company"), proposes to sell to the underwriters named in Schedule II
hereto (the "Underwriters"), for whom you are acting as representatives
(the "Representatives"), the principal amount of its Securities identified
in Schedule I hereto (the "Securities"), to be issued under an indenture
dated as of October 1, 1993 (the "Indenture"), between the Company and The
Chase Manhattan Bank (National Association), as trustee (the "Trustee"). If
the firm or firms listed in Schedule II hereto include only the firm or
firms listed in Schedule I hereto, then the terms "Underwriters" and
"Representatives", as used herein shall each be deemed to refer to such
firm or firms.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933 (the "Act") and has filed with the
Securities and Exchange Commission (the "Commission") a registration
statement or statements (the file number or numbers of which is or are
set forth in Schedule I hereto), including a related preliminary
prospectus, on such Form for the registration under the Act of the
offering and sale of the Securities. The Company may have filed one or
more amendments thereto, including the related preliminary prospectus,
and has filed a preliminary prospectus in accordance with Rules 415
and 424(b)(5), each of which has previously been furnished to you. The
Company will next file with the Commission one of the following: (i)
prior to effectiveness of such registration statement, a further
amendment thereto, including the form of final prospectus, (ii) a
final prospectus in accordance with Rules 430A and 424(b)(1) or (4),
or (iii) a final prospectus in accordance with Rules 415 and 424(b)(2)
or (5). In the case of clause (ii), the Company has included in such
registration statement or statements, as amended at the Effective
Date, all information (other than Rule 430A Information) required by
the Act and the rules thereunder to be included in the Prospectus with
respect to the Securities and the offering thereof. As filed, such
amendment and form of final prospectus, or such final prospectus,
shall include all Rule 430A Information and, except to the extent the
Representatives shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Prospectus)
as the Company has advised you, prior to the Execution Time, will be
included or made therein. If the Registration Statement contains the
undertaking specified by Regulation S-K Item 512(a), the Registration
Statement, at the Execution Time, meets the requirements set forth in
Rule 415(a)(1)(x).
The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term the "Effective Date" shall mean each
date that the Registration Statement and any post-effective amendment
or amendments thereto became or become effective. "Execution Time"
shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Preliminary Prospectus" shall mean
any preliminary prospectus referred to in the preceding paragraph and
any preliminary prospectus included in the Registration Statement at
the Effective Date that omits Rule 430A Information. "Prospectus"
shall mean the prospectus relating to the Securities that is first
filed pursuant to Rule 424(b) after the Execution Time
<PAGE>
or, if no filing pursuant to Rule 424(b) is required, shall mean the
form of final prospectus included in the Registration Statement at the
Effective Date. "Registration Statement" shall mean the registration
statement or statements referred to in the preceding paragraph,
including incorporated documents as of the filing of the Company's
Quarterly Report on Form 10-Q for the three month period ended June
30, 1995, exhibits and financial statements, in the form in which it
or they has or have or shall become effective and, in the event any
post-effective amendment thereto becomes effective prior to the
Closing Date (as hereinafter defined), shall also mean such
registration statement or statements as so amended. Such term shall
include Rule 430A Information deemed to be included therein at the
Effective Date as provided by Rule 430A. "Rule 415", "Rule 424", "Rule
430A" and "Regulation S-K" refer to such rules under the Act. "Rule
430A Information" means information with respect to the Securities and
the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A. Any
reference herein to the Registration Statement, a Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934
(the "Exchange Act") on or before the effective date of the
Registration Statement or the date of such Preliminary Prospectus or
the Prospectus, as the case may be; and any reference herein to the
terms "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the filing of any document
under the Exchange Act after the effective date of the Registration
Statement, or the date of any Preliminary Prospectus or the
Prospectus, as the case may be, deemed to be incorporated therein by
reference.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Prospectus
(and any supplements thereto) will, comply in all material respects
with the applicable requirements of the Act and the Exchange Act and
the respective rules thereunder; on the Effective Date and on the
Closing Date the Indenture did or will comply in all material respects
with the requirements of the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the rules thereunder; on the Effective Date, the
Registration Statement did not or will not contain any untrue
statement of a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and,
on the Effective Date, the Prospectus, if not filed pursuant to Rule
424(b), did not or will not, and on the date of any filing pursuant to
Rule 424(b) and on the Closing Date, the Prospectus (together with any
supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to (i) that part of
the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee or (ii) the information contained in or omitted from
the Registration Statement or the Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through
the Representatives specifically for use in connection with the
preparation of the Registration Statement or the Prospectus (or any
supplement thereto).
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase
price set forth in Schedule I hereto, the respective principal amounts of
the Securities set forth opposite each respective Underwriter's name in
Schedule II hereto, except that, if Schedule I hereto provides for the sale
of Securities pursuant to delayed delivery arrangements, the respective
principal amounts of Securities to be purchased by the Underwriters shall
be as set forth in Schedule II hereto, less the respective amounts of
Contract Securities determined as provided below. Securities to be
purchased by the Underwriters are herein sometimes called the
"Underwriters' Securities" and Securities to be purchased pursuant to
Delayed Delivery Contracts as hereinafter provided are herein called
"Contract Securities".
If so provided in Schedule I hereto, the Underwriters are authorized
to solicit offers to purchase Securities from the Company pursuant to
delayed delivery contracts ("Delayed Delivery Contracts"), substantially in
the
<PAGE>
form of Schedule III hereto but with such changes therein as the Company
may authorize or approve. The Underwriters will endeavor to make such
arrangements and, as compensation therefor, the Company will pay to the
Representatives, for the account of underwriters, on the Closing Date, the
percentage set forth in Schedule I hereto of the principal amount of the
Securities for which Delayed Delivery Contracts are made. Delayed Delivery
Contracts are to be with institutional investors, including commercial and
savings banks, insurance companies, pension funds, investment companies and
educational and charitable institutions. The Company will make Delayed
Delivery Contracts in all cases where sales of Contract Securities arranged
by the Underwriters have been approved by the Company but, except as the
Company may otherwise agree, each such Delayed Delivery Contract must be
for not less than the minimum principal amount set forth in Schedule I
hereto and the aggregate principal amount of Contract Securities may not
exceed the maximum aggregate principal amount set forth in Schedule I
hereto. The Underwriters will not have any responsibility in respect of the
validity or performance of Delayed Delivery Contracts. The principal amount
of Securities to be purchased by each Underwriter as set forth in Schedule
II hereto shall be reduced by an amount which shall bear the same
proportion to the total principal amount of Contract Securities as the
principal amount of Securities set forth opposite the name of such
Underwriter bears to the aggregate principal amount set forth in Schedule
II hereto, except to the extent that you determine that such reduction
shall be otherwise than in such proportion and so advise the Company in
writing; provided, however, that the total principal amount of Securities
to be purchased by all Underwriters shall be the aggregate principal amount
set forth in Schedule II hereto, less the aggregate principal amount of
Contract Securities.
3. Delivery and Payment. Delivery of and payment for the Underwriters'
Securities shall be made at the office, on the date and at the time
specified in Schedule I hereto, which date and time may be postponed by
agreement between the Representatives and the Company or as provided in
Section 8 hereof (such date and time of delivery and payment for the
Securities being called the "Closing Date"). Delivery of the Underwriters'
Securities shall be made to the Representatives for the respective accounts
of the several Underwriters against payment by the several Underwriters
through the Representatives of the purchase price thereof to or upon the
order of the Company by certified or official bank check or checks payable,
or wire transfers, in immediately available funds. The Debentures shall be
delivered in definitive global form through the facilities of Depository
Trust Company.
4. Agreements. The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, and any amendment thereof, if not effective at
the Execution Time, to become effective. If the Registration Statement
has become or becomes effective pursuant to Rule 430A, or filing of
the Prospectus is otherwise required under Rule 424(b), the Company
will file the Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed
and will provide evidence satisfactory to the Representatives of such
timely filing. The Company will promptly advise the Representatives
(i) when the Registration Statement shall have become effective, (ii)
when any amendment to the Registration Statement relating to the
Securities shall have become effective, (iii) of any request by the
Commission for any amendment of the Registration Statement or
amendment of or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (v)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof. The Company will not file any
amendment of the Registration Statement or supplement to the
Prospectus unless the Company has furnished you a copy for your review
prior to filing and will not file any such proposed amendment or
supplement to which you reasonably object.
(b) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then amended or supplemented would
include
<PAGE>
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it
shall be necessary to amend or supplement the Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder,
the Company will give the Representatives immediate notice of the
occurrence of such event and promptly will prepare and file with the
Commission, subject to the first sentence of paragraph (a) of this
Section 4, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance.
(c) The Company will make generally available to its security
holders and to the Representatives as soon as practicable, but not
later than 45 days after the end of the 12-month period beginning at
the end of the current fiscal quarter of the Company, an earnings
statement (which need not be audited) of the Company and its
subsidiaries, covering a period of at least 12 months beginning after
the end of the current fiscal quarter of the Company, which will
satisfy the provisions of Section 11(a) of the Act.
(d) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, copies of the Registration
Statement (including exhibits thereto) and each amendment thereto
which shall become effective on or prior to the Closing Date and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of any Preliminary Final
Prospectus and the Final Prospectus and any amendments thereof and
supplements thereto as the Representatives may reasonably request. The
Company will pay the expenses of printing all documents relating to
the offering.
(e) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in
effect so long as required for the distribution of the Securities and
will arrange for the determination of the legality of the Securities
for purchase by institutional investors.
(f) Until the earlier of the day on which the distribution of the
Securities is completed or the business day following the Closing
Date, the Company will not, without the consent of the
Representatives, offer or sell, or announce the offering of, any debt
securities covered by the Registration Statement or any other
registration statement filed under the Act.
5. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Underwriters' Securities shall be
subject to the accuracy of the representations and warranties on the part
of the Company contained herein as of the Execution Time, as of the date of
the effectiveness of any amendment to the Registration Statement filed
prior to the Closing Date (including the filing of any document
incorporated by reference therein) and as of the Closing Date, to the
accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing to
a later time, the Registration Statement shall have become effective
not later than (i) 6:00 P.M. New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 P.M. New York City time on such date or
(ii) 12:00 Noon on the business day following the day on which the
public offering price was determined, if such determination occurred
after 3:00 P.M. New York City time on such date; if filing of the
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Prospectus shall have been filed in the manner and within
the time period required by Rule 424(b); and no stop order suspending
the effectiveness of the Registration Statement, as amended from time
to time, shall have been issued and no proceedings for that purpose
shall have been instituted or threatened.
(b) The Company shall have furnished to the Representatives:
<PAGE>
(i) the opinion of Peter M. Acton, Associate General Counsel
of the Company, dated the Closing Date, to the effect that:
(A) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of New York, with full corporate power and
authority to own its properties and conduct its business as
described in the Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing
under the laws of each jurisdiction within the United States
which requires such qualifications wherein it owns or leases
material properties or conducts material business;
(B) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries,
of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the
Prospectus, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit, which is not described or filed as required;
(C) such counsel has no reason to believe that the
Registration Statement or any amendment thereof at the time
it became effective contained any untrue statement of a
material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as amended or
supplemented, contains any untrue statement of a material
fact or omits to state a material fact necessary to make the
statements therein, in light of the circumstances under
which they were made, not misleading; and
(D) none of the issue and sale of the Securities, the
consummation of any other of the transactions herein
contemplated or the fulfillment of the terms hereof or of
any Delayed Delivery Contracts will conflict with, result in
a breach of, or constitute a default under, the charter or
by-laws of the Company or the terms of any indenture or
other agreement or instrument known to such counsel and to
which the Company or any of its subsidiaries is a party or
bound, or any order or regulation known to such counsel to
be applicable to the Company or any of its subsidiaries of
any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Company or any of its subsidiaries.
(ii) the opinion of Cravath, Swaine & Moore, counsel for the
Company, dated the Closing Date, to the effect that:
(A) the Company is a corporation validly existing and
in good standing under the laws of the State of New York,
with full corporate power and authority to own its
properties and conduct its business as described in the
Prospectus;
(B) the Securities conform in all material respects to
the description thereof contained in the Prospectus;
(C) the Indenture has been duly authorized, executed
and delivered, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding
obligation enforceable against the Company in accordance
with its terms (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and other similar laws affecting creditors' rights generally
from time to time in effect, and subject, as to
enforceability, to general principles of equity, regardless
of whether such enforceability is considered in a proceeding
in equity or at law); and the Securities have been duly
authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant to
this Agreement, in the case of the Underwriters' Securities,
or by the purchasers thereof pursuant to Delayed Delivery
Contracts, in the case of any Contract Securities, will
constitute legal, valid
<PAGE>
and binding obligations of the Company entitled to the
benefits of the Indenture (subject to applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium,
and other similar laws affecting creditors' rights generally
from time to time in effect);
(D) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company of a character required to
be disclosed in the Registration Statement which is not
adequately disclosed in the Registration Statement or
Prospectus and there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit, which is not described or filed as required;
(E) the Registration Statement and any amendments
thereto have become effective under the Act; any required
filing of the Prospectus and any supplement thereto pursuant
to Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); to the best knowledge
of such counsel, no stop order suspending the effectiveness
of the Registration Statement, as amended, has been issued,
no proceedings for that purpose have been instituted or are
pending or contemplated under the Act;
(F) this Agreement and any Delayed Delivery Contracts
have been duly authorized, executed and delivered by the
Company;
(G) no authorization, approval or other action by, and
no notice to, consent of, order of, or filing with, any
United States Federal or New York governmental authority or
regulatory body is required for the consummation of the
transactions contemplated herein or in any Delayed Delivery
Contracts, except such as have been obtained under the Act
and such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and
distribution of the Securities and such other approvals
(specified in such opinion) as have been obtained; and
(H) none of the issue and sale of the Securities, or
the consummation of any other of the transactions herein
contemplated or the performance of the terms hereof or of
any Delayed Delivery Contracts (i) will conflict with,
result in a breach of, or constitute a default under the
charter or by-laws of the Company, or (ii) will contravene
any law, rule or regulation of the United States or the
State of New York, or, to the knowledge of such counsel, any
order or decree of any court or governmental agency or
instrumentality.
In rendering such opinions, such counsel may rely (A)
as to matters involving the application of laws of any
jurisdiction other than the State of New York or the United
States, to the extent they deem proper and specified in such
opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to
counsel for the Underwriters; and (B) as to matters of fact,
to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.
In addition, such counsel shall state that, having
participated in conferences with certain officers of, and
with the accountants for, the Company and having made
certain inquiries and investigations in connection with the
preparation of the Registration Statement and the
Prospectus, such counsel has no reason to believe that (i)
the Registration Statement and the Prospectus (except the
financial statements and the notes thereto and other
information of an accounting or financial nature included
therein, and the Statement of Eligibility (Form T-1)
included as an exhibit to the Registration Statement, as to
which such counsel need express no view) were not
appropriately responsive in all material respects with
requirements of the Act and the applicable rules and
regulations of the Commission thereunder and (ii) the
Registration Statement at the Effective Date contained an
untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the
Prospectus on
<PAGE>
the Closing Date includes any untrue statement of a material
fact or omits to state a material fact necessary in order to
make the statements therein, in light of the circumstances
under they were made, not misleading (in each case except
for the financial statements and the notes thereto and other
information of an accounting or financial nature included
therein, as to which such counsel need express no view).
(c) The Representatives shall have received from Davis Polk &
Wardwell, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of the
Securities, the Indenture, any Delayed Delivery Contracts, the
Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the principal financial or
accounting officer (or Vice President and Treasurer) of the Company,
dated the Closing Date, to the effect that the signer of such
certificate has carefully examined the Registration Statement, the
Prospectus, any supplement to the Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued and no
proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus, there has been no material adverse
change in the condition (financial or other), earnings, business
or properties of the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus.
(e) At the Closing Date, Price Waterhouse LLP shall have
furnished to the Representatives a letter or letters (which may refer
to a letter previously delivered to one or more of the
Representatives), dated as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange
Act and the respective applicable published rules and regulations
thereunder, that the response, if any, to Item 10 of the Registration
Statement is correct insofar as it relates to them and stating in
effect that:
(i) in their opinion the audited financial statements and
schedules thereto included or incorporated in the Registration
Statement and the Prospectus and reported on by them comply as to
form in all material respects with the applicable accounting
requirements of the Exchange Act and the published rules and
regulations thereunder with respect to financial statements and
financial statement schedules included or incorporated in annual
reports on Form 10-K under the Exchange Act;
(ii) on the basis of a reading of the unaudited financial
statements included or incorporated in the Registration Statement
and the Prospectus and of the latest unaudited financial
statements made available by the Company and its subsidiaries;
carrying out certain specified procedures (but not an examination
in accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and
executive committees of the Company and the Subsidiaries since
the date of the latest audited balance sheet, through a specified
date not more than five business days prior to the date of the
letter; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the
Company and its subsidiaries as to
<PAGE>
transactions and events subsequent to the date of the most recent
financial statements incorporated in the Registration Statement
and the Prospectus, nothing came to their attention which caused
them to believe that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the
Prospectus do not comply as to form in all material respects
with applicable accounting requirements and with the
published rules and regulations of the Commission with
respect to financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange Act; and
said unaudited financial statements are not stated on a
basis substantially consistent with that of the audited
financial statements included or incorporated in the
Registration Statement and the Prospectus; or
(2) with respect to the period subsequent to the date
of the most recent financial statements incorporated in the
Registration Statement and the Prospectus, there were, at a
specified date not more than five business days prior to the
date of the letter, any increases in long-term debt of the
Company and its subsidiaries or decreases in the capital
stock of the Company or decreases in the stockholders'
equity of the Company and its subsidiaries as compared with
the amounts shown on the most recent consolidated balance
sheet included or incorporated in the Registration Statement
and the Prospectus, except in all instances for increases or
decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Company as to
the significance thereof unless said explanation is not
deemed necessary by the Representatives; and
(iii) they have performed certain other procedures as a
result of which they determined that the information described in
a schedule to be delivered on behalf of the Underwriters of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general ledger of the Company) set forth in the Registration
Statement, as amended, the Prospectus, as amended or
supplemented, and in Exhibit 12 to the Registration Statement
(including selected accounting, financial or statistical
information included or incorporated in the Company's Annual
Report on Form 10-K incorporated in the Prospectus or any of the
Company's Quarterly Reports on Form l0-Q incorporated therein),
agrees with the general ledger of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (e) include any
supplements thereto at the date of the letter.
(f) Subsequent to the respective dates of which information is
given in the Registration Statement and the Prospectus, there shall
not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (e) of this Section 5 or (ii) any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its
subsidiaries the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to
proceed with the public offering or the delivery of the Securities as
contemplated by the Registration Statement and the Prospectus.
(g) Prior to the Closing Date, the Company shall have furnished
to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
(h) The Company shall have accepted Delayed Delivery Contracts in
any case where sales of Contract Securities arranged by the
Underwriters have been approved by the Company.
(i) Subsequent to the Execution Time, there shall not have been
any decrease in the ratings of any of the Securities by Moody's
Investor's Service, Inc. ("Moody's") or Standard & Poor's Corporation
("S&P") and neither Moody's nor S&P shall have publicly announced that
it has placed any of the Securities on a credit watch with negative
implications.
<PAGE>
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and
their counsel, this Agreement and all obligations of the Underwriters
hereunder may be cancelled at, or at any time prior to, the Closing Date by
the Representatives. Notice of such cancellation shall be given to the
Company in writing or by telephone or telegraph confirmed in writing.
6. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth in Section 5 hereof is not
satisfied or because of any refusal, inability or failure on the part of
the Company to perform any agreement herein or comply with any provision
hereof other than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters severally upon demand for all
out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the
proposed purchase and sale of the Securities.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person who controls
any Underwriter within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party for any legal or other
expenses reasonably incurred, as incurred, by them in connection with
investigating or defending any such loss, claim, damage, liability or
action; provided, however, that (i) the Company will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and
in conformity with written information furnished to the Company by or on
behalf of any Underwriter through the Representatives specifically for use
in connection with the preparation thereof, and (ii) such indemnity with
respect to any Preliminary Prospectus shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) from whom the
person asserting any such loss, claim, damage or liability purchased the
Securities which are the subject thereof if such person did not receive a
copy of the Prospectus (or the Prospectus as supplemented) excluding
documents incorporated therein by reference at or prior to the confirmation
of the sale of such Securities to such person in any case where such
delivery is required by the Act and the untrue statement or omission of a
material fact contained in such Preliminary Prospectus was corrected in the
Prospectus (or the Prospectus as supplemented prior to the confirmation of
the sale of such Securities to such person). This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter through the Representatives
specifically for use in the preparation of the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the
cover page of the Prospectus and under the heading "Underwriting" or "Plan
of Distribution" and, if Schedule I hereto provides for sales of Securities
pursuant to delayed delivery arrangements, in the last sentence under the
heading "Delayed Delivery Arrangements" in any Preliminary Prospectus and
the Prospectus, constitute the only information furnished in writing by or
on behalf
<PAGE>
of the several Underwriters for inclusion in any Preliminary Prospectus or
the Prospectus, and you, as the Representatives, confirm that such
statements are correct.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under this Section 7. In case any such action is
brought against any indemnified party, and it notifies the indemnifying
party of the commencement thereof, the indemnifying party will be entitled
to appoint counsel satisfactory to such indemnified party to represent the
indemnified party in such action; provided, however, if the defendants in
any such action include both the indemnified party and the indemnifying
party and the indemnified party shall have reasonably concluded that there
may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right
to select separate counsel to defend such action on behalf of such
indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to appoint counsel to
defend such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with
the proviso to the next preceding sentence (it being understood, however,
that the indemnifying party shall not be liable for the expenses of more
than one separate counsel (in addition to any local counsel), approved by
the Representatives in the case of paragraph (a) of this Section 7,
representing the indemnified parties under such paragraph (a) who are
parties to such action), (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action or (iii) the indemnifying party has authorized
the employment of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is applicable,
such liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of
this Section 7 is due in accordance with its terms but is for any reason
held by a court to be unavailable from the Company on grounds of policy or
otherwise, the Company and the Underwriters shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending
same) to which the Company and one or more of the Underwriters may be
subject in such proportion so that the Underwriters are responsible for
that portion represented by the percentage that the underwriting discount
bears to the sum of such discount and the purchase price of the Securities
set forth on Schedule I hereto and the Company is responsible for the
balance; provided, however, that (y) in no case shall any Underwriter
(except as may be provided in any agreement among underwriters relating to
the offering of the Securities) be responsible for any amount in excess of
the underwriting discount applicable to the Securities purchased by such
Underwriter hereunder and (z) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person
who controls an Underwriter within the meaning of either the Act or the
Exchange Act shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each
case to clauses (y) and (z) of this paragraph (d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this
paragraph (d), notify such party or parties from whom contribution may be
sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any
other obligation it or they may have hereunder or otherwise than under this
paragraph (d).
<PAGE>
8. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase
shall constitute a default in the performance of its or their obligations
under this Agreement, the remaining Underwriters shall be obligated
severally to take up and pay for (in the respective proportions which the
amount of Securities set forth opposite their names in Schedule II hereto
bears to the aggregate amount of Securities set forth opposite the names of
all the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Securities which
the defaulting Underwriter or Underwriters agreed but failed to purchase
shall exceed 10% of the aggregate amount of Securities set forth in
Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 8, the Closing Date shall be
postponed for such period, not exceeding seven days, as the Representatives
shall determine in order that the required changes in the Registration
Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company
and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
9. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time
(i) trading in securities generally on the New York Stock Exchange shall
have been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a banking moratorium shall have been
declared either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak or material escalation of hostilities or
other calamity or crisis the effect of which on the financial markets of
the United States is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities.
10. Representations and Indemnities to Survive. The respective
agreement representations, warranties, indemnities and other statements of
the Company or its officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or the Company
or any of the officers, directors or controlling persons referred to in
Section 7 hereof, and will survive delivery of and payment for the
Securities. The provisions of Sections 6 and 7 hereof shall survive the
termination or cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telegraphed and confirmed to them, at the address
specified in Schedule I hereto; or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it, at Armonk, New York 10504;
attention of the Treasurer.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7
hereof, and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding
agreement among the Company and the several Underwriters.
Very truly yours,
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By:/s/ JEFFREY D. SERKES
-------------------------------
The foregoing Agreement is hereby
confirmed and accepted on the
date specified in Schedule I hereto.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
CS First Boston Corporation
Goldman, Sachs & Co.
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Salomon Brothers Inc
By: Merrill Lynch, Pierce, Fenner & Smith Incorporated
By:/s/ HOWARD S. BOCHNER
---------------------
Title: Director
For themselves and the other several
Underwriters, if any, named in
Schedule II to the foregoing Agreement.
<PAGE>
Schedule I
Underwriting Agreement dated October 25, 1995.
Registration Nos. 33-50537 and 33-49475.
Representatives:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
250 Vesey
Street World Financial Center-North Tower
New York, New York
10281
CS First Boston Corporation
Park Avenue Plaza
New York, New York 10055
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
J.P. Morgan Securities Inc.
60 Wall Street
New York, NY
Morgan Stanley & Co. Incorporated
1222 Avenue of the Americas
New York, New York 10020
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Title, Purchase Price and Description of Securities:
Debentures due 2025:
Title: 7% Debentures due 2025.
Principal amount: $600,000,000.
Purchase price: 98.665% of the principal amount of
Debentures due 2025 plus accrued interest from
October 30, 1995.
Offering price: 99.54% of the principal amount of Debentures
due 2025 plus accrued interest from October 30, 1995.
Interest: Payable on October 30 and April 30 of each year,
commencing on April 30, 1996.
Sinking fund provisions: None.
Redemption provisions: The Debentures due 2025 are
redeemable as a whole or in part, at the option of the
Company at any time, at a redemption price equal to the
greater of (i) 100% of the principal amount of such
Debentures and (ii) the sum of the present values of the
remaining scheduled payments of principal and thereon
discounted to the date of redemption on a semi-annual
basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate (as defined therein)
plus 12.5 basis points, plus in each case accrued
interest to the date of redemption.
<PAGE>
Debentures due 2045:
Title: 7% Debentures due 2045.
Principal amount: $150,000,000.
Purchase price: 97.14% of the principal amount of Debentures
due 2045 plus accrued interest from October 30, 1995.
Offering price: 98.14% of the principal amount of Debentures
due 2045 plus accrued interest from October 30, 1995.
Interest: Payable on April 30 and October 30 of each year,
commencing on April 30, 1996.
Sinking fund provisions: None.
Redemption provisions: The Debentures due 2045 are
redeemable as a whole or in part, at the option of the
Company at any time, at a redemption price equal to the
greater of (i) 100% of the principal amount of such
Debentures and (ii) the sum of the present values of the
remaining scheduled payments of principal and thereon
discounted to the date of redemption on a semi-annual
basis (assuming a 360-day year consisting of twelve
30-day months) at the Treasury Rate (as defined therein)
plus 12.5 basis points, plus in each case accrued
interest to the date of redemption.
Closing Date, Time and Location: October 30, 1995, 10:00 A.M., at
the offices of Cravath, Swaine & Moore, Worldwide Plaza,
825 Eighth Avenue, New York, New York.
Delayed Delivery Arrangements: None.
Items specified pursuant to Section 5(e)(iii) to be covered by
the letter from Price Waterhouse LLP delivered pursuant to
Section 5(e): As set forth in a schedule delivered on the
date hereof on behalf of the Underwriters.
<PAGE>
Schedule II
International Business Machines Corporation
$600,000,000 7% Debentures due 2025
$150,000,000 7% Debentures due 2045
Underwriters Principal Amount
of Securities
to be Purchased
Debentures due Debentures due
2025 2045
Merrill Lynch, Pierce, Fenner &
Smith Incorporated ......................... $100,000,000 $ 25,000,000
CS First Boston Corporation ................ 100,000,000 25,000,000
Goldman, Sachs & Co. ....................... 100,000,000 25,000,000
J.P. Morgan Securities Inc. ................ 100,000,000 25,000,000
Morgan Stanley & Co. Incorporated .......... 100,000,000 25,000,000
Salomon Brothers Inc. ...................... 100,000,000 25,000,000
------------ ------------
Total .............................. $600,000,000 $150,000,000
============ ============
<PAGE>
Schedule III
Delayed Delivery Contract
[Insert name and address
of lead Representative]
,199
Dear Sirs:
The undersigned hereby agrees to purchase from International Business
Machines Corporation (the "Company"), and the Company agrees to sell to the
undersigned, on , 199 , (the "Delivery Date"), $ principal amount of the
Company's (the "Securities") offered by the Company's Final Prospectus
dated , 199 , receipt of a copy of which is hereby acknowledged, at a
purchase price of % of the principal amount thereof, plus accrued , if any,
thereon from , 19 , to the date of payment and delivery, and on the further
terms and conditions set forth in this contract.
Payment for the Securities to be purchased by the undersigned shall be
made on or before 11:00 A.M. on the Delivery Date to or upon the order of
the Company in New York Clearing House (next day) funds, at your office or
at such other place as shall be agreed between the Company and the
undersigned upon delivery to the undersigned of the Securities in
definitive, fully registered form and in such authorized denominations and
registered in such names as the undersigned may request by written or
telegraphic communication addressed to the Company not less than five full
business days prior to the Delivery Date. If no request is received, the
Securities will be registered in the name of the undersigned and issued in
a denomination equal to the aggregate principal amount of Securities to be
purchased by the undersigned on the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Securities on the Delivery Date, and the obligation of the Company to
sell and deliver Securities on the Delivery Date, shall be subject to the
conditions (and neither party shall incur any liability by reason of the
failure thereof) that (1) the purchase of Securities to be made by the
undersigned, which purchase the undersigned represents is not prohibited on
the date hereof, shall not on the Delivery Date be prohibited under the
laws of the jurisdiction to which the undersigned is subject, and (2) the
Company, on or before the Delivery Date, shall have sold to certain
underwriters (the "Underwriters") such principal amount of the Securities
as is to be sold to them pursuant to the Underwriting Agreement referred to
in the Final Prospectus mentioned above. Promptly after completion of such
sale to the Underwriters, the Company will mail or deliver to the
undersigned at its address set forth below notice to such effect,
accompanied by a copy of the opinion of counsel for the Company delivered
to the Underwriters in connection therewith. The obligation of the
undersigned to take delivery of and make payment for the Securities, and
the obligation of the Company to cause the Securities to be sold and
delivered, shall not be affected by the failure of any purchaser to take
delivery of and make payment for the Securities pursuant to other contracts
similar to this contract.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
<PAGE>
It is understood that acceptance of this contract and other similar
contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first come, first served basis. If this
contract is acceptable to the Company, it is required that the Company sign
the form of acceptance below and mail or deliver one of the counterparts
hereof to the undersigned at its address set forth below. This will become
a binding contract between the Company and the undersigned, as of the date
first above written, when such counterpart is so mailed or delivered.
This agreement shall be governed by and construed in accordance with
the laws of the State of New York.
Very truly yours,
------------------------
(Name of Purchaser)
By ---------------------
(Signature and Title)
------------------------
(Address)
Accepted:
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By ----------------------------
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the
issuer or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
INTERNATIONAL BUSINESS MACHINES CORPORATION
7% Debenture due 2025
CUSIP 459200 AM3
No.: R 1 $
INTERNATIONAL BUSINESS MACHINES CORPORATION, a corporation duly
organized and existing under the laws of the State of New York (herein
called the "Company", which term includes any successor corporation under
the Indenture referred to on the reverse hereof), for value received,
hereby promises to pay to CEDE & CO., or registered assigns, the principal
sum of 600,000,000 Dollars, at the office or agency of the Company in the
Borough of Manhattan, The City and State of New York, on October 30, 2025,
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts,
and to pay interest, semi-annually on April 30 and October 30 of each year,
on said principal sum at said office or agency, in like coin or currency,
at the rate of 7% per annum, from the April 30 and the October 30, as the
case may be, next preceding the date of this Debenture to which interest
has been paid, unless the date hereof is a date to which interest has been
paid, in which case from the date of this Debenture, or unless no interest
has been paid on the Debentures due 2025 (as defined on the reverse
hereof), in which case from October 30, 1995, until payment of said
principal sum has been made or duly provided for. Notwithstanding the
foregoing, if the date hereof is after April 15 or October 15, as the case
may be, and before the following April 30 or October 30, this Debenture
shall bear interest from such April 30 or October 30; provided, however,
that if the Company shall default in the payment of interest due on such
April 30 or October 30, then this Debenture shall bear interest from the
next preceding April 30 or October 30 to which interest has been paid, or,
if no interest has been paid on the Debentures due 2025, from October 30,
1995. The interest so payable on any April 30 or October 30 will, subject
to certain exceptions provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Debenture is registered at
the close of business on such April 15 or October 15, as the case may be,
next preceding such April 30 or October 30, unless the Company shall
default in the payment of interest due on such interest payment date, in
which case such defaulted interest, at the option of the Company, may be
paid to the person in whose name this Debenture is registered at the close
of business on a special record date for the payment of such defaulted
interest established by notice to the registered holders of Debentures not
less than ten days preceding such special record date or maybe paid in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures due 2025 may be listed. Payment
of interest may, at the option of the Company, be made by check mailed to
the registered address of the person entitled thereto.
Reference is made to the further provisions of this Debenture set
forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by
the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: INTERNATIONAL BUSINESS MACHINES
CORPORATION
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION by _________________________________
This is one of the Securities
of the Series designated herein issued
under the within-mentioned Indenture. by _________________________________
THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), as Trustee
by ______________________________
Authorized Signatory
<PAGE>
This Debenture is one of a duly authorized issue of unsecured
debentures, notes or other evidences of indebtedness of the Company
(hereinafter called the "Securities"), of the series hereinafter specified,
all issued or to be issued under an indenture dated as of October 1, 1993
(hereinafter called the "Indenture"), duly executed and delivered by the
Company to The Chase Manhattan Bank (National Association), a New York
banking corporation, as trustee (hereinafter called the "Trustee"), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the respective rights and duties thereunder of
the Trustee, the Company and the holders of the Securities. The Securities
may be issued in one or more series, which different series may be issued
in various aggregate principal amounts, may mature at different times, may
bear interest at different rates, may have different conversion prices (if
any), may be subject to different redemption provisions, may be subject to
different sinking, purchase or analogous funds, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided. This Debenture is one of a series designated as the 7% Debentures
due 2025 of the Company (hereinafter called the "Debentures due 2025")
issued under the Indenture, limited in aggregate principal amount to
$600,000,000.
In case an Event of Default with respect to the Debentures due 2025,
as defined in the Indenture, shall have occurred and be continuing, the
principal hereof together with interest accrued thereon, if any, may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities at the time outstanding of all
series to be affected (acting as one class) to execute supplemental
indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the
Securities of such series to be affected; provided, however, that no such
supplemental indenture shall, among other things, (i) change the fixed
maturity of the principal of, or any installment of principal of or
interest on, any Security; (ii) reduce the principal amount thereof or the
rate of interest thereon or any premium payable upon the redemption
thereof; (iii) impair the right to institute suit for the enforcement of
any such payment on or after the fixed maturity thereof (or, in the case of
redemption, on or after the redemption date); (iv) reduce the percentage in
principal amount of the outstanding Securities of any series, the consent
of whose holders is required for any such supplemental indenture, or the
consent of whose holders is required for any waiver (of compliance with
certain provisions of the Indenture or certain defaults thereunder and
their consequences) provided for in the Indenture; (v) change any
obligation of the Company, with respect to outstanding Securities of a
series, to maintain an office or agency in the places and for the purposes
specified in the Indenture for such series; or (vi) modify any of the
foregoing provisions or the provisions for the waiver of certain covenants
and defaults, except to increase any applicable percentage of the aggregate
principal amount of outstanding Securities the consent of the holders of
which is required or to provide with respect to any particular series the
right to condition the effectiveness of any supplemental indenture as to
that series on the consent of the holders of a specified percentage of the
aggregate principal amount of outstanding Securities of such series or to
provide that certain other provisions of the Indenture cannot be modified
or waived without the consent of the holder of each outstanding Security
affected thereby. It is also provided in the Indenture that the holders of
a majority in aggregate principal amount of the Securities of a series at
the time outstanding may on behalf of the holders of all the Securities of
such series waive any past default under the Indenture with respect to such
series and its consequences, except a default in the payment of the
principal of, premium, if any, or interest, if any, on any Security of such
series or in respect of a covenant or provision which cannot be modified
without the consent of the Holder of each outstanding Security of the
series affected. Any such consent or waiver by the holder of this Debenture
shall be conclusive and binding upon such holder and upon all future
holders and owners of this Debenture and any Debentures due 2025 which may
be issued in exchange or substitution herefor, irrespective of whether or
not any notation thereof is made upon this Debenture or such other
Debentures due 2025.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, if
any, and interest on this Debenture at the place, at the respective times,
at the rate and in the coin or currency herein prescribed.
<PAGE>
The Indenture permits the Company to Discharge its obligations with
respect to the Debentures due 2025 on the 91st day following the
satisfaction of the conditions set forth in the Indenture, which include
the deposit with the Trustee of money or U.S. Government Obligations or a
combination thereof sufficient to pay and discharge each installment of
principal of (including premium, if any, on) and interest, if any, on the
outstanding Debentures due 2025.
If the Company shall, in accordance with Section 901 of the Indenture,
consolidate with or merge into any other corporation or convey or transfer
its properties and assets substantially as an entirety to any Person, the
successor shall succeed to, and be substituted for, the Person named as the
"Company" on the face of this Debenture, all on the terms set forth in the
Indenture.
The Debentures due 2025 are issuable in registered form without
coupons in denominations of $1,000 and any integral multiple of $1,000. In
the manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge, Debentures due 2025 may be
exchanged for an equal aggregate principal amount of Debentures due 2025 of
other authorized denominations at the office or agency of the Company
maintained for such purpose in the Borough of Manhattan, The City and State
of New York.
The Debentures due 2025 may be redeemed as a whole or in part, at the
option of the Company at any time, upon mailing a notice of such redemption
not less than 30 nor more than 60 days prior to the date fixed for
redemption to the holders of the Debentures due 2025 at their last
registered addresses, all as provided in the Indenture, at a redemption
price equal to the greater of (i) 100% of the principal amount of such
Debentures due 2025 and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the
redemption date on a semiannual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Rate plus 12.5 basis points, plus
in each case accrued interest thereon on the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Debentures due 2025 to be redeemed
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of such Debentures.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with the Company.
"Comparable Treasury Price" means with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on
the third business day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (A) the average of the Reference Treasury Dealer Quotations
for such redemption date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer
than four such Reference Treasury Deal Quotations, the average of all such
Quotations. "Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expected in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m. on the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Merrill Lynch, Pierce,
Fenner & Smith Incorporated, CS First Boston Corporation, Goldman, Sachs &
Co., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated,
Salomon Brothers Inc and their respective successors; provided, however,
that if any of the foregoing
<PAGE>
shall cease to be a primary U.S. Government securities dealer in New York
City (a "Primary Treasury Dealer"), the Company shall substitute therefor
another Primary Treasury Dealer.
Upon due presentation for registration of transfer of this Debenture
at the office or agency of the Company for such registration in the Borough
of Manhattan, The City and State of New York, a new Debenture or Debentures
of authorized denominations for an equal aggregate principal amount will be
issued to the transferee in exchange herefor, subject to the limitations
provided in the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee and any agent of the Company or the
Trustee may deem and treat the registered holder hereof as the absolute
owner of this Debenture (whether or not this Debenture shall be overdue)
for the purpose of receiving payment of the principal of, premium, if any,
and interest on this Debenture, as herein provided, and for all other
purposes, and neither the Company nor the Trustee nor any agent of the
Company or the Trustee shall be affected by any notice of the contrary. All
payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, effectually satisfy and discharge liability
for moneys payable on this Debenture.
No recourse for the payment of the principal of, premium, if any, or
interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental
thereto or in any Debenture, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
officer or director, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or any
successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part
of the consideration for the issue hereof, expressly waived and released.
Unless otherwise defined in this Debenture, all terms used in this
Debenture which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the
issuer or its agent for registration of transfer, exchange or payment, and
any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
INTERNATIONAL BUSINESS MACHINES CORPORATION
7% Debenture due 2045
CUSIP 459200 AN1
No.: R 1 $
INTERNATIONAL BUSINESS MACHINES CORPORATION, a corporation duly
organized and existing under the laws of the State of New York (herein
called the "Company", which term includes any successor corporation under
the Indenture referred to on the reverse hereof), for value received,
hereby promises to pay to CEDE & CO., or registered assigns, the principal
sum of 150,000,000 Dollars, at the office or agency of the Company in the
Borough of Manhattan, The City and State of New York, on October 30, 2045,
in such coin or currency of the United States of America as at the time of
payment shall be legal tender for the payment of public and private debts,
and to pay interest, semi-annually on April 30 and October 30 of each year,
on said principal sum at said office or agency, in like coin or currency,
at the rate of 7% per annum, from the April 30 and the October 30, as the
case may be, next preceding the date of this Debenture to which interest
has been paid, unless the date hereof is a date to which interest has been
paid, in which case from the date of this Debenture, or unless no interest
has been paid on the Debentures due 2045 (as defined on the reverse
hereof), in which case from October 30, 1995, until payment of said
principal sum has been made or duly provided for. Notwithstanding the
foregoing, if the date hereof is after April 15 or October 15, as the case
may be, and before the following April 30 or October 30, this Debenture
shall bear interest from such April 30 or October 30; provided, however,
that if the Company shall default in the payment of interest due on such
April 30 or October 30, then this Debenture shall bear interest from the
next preceding April 30 or October 30 to which interest has been paid, or,
if no interest has been paid on the Debentures due 2045, from October 30,
1995. The interest so payable on any April 30 or October 30 will, subject
to certain exceptions provided in the Indenture referred to on the reverse
hereof, be paid to the person in whose name this Debenture is registered at
the close of business on such April 15 or October 15, as the case may be,
next preceding such April 30 or October 30, unless the Company shall
default in the payment of interest due on such interest payment date, in
which case such defaulted interest, at the option of the Company, may be
paid to the person in whose name this Debenture is registered at the close
of business on a special record date for the payment of such defaulted
interest established by notice to the registered holders of Debentures not
less than ten days preceding such special record date or maybe paid in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures due 2045 may be listed. Payment
of interest may, at the option of the Company, be made by check mailed to
the registered address of the person entitled thereto.
Reference is made to the further provisions of this Debenture set
forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been signed by
the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities
of the Series designated herein issued
under the within-mentioned Indenture.
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Trustee
by____________________________________________________________________
Authorized Signatory
<PAGE>
[SEAL]
INTERNATIONAL BUSINESS MACHINES CORPORATION
by____________________________________________________________________
by____________________________________________________________________
<PAGE>
This Debenture is one of a duly authorized issue of unsecured
debentures, notes or other evidences of indebtedness of the Company
(hereinafter called the "Securities"), of the series hereinafter specified,
all issued or to be issued under an indenture dated as of October 1, 1993
(hereinafter called the "Indenture"), duly executed and delivered by the
Company to The Chase Manhattan Bank (National Association), a New York
banking corporation, as trustee (hereinafter called the "Trustee"), to
which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the respective rights and duties thereunder of
the Trustee, the Company and the holders of the Securities. The Securities
may be issued in one or more series, which different series may be issued
in various aggregate principal amounts, may mature at different times, may
bear interest at different rates, may have different conversion prices (if
any), may be subject to different redemption provisions, may be subject to
different sinking, purchase or analogous funds, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided. This Debenture is one of a series designated as the 7% Debentures
due 2045 of the Company (hereinafter called the "Debentures due 2045")
issued under the Indenture, limited in aggregate principal amount to
$150,000,000.
In case an Event of Default with respect to the Debentures due 2045,
as defined in the Indenture, shall have occurred and be continuing, the
principal hereof together with interest accrued thereon, if any, may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Securities at the time outstanding of all
series to be affected (acting as one class) to execute supplemental
indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or of any supplemental
indenture or modifying in any manner the rights of the holders of the
Securities of such series to be affected; provided, however, that no such
supplemental indenture shall, among other things, (i) change the fixed
maturity of the principal of, or any installment of principal of or
interest on, any Security; (ii) reduce the principal amount thereof or the
rate of interest thereon or any premium payable upon the redemption
thereof; (iii) impair the right to institute suit for the enforcement of
any such payment on or after the fixed maturity thereof (or, in the case of
redemption, on or after the redemption date); (iv) reduce the percentage in
principal amount of the outstanding Securities of any series, the consent
of whose holders is required for any such supplemental indenture, or the
consent of whose holders is required for any waiver (of compliance with
certain provisions of the Indenture or certain defaults thereunder and
their consequences) provided for in the Indenture; (v) change any
obligation of the Company, with respect to outstanding Securities of a
series, to maintain an office or agency in the places and for the purposes
specified in the Indenture for such series; or (vi) modify any of the
foregoing provisions or the provisions for the waiver of certain covenants
and defaults, except to increase any applicable percentage of the aggregate
principal amount of outstanding Securities the consent of the holders of
which is required or to provide with respect to any particular series the
right to condition the effectiveness of any supplemental indenture as to
that series on the consent of the holders of a specified percentage of the
aggregate principal amount of outstanding Securities of such series or to
provide that certain other provisions of the Indenture cannot be modified
or waived without the consent of the holder of each outstanding Security
affected thereby. It is also provided in the Indenture that the holders of
a majority in aggregate principal amount of the Securities of a series at
the time outstanding may on behalf of the holders of all the Securities of
such series waive any past default under the Indenture with respect to such
series and its consequences, except a default in the payment of the
principal of, premium, if any, or interest, if any, on any Security of such
series or in respect of a covenant or provision which cannot be modified
without the consent of the Holder of each outstanding Security of the
series affected. Any such consent or waiver by the holder of this Debenture
shall be conclusive and binding upon such holder and upon all future
holders and owners of this Debenture and any Debentures due 2045 which may
be issued in exchange or substitution herefor, irrespective of whether or
not any notation thereof is made upon this Debenture or such other
Debentures due 2045.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, if
any, and interest on this Debenture at the place, at the respective times,
at the rate and in the coin or currency herein prescribed.
<PAGE>
The Indenture permits the Company to Discharge its obligations with
respect to the Debentures due 2045 on the 91st day following the
satisfaction of the conditions set forth in the Indenture, which include
the deposit with the Trustee of money or U.S. Government Obligations or a
combination thereof sufficient to pay and discharge each installment of
principal of (including premium, if any, on) and interest, if any, on the
outstanding Debentures due 2045.
If the Company shall, in accordance with Section 901 of the Indenture,
consolidate with or merge into any other corporation or convey or transfer
its properties and assets substantially as an entirety to any Person, the
successor shall succeed to, and be substituted for, the Person named as the
"Company" on the face of this Debenture, all on the terms set forth in the
Indenture.
The Debentures due 2045 are issuable in registered form without
coupons in denominations of $1,000 and any integral multiple of $1,000. In
the manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge, Debentures due 2045 may be
exchanged for an equal aggregate principal amount of Debentures due 2045 of
other authorized denominations at the office or agency of the Company
maintained for such purpose in the Borough of Manhattan, The City and State
of New York.
The Debentures due 2045 may be redeemed as a whole or in part, at the
option of the Company at any time, upon mailing a notice of such redemption
not less than 30 nor more than 60 days prior to the date fixed for
redemption to the holders of the Debentures due 2045 at their last
registered addresses, all as provided in the Indenture, at a redemption
price equal to the greater of (i) 100% of the principal amount of such
Debentures due 2045 and (ii) the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the
redemption date on a semiannual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Treasury Rate plus 12.5 basis points, plus
in each case accrued interest thereon on the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity
comparable to the remaining term of the Debentures due 2045 to be redeemed
that would be utilized, at the time of selection and in accordance with
customary financial practice, in pricing new issues of corporate debt
securities of comparable maturity to the remaining term of such Debentures.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with the Company.
"Comparable Treasury Price" means with respect to any redemption date,
(i) the average of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) on
the third business day preceding such redemption date, as set forth in the
daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
business day, (A) the average of the Reference Treasury Dealer Quotations
for such redemption date, after excluding the highest and lowest such
Reference Treasury Dealer Quotations, or (B) if the Trustee obtains fewer
than four such Reference Treasury Deal Quotations, the average of all such
Quotations. "Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any redemption date, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expected in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer
at 5:00 p.m. on the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Merrill Lynch, Pierce,
Fenner & Smith Incorporated, CS First Boston Corporation, Goldman, Sachs &
Co., J.P. Morgan Securities Inc., Morgan Stanley & Co. Incorporated,
Salomon Brothers Inc and their respective successors; provided, however,
that if any of the foregoing
<PAGE>
shall cease to be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), the Company shall substitute
therefor another Primary Treasury Dealer.
Upon due presentation for registration of transfer of this Debenture
at the office or agency of the Company for such registration in the Borough
of Manhattan, The City and State of New York, a new Debenture or Debentures
of authorized denominations for an equal aggregate principal amount will be
issued to the transferee in exchange herefor, subject to the limitations
provided in the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee and any agent of the Company or the
Trustee may deem and treat the registered holder hereof as the absolute
owner of this Debenture (whether or not this Debenture shall be overdue)
for the purpose of receiving payment of the principal of, premium, if any,
and interest on this Debenture, as herein provided, and for all other
purposes, and neither the Company nor the Trustee nor any agent of the
Company or the Trustee shall be affected by any notice of the contrary. All
payments made to or upon the order of such registered holder shall, to the
extent of the sum or sums paid, effectually satisfy and discharge liability
for moneys payable on this Debenture.
No recourse for the payment of the principal of, premium, if any, or
interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental
thereto or in any Debenture, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
officer or director, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or any
successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part
of the consideration for the issue hereof, expressly waived and released.
Unless otherwise defined in this Debenture, all terms used in this
Debenture which are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
