ORIGINAL ELECTRONICALLY TRANSMITTED TO THE SECURITIES AND EXCHANGE COMMISSION ON
December 18, 1995
REGISTRATION NO. 33- (1)
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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INTERNATIONAL BUSINESS MACHINES CORPORATION
(Exact name of registrant as specified in its charter)
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<TABLE><CAPTION>
NEW YORK 13-0871985
<S> <C>
(State or other jurisdiction of incorporation (I.R.S. employer identification number)
or organization)
</TABLE>
ARMONK, NEW YORK 10504
(914) 765-1900
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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LAWRENCE R. RICCIARDI
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
INTERNATIONAL BUSINESS MACHINES CORPORATION
ARMONK, NEW YORK 10504
(914) 765-1900
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans,
please check the following box: / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /...............
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /...............
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
CALCULATION OF REGISTRATION FEE
<TABLE><CAPTION>
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PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(a) PER UNIT(b) PRICE(a)(b) FEE
<S> <C> <C> <C> <C>
Debt Securities................
Preferred Stock(c).............
Depositary Shares(c)........... $1,750,000,000(1) 100% $1,750,000,000(1) $603,449
Capital Stock(c)...............
Warrants.......................
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</TABLE>
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(a) Subject to Rule 462(b) under the Securities Act, in no event will the aggregate initial
offering price of the securities issued under this Registration Statement (which includes
securities issued hereunder pursuant to Rule 429 under the Securities Act) exceed
$2,000,000,000, or if any securities are issued in any foreign currency units, the U.S.
dollar equivalent of $2,000,000,000. For Debt Securities issued with an original issue
discount, the amount to be registered is calculated as the initial accreted value of such
Debt Securities.
(b) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(o).
(c) In addition to any Preferred Stock, Depositary Shares or Capital Stock that may be issued
directly under this Registration Statement, there are being registered hereunder an
indeterminate number of shares of Preferred Stock, Depositary Shares or Capital Stock as may
be issued upon conversion or exchange of Debt Securities, Preferred Stock or Depositary
Shares, as the case may be. No separate consideration will be received for any shares of
Preferred Stock, Depositary Shares or Capital Stock so issued upon conversion or exchange.
</TABLE>
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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(1) Pursuant to Rule 429 of the Rules and Regulations of the Securities and
Exchange Commission under the Securities Act of 1933, the Prospectus included in
this Registration Statement also relates to $250,000,000 of Securities
previously registered under the Registrant's Registration Statement on Form S-3
(File No. 33-50537). This Registration Statement also constitutes Post-Effective
Amendment No. 1 with respect to the Registrant's Registration Statement on Form
S-3 (File No. 33-50537).
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<PAGE>
Subject to Completion
December 18, 1995
PROSPECTUS
INTERNATIONAL BUSINESS MACHINES CORPORATION
DEBT SECURITIES
PREFERRED STOCK
DEPOSITARY SHARES
CAPITAL STOCK
WARRANTS
International Business Machines Corporation (the "Company") intends from
time to time to issue, in one or more series, up to an aggregate of
$2,000,000,000 of its debt securities (the "Debt Securities"), which may be
either senior (the "Senior Debt Securities") or subordinated (the "Subordinated
Debt Securities") in priority of payment, preferred stock (the "Preferred
Stock"), depositary shares (the "Depositary Shares") representing a fractional
interest in a share of Preferred Stock, Capital Stock (the "Capital Stock") and
warrants to purchase Debt Securities, Preferred Stock or Capital Stock (the
"Warrants") (the Debt Securities, Preferred Stock, Depositary Shares, Capital
Stock and Warrants being collectively referred to herein as the "Securities").
When a particular series of Securities is offered, a supplement to this
Prospectus (the "Prospectus Supplement") will be delivered with the Prospectus.
For Debt Securities, the Prospectus Supplement will set forth with respect to
such series: whether it is a series of Senior Debt Securities or Subordinated
Debt Securities; the designation and principal amount offered; the rate (or
method of calculation) and time of payment of interest, if any; the authorized
denominations; the maturity or maturities; the terms for a sinking, purchase or
analogous fund, if any; the terms for redemption or early repayment, if any; the
currency or currencies or currency unit or currency units in which principal,
premium, if any, or interest, if any, is payable; the purchase price and other
terms of the offering; and any listing on a securities exchange. For Preferred
Stock and Depositary Shares, the Prospectus Supplement will set forth with
respect to such series: the designation; aggregate number of shares; liquidation
preference per share; dividend rate (or method of calculation); dates on which
dividends shall be payable, whether dividends shall be cumulative, noncumulative
or partially cumulative and dates from which dividends shall accrue; any
redemption or sinking fund provisions; the purchase price and other terms of the
offering; any listing on a securities exchange; and if Depositary Shares will be
offered, the fraction of a share of Preferred Stock represented by each
Depositary Share. For Capital Stock, the Prospectus Supplement will set forth
with respect to such series: the number of shares; and the purchase price and
other terms of the offering. For Warrants, the Prospectus Supplement will set
forth with respect to such series: the number and terms thereof; the designation
and the number of securities issuable upon exercise; the purchase price and
other terms of the offering; the exercise price; and, where applicable, the
duration and detachability thereof.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The Securities may be sold (i) through underwriting syndicates represented
by managing underwriters or by underwriters without a syndicate; (ii) through
agents designated from time to time; or (iii) directly. The names of any
underwriters or agents of the Company involved in the sale of the Securities in
respect of which this Prospectus is being delivered and any applicable
commissions or discounts are set forth in the Prospectus Supplement. The net
proceeds to the Company from such sale are also set forth in the Prospectus
Supplement.
THE DATE OF THIS PROSPECTUS IS , 1996.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Reports, proxy statements and other information
filed by the Company may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the Commission's regional offices located at 7
World Trade Center, 13th Floor, New York, New York 10048, and Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and copies of such
material may be obtained from the Public Reference Section of the Commission,
Washington, D.C. 20549, at prescribed rates. Such reports, proxy statements and
other information may also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, 7th Floor, New York, New York, the Chicago
Stock Exchange, Incorporated, 440 South LaSalle Street, Suite 518, Chicago,
Illinois and the Pacific Stock Exchange Incorporated, 115 Sansome Street, 2nd
Floor, San Francisco, California.
INFORMATION INCORPORATED BY REFERENCE
The Annual Report of the Company on Form 10-K for the fiscal year ended
December 31, 1994, the Quarterly Reports of the Company on Form 10-Q for the
quarters ended March 31, 1995, June 30, 1995 and September 30, 1995, and the
Current Report of the Company on Form 8-K dated October 30, 1995, are
incorporated herein by reference. All documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and
prior to the termination of the offering of the Securities offered hereby shall
be deemed to be incorporated herein by reference.
The Company will cause to be furnished without charge to each person to whom
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all the documents described above, other than exhibits to such
documents. Requests should be addressed to: First Chicago Trust Company of New
York, Mail Suite 4688, P.O. Box 2530, Jersey City, New Jersey, 07303-2530;
telephone: (201) 324-0405.
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<PAGE>
THE COMPANY
The Company develops, manufactures and sells advanced information processing
products, including computers and microelectronic technology, software,
networking systems and information technology-related services. The Company
offers value worldwide through its North America, Europe/Middle East/Africa,
Latin America, Asia/Pacific, Global Services and Worldwide Client Server
Computing business units, by providing comprehensive and competitive product
choices.
The Company's principal executive offices are located at Armonk, New York
10504, and its telephone number is (914) 765-1900.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of the Securities for
general corporate purposes.
The Company expects that it will, on a recurring basis, engage in additional
financings in character and amount to be determined as the need arises.
RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The ratio of earnings to fixed charges has been computed by dividing
earnings before income taxes (which excludes the cumulative and transition
effects of accounting changes) and fixed charges by fixed charges. The ratio of
earnings to combined fixed charges and preferred stock dividends has been
computed by dividing earnings before income taxes (which excludes the cumulative
and transition effects of accounting changes) and fixed charges by the sum of
fixed charges and dividends on preferred stock. For purposes of calculating the
ratio of earnings to combined fixed charges and preferred stock dividends, the
preferred stock dividend requirements were assumed to be equal to the pre-tax
earnings that would be required to cover such dividend requirements based on the
Company's effective income tax rates for the respective periods. "Fixed charges"
consist of interest on debt and that portion of rental expense deemed to be
representative of interest.
<TABLE><CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
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1995 1994 1994 1993 1992 1991 1990
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<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges........... 4.5 2.5 3.1 (a) (a) 1.0 4.1
Ratio of earnings to combined fixed charges
and preferred stock dividends.............. 4.4 2.4 2.9 (a) (a) 1.0 4.1
</TABLE>
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(a) No ratios are shown for these periods as earnings were insufficient to cover fixed
charges and, in 1993, combined fixed charges and preferred stock dividends. As a result
of the net loss incurred for the year ended December 31, 1993, earnings were inadequate
to cover fixed charges and combined fixed charges and preferred stock dividends by
$8,478 million and $8,525 million, respectively. As a result of the net loss incurred
for the year ended December 31, 1992, earnings were inadequate to cover fixed charges
by $8,962 million.
</TABLE>
DESCRIPTION OF THE DEBT SECURITIES
The Debt Securities will constitute either Senior Debt Securities or
Subordinated Debt Securities. The Senior Debt Securities are to be issued under
an Indenture (the "Senior Indenture") dated as of October 1, 1993, between the
Company and The Chase Manhattan Bank (National Association), as Trustee (the
"Senior Trustee"), as supplemented by the First Supplemental Indenture thereto
dated as of December 15, 1995, filed as an exhibit to the Registration Statement
of which this Prospectus is a part. The Subordinated Debt Securities will be
issued under an Indenture (the "Subordinated Indenture") to be entered into
between the Company and the trustee named in the applicable Prospectus
Supplement (the "Subordinated Trustee"), a form of which is filed as an exhibit
to the Registration
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Statement of which this Prospectus is a part. The Senior Indenture and the
Subordinated Indentures are collectively referred to herein as the "Indentures".
The following statements are subject to the detailed provisions of the
applicable Indenture; whenever particular provisions of the applicable Indenture
are referred to, such provisions are incorporated by reference as a part of the
statement made, and the statement is qualified in its entirety by such
reference. Whenever a defined term is referred to and not defined under
"Description of the Debt Securities", the definition thereof is contained in the
applicable Indenture. Cross references to Sections of the Indentures relate to
both the Senior Indenture and the Subordinated Indenture, unless otherwise
indicated.
GENERAL
Each Indenture provides for the issuance from time to time of Debt
Securities in an unlimited aggregate principal amount and an unlimited number of
series.
Reference is made to the applicable Prospectus Supplement for the following
terms of the series of Debt Securities offered thereby: (i) the title of the
Debt Securities of such series; (ii) any limit upon the aggregate principal
amount of such Debt Securities; (iii) the date or dates on which such Debt
Securities will mature or the method of determination of such date or dates;
(iv) the rate or rates, or the method of determination thereof, at which such
Debt Securities will bear interest, if any, the date or dates from which such
interest will accrue, the date or dates such interest will be payable and, for
Registered Debt Securities, the Regular Record Dates; (v) the place or places
where the principal of, and premium and interest, if any, on, such Debt
Securities will be payable; (vi) the periods, prices and terms and conditions
upon which any such Debt Security may be redeemed, in whole or in part, at the
option of the Company; (vii) any terms for redemption or repurchase pursuant to
any sinking fund or analogous provision or at the option of a Holder; (viii) any
terms for conversion of the Debt Securities into other securities of the Company
or any other corporation at the option of a holder; (ix) any terms for the
attachment to such Debt Securities of warrants, options or other rights to
purchase or sell stock or other securities of the Company; (x) if other than the
principal amount thereof, the portion of the principal amount of such Debt
Securities that will be payable upon acceleration of maturity (Debt Securities
subject to such provisions being referred to as "Original Issue Discount
Securities"); (xi) any deletions or modifications of, or additions to, the
Events of Default or covenants of the Company under the Indenture with respect
to such Debt Securities (including whether the covenants described below under
"Certain Covenants of the Company" will not apply to such Debt Securities);
(xii) if other than U.S. dollars, the currency, currencies or currency unit or
units in which such Debt Securities will be denominated and in which the
principal of, and premium and interest, if any, on, such Securities will be
payable; (xiii) whether, and the terms and conditions on which, the Company or a
Holder may elect that, or the other circumstances under which, payment of
principal of, or premium or interest, if any, on, such Debt Securities is to be
made in a currency or currencies or currency unit or units other than that in
which such Debt Securities are denominated; (xiv) any matter of determining the
amount of principal of, or premium or interest, if any, on, any such Debt
Securities to be determined with reference to an index based on a currency or
currency unit, or units other than that in which such Debt Securities are stated
to be payable or an index based on any other method; (xv) whether such Debt
Securities will be issued in fully registered form without coupons ("Registered
Debt Securities") or in bearer form with or without coupons ("Bearer Debt
Securities"), or any combination thereof, whether such Debt Securities will be
issued in the form of one or more global securities (each a "Global Debt
Security") and whether such Debt Securities are to be issuable in temporary
global form or definitive global form; (xvi) if such Debt Securities are to be
issued upon the exercise of warrants, the time, manner and place for such Debt
Securities to be authenticated and delivered; (xvii) whether and under what
circumstances the Company will pay additional amounts to any holder of such Debt
Securities who is not a United States person (as defined below under "Temporary
Global Securities") in respect of any tax, assessment or governmental charge
withheld or deducted and, if so, whether and on what terms the Company will have
the option to redeem such Debt Securities rather than pay any additional
4
<PAGE>
amounts; and (xviii) any other terms of any of such Debt Securities not
inconsistent with the Indenture. (Section 202 and 301)
Unless otherwise specified in the applicable Prospectus Supplement, (x) the
Debt Securities will be Registered Debt Securities and (y) Debt Securities
denominated in U.S. dollars will be issued, in the case of Registered Debt
Securities, in denominations of $1,000 or an integral multiple thereof and, in
the case of Bearer Debt Securities, in denominations of $5,000. Debt Securities
may bear legends required by United States Federal tax law and regulations.
(Section 401)
If any of the Debt Securities are sold for any foreign currency or currency
unit or if the principal of, or premium or interest, if any, on, any of the Debt
Securities is payable in any foreign currency or currency unit, the
restrictions, elections, tax consequences, specific terms and other information
with respect to such Debt Securities and such foreign currency or currency unit
will be set forth in the Prospectus Supplement relating thereto.
EXCHANGE, REGISTRATION AND TRANSFER
Registered Debt Securities of any series will be exchangeable for other
Registered Debt Securities of the same series and of a like aggregate principal
amount and tenor of different authorized denominations. If Debt Securities of
any series are issuable as both Registered Debt Securities and Bearer Debt
Securities, the Bearer Debt Securities of such series (with all unmatured
coupons, except as provided below, and all matured coupons in default) will be
exchangeable for Registered Debt Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor. If a Bearer
Debt Security with coupons appertaining thereto is surrendered in exchange for a
Registered Debt Security after a Regular Record Date or Special Record Date and
before the relevant date for payment of interest, such Bearer Debt Security
shall be surrendered without the coupon relating to such date for payment of
interest and interest will not be payable on such date in respect of the
Registered Debt Security issued in exchange for such Bearer Debt Security, but
will be payable only to the holder of such coupon when due in accordance with
the terms thereof and of the Indenture. Bearer Debt Securities will not be
issued in exchange for Registered Debt Securities (unless otherwise specified in
the applicable Prospectus Supplement and permitted by applicable rules and
regulations). No service charge will be made for any transfer or exchange of the
Debt Securities, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge in connection therewith. (Section
404)
Debt Securities may be presented for exchange as provided above, and
Registered Debt Securities (other than U.S. Book-Entry Debt Securities (as
defined below under "Definitive Global Securities-- U.S. Book-Entry
Securities")) may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed), at the office of the Security
Registrar or at the office of any additional transfer agent designated by the
Company for such purpose with respect to any series of Debt Securities and
referred to in the applicable Prospectus Supplement. (Sections 404 and 1102) The
Chase Manhattan Bank (National Association), located at One Chase Manhattan
Plaza, New York, New York 10081, is the Security Registrar under the Senior
Indenture, and the Security Registrar under the Subordinated Indenture will be
designated in the applicable Prospectus Supplement. (Section 404) The Company
may at any time designate, or rescind the designation of, the Security Registrar
or any additional transfer agent or approve a change in the location through
which the Security Registrar or any such transfer agent acts, except that, if
Debt Securities of a series are issuable solely as Registered Debt Securities,
the Company will be required to maintain a transfer agent in each Place of
Payment for such series and, if Debt Securities of a series are issuable as both
Registered Debt Securities and Bearer Debt Securities or solely as Bearer Debt
Securities, the Company will be required to maintain (in addition to the
Security Registrar) a transfer agent in a Place of Payment for such series
located outside of the United States. The Company may at any time designate
additional transfer agents with respect to any series of Debt Securities.
(Section 1102)
5
<PAGE>
In the event of any redemption in part of any series of Debt Securities, the
Company will not be required to: (i) issue, register the transfer of, or
exchange, Debt Securities of any series during a period beginning at the opening
of business 15 Business Days before any selection of Debt Securities of that
series to be redeemed and ending at the close of business on (a) if Debt
Securities of the series are issuable only as Registered Debt Securities, the
day of mailing of the relevant notice of redemption and (b) if Debt Securities
of the series are issuable as Bearer Debt Securities, the day of the first
publication of the relevant notice of redemption or, if Debt Securities of the
series are also issuable as Registered Debt Securities and there is no
publication, the day of mailing of the relevant notice of redemption; (ii)
register the transfer of, or exchange, any Registered Debt Security selected for
redemption, in whole or in part, except the unredeemed portion of any Registered
Debt Security being redeemed in part; or (iii) exchange any Bearer Debt Security
selected for redemption, except to exchange such Bearer Debt Security for a
Registered Debt Security of that series and like tenor which is simultaneously
surrendered for redemption. (Section 404)
For a discussion of restrictions on the exchange, registration and transfer
of Global Debt Securities, see "Global Securities" below.
PAYMENT AND PAYING AGENTS
Payment of principal of, and premium and interest, if any, on, Registered
Debt Securities will be made in the designated currency or currency unit at the
office of such Paying Agent or Paying Agents as the Company may designate from
time to time. At the option of the Company, payment of any interest on
Registered Debt Securities may be made by check mailed to the address of the
person entitled thereto as such address shall appear in the Security Register.
Payment of any installment of interest on Registered Debt Securities will be
made to the person in whose name such Registered Debt Security is registered at
the close of business on the Regular Record Date for such interest. (Sections
406 and 410)
Payment of principal of, and premium and interest, if any, on, Bearer Debt
Securities will be made in the designated currency unit at the offices of such
Paying Agents outside the United States as the Company may designate from time
to time. On the applicable payment date therefor payments of principal of, and
premium, if any, on, Bearer Debt Securities will be made against surrender of
such Debt Securities, and payment of interest on Bearer Debt Securities with
coupons appertaining thereto on any Interest Payment Date will be made only
against surrender of the coupon relating to such Interest Payment Date.
(Sections 410 and 1102) No payment with respect to any Bearer Debt Security will
be made at any office or agency of the Company in the United States or by check
mailed to any address in the United States or by transfer to any account
maintained with a bank located in the United States. Notwithstanding the
foregoing, payments of principal of, and premium and interest, if any, on,
Bearer Debt Securities denominated and payable in U.S. dollars will be made at
the office of the Company's Paying Agent in the Borough of Manhattan, The City
of New York, if (but only if) payment of the full amount thereof in U.S. dollars
at all offices or agencies outside the United States is illegal or effectively
precluded by exchange controls or other similar restrictions. (Section 1102)
Unless otherwise indicated in the applicable Prospectus Supplement with
respect to Senior Debt Securities, The Chase Manhattan Bank (National
Association), located at One Chase Manhattan Plaza, New York, New York 10081,
will be designated as the Company's Paying Agent for payments with respect to
Senior Debt Securities that are issuable solely as Registered Debt Securities
and as the Company's Paying Agent in the Borough of Manhattan, The City of New
York for payments with respect to Senior Debt Securities (subject to the
limitations described above in the case of Bearer Debt Securities) that are
issuable solely as Bearer Debt Securities or as both Registered Debt Securities
and Bearer Debt Securities. With respect to Subordinated Debt Securities, the
Company's Paying Agent for payments with respect to Subordinated Debt Securities
that are issuable solely as Registered Debt Securities and the Company's Paying
Agent in the Borough of Manhattan, The City of New York for payments with
respect to Subordinated Debt Securities (subject to the limitations described
above in the case of Bearer Debt Securities) that are issuable solely as Bearer
Debt Securities or as both Registrable Debt Securities and Bearer Debt
Securities will be designated in the applicable Prospectus
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<PAGE>
Supplement. Any Paying Agents outside the United States and any other Paying
Agents in the United States initially designated by the Company for the Debt
Securities of a series will be named in the applicable Prospectus Supplement.
The Company may at any time designate additional Paying Agents or rescind the
designation of any Paying Agent or approve a change in the office through which
any Paying Agent acts, except that, if Debt Securities of a series are issuable
solely as Registered Debt Securities, the Company will be required to maintain a
Paying Agent in each Place of Payment for such series and, if Debt Securities of
a series are issuable as both Registered Debt Securities or Bearer Debt
Securities or solely as Bearer Debt Securities, the Company will be required to
maintain (i) a Paying Agent in the Borough of Manhattan, The City of New York
for payments with respect to any Registered Debt Securities of the series (and
for payments with respect to Bearer Debt Securities of the series in the
circumstances described above, but not otherwise), and (ii) a Paying Agent in a
Place of Payment located outside the United States where Debt Securities of such
series and any coupons appertaining thereto may be presented and surrendered for
payment; provided that if the Debt Securities of such series are listed on any
stock exchange located outside the United States and such stock exchange shall
so require, the Company will maintain a Paying Agent in any required city
located outside the United States for the Debt Securities of such series.
(Section 1102)
All moneys deposited with a Trustee or Paying Agent, or then held by the
Company, in trust for the payment of principal of, and premium and interest, if
any, on, any Debt Security or coupon that remains unclaimed at the end of two
years after such principal, premium or interest shall have become due and
payable will be repaid to the Company, or, if then held by the Company,
discharged from such trust, and the holder of such Debt Security or coupon will
thereafter look only to the Company for payment thereof. (Section 1103)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part as one or
more Global Debt Securities in either registered or bearer form and in either
temporary or definitive form. The Global Debt Security or Securities of a series
will be deposited with, or on behalf of, a depositary located in the United
States (a "U.S. Depositary") or a common depositary located outside the United
States (a "Common Depositary") identified in the Prospectus Supplement relating
to such series. All temporary or definitive Global Debt Securities in bearer
form will be deposited with a Common Depositary.
The specific terms of the depositary arrangement with respect to any Debt
Securities of a series issued in global form will be described in the Prospectus
Supplement relating to such series. For purposes other than making payments on a
definitive Global Debt Security, the Company may treat a person having a
beneficial interest in such definitive Global Debt Security as the holder of
such principal amount of Outstanding Debt Securities represented by such
definitive Global Debt Security as shall be specified in a written statement of
the holder of such definitive Global Debt Security, or, in the case of a
definitive Global Debt Security in bearer form, of Euro-clear or Cedel Bank (as
defined below), which is delivered to the Trustee by such person. (Section 411)
None of the Company, the Trustee, any Paying Agent or the Security Registrar
will have any responsibility or liability for any aspect of the records relating
to or payments made on account of beneficial ownership interests in a Global
Debt Security or for maintaining, supervising or reviewing any records relating
to such beneficial ownership interests. (Section 411) The Company anticipates
that the following provisions will apply to all depositary arrangements with a
U.S. Depositary or Common Depositary.
TEMPORARY GLOBAL SECURITIES
If so specified in the applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series that are issuable as Bearer Debt Securities
initially will be represented by one or more temporary Global Debt Securities,
without interest coupons, to be deposited with a Common Depositary in London for
Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the
Euro-clear System ("Euro-clear"), and Cedel Bank, societe anonyme ("Cedel Bank")
for credit to the respective accounts of the beneficial owners of such Debt
Securities (or to such other accounts as they
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may direct). On and after the exchange date determined as provided in any such
temporary Global Debt Security and described in the applicable Prospectus
Supplement, each such temporary Global Debt Security will be exchangeable for
definitive Debt Securities in bearer form, registered form, definitive global
bearer form or any combination thereof, as specified in the applicable
Prospectus Supplement. No Bearer Debt Security (including a Debt Security in
definitive global bearer form) delivered in exchange for a portion of a
temporary Global Debt Security will be mailed or otherwise delivered to any
location in the United States in connection with such exchange. (Sections 402
and 403)
Unless otherwise specified in the applicable Prospectus Supplement, interest
on any portion of a temporary Global Debt Security payable in respect of an
Interest Payment date occurring prior to the issuance of definitive Debt
Securities will be paid to each of Euro-clear and Cedel Bank with respect to the
portion of the temporary Global Debt Security held for its account upon delivery
to the applicable Trustee of a certificate signed by Euro-clear or Cedel Bank,
as the case may be, in the form required by the applicable Indenture dated no
earlier than such Interest Payment Date, which certificate must be based on
statements provided to it by its account holders who are beneficial owners of
interests in such temporary Global Debt Security to the effect that such portion
is not beneficially owned by a United States person, and has not been acquired
by or on behalf of a United States person or for offer to resell or for resale
to a United States person or any person inside the United States or, if a
beneficial interest in such portion has been acquired by a United States person,
(i) that such person is a financial institution, as defined in applicable
regulations promulgated under the Internal Revenue Code of 1986, as amended (the
"Code"), purchasing for its own account or has acquired such Debt Security
through a financial institution and (ii) that such Debt Securities are held by a
financial institution that has agreed in writing to comply with the requirements
of Section 165(j)(3)(A), (B) or (C) of the Code and the regulations thereunder
and that it did not purchase for offer to resell or for resale inside the United
States. Each of Euro-clear and Cedel Bank will in such circumstances credit the
interest received by it in respect of such temporary Global Debt Security to the
accounts of the beneficial owners thereof (or to such other accounts as they may
direct). (Section 403)
As used herein, "United States person" means a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States or an estate or trust the income of
which is subject to United States Federal income taxation regardless of its
source, and "United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
DEFINITIVE GLOBAL SECURITIES
Bearer Securities. If any Debt Securities of a series are issuable in
definitive global bearer form, the applicable Prospectus Supplement will
describe the circumstances, if any, under which beneficial owners of interests
in any such definitive global Bearer Debt Security may exchange such interests
for Debt Securities of such series and of like tenor and principal amount in any
authorized form and denomination. No Bearer Debt Security delivered in exchange
for a portion of a definitive Global Debt Security will be mailed or otherwise
delivered to any location in the United States in connection with such exchange.
(Section 404) Principal of, and premium and interest, if any, on, a definitive
global Bearer Debt Security will be payable in the manner described in the
applicable Prospectus Supplement.
U.S. Book-Entry Securities. If Debt Securities of a series are to be
represented by a definitive global Registered Debt Security to be deposited with
or on behalf of a U.S. Depositary, such Debt Securities ("U.S. Book-Entry Debt
Securities") will be represented by a definitive Global Debt Security registered
in the name of the U.S. Depositary or its nominee. Upon the issuance of a
definitive Global Debt Security registered in the name of the U.S. Depositary,
the U.S. Depositary will credit, on its book-entry registration and transfer
system, the respective principal amounts of the U.S. Book-Entry Debt Securities
represented by such Global Debt Security to the accounts of institutions that
have accounts with such depositary or its nominee ("participants"). The accounts
to be credited shall be designated by the underwriters or agents for the sale of
such U.S. Book-Entry Debt Securities or by the Company, if such Debt Securities
are offered and sold directly by the Company. Ownership of U.S.
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Book-Entry Debt Securities will be limited to participants or persons that may
hold interests through participants. Ownership of U.S. Book-Entry Debt
Securities will be shown on, and the transfer of that ownership will be effected
only through, records maintained by the U.S. Depositary or its nominee for the
applicable definitive Global Security or by participants or persons that hold
through participants. So long as the U.S. Depositary, or its nominee, is the
registered owner of such Global Debt Security, such depositary or such nominee,
as the case may be, will be considered the sole owner or holder of the U.S.
Book-Entry Debt Securities represented by such Global Debt Security for all
purposes under the Indenture. Payment of principal of, and premium and interest,
if any, on, U.S. Book-Entry Debt Securities will be made to the U.S. Depositary
or its nominee, as the case may be, as the registered owner or the holder of the
Global Debt Security representing such U.S. Book-Entry Debt Securities. Owners
of U.S. Book-Entry Debt Securities will not be entitled to have such Debt
Securities registered in their names in the Security Register, will not receive
or be entitled to receive physical delivery of such Debt Securities in
definitive form and will not be considered the owners or holders thereof under
the Indenture. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws impair the ability to purchase or transfer U.S. Book-Entry
Debt Securities.
The Company expects that the U.S. Depositary for U.S. Book-Entry Debt
Securities of a series, upon receipt of any payment of principal of, or premium
or interest, if any, on, the related definitive Global Debt Security, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in the principal amount of such Global
Debt Security as shown on the records of such Depositary. The Company also
expects that payments by participants to owners of beneficial interests in such
Global Debt Security held through such participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name", and
will be the responsibility of such participants.
CERTAIN COVENANTS OF THE COMPANY
Limitation on Merger, Consolidation and Certain Sales of Assets. The Company
will covenant that it will not merge into or consolidate with any other
corporation, or convey or transfer its properties and assets substantially as an
entirety, to, any person unless (a) the successor is a U.S. corporation, (b) the
successor assumes on the same terms and conditions all the obligations under the
Debt Securities and the Indentures and (c) immediately after giving effect to
the transaction, there is no default under the applicable Indenture. (Section
901) Upon any such merger, consolidation, conveyance or transfer, the successor
will succeed to, and will be substituted in lieu of, the Company. (Section 902)
Event Risk. Except for the limitations on Secured Indebtedness and Sale and
Leaseback Transactions described below under Senior Debt Securities, the
Indentures and Debt Securities do not contain any covenants or other provisions
designed to afford holders of the Debt Securities protection in the event of a
highly leveraged transaction involving the Company.
SATISFACTION AND DISCHARGE; DEFEASANCE
At the request of the Company, the applicable Indenture will cease to be in
effect as to the Debt Securities of any series (except for certain obligations
to register the transfer or exchange of such Debt Securities and related
coupons, if any, and hold moneys for payment of such Debt Securities and coupons
in trust) when either (a) all such Debt Securities and coupons have been
delivered to the applicable Trustee for cancellation or (b) all such Debt
Securities and coupons have become due and payable or will become due and
payable at their stated maturity within one year, or are to be called for
redemption within one year, and the Company has deposited with the applicable
Trustee, in trust money, in the currency, currencies or currency unit or units
in which such Debt Securities are payable, in an amount sufficient to pay all
the principal of, and premium and interest, if any, on, such Debt Securities on
the dates such payments are due in accordance with the terms of such Debt
Securities. (Section 501)
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Unless otherwise specified in the applicable Prospectus Supplement, the
Company, at its option, (a) will be Discharged after 90 days from any and all
obligations in respect of any series of Debt Securities (except for certain
obligations to register the transfer of or exchange Debt Securities and related
coupons, replace stolen, lost or mutilated Debt Securities and coupons, maintain
paying agencies and hold moneys for payment in trust) or (b) need not comply
with certain restrictive covenants of the Indenture in respect of such series
(including those described under "Certain Covenants of the Company"), in each
case if the Company deposits with the trustee in trust, money, or, in the case
of Debt Securities and coupons denominated in U.S. dollars, U.S. Government
Obligations or, in the case of Debt Securities and coupons denominated in a
foreign currency, Foreign Government Securities, which through the payment of
interest thereon and principal thereof in accordance with their terms will
provide money, in an amount sufficient to pay in the currency, currencies or
currency unit or units in which such Debt Securities are payable all the
principal (including any mandatory sinking fund payments) of, and interest on,
such series on the dates such payments are due in accordance with the terms of
such series. Among the conditions to the Company's exercising any such option,
the Company is required to deliver to the applicable Trustee an opinion of
counsel to the effect that the deposit and related defeasance would not cause
the holders of such series to recognize income, gain or loss for United States
Federal income tax purposes and that the holders of such series will be subject
to United States Federal income tax in the same amounts, in the same manner and
at the same times as would have been the case if such option had not been
exercised. (Section 503)
EVENTS OF DEFAULT, NOTICE AND WAIVER
Each Indenture provides that, if an Event of Default specified therein with
respect to any series of Debt Securities shall have happened and be continuing,
either the applicable Trustee or the holders of 25% in principal amount of the
outstanding Debt Securities of such series (in the case of certain events of
bankruptcy, insolvency and reorganization, voting as one class with all other
outstanding Debt Securities) may declare the principal of all the Debt
Securities of such series, together with accrued interest thereon, if any, to be
immediately due and payable by notice in writing to the Company (and to the
applicable Trustee if given by the holders). (Section 602)
Events of Default in respect of any series are defined in the Indentures as
being: default for 30 days in payment of any interest installment when due;
default in payment of principal of, or premium, if any, on, Debt Securities of
such series when due (other than any sinking fund payments) at their stated
maturity, by declaration, when called for redemption or otherwise; default for
30 days in the making of any sinking fund payment when due; default for 90 days
after notice to the Company by the applicable Trustee or by holders of 25% in
principal amount of the outstanding Debt Securities of such series in the
performance of any covenant in the Debt Securities of such series or in the
applicable Indenture with respect to Debt Securities of such series; and certain
events of bankruptcy, insolvency and reorganization. No Event of Default with
respect to a single series of indebtedness issued under an Indenture (and any
supplemental indentures) necessarily constitutes an Event of Default with
respect to any other series of indebtedness issued thereunder. (Section 601)
Each Indenture provides that the applicable Trustee will, within 90 days
after the occurrence of a default with respect to the Debt Securities of any
series, give to the holders of the Debt Securities of such series notice of all
uncured and unwaived defaults known to it; provided that, except in the case of
default in the payment of principal of, or premiums or interest, if any, on, or
a sinking fund installment, if any, with respect to any of the Debt Securities
of such series, such Trustee will be protected in withholding such notice if it
in good faith determines that the withholding of such notice is in the interest
of the holders of the Debt Securities of such series. The term "default" for the
purpose of this provision only means the happening of any of the Events of
Default specified above, except that any grace period of notice requirement is
eliminated. (Section 702)
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Each Indenture contains provisions entitling the applicable Trustee, subject
to the duty of such Trustee during an Event of Default to act with the required
standard of care, to be indemnified by the holders of the Debt Securities before
proceeding to exercise any right or power under such Indenture at the request of
holders of the Debt Securities. (Section 703)
Each Indenture provides that the holders of a majority in principal amount
of the outstanding Debt Securities of any series may in certain circumstances
direct the time, method and place of conducting proceedings for remedies
available to the applicable Trustee or exercising any trust or power conferred
on such Trustee in respect of such series. (Section 612)
Each Indenture includes a covenant that the Company will file annually with
the applicable Trustee an Officers' Certificate stating whether any default
exists and specifying any default that exists. (Section 1106)
In certain cases, the holders of a majority in principal amount of the
outstanding Debt Securities of any series may on behalf of the holders of all
Debt Securities of such series waive any past default or Event of Default with
respect to the Debt Securities of such series or compliance with certain
provisions of the Indenture, except, among other things, a default not
theretofore cured in payment of the principal of, or premium or interest, if
any, on, any of the Debt Securities of such series. (Section 613) The holders of
a majority in principal amount of a series of outstanding Debt Securities also
have certain rights to rescind any declaration of acceleration with respect to
such series after all Events of Default with respect to such series not arising
from such declaration shall have been cured. (Section 602)
MODIFICATION OF THE INDENTURES
Each Indenture provides that the Company and the Trustee thereunder may,
without the consent of any holders of Debt Securities, enter into supplemental
indentures for the purposes, among other things, of adding to the Company's
covenants, adding additional Events of Default, establishing the form or terms
of any series of Debt Securities issued under such supplemental indentures or
curing ambiguities or inconsistencies in the applicable Indenture or making
other provisions, provided such other provisions shall not adversely affect the
interests of the holders of any series of Debt Securities in any material
respect. (Section 1001)
Each Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in principal amount
of the outstanding Debt Securities of all affected series (acting as one class),
to execute supplemental indentures adding any provisions to or changing or
eliminating any of the provisions of the applicable Indenture or modifying the
rights of the holders of the Debt Securities of such series, except that no such
supplemental indenture may, without the consent of the holders of all the
outstanding Debt Securities affected thereby, among other things: (i) change the
Stated Maturity of the principal of, or any installment of principal of or
interest on, any Debt Security; (ii) reduce the principal amount of, the rate of
interest on, or any premium payable upon the redemption of, any Debt Security;
(iii) reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable upon acceleration of the Maturity thereof; (iv)
change any Place of Payment where, or the currency, currencies or currency unit
or units in which, any Debt Security or any premium or interest thereon is
payable; (v) impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of redemption,
on or after the Redemption Date); (vi) affect adversely the terms, if any, of
conversion of any Debt Security into stock or other securities of the Company or
of any other corporation; (vii) reduce the percentage in principal amount of the
outstanding Debt 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 applicable
Indenture or certain defaults thereunder and their consequences) provided for in
such Indenture; (viii) change any obligation of the Company, with respect to
outstanding Debt Securities of a series, to maintain an office or agency in the
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places and for the purposes specified in the Indenture for such series; or (ix)
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 Debt 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 Debt Securities of such series or to
provide that certain other provisions of the Indentures cannot be modified or
waived without the consent of the holder of each outstanding Debt Security
affected thereby. (Section 1002)
MEETINGS
The Indentures contain provisions for convening meetings of the holders of
Debt Securities of any series. (Section 1401) A meeting may be called at any
time by the Trustee under the applicable Indenture, and also, upon request, by
the Company or the holders of at least 10% in principal amount of the
outstanding Debt Securities of such series, in any such case upon notice given
in accordance with "Notices" below. (Section 1402) Persons entitled to vote a
majority in principal amount of the outstanding Debt Securities of a series will
constitute a quorum at a meeting of holders of Debt Securities of such series,
except that in the absence of a quorum, if the meeting was called by the Company
or the Trustee, it may be adjourned for a period of not less than 10 days, and
in the absence of a quorum at any such adjourned meeting, the meeting may be
further adjourned for a period of not less than 10 days. Except for any consent
which must be given by the holder of each outstanding Debt Security affected
thereby, as described above under "Modification of the Indentures", and subject
to the provisions described in the last sentence under this subheading, any
resolution presented at a meeting or adjourned meeting duly reconvened at which
a quorum is present may be adopted by the affirmative vote of the holders of a
majority in principal amount of the outstanding Debt Securities of that series;
provided, however, that any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which may be
made, given or taken by the holders of a specified percentage, which is equal to
or less than a majority, in principal amount of outstanding Debt Securities of a
series may be adopted at a meeting or an adjourned meeting duly reconvened at
which a quorum is present by the affirmative vote of the holders of such
specified percentage in principal amount of the outstanding Debt Securities of
that series. Any resolution passed or decision taken at any meeting of holders
of Debt Securities of any series duly held in accordance with an Indenture will
be binding on all holders of Debt Securities of that series and the related
coupons. With respect to any consent, waiver or other action which the
Indentures expressly provide may be given by the holders of a specified
percentage of outstanding Debt Securities of all series affected thereby (acting
as one class), only the principal amount of outstanding Debt Securities of any
series represented at a meeting or an adjourned meeting duly reconvened at which
a quorum is present as aforesaid and voting in favor of such action will be
counted for purposes of calculating the aggregate principal amount of
outstanding Debt Securities of all series affected thereby favoring such action.
(Section 1404)
NOTICES
Except as otherwise provided in the applicable Indenture, notices to holders
of Bearer Debt Securities will be given by publication at least once in a daily
newspaper in The City of New York and in London and in such other city or cities
as may be specified in such Bearer Debt Securities and will be mailed to such
persons whose names and addresses were previously filed with the applicable
Trustee, within the time prescribed for the giving of such notice. Notice to
holders of Registered Debt Securities will be given by mail to the addresses of
such holders as they appear in the Security Register. (Section 106)
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TITLE
Title to any Bearer Debt Securities and any coupons appertaining thereto
will pass by delivery. The Company, the Trustee and any agent of the Company or
the Trustee may treat the bearer of any Bearer Debt Security or related coupon
and, prior to due presentment for registration of transfer, the registered owner
of any Registered Debt Security (including Registered Debt Securities in global
registered form), as the absolute owner thereof (whether or not such Debt
Security or coupon shall be overdue and notwithstanding any notice to the
contrary) for the purpose of making payment and for all other purposes. (Section
407)
REPLACEMENT OF SECURITIES COUPONS
Any mutilated Debt Security and any Debt Security with a mutilated coupon
appertaining thereto will be replaced by the Company at the expense of the
holder upon surrender of such mutilated Debt Security or Debt Security with a
mutilated coupon to the Security Registrar. Debt Securities or coupons that
become destroyed, stolen or lost will be replaced by the Company at the expense
of the holder upon delivery to the Security Registrar of evidence of the
destruction, loss or theft thereof satisfactory to the Company and the Security
Registrar; in the case of any coupon which becomes destroyed, stolen or lost,
such coupon will be replaced (upon surrender to the Security Registrar of the
Debt Security with all appurtenant coupons not destroyed, stolen or lost) by
issuance of a new Debt Security in exchange for the Debt Security to which such
coupon appertains. In the case of a destroyed, lost or stolen Debt Security or
coupon, an indemnity satisfactory to the Security Registrar and the Company may
be required at the expense of the holder of such Debt Security or coupon before
a replacement Debt Security will be issued. (Section 405)
GOVERNING LAW
The Indentures, the Debt Securities and the coupons will be governed by, and
construed in accordance with, the laws of the State of New York.
CONCERNING THE TRUSTEES
The Company may from time to time maintain lines of credit, and have other
customary banking relationships, with the Senior Trustee or the Subordinated
Trustee.
SENIOR DEBT SECURITIES
The Senior Debt Securities will be unsecured and will rank pari passu with
all other unsecured and non-subordinated debt of the Company.
Certain Covenants in Senior Indenture
Limitation on Secured Indebtedness. The Senior Indenture provides that the
Company will not, and will not permit any Restricted Subsidiary to, create,
assume, incur or guarantee any Secured Indebtedness without securing the Debt
Securities equally and ratably with, or prior to, such Secured Indebtedness
unless immediately thereafter the aggregate amount of all Secured Indebtedness
(exclusive of Secured Indebtedness if the Debt Securities are secured equally
and ratably with, or prior to, such Secured Indebtedness) and the discounted
present value of all net rentals payable under leases entered into in connection
with Sale and Leaseback Transactions (as defined below) entered into after July
15, 1985 (except any such leases entered into by a Restricted Subsidiary before
the time it became a Restricted Subsidiary) would not exceed 10% of Consolidated
Net Tangible Assets. (Section 1104 of Senior Indenture)
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Limitation on Sale and Leaseback Transactions. The Senior Indenture provides
that the Company will not, and will not permit any Restricted Subsidiary to,
enter any lease longer than three years (excluding leases of newly acquired,
improved or constructed property) covering any Principal Property of the Company
or any Restricted Subsidiary that is sold to any other person in connection with
such lease (a "Sale and Leaseback Transaction"), unless either (a) immediately
thereafter, the sum of (i) the discounted present value of all net rentals
payable under all such leases entered into after July 15, 1985 (except any such
leases entered into by a Restricted Subsidiary before the time it became a
Restricted Subsidiary) and (ii) the aggregate amount of all Secured Indebtedness
(exclusive of Secured Indebtedness if the Debt Securities are secured equally
and ratably with, or prior to, such Secured Indebtedness) does not exceed 10% of
Consolidated Net Tangible Assets, or (b) an amount equal to the greater of (x)
the net proceeds to the Company or a Restricted Subsidiary from such sale and
(y) the discounted present value of all net rentals payable thereunder, is
applied within 180 days to the retirement of long-term debt of the Company or a
Restricted Subsidiary (other than such debt which is subordinated to the Debt
Securities or which is owing to the Company or a Restricted Subsidiary).
(Section 1105 of Senior Indenture)
Certain Definitions. "Secured Indebtedness" will mean indebtedness of the
Company or any Restricted Subsidiary for borrowed money secured by any lien upon
(or in respect of any conditional sale or other title retention agreement
covering) any Principal Property or any stock or indebtedness of a Restricted
Subsidiary, but excluding from such definition all indebtedness: (i) outstanding
on July 15, 1985, secured by liens (or arising from conditional sale or other
title retention agreements) existing on that date; (ii) incurred after July 15,
1985 to finance the acquisition, improvement or construction of property and
either secured by purchase money mortgages or liens placed on such property
within 180 days of acquisition, improvement or construction or arising from
conditional sale or other title retention agreements; (iii) secured by liens on
Principal Property or on the stock or indebtedness of Restricted Subsidiaries,
and, in either case, existing at the time of acquisition thereof; (iv) owing to
the Company or any Restricted Subsidiary; (v) secured by liens (or conditional
sale or other title retention devices) existing at the time a corporation became
or becomes a Restricted Subsidiary in the case of a corporation which shall have
become or becomes a Restricted Subsidiary after July 15, 1985; (vi) arising from
any Sale and Leaseback Transaction; (vii) incurred to finance the acquisition or
construction of property secured by liens in favor of any country or any
political subdivision thereof; and (viii) constituting any replacement,
extension or renewal of any such indebtedness (to the extent such indebtedness
is not increased). "Principal Property" will mean land, land improvements,
buildings and associated factory, laboratory and office equipment (excluding all
products marketed by the Company or any of its subsidiaries) constituting a
manufacturing, development, warehouse, service or office facility owned by or
leased to the Company or a Restricted Subsidiary, located within the United
States and having an acquisition cost plus capitalized improvements in excess of
0.15% of Consolidated Net Tangible Assets as of the date of such determination,
other than any such property financed through the issuance of tax-exempt
governmental obligations, or which the Board of Directors determines is not of
material importance to the Company and its Restricted Subsidiaries taken as a
whole, or in which the interest of the Company and all its subsidiaries does not
exceed 50%. "Consolidated Net Tangible Assets" will mean the total assets of the
Company and its subsidiaries, less current liabilities and certain intangible
assets (not including program products). "Restricted Subsidiary" will mean (i)
any subsidiary of the Company which has substantially all its property in the
United States, which owns or is a lessee of any Principal Property and in which
the investment of the Company and all its subsidiaries exceeds 0.15% of
Consolidated Net Tangible Assets as of the date of such determination, other
than certain financing subsidiaries and subsidiaries formed or acquired after
July 15, 1985 for the purpose of acquiring the stock, business or assets of
another person and that have not and do not acquire all or any substantial part
of the business or assets of the Company or any Restricted Subsidiary and (ii)
any other subsidiary designated by the Board of Directors as a Restricted
Subsidiary. (Section 101 of Senior Indenture)
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The Senior Indenture provides that the Company may omit to comply with the
restrictive covenants described above under "Limitation on Secured Indebtedness"
and "Limitation on Sale and Leaseback Transactions" if the holders of not less
than a majority in principal amount of all series of outstanding Debt Securities
affected thereby (acting as one class) waive compliance with such restrictive
covenants. (Section 1107 of Senior Indenture)
SUBORDINATED DEBT SECURITIES
The Subordinated Debt Securities will be unsecured and will be subject to
the subordination provisions described below.
The payment of the principal of, premium (if any) and interest on the
Subordinated Debt Securities is subordinated in right of payment, as set forth
in the Subordinated Indenture, to the payment when due of all Senior
Indebtedness. (Section 1501 of Subordinated Indenture) However, payment from the
money or the proceeds of U.S. government obligations held in any defeasance
trust is not subordinate to any Senior Indebtedness or subject to the
restrictions described herein. (Section 1512 of Subordinated Indenture). Claims
of creditors of the Company's subsidiaries, including trade creditors, secured
creditors and creditors holding guarantees issued by such subsidiaries, and
claims of preferred stockholders (if any) of such subsidiaries generally will
have priority with respect to the assets and earnings of such subsidiaries over
the claims of creditors of the Company, including holders of the Subordinated
Debt Securities, even though such obligations may not constitute Senior
Indebtedness. The Subordinated Debt Securities therefore will be effectively
subordinated to creditors (including trade creditors) and preferred stockholders
(if any) of subsidiaries of the Company.
Senior Indebtedness is defined in the Subordinated Indenture as the
principal of, premium, if any, and interest on, (i) all the Company's
indebtedness for money borrowed, other than the subordinated securities issued
under the Subordinated Indenture, whether outstanding on the date of execution
of the Subordinated Indenture or thereafter created, assumed or incurred, except
such indebtedness as is by its terms expressly stated to be not superior in
right of payment to the subordinated securities issued under the Subordinated
Indenture or to rank pari passu with the subordinated securities issued under
the Subordinated Indenture and (ii) any deferrals, renewals or extensions of any
such Senior Indebtedness, except that Senior Indebtedness will not include (1)
any obligation of the Company to any subsidiary, (2) any liability for Federal,
state, local or other taxes owed or owing by the Company, (3) any accounts
payable or other liability to trade creditors arising in the ordinary course of
business (including guarantees thereof or instruments evidencing such
liabilities), (4) any indebtedness, guarantee or obligation of the Company which
is expressly subordinate or junior in right of payment in any respect to any
other indebtedness, guarantee or obligation of the Company, including any senior
subordinated indebtedness and any subordinated obligations, (5) any obligations
with respect to any capital stock, or (6) any indebtedness incurred in violation
of the Subordinated Indenture. The term "indebtedness for money borrowed" as
used in the foregoing sentence includes, without limitation, any obligation of,
or any obligation guaranteed by, the Company for the repayment of borrowed
money, whether or not evidenced by bonds, debentures, notes or other written
instruments, and any deferred obligation for the payment of the purchase price
of property or assets. (Section 101 of Subordinated Indenture) There is no
limitation on the issuance of additional Senior Indebtedness of the Company. The
Senior Debt Securities constitute Senior Indebtedness under the Subordinated
Indenture. The Subordinated Debt Securities will rank pari passu with other
subordinated indebtedness of the Company.
The Company may not pay principal of, premium (if any) or interest on the
Subordinated Debt Securities, make any deposits pursuant to the defeasance
provisions in the Subordinated Indenture or otherwise purchase, redeem or retire
any Subordinated Debt Securities (collectively, "pay the Subordinated Debt
Securities") if (i) any Senior Indebtedness is not paid when due or (ii) any
other default on Senior Indebtedness occurs and the maturity of such Senior
Indebtedness is accelerated in accordance with its terms unless the default has
been cured or waived and any such acceleration has been rescinded
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or such Senior Indebtedness has been paid in full. However, the Company may pay
the Subordinated Securities without regard to the foregoing if the Company and
the Subordinated Trustee receive written notice approving such payment from the
Representatives of the holders of Senior Indebtedness with respect to which
either of the events set forth in clause (i) or (ii) of the immediately
preceding sentence has occurred and is continuing. During the continuance of any
default (other than a default described in clause (i) or (ii) of the second
preceding sentence) with respect to any Senior Indebtedness pursuant to which
the maturity thereof may be accelerated immediately without further notice
(except such notice as may be required to effect such acceleration) or the
expiration of any applicable grace periods, the Company may not pay the
Subordinated Securities for a period (a "Payment Blockage Period") commencing
upon the receipt by the Subordinated Trustee (with a copy to the Company) of
written notice (a "Blockage Notice") of such default from the Representatives of
the holders of Senior Indebtedness specifying an election to effect a Payment
Blockage Period and ending 179 days thereafter (or earlier if such Payment
Blockage Period is terminated (1) by written notice to the Subordinated Trustee
and the Company from the Person or Persons who gave such Blockage Notice, (2)
because the default giving rise to such Blockage Notice is no longer continuing
or (3) because such Senior Indebtedness has been repaid in full).
Notwithstanding the provisions described in the immediately preceding sentence,
unless the holders of Senior Indebtedness or the Representatives of such holders
have accelerated the maturity of such Senior Indebtedness, the Company may
resume payments on the Subordinated Debt Securities after the end of such
Payment Blockage Period. Not more than one Blockage Notice may be given in any
consecutive 360-day period, irrespective of the number of defaults with respect
to Senior Indebtedness during such period. (Section 1503 of Subordinated
Indenture)
Upon any payment or distribution of the assets of the Company to creditors
upon a total or partial liquidation or dissolution or reorganization of or
similar proceeding relating to the Company or their property, the holders of
Senior Indebtedness will be entitled to receive payment in full of the Senior
Indebtedness before the holders of Subordinated Debt Securities are entitled to
receive any payment, and until the Senior Indebtedness is paid in full, any
payment or distribution to which holders of Subordinated Debt Securities would
be entitled but for the subordination provisions of the Subordinated Indenture
(other than distributions of stock and certain debt securities subordinated to
the Senior Indebtedness) will be made to holders of the Senior Indebtedness as
their interests may appear. (Section 1502 of Subordinated Indenture) If a
distribution is made to holders of Subordinated Debt Securities that, due to the
subordination provisions, should not have been made to them, such holders of
Subordinated Debt Securities are required to hold it in trust for the holders of
Senior Indebtedness, and pay it over to them as their interests may appear.
(Section 1505 of Subordinated Indenture)
If payment of the Subordinated Debt Securities is accelerated because of an
Event of Default, the Company or the Subordinated Trustee will promptly notify
the holders of Senior Indebtedness or the Representatives of such holders of the
acceleration. The Company may not pay the Subordinated Securities until five
Business Days after such holders or the Representatives of the Senior
Indebtedness receive notice of such acceleration and, thereafter, may pay the
Subordinated Securities only if the subordination provisions of the Subordinated
Indenture otherwise permit payment at that time. (Section 1505 of Subordinated
Indenture)
By reason of such subordination provisions contained in the Subordinated
Indenture, in the event of insolvency, creditors of the Company who are holders
of Senior Indebtedness may recover more, ratably, than the holders of
Subordinated Debt Securities, and creditors of the Company who are not holders
of Senior Indebtedness may recover less, ratably, than holders of Senior
Indebtedness and may recover more, ratably, than the holders of Subordinated
Indebtedness.
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DESCRIPTION OF THE PREFERRED STOCK
The following is a description of certain general terms and provisions of
the Preferred Stock. The particular terms of any series of Preferred Stock will
be described in the applicable Prospectus Supplement. If so indicated in a
Prospectus Supplement, the terms of any such series may differ from the terms
set forth below.
The summary of terms of the Company's Preferred Stock contained in this
Prospectus does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of the Company's Certificate of Incorporation
and the certificate of amendment relating to each series of the Preferred Stock
(the "Certificate of Amendment"), which will be filed as an exhibit to or
incorporated by reference in the Registration Statement of which this Prospectus
is a part at or prior to the time of issuance of such series of the Preferred
Stock.
The Company's Certificate of Incorporation authorizes the issuance of
150,000,000 shares of Preferred Stock, par value $.01 per share. As of November
30, 1995, 2,610,710 shares of Series A 7 1/2% Preferred Stock, liquidation
preference $100 per share, were outstanding. Subject to limitations prescribed
by law, the Board of Directors is authorized at any time to issue one or more
series of Preferred Stock; to determine the designation for any such series by
number, letter, or title that shall distinguish such series from any other
series of Preferred Stock; and to determine the number of shares in any such
series (including a determination that such series shall consist of a single
share).
The Board of Directors is authorized to determine, for each series of
Preferred Stock, and the Prospectus Supplement shall set forth with respect to
such series: (i) whether the holders thereof shall be entitled to cumulative,
noncumulative, or partially cumulative dividends and, with respect to shares
entitled to dividends, the dividend rate or rates, including without limitation
the methods and procedures for determining such rate or rates, and any other
terms and conditions relating to such dividends; (ii) whether, and if so to what
extent and upon what terms and conditions, the holders thereof shall be entitled
to rights upon the liquidation of, or upon any distribution of the assets of,
the Company; (iii) whether, and if so upon what terms and conditions, such
shares shall be convertible into, or exchangeable for, other securities or
property; (iv) whether, and if so upon what terms and conditions, such shares
shall be redeemable; (v) whether the shares shall be redeemable and subject to
any sinking fund provided for the purchase or redemption of such shares and, if
so, the terms of such fund; (vi) whether the holders thereof shall be entitled
to voting rights and, if so, the terms and conditions for the exercise thereof;
provided that the holders of shares of Preferred Stock (A) will not be entitled
to more than the lesser of (x) one vote per $100 of liquidation value or (y) one
vote per share, when voting as a class with the holders of shares of capital
stock, and (B) will not be entitled to vote on any matter separately as a class,
except to the extent specified with respect to each series, (x) with respect to
any amendment or alteration of the provisions of the Certificate of
Incorporation that would adversely affect the powers, preferences, or special
rights of the applicable series of Preferred Stock or (y) in the event the
Corporation fails to pay dividends on any series of Preferred Stock in full for
any six quarterly dividend payment periods, whether or not consecutive, in which
event the number of directors may be increased by two and the holders of
outstanding shares of Preferred Stock then similarly entitled shall be entitled
to elect the two additional directors until full accumulated dividends on all
such shares of Preferred Stock shall have been paid; and (vii) whether the
holders thereof shall be entitled to other preferences or rights, and, if so,
the qualifications, limitations, or restrictions of such preferences or rights.
DIVIDENDS
Holders of shares of Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors out of funds of the Company legally
available for payment, cash dividends payable at such dates and at such rates
per share per annum as set forth in the applicable Prospectus Supplement. The
Prospectus Supplement will also state applicable record dates regarding the
payment
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of dividends. Except as set forth below, no dividends shall be declared or paid
or set apart for payment on any series of Preferred Stock unless full dividends
for all series of Preferred Stock (including any accumulation in respect of
unpaid dividends for prior dividend periods, if dividends on such Preferred
Stock are cumulative) have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof is set apart for such
payment. When dividends are not so paid in full (or a sum sufficient for such
full payment is not so set apart) upon the Preferred Stock, dividends declared
(if any) on the Preferred Stock shall be declared pro-rata so that the amount of
dividends declared per share on each series of Preferred Stock shall in all
cases bear to each other series the same ratio that (x) accrued dividends
(including any accumulation with respect to unpaid dividends for prior dividend
periods, if dividends for such series are cumulative) for the then-current
dividend period per share for each respective series of Preferred Stock bear to
(y) aggregate accrued dividends for the then-current dividend period (including
all accumulations with respect to unpaid dividends for prior periods for all
series which are cumulative) for all outstanding shares of Preferred Stock.
Unless all dividends on the Preferred Stock shall have been paid in full (i)
no dividend shall be declared and paid or declared and a sum sufficient thereof
set apart for payment (other than a dividend in the Company's capital stock or
in any other class ranking junior to the Preferred Stock as to dividends and
liquidation preferences) or other distribution declared or made upon the shares
of the Company's capital stock or upon any other class ranking junior to the
Preferred Stock as to dividends or liquidation preferences and (ii) no shares of
the Company's capital stock or class of stock ranking junior to the Preferred
Stock as to dividends or liquidation preferences may be redeemed, purchased or
otherwise acquired by the Company except by conversion into or exchange for
shares of the Company ranking junior to the Preferred Stock as to dividends and
liquidation preferences.
CONVERTIBILITY
No series of Preferred Stock will be convertible into, or exchangeable for,
other securities or property except as set forth in the related Prospectus
Supplement.
REDEMPTION AND SINKING FUND
No series of Preferred Stock will be redeemable or receive the benefit of a
sinking fund except as set forth in the related Prospectus Supplement.
LIQUIDATION
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the Company, holders of any series of Preferred Stock will be entitled to
receive the liquidation preference per share specified in the Prospectus
Supplement, if any, in each case together with any applicable accrued and unpaid
dividends and before any distribution to holders of the Company's capital stock
or any class of stock ranking junior to the Preferred Stock as to dividends and
liquidation preferences. In the event there are insufficient assets to pay such
liquidation preferences for all classes of Preferred Stock in full, the
remaining assets shall be allocated ratably among all series of Preferred Stock
based upon the aggregate liquidation preference for all outstanding shares for
each such series. After payment of the full amount of the liquidation preference
to which they are entitled, the holders of shares of Preferred Stock will not be
entitled to any further participation in any distribution of assets by the
Company unless otherwise provided in a Prospectus Supplement, and the remaining
assets of the Company shall be distributable exclusively among the holders of
the Company's capital stock and any class of stock ranking junior to the
Preferred Stock as to dividends and liquidation preferences, according to their
respective interests.
VOTING
No series of Preferred Stock will be entitled to vote except as provided
below or in the related Prospectus Supplement. Unless otherwise specified in the
related Prospectus Supplement, if at any time
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the Company shall have failed to declare and pay in full dividends for six
quarterly periods, whether consecutive or not, on any applicable series of
Preferred Stock and all such preferred dividends remain unpaid (a "Preferred
Dividend Default"), the number of directors of the Company shall be increased by
two and the holders of such series of Preferred Stock, voting together as a
class with all other series of Preferred Stock then entitled to vote on such
election of directors, shall be entitled to elect such two additional directors
until the full dividends accumulated on all outstanding shares of such series
shall have been declared and paid in full. Upon the occurrence of a Preferred
Dividend Default, the Board of Directors shall within 10 business days of such
default call a special meeting of the holders of shares of all affected series,
for which there is a Preferred Dividend Default, for the purpose of electing the
additional directors. In lieu of holding such meeting, the holders of record of
a majority of the outstanding shares of all series for which there is a
Preferred Dividend Default who are then entitled to participate in the election
of directors may, by action taken by written consent, elect such additional
directors. If and when all accumulated dividends on any series of Preferred
Stock have been paid in full, the holders of shares of such series shall be
divested of the foregoing voting rights subject to revesting in the event of
each and every Preferred Dividend Default. Upon termination of such special
voting rights attributable to all series for which there has been a Preferred
Dividend Default, the term of office of each director so elected (a "Preferred
Stock Director") shall terminate and the number of directors of the Company
shall, without further action, be reduced by two, subject always to the increase
in the number of directors pursuant to the foregoing provisions in case of a
future Preferred Dividend Default. Any Preferred Stock Director may be removed
at any time with or without cause by, and shall not be removed otherwise than
by, the vote of the holders of record of a majority of the outstanding shares of
all series of Preferred Stock who were entitled to participate in such
director's election, voting as a separate class, at a meeting called for such
purpose or by written consent. So long as a Preferred Stock Default shall
continue, any vacancy in the office of a Preferred Stock Director may be filled
by written consent of the Preferred Stock Director remaining in office, or if
none remains in office, by a vote of the holders of record of a majority of the
outstanding series of Preferred Stock who are then entitled to participate in
the election of such Preferred Stock Directors as provided above. As long as the
Preferred Dividend Default shall continue, holders of the Preferred Stock shall
not, as such stockholders, be entitled to vote on the election or removal of
directors, other than Preferred Stock Directors, but shall not be divested of
any other voting rights provided to the holders of Preferred Stock by law with
respect to any other matter to be acted upon by the stockholders of the Company.
The Preferred Stock Directors shall each be entitled to one vote per director on
any matter. Additionally, unless otherwise specified in a Prospectus Supplement,
the affirmative vote of the holders of a majority of the outstanding shares of
each series of Preferred Stock voting together as a class, is required to
authorize any amendment, alteration or repeal of the Restated Certificate of
Incorporation or any Certificate of Amendment which would adversely affect the
powers, preferences, or special rights of the Preferred Stock including
authorizing any class of stock with superior dividend and liquidation
preferences.
MISCELLANEOUS
The holders of Preferred Stock will have no preemptive rights. The Preferred
Stock, upon issuance against full payment of the purchase price therefor, will
be fully paid and nonassessable. Shares of Preferred Stock redeemed or otherwise
reacquired by the Company shall resume the status of authorized and unissued
shares of Preferred Stock undesignated as to series, and shall be available for
subsequent issuance. There are no restrictions on repurchase or redemption of
the Preferred Stock while there is any arrearage on sinking fund installments
except as may be set forth in a Prospectus Supplement. Neither the par value nor
the liquidation preference is indicative of the price at which the Preferred
Stock will actually trade on or after the date of issuance. Payment of dividends
on any series of Preferred Stock may be restricted by loan agreements,
indentures and other transactions entered into by the Company.
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NO OTHER RIGHTS
The shares of a series of Preferred Stock will not have any preferences,
voting powers or relative, participating, optional or other special rights
except as set forth above or in the related Prospectus Supplement, the
Certificate of Incorporation or Certificate of Amendment or as otherwise
required by law.
TRANSFER AGENT AND REGISTRAR
The transfer agent for each series of Preferred Stock will be described in
the related Prospectus Supplement.
DESCRIPTION OF THE DEPOSITARY SHARES
The Company may, at its option, elect to offer Depositary Shares rather than
full shares of Preferred Stock. In the event such option is exercised, each of
the Depositary Shares will represent ownership of and entitlement to all rights
and preferences of a fraction of a share of Preferred Stock of a specified
series (including dividend, voting, redemption and liquidation rights). The
applicable fraction will be specified in the Prospectus Supplement. The shares
of Preferred Stock represented by the Depositary Shares will be deposited with a
Depositary (the "Depositary") named in the applicable Prospectus Supplement,
under a Deposit Agreement (the "Deposit Agreement"), among the Company, the
Depositary and the holders of the Depositary Receipts. Certificates evidencing
Depositary Shares ("Depositary Receipts") will be delivered to those persons
purchasing Depositary Shares in the offering. The Depositary will be the
transfer agent, registrar and dividend disbursing agent for the Depositary
Shares. Holders of Depositary Receipts agree to be bound by the Deposit
Agreement, which requires holders to take certain actions such as filing proof
of residence and paying certain charges.
The summary of terms of the Company's Depositary Shares contained in this
Prospectus does not purport to be complete and is subject to, and qualified in
its entirety by, the provisions of the Deposit Agreement, the Company's
Certificate of Incorporation and the Certificate of Amendment for the applicable
series of Preferred Stock.
DIVIDENDS
The Depositary will distribute all cash dividends or other cash
distributions received in respect of the series of Preferred Stock represented
by the Depositary Shares to the record holders of Depositary Receipts in
proportion to the number of Depositary Shares owned by such holders on the
relevant record date, which will be the same date as the record date fixed by
the Company for the applicable series of Preferred Stock. The Depositary,
however, will distribute only such amount as can be distributed without
attributing to any Depositary Share a fraction of one cent, and any balance not
so distributed will be added to and treated as part of the next sum received by
the Depositary for distribution to record holders of Depositary Receipts then
outstanding.
In the event of a distribution other than in cash, the Depositary will
distribute property received by it to the record holders of Depositary Receipts
entitled thereto, in proportion, as nearly as may be practicable, to the number
of Depositary Shares owned by such holders on the relevant record date, unless
the Depositary determines (after consultation with the Company) that it is not
feasible to make such distribution, in which case the Depositary may (with the
approval of the Company) adopt any other method for such distribution as it
deems appropriate, including the sale of such property and distribution of the
net proceeds from such sale to such holders.
LIQUIDATION PREFERENCE
In the event of the liquidation, dissolution or winding up of the affairs of
the Company, whether voluntary or involuntary, the holders of each Depositary
Share will be entitled to the fraction of the
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liquidation preference accorded each share of the applicable series of Preferred
Stock, as set forth in the Prospectus Supplement.
REDEMPTION
If the series of Preferred Stock represented by the applicable series of
Depositary Shares is redeemable, such Depositary Shares will be redeemed from
the proceeds received by the Depositary resulting from the redemption, in whole
or in part, of Preferred Stock held by the Depositary. Whenever the Company
redeems any Preferred Stock held by the Depositary, the Depositary will redeem
as of the same redemption date the number of Depositary Shares representing the
Preferred Stock so redeemed. The Depositary will mail the notice of redemption
promptly upon receipt of such notice from the Company and not less than 35 nor
more than 60 days prior to the date fixed for redemption of the Preferred Stock
and the Depositary Shares to the record holders of the Depositary Receipts.
VOTING
Promptly upon receipt of notice of any meeting at which the holders of the
series of Preferred Stock represented by the applicable series of Depositary
Shares are entitled to vote, the Depositary will mail the information contained
in such notice of meeting to the record holders of the Depositary Receipts as of
the record date for such meeting. Each such record holder of Depositary Receipts
will be entitled to instruct the Depositary as to the exercise of the voting
rights pertaining to the number of shares of Preferred Stock represented by such
record holder's Depositary Shares. The Depositary will endeavor, insofar as
practicable, to vote such Preferred Stock represented by such Depositary Shares
in accordance with such instructions, and the Company will agree to take all
action which may be deemed necessary by the Depositary in order to enable the
Depositary to do so. The Depositary will abstain from voting any of the
Preferred Stock to the extent that it does not receive specific instructions
from the holders of Depositary Receipts.
WITHDRAWAL OF PREFERRED STOCK
Upon surrender of Depositary Receipts at the principal office of the
Depositary, upon payment of any unpaid amount due the Depositary, and subject to
the terms of the Deposit Agreement, the owner of the Depositary Shares evidenced
thereby is entitled to delivery of the number of whole shares of Preferred Stock
and all money and other property, if any, represented by such Depositary Shares.
Partial shares of Preferred Stock will not be issued. If the Depositary Receipts
delivered by the holder evidence a number of Depositary Shares in excess of the
number of Depositary Shares representing the number of whole shares of Preferred
Stock to be withdrawn, the Depositary will deliver to such holder at the same
time a new Depositary Receipt evidencing such excess number of Depositary
Shares. Holders of Preferred Stock thus withdrawn will not thereafter be
entitled to deposit such shares under the Deposit Agreement or to receive
Depositary Receipts evidencing Depositary Shares therefor.
AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT
The form of Depositary Receipt evidencing the Depositary Shares and any
provision of the Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Depositary. However, any
amendment which materially and adversely alters the rights of the holders (other
than any change in fees) of Depositary Shares will not be effective unless such
amendment has been approved by at least a majority of the Depositary Shares then
outstanding. No such amendment may impair the right, subject to the terms of the
Deposit Agreement, of any owner of any Depositary Shares to surrender the
Depositary Receipt evidencing such Depositary Shares with instructions to the
Depositary to deliver to the holder the Preferred Stock and all money and other
property, if any, represented thereby, except in order to comply with mandatory
provisions of applicable law. The Deposit Agreement may be terminated by the
Company or the Depositary only if (i) all outstanding Depositary Shares have
been redeemed or (ii) there has been a final distribution in respect
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of the Preferred Stock in connection with any dissolution of the Company and
such distribution has been made to all the holders of Depositary Shares.
CHARGES OF DEPOSITARY
The Company will pay all transfer and other taxes and governmental charges
arising solely from the existence of the depositary arrangements. The Company
will pay charges of the Depositary in connection with the initial deposit of the
Preferred Stock and the initial issuance of the Depositary Shares, any
redemption of the Preferred Stock and all withdrawals of Preferred Stock by
owners of Depositary Shares. Holders of Depositary Receipts will pay transfer,
income and other taxes and governmental charges and certain other charges as are
provided in the Deposit Agreement to be for their accounts. In certain
circumstances, the Depositary may refuse to transfer Depositary Shares, may
withhold dividends and distributions and sell the Depositary Shares evidenced by
such Depositary Receipt if such charges are not paid.
MISCELLANEOUS
The Depositary will forward to the holders of Depositary Receipts all
reports and communications from the Company which are delivered to the
Depositary and which the Company is required to furnish to the holders of the
Preferred Stock. In addition, the Depositary will make available for inspection
by holders of Depositary Receipts at the principal office of the Depositary, and
at such other places as it may from time to time deem advisable, any reports and
communications received from the Company which are received by the Depositary as
the holder of Preferred Stock.
Neither the Depositary nor the Company assumes any obligation or will be
subject to any liability under the Deposit Agreement to holders of Depositary
Receipts other than for its negligence or willful misconduct. Neither the
Depositary nor the Company will be liable if it is prevented or delayed by law
or any circumstance beyond its control in performing its obligations under the
Deposit Agreement. The obligations of the Company and the Depositary under the
Deposit Agreement will be limited to performance in good faith of their duties
thereunder, and they will not be obligated to prosecute or defend any legal
proceeding in respect of any Depositary Shares or Preferred Stock unless
satisfactory indemnity is furnished. The Company and the Depositary may rely on
written advice of counsel or accountants, on information provided by holders of
Depositary Receipts or other persons believed in good faith to be competent to
give such information and on documents believed to be genuine and to have been
signed or presented by the proper party or parties.
RESIGNATION AND REMOVAL OF DEPOSITARY
The Depositary may resign at any time by delivering to the Company notice of
its election to do so, and the Company may at any time remove the Depositary,
any such resignation or removal to take effect upon the appointment of a
successor Depositary and its acceptance of such appointment. Such successor
Depositary must be appointed within 60 days after delivery of the notice for
resignation or removal and must be a bank or trust company having its principal
office in the United States of America and having a combined capital and surplus
of at least $150,000,000.
FEDERAL INCOME TAX CONSEQUENCES
Owners of the Depositary Shares will be treated for Federal income tax
purposes as if they were owners of the Preferred Stock represented by such
Depositary Shares. Accordingly, such owners will be entitled to take into
account for Federal income tax purposes income and deductions to which they
would be entitled if they were holders of such Preferred Stock. In addition, (i)
no gain or loss will be recognized for Federal income tax purposes upon the
withdrawal of Preferred Stock in exchange for Depositary Shares, (ii) the tax
basis of each share of Preferred Stock to an exchanging owner of Depositary
Shares will, upon such exchange, be the same as the aggregate tax basis of the
Depositary
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Shares exchanged therefor, and (iii) the holding period for Preferred Stock in
the hands of an exchanging owner of Depositary Shares will include the period
during which such person owned such Depositary Shares.
DESCRIPTION OF THE CAPITAL STOCK
As of the date of this Prospectus, the Company's Certificate of
Incorporation authorizes the issuance of 750,000,000 shares of Capital Stock,
$1.25 par value per share. As of November 30, 1995, 549,950,300 shares of
Capital Stock were outstanding.
Subject to the rights of the holders of any outstanding shares of preferred
stock, holders of Capital Stock are entitled to receive such dividends, in cash,
securities, or property, as may from time to time be declared by the Board of
Directors. Subject to the provisions of the Company's By-laws, as from time to
time amended, with respect to the closing of the transfer books and the fixing
of a record date, holders of shares of Capital Stock are entitled to one vote
per share of Capital Stock held on all matters requiring a vote of the
stockholders. In the event of any liquidation, dissolution, or winding up of the
Company, either voluntary or involuntary, after payment shall have been made to
the holders of preferred stock of the full amount to which they shall be
entitled, the holders of Capital Stock shall be entitled to share ratably,
according to the number of shares held by them, in all remaining assets of the
Company available for distribution. Shares of Capital Stock are not redeemable
and have no subscription, conversion or preemptive rights.
DESCRIPTION OF THE WARRANTS
The Company may issue Warrants for the purchase of Debt Securities,
Preferred Stock or Capital Stock. Warrants may be issued independently or
together with Debt Securities, Preferred Stock or Capital Stock offered by any
Prospectus Supplement and may be attached to or separate from any such
Securities. Each series of Warrants will be issued under a separate warrant
agreement (a "Warrant Agreement") to be entered into between the Company and a
bank or trust company, as warrant agent (the "Warrant Agent"). The Warrant Agent
will act solely as an agent of the Company in connection with the Warrants and
will not assume any obligation or relationship of agency or trust for or with
any holders or beneficial owners of Warrants. The following summary of certain
provisions of the Warrants does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the provisions of the Warrant
Agreement that will be filed with the Commission in connection with the offering
of such Warrants.
DEBT WARRANTS
The Prospectus Supplement relating to a particular issue of Warrants to
issue Debt Securities ("Debt Warrants") will describe the terms of such Debt
Warrants, including the following: (a) the title of such Debt Warrants; (b) the
offering price for such Debt Warrants, if any; (c) the aggregate number of such
Debt Warrants; (d) the designation and terms of the Debt Securities purchasable
upon exercise of such Debt Warrants; (e) if applicable, the designation and
terms of the Debt Securities with which such Debt Warrants are issued and the
number of such Debt Warrants issued with each such Debt Security; (f) if
applicable, the date from and after which such Debt Warrants and any Debt
Securities issued therewith will be separately transferable; (g) the principal
amount of Debt Securities purchasable upon exercise of a Debt Warrant and the
price at which such principal amount of Debt Securities may be purchased upon
exercise (which price may be payable in cash, securities, or other property);
(h) the date on which the right to exercise such Debt Warrants shall commence
and the date on which such right shall expire; (i) if applicable, the minimum or
maximum amount of such Debt Warrants that may be exercised at any one time; (j)
whether the Debt Warrants represented by the Debt Warrant certificates or Debt
Securities that may be issued upon exercise of the Debt Warrants will be
23
<PAGE>
issued in registered or bearer form; (k) information with respect to book-entry
procedures, if any; (l) the currency or currency units in which the offering
price, if any, and the exercise price are payable; (m) if applicable, a
discussion of material United States federal income tax considerations; (n) the
antidilution provisions of such Debt Warrants, if any; (o) the redemption or
call provisions, if any, applicable to such Debt Warrants; and (p) any
additional terms of the Debt Warrants, including terms, procedures, and
limitations relating to the exchange and exercise of such Debt Warrants.
STOCK WARRANTS
The Prospectus Supplement relating to any particular issue of Warrants to
issue Capital Stock or Preferred Stock will describe the terms of such Warrants,
including the following: (a) the title of such Warrants; (b) the offering price
for such Warrants, if any; (c) the aggregate number of such Warrants; (d) the
designation and terms of the Capital Stock or Preferred Stock purchasable upon
exercise of such Warrants; (e) if applicable, the designation and terms of the
Securities with which such Warrants are issued and the number of such Warrants
issued with each such Security; (f) if applicable, the date from and after which
such Warrants and any Securities issued therewith will be separately
transferable; (g) the number of shares of Capital Stock or Preferred Stock
purchasable upon exercise of a Warrant and the price at which such shares may be
purchased upon exercise; (h) the date on which the right to exercise such
Warrants shall commence and the date on which such right shall expire; (i) if
applicable, the minimum or maximum amount of such Warrants that may be exercised
at any one time; (j) the currency or currency units in which the offering price,
if any, and the exercise price are payable; (k) if applicable, a discussion of
material United States federal income tax considerations; (l) the antidilution
provisions of such Warrants, if any; (m) the redemption or call provisions, if
any, applicable to such Warrants; and (n) any additional terms of the Warrants,
including terms, procedures, and limitations relating to the exchange and
exercise of such Warrants.
PLAN OF DISTRIBUTION
The Company may sell the Securities in any of three ways: (i) through
underwriters; (ii) through agents; or (iii) directly to a limited number of
institutional purchasers or to a single purchaser. The Prospectus Supplement
with respect to each series of Securities will set forth the terms of the
offering of the Securities of such series, including the name or names of any
underwriters, the purchase price and the proceeds to the Company from such sale,
any underwriting discounts and other items constituting underwriters'
compensation, any initial public offering price and any discounts or concessions
allowed or reallowed or paid to dealers, and any securities exchanges on which
the Securities of such series may be listed.
If underwriters are used in the sale, the Securities will be acquired by the
underwriters for their own account and may be resold from time to time in one or
more transactions, including negotiated transactions, at a fixed public offering
price or at varying prices determined at the time of sale. The Securities may be
either offered to the public through underwriting syndicates represented by
managing underwriters or by underwriters without a syndicate. Unless otherwise
set forth in the Prospectus Supplement, the obligations of the underwriters to
purchase Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all the Securities of a series if any
are purchased. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
Securities may be sold directly by the Company or through agents designated
by the Company from time to time. Any agent involved in the offer or sale of the
Securities in respect of which this Prospectus is delivered will be named, and
any commissions payable by the Company to such agent will be set forth, in the
Prospectus Supplement. Unless otherwise indicated in the Prospectus Supplement,
any such agent will be acting on a best efforts basis for the period of its
appointment.
24
<PAGE>
If so indicated in the Prospectus Supplement, the Company will authorize
agents or underwriters to solicit offers by certain types of institutions to
purchase Securities from the Company at the public offering price set forth in
the Prospectus Supplement pursuant to delayed delivery contracts providing for
payment and delivery on a specified date in the future. Such contracts will be
subject only to those conditions set forth in the Prospectus Supplement, and the
Prospectus Supplement will set forth the commissions payable for solicitation of
such contracts.
Agents and underwriters may be entitled under agreements entered into with
the Company to indemnification by the Company against certain civil liabilities,
including liabilities under the Securities Act of 1933, or to contribution with
respect to payments which the agents or underwriters may be required to make in
respect thereof. Agents and underwriters may be customers of, engage in
transactions with, or perform services for, the Company in the ordinary course
of business.
Each series of Securities will be a new issue of securities with no
established trading market. Any underwriters to whom Securities are sold by the
Company for public offering and sale may make a market in such Securities, but
such underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for any Securities.
EXPERTS
The consolidated financial statements of the Company incorporated in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994 have been so incorporated in reliance on the report of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
25
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following statement sets forth the estimated amounts of expenses, other
than underwriting discounts, to be borne by the Company in connection with the
offering described in this Registration Statement:
Securities and Exchange Commission Registration Fee............ $ 603,449
Trustee's Fees................................................. 50,000
Printing and Engraving Expenses................................ 120,000
Rating Agency Fees............................................. 150,000
Accounting Fees and Expenses................................... 40,000
Legal Fees and Expenses........................................ 150,000
Blue Sky Fees and Expenses..................................... 50,000
Listing Fee.................................................... 50,000
Miscellaneous Expenses......................................... 16,551
----------
Total Expenses.......................................... $1,230,000
==========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The By-Laws of the Company (Article VI, Section 6) provide the following:
"The Corporation shall, to the fullest extent permitted by applicable law as
in effect at any time, indemnify any person made, or threatened to be made, a
party to an action or proceeding whether civil or criminal (including an action
or proceeding by or in the right of the Corporation or any other corporation of
any type or kind, domestic or foreign, or any partnership, joint venture, trust,
employee benefit plan or other enterprise, for which any director or officer of
the Corporation served in any capacity at the request of the Corporation), by
reason of the fact that such person or such person's testator or intestate was a
director or officer of the Corporation, or served such other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise in
any capacity, against judgments, fines, amounts paid in settlement and
reasonable expenses, including attorneys' fees actually and necessarily incurred
as a result of such action or proceeding, or any appeal therein. Such
indemnification shall be a contract right and shall include the right to be paid
advances of any expenses incurred by such person in connection with such action,
suit or proceeding, consistent with the provisions of applicable law in effect
at any time. Indemnification shall be deemed to be 'permitted' within the
meaning of the first sentence hereof if it is not expressly prohibited by
applicable law as in effect at any time."
The Certificate of Incorporation of the Company (Article ELEVENTH) provides the
following:
"Pursuant to Section 402(b) of the Business Corporation Law of the State of
New York, the liability of the Corporation's directors to the Corporation or its
stockholders for damages for breach of duty as a director shall be eliminated to
the fullest extent permitted by the Business Corporation Law of the State of New
York, as it exists on the date hereof or as it may hereafter be amended. No
amendment to or repeal of this Article shall apply to or have any effect on the
liability or alleged liability of any director of the corporation for or with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal."
With certain limitations, Sections 721 through 726 of the New York Business
Corporation Law permit a corporation to indemnify a director or officer made a
party to an action (i) by a corporation or in its right in order to procure a
judgment in its favor unless he shall have breached his duties, or (ii) other
than an action by or in the right of the corporation in order to procure a
judgment in its favor, if such director or officer acted in good faith and in a
manner he reasonably believed to be in or, in certain cases not opposed to such
corporation's interest and additionally, in criminal actions, had no reasonable
cause to believe his conduct was unlawful.
II-1
<PAGE>
In addition, the Company maintains directors' and officers' liability
insurance policies.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
(1)(a) --Proposed Form of Underwriting Agreement.*
(1)(b) --Proposed Form of Agency Agreement.*
(4)(a) --Restated Certificate of Incorporation of the Company.***
(4)(b) --Indenture dated as of October 1, 1993, between the Company and The Chase
Manhattan Bank (National Association) as Trustee.**
(4)(c) --First Supplemental Indenture dated as of December 15, 1995, to Indenture
dated as of October 1, 1993, between the Company and The Chase Manhattan
Bank (National Association).*
(4)(d) --Form of Subordinated Indenture.*
(4)(e) --Form of Fixed Rate Non-Redeemable Medium-Term Note.**
(4)(f) --Form of Fixed Rate Redeemable Medium-Term Note.**
(4)(g) --Form of Floating Rate Non-Redeemable Medium-Term Note.**
(4)(h) --Form of Temporary Global Fixed Rate Bearer Medium-Term Note.**
(4)(i) --Form of Definitive Global Fixed Rate Bearer Medium-Term Note.**
(4)(j) --Form of Definitive Fixed Rate Bearer Medium-Term Note.**
(4)(k) --Form of Fixed Rate Debt Security with Optional Redemption.**
(4)(l) --Form of Fixed Rate Debt Security with Optional Redemption and Sinking
Fund.**
(4)(m) --Form of Extendible Debt Security with Optional Redemption.**
(4)(n) --Form of Zero Coupon Debt Security with Optional Redemption.**
(4)(o) --Form of Original Issue Discount Debt Security with Optional Redemption.**
(4)(p) --Form of Certificate of Amendment.****
(4)(q) --Form of Preferred Stock Certificate.****
(4)(r) --Form of Deposit Agreement.****
(4)(s) --Form of Depositary Receipt (included as Exhibit A to the Form of Deposit
Agreement).****
(4)(t) --Form of Warrant Agreement.*****
(4)(u) --Form of Warrant Certificate.*****
(5) --Opinion of Cravath, Swaine & Moore.*
(12) --Computation of Ratios of Earnings to Fixed Charges and Earnings to Combined
Fixed Charges and Preferred Stock Dividends.*
(23)(a) --Consent of Independent Accountants.*
(23)(b) --Consent of Counsel (included in Exhibit 5).*
(24)(a) --Powers of Attorney.*
(24)(b) --Certified copy of a resolution adopted by the Company's Board of Directors
authorizing execution of the registration statement by power of attorney.*
(25)(a) --Statement of Eligibility and Qualification on Form T-1 of The Chase
Manhattan Bank (National Association) to act as Trustee under the Senior
Indenture dated October 1, 1993.**
(25)(b) --Statement of Eligibility and Qualification on Form T-1 of the Subordinated
Trustee to act as Trustee under the Subordinated Indenture.*****
</TABLE>
- ------------
* Filed electronically herewith.
** Incorporated by reference to the Company's Registration Statement on Form
S-3 (Registration No. 33-50537).
*** Incorporated by reference to Exhibit VI of the Company's Form 10-K for the
year ended December 31, 1992.
**** Incorporated by reference to the Company's Registration Statement on Form
S-3 (Registration No. 33-49475).
***** To be filed as an Exhibit to a report of the Company pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934 and incorporated
herein by reference.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement (other than as
provided in the proviso and instructions to Item 512(a) of Regulation S-K)
(i) to include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933; (ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the registration statement; and (iii) to
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described in Item 15 above, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission, such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
by such officer, director or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question of whether or not such indemnification
by it is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that is has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 15th day of December, 1995.
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By: *
------------------------------------
Louis V. Gerstner, Jr.
Chairman of the Board of Directors and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE><CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
*
- ---------------------------------- Chairman of the Board and December 15, 1995
Louis V. Gerstner, Jr. Chief Executive Officer
(Principal Executive Officer)
* Senior Vice President December 15, 1995
- ---------------------------------- and Chief Financial Officer
G. Richard Thoman (Principal Financial Officer)
* Vice President and Controller December 15, 1995
- ---------------------------------- (Principal Accounting Officer)
James M. Alic
- ---------------------------------- Director December 15, 1995
Cathleen Black
* Director December 15, 1995
- ----------------------------------
Harold Brown
* Director December 15, 1995
- ----------------------------------
Fritz Gerber
* Director December 15, 1995
- ----------------------------------
Nannerl O. Keohane
* Director December 15, 1995
- ----------------------------------
Charles F. Knight
* Director December 15, 1995
- ----------------------------------
Lucio A. Noto
* Director December 15, 1995
- ----------------------------------
John B. Slaughter
* Director December 15, 1995
- ----------------------------------
Alex Trotman
* Director December 15, 1995
- ----------------------------------
Lodewijk C. van Wachem
* Director December 15, 1995
- ----------------------------------
Charles M. Vest
*By: /s/ JOHN E. HICKEY
------------------------------
JOHN E. HICKEY
Attorney-in-Fact
</TABLE>
II-4
Exhibit (1)(a)
INTERNATIONAL BUSINESS MACHINES CORPORATION
UNDERWRITING AGREEMENT
New York, New York
To the Representatives named in Schedule I
hereto of the Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
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 (the
"Representatives") are acting as representatives, (1) debt securities of
the Company (the "Debt Securities"); (2) shares of capital stock, par value
$1.25 per share, of the Company (the "Capital Stock"); (3) shares of
preferred stock, par value $.01 per share, of the Company (the "Preferred
Stock"); (4) depositary shares representing entitlement to all rights and
preferences of a fraction of a share of Preferred Stock of a specific
series (the "Depositary Shares"); and/or (5) warrants to purchase Debt
Securities, shares of Capital Stock, shares of Preferred Stock or
Depositary Shares (the "Warrants"). The Debt Securities, Capital Stock,
Preferred Stock, Depositary Shares and/or Warrants may be sold either
separately or as units (the "Units") together with any of the foregoing.
The terms of such sales pursuant to this Agreement are described in
Schedule I hereto. The Debt Securities, Capital Stock, Preferred Stock,
Depositary Shares and/or Warrants to be sold pursuant to this Agreement as
set forth in Schedule I hereto shall be referred to herein as the
"Securities". The Capital Stock and Preferred Stock described in Schedule
I hereto shall collectively be referred to herein as the "Equity
Securities". 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 as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in paragraph
(d) hereof.
<PAGE>
2
(a) If the offering of the Securities is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable
and, if the offering of the Securities is a Non-Delayed Offering (as
so specified), paragraph (ii) below is applicable.
(i) The Company meets the requirements for the 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 (the file number of
which is set forth in Schedule I hereto) on such Form,
including a basic prospectus, for registration under the Act
of the offering and sale of the Securities. The Company may
have filed one or more amendments thereto, and may have used
a Preliminary Final Prospectus, each of which has previously
been furnished to you. Such registration statement, as so
amended, has become effective. The offering of the
Securities is a Delayed Offering and, although the Basic
Prospectus may not include all the information with respect
to the Securities and the offering thereof required by the
Act and the rules thereunder to be included in the Final
Prospectus, the Basic Prospectus is responsive to all the
disclosure requirements of the Act and the rules and
regulations thereunder as of the Effective Date. The
Company will next file with the Commission pursuant to Rules
415, 424(b)(2) or (5) or 434 or a combination thereof a
final supplement to the form of prospectus included in such
registration statement relating to the Securities and the
offering thereof. As filed, such final prospectus
supplement shall include all required information with
respect to the Securities and the offering thereof 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 Basic Prospectus
and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Execution Time, will be included
or made therein. If the Rule 434 Delivery Alternative is
used, the Company will also file the Rule 434 Term Sheet in
accordance with Rule 434. As filed, such Rule 434 Term
Sheet shall contain all the information required by
Rule 434, and except to the extent the Representatives shall
agree in writing to a
<PAGE>
3
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. Upon your request, but
not without your agreement, the Company will also file a
Rule 462(b) Registration Statement in accordance with
Rule 462(b).
(ii) The Company meets the requirements for the use of
Form S-3 under the Act and has filed with the Commission a
registration statement (the file number of which is set
forth in Schedule I hereto) on such Form, including a basic
prospectus, for registration under the Act of the offering
and sale of the Securities. The Company may have filed one
or more amendments thereto, including a Preliminary Final
Prospectus, each of which has previously been furnished to
you. The Company will next file with the Commission either
(x) a final prospectus supplement relating to the Securities
in accordance with Rules 430A and 424(b)(1) or (4) and/or
434, or (y) prior to the effectiveness of such registration
statement, an amendment to such registration statement,
including the form of final prospectus supplement. In the
case of clause (x), the Company has included in such
registration statement, as amended at the Effective Date,
all information (other than Rule 430A Information and
Rule 434 Information) required by the Act and the rules
thereunder to be included in the Final Prospectus with
respect to the Securities and the offering thereof. As
filed, such final prospectus supplement or such amendment
and form of final prospectus supplement shall contain all
Rule 430A Information, together with all other such required
information, with respect to the Securities and the offering
thereof 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
Basic Prospectus and any Preliminary Final Prospectus) as
the Company has advised you, prior to the Execution Time,
will be included or made therein. If the
<PAGE>
4
Rule 434 Delivery Alternative is used, the Company will also
file the Rule 434 Term Sheet in accordance with Rule 434.
As filed, such Rule 434 Term Sheet shall contain all the
information required by Rule 434, 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. Upon your request, but
not without your agreement, the Company will also file a
Rule 462(b) Registration Statement in accordance with
Rule 462(b).
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus and any Rule 434 term sheet is
first filed (if required) in accordance with Rule 424(b) and on the
Closing Date, the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of
the Act and the Securities Exchange Act of 1934 (the "Exchange Act")
(with respect to documents incorporated by reference in the
Registration Statement) and the respective rules thereunder; on the
Effective Date, the Registration Statement did not or will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; on the Effective Date and on the
Closing Date the Indenture, if applicable, did or will comply in all
material respects with the requirements of the Trust Indenture Act and
the rules thereunder; and, on the Effective Date, the Final
Prospectus, if not filed pursuant to Rule 424(b), did not or will not,
or on the date of any filing pursuant to Rule 424(b) or Rule 434 and
on the Closing Date, the Final Prospectus (together with any
supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
-------- -------
Company makes 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 Final Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion
<PAGE>
5
in the Registration Statement or the Final Prospectus (or any
supplement thereto).
(c) If the Securities are to be listed on any securities
exchange, authorization therefor has been given, subject to official
notice of issuance and evidence of satisfactory distribution, or the
Company is filing or has filed a preliminary listing application and
all required supporting documents with respect to the Securities with
such securities exchange and has no reason to believe that the
Securities will not be authorized for listing, subject to official
notice of issuance and evidence of satisfactory distribution.
(d) The terms which follow, when used in this Agreement, shall
have the following meanings:
"Basic Prospectus" shall mean the prospectus referred to in
paragraph (a) above contained in the Registration Statement at the
Effective Date including, in the case of a Non-Delayed Offering, any
Preliminary Final Prospectus.
"Delayed Offering" shall mean an offering of securities pursuant
to Rule 415 which does not commence promptly after the effective date of a
registration statement, with the result that only information required
pursuant to Rule 415 need be included in such registration statement at the
effective date thereof with respect to the securities so offered.
"Effective Date" shall mean each date that the Registration
Statement, any post-effective amendment or amendments thereto or any
Rule 462(b) Registration Statement became or becomes effective and each
date after the date hereof on which a document incorporated by reference in
the Registration Statement is filed.
"Execution Time" shall mean the date and time that this Agreement
is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating
to the Securities that is first filed pursuant to Rule 424(b) and any term
sheet pursuant to Rule 434 after the Execution Time, together with the
Basic Prospectus or, if, in the case of a Non-Delayed Offering, no filing
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities, including the Basic Prospectus,
included in the Registration Statement at the Effective Date. If the
Rule 434 Delivery Alternative is used, such term shall also include the
Basic Prospectus and the Rule 434 Term Sheet, taken together.
<PAGE>
6
"Non-Delayed Offering" shall mean an offering of securities which
is intended to commence promptly after the effective date of a registration
statement, with the result that, pursuant to Rules 415 and 430A, all
information (other than Rule 430A Information) with respect to the
securities so offered must be included in such registration statement at
the effective date thereof.
"Preliminary Final Prospectus" shall mean any preliminary
prospectus supplement to the Basic Prospectus which describes the
Securities and the offering thereof and is used prior to filing of the
Final Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph (a) above, including incorporated documents,
exhibits and financial statements, as amended at the Execution Time (or, if
not effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto or any
Rule 462(b) Registration Statement becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such registration statement
as so amended. Such term shall include any Rule 430A Information and
Rule 434 Information deemed to be included therein at the Effective Date as
provided by Rule 430A and Rule 434, respectively.
"Rule 415", "Rule 424", "Rule 430A", "Rule 434", "Rule 462(b)"
and "Regulation S-K" refer to such rules or regulation 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.
"Rule 434 Delivery Alternative" shall mean the delivery
alternative permitted by Rule 434. "Rule 434 Information" shall mean any
information to be included in a Rule 434 Term Sheet. "Rule 434 Term Sheet"
shall mean the term sheet or abbreviated term sheet delivered by the
Underwriters to investors and filed by the Company with the Commission
pursuant to Rule 434.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the initial Registration Statement (file
number ).
Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Exchange
Act on or before the
<PAGE>
7
Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be; and any reference herein to the terms "amend", "amendment"
or "supplement" with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by
reference.
2. Purchase and Sale. (a) 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 principal amount or
number of shares or Units of Securities set forth opposite such
Underwriter's name in Schedule II hereto, except that, in the case of Debt
Securities, if Schedule I hereto provides for the sale of such Debt
Securities pursuant to delayed delivery arrangements, the respective
principal amount of Securities to be purchased by the Underwriters shall be
as set forth in Schedule II hereto less the respective amount 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".
(b) 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 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 the
Underwriters, on the Closing Date, the percentage set forth in Schedule I
hereto of the principal amount of the Debt Securities for which such
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 enter into Delayed Delivery
Contracts in all cases where such 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 set forth in Schedule I hereto
and the aggregate principle amount of Contract Securities may not exceed
the maximum aggregate principal amount set forth in
<PAGE>
8
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 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
Underwriters' Securities being herein 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 in, or wire transfer or transfers of, (next day)
funds or as otherwise may be agreed as set forth on Schedule I hereto.
Delivery of the Underwriters' Securities shall be made at such location as
the Representatives shall reasonably designate at least one business day in
advance of the Closing Date and payment for the Securities shall be made at
the office specified in Schedule I hereto. Certificates for the
Underwriters' Securities shall be registered in such names and in such
denominations as the Representatives may request not less than three full
business days in advance of the Closing Date.
The Company agrees to have the Underwriters' Securities available
for inspection, checking and packaging by the Representatives in New York,
New York, not later than 1:00 PM on the business day prior to the Closing
Date.
4. Agreements. The Company agrees with the several Underwriters
-----------
that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, to become effective. Prior to the termination
of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or
<PAGE>
9
supplement (including the Final Prospectus or any Preliminary Final
Prospectus) to the Basic Prospectus unless the Company has furnished
you a copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, the Company will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The
Company will promptly advise the Representatives (i) when the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, shall have become effective, (ii) when the
Final Prospectus, and any supplement thereto, shall have been filed
with the Commission pursuant to Rule 424(b), (iii) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (iv)
of any request by the Commission at any time when a prospectus
relating to the Securities is required to be delivered under the Act
for any amendment of the Registration Statement or supplement to the
Final Prospectus or for any additional information, (v) of the
issuance by the Commission at any time when a prospectus relating to
the Securities is required to be delivered under the Act of any stop
order suspending the effectiveness of the Registration Statement or
the institution or threatening of any proceeding for that purpose and
(vi) 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.
(b) At any time when a prospectus relating to the Securities is
required to be delivered under the Act, if any event occurs as a
result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) prepare and
file with the Commission, subject to the second sentence of paragraph
(a) of this Section 4, an amendment or supplement which will correct
such statement or omission or effect such compliance and (ii) supply
any supplemented Prospectus to you in such quantities as you may
reasonably request.
<PAGE>
10
(c) As soon as practicable, but not later than the Availability
Date, the Company will make generally available to its security
holders and to the Representatives an earnings statement or statements
of the Company and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act. For the
purpose of the preceding sentence, "Availability Date" means the 45th
day after the end of the fourth fiscal quarter following the fiscal
quarter that includes the Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(d) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, copies of the Registration
Statement (including exhibits thereto) 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 supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(e) The Company will arrange for the qualification of the
Securities and any Debt Securities, Capital Stock, Preferred Stock,
Warrants or Depositary Shares that may be issuable pursuant to the
exercise, conversion or exchange, as the case may be, of the
Securities offered by the Company, 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 (except that in no event will the Company be required
in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process), will arrange for the
determination of the legality of the Securities for purchase by
institutional investors, and will pay the fee of the National
Association of Securities Dealers, Inc., in connection with its
review, if any, of the offering.
(f) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of Doing Business with
----------------------------------------------------
Cuba, and the Company further agrees that if it commences engaging in
----
business with the government of Cuba or with any person or affiliate
located in Cuba after the date the Registration Statement becomes or
has become effective with the Commission or with the Florida
Department of Banking and Finance (the "Department"), whichever date
is later, or if the information reported in the Prospectus, if any,
concerning
<PAGE>
11
the Company's business with Cuba or with any person or affiliate
located in Cuba changes in any material way, the Company will provide
the Department notice of such business or change, as appropriate, in a
form acceptable to the Department.
(g) The Company also agrees to comply with such other covenants
as may be set forth on Schedule I hereto.
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 and the
Closing Date, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional
conditions:
(a) 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 will become effective not
later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM 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 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened.
(b) (1) The Company shall have furnished to the Representatives
the opinion of the General Counsel or Associate General Counsel of the
Company, dated the Closing Date and to the effect that:
(i) the Company (A) 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 Final Prospectus and (B) is duly qualified to do business as
a foreign corporation and in good standing under the laws of each
jurisdiction within the United States
<PAGE>
12
which requires such qualification wherein it owns or leases material
properties or conducts material business;
(ii) all the outstanding shares of capital stock of the
Company and each of IBM World Trade Corporation, IBM World Trade
Europe/Middle East/Africa Corporation and IBM Credit Corporation
(collectively, the "Subsidiaries") have been duly and validly
authorized and issued and are fully paid and nonassessable, and
all outstanding shares of capital stock of the Subsidiaries are
owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances;
(iii) (A) the Company's authorized equity capitalization is
as set forth in the Final Prospectus; and (B) the holders of
outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe to the
Securities;
(iv) 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 or any of its subsidiaries, of a character
required to be disclosed in the Registration Statement which is
not adequately disclosed in the Final Prospectus, and there is no
franchise, contract or other document of a character required to
be described in the Registration Statement or Final Prospectus,
or to be filed as an exhibit to the Registration Statement, which
is not described or filed as required;
(v) neither the execution and delivery of the Indenture,
the issue and sale of the Securities, nor the consummation of any
other of the transactions contemplated herein or therein nor the
fulfillment of the terms hereof or thereof or of any Delayed
Delivery Contracts will conflict with, result in a breach or
violation of, or constitute a default, under (A) the charter or
by-laws of the Company; (B) 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 (C) any
judgment, order, decree 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;
<PAGE>
13
(vi) there are no contracts or instruments known to such
counsel between the Company and any person granting such person
the right to require the Company to include such securities in
the securities registered pursuant to the Registration Statement;
and no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement;
and
(vii) such other legal opinions with respect to the Securities
as are set forth on Schedule I hereto.
(2) The Company also shall have furnished to the Representatives
the opinion of Cravath, Swaine & Moore, counsel to the Company, dated
the Closing Date, to the effect that:
(i) the Company 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 Final Prospectus;
(ii) (A) the Company's authorized equity capitalization is
as set forth in the Final Prospectus; and (B) the Securities
conform in all material respects to the description thereof
contained in the Final Prospectus;
(iii) in the case of an offering of Debt Securities,
(A) the indenture governing such Debt Securities (the
"Indenture") has been duly authorized, executed and delivered by
the Company; (B) the Indenture has been duly qualified under the
Trust Indenture Act of 1939; (C) the Indenture constitutes a
valid and binding instrument enforceable against the Company in
accordance with its terms (subject to applicable bankruptcy,
reorganization, insolvency, fraudulent transfer, moratorium or
other similar laws affecting creditors' rights generally from
time to time in effect and to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding at law or in equity); (D) the Debt 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 valid and binding
obligations of the Company, be convertible or exchangeable for
other
<PAGE>
14
securities of the Company in accordance with their terms as set
forth in the Final Prospectus, as the case may be, and will be
entitled to the benefits of the Indenture; (E) if the Debt
Securities are convertible or exchangeable into Equity
Securities, the shares of Equity Securities issuable upon such
conversion or exchange will have been duly authorized and
reserved for issuance upon such conversion or exchange and, when
issued upon such conversion or exchange in accordance with the
terms of the Indenture, will be validly issued, fully paid and
nonassessable and will conform to the description thereof
contained in the Final Prospectus; and (F) the issuance of such
shares of Equity Securities upon conversion or exchange will not
be subject to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Company;
(iv) in the case of an offering of Capital Stock, (A) the
shares of Capital Stock being delivered at such Closing Date have
been duly authorized by the Company and, when issued and
delivered and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; and (B) the
issuance of the Capital Stock is not subject to preemptive or
other similar rights arising by operation of law or under the
charter or by-laws of the Company;
(v) in the case of an offering of Preferred Stock, (A) the
shares of Preferred Stock being delivered at such Closing Date
have been duly authorized by the Company and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; (B) the issuance
of the shares of Preferred Stock is not subject to preemptive or
other similar rights arising by operation of law or under the
charter or by-laws of the Company; and (C) the shares of such
Capital Stock or other securities initially issuable upon
conversion or exchange of such shares of Preferred Stock will
have been duly authorized and reserved for issuance upon such
conversion or exchange and, when issued upon such conversion or
exchange in accordance with the terms of the certificate of
designation for such Preferred Stock, will be validly issued,
fully paid and nonassessable and will conform to the description
thereof contained in the Final Prospectus;
(vi) in the case of an offering of Depositary Shares, (A) the
deposit agreement relating to the Securities (the "Deposit
Agreement") has been duly authorized, executed and delivered by
the Company, and,
<PAGE>
15
assuming due authorization, execution and delivery thereof by the
Depositary named therein (the "Depositary"), constitutes a valid
and binding instrument enforceable against the Company in
accordance with its terms (subject to applicable bankruptcy,
reorganization, insolvency, fraudulent transfer, moratorium or
other similar laws affecting creditors' rights generally from
time to time in effect and to general principles of equity,
regardless of whether enforceability is considered in a
proceeding at law or in equity); and (B) assuming payment of the
purchase price by the Underwriters, each Depositary Share
represents the fractional interest set forth in the applicable
Prospectus Supplement in a validly issued, fully paid and
nonassessable share of Preferred Stock; and the Depositary Shares
have been duly authorized by the Company and, when issued under
the Deposit Agreement in accordance with the provisions of the
Deposit Agreement, will be validly issued, and, assuming due
execution and delivery of the depositary receipts relating to the
Securities by the Depositary pursuant to the Deposit agreement,
such Depositary Receipts will entitle the holders thereof to the
benefits provided therein and in the Deposit Agreement;
(vii) in the case of an offering of Warrants, (A) the warrant
agreement relating to the Securities (the "Warrant Agreement")
has been duly authorized, executed and delivered by the Company,
and, assuming due authorization, execution and delivery thereof
by the warrant agent named therein (the "Warrant Agent"),
constitutes a valid and binding instrument enforceable against
the Company in accordance with its terms (subject to applicable
bankruptcy, reorganization, insolvency, fraudulent transfer,
moratorium or other similar laws affecting creditors' rights
generally from time to time in effect and to general principles
of equity, regardless of whether enforceability is considered in
a proceeding at law or in equity); and (B) the Warrants have been
duly authorized by the Company and, when executed and
authenticated in accordance with the provisions of the Warrant
Agreement, and delivered to and paid for by the Underwriters
pursuant to this Agreement, or the purchasers thereof pursuant to
Delayed Delivery Contracts, in the case of any Contract
Securities, will constitute valid and binding obligations of the
Company entitled to the benefits of the Warrant Agreement;
(viii) 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 or any of its subsidiaries, of a character
required to be disclosed in the
<PAGE>
16
Registration Statement which is not adequately disclosed in the
Final Prospectus, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Final Prospectus, or to be filed as an
exhibit to the Registration Statement, which is not described or
filed as required;
(ix) this Agreement and any Delayed Delivery Contracts have
been duly authorized, executed and delivered by the Company;
(x) any Delayed Delivery Contracts are valid and binding
agreements of the Company enforceable in accordance with their
terms (subject to applicable bankruptcy, reorganization,
insolvency, fraudulent transfer, moratorium or other similar laws
affecting creditors' rights generally from time to time in effect
and to general principles of equity, regardless of whether such
enforceability is considered in a proceeding at law or in
equity);
(xi) no consent, approval, authorization or order of 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 or, in
the event an application is made to list the Securities on any
exchange or automated quotation system the Exchange Act, and such
as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities
by the Underwriters and such other United States Federal or
New York approvals (specified in such opinion) as have been
obtained;
(xii) neither the execution and delivery of the Indenture,
the issue and sale of the Securities, nor the consummation of any
other of the transactions contemplated herein or therein nor the
fulfillment of the terms hereof or thereof or of any Delayed
Delivery Contracts will conflict with, result in a breach or
violation of, or constitute a default, under (A) the charter or
by-laws of the Company; (B) 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 (C) any
judgment, order, decree 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; and
<PAGE>
17
(xiii) the Registration Statement has become effective
under the Act; any required filing of the Basic Prospectus, any
Preliminary Final Prospectus and the Final Prospectus, and any
supplements thereto, pursuant to Rule 424(b) or Rule 434 has been
made in the manner and within the time period required by Rule
424(b) or Rule 434; to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement
has been issued, no proceedings for that purpose have been
instituted or threatened.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of New York 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
reasonably 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.
(b) (3) Each such counsel shall also furnish a letter that shall
state that such counsel has no reason to believe that: (i) at the
Effective Date the Registration Statement 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 Final Prospectus, at the date of
such opinion, includes an untrue statement of a material fact or omits
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; and (ii) the Registration Statement and the Final
Prospectus as amended or supplemented, (except the financial
statements 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 opinion), appeared on their face to be appropriately
responsive in all material respects to the requirements of the Act and
the Trust Indenture Act of 1939 and the applicable rules and
regulations thereunder. The letter furnished by the General Counsel
or Associate General Counsel of the Company shall also state that the
documents incorporated by reference in the Final Prospectus as amended
or supplemented (except the financial statements and other financial
information of an accounting or financial nature included therein, as
to which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder.
<PAGE>
18
(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 Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(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 or Treasurer) of the Company,
dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Final Prospectus, any supplement to the Final 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 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 Final 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 Final
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,
<PAGE>
19
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 and any pro forma financial statements of the
Company and its subsidiaries included or incorporated in the
Registration Statement and the Final Prospectus and reported on
by them comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange
Act and the published rules and regulations thereunder;
(ii) on the basis of a reading of the unaudited financial
statements included or incorporated in the Registration Statement
and Final 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 transactions and events
subsequent to the date of the most recent financial statements
incorporated in the Registration Statement and the Final
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 Final
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; or
that 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 Final Prospectus; or
<PAGE>
20
(2) with respect to the period subsequent to the date
of the most recent financial statements incorporated in the
Registration Statement and the Final 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 Final Prospectus, or for the
period from the date of the most recent financial statements
included or incorporated in the Registration Statement and
the Final Prospectus to such specified date there were any
deceases, as compared with the corresponding period in the
preceding year, or the preceding quarter, in total revenue,
gross profit, earnings before income taxes, net earnings or
in total or per share amounts of net earnings applicable to
common stockholders of the Company and its subsidiaries,
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;
(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 Final 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 Final Prospectus or any
of the Company's Quarterly Reports on Form 10-Q incorporated
therein), agrees with the general ledger of the Company and its
subsidiaries, excluding any questions of legal interpretation;
and
(iv) if unaudited pro forma financial statements are included
or incorporated in the Registration Statement or the Final
Prospectus, on the basis of a reading of the unaudited pro forma
financial statements, carrying out certain specified procedures,
inquiries of certain officials of
<PAGE>
21
the Company and the acquired company who have responsibility for
financial and accounting matters, and proving the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing
came to their attention which caused them to believe that the
pro forma financial statements do not comply in form in all
material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X or that the pro forma adjustments
have not been properly applied to the historical amounts in the
compilation of such statements.
References to the Final Prospectus in this paragraph (e) include
any supplements thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement and the
Final 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 reasonable judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement and the Final
Prospectus.
(g) On or after the Execution Time (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities or
preferred stock by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes
of Rule 438(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's
debt securities or preferred stock.
(h) Prior to the Closing Date, the Company shall have furnished
to the Representatives such further legal opinions, information,
certificates and documents as the Representatives may reasonably
request.
(i) 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.
<PAGE>
22
(j) The Company also agrees to comply with such other conditions
as may be set forth on Schedule I hereto.
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
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the
Closing Date by the Representatives. Notice of such 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 through the
Representatives upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of one Underwriter's counsel) approved by
the Representatives 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 the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in
any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (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
<PAGE>
23
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein, and (ii) such indemnity with respect to
any untrue statement or omission of a material fact made in any Preliminary
Final 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 Final
Prospectus (or the Final 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 Final Prospectus was corrected in the Final
Prospectus (or the Final 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 inclusion in the documents referred to in the foregoing
indemnity, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such action or claim. 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, 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 Final Prospectus or the Final Prospectus constitute the
only information furnished in writing by or on behalf of the several
Underwriters for inclusion in the documents referred to in the foregoing
indemnity, 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 failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph
<PAGE>
24
(a) or (b) above unless and to the extent it did not otherwise learn of
such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a)
or (b) above. The indemnifying party shall be entitled to appoint counsel
of the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided,
--------
however, that such counsel shall be satisfactory to the indemnified party.
- -------
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding. An indemnifying party shall
not be liable under this Section 7 to any indemnified party regarding any
settlement or compromise or consent to the entry of any judgement with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or consent is
consented to by such indemnifying party, which consent shall not be
unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party
<PAGE>
25
for any reason, the Company and the Underwriters agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which the Company and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and by the Underwriters from
the offering of the Securities; provided, however, that in no such case
-------- -------
shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for
any amount in excess of the underwriting discount or commission applicable
to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and the Underwriters shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and of the Underwriters in
connection with the statements or omissions which resulted in such Losses
as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from
the offering (before deducting expenses), and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page of
the Final Prospectus. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information
provided by the Company or the Underwriters. The Company and the
Underwriters agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section
7, each person who controls an Underwriter within the meaning of either the
Act or the Exchange Act and each director, officer, employee and agent of
an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each
case to the applicable terms and conditions of this paragraph (d).
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
<PAGE>
26
respective proportions which the amount of Securities set forth opposite
their names in Schedule II hereto bears to the aggregate amount or number
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 or number of Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount or number 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 escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to
make it, in the reasonable judgment of the Representatives, impracticable
or inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Final Prospectus.
10. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements
of the Company or its officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or the Company
or any of the officers, directors 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.
<PAGE>
27
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 One Old Orchard Road,
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 without
reference to principles of conflicts of laws.
<PAGE>
28
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:
------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
By:
-------------------------------
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
<PAGE>
SCHEDULE I
Common Stock
Preferred Stock
Depositary Shares
Warrants
Underwriting Agreement dated
Registration Statement No. 33-
Representative(s):
Designation, Purchase Price and Description:
Designation:
Liquidation preference per share:
Number of shares:
Purchase price per share (include accrued dividends, if any):
Other provisions:
Over-allotment option:
[Subject to the terms and conditions and in reliance upon the
representations and warranties set forth in the Underwriting Agreement, the
Company hereby grants an option to the several Underwriters named in
Schedule II hereto to purchase, severally and not jointly, up to
[ ] additional shares of [ ] (the "[U.S.] Option Securities",
[together with the International Option Securities (as hereinafter
defined]), the "Option Securities") at the same purchase price per share as
the Underwriters shall pay for the Securities. Said option may be
exercised only to cover over-allotments in the sale of the Securities by
the Underwriters. Said option
I-1
<PAGE>
may be exercised in whole or in part at any time (but not more than once)
on or before the th day after the date of the Final Prospectus, upon
written or telegraphic notice by the Representatives to the Company setting
forth the number of shares of [U.S.] Option Securities as to which the
several Underwriters are exercising the option and the Settlement Date, as
defined in the Underwriting Agreement. The number of shares of
[U.S.] Option Securities to be purchased by each Underwriter shall be the
same percentage of the total number of shares of [U.S.] Option Securities
to be purchased by the several Underwriters as such Underwriter is
purchasing of the securities, as set forth in Schedule II hereto, subject
to such adjustments as the Representatives in their absolute discretion
shall make to eliminate any fractional shares.
If the option provided for herein is exercised after the
business day prior to the Closing Date, as defined in the Underwriting
Agreement, the Company will deliver (at the expense of the Company) to the
Representatives, at [ ], New York, New York, on the
date specified by the Representatives (which shall be within three business
days after exercise of said option) (the "Settlement Date"), certificates
for [U.S.] Option Securities in such names and denominations as the
Representatives shall have requested not less than three full business days
in advance of the Settlement Date unless the parties otherwise agree
against payment of the purchase price thereof to or upon the order of the
Company by certified or official bank check or checks payable in, or wire
transfers of, (next day) funds. If settlement for [U.S.] Option Securities
occurs after the Closing Date, the Company will deliver to the
Representatives on the Settlement Date for [U.S.] Option Securities, and
the obligation of the Underwriters to purchase the [U.S.] Option Securities
shall be conditioned upon receipt of, supplemental opinions, certificates
and letters confirming as of such date the opinions, certificates and
letters delivered on the Closing Date pursuant to Section 5 of the
Underwriting Agreement.]
Other provisions of or Amendments to Underwriting Agreement:
[The Company is concurrently entering into an International
Underwriting Agreement dated the date hereof (the "International
Underwriting Agreement") providing for the issue and sale by the Company of
[ ] outside the United States and Canada through arrangements
with certain underwriters outside the United States and Canada (the
"International Underwriters"), for whom [ ] are acting as
representatives (the "International Representatives"), and providing for
the grant to the International Underwriters of an option to purchase from
the Company up to [ ] additional shares of [ ] (the
"International Option Securities"). It is further understood and agreed
that the Underwriters and the
I-2
<PAGE>
International Underwriters have entered into an Agreement dated the date
hereof (the "Agreement between Underwriters and International
Underwriters"), pursuant to which, among other things, the International
Underwriters may purchase from the Underwriters a portion of the Securities
to be sold pursuant to the Underwriting Agreement and the Underwriters may
purchase from the International Underwriters a portion of the Securities to
be sold pursuant to the International Underwriting Agreement.
It is understood that two forms of Preliminary Final Prospectuses
and two forms of Final Prospectuses are to be used in connection with the
offering and sale of the Securities pursuant to the Underwriting Agreement
and International Underwriting Agreement: one form of Preliminary Final
Prospectus and one form of Final Prospectus relating to the Securities,
which are to be offered and sold to United States and Canadian Persons, and
one form of Preliminary Final Prospectus and one form of Final Prospectus
relating to the Securities, which are to be offered and sold to persons
other than United States and Canadian Persons. The two forms of
Preliminary Final Prospectuses and the two forms of Final Prospectuses are
identical except for the outside front cover page, the discussion under the
heading "Underwriting" and the outside back cover page. The form of
Preliminary Final Prospectus, the form of Final Prospectus and the form of
any Rule 434 term sheet relating to the Securities which are to be offered
to U.S. and Canadian Persons, as first filed pursuant to Rule 424(b) or
Rule 434 or, if no filing pursuant to Rule 424(b) is made, such form of
Preliminary Final Prospectus, Final Prospectus and any Rule 434 term sheet
included in the Registration Statement at the Effective Date, is
hereinafter called the "U.S. Prospectus"; such form of Preliminary Final
Prospectus, such form of Final Prospectus and such form of any Rule 434
term sheet relating to the Securities which are to be offered to Persons
other than United States and Canadian Persons, as first filed pursuant to
Rule 424(b) or Rule 434 or, if no filing pursuant to Rule 424(b) is made,
such form of Preliminary Final Prospectus, such form of Final Prospectus
and such form of any Rule 434 terms sheet included in the Registration
Statement at the Effective Date, is hereinafter called the "International
Prospectus"; and the U.S. Prospectus and the International Prospectus are
hereinafter collectively called the "Prospectuses."
Each Underwriter agrees that (i) it is not purchasing any of the
Securities or Option Securities for the account of anyone other than a
United States or Canadian Person, (ii) it has not offered or sold, and will
not offer or sell, directly or indirectly, any of the Securities or Option
Securities or distribute any U.S. Prospectus to any person outside the
United States or Canada, or to anyone other than a United States or
Canadian Person, and (iii) any dealer to whom it may sell any of the
Securities will represent that it is not purchasing for the account of
anyone other than
I-3
<PAGE>
a United States or Canadian Person and agree that it will not offer or
resell, directly or indirectly, any of the Securities or Option Securities
outside the United States or Canada, or to anyone other than a United
States or Canadian Person or to any other dealer who does not so represent
and agree; provided, however, that the foregoing shall not restrict
-------- -------
(a) purchases and sales between the Underwriters on the one hand and the
International Underwriters on the other hand pursuant to the Agreement
between Underwriters and International Underwriters, (b) stabilization
transactions contemplated under the Agreement between Underwriters and
International Underwriters, conducted through [ ] as part of
the distribution of the Securities or Option Securities, and (c) sales to
or through (or distributions of U.S. Prospectuses or U.S. Preliminary
Prospectuses to) United States or Canadian Persons who are investment
advisors, or who otherwise exercise investment discretion, and who are
purchasing for the account of anyone other than a United States or Canadian
Person.
The agreements of the Underwriters and International Underwriters
set forth above shall terminate upon the earlier of the following events:
(i) a mutual agreement of the Representatives and the
International Representatives to terminate the selling
restrictions set forth above and in Schedule I of the
International Underwriting Agreement; or
(ii) the expiration of a period of 30 days after the Closing
Date, unless (A) the Representatives shall have given notice
to the Company and the International Representatives that
the distribution of the Securities by the Underwriters has
not yet been completed or (B) the International
Representatives shall have given notice to the Company and
the Underwriters that the distribution of the International
Securities by the International Underwriters has not yet
been completed. If such notice by the Representatives or
the International Representatives is given, the agreements
set forth above shall survive until the earlier of (1) the
event referred to in clause (i) above or (2) the expiration
of an additional period of 30 days from the date of any such
notice].
I-4
<PAGE>
Additional Covenants Pursuant to Section 4:
[Until the [ ], the Company will
not, without the consent of the Representatives, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any securities issued or guaranteed by the
Company (other than the Securities).]
[The Company will arrange for the listing of the Equity
Securities upon notice of issuance on [designate any national
securities exchange or automated quotation system].]
Additional Covenants Pursuant to Section 5:
Supplemental matters to be covered by the opinion of Cravath, Swaine &
Moore and/or the General Counsel or Associate General Counsel of the
Company, to be delivered pursuant to Section 5(b):
Modification of items to be covered by the letter from Price Waterhouse LLP
delivered pursuant to Section 5(e) at the Execution Time:
Section 5(h) provisions, if any:
Deposit Agreement: Terms and Conditions
Warrant Agreement: Terms and Conditions
Purchased Securities Closing Date and Time:
Method of Payment of Underwriters' Securities:
Delayed Delivery Arrangements:
Fee:
Minimum principal amount of each contract:
Maximum aggregate principal amount of all contracts:
Convertibility:
I-5
<PAGE>
Exchangeability into Debt Securities:
Closing Date and Time:
I-6
<PAGE>
SCHEDULE I
Debt Securities
---------------
Underwriting Agreement dated
Registration Statement No. 33-
Representatives:
Title of Securities:
Principal Amount:
Interest Rate:
Purchase Price:
Offering Price:
Interest Payment Dates:
Subordination Provisions:
Optional Redemption:
Sinking Fund Provisions:
Delayed Delivery:
Closing Date and Time:
Method of Payment of Underwriters' Securities:
I-7
<PAGE>
Other provisions of or Amendments to
Underwriting Agreement:
Additional Covenants Pursuant to
Section 4:
[Until [ ], the Company will not, without
the consent of the Representatives, offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce the offering
of, any securities issued or guaranteed by the Company (other than the
Securities).]
Additional Covenants
Pursuant to Section 5:
[At or prior to the Closing Date, the Indenture dated as of the
Closing Date, between the Company and [ ], as Trustee, in
form and substance satisfactory to the Underwriters, shall have been
executed and delivered by the parties thereto and shall be in full force
and effect.]
I-8
<PAGE>
Units
Title and principal amount of Debt Securities or title and number of shares
of Common Stock, Preferred Stock, Warrants or Depositary Shares in one
Unit:
Purchase Price and currency:
Section 4(g) Listing upon notice of issuance on any national securities
exchange or automated quotation system:
Detachable Date:
Overallotment option:
Other provisions:
Section 5(h) provisions, if any:
Delayed Delivery:
I-9
<PAGE>
[None]
[Underwriters' commission shall be __% of the principal amount of
Designated Securities for which Delayed Delivery Contracts have been
entered into and the check given in payment of such commission shall be
drawn to the order of _____________]
[Maximum aggregate principal amount of Designated Securities to be offered
and sold pursuant to Delayed Delivery Contracts: [$]_______________]
[Minimum principal amount of each Delayed Delivery Contract:
[$]______________]
I-10
<PAGE>
SCHEDULE II
Amount
Underwriter To Be Purchased
- ----------- ----------------
<PAGE>
SCHEDULE III
Delayed Delivery Contract
[Date]
[Insert name and address
of lead Representative]
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from International
Business Machines Corporation (the "Company"), and the Company agrees to
sell to the undersigned, on , 19 , (the "Delivery Date"),
principal amount of the Company's (the
"Securities") offered by the Company's Prospectus dated , 199 ,
and related Prospectus Supplement dated , 199 , receipt of a copy
of which is hereby acknowledged, at a [purchase price of % of the]
[principal amount] [thereof, plus] [accrued interest] [amortization of
original issue discount], if any, thereon from , 199 , 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 AM, New York City time, 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 or number 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
III-1
<PAGE>
III-2
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 or number of Securities as is to be
sold to them pursuant to the Underwriting Agreement referred to in the
Prospectus and Prospectus Supplement 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.
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
III-2
<PAGE>
III-3
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 of Officer)
-------------------------------
(Address)
Accepted:
International Business Machines Corporation,
By
-------------------------------
Name:
Title:
III-3
Exhibit (1)(b)
$[ ]
International Business Machines Corporation
-------------------------------------------
U.S. Medium-Term Notes
----------------------
AGENCY AGREEMENT
----------------
, 199
[Agents' Addresses]
Dear Sirs:
1. Introduction. International Business Machines Corporation, a
-------------
New York corporation (the "Issuer"), confirms its agreement with each of
you (individually an "Agent" and collectively the "Agents") with respect to
the issue and sale from time to time by the Issuer on or after the date
hereof of up to $[ ] aggregate principal amount of its Medium-
Term Securities (or for Medium-Term Securities denominated in currencies or
currency units other than U.S. dollars, the equivalent thereof based on the
prevailing exchange rates at the respective times such Medium-Term
Securities are first offered) (the "Securities") issued under Article Three
of the Indenture, dated as of October 1, 1993 (the "Indenture"), between
the Issuer and The Chase Manhattan Bank (National Association), as trustee
(the "Trustee"), as supplemented by the First Supplemental Indenture
thereto dated as of December 15, 1995. The Securities will be issued, and
the terms thereof estab-
<PAGE>
2
lished, from time to time by the Issuer in accordance with the Indenture and
the Procedures (as defined in Section 3(d) hereof).
2. Representations and Warranties of the Issuer. The Issuer
---------------------------------------------
represents and warrants to, and agrees with, each Agent as follows:
(a) Registration statements of the Issuer (Nos. 33- and 33-
50537), relating to securities of the Issuer (collectively the
"Registered Securities"), including the Securities, have been filed
with the Securities and Exchange Commission (the "Commission") and
have become effective (such registration statements, as amended as of
the Closing Date (as defined in Section 3(e) hereof), including all
material incorporated by reference therein, being hereinafter
collectively referred to as the "Registration Statement", and the
prospectus dated , 1996, a form of which is [included in
Registration Statement No. 33- ][filed with the Commission
pursuant to Rule 424(b)(2)], as supplemented as of the Closing Date,
including all material incorporated by reference therein, being
hereinafter referred to as the "Prospectus"). Any reference in this
Agreement to amending or supplementing the Prospectus shall be deemed
to include the filing of materials incorporated by reference in the
Prospectus after the Closing Date and any reference in this Agreement
to any amendment or supplement to the Prospectus shall be deemed to
include any such materials incorporated by reference in the Prospectus
after the Closing Date.
(b) On the effective date of each registration statement
included in the definition of Registration Statement, such
registration statement conformed, and on the Closing Date the
Prospectus as then amended or supplemented will conform, in all
respects to the requirements of the Securities Act of 1933 (the
"Act"), the Securities Exchange Act of 1934 (the "Exchange Act"), the
Trust Indenture Act of 1939 (the "Trust Indenture Act") and the rules
and regulations of the Commission thereunder (the "Rules and
Regulations"), and on its effective date each registration statement
did not, and such Prospectus will not, include any untrue statement of
a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading, except that the foregoing does not apply to
<PAGE>
3
statements in or omissions from any of such documents based upon
written information furnished to the Issuer by any Agent specifically
for use therein.
3. Appointment as Agent; Solicitations as Agent. (a) Subject
---------------------------------------------
to the terms and conditions stated herein, the Issuer hereby appoints each
of the Agents an agent of the Issuer for the purpose of soliciting or
receiving offers to purchase the Securities from the Issuer by others.
Nothing contained in this Agreement shall be construed to prevent the
Issuer from selling at any time to any person any Registered Securities,
including the Securities, directly on its own behalf or in a firm
commitment underwriting pursuant to an underwriting agreement that does not
provide for a continuous offering of such Securities. Each Agent agrees to
use its reasonable efforts to solicit purchases of the Securities on the
terms and subject to the conditions set forth herein and in the Procedures
(as defined below).
(b) On the basis of the representations and warranties contained
herein, but subject to the terms and conditions herein set forth, each
Agent agrees, as agent of the Issuer, to solicit offers to purchase
the Securities upon the terms and conditions set forth in the
Prospectus, as from time to time amended or supplemented.
Upon receipt of notice from the Issuer as contemplated by
Section 4(b) hereof, the Agents shall suspend solicitation of offers
to purchase the Securities until such time as the Issuer shall have
furnished them with an amendment or supplement to the Registration
Statement or the Prospectus, as the case may be, contemplated by
Section 4(b) and shall have advised the Agents that such solicitation
may be resumed.
The Issuer reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase the Securities commencing at any
time for any period of time or permanently. Upon receipt of notice
from the Issuer, the Agents will forthwith suspend solicitation of
offers to purchase the Securities from the Issuer until such time as
the Issuer has advised the Agents that such solicitation may be
resumed.
Unless otherwise mutually agreed upon between the Issuer and the
Agent soliciting such offer, the Agents are authorized to solicit
offers to purchase Securities
<PAGE>
4
only in fully registered form in denominations of $1,000 or any
multiple thereof. The authorized denominations of Securities not
denominated in U.S. dollars will be determined by the Issuer at the
time of sale. Each Agent shall communicate to the Issuer, orally or
in writing, each reasonable offer to purchase the Securities received
by it as Agent. The Issuer shall have the sole right to accept offers
to purchase the Securities and may reject any such offer, in whole or
in part. Each Agent shall have the right, in its discretion
reasonably exercised, without notice to the Issuer, to reject any
offer to purchase the Securities received by it, in whole or in part,
and any such rejection shall not be deemed a breach of its agreement
contained herein.
No Security which the Issuer has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or
sold, by the Issuer until such Security shall have been delivered to
the purchaser thereof against payment by such purchaser.
(c) At the time of delivery of, and payment for, any Securities
sold by the Issuer as a result of a solicitation made by, or offer to
purchase received by, an Agent, the Issuer agrees to pay such Agent a
commission in accordance with the schedule set forth in Exhibit A
hereto, unless otherwise agreed.
(d) Administrative procedures respecting the sale of Securities
(the "Procedures") shall be agreed upon from time to time by the
Agents and the Issuer. The initial Procedures, which are set forth in
Exhibit B hereto, shall remain in effect until changed by agreement
among the Issuer and the Agents. Each Agent and the Issuer agree to
perform the respective duties and obligations specifically provided to
be performed by each of them herein and in the Procedures. The Issuer
will furnish to the Trustee a copy of the Procedures as from time to
time in effect.
(e) The documents required to be delivered by Section 5 hereof
shall be delivered at the offices of Cravath, Swaine & Moore, 825
Eighth Avenue, New York, New York, not later than 10:00 A.M., New York
City time, on the date of this Agreement or at such other place, and
at such later time and date as may be
<PAGE>
5
mutually agreed by the Issuer and the Agents, such time and date being
herein called the "Closing Date".
4. Certain Agreements of the Issuer. The Issuer agrees with the
---------------------------------
Agents that, in connection with each offering of Securities,
(a) The Issuer will advise each Agent promptly of any proposal
to amend or supplement the Registration Statement or the Prospectus
(other than an amendment or supplement (i) providing solely for a
change in the terms of the Securities, (ii) by means of the filing of
materials incorporated by reference in the Prospectus, (iii) relating
to an offering by the Issuer of Registered Securities other than the
Securities or (iv) that is a pricing amendment or supplement relating
to Securities the purchase of which was not solicited by any Agent)
and will afford the Agents a reasonable opportunity to comment on any
such proposed amendment or supplement; and the Issuer will also advise
each Agent of the filing of any such amendment or supplement and of
the institution by the Commission of any stop order proceedings in
respect of the Registration Statement or of any part thereof and will
use its best efforts to prevent the issuance of any such stop order
and to obtain as soon as possible its lifting, if issued.
(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 an 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 when such Prospectus
is delivered, not misleading, or if it is necessary at any time to
amend the Registration Statement or the Prospectus to comply with the
Act, the Exchange Act or the Rules and Regulations (other than as
contemplated in the parenthetical clause of Section 4(a) hereof), the
Issuer will promptly notify each Agent to suspend solicitation of
offers to purchase the Securities; and if the Issuer shall decide so
to amend or supplement the Registration Statement or the Prospectus,
it will promptly advise each Agent by telephone (with confirmation in
writing) and will promptly prepare and file with the Commission an
amendment or supplement which will correct such
<PAGE>
6
statement or omission or an amendment which will effect such
compliance. Notwithstanding the foregoing, if, at the time of any
notification to suspend solicitations, any Agent shall own any of the
Securities with the intention of reselling them as contemplated by
Section 11 hereof, or the Issuer has accepted an offer to purchase
Securities but the related settlement has not occurred, the Issuer,
subject to the provisions of subsection (a) of this Section, will
promptly prepare and file with the Commission an amendment or
supplement which will correct such statement or omission or an
amendment which will effect such compliance.
(c) The Issuer, during the period when a prospectus relating to
the Securities is required to be delivered under the Act, will file
promptly all documents required to be filed with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act. In
addition, the Issuer will promptly furnish each Agent with copies of
all press releases or announcements to the general public. The Issuer
will also immediately notify each Agent of any downgrading in the
rating of the Securities or any other debt securities of the Issuer,
or any proposal to downgrade the rating of the Securities or any other
debt securities of the Issuer, by any "nationally recognized statis-
tical rating organization" (as defined for purposes of Rule 436(g)
under the Act), as soon as the Issuer learns of such downgrading or
proposal to downgrade.
(d) The Issuer will furnish to each Agent copies of the
Prospectus and all amendments and supplements thereto, and all
amendments to the Registration Statement after the date hereof (other
than an amendment or supplement (i) relating to an offering by the
Issuer of Registered Securities other than the Securities or (ii) that
solely specifies the terms of the Securities the purchase of which was
not solicited by any Agent), in each case as soon as available and in
such quantities as are reasonably requested.
(e) The Issuer will arrange for the qualification of the
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Agents
designate and will continue such qualifications in effect so long as
required for the distribution of the Securities.
<PAGE>
7
(f) So long as any Securities are outstanding, the Issuer will
furnish to the Agents, (i) as soon as practicable after the end of
each fiscal year, a copy of its annual report to stockholders for such
year, (ii) as soon as available, a copy of each report or definitive
proxy statement of the Issuer, if any, filed with the Commission under
the Exchange Act or mailed to stockholders, and (iii) from time to
time, such other information concerning the Issuer as the Agents may
reasonably request.
(g) The Issuer will pay all expenses incident to the performance
of its obligations under this Agreement and will reimburse each Agent
for any expenses (including fees and disbursements of counsel)
incurred by it in connection with qualification of the Securities for
sale and determination of their eligibility for investment under the
laws of such jurisdictions as such Agent may designate and the
printing of memoranda relating thereto, for any fees charged by
investment rating agencies for the rating of the Securities, for
expenses incurred in distributing the Prospectus and all supplements
thereto, any preliminary prospectuses and any preliminary prospectus
supplements to each Agent and for the reasonable fees and
disbursements of counsel to the Agents.
(h) The Issuer confirms as of the date hereof, and each
acceptance by the Issuer of an offer to purchase Securities will be
deemed an affirmation, that the Issuer is in compliance with all
provisions of Section 1 of the Laws of Florida, Chapter 92-198, An Act
------
Relating to Disclosure of Doing Business with Cuba, and the Issuer
--------------------------------------------------
further agrees that if it commences engaging in business with the
government of Cuba or with any person or affiliate located in Cuba
after the date the Registration Statement becomes effective with the
Commission or with the Florida Department of Banking and Finance (the
"Department"), whichever date is later, or if the information reported
in the Prospectus, if any, concerning the Issuer's business with Cuba
or with any person or affiliate located in Cuba changes in any
material way, the Issuer will provide the Department notice of such
business or change, as appropriate, in a form acceptable to the
Department.
<PAGE>
8
5. Conditions of Obligations. The obligation of each Agent, as
--------------------------
agent of the Issuer, under this Agreement at any time to solicit offers to
purchase the Securities is subject to the accuracy, on the date hereof, on
the Closing Date, on the date of each such solicitation, and at each of the
times of acceptance and of delivery referred to in Section 6(a) hereof and
at each Representation Date (as defined in Section 6(b)), of the
representations and warranties of the Issuer herein, to the accuracy, on
each such date, of the statements of the Issuer's officers in any
certificates made pursuant to the provisions hereof, to the performance, on
or prior to each such date, by the Issuer of its obligations hereunder, and
to each of the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the
Registration Statement or of any part thereof shall have been issued
and no proceedings for that purpose shall have been instituted or, to
the knowledge of the Issuer or any Agent, shall be contemplated by the
Commission.
(b) The Prospectus, as amended or supplemented as of the Closing
Date, the date of such solicitation or any Representation Date, shall
not contain any untrue statement of fact which, in the opinion of any
Agent, is material or omits to state a fact which, in the opinion of
any Agent, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) There shall not have occurred between each trade and
settlement date (i) any change, or any development involving a
prospective change, in or affecting particularly the business or
properties of the Issuer or its subsidiaries which, in the judgment of
such Agent, materially impairs the investment quality of the
Securities; (ii) any downgrading in the rating of the Issuer's debt
securities or public announcement that such debt securities are under
surveillance or review, with possible negative implications, by any
"nationally recognized statistical rating organization" (as defined
for purposes of Rule 436(g) under the Act); (iii) any suspension or
limitation of trading in securities generally on the New York Stock
Exchange, or any setting of minimum prices for trading on such
exchange, or any suspension of trading of any securities of the Issuer
on any
<PAGE>
9
exchange or in the over-the-counter market; (iv) any banking
moratorium declared by Federal or New York authorities; or (v) any
outbreak or escalation of major hostilities in which the United States
is involved, any declaration of war by Congress or any other
substantial national or international calamity or emergency if, in the
judgment of such Agent, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with solicitations of purchases of, or sales of,
Securities.
(d) At the Closing Date, the Agents shall have received:
(i) the opinion of the General Counsel or Associate General
Counsel of the Issuer, dated the Closing Date, to the effect
that:
(A) the Issuer (x) 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 (y) 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 qualification wherein it owns or leases
material properties or conducts material business where such
failure so to qualify may have a material adverse effect on
the financial condition, earnings, business or properties of
the Issuer;
(B) 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 Issuer 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
<PAGE>
10
exhibit, which is not described or filed as required; and
the statements in the Prospectus describing the terms of the
Securities and the provisions of the Indenture fairly
summarize the matters therein described; and
(C) none of the issue and sale of the Securities, the
consummation of any other of the transactions contemplated
herein or the fulfillment of the terms hereof will conflict
with, result in a breach or violation of, or constitute a
default under, (x) the charter or by-laws of the Issuer;
(y) the terms of any indenture or other agreement or
instrument known to such counsel and to which the Issuer or
any of its subsidiaries is a party or bound, or (z) any
judgment, order, decree or regulation known to such counsel
to be applicable to the Issuer or any of its subsidiaries of
any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the
Issuer or any of its subsidiaries.
(ii) the opinion of Cravath, Swaine & Moore, counsel for the
Issuer, dated the Closing Date, to the effect that:
(A) the Issuer 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;
(B) the authorized Securities conform in all material
respects to the description thereof contained in the
Prospectus;
(C) the Indenture has been duly authorized, executed
and delivered by the Issuer, has been duly qualified under
the Trust Indenture Act, and constitutes a valid and binding
instrument enforceable against the Issuer in accordance with
its terms (subject to applicable bankruptcy, reorganization,
insolvency, fraudulent transfer, moratorium or other similar
laws affecting creditors'
<PAGE>
11
rights generally from time to time in effect and 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 by
resolutions of the Board of Directors of the Issuer for
issuance during 1996, subject to the establishment of
certain terms of the Securities by officers of the Issuer
authorized by such resolutions to establish such terms, and,
when the terms of any such Security have been established as
provided in such resolutions and in the Indenture and such
Security has been executed and authenticated in accordance
with the provisions of the Indenture and delivered to and
paid for by the purchaser thereof in accordance with the
terms of this Agreement, each such Security, assuming it
does not violate any applicable law then binding on the
Issuer, will constitute a valid and binding obligation of
the Issuer entitled to the benefits of the Indenture;
(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 Issuer 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 the 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, and, to the
knowledge of such counsel, 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 threatened;
<PAGE>
12
(F) this Agreement has been duly authorized, executed
and delivered by the Issuer;
(G) no consent, approval, authorization or order of any
United States Federal or New York governmental agency or
regulatory body is required for the consummation of the
transactions contemplated herein, 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
issue and sale 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, the
consummation of any other of the transactions herein
contemplated or the fulfillment of the terms hereof will
conflict with, result in a breach or violation of, or
constitute a default under, (x) the charter or by-laws of
the Issuer or (y) any judgment, order, decree or regulation
known to such counsel to be applicable to the Issuer or any
of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator
having jurisdiction over the Issuer or any of its
subsidiaries.
(iii) each such counsel shall also furnish
letter that shall state that such counsel has no reason to believe
that: (i) at the Effective Date the Registration Statement 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, at the date of such
opinion, includes an untrue statement of a material fact or omits 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; and (ii) the Registration Statement and the Prospectus
as amended or supplemented, (except the financial statements and other
information of an accounting or financial nature included therein, and
the Statement of Eligibility (Form T-1) included as an
<PAGE>
13
exhibit to the Registration Statement, as to which such counsel
need express no opinion), appeared on their face to be
appropriately responsive in all material respects to the
requirements of the Act and the Trust Indenture Act and the
applicable rules and regulations thereunder. The letter
furnished by the General Counsel or Associate General Counsel of
the Company shall also state that the documents incorporated by
reference in the Prospectus as amended or supplemented (except
the financial statements and other financial information of an
accounting or financial nature included therein, as to which such
counsel need express no opinion), when they became effective or
were filed with the Commission, as the case may be, complied as
to form in all material respects with the requirements of the Act
or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder.
(e) At the Closing Date, the Agents shall have received a
certificate, dated the Closing Date, of the Chief Executive Officer or
any Vice President and the Treasurer, any Assistant Treasurer, or any
principal financial or accounting officer of the Issuer in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that (i) the representations and warranties
of the Issuer in this Agreement are true and correct, (ii) the Issuer
has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied hereunder at or prior to the Closing
Date, (iii) no stop order suspending the effectiveness of the
Registration Statement or of any part thereof has been issued and no
proceedings for that purpose have been instituted or are contemplated
by the Commission, and (iv) subsequent to the date of the most recent
financial statements in the Prospectus, there has been no material
adverse change in the financial position or results of operations of
the Issuer and its subsidiaries, except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(f) At each Representation Date referred to in Section 6(d), the
Agents shall have received a letter, dated such date, of Price
Waterhouse LLP ("Price Waterhouse"), confirming that they are
independent
<PAGE>
14
public 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 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 related 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 Prospectus and of the latest unaudited financial statements
made available by the Issuer 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 Board of Directors of the Issuer and the Pricing
Committee appointed by the Board of Directors of the Issuer, if
any; and inquiries of certain officials of the Issuer who have
responsibility for financial and accounting matters as to trans-
actions and events subsequent to the date of the most recent
financial statements included or incorporated in the Registration
Statement and the Prospectus, nothing came to their attention
that caused them to believe that:
(A) any unaudited financial statements included or
incorporated in the Registration Statement and 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
<PAGE>
15
included or incorporated in quarterly reports on Form 10-Q
under the Exchange Act; or said unaudited financial
statements are not fairly presented (except as permitted by
Form 10-Q) in conformity with generally accepted accounting
principles applied on a basis substantially consistent with
that of the audited financial statements included or
incorporated in the Registration Statement and Prospectus;
or
(B) any unaudited capsule information included or
incorporated in the Registration Statement and Prospectus
does not agree with the amounts set forth in the unaudited
consolidated financial statements from which it was derived
or was not determined on a basis substantially consistent
with that of the audited financial statements included or
incorporated in the Registration Statement and Prospectus;
and
(iii) they have performed certain other procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Issuer) set forth in the
Registration Statement and the Prospectus, including the
information included or incorporated in Items 1 and 7 of the
Issuer's Annual Report on Form 10-K incorporated therein or in
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" included or incorporated in any of the
Issuer's Quarterly Reports on Form 10-Q incorporated therein,
agrees with the accounting records of the Issuer and its
subsidiaries, excluding any questions of legal interpretation.
References to the Registration Statement and the Prospectus in
this subsection (f) are to such documents as amended and supplemented
at the date of the letter.
(g) The Agents shall have received from Davis Polk & Wardwell,
counsel for the Agents, such opinion or opinions, dated the Closing
Date, with respect to the incorporation of the Issuer, the validity of
the
<PAGE>
16
Securities, the Registration Statement, the Prospectus and other
related matters as they may require, and the Issuer shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
The obligation of each Agent, as agent of the Issuer, under this
Agreement to solicit offers to purchase Securities at any time after
January 1 of each year, commencing January 1, 1997, is also subject to the
delivery to the Agents before that date of an opinion of Cravath, Swaine &
Moore to the effect of sub-paragraph (d)(ii)(C) above with respect to the
Securities to be issued during such year and such other documents and
certificates (including an opinion of Davis Polk & Wardwell to the effect
of sub-paragraph (g) above) as the Agents may reasonably request before
that date and the Issuer shall have furnished to Davis Polk & Warkwell such
documents as they may reasonably request before that date for the purpose
of enabling them to render such opinion.
The Issuer will furnish the Agents with such conformed copies of
such opinions, certificates, letters and documents as they reasonably
request.
6. Additional Covenants of the Issuer. The Issuer agrees that:
-----------------------------------
(a) Each acceptance by the Issuer of an offer for the purchase
of Securities solicited by any Agent pursuant hereto shall be deemed
to be an affirmation that its representations and warranties contained
in this Agreement are true and correct at the time of such acceptance
and a covenant that such representations and warranties will be true
and correct at the time of delivery to the purchaser of the Securities
relating to such acceptance as though made at and as of each such
time, it being understood that such representations and warranties
shall relate to the Prospectus as amended or supplemented at each such
time. Each such acceptance by the Issuer of an offer for the purchase
of Securities shall be deemed to constitute an additional
representation, warranty and agreement by the Issuer that, as of the
settlement date for the sale of such Securities, after giving effect
to the issuance of such Securities, of any other Securities to be
issued on or prior to such settlement date and of any other Registered
Securities to be issued and sold by the Issuer on
<PAGE>
17
or prior to such settlement date, the aggregate amount of Registered
Securities (including any Securities) which have been issued and sold
by the Issuer will not exceed the amount of Registered Securities
registered pursuant to the Registration Statement.
(b) Each time that the Registration Statement or the Prospectus
shall be amended or supplemented (other than by an amendment or
supplement (i) that relates to an offering by the Issuer of Registered
Securities other than the Securities or (ii) that solely specifies the
terms of the Securities) (each such time being herein referred to as a
"Representation Date"), the Issuer shall, concurrently with such
amendment or supplement, furnish the Agents with a certificate, dated
the date of delivery thereof, of the Chief Executive Officer or any
Vice President and the Treasurer, any Assistant Treasurer, or any
principal financial or accounting officer of the Issuer, in form
satisfactory to the Agents, to the effect that the statements
contained in the certificate covering the matters set forth in
Section 5(e) hereof which was last furnished to the Agents are true
and correct at the time of such amendment or supplement as though made
at and as of such time (except that such statements shall be deemed to
relate to the Registration Statement and the Prospectus as amended or
supplemented at such time and except that the statements contained in
the certificate covering the matters set forth in clause (ii) of
Section 5(e) shall be deemed to relate to the time of delivery of such
certificate) or, in lieu of such certificate, a certificate of the
same tenor as the certificate referred to in Section 5(e), modified as
necessary to relate to the Registration Statement and the Prospectus
as amended or supplemented at the time of delivery of such certificate
and, in the case of the matters set forth in clause (ii) of Sec-
tion 5(e), to the time of delivery of such certificate; provided,
--------
however, that the Issuer shall deliver such a certificate with respect
-------
to a Representation Date arising from the incorporation by reference
into the Prospectus of a quarterly report on Form 10-Q only upon the
reasonable request of the Agents.
(c) At each Representation Date, the Issuer shall, if so
requested by the Agents, concurrently furnish the Agents with a
written opinion or opinions, dated the date of such Representation
Date, of inside
<PAGE>
18
counsel for the Issuer or, if so specified by the Agents and solely in
connection with an amendment or supplement setting forth or incorpo-
rating by reference financial statements or other information included
in the Issuer's Annual Reports on Form 10-K, of Cravath, Swaine &
Moore, in form satisfactory to the Agents, to the effect set forth in
Section 5(d) hereof, but modified, as necessary, to relate to the
Registration Statement and the Prospectus as amended or supplemented
at such Representation Date; provided, however, that in lieu of such
-------- -------
opinion or opinions, counsel may furnish the Agents with a letter or
letters to the effect that the Agents may rely on a prior opinion
delivered under Section 5(d) or this Section 6(c) to the same extent
as if it were dated the date of such letter (except that statements in
such prior opinion shall be deemed to relate to the Registration
Statement and the Prospectus as amended or supplemented at such
Representation Date).
(d) At each Representation Date on which the Registration
Statement or the Prospectus shall be amended or supplemented to
include additional financial information as a result of the filing of
the Issuer's Annual Report on Form 10-K and, upon the request of the
Agents, at any other such Representation Date, the Issuer shall cause
Price Waterhouse concurrently to furnish the Agents with a letter,
addressed jointly to the Issuer and the Agents and dated the date of
such Representation Date, in form and substance satisfactory to the
Agents, to the effect set forth in Section 5(f) hereof but modified to
relate to the Registration Statement and the Prospectus as amended or
supplemented at such Representation Date, with such changes as may be
necessary to reflect changes in the financial statements and other
information derived from the accounting records of the Issuer;
provided, however, that if the Registration Statement or the
-------- -------
Prospectus is amended or supplemented solely to include financial
information as of and for a fiscal quarter, Price Waterhouse may limit
the scope of such letter to the audited financial statements included
in such amendment or supplement unless there is contained therein any
other accounting, financial or statistical information that, in the
reasonable judgment of the Agents, should be covered by such letter,
in which event such letter shall also cover such other information and
procedures as shall be agreed upon by the Agents.
<PAGE>
19
(e) The Issuer agrees that any obligation of a person who has
agreed to purchase Securities as the result of solicitation by any
Agent pursuant hereto to make payment for and take delivery of such
Securities shall be subject to (i) the accuracy, on the related
settlement date fixed pursuant to the Procedures, of the Issuer's
representation and warranty deemed to be made to the Agents pursuant
to the last sentence of subsection (a) of this Section 6, and (ii) the
satisfaction, on such settlement date, of each of the conditions set
forth in Sections 5(a), (b) and (c), it being understood that under no
circumstance shall any Agent have any duty or obligation to exercise
the judgment permitted under Section 5(b) or (c) on behalf of any such
person.
7. Indemnification and Contribution. (a) The Issuer agrees to
---------------------------------
indemnify and hold harmless each Agent and each person who controls such
Agent 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 relating to the Registered Securities as originally
filed or in any amendment thereto, or in any preliminary prospectus or the
Prospectus, 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 Agent for any legal or other expenses reasonably incurred by
such Agent in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that (i) the Issuer
-------- -------
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 an untrue
statement or alleged untrue statement or omission or alleged omission made
in any of such documents in reliance upon and in conformity with written
information furnished to the Issuer by any Agent specifically for use in
connection with the preparation thereof and (ii) such indemnity with
respect to any preliminary prospectus or the Prospectus shall not inure to
the benefit of any Agent (or any person controlling such Agent) through
which the person asserting any such
<PAGE>
20
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 so amended or supplemented), excluding documents
incorporated therein by reference, at or prior to the earlier of the
confirmation of the sale of such Securities or the delivery of the Secur-
ities 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 any
preliminary prospectus or the Prospectus was corrected in the Prospectus
(or the Prospectus as amended or 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 Issuer may otherwise have.
(b) Each Agent agrees to indemnify and hold harmless the Issuer,
each of its directors, each of its officers who signed the Registration
Statement or any amendment thereto, and each person who controls the Issuer
within the meaning of either the Act or the Exchange Act, to the same
extent as the foregoing indemnity from the Issuer to such Agent, but only
with reference to written information relating to such Agent furnished to
the Issuer by such Agent 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 such Agent may otherwise have.
(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 participate therein, and to the extent that it may elect by
written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense
thereof, with counsel satisfactory to such indemnified party; 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
<PAGE>
21
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 assert such legal
defenses and to otherwise participate in the defense of 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
assume the defense of 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
connection with the assertion of legal defenses 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, approved by the Agents in the case of
subparagraph (a), representing the indemnified parties under
subparagraph (a) who are parties to such action), (ii) the indemnifying
party shall not have employed counsel satisfactory to the indemnified party
to represent the indemnified party within a reasonable time after notice of
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 Issuer on grounds of policy or
otherwise, the Issuer and the Agents 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 Issuer and any Agent may be subject in such proportion so that
the Agents are responsible for that portion represented by the percentage
that the sum of aggregate commissions received by the Agents pursuant to
Section 3(c) hereof bears to the aggregate principal amount of the
Securities sold hereunder and the Issuer is responsible for the balance;
provided, however, that (y) in no case shall any Agent be responsible for
- -------- -------
any amount in excess of the commissions received by it, and (z) no person
found liable for fraudu-
<PAGE>
22
lent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was found not liable
for such fraudulent misrepresentation. For purposes of this Section 7,
each person who controls any Agent within the meaning of either the Act or
the Exchange Act shall have the same rights to contribution as such Agent,
and each person who controls the Issuer within the meaning of either the
Act or the Exchange Act, each officer of the Issuer who shall have signed
the Registration Statement or any amendment thereto, and each director of
the Issuer shall have the same rights to contribution as the Issuer,
subject in each case to clause (y) 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 notify such party or
parties shall not relieve the party or parties from whom contribution may
be sought from any obligation it or they may have hereunder or otherwise
than under this paragraph (d).
8. Status of each Agent. In soliciting offers to purchase the
---------------------
Securities from the Issuer pursuant to this Agreement and in assuming its
other obligations hereunder (other than offers to purchase pursuant to
Section 11 hereof), each Agent is acting solely as agent for the Issuer and
not as principal. Each Agent will make reasonable efforts to assist the
Issuer in obtaining performance by each purchaser whose offer to purchase
Securities from the Issuer has been solicited by such Agent and accepted by
the Issuer, but such Agent shall have no liability to the Issuer in the
event any such purchase is not consummated for any reason. If the Issuer
shall default on its obligations to deliver Securities to a purchaser who
has agreed to purchase Securities as a result of solicitation by any Agent
pursuant hereto, and whose offer the Issuer has accepted, the Issuer
(i) shall hold the Agents harmless against any loss, claim or damages
arising from or as a result of such default by the Issuer, and (ii) in
particular, shall pay to the Agents any commission to which they would be
entitled in connection with such sale.
9. Survival of Certain Representations and Obligations. The
----------------------------------------------------
respective indemnities, agreements, representations, warranties and other
statements of the Issuer or its officers and of the Agents set forth in or
made pursuant
<PAGE>
23
to this Agreement will remain in full force and effect, regardless of any
investigation, or statement as to the results thereof, made by or on behalf
of any Agent, the Issuer or any of their respective representatives,
officers or directors or any controlling person and will survive delivery
of and payment for the Securities. If this Agreement is terminated
pursuant to Section 10 or for any other reason, the Issuer shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to
Section 4(g) and the obligations of the Issuer under Section 4(f) and the
respective obligations of the Issuer and the Agents pursuant to Section 7
shall remain in effect. In addition, if any such termination shall occur
either (i) at a time when any Agent shall own any of the Securities with
the intention of reselling them as contemplated by Section 11 hereof or
(ii) after the Issuer has accepted an offer to purchase Securities
solicited by any Agent pursuant hereto and prior to the related settlement,
the obligations of the Issuer under the last sentence of Section 4(b),
under Sections 4(a), 4(c), 4(d), 4(e), 6(a), and 6(e) and, in the case of a
termination occurring as described in (ii) above, under Section 3(c) and
under the last sentence of Section 8, shall also remain in effect.
10. Termination. This Agreement may be terminated for any
------------
reason at any time by the Issuer as to any Agent or, in the case of any
Agent, by such Agent insofar as this Agreement relates to such Agent, upon
the giving of one day's written notice of such termination to the other
parties hereto. Any settlement with respect to Securities placed by an
Agent occurring after termination of this Agreement shall be made in
accordance with the Procedures and each Agent agrees, if requested by the
Issuer, to take the steps therein provided to be taken by such Agent in
connection with such settlement.
11. Purchases as Principal. From time to time, any Agent may
-----------------------
agree with the Issuer to purchase Securities from the Issuer as principal,
in which case such purchase shall be made in accordance with the terms of a
separate agreement (a "Purchase Agreement") to be entered into between such
Agent and the Issuer in the form attached hereto as Exhibit C. In
connection with any resale of Securities so purchased, an Agent may agree
with the Issuer that such Securities may be resold by such Agent at varying
prices from time to time or at a fixed public offering price or that such
Agent may use a selling or dealer group and may reallow to any broker or
dealer any portion of the discount
<PAGE>
24
or commission payable pursuant hereto. A Purchase Agreement, to the extent
set forth therein, may incorporate by reference specified provisions of
this Agreement.
12. Notices. Except as otherwise provided herein, all notices
--------
and other communications hereunder shall be in writing and shall be deemed
to have been duly given if mailed or transmitted by any standard form of
telecommunication. Except as otherwise provided in the Procedures, notices
to [Agent] shall be directed to it at , Attention:
; notices to [Agent] shall be directed to it at
, Attention: ; and notices to the Issuer
shall be directed to it at Armonk, New York 10504, Attention: Office of
the Treasurer; or in the case of any party hereto, to such other address or
person as such party shall specify to each other party by a notice given in
accordance with the provisions of this Section 12. Any such notice shall
take effect at the time of receipt.
13. Successors. This Agreement will inure to the benefit of and
-----------
be binding upon the parties hereto, their respective successors, the
officers and directors and controlling persons referred to in Section 7
and, to the extent provided in Section 6(e), any person who has agreed to
purchase Securities from the Issuer as the result of solicitation by any
Agent pursuant hereto, and no other person will have any right or
obligation hereunder.
14. Governing Law; Counterparts. This Agreement shall be
----------------------------
governed by and construed in accordance with the laws of the State of New
York. This Agreement may be executed in counterparts and the executed
counterparts shall together constitute a single instrument.
If the foregoing correctly sets forth our agreement, please
indicate your acceptance hereof in the space provided for that purpose
below.
Very truly yours,
INTERNATIONAL BUSINESS
MACHINES CORPORATION
By:
-------------------------
Title:
<PAGE>
25
CONFIRMED AND ACCEPTED, as of the
date first above written:
[ ]
By
__________________________
Title:
[ ]
By
__________________________
Title:
<PAGE>
EXHIBIT A
The Issuer agrees to pay the relevant Agent a commission equal to
the following percentage of the principal amount of Securities sold to
purchasers solicited by such Agent:
Commission Rate
(as a percentage
Term of principal amount)
---- --------------------
9 months to less than 12 months .125%
12 months to less than 18 months .15
18 months to less than 24 months .20
24 months to less than 30 months .25
30 months to less than 3 years .30
3 years to less than 4 years .35
4 years to less than 5 years .45
5 years to less than 7 years .50
7 years to less than 10 years .55
10 years to less than 15 years .625
15 years to less than 20 years .700
20 years to 30 years .750
More than 30 years as negotiated
between the Company
and the relevant
Agent at the time of
sale
<PAGE>
EXHIBIT B
Administrative Procedures
-------------------------
The Medium-Term Notes due nine months or more from their issue
date (the "Notes") are to be offered on a continuing basis by International
Business Machines Corporation (the "Issuer").
, as agents (each individually
an "Agent" and collectively the "Agents"), have agreed to use reasonable
efforts to solicit purchases of the Notes pursuant to an Agency Agreement
dated , 199 (the "Agency Agreement"), among the Issuer and the
Agents. No Agent will be obligated to purchase Notes for its own account.
The Notes will be issued pursuant to an Indenture, dated as of October 1,
1993 (the "Indenture"), between the Issuer and The Chase Manhattan Bank
(National Association), as trustee (the "Trustee"), as supplemented by the
First Supplemental Indenture thereto dated as of December 15, 1995. The
Notes will rank equally with all other unsecured and unsubordinated
indebtedness of the Issuer and have been registered with the Securities and
Exchange Commission (the "Commission").
Each Note will be represented initially by either a global
security registered in the name of a nominee of The Depository Trust
Company, as Depositary ("DTC") (a "BookEntry Note") or a certificate issued
in definitive form (a "Certificate Note"). It is currently contemplated
that both Fixed Rate Notes (as defined below) and Floating Rate Notes (as
defined below) may be issued as Book-Entry Notes.
Administrative procedures and specific terms of the Notes and the
offering, to the extent Notes are offered and sold through the Agents, are
explained below. Administrative and record-keeping responsibilities will
be handled for the Issuer by its Treasury Department. The Issuer will
advise each Agent in writing of those persons handling administrative
responsibilities with whom each Agent is to communicate regarding offers to
purchase Notes and the details of their delivery. To the extent that the
following procedures conflict with the provisions of the Notes, the
Indenture or the Letter (as defined below), the relevant provisions of the
Note, the Indenture or the Letter shall control.
<PAGE>
2
I. CERTIFICATE NOTES AND GENERAL TERMS
The following administrative procedures and specific terms are
applicable to Certificate Notes and, except to the extent otherwise
specified under II below, Book-Entry Notes.
Original Issue Date: Each Note will be dated the date of its
- -------------------
authentication. Each Note will also bear an
original issue date which, with respect to any
Note (or portion thereof), shall mean the date
of its original issuance and shall be specified
therein. The original issue date shall remain
the same for all Notes subsequently issued upon
transfer, exchange or substitution of a Note,
regardless of their dates of authentication.
Maturities: Each Note will mature on a date, selected by
- ----------
the purchaser and agreed to by the Issuer,
which will be at least nine months after the
date of issue; provided, however, that each
-------- -------
Floating Rate Note (as defined below) will
mature on an Interest Payment Date (as defined
below) for such Note.
Redemption: The Floating Rate Notes will not be redeemable
- ----------
prior to maturity. The Fixed Rate Notes (as
defined below) either (i) will not be
redeemable prior to maturity, or (ii) will be
redeemable at the option of the Issuer on or
after a specified date prior to maturity at par
or at prices which will decline annually by a
fixed percentage from a specified initial
premium to par. Unless otherwise specified in
the applicable pricing supplement, Redemption
Dates for redeemable Fixed Rate Notes will
correspond with the Interest Payment Dates for
such Notes.
<PAGE>
3
Price to Public: Each Note will be issued at 100% of principal
- ---------------
amount, unless otherwise agreed between the
Issuer and the relevant Agent.
Denominations: Unless otherwise agreed between the Issuer and
- -------------
the relevant Agent, the denominations of the
Notes will be $1,000 or any multiple thereof.
The denominations of Notes denominated in
currencies or currency units other than U.S.
dollars will be as agreed between the Issuer
and the relevant Agent.
Registration: Notes will be issued only in fully registered
- ------------
form.
Interest Payment: Each Note will bear interest from and including
- ----------------
its original issue date or, in the case of
Notes issued upon replacement, transfer or
exchange, from the most recent Interest Payment
Date to which interest has been paid or
provided for, to but excluding the maturity
date of such Note; provided, however, that a
-------- -------
Floating Rate Note which has a rate of interest
that is reset weekly will bear interest from
and including its original issue date or the
day following the most recent Record Date (as
defined below) for the most recent Interest
Payment Date to which interest on such Note has
been paid or provided for. Each Note will bear
interest (i) in the case of Notes bearing
interest at a Fixed Rate (the "Fixed Rate
Notes"), at the annual rate stated on the face
thereof, payable semiannually in arrears on
April 1 and October 1 (each an "Interest
Payment Date" with respect to such Fixed Rate
Note) and at maturity and (ii) in the case of
Notes bearing interest at a rate or rates
determined by reference to an
<PAGE>
4
interest rate formula (the "Floating Rate
Notes"), at a rate determined pursuant to the
formula stated on the face thereof, payable in
arrears on such dates as are specified therein
and in the related Pricing Supplement (each an
"Interest Payment Date" with respect to such
Floating Rate Note). Interest payable on a
Fixed Rate Note (including payments for partial
periods) will be calculated and paid on the
basis of a 360-day year of 12 30-day months.
Interest payable on a Floating Rate Note will
be calculated and paid on the basis of the
actual number of days elapsed in the interest
period and a year of 360 days; provided,
--------
however, that interest payable on a Floating
-------
Rate Note which has a rate of interest
determined in accordance with the Treasury Rate
will be calculated on the basis of the actual
number of days in the year. Interest will be
payable on each Interest Payment Date to the
person in whose name the Note is registered at
the close of business 15 calendar days prior to
such Interest Payment Date whether or not such
day is a Business Day (as defined in the
Indenture) (the "Record Date") except that
(a) on any Note originally issued after a
Record Date and prior to the next succeeding
Interest Payment Date, the first payment of
interest on such Note will be made on the
Interest Payment Date following the next
succeeding Regular Record Date to the
registered owner on such next Regular Record
Date and (b) interest payable at maturity (or,
in the case of a Fixed Rate Note, upon
redemption) will be payable to the person to
whom principal shall be payable. With respect
to Fixed Rate Notes, each payment of interest
<PAGE>
5
shall include interest accrued to but excluding
the date of such payment. All interest
payments (excluding interest payments made at
maturity) will be made by check mailed to the
person entitled thereto as provided above.
Acceptance of Each Agent will promptly advise the Issuer of
- ------------- each reasonable offer to purchase Notes
Offers: received by it, other than those rejected by
- ------ such Agent. Each Agent may, in its discretion
reasonably exercised, without notice to the
Issuer, reject any offer received by it, in
whole or in part. The Issuer will have the
sole right to accept offers to purchase Notes
and may reject any such offer, in whole or in
part. If the Issuer rejects an offer solicited
by an Agent, the Issuer will promptly notify
the Agent involved.
Settlement: All offers accepted by the Issuer will be
- ---------- settled on the third Business Day next
succeeding the date of acceptance unless
otherwise agreed by any purchaser and the
Issuer. Prior to 3:00 p.m., New York City
time, on the Business Day next preceding the
settlement date, the Issuer will instruct the
Trustee to authenticate and deliver the Notes
no later than 2:15 p.m., New York City time, on
the settlement date.
Details for For each offer solicited by an Agent that is
- ----------- accepted by the Issuer, the Agent who presented
Settlement: the offer (the "Presenting Agent") shall
- ----------- communicate to the Issuer's Treasury Department
by telephone, facsimile transmission or other
acceptable means the following information (the
"Purchase Information"):
<PAGE>
6
1. Exact name in which the Note or Notes are
to be registered ("registered owner").
2. Exact address of registered owner.
3. Taxpayer identification number of
registered owner.
4. Principal amount of each Note to be
delivered to the registered owner.
5. Issue price, interest rate if fixed or
initial interest rate if floating, interest
rate basis, spread or spread multiplier,
maximum or minimum interest rates, index
maturity, Interest Determination Dates,
Interest Reset Dates (as such terms are defined
in the applicable Prospectus Supplement)
interest reset period, interest payment period
and Interest Payment Dates of Notes, in each
case, to the extent applicable.
6. The currency, currencies, currency unit
or currency units in which the Note or Notes
are to be denominated and (if not the same)
payable.
7. Maturity date of Notes.
8. Initial redemption date of Notes, if any.
9. Optional redemption price (including the
fixed percentage by which the premium, if any,
annually declines) of Notes, if any.
10. Original issue date of Notes.
11. Settlement date for Notes.
<PAGE>
7
12. Presenting Agent's commission (to be
paid in the form of a discount from the
proceeds remitted to the Issuer upon
settlement).
The original issue date of, and the settlement
date for, Notes will be the same. Before
accepting any offer to purchase Notes to be
settled in less than three days, the Issuer
shall verify that the Trustee will have
adequate time to prepare and authenticate the
Notes. After receiving the details for each
offer from the Presenting Agent, the Issuer
will, after recording the details and any
necessary calculations, communicate the
Purchase Information by telephone, facsimile
transmission or other acceptable means, to the
Trustee. Prior to preparing the Notes for
delivery, the Trustee will confirm the Purchase
Information by telephone with the Presenting
Agent. The Trustee will assign to and enter on
each Note a transaction number.
Special provisions relating to Certificate
Notes denominated or payable in a currency,
currencies, a currency unit or currency units
other than U.S. dollars may be agreed by the
Issuer and the Agents at a later time.
Confirmation: For each accepted offer solicited by an Agent,
- ------------ the Presenting Agent will issue a confirmation
to the purchaser, with a copy to the Issuer's
Treasury Department and the Trustee, setting
forth the Purchase Information and delivery and
payment instructions.
Note Deliveries Upon the receipt of appropriate
and Cash Payment: documentation and instructions, which may be by
- ---------------- telephone to be
<PAGE>
8
confirmed in writing from the Issuer, and
verification thereof, the Trustee will cause
the Notes to be prepared and authenticated and
hold the Notes for delivery against payment.
The Trustee will deliver the Notes, in
accordance with instructions from the Issuer,
to the Presenting Agent, as the Issuer's agent,
for the benefit of the purchaser only against
delivery of a receipt therefor.
Agents' addresses for delivery of Certificate
Notes:
The Presenting Agent, as the Issuer's agent,
will deliver the Notes (with the written
confirmation provided for above) to the
purchaser thereof against payment by such
purchaser in immediately available funds and
will give instructions for payment to be made
to the Issuer of an amount equal to the face
amount of the Notes less the Presenting Agent's
commission. Delivery of any confirmation or
Note will be made in compliance with "Delivery
of Prospectus" below.
Fails: In the event that a purchaser shall fail to
- ----- accept delivery of and make payment for a Note
on the settlement date, the Presenting Agent
will notify the Trustee and the Issuer by
<PAGE>
9
telephone, confirmed in writing. If the Note
has been delivered to the Presenting Agent, as
the Issuer's agent, the Presenting Agent shall
return such Note to the Trustee. If funds have
been advanced by the Presenting Agent for the
purchase of such Note, the Issuer will,
immediately upon receipt of such notice, refund
the payment previously made to it by the
Presenting Agent in immediately available
funds. Such payments will be made on the
settlement date, if possible, and in any event
not later than the Business Day following the
settlement date. If such failure shall have
occurred for any reason other than the failure
of the Presenting Agent to provide the Purchase
Information to the Issuer or to provide a
confirmation to the purchaser, the Issuer will
reimburse the Presenting Agent on an equitable
basis for its loss of the use of funds during
the period when they were credited to the
account of the Issuer.
Immediately upon receipt of the Note in respect
of which the failure occurred, the Trustee will
cause the Security Registrar to make
appropriate entries to reflect the fact that
the Note was never issued and will destroy the
Note.
Procedure for The Issuer and the Agents will discuss from
Rate Changes: time to time the rates to be borne by the Notes
- ------------ that may be sold as a result of the
solicitation of offers by the Agents. Once any
Agent has recorded any indication of interest
in Notes upon certain terms, and communicated
with the Issuer, if the Issuer plans to accept
an offer to purchase Notes upon such terms, it
will prepare a
<PAGE>
10
pricing sticker reflecting the terms of such
Notes and, after approval from the Agents, will
arrange to have the required number of copies
of the sticker filed with the Commission within
two Business Days following such acceptance and
will supply at least five copies of such
sticker to the Presenting Agent. No
settlements with respect to Notes upon such
terms may occur prior to such filing and the
Agents will not, prior to such filing, mail
confirmations to customers who have offered to
purchase Notes upon such terms. After such
filing, sales, mailing of confirmations and
settlements may occur with respect to Notes
upon such terms, subject to tte provisions of
"Delivery of Prospectus" below.
If the Issuer decides to "post" fixed interest
rates and a decision has been reached to change
interest rates, the Issuer will promptly notify
each Agent. Each Agent will forthwith suspend
solicitation of purchases. At that time, the
Agents will recommend and the Issuer will
establish fixed interest rates to be so posted.
Following establishment of posted fixed
interest rates and prior to the filing of the
pricing sticker described in the preceding
paragraph, the Agents may only record
indications of interest in purchasing Fixed
Rate Notes at the posted fixed interest rates.
After such filing, sales, mailing of
confirmations and settlements at the posted
rates may resume, subject to the provisions of
"Delivery of Prospectus" below.
Outdated stickers, and copies of the Prospectus
to which they are
<PAGE>
11
attached (other than those retained for files),
will be destroyed.
Suspension of As provided in the Agency Agreement, the Issuer
Solicitation may suspend Amendment or solicitation of
Amendment or purchases at any time and, upon receipt of
Supplement: notice from the Issuer, each Agent will
- ---------- forthwith suspend solicitation until such time
as the Issuer has advised them that
solicitation of purchases may be resumed.
If the Agents receive the notice from the
Issuer contemplated by Section 4(b) of the
Agency Agreement, they will promptly suspend
solicitation and will only resume solicitation
as provided in the Agency Agreement. If the
Issuer decides to amend or supplement the
Registration Statement or the Prospectus
relating to the Notes (other than by an
amendment or supplement that (i) only specifies
the terms of the Securities or (ii) relates to
an offering by the Issuer of Registered
Securities other than the Securities), it will
promptly advise each Agent and will furnish
each Agent with the proposed amendment or
supplement in accordance with the terms of the
Agency Agreement. The Issuer will promptly
file or mail to the Commission for filing such
amendment or supplement, provide the Agents
with copies of any such amendment or
supplement, confirm to the Agents that such
amendment or supplement has been filed with the
Commission and advise the Agents that
solicitation may be resumed.
Any such suspension shall not affect the
Issuer's obligations under the Agency
Agreement; and in the event that at the time
the Issuer suspends
<PAGE>
12
solicitation of offers to purchase Notes there
shall be any offers already accepted by the
Issuer outstanding for settlement, the Issuer
will have the sole responsibility for
fulfilling such obligations. The Issuer will
in addition promptly advise the Agents and the
Trustee if such offers are not to be settled
and if copies of the Prospectus as in effect at
the time of the suspension may not be delivered
in connection with the settlement of such
offers.
Delivery of With respect to each purchase resulting from a
Prospectus: solicitation by any Agent, a copy of the
- ---------- Prospectus, as most recently amended or
supplemented on the date of delivery thereof
(except as provided below), but excluding
materials incorporated by reference therein,
must be delivered to a purchaser prior to or
together with the earlier of delivery of
(i) the written confirmation provided for
above, and (ii) any Note purchased by such
purchaser as a result of such solicitation.
The Issuer shall ensure that the Presenting
Agent receives the required number of copies of
the Prospectus and each amendment or supplement
thereto (including appropriate pricing
stickers), but excluding materials incorporated
by reference therein, by telecopy or overnight
express (for delivery not later than 11:00 a.m.
on the Business Day next following the trade
date) to enable the Presenting Agent to deliver
such confirmation or Note to such purchaser as
contemplated by these procedures and in
compliance with the preceding sentence. If,
since the date of acceptance of such pur-
chaser's offer, the Prospectus shall
<PAGE>
13
have been supplemented solely to reflect any
sale of Notes on terms different from those
agreed to between the Issuer and such purchaser
or a change in posted rates not applicable to
such purchaser, such purchaser shall not
receive the Prospectus as supplemented by such
new supplement, but shall receive the
Prospectus as supplemented to reflect the terms
of the Notes being purchased by such purchaser
and otherwise as most recently amended or
supplemented on the date of delivery of the
Prospectus.
Agents' addresses for delivery of Pricing
Supplements:
Authenticity of The Issuer will cause the Trustee to furnish
Signatures: the Agents from time to time with the specimen
- ---------- signatures of each of the Trustee's officers,
employees or agents who have been authorized by
the Trustee to authenticate Notes, but the
Agents will have no obligation or liability to
the Issuer or the Trustee in respect of the
authenticity of the signature of any officer,
employee or agent of
<PAGE>
14
the Issuer or the Trustee on any Note.
Advertising Cost: The Issuer will determine with the Agents the
- ---------------- amount of advertising that may be appropriate
in offering the Notes. Advertising expenses
will be paid by the Issuer.
II. BOOK-ENTRY NOTES
The following procedures supplement and, to the extent
inconsistent therewith, replace the procedures set forth above with respect
to the offering of Book-Entry Notes. In connection with the qualification
of the Book-Entry Notes for eligibility in the book-entry system maintained
by DTC, the Trustee will perform the custodial, document control and
administrative functions described below, in accordance with its respective
obligations under a Letter of Representation (the "Letter") from the Issuer
and the Trustee to be entered into with DTC and a Medium-Term Note
Certificate Agreement between the Trustee and DTC dated as of March 10,
1989, and its obligations as a participant in DTC, including DTC's Same-Day
Funds Settlement System ("SDFS"). Both Fixed and Floating Rate Notes may
be issued in book-entry form.
Issuance: On any date of settlement (as defined under
- -------- "Settlement" below) for one or more Book-Entry
Notes, the Issuer will issue a single global
security in fully registered form without
coupons (a "Global Security") representing up
to $150,000,000 principal amount of all such
Notes that have the same maturity date,
redemption provisions, if any, repayment pro-
visions, if any, Interest Payment Dates,
interest rate basis, spread or spread
multiplier, maximum or minimum interest rates,
index maturity, Interest Determination Dates,
Interest Reset Dates (as such terms are defined
in the applicable Prospectus Supplement),
interest reset period, original issue date
<PAGE>
15
and original issue discount provisions, in each
case, to the extent applicable (collectively,
the "Terms"). Each Global Security will be
dated and issued as of the date of its
authentication by the Trustee. Each Global
Security will bear an "Issue Date", which will
be (i) with respect to an original Global
Security (or any portion thereof), its original
issue date, and (ii) following a consolidation
of Global Securities, the most recent Interest
Payment Date to which interest has been paid or
duly provided for on the predecessor Global
Securities, regardless of the date of
authentication of such subsequently issued
Global Security. No Global Security will
represent any Certificated Note.
Identification The Issuer will arrange with the CUSIP Service
Numbers: Bureau of Standard & Poor's Corporation (the
- ------- "CUSIP Service Bureau") for the reservation of
a series of CUSIP numbers, consisting of
approximately 900 CUSIP numbers relating to
Global Securities representing Book-Entry
Notes. The Issuer will obtain from the CUSIP
Service Bureau a written list of such series of
reserved CUSIP numbers and will deliver to the
Trustee and DTC a written list of CUSIP numbers
of such series. The Trustee will assign CUSIP
numbers to Global Securities as described below
under Settlement Procedure "C". DTC will
notify the CUSIP Service Bureau periodically of
the CUSIP numbers that the Trustee has assigned
to Global Securities. The Trustee will notify
the Issuer at any time when fewer than 100 of
the reserved CUSIP numbers remain unassigned to
Global Securities, and if it deems necessary,
the Issuer
<PAGE>
16
will reserve additional CUSIP numbers for
assignment to Global Securities representing
Book-Entry Notes. Upon obtaining such
additional CUSIP numbers, the Issuer shall
deliver a list of such additional CUSIP numbers
to the Trustee and DTC.
Registration: Each Global Security will be registered in the
- ------------ name of Cede & Co., as nominee for DTC, on the
Securities Register maintained under the
Indenture. The beneficial owner of a Book-
Entry Note (or one or more indirect
participants in DTC designated by such owner)
will designate one or more participants in DTC
(with respect to such Note, the "Participants")
to act as agent or agents for such owner in
connection with the book-entry system
maintained by DTC, and DTC will record in book-
entry form, in accordance with instructions
provided by such Participants, a credit balance
with respect to such Note in the account of
such Participants. The ownership interest of
such beneficial owner in such Note will be
recorded through the records of such
Participants or through the separate records of
such Participants and one or more indirect
participants in DTC.
Transfers: Transfers of a Book-Entry Note will be
- --------- accomplished by book entries made by DTC and,
in turn, by Participants (and, in certain
cases, one or more indirect participants in
DTC) acting on behalf of beneficial transferors
and transferees of such Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP
- --------- Service Bureau at any time a written notice of
consolidation (a copy of which shall be
attached to
<PAGE>
17
the Global Security resulting from such
consolidation) specifying (i) the CUSIP numbers
of two or more Outstanding Global Securities
that represent Book-Entry Notes having the same
Terms (other than original issue date) and for
which interest has been paid to the same date,
(ii) a date, occurring at least 30 days after
such written notice is delivered and at least
30 days before the next Interest Payment Date
for such Book-Entry Notes, on which such Global
Securities shall be exchanged for a single
replacement Global Security and (iii) a new
CUSIP number to be assigned to such replacement
Global Security. Upon receipt of such a
notice, DTC will send to its Participants
(including the Trustee) a written
reorganization notice to the effect that such
exchange will occur on such date. Prior to the
specified exchange date, the Trustee will
deliver to the CUSIP Service Bureau a written
notice setting forth such exchange date and the
new CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be
valid. On the specified exchange date, the
Trustee will exchange such Global Securities
for a single Global Security bearing the new
CUSIP number and a new original issue date and
the CUSIP numbers of the exchanged Global
Securities will, in accordance with CUSIP
Service Bureau procedures, be canceled and not
immediately reassigned. Notwithstanding the
foregoing, if the Global Securities to be
exchanged exceed $150,000,000 in aggregate
principal amount, one Global Security will be
authenticated and issued to represent each
<PAGE>
18
$150,000,000 of principal amount of the
exchanged Global Securities and an additional
Global Security will be authenticated and
issued to represent any remaining principal
amount of such Global Securities (see
"Denominations" below).
Notice of Repayment With respect to each Book-Entry Note that is
Terms: repayable at the option of the Holder, the
- ----- Trustee will furnish DTC on or not more than
60 days prior to the settlement date pertaining
to such Book-Entry Note a notice setting forth
the terms of such repayment option. Such terms
shall include the start date and end dates of
the first exercise period, the purchase date
following such first exercise period, the
frequency that such exercise periods occur
(i.e., quarterly, semiannually, annually, etc.)
----
and, if the repayment option expires before
maturity, the same information (except
frequency) concerning the last exercise period.
It is understood that the exercise period shall
be at least 15 calendar days long and that the
purchase date shall be at least 7 calendar
days,after the last day of the exercise period.
Redemption and The Trustee will comply with the terms of the
Repayment: Letter with regard to redemptions and
- --------- repayments of the Notes. If a Global Security
is to be redeemed or repaid in part, the
Trustee will exchange such Global Security for
two Global Securities, one of which shall
represent the portion of the Global Security
being redeemed or repaid and shall be canceled
immediately after issuance and the other of
which shall represent the remaining portion of
such Global Security and shall bear
<PAGE>
19
the CUSIP number of the surrendered Global
Security.
Denominations: Unless otherwise agreed between the Issuer and
- ------------- the relevant Agent, Book-Entry Notes will be
issued in principal amounts of $1,000 or any
multiple thereof. Global Securities will be
denominated in principal amounts not in excess
of $150,000,000. If one or more Book-Entry
Notes having an aggregate principal amount in
excess of $150,000,000 would, but for the
preceding sentence, be represented by a single
Global Security, then one Global Security will
be issued to represent each $150,000,000
principal amount of such Book-Entry Note or
Notes and an additional Global Security will be
issued to represent any remaining principal
amount of such Book-Entry Note or Notes. In
such a case, each of the Global Securities
representing such Book-Entry Note or Notes
shall be assigned the same CUSIP number.
Interest: Publication. Standard & Poor's Corporation
- --------- -----------
will use the information received in the
pending deposit message described under the
Settlement Procedure "C" below in order to
include the amount of any interest payable and
certain other information regarding the related
Global Security in the appropriate weekly bond
report published by Standard & Poor's
Corporation.
Notice of Interest Payment and Regular Record
---------------------------------------------
Dates. On the first Business Day of January,
-----
April, July and October of each year, the
Trustee will deliver to the Issuer and DTC a
written list of Regular Record Dates and
Interest Payment Dates that will occur with
respect
<PAGE>
20
to Book-Entry Notes during the six-month period
beginning on such first Business Day. Promptly
after each Interest Determination Date or
Calculation Date, as applicable (as defined in
the applicable Note) for Floating Rate Notes,
the Company, upon receiving notice thereof,
will notify Standard & Poor's Corporation of
the interest rate determined on such Interest
Determination Date or Calculation Date, as
applicable.
Payments of Payments of Interest Only. Promptly after each
-------------------------
Principal and
Interest: Regular Record Date, the Trustee will deliver
- -------- to the Issuer and DTC a written notice
specifying by CUSIP number the amount of
interest to be paid on each Global Security on
the following Interest Payment Date (other than
an Interest Payment Date coinciding with
maturity) and the total of such amounts. The
Issuer will confirm with the Trustee the amount
payable on each Global Security on such
Interest Payment Date. DTC will confirm the
amount payable on each Global Security on such
Interest Payment Date by reference to the daily
or weekly bond reports published by Standard &
Poor's Corporation. The Issuer will pay to the
Trustee the total amount of interest due on
such Interest Payment Date (other than at
maturity), and the Trustee will pay such amount
to DTC at the times and in the manner set forth
below under "Manner of Payment". If any
Interest Payment Date for a Book-Entry Note is
not a Business Day, the payment due on such day
shall be made on the next succeeding Business
Day and no interest shall accrue on such
payment for the period from and after such
Interest Payment Date.
<PAGE>
21
Payments at Maturity. On or about the first
--------------------
Business Day of each month, the Trustee will
deliver to the Issuer and DTC a written list of
principal and interest to be paid on each
Global Security maturing either at stated
maturity or on a redemption or repayment date
in the following month. The Issuer, the
Trustee and DTC will confirm the amounts of
such principal and interest payments with
respect to each such Global Security on or
about the fifth Business Day preceding the
maturity of such Global Security. The Issuer
will pay to the Trustee, as the paying agent,
the principal amount of such Global Security,
together with interest due at such maturity.
The Trustee will pay such amounts to DTC at the
times and in the manner set forth below under
"Manner of Payment". If any maturity of a
Global Security representing Book-Entry Notes
is not a Business Day, the payment due on such
day shall be made on the next succeeding
Business Day and no interest shall accrue on
such payment for the period from and after such
maturity. Promptly after payment to DTC of the
principal and interest due at the maturity of
such Global Security, the Trustee will cancel
and destroy such Global Security in accordance
with the terms of the Indenture and deliver a
certificate of destruction to the Issuer.
Manner of Payment. The total amount of any
------------------
principal and interest due on Global Securities
on any Interest Payment Date or at Maturity
shall be paid by the Issuer to the Trustee in
funds available for use by the Trustee as of
9:30 a.m. (New York City time), or as soon as
<PAGE>
22
practicable thereafter on such date. The
Issuer will make such payment on such Global
Securities by wire transfer to the Trustee.
The Issuer will confirm instructions regarding
payment in writing to the Trustee. Prior to
10:00 a.m. (New York City time) on each
maturity date or as soon as possible
thereafter, following receipt of such funds
from the Issuer, the Trustee will pay by
separate wire transfer (using Fedwire message
entry instructions in a form previously
specified by DTC) to an account at the Federal
Reserve Bank of New York previously specified
by DTC, in funds available for immediate use by
DTC, each payment of principal (together with
interest thereon) due on Global Securities on
any maturity date. On each Interest Payment
Date, interest payment shall be made to DTC in
same-day funds in accordance with existing
arrangements between the Trustee and DTC.
Thereafter, on each such date, DTC will pay, in
accordance with its SDFS operating procedures
then in effect, such amounts in funds available
for immediate use to the respective
Participants in whose names the Book-Entry
Notes represented by such Global Securities are
recorded in the book-entry system maintained by
DTC. Neither of the Issuer or tne Trustee
shall have any direct responsibility or
liability for the payment by DTC to such
Participants of the principal of and interest
on the Book-Entry Notes.
Withholding Taxes. The amount of any taxes
------------------
required under applicable law to be withheld
from any interest payment on a Book-Entry Note
will be determined and withheld by the
Participant, indirect participant in
<PAGE>
23
DTC or other Person responsible for forwarding
payments and materials directly to the
beneficial owner of such Note.
Settlement: The receipt by the Issuer of immediately
- ---------- available funds in payment for a Book-Entry
Note and the authentication and issuance of the
Global Security or Global Securities
representing such Note shall constitute
"settlement" with respect to such Note. All
orders accepted by the Issuer will be settled
on the fifth Business Day from the date of the
sale pursuant to the timetable for settlement
set forth below unless the Issuer and the
purchaser agree to settlement on another day.
Settlement Settlement Procedures with regard to each Book-
- ----------- Entry Note sold by the Issuer through a
Procedures: Presenting Agent as agent shall be as follows:
- ----------
A. The Presenting Agent shall communicate to
the Issuer's Treasury Department by
telephone, facsimile transmission or other
acceptable means the Purchase Information.
B. After receiving the details for each offer
from the Presenting Agent, the Issuer
will, after recording the details and any
necessary calculations, communicate the
Purchase Information by telephone,
facsimile transmission or other acceptable
means, to the Trustee.
C. The Trustee will assign a CUSIP number to
the Global Security representing such Note
and will
<PAGE>
24
telephone the Issuer and advise the Issuer
of such CUSIP number. The Trustee will
enter a pending deposit message through
DTC's Participant Terminal System,
providing the following settlement
information to DTC (which shall route such
information to Standard & Poor's
Corporation and Interactive Data Services)
and the Presenting Agent:
1. The applicable information set forth
in Settlement Procedure "A".
2. Identification as a Fixed Rate Book-
Entry Note or a Floating Rate Book-
Entry Note.
3. Interest payment period.
4. Initial Interest Payment Date for
such Note, number of days by which
such date succeeds the related DTC
record date (which, in the case of
Floating Rate Notes which reset
weekly shall be the date five
calendar days immediately preceding
the applicable Interest Payment Date
and in the case of all other Notes
shall be the Regular Record Date as
defined in the Note) and amount of
interest payable on such Interest
Payment Date per $1,000 principal
amount of Notes.
5. Participants' account numbers
maintained by DTC on behalf of the
Trustee and the Presenting Agent.
<PAGE>
25
6. CUSIP number of the Global Security
representing such Note.
7. Whether such Global Security will
represent any other Book-Entry Note
(to the extent known at such time).
D. The Issuer will deliver to the Trustee a
Global Security representing such Note.
E. The Trustee will complete and authenticate
the Global Security representing such
Note. Prior to preparing the Global
Security for delivery, the Trustee will
confirm the Purchase Information by
telephone with the Presenting Agent.
F. DTC will credit such Note to the Trustee's
participant account at DTC.
G. The Trustee will enter an SDFS deliver
order through DTC's Participant Terminal
System instructing DTC to (i) debit such
Note to the Trustee's participant account
and credit such Note to the Presenting
Agent's participant account and (ii) debit
the Presenting Agent's settlement account
and credit the Trustee's settlement
account for an amount equal to the price
of such Note less the Presenting Agent's
commission. The entry of such a delivery
order shall constitute a representation
and warranty by the Trustee to DTC that
(i) the Global Security representing such
Book-Entry Note has been
<PAGE>
26
executed, delivered and authenticated and
(ii) the Trustee is holding such Global
Security pursuant to the Medium-Term Note
Certificate Agreement between the Trustee
and DTC.
H. The Presenting Agent will enter an SDFS
deliver order through DTC's Participant
Terminal System instructing DTC (i) to
debit such Note to the Presenting Agent's
participant account and credit such Note
to the participant accounts of the
Participants with respect to such Note and
(ii) to debit the settlement accounts of
such Participants and credit the
settlement account of The Presenting Agent
for an amount equal to the price of such
Note.
I. Transfers of funds in accordance with SDFS
deliver orders described in Settlement
Procedures "G" and "H" will be settled in
accordance with SDFS operating procedures
in effect on the settlement date.
J. The Trustee, upon confirming receipt of
such funds, will wire transfer to the
account of the Issuer maintained at Morgan
Guaranty Trust Co., New York N.Y., Account
of International Business Machines
Corporation, Cash Concentration, ABA
Number 021000238, Account Number 001 35
436, in funds available for immediate use
in the amount transferred to the Trustee
in accordance with Settlement Procedure
"G".
<PAGE>
27
K. The Presenting Agent will confirm the
purchase of such Note to the purchaser
either by transmitting to the Participants
with respect to such Note a confirmation
order or orders through DTC's
institutional delivery system or by mail-
ing a written confirmation to such
purchaser.
Settlement For orders of Book-Entry Notes
Procedures solicited by an Agent and accepted by
Timetable: the Issuer for settlement on the
--------- first Business Day after the sale
date, Settlement Procedures "A"
through "K" set forth above shall be
completed as soon as possible but not
later than the respective times (New
York City time) set forth below:
Settlement
Procedure Time
---------- ----
A 11:00 a.m. on the sale date
B 12:00 noon on the sale date
C 2:00 p.m. on the sale date
D 3:00 p.m. on the sale date
E 9:00 a.m. on settlement
date
F 10:00 a.m. on settlement
date
G-H 2:00 p.m. on settlement
date
I 4:45 p.m. on settlement
date
J-K 5:00 p.m. on settlement
date
If a sale is to be settled two
Business Days after the sale date,
Settlement Procedures "A", "B" and
"C" shall be completed as soon as
practicable but no later than 11:00
a.m., 12:00 noon and 2:00 p.m., as
the case may be, on the first
Business Day after the sale date.
<PAGE>
28
If a sale is to be settled more than
two Business Days after the sale
date, Settlement Procedure "A" shall
be completed as soon as practicable
but no later than 11:00 a.m. on the
first Business Day after the sale
date and Settlement Procedures "B"
and "C" shall be completed as soon as
practicable but no later than 12:00
noon and 2:00 p.m., as the case may
be, on the second Business Day after
the sale date. If the initial
interest rate for a Floating Rate
Book-Entry Note has not been
determined at the time that
Settlement Procedure "A" is
completed, Settlement Procedures "B"
and "C" shall be completed as soon as
such rate has been determined but no
later than 12:00 noon and 2:00 p.m.,
respectively, on the Business Day
before the settlement date.
Settlement Procedure "I" is subject
to extension in accordance with any
extension of Fedwire closing
deadlines and in the other events
specified in the SDFS operating
procedures in effect on the
settlement date.
If settlement of a Book-Entry Note is
rescheduled or canceled, the Trustee,
upon receipt of notice, will deliver
to DTC, through DTC's Participant
Terminal System, a cancellation
message to such effect by no later
than 2:00 p.m. on the Business Day
immediately preceding the scheduled
settlement date.
Failure to Settle: If the Trustee fails to enter an SDFS
----------------- deliver order with respect to a Book-
Entry Note pursuant to Settlement
Procedure "G", the Trustee may
deliver to DTC, through DTC's
Participant Terminal System, as soon
as practicable, a withdrawal message
instructing DTC to debit such Note to
<PAGE>
29
the Trustee's participant account.
DTC will process the withdrawal
message, provided that the Trustee's
participant account contains a
principal amount of the Global
Security representing such Note that
is at least equal to the principal
amount to be debited. If a
withdrawal message is processed with
respect to all the Book-Entry Notes
represented by a Global Security, the
Trustee will mark such Global
Security "canceled", make appropriate
entries in its records and send such
canceled Global Security to the
Issuer. The cusir number assigned to
such Global Security shall, in
accordance with CUSIP Service Bureau
procedures, be canceled and not
immediately reassigned. If a
withdrawal message is processed with
respect to one or more, but not all,
the Book-Entry Notes represented by a
Global Security, the Trustee will
exchange such Global Security for two
Global Securities, one of which shall
represent such Book-Entry Note or
Notes and shall be canceled
immediately after issuance and the
other of which shall represent the
remaining Book-Entry Notes previously
represented by the surrendered Global
Security and shall bear the CUSIP
number of the surrendered Global
Security.
If the purchase price for any Book-
Entry Note is not timely paid to the
Participants with respect to such
Note by the beneficial purchaser
thereof (or a Person, including an
indirect participant in DTC, acting
on behalf of such purchaser), such
Participants and, in turn, the
Presenting Agent may enter SDFS
deliver orders through DTC's
Participant Terminal System reversing
the orders entered pursuant to
<PAGE>
30
Settlement Procedures "H" and "G",
respectively. Thereafter, the
Trustee will deliver the withdrawal
message and take the applicable
related actions described in the
preceding paragraph. If such failure
shall have occurred for any reason
other than the failure of the
Presenting Agent to provide the
Purchase Information to the Issuer or
to provide a confirmation to the
purchaser, the Issuer will reimburse
the Presenting Agent on an equitable
basis for its loss of the use of
funds during the period when they
were credited to the account of the
Issuer.
Notwithstanding the foregoing, upon
any failure to settle with respect to
a Book-Entry Note, DTC may take any
actions in accordance with its SDFS
operating procedures then in effect.
In the event of a failure to settle
with respect to one or more, but not
all, the Book-Entry Notes to have
been represented by a Global
Security, the Trustee will provide,
in accordance with Settlement
Procedure "E", for the authentication
and issuance of a Global Security
representing the other Book-Entry
Notes to have been represented by
such Global Security and will make
appropriate entries in its records.
<PAGE>
EXHIBIT C
PURCHASE AGREEMENT
, 19
International Business Machines Corporation
Armonk, NY 10504
Attention: Treasurer
The undersigned agrees to purchase the following principal amount
of the Securities described in the Agency Agreement dated , 199
(the "Agency Agreement"):
Principal Amount $______________________
Interest Rate ______________________
Maturity Date _______________, 19___
Discount ________% of Principal Amount
Price to be paid
to Issuer
(in immediately
available funds) $______________________
Settlement Date ______________________
Except as otherwise expressly provided herein, all terms used
herein which are defined in the Agency Agreement shall have the same
meanings as in the Agency Agreement. The terms Agent or Agents, as used in
the Agency Agreement, shall be deemed to refer to the undersigned for
purposes of this Agreement.
This Agreement incorporates by reference Sections 3(c), 4, 6, 7,
12 and 13 of the Agency Agreement, the first and last sentences of
Section 9 thereof and, to the extent applicable, the Procedures. You and
we agree to perform, to the extent applicable, our respective duties and
obligations specifically provided to be performed by each of us in the
Procedures.
Our obligation to purchase Securities hereunder is subject to the
accuracy on the above Settlement Date of your
<PAGE>
2
representations and warranties contained in Section 2 of the Agency
Agreement (it being understood that such representations and warranties
shall relate to the Registration Statement and the Prospectus as amended at
such Settlement Date) and to your performance and observance of all cove-
nants and agreements contained in Sections 4 and 6 thereof. Our obligation
hereunder is also subject to the following conditions:
(a) the satisfaction, at such Settlement Date, of each of the
conditions set forth in subsections (a) and (b) and (d) through (g) of
Section 5 of the Agency Agreement (it being understood that each document
so required to be delivered shall be dated such Settlement Date and that
each such condition and the statements contained in each such document that
relate to the Registration Statement or the Prospectus shall be deemed to
relate to the Registration Statement or the Prospectus, as the case may be,
as amended or supplemented at the time of settlement on such Settlement
Date and except that the opinion described in Section 5(d) of the Agency
Agreement shall be modified so as to state that the Securities being sold
on such Settlement Date, when delivered against payment therefor as
provided in the Indenture and this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and legally
binding obligations of the Issuer enforceable in accordance with their
terms, subject only to the exceptions as to enforcement set forth in
clause (ii) of Section 5(d) of the Agency Agreement, and will conform to
the description thereof contained in the Prospectus as amended or
supplemented at such Settlement Date); and
(b) there shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting particularly
the business or properties of the Issuer or its subsidiaries which, in our
judgment, materially impairs the investment quality of the Securities;
(ii) any downgrading in the rating of the Issuer's debt securities or
public announcement that such debt securities are under surveillance or
review, with possible negative implications, by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act); (iii) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum prices
for trading on such exchange, or any suspension of trading of any
securities of the Issuer on any exchange or in the over-the-counter market;
(iv) any banking moratorium declared by
<PAGE>
3
Federal or New York authorities; or (v) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war
by Congress or any other substantial national or international calamity or
emergency if, in our judgment, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the sale of and payment for the Securities.
[In further consideration of our agreement hereunder, you agree
that between the date hereof and the above Settlement Date, you will not
offer or sell, or enter into any agreement to sell, any debt securities of
the Issuer in the United States, other than sales of Securities, borrowings
under your revolving credit agreements and lines of credit, the private
placement of securities and issuances of your commercial paper.]
If for any reason our purchase of the above Securities is not
consummated, you shall remain responsible for the expenses to be paid or
reimbursed by you pursuant to Section 4 of the Agency Agreement and the
respective obligations of you and the undersigned pursuant to Section 7
shall remain in effect. If for any reason our purchase of the above
Securities is not consummated other than because of our default or a
failure to satisfy a condition set forth in clause (iii), (iv) or (v) of
paragraph (b) above, you shall reimburse us, severally, for all out-of-
pocket expenses reasonably incurred by us in connection with the offering
of the above Securities and not otherwise required to be reimbursed
pursuant to Section 4 of the Agency Agreement.
This Agreement shall be governed by and construed in accordance
with the laws of the State of New York. This
<PAGE>
4
Agreement may be executed in counterparts and the executed counterparts
shall together constitute a single instrument.
[Insert Name of Purchaser]
By_________________________
CONFIRMED AND ACCEPTED, as of
the date first above written:
International Business Machines Corporation
By
--------------------------
Exhibit 4(c)
FIRST SUPPLEMENTAL INDENTURE dated as of December 15,
1995, between INTERNATIONAL BUSINESS MACHINES CORPORATION, a
corporation duly organized and existing under the laws of
New York (herein called the "Company") having its principal
office at One Old Orchard Road, Armonk, New York 10504, and
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national
banking association organized and existing under the laws of
the United States of America, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company and the Trustee are parties to an Indenture dated as
of October 1, 1993 (the "Indenture"), relating to the issuance from time to
time by the Company of its Securities. Capitalized terms used herein, not
otherwise defined, shall have the same meanings given them in the
Indenture.
The Company has requested the Trustee to join with it in the
execution and delivery of this first supplemental indenture (the "First
Supplemental Indenture") in order to supplement and amend the Indenture,
with respect to Securities outstanding under series created after the date
hereof, to increase the amount of Secured Indebtedness and Attributable
Debt that the Company is permitted to incur.
Section 1001 of the Indenture provides that a supplemental
indenture may be entered into by the Company and the Trustee, without the
consent of any Holders, provided that such supplemental indenture does not
--------
adversely affect the interests of the Holders of outstanding Securities of
any series in any material respect.
The Company has determined that this First Supplemental Indenture
complies with said Section 1001 and does not require the consent of any
Holders.
All things necessary to make this First Supplemental Indenture a
valid agreement of the Company and the Trustee, in accordance with the
terms of the Indenture, and a valid amendment of and supplement to the
Indenture have been done.
<PAGE>
2
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
Securities by the Holders thereof, it is mutually agreed, for the equal and
ratable benefit of all Holders of Securities of any series created after
the date hereof, as follows:
I. AMENDMENT TO THE INDENTURE
Sections 1104 and 1105 of the Indenture are amended, with respect
to Securities outstanding under series created after the date hereof, to
replace the number "5%" with "10%" in the last clause of Section 1104 and
in clause (a) of Section 1105.
II. GENERAL PROVISIONS
A. The recitals contained herein shall be taken as the
statements of the Company, and the Trustee assumes no responsibility for
the correctness of same. The Trustee makes no representation as to the
validly of this First Supplemental Indenture. The Indenture, as
supplemented and amended by this First Supplemental Indenture, is in all
respects hereby adopted, ratified and confirmed.
B. This instrument may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
<PAGE>
3
C. This First Supplemental Indenture shall be governed by and
construed in accordance with the laws of the State of New York.
INTERNATIONAL BUSINESS
MACHINES CORPORATION,
by /s/ Jeffrey D. Serkes
---------------------
Name: Jeffrey D. Serkes
Title: Vice President and
Treasurer
(SEAL)
Attest:
/s/ John E. Hickey
- ------------------
John E. Hickey
Secretary
THE CHASE MANHATTAN BANK,
(National Association), as
Trustee,
by /s/ James D. Heaney
-------------------
Name: James D. Heaney
Title: Vice President
(SEAL)
Attest:
/s/ Gemmel Richards
- -------------------
Gemmel Richards
Assistant Secretary
<PAGE>
4
STATE OF NEW YORK )
) ss.:
COUNTY OF WESTCHESTER)
On the 15th day of December, 1995, before me personally came
Jeffrey Serkes to me known, who, being by me duly sworn, did depose and say
that he is a Treasurer of INTERNATIONAL BUSINESS MACHINES CORPORATION, one
of the corporations described in and which executed the foregoing
instrument; that he knows the seal of said corporation; that the seal
affixed to said instrument is such corporate seal; that it was so affixed
by authority of the Board of Directors of said corporation; and that he
signed his name thereto by like authority.
/s/ Richard D. Borgeson
--------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF KINGS )
On the 15th day of December, 1995, before me personally came
James D. Heaney to me known, who, being by me duly sworn, did depose and
say that he is a Vice President of THE CHASE MANHATTAN BANK (NATIONAL
ASSOCIATION), one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation; and
that he signed his name thereto by like authority.
/s/ Margaret M. Price
-------------------------
Notary Public
Exhibit (4)(d)
==========================================================================
INTERNATIONAL BUSINESS MACHINES CORPORATION
and
as Trustee
Indenture
Dated as of , 199
Providing for the Issuance of
Subordinated Debt Securities in Series
==========================================================================
<PAGE>
INTERNATIONAL BUSINESS MACHINES CORPORATION
Reconciliation and Tie Between Trust Indenture Act of 1939 and Indenture
Provisions*
Trust Indenture
Act Section Indenture Section
- --------------- -----------------
Sec. 310(a)(1) ......................... 709
(a)(2) ......................... 709
(a)(3) ......................... Not Applicable
(a)(4) ......................... Not Applicable
(b) ......................... 708
......................... 710
Sec. 311(a) ......................... 713(a)
......................... 713(c)
(b) ......................... 713(b)
(b)(2) ......................... 803(a)(2)
......................... 803(b)
Sec. 312(a) ......................... 801
......................... 802(a)
(b) ......................... 802(b)
(c) ......................... 802(c)
Sec. 313(a) ......................... 803(a)
(b) ......................... 803(b)
(c) ......................... 803(d)
(d) ......................... 803(c)
Sec. 314(a) ......................... 804
(b) ......................... Not Applicable
(c)(1) ......................... 102
(c)(2) ......................... 102
(c)(3) ......................... Not Applicable
(d) ......................... Not Applicable
(e) ......................... 102
Sec. 315(a) ......................... 701(a)
(b) ......................... 702
......................... 803(a)(6)
(c) ......................... 701(b)
(d) ......................... 701(c)
(d)(1) ......................... 701(a)
(d)(2) ......................... 701(c)(2)
(d)(3) ......................... 701(c)(3)
(e) ......................... 614
Sec. 316(a) ......................... 101
(a)(1)(A) ......................... 602
......................... 612
(a)(1)(B) ......................... 613
(a)(2) ......................... Not Applicable
(b) ......................... 608
Sec. 317(a)(1) ......................... 603
(a)(2) ......................... 604
(b) ......................... 1103
Sec. 318(a) ......................... 107
- --------------------
* This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
<PAGE>
Page
TABLE OF CONTENTS1
ARTICLE ONE
Definitions and Other Provisions of General Application
SECTION 101. Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . 2
Authorized Newspaper . . . . . . . . . . . . . . . . . . 2
Bearer Security . . . . . . . . . . . . . . . . . . . . 2
Blockage Notice . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . 2
Common Depositary . . . . . . . . . . . . . . . . . . . 2
Company . . . . . . . . . . . . . . . . . . . . . . . . 3
Company Request; Request of the Company;
Company Order; Order of the Company . . . . . . . . . 3
Component Currency . . . . . . . . . . . . . . . . . . . 3
Conversion Date . . . . . . . . . . . . . . . . . . . . 3
Conversion Rate . . . . . . . . . . . . . . . . . . . . 3
Corporate Trust Office . . . . . . . . . . . . . . . . 3
corporation . . . . . . . . . . . . . . . . . . . . . . 3
Coupon or coupon . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . 3
Discharged . . . . . . . . . . . . . . . . . . . . . . . 3
Dollar . . . . . . . . . . . . . . . . . . . . . . . . . 3
Dollar Equivalent of the Currency Unit . . . . . . . . . 3
Dollar Equivalent of the Foreign Currency . . . . . . . 3
ECU . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Euro-clear . . . . . . . . . . . . . . . . . . . . . . . 3
European Communities . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . 3
Exchange Rate Agent . . . . . . . . . . . . . . . . . . 3
Exchange Rate Officers' Certificate . . . . . . . . . . 4
Foreign Currency . . . . . . . . . . . . . . . . . . . . 4
Foreign Government Securities . . . . . . . . . . . . . 4
Holder or holder . . . . . . . . . . . . . . . . . . . . 4
--------------------
1This table of contents shall not, for any purpose, be deemed to
be part of the Indenture.
<PAGE>
Contents, P. 2
Page
Indebtedness . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . 4
interest . . . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . . 4
Market Exchange Rate . . . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . . . 4
Medium-Term Debt Securities . . . . . . . . . . . . . 4
Medium-Term Debt Securities Certificate . . . . . . . 4
Officers' Certificate . . . . . . . . . . . . . . . . 5
Official Currency Unit Exchange Rate . . . . . . . . . 5
Opinion of Counsel . . . . . . . . . . . . . . . . . . 5
Original Issue Discount Security . . . . . . . . . . . 5
Outstanding or outstanding . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . 6
Payment Blockage Period . . . . . . . . . . . . . . . 6
Person or person . . . . . . . . . . . . . . . . . . . 6
Place of Payment . . . . . . . . . . . . . . . . . . . 6
Predecessor Security . . . . . . . . . . . . . . . . . 6
Redemption Date . . . . . . . . . . . . . . . . . . . 6
Redemption Price . . . . . . . . . . . . . . . . . . . 6
Registered Security . . . . . . . . . . . . . . . . . 7
Regular Record Date . . . . . . . . . . . . . . . . . 7
Representative . . . . . . . . . . . . . . . . . . . . 7
Required Currency . . . . . . . . . . . . . . . . . . 7
Responsible Trust Officer . . . . . . . . . . . . . . 7
Securities . . . . . . . . . . . . . . . . . . . . . . 7
Security Register . . . . . . . . . . . . . . . . . . 7
Security Registrar . . . . . . . . . . . . . . . . . . 7
Senior Indebtedness . . . . . . . . . . . . . . . . . 7
Special Record Date . . . . . . . . . . . . . . . . . 8
Specified Amount . . . . . . . . . . . . . . . . . . . 8
Stated Maturity . . . . . . . . . . . . . . . . . . . 8
Subsidiary . . . . . . . . . . . . . . . . . . . . . . 8
Trust Indenture Act . . . . . . . . . . . . . . . . . 8
Trustee . . . . . . . . . . . . . . . . . . . . . . . 8
United States . . . . . . . . . . . . . . . . . . . . 8
U.S. Government Obligations . . . . . . . . . . . . . 8
Valuation Date . . . . . . . . . . . . . . . . . . . . 8
Vice President . . . . . . . . . . . . . . . . . . . . 8
Voting Shares . . . . . . . . . . . . . . . . . . . . 8
SECTION 102 Compliance Certificates and Opinions . . . . . . . . . . 8
SECTION 103. Form of Documents Delivered to Trustee . . . . . . . . . 9
<PAGE>
Contents, P. 3
Page
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . . . . 9
SECTION 105. Notices, etc., to Trustee and Company . . . . . . . . . . 11
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . . . . 12
SECTION 107. Conflict with Trust Indenture Act . . . . . . . . . . . . 13
SECTION 108. Effect of Headings and Table of Contents . . . . . . . . 13
SECTION 109. Successors and Assigns . . . . . . . . . . . . . . . . . 13
SECTION 110. Separability Clause . . . . . . . . . . . . . . . . . . . 13
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . . . . 13
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 113. Legal Holidays . . . . . . . . . . . . . . . . . . . . . 13
SECTION 114. Moneys of Different Currencies To Be Segregated . . . . . 14
SECTION 115. Payment To Be in Proper Currency . . . . . . . . . . . . 14
SECTION 116. Language of Notices, etc . . . . . . . . . . . . . . . . 14
SECTION 117. Changes in Exhibits . . . . . . . . . . . . . . . . . . . 14
ARTICLE TWO
Issuance of Securities
SECTION 201. Creation of Securities in Amount Unlimited . . . . . . . 15
SECTION 202. Documents Required for Issuance of Each Series of
Securities Other Than Medium-Term Debt
Securities . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE THREE
Issuance of Medium-Term Debt Securities
SECTION 301. Documents Required for Issuance of Each Series of
Medium-Term Debt Securities . . . . . . . . . . . . . 18
SECTION 302. Form of Medium-Term Debt Securities . . . . . . . . . . . 23
ARTICLE FOUR
The Securities
SECTION 401. Form and Denomination . . . . . . . . . . . . . . . . . . 23
SECTION 402. Execution, Delivery, Dating and Authentication . . . . . 24
<PAGE>
Contents, P. 4
Page
SECTION 403. Temporary Securities . . . . . . . . . . . . . . . . . . 25
SECTION 404. Registration, Registration of Transfer and
Exchange . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 405. Mutilated, Destroyed, Lost and Stolen Securities. . . . . 30
SECTION 406. Payment of Interest; Interest Rights Preserved. . . . . . 31
SECTION 407. Persons Deemed Owners . . . . . . . . . . . . . . . . . . 32
SECTION 408. Cancelation . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 409. Computation of Interest . . . . . . . . . . . . . . . . . 33
SECTION 410. Currency and Manner of Payment in Respect of
Securities .. . . . . . . . . . . . . . . . . . . . . . 33
SECTION 411. Securities in Global Form . . . . . . . . . . . . . . . . 38
ARTICLE FIVE
Satisfaction and Discharge
SECTION 501. Satisfaction and Discharge of Indenture in
Respect of Any Series of Securities . . . . . . . . . . 39
SECTION 502. Application of Trust Money . . . . . . . . . . . . . . . 40
SECTION 503. Satisfaction, Discharge and Defeasance of
Securities of Any Series . . . . . . . . . . . . . . . 40
SECTION 504. Reinstatement . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 505. Definitions . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE SIX
Remedies
SECTION 601. Events of Default . . . . . . . . . . . . . . . . . . . . 43
SECTION 602. Acceleration of Maturity; Rescission and
Annulment . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 603. Collection of Indebtedness and Suits for
Enforcement by Trustee . . . . . . . . . . . . . . . 45
SECTION 604. Trustee May File Proofs of Claim . . . . . . . . . . . . 46
SECTION 605. Trustee May Enforce Claims Without Possession of
Securities . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 606. Application of Money Collected . . . . . . . . . . . . . 47
<PAGE>
Contents, P. 5
Page
SECTION 607. Limitation on Suits . . . . . . . . . . . . . . . . . . . 47
SECTION 608. Unconditional Right of Holders To Receive
Principal, Premium and Interest . . . . . . . . . . . 48
SECTION 609. Restoration of Rights and Remedies . . . . . . . . . . . 48
SECTION 610. Rights and Remedies Cumulative . . . . . . . . . . . . . 48
SECTION 611. Delay or Omission Not Waiver . . . . . . . . . . . . . . 49
SECTION 612. Control by Holders . . . . . . . . . . . . . . . . . . . 49
SECTION 613. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 49
SECTION 614. Undertaking for Costs . . . . . . . . . . . . . . . . . . 50
SECTION 615. Waiver of Stay or Extension Laws . . . . . . . . . . . . 50
ARTICLE SEVEN
The Trustee
SECTION 701. Certain Duties and Responsibilities . . . . . . . . . . . 50
SECTION 702. Notice of Defaults . . . . . . . . . . . . . . . . . . . 51
SECTION 703. Certain Rights of Trustee . . . . . . . . . . . . . . . . 51
SECTION 704. Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . . . . . . . . 52
SECTION 705. May Hold Securities . . . . . . . . . . . . . . . . . . . 52
SECTION 706. Money Held in Trust . . . . . . . . . . . . . . . . . . . 53
SECTION 707. Compensation and Reimbursement . . . . . . . . . . . . . 53
SECTION 708. Disqualification; Conflicting Interests . . . . . . . . . 53
SECTION 709. Corporate Trustee Required; Eligibility . . . . . . . . . 54
SECTION 710. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 711. Acceptance of Appointment by Successor . . . . . . . . . 56
SECTION 712. Merger, Conversion, Consolidation or Succession
to Business . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 713. Preferential Collection of Claims Against
Company . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 714. Judgment Currency . . . . . . . . . . . . . . . . . . . . 60
SECTION 715. Appointment of Authenticating Agent . . . . . . . . . . . 61
<PAGE>
Contents, P. 6
Page
ARTICLE EIGHT
Holders' Lists and Reports by Trustee and Company
SECTION 801. Company To Furnish Trustee Names and Addresses of
Holders . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 802. Preservation of Information; Communications to
Holders . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 803. Reports by Trustee . . . . . . . . . . . . . . . . . . . 65
SECTION 804. Reports by Company . . . . . . . . . . . . . . . . . . . 66
ARTICLE NINE
Consolidation, Merger, Conveyance or Transfer
SECTION 901. Company May Consolidate, etc., Only on
Certain Terms . . . . . . . . . . . . . . . . . . . . 67
SECTION 902. Successor Corporation Substituted . . . . . . . . . . . . 67
ARTICLE TEN
Supplemental Indentures
SECTION 1001. Supplemental Indentures Without Consent
of Holders . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 1002. Supplemental Indentures with Consent
of Holders . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 1003. Execution of Supplemental Indentures . . . . . . . . . . 70
SECTION 1004. Effect of Supplemental Indentures . . . . . . . . . . . 70
SECTION 1005. Conformity with Trust Indenture Act . . . . . . . . . . 70
SECTION 1006. Reference in Securities to Supplemental
Indentures . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE ELEVEN
Covenants
SECTION 1101. Payment of Principal, Premium and Interest . . . . . . . 71
SECTION 1102. Maintenance of Office or Agency . . . . . . . . . . . . 71
SECTION 1103. Money for Securities Payments To Be Held
in Trust . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 1104. Statement by Officers as to Default . . . . . . . . . . 73
SECTION 1105. Additional Amounts . . . . . . . . . . . . . . . . . . . 74
<PAGE>
Contents, P. 7
Page
ARTICLE TWELVE
Redemption of Securities
SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . . 74
SECTION 1202. Election To Redeem; Notice to Trustee . . . . . . . . . 75
SECTION 1203. Selection by Trustee of Securities To
Be Redeemed . . . . . . . . . . . . . . . . . . . . . 75
SECTION 1204. Notice of Redemption . . . . . . . . . . . . . . . . . . 75
SECTION 1205. Deposit of Redemption Price . . . . . . . . . . . . . . 76
SECTION 1206. Securities Payable on Redemption Date . . . . . . . . . 76
SECTION 1207. Securities Redeemed in Part . . . . . . . . . . . . . . 77
ARTICLE THIRTEEN
Sinking Funds
SECTION 1301. Applicability of Article . . . . . . . . . . . . . . . . 77
SECTION 1302. Satisfaction of Sinking Fund Payments
with Securities . . . . . . . . . . . . . . . . . . . 77
SECTION 1303. Redemption of Securities for Sinking Fund . . . . . . . 78
ARTICLE FOURTEEN
Meetings of Holders of Securities
SECTION 1401. Purposes for Which Meetings May Be Called . . . . . . . 78
SECTION 1402. Call, Notice and Place of Meetings . . . . . . . . . . . 78
SECTION 1403. Persons Entitled To Vote at Meetings . . . . . . . . . . 79
SECTION 1404. Quorum; Action . . . . . . . . . . . . . . . . . . . . . 79
SECTION 1405. Determination of Voting Rights; Conduct and
Adjournment of Meetings . . . . . . . . . . . . . . . 80
SECTION 1406. Counting Votes and Recording Action of Meetings. . . . . 80
ARTICLE FIFTEEN
Subordination
SECTION 1501. Agreement to Subordinate . . . . . . . . . . . . . . . . 81
SECTION 1502. Liquidation, Dissolution, Bankruptcy . . . . . . . . . . 81
SECTION 1503. Default on Senior Indebtedness . . . . . . . . . . . . . 81
<PAGE>
Contents, P. 8
Page
SECTION 1504. Acceleration of Payment of Securities . . . . . . . . . 82
SECTION 1505. When Distributions Must Be Paid Over . . . . . . . . . . 82
SECTION 1506. Subrogation . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 1507. Relative Rights . . . . . . . . . . . . . . . . . . . . 82
SECTION 1508. Subordination May Not Be Impaired by
Company . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 1509. Rights of Trustee and Paying Agent . . . . . . . . . . . 83
SECTION 1510. Distribution or Notice to Representative . . . . . . . . 83
SECTION 1511. Article Fifteen Not To Prevent Events of
Default or Limit Right To Accelerate . . . . . . . . . 83
SECTION 1512. Trust Moneys Not Subordinated . . . . . . . . . . . . . 83
SECTION 1513. Trustee Entitled To Rely . . . . . . . . . . . . . . . . 83
SECTION 1514. Trustee To Effectuate Subordination . . . . . . . . . . 84
SECTION 1515. Trustee Not Fiduciary for Holders of
Senior Indebtedness . . . . . . . . . . . . . . . . . 84
SECTION 1516. Reliance by Holders of Senior Indebtedness
on Subordination Provisions . . . . . . . . . . . . . 84
EXHIBIT A Forms of Debt Securities
EXHIBIT B.1 Form of Certificate to be given by Person entitled to receive
Bearer Security
EXHIBIT B.2 Form of Certificate to be given by Euro-clear and Cedel Bank
societe anonyme in connection with the Exchange of a portion
of Temporary Global Security
EXHIBIT B.3 Form of Certificate to be given by Euro-clear and Cedel Bank
societe anonyme to obtain Interest prior to an Exchange Date
EXHIBIT B.4 Form of Certificate to be given by Beneficial Owners to
obtain Interest prior to an Exchange Date
EXHIBIT B.5 Form of Confirmation to be sent to Purchasers of Bearer
Securities
<PAGE>
INDENTURE dated as of , 199 , between
INTERNATIONAL BUSINESS MACHINES CORPORATION, a corporation duly
organized and existing under the laws of the State of New York
(herein called the "Company"), having its principal office at One
Old Orchard Road, Armonk, New York 10504, and
, as
Trustee (herein called the "Trustee"), the office of the Trustee
at which at the date hereof its corporate trust business is
principally administered being .
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness (herein
called the "Securities"), to be issued in one or more series as in this
Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed,
for the equal and proportionate benefit of all Holders of the Securities or
of series thereof, as follows:
ARTICLE ONE
Definitions and Other Provisions of General Application
SECTION 101. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted in the United
States of America at the date of such computation; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally within an Article of this Indenture, may
be defined in that Article.
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
<PAGE>
2
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 715 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Authorized Newspaper" means a newspaper of general circulation in the
place of publication, printed in the official language of the country of
publication and customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays. Whenever successive weekly
publications in an Authorized Newspaper are authorized or required
hereunder, they may be made (unless otherwise expressly provided herein) on
the same or different days of the week and in the same or different
Authorized Newspapers.
"Bearer Security" means any Security which is not registered in the
Security Register as to both principal and interest (including without
limitation any Security in temporary or definitive global bearer form).
"Blockage Notice" has the meaning specified in Section 1503.
"Board of Directors" means either the board of directors of the Company,
any executive officer of the Company duly authorized to act in the name of
or on behalf of that board or any committee consisting of two or more
persons who need not be directors duly authorized to act in the name of or
on behalf of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors and to be in full force and effect on the
date of such certification.
"Business Day", when used with respect to any Place of Payment or place
of publication, means each day on which commercial banks and foreign
exchange markets settle payments in the Place of Payment or place of
publication, or as specified for a series of Securities pursuant to
Section 202 or Section 301, as the case may be. Unless otherwise specified
pursuant to Section 202 or Section 301, as the case may be, when used with
respect to Securities bearing interest at a rate or rates determined by
reference to London interbank offered rates for deposits in U.S. Dollars,
"Business Day" shall exclude any day on which commercial banks and foreign
exchange markets do not settle payments in London.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after the execution of this instrument such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 403.
<PAGE>
3
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request", "Request of the Company", "Company Order" or "Order
of the Company" means a written request or order signed in the name of the
Company by its Chairman of the Board, its President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Controller, an Assistant
Controller, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Component Currency" has the meaning specified in Section 410(i).
"Conversion Date" has the meaning specified in Section 410(e).
"Conversion Rate" has the meaning specified in Section 714.
"Corporate Trust Office" means the office of the Trustee in New York,
New York, at which at any particular time its corporate trust business
shall be principally administered, which office at the date hereof is
except that with respect to the presentation of
Securities (or Coupons, if any, representing an installment of interest)
for payment or for registration of transfer and exchange, such term shall
mean the office or the agency of the Trustee in said city at which at any
particular time its corporate agency business shall be conducted.
"corporation" includes corporations, associations, companies and
business trusts.
"Coupon" or "coupon" means any interest coupon appertaining to a Bearer
Security.
"Defaulted Interest" has the meaning specified in Section 406.
"Discharged" has the meaning specified in Section 505.
"Dollar" means the coin or currency of the United States of America as
at the time of payment is legal tender for the payment of public and
private debts.
"Dollar Equivalent of the Currency Unit" has the meaning specified in
Section 410(h).
"Dollar Equivalent of the Foreign Currency" has the meaning specified in
Section 410(g).
"ECU" means the European Currency Unit as defined and revised from time
to time by the Council of the European Communities.
"Euro-clear" means the operator of the Euro-clear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"Event of Default" has the meaning specified in Section 601.
"Exchange Rate Agent" means the entity appointed by the Company pursuant
to Section 104(g). Unless otherwise specified as contemplated by
Section 202 or Section 301, as the
<PAGE>
4
case may be, the Luxembourg Stock Exchange shall act as Exchange Rate Agent
for purposes of Section 410 in the case of each series of Securities listed
on the Luxembourg Stock Exchange.
"Exchange Rate Officers' Certificate" means a telecopy or tested telex
or a certificate setting forth (i) the applicable Official Currency Unit
Exchange Rate and (ii) the Dollar or Foreign Currency or currency unit
amounts of principal, premium, if any, and interest, if any, respectively
(on an aggregate basis and on the basis of a Security having a principal
amount of 1,000 units in the relevant currency or currency unit), payable
on the basis of such Official Currency Unit Exchange Rate, sent (in the
case of a telecopy or telex) or executed (in the case of a certificate) by
the Controller or any Assistant Controller or by the Treasurer or any
Assistant Treasurer of the Company and delivered to the Trustee; such
telecopy, tested telex or certificate need not comply with Section 102.
"Foreign Currency" means a currency issued by the government of any
country other than the United States of America.
"Foreign Government Securities" has the meaning specified in
Section 505.
"Holder" or "holder" means, with respect to a Registered Security, the
Person in whose name at the time a particular Registered Security is
registered in the Security Register and, with respect to a Bearer Security
and/or a Coupon, the bearer thereof.
"Indebtedness" of any corporation means all indebtedness representing
money borrowed which is created, assumed, incurred or guaranteed in any
manner by such corporation or for which such corporation is otherwise
responsible or liable (whether by agreement to purchase indebtedness of, or
to supply funds to or invest in, others).
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof and shall include the terms of particular series of Securities
established as contemplated by Section 202 and Section 301, as the case may
be.
"interest", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Market Exchange Rate" has the meaning specified in Section 410(i).
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes
due and payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Medium-Term Debt Securities" has the meaning specified in Section 301.
"Medium-Term Debt Securities Certificate" shall mean a certificate
signed by the Chairman of the Board, the President, any Vice President, the
Treasurer, the Controller, any Secretary or Assistant Treasurer, Assistant
Controller or Assistant Secretary of the Company, or any other
<PAGE>
5
employee of the Company designated by a Board Resolution as having the
authority to deliver a Medium-Term Debt Securities Certificate hereunder.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President or any Vice President, and by the Treasurer, the
Controller, the Secretary or any Assistant Treasurer, Assistant Controller
or Assistant Secretary, of the Company, and delivered to the Trustee. Each
such Officers' Certificate shall contain the statements provided in Section
102 if and to the extent required by the provisions of such Section.
"Official Currency Unit Exchange Rate" means, with respect to any
payment to be made hereunder, the exchange rate between the relevant
currency unit and the currency or currency unit of payment calculated by
the Exchange Rate Agent for the Securities of the relevant series (in the
case of ECU, reported by the Commission of the European Communities and on
the date hereof based on the rates in effect at 2:30 p.m., Brussels time,
on the exchange markets of the Component Currencies of ECU), on the
Business Day (in the city in which such Exchange Rate Agent has its
principal office) immediately preceding delivery of any Exchange Rate
Officers' Certificate.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Company. Each Opinion of Counsel shall
contain the statements provided in Section 102 if and to the extent
required by the provisions of such Section.
"Original Issue Discount Security" means any Security which provides for
an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to
Section 602.
"Outstanding" or "outstanding", when used with respect to Securities,
means, as of the date of determination, all Securities theretofore
authenticated and delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered or
deemed delivered to the Trustee for cancelation;
(ii) Securities for whose payment or redemption money in the
necessary amount and in the required currency or currency unit has been
theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been
made; and
(iii) Securities which have been paid pursuant to Section 405 or in
exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid obligations
of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or
whether a quorum is present at a meeting of Holders of Outstanding
<PAGE>
6
Securities or the number of votes entitled to be cast by each Holder of a
Security in respect of such Security at any such meeting, (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon a
declaration of acceleration of the Maturity thereof pursuant to
Section 602, (ii) the principal amount of a Security denominated in a
Foreign Currency or currency unit shall be the Dollar equivalent obtained
by converting the specified Foreign Currency or currency unit into Dollars
at the Market Exchange Rate on the date of such determination (or, in the
case of a Security denominated in a currency unit for which there is no
Market Exchange Rate, the Dollar equivalent obtained by adding together the
results obtained by converting the Specified Amount of each Component
Currency into Dollars at the Market Exchange Rate for each such Component
Currency on the date of such determination) of the principal amount (or, in
the case of an Original Issue Discount Security, of the amount determined
as provided in (i) above) of such Security, and (iii) Securities owned by
the Company or any other obligor upon the Securities or any Affiliate of
the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which the Trustee
knows to be so owned shall be so disregarded. Securities so owned which
have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor.
"Paying Agent" means the Trustee or any other Person authorized by the
Company to pay the principal of (and premium, if any) or interest, if any,
on any Securities on behalf of the Company.
"Payment Blockage Period" has the meaning specified in Section 1503.
"Person" or "person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if
any) and interest, if any, on the Securities of that series are payable as
specified in accordance with Section 202 or Section 301, as the case may
be.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by
such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 405 in exchange for or
in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed
to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price, in the currency or currency unit in which such
Security is payable, at which it is to be redeemed pursuant to this
Indenture.
<PAGE>
7
"Registered Security" means any Security registered in the Security
Register (including without limitation any Security in temporary or
definitive global registered form).
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Registered Securities of any series means the date specified
for that purpose as contemplated by Section 202 or Section 301, as the case
may be, which date shall be, unless otherwise specified pursuant to
Section 202 or Section 301, as the case may be, the fifteenth day preceding
such Interest Payment Date, whether or not such day shall be a Business
Day.
"Representative" means any trustee, agent or representative (if any) for
an issue of Senior Indebtedness.
"Required Currency" has the meaning specified in Section 115.
"Responsible Trust Officer", when used with respect to the Trustee,
means the chairman or any vice chairman of the board of directors, the
chairman or any vice chairman of the executive committee of the board of
directors, the chairman of the trust committee, the president, any vice
president, any assistant vice president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the
controller or any assistant controller or any other officer of the Trustee
customarily performing functions similar to those performed by any of the
above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities (including Medium-Term
Debt Securities) authenticated and delivered under this Indenture and, in
the case of any Bearer Security, shall include where appropriate any
Coupons appertaining thereto.
"Security Register" has the meaning specified in Section 404.
"Security Registrar" means the Person appointed as the initial Security
Registrar in Section 404 or any Person appointed by the Company as a
successor or replacement Security Registrar.
"Senior Indebtedness" means the principal of, premium, if any, and
interest on, (i) all the Company's other indebtedness for money borrowed,
other than the Securities, whether outstanding on the date of execution of
this Indenture or thereafter created, assumed or incurred, except such
indebtedness as is by its terms expressly stated to be not superior in
right of payment to the Securities or to rank pari passu with the
Securities and (ii) any deferrals, renewals or extensions of any such
Senior Indebtedness; provided, however, that Senior Indebtedness shall not
include (1) any obligation of the Company to any Subsidiary, (2) any
liability for Federal, state, local or other taxes owed or owing by the
Company, (3) any accounts payable or other liability to trade creditors
arising in the ordinary course of business (including guarantees thereof or
instruments evidencing such liabilities), (4) any indebtedness, guarantee
or obligation of the Company which is expressly subordinate or junior in
right of payment in any respect to any other indebtedness, guarantee or
obligation of the Company, including any senior subordinated Indebtedness
and any other subordinated obligations, (5) any obligations with respect to
any capital Stock, or (6) any
<PAGE>
8
Indebtedness incurred in violation of this Indenture. The term
"indebtedness for money borrowed" as used herein shall include, without
limitation, any obligation of, or any obligation guaranteed by, the Company
for the repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments, and any deferred obligation
for the payment of the purchase price of property or assets.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 406.
"Specified Amount" has the meaning specified in Section 410(i).
"Stated Maturity", when used with respect to any Security (or Coupon, if
any, representing an installment of interest) or any installment of
principal thereof or interest thereon, means the date specified in such
Security (or Coupon) as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"Subsidiary" means any corporation a majority of the Voting Shares of
which are at the time owned or controlled, directly or indirectly, by the
Company or by one or more Subsidiaries, or by the Company and one or more
Subsidiaries.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
by the Trust Indenture Reform Act of 1990, and as in force at the date as
of which this instrument was executed, except as provided in Section 1005.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee
hereunder, and if at any time there is more than one such Person, "Trustee"
as used with respect to the Securities of any series shall mean the Trustee
with respect to Securities of that series.
"United States" means the United States of America (including the states
and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"U.S. Government Obligations" has the meaning specified in Section 505.
"Valuation Date" has the meaning specified in Section 410(e).
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word
or words added before or after the title "vice president".
"Voting Shares" means, as to shares of a particular corporation,
outstanding shares of stock of any class of such corporation entitled to
vote in the election of directors, excluding shares entitled so to vote
only upon the happening of some contingency.
SECTION 102. Compliance Certificates and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any
provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and an
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9
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the
case of any such application or request as to which the furnishing of such
documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional
certificate or opinion need be furnished.
Unless expressly otherwise specified with respect to any certificate or
opinion provided for in this Indenture, every certificate or opinion with
respect to compliance with a condition or covenant provided for in this
Indenture (other than annual certificates provided pursuant to
Section 1104) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case where
several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that
they be so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and one or more
other such Persons as to other matters, and any such Person may certify or
give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate
or opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 104. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this
Indenture to be given or taken by Holders of Securities of any series may
be embodied in and evidenced by (i) one or more instruments of
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10
substantially similar tenor signed by such Holders in person or by proxies
duly appointed in writing, (ii) the record of such Holders voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fourteen, or (iii) a combination
of any such record and one or more instruments of substantially similar
tenor signed by such Holders in person or by proxies duly appointed in
writing. Except as herein otherwise expressly provided, such action shall
become effective when such record and/or instrument or instruments are
delivered to the Trustee and, where it is hereby expressly required, to the
Company. Such record or instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments or so voting at
any such meeting. Proof of execution of any such instrument or of a writing
appointing any such proxy shall be sufficient for any purpose of this
Indenture and (subject to Section 701) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this Section. The record
of any meeting of Holders of Securities shall be proved in the manner
provided in Section 1406.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer
authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting in a capacity
other than his individual capacity, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) The principal amount and serial numbers of Bearer Securities held
by any Person, and the date of holding the same, may be proved by the
production of such Bearer Securities or by a certificate executed by any
trust company, bank, banker or other depository, wherever situated, showing
that at the date therein mentioned such Person had on deposit with such
depository, or exhibited to it, the Bearer Securities therein described; or
such facts may be proved by the certificate or affidavit of the Person
holding such Bearer Securities, if such certificate or affidavit is deemed
by the Trustee to bc satisfactory. The Trustee and the Company may assume
that such ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date issued in respect of the same
Bearer Security is produced, (2) such Bearer Security is produced to the
Trustee by some other Person, (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no
longer Outstanding.
(d) The fact and date of execution of any such instrument or writing
pursuant to clause (c) above, the authority of the Person executing the
same and the principal amount and serial numbers of Bearer Securities held
by the Person so executing such instrument or writing and the date of
holding the same may also be proved in any other manner which the Trustee
deems sufficient; and the Trustee may in any instance require further proof
with respect to any of the matters referred to in this clause.
(e) The principal amount and serial numbers of Registered Securities
held by any Person and the date of holding the same shall be proved by the
Security Register.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of a Holder shall bind every future Holder of the same
Security and/or Coupon and the Holder of every
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11
Security and/or Coupon issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security
and/or Coupon.
(g) Whenever any Act is to be taken hereunder by the Holders of two or
more series of Securities denominated in different currencies (or currency
units), then, for the purpose of determining the principal amount of
Securities held by such Holders, the aggregate principal amount of the
Securities denominated in a Foreign Currency (or any currency unit) shall
be deemed to be that amount determined by the Company or by an authorized
Exchange Rate Agent and evidenced to the Trustee by an Officers'
Certificate as of the date the taking of such Act by the Holders of the
requisite percentage in principal amount of the Securities is evidenced to
the Trustee to be equal to the Dollar equivalent obtained by converting the
specified Foreign Currency or currency unit into Dollars at the Market
Exchange Rate on such date (or, in the case of a Security denominated in a
currency unit for which there is no Market Exchange Rate, the Dollar
equivalent obtained by adding together the results obtained by converting
the Specified Amount of each Component Currency into Dollars at the Market
Exchange Rate for each such Component Currency on such date) of the
principal amount (or, in the case of an Original Issue Discount Security,
the principal amount thereof that would be due and payable as of the
declaration of acceleration of the Maturity thereof pursuant to
Section 602) of such Security. An Exchange Rate Agent may be authorized in
advance or from time to time by the Company. Any such determination by the
Company or by any such Exchange Rate Agent shall be conclusive and binding
on all Holders, the Company and the Trustee, and neither the Company nor
any such Exchange Rate Agent shall be liable therefor in the absence of bad
faith.
(h) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to a
Board Resolution, fix in advance a record date for the determination of
Holders entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other Act, but the Company shall have no
obligation to do so. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as
of such record date; provided that no such authorization, agreement or
consent by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not
later than six months after the record date.
SECTION 105. Notices, etc., to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or other Act of Holders
or other document provided or permitted by this Indenture to be made upon,
given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be made, given,
furnished or filed in writing to or with the Trustee at its Corporate
Trust Office and unless otherwise herein
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12
expressly provided, any such document shall be deemed to be sufficiently
made, given, furnished or filed upon its receipt by a Responsible Trust
Officer of the Trustee, or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided)
if in writing and delivered in person, mailed, first-class postage
prepaid, or sent by overnight courier or, until such time as the Company
shall have notified the Trustee in writing that it shall no longer
accept delivery of notice by telecopy or telex, given by telecopy or by
telex (with answerback received) to the Company addressed to it at the
address of its principal office specified in the first paragraph of this
instrument or at any other address previously furnished in writing to
the Trustee by the Company, or at its telecopy or telex number from time
to time furnished in writing to the Trustee expressly for purposes of
this Indenture, Attention: Secretary.
SECTION 106. Notice to Holders; Waiver. (a) Where this Indenture
provides for notice to Holders of any event:
(i) if any of the Securities affected by such event are Registered
Securities, such notice shall be sufficiently given (unless otherwise
herein expressly provided or unless otherwise specified in such
Securities) if in writing and delivered in person, mailed, first-class
postage prepaid or sent by overnight courier, to each Holder affected by
such event, at his address as it appears in the Security Register,
within the time prescribed for the giving of such notice, and
(ii) if any of the Securities affected by such event are Bearer
Securities, such notice shall be sufficiently given (unless otherwise
herein expressly provided or unless otherwise specified in such
Securities) if (A) published once in an Authorized Newspaper in New York
City and London and, if applicable, in Luxembourg or such other place of
publication as may be required pursuant to the rules and regulations of
any securities exchange on which such Securities are listed, and (B)
delivered in person, mailed, first-class postage prepaid or sent by
overnight courier to such Persons whose names were previously filed with
the Trustee, within the time prescribed for the giving of such notice.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice to Holders of
Registered Securities in the manner specified above, then such notification
as shall be made with the approval of the Trustee shall constitute a
sufficient notification for every purpose hereunder. In case by reason of
the suspension of publication of any Authorized Newspaper or Authorized
Newspapers or by reason of any other cause it shall be impracticable to
publish any notice to Holders of Bearer Securities as provided above, then
such notification to Holders of Bearer Securities as shall be given with
the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder.
(b) In any case where notice to a Holder of Registered Securities is
given in any manner specified in paragraph (a) above, such notice shall be
conclusively presumed to have been duly given, whether or not such Holder
receives such notice. In any case where notice to Holders of Registered
Securities is given in any manner specified in paragraph (a) above, neither
the failure to deliver, mail or send such notice, nor any defect in any
notice so mailed or sent, to any
<PAGE>
13
particular Holder of a Registered Security shall affect the sufficiency of
such notice with respect to other Holders of Registered Securities or the
sufficiency of any notice to Holders of Bearer Securities given as provided
herein. Neither the failure to give notice by publication to Holders of
Bearer Securities as provided in paragraph (a) above, nor any defect in any
notice so published, shall affect the sufficiency of any notice to Holders
of Registered Securities given as provided herein.
(c) Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent
of such notice. Waivers of notice by Holders of Securities shall be filed
with the Trustee, but such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
SECTION 107. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with the duties imposed by any of
Sections 310 to 317, inclusive, of the Trust Indenture Act through
operation of Section 318(c) thereof, such imposed duties shall control.
SECTION 108. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 109. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns,
whether so expressed or not.
SECTION 110. Separability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby.
SECTION 111. Benefits of Indenture. Nothing in this Indenture or in the
Securities or Coupons, express or implied, shall give to any Person, other
than the parties hereto and their successors hereunder and the Holders, any
benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 112. Governing Law. THIS INDENTURE AND THE SECURITIES AND
COUPONS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK.
SECTION 113. Legal Holidays. Except as otherwise specified as
contemplated by Section 202 or Section 301, as the case may be, in any case
where any Interest Payment Date, Redemption Date or Stated Maturity of any
Security or Coupon shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of such
Security or Coupon) payment of interest or principal (and premium, if any)
need not be made at such Place of Payment on such date, but may be made on
the next succeeding Business Day at such Place of Payment with the same
force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity, as the case may be, provided that no
interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be, to the next
succeeding Business Day at such Place of Payment.
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14
SECTION 114. Moneys of Different Currencies To Be Segregated. The
Trustee shall segregate moneys, funds and accounts held by the Trustee
hereunder in one currency (or currency unit) from any moneys, funds or
accounts in any other currencies (or currency units), notwithstanding any
provision herein which would otherwise permit the Trustee to commingle such
amounts.
SECTION 115. Payment To Be in Proper Currency. In the case of any
Security denominated in any particular currency or currency unit (the
"Required Currency"), subject to applicable law and except as otherwise
provided herein, therein or in or pursuant to the related Board Resolution,
Medium-Term Debt Securities Certificate or supplemental indenture, the
obligation of the Company to make any payment of principal, premium or
interest thereon shall not be discharged or satisfied by any tender by the
Company, or recovery by the Trustee, in any currency or currency unit other
than the Required Currency, except to the extent that such tender or
recovery shall result in the Trustee's timely holding the full amount of
the Required Currency then due and payable. If any such tender or recovery
is made in other than the Required Currency, the Trustee may take such
actions as it considers appropriate to exchange such other currency or
currency unit for the Required Currency. The costs and risks of any such
exchange, including without limitation the risks of delay and exchange rate
fluctuation, shall be borne by the Company, the Company shall be liable for
any shortfall or delinquency in the full amount of the Required Currency
then due and payable, and in no circumstances shall the Trustee be liable
therefor. The Company hereby waives any defense of payment based upon any
such tender or recovery which is not in the Required Currency, or which,
when exchanged for the Required Currency by the Trustee, is less than the
full amount of the Required Currency then due and payable
SECTION 116. Language of Notices, etc. Any request, demand,
authorization, direction, notice, consent or waiver required or permitted
under this Indenture shall be in the English language, except that any
published notice may be in an official language of the country of
publication.
SECTION 117. Changes in Exhibits. At any time and from time to time, the
Company may substitute a new form, or add new forms, of the Exhibits
hereto. Such substitution shall be effective upon receipt by the Trustee of
such new form of Exhibit and a Board Resolution or Officers' Certificate
adopting such new form of Exhibit, and thereafter all references in this
Indenture to such Exhibit shall be deemed to refer to such new form of
Exhibit.
ARTICLE TWO
Issuance of Securities
SECTION 201. Creation of Securities in Amount Unlimited. An unlimited
aggregate principal amount of Securities may be issued pursuant to this
Article Two and, in the case of Medium-Term Debt Securities, pursuant to
Article Three. The Securities (including Medium-Term Debt Securities) may
be authenticated and delivered, as authorized by the Board of Directors, in
an unlimited number of series.
SECTION 202. Documents Required for Issuance of Each Series of
Securities Other than Medium-Term Debt Securities. At any time and from
time to time, Securities of each series created pursuant to the provisions
of this Article Two may be executed by the Company and delivered to
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15
the Trustee and shall be authenticated by the Trustee and shall be
authenticated by the Trustee and delivered to, or upon the order of, the
Company upon receipt by the Trustee of the following:
(a) A Board Resolution or Board Resolutions authorizing the execution,
authentication and delivery of the Securities of the series, and
specifying:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other Securities);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this
Article Two (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 403, 404, 405, 1006 or
1207 and except for any Securities which, pursuant to Section 402, are
deemed never to have been authenticated and delivered hereunder);
(3) the date or dates on which the principal (and premium, if any)
of any of the Securities of the series are payable or the method of
determination thereof;
(4) the rate or rates, or the method of determination thereof, at
which any of the Securities of the series shall bear interest, if any,
the date or dates from which such interest shall accrue, the Interest
Payment Dates on which such interest shall be payable and the Regular
Record Date for the interest payable on any Registered Securities on
any Interest Payment Date;
(5) the place or places where the principal of (and premium, if
any) and interest, if any, on any of the Securities and Coupons, if
any, of the series shall be payable and the office or agency for the
Securities of the series maintained by the Company pursuant to
Section 1102;
(6) the period or periods within which, the price or prices at
which and the terms and conditions upon which any of the Securities of
the series may be redeemed, in whole or in part, at the option of the
Company;
(7) the terms of any sinking fund and the obligation, if any, of
the Company to redeem or purchase Securities of the series pursuant to
any sinking fund or analogous provisions or at the option of a Holder
thereof and the period or periods within which, the price or prices at
which and the terms and conditions upon which Securities of the series
shall be redeemed or purchased, in whole or in part;
(8) the terms of the obligation of the Company, if any, to permit
the conversion of the Securities of the series into stock or other
securities of the Company or of any other corporation;
(9) the terms, if any, for the attachment to Securities of the
series of warrants, optionsor other rights to purchase or sell stock
or other securities of the Company;
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16
(10) if other than denominations of $1,000 and in any integral
multiple thereof, if Registered Securities, and $5,000, if Bearer
Securities, for Securities denominated in Dollars, the denominations
in which the Securities of the series shall be issuable;
(11) if other than the principal amount thereof, the portion of the
principal amount of any of the Securities of the series which shall be
payable upon declaration of acceleration of the Maturity thereof
pursuant to Section 602;
(12) the application, if any, of Section 503, or such other means
of satisfaction and discharge as may be specified for the Securities
and Coupons, if any, for a series;
(13) any deletions or modifications of or additions to the Events
of Default set forth in Section 601 or covenants of the Company set
forth in Article Nine or Eleven pertaining to the Securities of the
series;
(14) the forms of the Securities and Coupons, if any, of the
series;
(15) if other than Dollars, the currency or currencies, or currency
unit or units, in which the Securities of such series will be
denominated and/or in which payment of the principal of (and premium,
if any) and interest, if any, on any of the Securities of the series
shall be payable and the Exchange Rate Agent, if any, for such series;
(16) if the principal of (and premium, if any) or interest, if any,
on any of the Securities of the series are to be payable at the
election of the Company or a Holder thereof, or under some or all
other circumstances, in a currency or currencies, or currency unit or
units, other than that in which the Securities are denominated, the
period or periods within which, and the terms and conditions upon
which, such election may be made, or the other circumstances under
which any of the Securities are to be so payable, including without
limitation the application of Section 410(b) and any deletions to,
modifications of or additions to the provisions thereof, and any
provision requiring the Holder to bear currency exchange costs by
deduction from such payments;
(17) if the amount of payments of principal of (and premium, if
any) or interest, if any, on any of the Securities of the series may
be determined with reference to an index based on (i) a currency or
currencies or currency unit or units other than that in which such
Securities are stated to be payable or (ii) any method, not
inconsistent with the provisions of this Indenture, specified in or
pursuant to such Board Resolution, then in each case (i) and (ii) the
manner in which such amounts shall be determined;
(18) whether the Securities of the series are to be issued as
Registered Securities or Bearer Securities (with or without Coupons),
or any combination thereof, whether Bearer Securities may be exchanged
for Registered Securities of the series and whether Registered
Securities may be exchanged for Bearer Securities of the series (if
permitted by applicable laws and regulations) and the circumstances
under which and the place or places where any such exchanges, if
permitted, may be made; and whether any Securities of the series are
to be issuable initially in temporary global form and whether any
Securities of the series are to be issuable in definitive global form
with or without
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17
Coupons and, if so, whether beneficial owners of interests in any such
definitive global Security may exchange such interests for Securities
of such series and of like tenor of any authorized form and
denomination and the circumstances under which and the place or places
where any such exchanges may occur, if other than in the manner
provided in Section 404;
(19) if the Securities and Coupons, if any, of the series are to be
issued upon the exercise of warrants, the time, manner and place for
such Securities and Coupons, if any, to be authenticated and
delivered;
(20) whether and under what circumstances and with what procedures
and documentation the Company will pay additional amounts on any of
the Securities and Coupons, if any, of the series to any Holder who is
not a U.S. Person (including definition of such term), in respect of
any tax assessment or governmental charge withheld or deducted and, if
so, whether the Company will have the option to redeem such Securities
rather than pay additional amounts (and the terms of any such option);
(21) the Person to whom any interest on any Registered Security of
the series shall be payable, if other than the Person in whose name
that Security (or one or more Predecessor Securities) is registered at
the close of business on the Regular Record Date for such interest,
the manner in which, or the Person to whom, any interest on any Bearer
Security of the series shall be payable, if otherwise than upon
presentation and surrender of the Coupons appertaining thereto as they
severally mature and the extent to which, or the manner in which, any
interest payable on a temporary global Security on an Interest Payment
Date will be paid if other than in the manner provided in Section 403;
and
(22) any other terms of any of the Securities of the series (which
terms shall not be inconsistent with the provisions of this
Indenture).
If any of the terms of the series are established by action taken
pursuant to a Board Resolution or Board Resolutions, an Officers'
Certificate certifying as to such action also shall be delivered to the
Trustee.
(b) In case the Securities of the series to be authenticated and
delivered are to be created pursuant to one or more supplemental
indentures, such supplemental indenture or indentures, accompanied by a
Board Resolution or Board Resolutions authorizing such supplemental
indenture or indentures and designating the new series to be created and
prescribing pursuant to paragraph (a) above, consistent with the
applicable provisions of this Indenture, the terms and provisions
relating to the Securities of the series.
(c) Either (i) a certificate or other official document evidencing
the due authorization, approval or consent of any governmental body or
bodies, at the time having jurisdiction in the premises, together with
an Opinion of Counsel that the Trustee is entitled to rely thereon and
that the authorization, approval or consent of no other governmental
body is required, or (ii) an Opinion of Counsel that no authorization,
approval or consent of any governmental body is required.
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(d) An Opinion of Counsel that all instruments furnished the Trustee
conform to the requirements of this Indenture and constitute sufficient
authority hereunder for the Trustee to authenticate and deliver the
Securities and to deliver the Coupons, if any, of the series; that all
conditions precedent provided for in this Indenture relating to the
authentication and delivery of the Securities and delivery of the
Coupons, if any, of the series have been complied with and the Company
is duly entitled to the authentication and delivery of the Securities
and Coupons, if any, of the series in accordance with the provisions of
this Indenture; that all laws and requirements with respect to the form
and execution by the Company of the supplemental indenture, if any, and
the execution and delivery by the Company of the Securities and Coupons,
if any, of the series have been complied with; that the Company has
corporate power to execute and deliver the supplemental indenture, if
any, and to issue the Securities and Coupons, if any, of the series and
has duly taken all necessary corporate action for those purposes; and
that the supplemental indenture, if any, as executed and delivered and
the Securities and Coupons, if any, of the series, when issued, will be
the legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their terms (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other laws affecting creditors' rights generally from time
to time in effect, the enforceability of the Company's obligations also
being subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law);
that the Securities and Coupons, if any, of the series, when issued,
will be entitled to the benefits of this Indenture, equally and ratably
with all other Securities and Coupons, if any, of such series
theretofore issued and then outstanding hereunder; and that the amount
of Securities then outstanding under this Indenture, including the
Securities of the series, will not exceed the amount at the time
permitted by law or this Indenture.
(e) An Officers' Certificate stating that the Company is not in
default under this Indenture and that the issuance of the Securities and
Coupons, if any, of the series will not result in any breach of any of
the terms, conditions or provisions of, or constitute a default under,
the Company's certificate of incorporation or by-laws or any indenture,
mortgage, deed of trust or other agreement or instrument to which the
Company is a party or by which it is bound, or any order of any court or
administrative agency entered in any proceeding to which the Company is
a party or by which it may be bound or to which it may be subject; and
that all conditions precedent provided in this Indenture relating to the
authentication and delivery of the Securities and Coupons, if any, of
the series have been complied with.
(f) Such other documents as the Trustee may reasonably require.
ARTICLE THREE
Issuance of Medium-Term Debt Securities
SECTION 301. Documents Required for Issuance of Each Series of Medium-
Term Debt Securities. At any time, and from time to time, Securities
(sometimes referred to herein as "Medium-Term Debt Securities") of each
series created pursuant to the provisions of this Article Three may be
executed by the Company and delivered to the Trustee and shall be
authenticated
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19
by the Trustee and delivered to, or upon the order of, the Company upon
receipt by the Trustee of the following:
(a) A Board Resolution or Board Resolutions authorizing the execution,
authentication and delivery of Medium-Term Debt Securities up to a
specified aggregate principal amount, in such series and subject to such
terms as shall be established by officers of the Company authorized by
such resolutions to establish such series and terms.
(b) A Medium-Term Debt Securities Certificate requesting the Trustee
to authenticate and deliver Medium-Term Debt Securities of a series as
contemplated by Section 402, and specifying the following terms with
respect to the Medium-Term Debt Securities of the particular series,
authorized pursuant to the Board Resolution or Board Resolutions
referred to in paragraph (a) above:
(1) the title of the Medium-Term Debt Securities of the series
(which shall distinguish the Medium-Term Debt Securities of the series
from all other Securities);
(2) the date of the Medium-Term Debt Securities of the series;
(3) any limit upon the aggregate principal amount of the Medium-
Term Debt Securities of the series which may be authenticated and
delivered under this Article Three (except for Medium-Term Debt
Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Medium-Term Debt
Securities of the series pursuant to Section 403, 404, 405, 1006 or
1207 and except for any Medium-Term Debt Securities which, pursuant to
Section 402, are deemed never to have been authenticated and delivered
hereunder);
(4) the date or dates on which the principal (and premium, if any)
of any of the Medium-Term Debt Securities of the series are payable or
the method of determination thereof, which in any event may not be
less than nine months subsequent to the date of the first
authentication of Medium-Term Debt Securities of the series;
(5) the rate or rates. or the method of determination thereof, at
which any of the Medium-Term Debt Securities of the series shall bear
interest, if any, the date or dates from which such interest shall
accrue, the Interest Payment Dates on which such interest shall be
payable and the Regular Record Date for the interest payable on any
Medium-Term Debt Securities of the series that are Registered
Securities on any Interest Payment Date;
(6) the place or places where the principal of (and premium, if
any) and interest, if any, on any of the Medium-Term Debt Securities
and Coupons, if any, of the series shall be payable and the office or
agency for the Medium-Term Debt Securities of the series maintained by
the Company pursuant to Section 1102;
(7) the period or periods within which, the price or prices at
which and the terms and conditions upon which any of the Medium-Term
Debt Securities of the series may be redeemed, in whole or in part, at
the option of the Company;
<PAGE>
20
(8) the terms of any sinking fund and the obligation, if any, of
the Company to redeem or purchase Medium-Term Debt Securities of the
series pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which
Medium-Term Debt Securities of the series shall be redeemed or
purchased, in whole or in part;
(9) the terms of the obligation of the Company, if any, to permit
the conversion of the Medium-Term Debt Securities of the series into
stock or other securities of the Company or of any other corporation;
(10) the terms, if any, for the attachment to Medium-Term Debt
Securities of the series of warrants, options or other rights to
purchase or sell stock or other securities of the Company;
(11) if other than denominations of $1,000 and in any integral
multiple thereof, if Registered Securities, and $5,000 if Bearer
Securities, for Medium-Term Debt Securities denominated in Dollars,
the denominations in which the Medium-Term Debt Securities of the
series shall be issuable;
(12) if other than the principal amount thereof, the portion of the
principal amount of any of the Medium-Term Debt Securities of the
series which shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 602;
(13) the application, if any, of Section 503, or such other means
of satisfaction and discharge as may be specified for the Medium-Term
Debt Securities and Coupons, if any, of the series;
(14) any deletions or modifications of or additions to the Events
of Default set forth in Section 601 or covenants of the Company set
forth in Article Nine or Eleven pertaining to the Medium-Term Debt
Securities of the series;
(15) if other than Dollars, the currency or currencies, or currency
unit or units, in which the Medium-Term Debt Securities of the series
will be denominated and/or in which payment of the principal of (and
premium, if any) and interest, if any, on any of the Medium-Term Debt
Securities of the series shall be payable and the Exchange Rate Agent,
if any, for such series;
(16) if the principal of (and premium, if any) or interest, if any,
on any of the Securities of the series are to be payable at the
election of the Company or Holder thereof, or under some or all other
circumstances, in a currency or currencies, or currency unit or units,
other than that in which the Medium-Term Debt Securities are stated to
be payable, the period or periods within which, and the terms and
conditions upon which, such election may be made, or the other
circumstances under which any of the Medium-Term Debt Securities are
to be so payable, including without limitation the application of
Section 410(b) and any deletions to, modification of or additions to
the provisions thereof,
<PAGE>
21
and any provision requiring the Holder to bear currency exchange costs
by deduction from such payments;
(17) if the amount of payments of principal of (and premium, if
any) or interest, if any, on any of the Medium-Term Debt Securities of
the series may be determined with reference to an index based on (i) a
currency or currencies or currency unit or units other than that in
which such Securities are stated to be payable or (ii) any method, not
inconsistent with the provisions of this Indenture, specified in or
pursuant to such Board Resolution, then in each case (i) and (ii) the
manner in which such amounts shall be determined;
(18) whether the Medium-Term Debt Securities of the series are to
be issued as Registered Securities or Bearer Securities (with or
without Coupons), or any combination thereof, whether Bearer
Securities may be exchanged for Registered Securities of the series
and whether Registered Securities may be exchanged for Bearer
Securities of the series (if permitted by applicable laws and
regulations) and the circumstances under which and the place or places
where any such exchanges, if permitted, may be made; and whether any
Medium-Term Debt Securities of the series are to be issuable initially
in temporary global form and whether any Medium-Term Debt Securities
of the series are to be issuable in definitive global form with or
without Coupons and, if so, whether beneficial owners of interests in
any such definitive global Medium-Term Debt Security may exchange such
interests for Medium-Term Debt Securities of such series and of like
tenor of any authorized form and denomination and the circumstances
under which and the place or places where any such exchange may occur,
if other than in the manner provided in Section 404;
(19) if the Medium-Term Debt Securities and Coupons, if any, of the
series are to be issued upon the exercise of warrants, the time,
manner and place for such Medium-Term Debt Securities and Coupons, if
any, of the series to be authenticated and delivered;
(20) whether and under what circumstances and with what procedures
and documentation the Company will pay additional amounts on any of
the Medium-Term Debt Securities of the series to any Holder who is not
a U.S. Person (including a definition of such term), in respect of any
tax assessment or governmental charge withheld or deducted and, if so,
whether the Company will have the option to redeem such Medium-Term
Debt Securities rather than pay additional amounts (and the terms of
any such option);
(21) the Person to whom any interest on any Medium-Term Debt
Security of the series shall be payable, if other than the Person in
whose name that Medium-Term Debt Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular
Record Date for such interest, the manner in which, or the person to
whom, any interest on any Bearer Security of the series shall be
payable, if otherwise than upon presentation and surrender of the
Coupons appertaining thereto as they severally mature and the extent
to which, or the manner in which, any interest payable on a temporary
<PAGE>
22
global Medium-Term Debt Security on an Interest Payment Date will be
paid if other than in the manner provided in Section 403;
(22) if other than the forms set forth in Exhibit A hereto, the
forms of the Medium-Term Debt Securities and Coupons, if any, of the
series; and
(23) any other terms of any of the Medium-Term Debt Securities of
the series (which terms shall not be inconsistent with the provisions
of this Indenture).
Unless the Company shall be required to deliver an Officers'
Certificate pursuant to paragraph (d) below in connection with the
authentication of the Medium-Term Debt Securities of the series, the
delivery of such Medium-Term Debt Securities Certificate to the Trustee
shall be deemed to be a certification by the Company that all matters
certified in the most recent Officers' Certificate delivered to the
Trustee pursuant to paragraph (d) below continue to be true and correct,
as if such Officers' Certificate related to the Medium-Term Debt
Securities covered by such Medium-Term Debt Securities Certificate, on
and as of the date of such Medium-Term Debt Securities Certificate. The
delivery of such Medium-Term Debt Securities Certificate also shall be
deemed to be a certification that the Board Resolution or Board
Resolutions referred to in paragraph (a) above are in full force and
effect on and as of the date of such Medium-Term Debt Securities
Certificate and that the terms and form or forms of the Medium-Term Debt
Securities and Coupons, if any, of the series have been established by
an officer or officers of the Company authorized by such Board
Resolution or Board Resolutions in accordance with the provisions
thereof and hereof.
(c) If (i) the Company shall not have previously delivered to the
Trustee an Opinion of Counsel to the effect set forth in this paragraph
(c) with respect to the Medium-Term Debt Securities authorized pursuant
to the Board Resolution or Board Resolutions referred to in paragraph
(a) above or (ii) if the Medium-Term Debt Securities Certificate
referred to in paragraph (b) above specifies a means of satisfaction and
discharge other than the application of Section 503 with respect to the
series of Medium-Term Debt Securities to which such Medium-Term Debt
Securities Certificate relates, an Opinion of Counsel that the Medium-
Term Debt Securities have been duly authorized by resolutions of the
Board of Directors of the Company, subject to the establishment of
certain terms of the Medium-Term Debt Securities and Coupons, if any, of
the series by officers of the Company authorized by such resolutions to
establish such terms, that when the terms of the Medium-Term Debt
Securities and Coupons, if any, of the series have been established as
provided in such resolutions and in this Indenture and the Medium-Term
Debt Securities and Coupons, if any, of the series have been executed,
authenticated and delivered in accordance with the provisions of this
Indenture, the Medium-Term Debt Securities and Coupons, if any, of the
series, assuming they do not violate any applicable law then binding on
the Company, will constitute legal, valid and binding obligations of the
Company entitled to the benefits of this Indenture, equally and ratably
with all other Securities and Coupons, if any, of such series
theretofore issued and then outstanding hereunder, and that the amount
of Securities then outstanding under this Indenture, including the
Medium-Term Debt Securities of the series, will not exceed the amount at
the time permitted by law or this Indenture.
<PAGE>
23
(d) If the Company shall not have delivered an Officers' Certificate
pursuant to the provisions of this paragraph (d) to the Trustee during
the immediately preceding 12-month period, an Officers' Certificate
stating that the Company is not in default under this Indenture, that
the issuance of the Medium-Term Debt Securities and Coupons, if any, of
the series will not result in any breach of any of the terms, conditions
or provisions of, or constitute a default under, the Company's
certificate of incorporation or By-laws or any indenture, mortgage, deed
of trust or other agreement or instrument to which the Company is a
party or by which it is bound, or any order of any court or
administrative agency entered in any proceeding to which the Company is
a party or by which it may be bound or to which it may be subject, that
all laws and requirements with respect to the execution and delivery by
the Company of the Medium-Term Debt Securities and Coupons, if any, of
the series have been complied with and that all conditions precedent
provided in this Indenture relating to the authentication and delivery
of the Medium-Term Debt Securities and Coupons, if any, of the series
have been complied with.
(e) Such other documents as the Trustee shall reasonably request.
SECTION 302. Form of Medium-Term Debt Securities. The Medium-Term Debt
Securities and Coupons, if any, of each series shall be in such forms as
shall be specified as contemplated by Section 301. In the absence of any
such provisions with respect to the Medium-Term Debt Securities of any
series, the Medium-Term Debt Securities and Coupons, if any, of such series
shall be substantially in the applicable form or forms set forth in Exhibit
A hereto, except with such additions, changes and deletions thereto as may
be required to reflect the different provisions thereof as shall be
specified as provided in Section 301.
ARTICLE FOUR
The Securities
SECTION 401. Form and Denomination. All Securities of any one series and
the Coupons appertaining to any Bearer Securities of such series shall be
substantially identical except, in the case of Registered Securities, as to
denomination and except as may otherwise be provided in or pursuant to the
Board Resolution referred to in Section 202 or Section 301, as the case may
be, and (subject to Section 402) set forth in the Officers' Certificate or
Medium-Term Debt Securities Certificate referred to in Section 202 or
Section 301, as the case may be, or in any indenture supplemental hereto.
The Securities of each series shall be issuable in such denominations as
shall be specified as contemplated by Section 202 or Section 301, as the
case may be. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series denominated in
Dollars shall be issuable in denominations of $l,000 and in any integral
multiple thereof, if registered, and in denominations of $5,000 if bearer.
Securities of each series shall be numbered, lettered or otherwise
distinguished in such manner or in accordance with such plan as the
officers of the Company executing the same may determine with the approval
of the Trustee. Each Security shall bear the appropriate legends, if any,
as required by U.S. Federal tax law and regulations.
<PAGE>
24
SECTION 402. Execution, Delivery, Dating and Authentication. The
Securities shall be executed on behalf of the Company by a manual or
facsimile signature of its Chairman, its President, any of its Vice
Presidents, its Treasurer, any Assistant Treasurer, its Secretary or any
Assistant Secretary, under its corporate seal reproduced thereon. Any
Coupons shall be executed on behalf of the Company by the manual or
facsimile signature of any such officer of the Company. In case any of the
above referenced officers of the Company who shall have signed any of the
Securities or Coupons shall cease to be such officer before the Securities
so signed shall have been authenticated and delivered by the Trustee or
disposed of by the Company, such Securities nevertheless may be
authenticated and delivered or disposed of as though the person who signed
such Securities and/or Coupons had not ceased to be such officer; and any
Securities or Coupons may be signed on behalf of the Company by such
persons as, at the actual date of the execution of such Security or Coupon,
shall be such officers of the Company, although at the date of the
execution of this Indenture any such person was not such officer.
At any time and from time to time, the Company may deliver Securities of
any series, together with any Coupons appertaining thereto, executed by the
Company to the Trustee for authentication, together (except in the case of
any Medium-Term Debt Securities) with a Company Order for the
authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order (or, in the case of Medium-Term Debt
Securities of any series, upon receipt of a Medium-Term Debt Securities
Certificate and in accordance with the terms thereof) shall authenticate
and make available for delivery such Securities; provided, however, that,
unless otherwise specified in the Board Resolution (or, in the case of any
Bearer Securities that are Medium-Term Debt Securities in the Medium-Term
Debt Securities Certificate) with respect to an Bearer Securities, in
connection with its original issuance, no Bearer Security (including any
temporary Bearer Security issued pursuant to Section 403 which is not in
global form) shall be mailed or otherwise delivered to any location in the
United States; and provided further that, unless otherwise specified in the
Board Resolution (or, in the case of any Bearer Securities that are Medium-
Term Debt Securities, in the Medium-Term Debt Securities Certificate) with
respect to such Bearer Securities, such Bearer Security may be delivered in
connection with its original issuance only if the Person entitled to
receive such Bearer Security (including any temporary Bearer Security
issued pursuant to Section 403 which is not in global form) shall have
furnished to the Company or any agent, underwriter or selling group member
a certificate substantially in the form set forth in Exhibit B.1 to this
Indenture, dated no earlier than 15 days prior to the earlier of the date
on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. In
connection with the original issuance of any Bearer Security and unless
otherwise specified in the Board Resolution (or, in the case of any Bearer
Securities that are Medium-Term Debt Securities, in the Medium-Term Debt
Securities Certificate) with respect to such Bearer Securities, a
confirmation substantially in the form set forth in Exhibit B.5 to this
Indenture shall be sent to each purchaser thereof. If any Security shall bc
represented by a definitive global Bearer Security, then, for purposes of
this Section and Section 403, the notation of a beneficial owner's interest
therein upon original issuance of such Security or upon exchange of a
portion of a temporary global Security shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest
in such definitive global Bearer Security. Except as permitted by
<PAGE>
25
Section 405, the Trustee shall not authenticate and make available for
delivery any Bearer Security unless all appurtenant Coupons for interest
then matured have been detached and canceled.
The Trustee shall not be required to authenticate Securities of any
series if the issue of such Securities pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under the Securities
and this Indenture or otherwise in a manner which is not reasonably
acceptable to the Trustee, or if the Trustee determines that such action
may not lawfully be taken.
Unless otherwise specified pursuant to Section 301(b)(2), each
Registered Security shall be dated the date of its authentication, and each
Bearer Security and any Bearer Security in global form shall be dated as of
the date of original issuance of the first Security of such series to be
issued.
No Security or Coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for below executed by the Trustee by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder. Notwithstanding the foregoing, if any Security shall have been
duly authenticated and delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the Trustee for
cancelation as provided in Section 408 together with a written statement
(which need not comply with Section 102 and need not be accompanied by an
Opinion of Counsel) stating that such Security has never been issued and
sold by the Company, for all purposes of this Indenture such Security shall
be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
The Trustee's certificate of authentication shall be in substantially
the following form:
Dated:
This is one of the Securities of the series designated herein issued
under the within-mentioned Indenture.
,
as Trustee
By
---------------------------
Authorized Signatory
SECTION 403. Temporary Securities. Pending the preparation of definitive
Securities of any series, the Company may execute, and upon Company Order
(or, in the case of Medium-Term Debt Securities, receipt of the Medium-Term
Debt Securities Certificate with respect to such Medium-Term Debt
Securities) the Trustee shall authenticate and make available for delivery,
temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which
they are issued, in registered form or, if authorized, in bearer form with
one or more Coupons or without Coupons, and with such appropriate
insertions, omissions, substitutions and other variations
<PAGE>
26
as the officers executing such Securities may determine, as evidenced
conclusively by their execution of such Securities. Such temporary
Securities may be in global form.
Except in the case of temporary Securities in global form (which shall
be exchanged in accordance with the provisions of the following
paragraphs), if temporary Securities of any series are issued, the Company
will cause definitive Securities of that series to be prepared without
unreasonable delay. After the preparation of definitive Securities of such
series, the temporary Securities of such series shall be exchangeable for
definitive Securities of such series upon surrender of the temporary
Securities of such series at the office or agency of the Company maintained
pursuant to Section 1102 in a Place of Payment for such series for the
purpose of exchanges of Securities of such series, without charge to the
Holder. Upon surrender for cancelation of any one or more temporary
Securities of any series (accompanied by any unmatured Coupons) the Company
shall execute and the Trustee shall authenticate and make available for
delivery in exchange therefor a like aggregate principal amount of
definitive Securities of the same series and of like tenor or authorized
denominations; provided, however, that, unless otherwise specified as
contemplated by Section 202 or Section 301, as the case may be, no
definitive Bearer Security shall be delivered in exchange for a temporary
Registered Security; provided further that a definitive Bearer Security
shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth in Section 402.
If temporary Bearer Securities of any series are issued in global form,
such temporary global Bearer Securities shall, unless otherwise specified
as contemplated by Section 202 or Section 301, as the case may be, be
delivered to the London office of a depository or common depository (the
"Common Depositary"), for the benefit of Euro-clear and Cedel Bank societe
anonyme ("Cedel"), for credit to the respective accounts of the beneficial
owners of interests in such Securities (or to such other accounts as they
may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary
global Security (the "Exchange Date"), the Company shall deliver to the
Trustee definitive Securities, in aggregate principal amount equal to the
principal amount of such temporary global Security, executed by the
Company. On or after the Exchange Date such temporary global Security shall
be surrendered by the Common Depositary to the Trustee, as the Company's
agent for such purpose, to be exchanged, in whole or from time to time in
part, for definitive Securities without charge and the Trustee shall
authenticate and make available for delivery, in exchange for each portion
of such temporary global Security, an equal aggregate principal amount of
definitive Securities of the same series of authorized denominations and of
like tenor as the portion of such temporary global Security to be
exchanged. The definitive Securities to be delivered in exchange for any
such temporary global Security shall be in bearer form, registered form,
definitive global form or any combination thereof, as specified as
contemplated by Section 202 or Section 301, as the case may be, and, if any
combination thereof is so specified, as requested by the beneficial owner
thereof; provided, however, that, unless otherwise specified as
contemplated by Section 202 or Section 301, as the case may be, upon such
presentation by the Common Depositary, such temporary global Security shall
be accompanied by a certificate dated the Exchange Date or a subsequent
date and signed by Euro-clear as to the portion of such temporary global
Security held for its account then to be exchanged and a
<PAGE>
27
certificate dated the Exchange Date or a subsequent date and signed by
Cedel as to the portion of such temporary global Security held for its
account then to be exchanged, each in the form set forth in Exhibit B.2 to
this Indenture; provided further that definitive Bearer Securities
(including a definitive global Bearer Security) shall be delivered in
exchange for a portion of a temporary global Security only in compliance
with the requirements of Section 402.
Unless otherwise specified as contemplated by Section 202 or Section
301, as the case may be, the interest of a beneficial owner of Securities
of a series in a temporary global Bearer Security shall be exchanged for
definitive Bearer Securities of the same series and of like tenor following
the Exchange Date when the beneficial owner instructs Euro-clear or Cedel,
as the case may be, to request such exchange on his behalf and delivers to
Euro-clear or Cedel, as the case may be, a certificate substantially in the
form set forth in Exhibit B.1 to this Indenture, dated no earlier than 15
days prior to the Exchange Date, copies of which certificate shall be
available from the offices of Euro-clear, Cedel, the Trustee, any
Authenticating Agent appointed for such series of Securities and any Paying
Agent appointed for such series of Securities. Unless otherwise specified
as contemplated by Section 202 or Section 301, as the case may be, any such
exchange shall be made free of charge to the beneficial owners of such
temporary global Security, except that a Person receiving definitive
Securities must bear the cost of insurance, postage, transportation and the
like in the event that such Person does not take delivery of such
definitive Securities in person at the offices of Euro-clear or Cedel. The
definitive Bearer Securities to be delivered in exchange for any portion of
a temporary global Security shall be delivered only outside the United
States.
Until exchanged in full as provided above, the temporary Securities of
any series shall in all respects be entitled to the same benefits under
this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated by Section 202 or Section 301, as the case may
be, interest payable on a temporary global Bearer Security on an Interest
Payment Date for Securities of such series occurring prior to the
applicable Exchange Date shall be payable to Euro-clear and Cedel on such
Interest Payment Date upon delivery by Euro-clear and Cedel to the Trustee
of a certificate or certificates substantially in the form set forth in
Exhibit B.3 to this Indenture, for credit without further interest on or
after such Interest Payment Date to the respective accounts of the Persons
who are the beneficial owners of such temporary global Security (or to such
other accounts as they may direct) on such Interest Payment Date and who
have each delivered to Euro-clear or Cedel, as the case may be, a
certificate substantially in the form set forth in Exhibit B.4 to this
Indenture. Any interest so received by Euro-clear and Cedel and not paid as
herein provided shall be returned to the Trustee immediately prior to the
expiration of two years after such Interest Payment Date in order to be
repaid to the Company in accordance with Section 1103.
SECTION 404. Registration, Registration of Transfer and Exchange. The
Company shall cause to be kept at an office or agency to be maintained by
the Company in accordance with Section 1102 a register (being the combined
register of the Security Registrar and all additional transfer agents
designated pursuant to Section 1102 for the purpose of registration of
transfer of Securities and sometimes collectively referred to as the
"Security Register") in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Registered
Securities and the registration of transfers of Registered Securities is
<PAGE>
28
hereby appointed the initial Security Registrar. At all reasonable times
each register maintained by the Security Registrar and any additional
transfer agents shall be open for inspection by the Trustee.
Upon surrender for registration of transfer of any Registered Security
of any series at the office or agency of the Company maintained pursuant to
Section 1102 for such purpose in a Place of Payment for such series, the
Company shall execute, and the Trustee shall authenticate and make
available for delivery, in the name of the designated transferee or
transferees, one or more new Registered Securities of the same series of
any authorized denominations and of a like aggregate principal amount and
tenor.
At the option of the Holder, Registered Securities of any series may be
exchanged for other Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and
tenor, upon surrender of the Securities to be exchanged at any such office
or agency. Whenever any Securities are so surrendered for exchange. the
Company shall execute, and the Trustee shall authenticate and make
available for delivery, the Securities which the Holder making the exchange
is entitled to receive. Unless otherwise specified as contemplated by
Section 202 or Section 301, as the case may be, Bearer Securities may not
be issued in exchange for Registered Securities.
At the option of the Holder and unless otherwise specified as
contemplated by Section 202 or Section 301, as the case may be, Bearer
Securities of any series may be exchanged for Registered Securities of the
same series of any authorized denominations and of a like aggregate
principal amount and tenor, upon surrender of the Bearer Securities to be
exchanged at any such office or agency, with all unmatured Coupons and all
matured Coupons in default appertaining thereto. If the Holder of a Bearer
Security is unable to produce any such unmatured Coupon or Coupons or
matured Coupon or Coupons in default, such exchange may be effected if the
Bearer Securities are accompanied by payment in funds acceptable to the
Company in an amount equal to the face amount of such missing Coupon or
Coupons, or the surrender of such missing Coupon or Coupons may be waived
by the Company and the Trustee if there is furnished to them such security
or indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to any
Paying Agent any such missing Coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount
of such payment; provided, however, that, except as otherwise provided in
Section 1102, interest represented by Coupons shall be payable only upon
presentation and surrender of those Coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency in
exchange for a Registered Security of the same series and like tenor after
the close of business at such office or agency on (i) any Regular Record
Date and before the opening of business at such office or agency on the
relevant Interest Payment Date, or (ii) any Special Record Date and before
the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the Coupon relating to such Interest Payment Date or
proposed date for payment, as the case may be, and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment
Date or proposed date for payment, as the case may be, in respect of the
Registered Security issued
<PAGE>
29
in exchange for such Bearer Security, but will be payable only to the
Holder of such Coupon when due in accordance with the provisions of this
Indenture.
Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled
to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 202 or Section 301, as the case may be, any
definitive global Bearer Security shall be exchangeable only as provided in
this paragraph. If the beneficial owners of interests in a definitive
global Bearer Security are entitled to exchange such interests for
Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified as contemplated by Section
202 or Section 301, as the case may be, then without unnecessary delay but
in any event not later than the earliest date on which such interest may be
so exchanged, the Company shall deliver to the Trustee definitive
Securities in an aggregate principal amount equal to the principal amount
of such definitive global Bearer Security, executed by the Company. On or
after the earliest date on which such interests may be so exchanged, such
definitive global Bearer Security shall be surrendered by the Common
Depositary or such other depositary or Common Depositary) as shall be
specified in the Company Order or Medium-Term Debt Securities Certificate,
as the case may be, with respect thereto to the Trustee, as the Company's
agent for such purpose, to be exchanged, in whole or from time to time in
part, for definitive Securities without charge and the Trustee shall
authenticate and make available for delivery, in exchange for each portion
of such definitive global Bearer Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized
denominations and of like tenor as the portion of such definitive global
Bearer Security to be exchanged which, unless the Securities of the series
are not issuable both as Bearer Securities and as Registered Securities, as
specified as contemplated by Section 202 or Section 301, as the case may
be, shall be in the form of Bearer Securities or Registered Securities, or
any combination thereof, as shall be specified by the beneficial owner
thereof; provided, however, that no such exchanges may occur during a
period beginning at the opening of business 15 Business Days before any
selection of Securities of that series to be redeemed and ending on the
relevant Redemption Date; provided further that no Bearer Security
delivered in exchange for a portion of a definitive global Security shall
be mailed or otherwise delivered to any location in the United States. If a
Registered Security is issued in exchange for any portion of a definitive
global Bearer Security after the close of business at the office or agency
where such exchange occurs on (i) any Regular Record Date and before the
opening of business at such office or agency on the relevant Interest
Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment
of Defaulted Interest, interest or Defaulted Interest, as the case may be,
will not be payable on such Interest Payment Date or proposed date for
payment, as the case may be, in respect of such Registered Security, but
will be payable on such Interest Payment Date or proposed date for payment,
as the case may be, only to the Person to whom interest in respect of such
portion of such definitive global Bearer Security is payable in accordance
with the provisions of this Indenture.
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30
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the
Trustee or any transfer agent) be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar or any transfer agent duly executed, by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration of transfer or exchange of
Securities, other than exchanges pursuant to Section 403, 1006 or 1207 not
involving any transfer.
The Company shall not be required (i) to issue, register the transfer of
or exchange Securities of any series during a period beginning at the
opening of business 15 Business Days before any selection of Securities of
that series to be redeemed and ending at the close of business on (A) if
Securities of the series are issuable only as Registered Securities, the
day of the mailing of the relevant notice of redemption and (B) if
Securities of the series are issuable as Bearer Securities, the day of the
first publication of the relevant notice of redemption or, if Securities of
the series are also issuable as Registered Securities and there is no
publication, the day of mailing of the relevant notice of redemption, or
(ii) to register the transfer of or exchange any Registered Security so
selected for redemption, in whole or in part, except the unredeemed portion
of any Security being redeemed in part, or (iii) to exchange any Bearer
Security so selected for redemption except that such a Bearer Security may
be exchanged for a Registered Security of that series and like tenor;
provided that such Registered Security shall be simultaneously surrendered
for redemption.
SECTION 405. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security or Security with a mutilated Coupon appertaining to it
is surrendered to the Trustee, the Company shall execute and the Trustee
shall authenticate and make available for delivery in exchange therefor a
new Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding with Coupons
corresponding to the Coupons, if any, appertaining to the surrendered
Security, provided that if such new Security is a Bearer Security, such
Security shall be delivered only outside the United States.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security or
Coupon and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security or
Coupon has been acquired by a bona ride purchaser, the Company shall
execute and the Trustee shall authenticate and make available for delivery,
in lieu of any such destroyed, lost or stolen Security or in exchange for
the Security to which a destroyed, lost or stolen Coupon appertains (upon
surrender to the Trustee of such Security with all appurtenant Coupons not
destroyed, lost or stolen), a new Security of the same series and of like
tenor and principal amount and bearing a number not contemporaneously
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31
outstanding, with Coupons corresponding to the Coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen Coupon appertains.
In case any such mutilated, destroyed, lost or stolen Security or Coupon
has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a new Security or Coupon, pay such
Security or Coupon; provided, however, that principal of (and premium, if
any) and any interest on Bearer Securities shall, except as otherwise
provided in Section 1102, be payable only at an office or agency located
outside the United States and, unless otherwise specified as contemplated
by Section 202 or Section 301, as the case may be, any interest on Bearer
Securities shall be payable only upon presentation and surrender of the
Coupons appertaining thereto.
Upon the issuance of any new Security or Coupon under this Section, the
Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.
Every new Security or Coupon of any series issued pursuant to this
Section in lieu of any mutilated, destroyed, lost or stolen Security or
Coupon shall constitute an original additional contractual obligation of
the Company, whether or not the mutilated, destroyed, lost or stolen
Security shall be at any time enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any
and all other Securities or Coupons of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated. destroyed, lost or stolen Securities
or Coupons.
SECTION 406. Payment of Interest; Interest Rights Preserved. Unless
otherwise provided as contemplated by Section 202 or Section 301, as the
case may be, with respect to any series of Securities, interest on any
Registered Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest. At the option of the Company, interest on the Registered
Securities of any series that bears interest may be paid by mailing a check
to the address of any Holder as such address shall appear in the Security
Register.
Any interest on any Registered Security of any series which is payable,
but is not punctually paid or duly provided for, on any Interest Payment
Date (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in Clause (1) or (2)
below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Securities of such series
(or their respective Predecessor Securities) are registered at the close
of business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall
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32
notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security of such series and the date of the
proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this
Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of
the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities of
such series at his address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 404,
each Security delivered under this Indenture upon registration of transfer
of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by
such other Security.
SECTION 407. Persons Deemed Owners. Prior to due presentment of a
Registered Security for registration of transfer, the Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose
name such Registered Security is registered as the owner of such Registered
Security for the purpose of receiving payment of principal of (and premium,
if any) and (subject to Sections 404, 406 and 411 and unless otherwise
specified as contemplated by Section 202 or Section 301, as the case may
be) interest on such Security and for all other purposes whatsoever,
whether or not such Security is overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
Title to any Bearer Security and any Coupons shall pass by delivery. The
Company, the Trustee and any agent of the Company or the Trustee may treat
the Holder of any Bearer Security and the Holder of any Coupon as the
absolute owner of such Security or Coupon for the purpose of receiving
payment thereof or on account thereof (unless otherwise specified as
contemplated by Section 202 or Section 301, as the case may be) and for all
other purposes whatsoever, whether
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33
or not such Security or Coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 408. Cancelation. All Securities and Coupons surrendered for
payment, redemption, registration of transfer or exchange or for credit
against any sinking fund payment shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee. All Securities and Coupons
so delivered shall be promptly canceled by the Trustee. All Bearer
Securities and unmatured Coupons held by the Trustee pending such
cancelation shall be deemed to be delivered for cancelation for all
purposes of this Indenture and the Securities. The Company may at any time
deliver to the Trustee for cancelation any Securities previously
authenticated and delivered hereunder which the Company may have acquired
in any manner whatsoever, and may deliver to the Trustee (or to any other
Person for delivery to the Trustee) for cancelation any Securities
previously authenticated hereunder which the Company has not issued and
sold, and all Securities so delivered to the Trustee shall be promptly
canceled by the Trustee. No Securities shall be authenticated in lieu of or
in exchange for any Securities canceled as provided in this Section, except
as expressly permitted by this Indenture. All canceled Securities and
Coupons held by the Trustee shall be disposed of in a manner selected by
the Trustee unless otherwise directed by a Company Order; provided,
however, that the Trustee may, but shall not be required to, destroy such
canceled Securities and Coupons.
SECTION 409. Computation of Interest. Except as otherwise specified as
contemplated by Section 202 or Section 301, as the case may be, for
Securities of any series, interest on the Securities of each series shall
bc computed on the basis of a 360-day year of twelve 30-day months.
SECTION 410. Currency and Manner of Payment in Respect of Securities.
The provisions of this Section shall apply to the Securities of any series
unless otherwise provided as contemplated by Section 202 or Section 301, as
the case may be.
(a) The following payment provisions shall apply to any Registered
Security of any series denominated in a Foreign Currency or any currency
unit, including without limitation ECU, except as provided in paragraph
(b) below:
(1) Except as provided in subparagraph (a)(2) or in paragraph (e)
below, payment of principal of and premium, if any, on such
Registered Security will be made at the Place of Payment by
delivery of a check in the currency or currency unit in which the
Security is denominated on the payment date against surrender of
such Registered Security, and any interest on any Registered
Security will be paid at the Place of Payment by mailing a check in
the currency or currency unit in which such interest is payable
(which shall be the same as that in which the Security is
denominated unless otherwise provided) to the Person entitled
thereto at the address of such Person appearing on the Security
Register.
(2) Payment of the principal of, premium, if any, and interest,
if any, on such Security may also, subject to applicable laws and
regulations, be made at such other place or places as may be
designated by the Company by any appropriate method.
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34
(b) With respect to any Registered Security of any series denominated
in any currency unit, including without limitation ECU, if the following
provisions (or any substitute therefor, or addition thereto, not
inconsistent with this Indenture) are established pursuant to Section
202 or Section 301, as the case may be, and if the Company has not,
before the delivery of the election referred to in clause (1) below,
deposited funds or securities in compliance with Section 501 or clause
(a)(i) or (if specified pursuant to Section 202 or Section 301, as the
case may be) clause (a)(ii) of Section 503, the following payment
provisions shall apply to any payment to be made prior to the giving of
any notice to Holders of any election to redeem pursuant to Section
1204, except as otherwise provided in paragraphs (e) and (f) below:
(1) A Holder of Securities of a series shall have the option to
elect to receive payments of principal of, premium, if any, and
interest, if any, on such Securities in a currency or currency unit
(including Dollars), other than that in which the Security is
denominated, such election, as designated in the certificates for such
Securities (or as provided by Section 202 or Section 301, as the case
may be, or a supplemental indenture hereto with respect to
uncertificated securities), shall be made by delivering to the Paying
Agent a written election, to be in form and substance satisfactory to
the Paying Agent, not later than the close of business in New York,
New York, on the day 15 days prior to the applicable payment date.
Such election will remain in effect for such Holder until changed by
the Holder by written notice to the Paying Agent (but any such written
notice must be received by the Paying Agent not later than the close
of business on the day 15 days prior to the next payment date to be
effective for the payment to be made on such payment date and no such
change may be made with respect to payments to be made on any Security
of such series with respect to which notice of redemption has been
given by the Company pursuant to Article Twelve). Any Holder of any
such Security who shall not have delivered any such election to the
Paying Agent in accordance with this paragraph (b) will be paid the
amount due on the applicable payment date in the relevant currency
unit as provided in paragraph (a) of this Section. Payment of
principal of and premium, if any, shall be made on the payment date
therefor against surrender of such Security. Payment of principal,
premium, if any, and interest, if any, shall be made at the Place of
Payment by mailing at such location a check, in the applicable
currency or currency unit, to the Holder entitled thereto at the
address of such Holder appearing on the Security Register.
(2) Payment of the principal of, premium, if any, and interest, if
any, on such Security may also, subject to applicable laws and
regulations, be made at such other place or places as may be
designated by the Company by any appropriate method.
(c) Payment of the principal of and premium, if any, and interest, if
any, on any Bearer Security will be made, except as provided in
Section 403 with respect to temporary global Securities, unless
otherwise specified pursuant to Section 202 or Section 301, as the case
may be, and/or Section 1001(8), at such place or places outside the
United States as may be designated by the Company pursuant to any
applicable laws or regulations by any appropriate method in the currency
or currencies or currency unit or units in which the Security is payable
(except as provided in paragraph (e) below) on the payment date therefor
against surrender of the Bearer Security, in the case of payment of
principal and premium, if any, or the relevant
<PAGE>
35
Coupon, in the case of payment of interest, if any, to a Paying Agent
designated for such series pursuant to Section 1102.
(d) Not later than 10 Business Days (with respect to any Place of
Payment) prior to each payment date, the Paying Agent shall deliver to
the Company a copy of its record of the respective aggregate amounts of
principal of, premium, if any, and interest, if any, on the Securities
to be made on such payment date, in the currency or currency unit in
which each of the Securities is payable, specifying the amounts so
payable in respect of Registered Securities and Bearer Securities and in
respect of the Registered Securities as to which the Holders of
Securities denominated in any currency unit shall have elected to be
paid in another currency or currency unit as provided in paragraph (b)
above. If the election referred to in paragraph (b) above has been
provided for pursuant to Section 202 or Section 301, as the case may be,
and if at least one Holder has made such election, then, not later than
the fifth Business Day (with respect to any Place of Payment) prior to
the applicable payment date the Company will deliver to the Trustee an
Exchange Rate Officers' Certificate in respect of the Dollar or Foreign
Currency or currency unit payments to be made on such payment date. The
Dollar or Foreign Currency or currency unit amount receivable by Holders
of Registered Securities denominated in a currency unit who have elected
payment in another currency or currency unit as provided in paragraph
(b) above shall be determined by the Company on the basis of the
applicable Official Currency Unit Exchange Rate set forth in the
applicable Exchange Rate Officers' Certificate.
(e) If a Foreign Currency in which any Security is denominated or
payable ceases to be recognized both by the government of the country
which issued such currency and for the settlement of transactions by
public institutions of or within the international banking community, or
if ECU ceases to be used within the European Monetary System, or if any
other currency unit in which a Security is denominated or payable ceases
to be used for the purposes for which it was established, in each case
as determined in good faith by the Company, then with respect to each
date for the payment of principal of, premium, if any, and interest, if
any, on the applicable Security denominated or payable in such Foreign
Currency, ECU or such other currency unit occurring after the last date
on which such Foreign Currency, ECU or such other currency unit was so
used (the "Conversion Date"), the Dollar shall become the currency of
payment for use on each such payment date (but ECU or the Foreign
Currency or the currency unit previously the currency of payment shall,
at the Company's election, resume being the currency of payment on the
first such payment date preceded by 15 Business Days during which the
circumstances which gave rise to the Dollar becoming such currency no
longer prevail, in each case as determined in good faith by the
Company). The Dollar amount to be paid by the Company to the Trustee and
by the Trustee or any Paying Agent to the Holder of such Security with
respect to such payment date shall be the Dollar Equivalent of the
Foreign Currency or, in the case of a currency unit, the Dollar
Equivalent of the currency unit, as determined by the Exchange Rate
Agent (which shall be delivered in writing to the Trustee not later than
the fifth Business Day prior to the applicable payment date) as of the
Conversion Date or, if later, the date most recently preceding the
payment date in question on which such determination is possible of
performance, but not more than 15 days before such payment date (such
Conversion Date or date preceding a
<PAGE>
36
payment date as aforesaid being called the "Valuation Date") in the
manner provided in paragraph (g) or (h) below.
(f) If the Holder of a Registered Security denominated in a currency
unit elects payment in a specified Foreign Currency or currency unit as
provided for by paragraph (b) and such Foreign Currency ceases to be
used both by the government of the country which issued such currency
and for the settlement of transactions by public institutions of or
within the international banking community, or if ECU ceases to be used
within the European Monetary System, or if another currency unit ceases
to be used for the purposes for which it is established, in each case as
determined in good faith by the Company, such Holder shall (subject to
paragraph (e) above) receivable payment in the currency unit in which
the Security is denominated. Each payment covered by an election
pursuant to paragraph (b) above shall be governed by the provisions of
this paragraph (f) (but, subject to any contravening valid election
pursuant to paragraph (b) above, the specified Foreign Currency or ECU
or other currency unit shall, at the Company's election, resume being
the currency or currency unit, as applicable, of payment with respect to
Holders who have so elected, but only with respect to payments on
payment dates preceded by 15 Business Days during which the
circumstances which gave rise to such currency unit becoming the
currency unit of payment, no longer prevail, in each case as determined
in good faith by the Company).
(g) The "Dollar Equivalent of the Foreign Currency" shall be
determined by the Exchange Rate Agent as of each Valuation Date and
shall be obtained by converting the specified Foreign Currency into
Dollars at the Market Exchange Rate on the Valuation Date.
(h) The "Dollar Equivalent of the Currency Unit" shall be determined
by the Exchange Rate Agent as of each Valuation Date and shall be the
sum obtained by adding together the results obtained by converting the
Specified Amount of each Component Currency into Dollars at the Market
Exchange Rate on the Valuation Date for such Component Currency.
(i) For purposes of this Section 410 the following terms shall have
the following meanings:
A "Component Currency" shall mean any currency which, on the
Conversion Date, was a component currency of the relevant currency
unit, including without limitation ECU.
A "Specified Amount" of a Component Currency shall mean the number
of units (including decimals) which such Component Currency
represented in the relevant currency unit, on the Conversion Date or,
if ECU and such currency unit is being used for settlement of
transactions by public institutions of or within the European
Communities or was so used after the Conversion Date, the Valuation
Date or the last date the currency unit was so used, whichever is
later. If after such date the official unit of any Component Currency
is altered by way of combination or subdivision, the Specified Amount
of such Component Currency shall be divided or multiplied in the same
proportion. If after such date two or more Component Currencies are
consolidated into a single currency, the respective Specified Amounts
of such Component Currencies shall be replaced by an
<PAGE>
37
amount in such single currency equal to the sum of the respective
Specified Amounts of such consolidated Component Currencies expressed
in such single currency, and such amount shall thereafter be a
Specified Amount and such single currency shall thereafter be a
Component Currency. If after such date any Component Currency shall be
divided into two or more currencies, the Specified Amount of such
Component Currency shall be replaced by specified amounts of such two
or more currencies, the sum of which, at the Market Exchange Rate of
such two or more currencies on the date of such replacement, shall be
equal to the Specified Amount of such former Component Currency and
such amounts shall thereafter be Specified Amounts and such currencies
shall thereafter be Component Currencies.
"Market Exchange Rate" shall mean, as of any date, for any currency
or currency unit the noon Dollar buying rate for that currency or
currency unit, as the case may be, for cable transfers quoted in New
York City on such date as certified for customs purposes by the
Federal Reserve Bank of New York or such other rate as may be
established pursuant to Section 202 or Section 301, as the case may
be. If such rates are not available for any reason with respect to one
or more currencies or currency units for which an Exchange Rate is
required, the Exchange Rate Agent shall use, in its sole discretion
and without liability on its part, such quotation of the Federal
Reserve Bank of New York as of the most recent available date, or
quotations from one or more major banks in New York City or in the
country of issue of the currency or currency unit in question, or such
other quotations as the Exchange Rate Agent shall deem appropriate.
Unless otherwise specified by the Exchange Rate Agent, if there is
more than one market for dealing in any currency or currency unit by
reason of foreign exchange regulations or otherwise, the market to be
used in respect of such currency or currency unit shall be that upon
which a nonresident issuer of securities designated in such currency
or currency unit would, as determined in its sole discretion and
without liability on the part of the Exchange Rate Agent, purchase
such currency or currency unit in order to make payments in respect of
such securities.
All decisions and determinations of the Exchange Rate Agent
regarding the Dollar Equivalent of the Foreign Currency, the Dollar
Equivalent of the Currency Unit and the Market Exchange Rate shall be
in its sole discretion and shall, in the absence of manifest error, be
conclusive for all purposes and irrevocably binding upon the Company
and all Holders of the Securities and Coupons denominated or payable
in the relevant currency or currency units. In the event that a
Foreign Currency ceases to be used both by the government of the
country which issued such currency and for the settlement of
transactions by public institutions of or within the international
banking community, the Company, after learning thereof, will
immediately give notice thereof to the Trustee (and the Trustee will
promptly thereafter give notice in the manner provided in Section 106
to the Holders) specifying the Conversion Date. In the event the ECU
ceases to be used within the European Monetary System, or any other
currency unit in which Securities or Coupons are denominated or
payable, ceases to be used for the purposes for which it was
established, the Company, after learning thereof, will immediately
give notice thereof to the Trustee (and the Trustee will promptly
thereafter give notice in the manner provided
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38
in Section 106 to the Holders) specifying the Conversion Date. Any
actions taken pursuant to the parentheticals at the end of the first
sentence of Section 410(e) and at the end of Section 410(f) shall be
promptly set forth in like notices from the Company to the Trustee and
then from the Trustee to the Holders (which notice may be mailed with
payment to the Holders).
Subject to the provisions of Sections 701 and 703, the Trustee
shall be fully justified and protected in relying and acting upon
information received by it from the Company and the Exchange Rate
Agent, and shall not otherwise have any duty or obligation to
determine such information independently.
SECTION 411. Securities in Global Form. If Securities of a series are
issuable in global form, as specified as contemplated by Section 202 or
Section 301, as the case may be, then, notwithstanding clause (a)(8) of
Section 202 or clause (b)(9) of Section 301, as the case may be, and the
provisions of Section 401, such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it shall represent the aggregate amount of Outstanding
Securities from time to time endorsed thereon and that the aggregate amount
of Outstanding Securities represented thereby may from time to time be
reduced or increased to reflect exchanges. Any endorsement of a Security in
global form to reflect the amount, or any increase or decrease in the
amount, of Outstanding Securities represented thereby shall be made by the
Trustee in such manner and upon instructions given by such Person or
Persons as shall be specified therein or in the Company Order (or, in the
case of Medium-Term Debt Securities, the Medium-Term Debt Securities
Certificate) to be delivered to the Trustee pursuant to Section 402 or
Section 403. Subject to the provisions of Section 402 and, if applicable,
Section 403, the Trustee shall deliver and redeliver any Security in
definitive global bearer form in the manner and upon written instructions
given by the Person or Persons specified therein or in the applicable
Company Order (or, in the case of Medium-Term Debt Securities, the Medium-
Term Debt Securities Certificate). If a Company Order (or, in the case of
Medium-Term Debt Securities, Medium-Term Debt Securities Certificate)
pursuant to Section 402 or 403 has been, or simultaneously is, delivered,
any instructions by the Company with respect to endorsement or delivery or
redelivery of a Security in global form shall be in writing but need not
comply with Section 102 and need not be accompanied by an Opinion of
Counsel.
The provisions of the last sentence of the fifth paragraph of
Section 402 shall apply to any Security represented by a Security in global
form if such Security was never issued and sold by the Company and the
Company delivers to the Trustee the Security in global form together with
written instructions (which need not comply with Section 102 and need not
be accompanied by an Opinion of Counsel) with regard to the reduction in
the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of the fifth paragraph
of Section 402.
Notwithstanding the provisions of Section 406, unless otherwise
specified as contemplated by Section 202 or Section 301, as the case may
be, payment of principal of and any premium and any interest on any
Security in definitive global form shall be made to the Person or Persons
specified therein.
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Notwithstanding the provisions of Section 407 and except as provided in
the preceding paragraph, the Company, and any agent of the Company may, and
the Trustee and any agent of the Trustee, at the direction of the Company,
may treat a Person as the Holder of such principal amount of Outstanding
Securities represented by a definitive global Security as shall be
specified in a written statement of the Holder of such definitive global
Security or, in the case of a definitive global Security in bearer form, of
Euro-clear or Cedel which is produced to the Trustee by such Person;
provided, however, that none of the Company, the Trustee, the Security
Registrar or any Paying Agent shall have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in a Security in global form or for
maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
ARTICLE FIVE
Satisfaction and Discharge
SECTION 501. Satisfaction and Discharge of Indenture in Respect of Any
Series of Securities. This Indenture shall upon Company Request cease to be
of further effect with respect to a series of Securities (except as to any
surviving rights of (as applicable) registration of transfer or exchange of
Securities and Coupons, if any, of such series herein expressly provided
for), and the Trustee, at the request and expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture with respect to such series, when
(1) either
(A) all Securities and Coupons, if any, of such series theretofore
authenticated and delivered (other than (i) Securities and Coupons of
such series which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 405 and (ii) Securities
and Coupons of such series for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such trust, as
provided in Section 1103) have been delivered to the Trustee for
cancelation; or
(B) all such Securities and Coupons of such series not theretofore
delivered to the Trustee for cancelation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount in the currency or currency unit in
which such Securities and Coupons of such series are payable
sufficient to pay and discharge the entire indebtedness on such
Securities and Coupons of such series not theretofore delivered to the
Trustee for cancelation, for principal (and
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premium, if any) and interest, if any, to the date of such deposit (in
the case of Securities and Coupons of such series which have become
due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company with respect to such series of Securities; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of the
Securities of the series under this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture with
respect to a series, the obligations of the Company to the Trustee under
Section 707, the obligations of the Trustee to any Authenticating Agent
under Section 715 and, if money shall have been deposited with the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of
the Trustee under Section 502 and the last paragraph of Section 1103 shall
survive.
SECTION 502. Application of Trust Money. Subject to the provisions of
the last paragraph of Section 1103, all money deposited with the Trustee
pursuant to Sections 501 and 503 (and all money received as payment in
connection with U.S. Government Obligations and Foreign Government
Securities deposited pursuant to Section 503) shall be held in trust and
applied by it, in accordance with the provisions of the Securities and
Coupons, if any, and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest, if any, for whose payment
such money has been deposited with the Trustee.
SECTION 503. Satisfaction, Discharge and Defeasance of Securities of Any
Series. (a) If this Section is specified, as contemplated by Section 202 or
Section 301, as the case may be, to be applicable to Securities and
Coupons, if any, of any series, at the Company's option, either
(i) the Company will be deemed to have been Discharged (as defined
below) from its obligations with respect to Securities and Coupons, if
any, of such series or
(ii) the Company will cease to be under any obligation with respect to
such series to comply with any term, provision or condition set forth in
(x) Sections 901 or 902, or (y) the instrument or instruments setting
forth the terms, provisions or conditions of such series pursuant to
Section 202 or Section 301, as the case may be (provided, in the case of
this subclause (y), that such instrument or instruments specify which
terms, provisions or conditions, if any, are subject to this
clause (a)(ii) and that no such instrument may specify that the Company
may cease to comply with any obligations as to which it may not be
Discharged pursuant to the definition of "Discharged").
(b) A Discharge pursuant to clause (a)(i) above shall be effective with
respect to the Securities and Coupons, if any, of such series on the 91st
day after the applicable conditions set forth below in (i) and either (ii)
or (iii) have been satisfied, and the Company's release from its
obligations to
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41
comply with certain obligations with respect to such series pursuant to
clause (a)(ii) above shall be effective with respect to the Securities and
Coupons, if any, of such series on the first day after the applicable
conditions set forth below in (i) and either (ii) or (iii) have been
satisfied:
(i) the Company has:
(A) paid or caused to be paid all other sums payable with respect
to the Outstanding Securities and Coupons, if any, of such series (in
addition to any required under clause (b)(ii) or (b)(iii)); and
(B) delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of the entire
indebtedness on all Outstanding Securities and Coupons, if any, of any
such series have been complied with;
(ii) (A) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as a trust fund specifically pledged as
security for, and dedicated solely to, the benefit of the Holders of the
Securities and Coupons, if any, of such series (1) money in an amount
(in such currency, currencies or currency unit or units in which any
Outstanding Securities and Coupons, if any, of such series are payable)
or (2) in the case of Securities and Coupons, if any, denominated in
Dollars, U.S. Government Obligations (as defined below) or, in the case
of Securities and Coupons, if any, denominated in a Foreign Currency,
Foreign Government Securities (as defined below), which through the
payment of interest and principal in respect thereof in accordance with
their terms will provide, not later than one day before the due date of
any payment of principal (including any premium) and interest, if any,
under the Securities and Coupons, if any, of such series, money in an
amount or (3) a combination of (1) and (2), which in any case of
clauses (1), (2) and (3) is sufficient (in the opinion with respect to
(2) and (3) of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee) to pay and discharge each installment of principal of
(including premium, if any, on), and interest, if any, on, the
Outstanding Securities and Coupons, if any, of such series on the dates
such installments of interest or principal are due, in the currency,
currencies or currency unit or units, in which such Securities and
Coupons, if any, are payable;
(B)(1) no Event of Default or event (including such deposit) which
with notice or lapse of time would become an Event of Default shall have
occurred and be continuing on the date of such deposit, (2) no Event of
Default as defined in clause (5) or (6) of Section 601, or event which
with notice or lapse of time or both would become an Event of Default
under either such clause, shall have occurred within 90 days after the
date of such deposit, and (3) such deposit and the related intended
consequence under clause (a)(i) or (a)(ii) above will not result in any
default or event of default under any material indenture, agreement or
other instrument binding upon the Company or any Subsidiary or any of
their properties;
(C) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that Holders of the Securities and Coupons, if
any, of such series will not recognize income, gain or loss for Federal
income tax purposes as a result of the Company's exercise of its
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42
option under this Section 503 and will be subject to Federal income tax
in the same amount, in the same manner and at the same times as would
have been the case if such option had not been exercised; and
(D) if the Securities of such series are then listed on the New York
Stock Exchange, the Company shall have delivered to the Trustee an
Opinion of Counsel to the effect that such Securities will not be
delisted as the result of the Company's exercise of its option under
this Section 503;
(iii) the Company has properly fulfilled such other means of
satisfaction and discharge as is specified, as contemplated by
Section 202 or Section 301, as the case may be, to be applicable to the
Securities and Coupons, if any, of such series.
(c) Any deposits with the Trustee referred to in clause (b)(ii)(A) above
will be made under the terms of an escrow trust agreement in form and
substance satisfactory to the Trustee. If any Outstanding Securities and
Coupons, if any, of such series are to be redeemed prior to their Stated
Maturity, whether pursuant to any mandatory redemption provisions or in
accordance with any mandatory sinking fund requirement, the applicable
escrow trust agreement will provide therefor and the Company will make
arrangements for the giving of notice of redemption by the Trustee in the
name, and at the expense, of the Company.
SECTION 504. Reinstatement. If the Trustee is unable to apply any money,
U.S. Government Obligations or Foreign Government Securities in accordance
with Section 501 by reason of any legal proceeding or by reason of any
order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's
obligations under this Indenture and the Securities and Coupons, if any, of
such series shall bc revived and reinstated as though no deposit had
occurred pursuant to Section 501 until such time as the Trustee is
permitted to apply all such money, U.S. Government Obligations or Foreign
Government Securities in accordance with Section 50 provided, however, that
if the Company has made any payment of interest on or principal of (and
premium, if any) on any Securities and Coupons, if any, of such series
because of the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such series of Securities and
Coupons, if any, to receive such payment from the money, U.S. Government
Obligations or Foreign Government Securities held by the Trustee.
SECTION 505. Definitions. The following terms, as used in this Article,
shall have the following meanings:
"Discharged" means that the Company will be deemed to have paid and
discharged the entire indebtedness represented by, and obligations
under, the Securities and Coupons, if any, of the series as to which
this Section is specified as applicable as aforesaid and to have
satisfied all the obligations under this Indenture relating to the
Securities and Coupons, if any, of such series (and the Trustee, at the
request and expense of the Company, will execute proper instruments
acknowledging the same), except (A) the rights of Holders thereof to
receive, from the trust fund described in Section 503(b)(ii)(A), payment
of the principal of (and premium, if any) and the interest, if any, on
such Securities and Coupons, if any, when such payments are due, (B) the
Company's obligations with respect to such Securities and
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43
Coupons, if any, under Sections 404 and 405 (insofar as applicable to
Securities of such series), 502, 1102 and 1103 (last paragraph only) and
the Company's obligations to the Trustee under Section 707, (C) the
rights of Holders of Securities of any series with respect to the
currency or currency units in which they are to receive payments of
principal, premium, if any, and interest, if any, and (D) the rights,
powers, trusts, duties and immunities of the Trustee hereunder, will
survive such discharge. The Company will reimburse the trust fund for
any loss suffered by it as a result of any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or
Foreign Government Securities, as the case may be, or any principal or
interest paid on such obligations, and, subject to the provisions of
Section 707, will indemnify the Trustee against any claims made against
the Trustee in connection with any such loss.
"Foreign Government Securities" means, with respect to Securities and
Coupons, if any, of any series that are denominated in a Foreign
Currency, securities that are (i) direct obligations of the government
that issued or caused to be issued such currency for the payment of
which obligations its full faith and credit is pledged or (ii)
obligations of a Person controlled or supervised by and acting as an
agency or instrumentality of such government the timely payment of which
is unconditionally guaranteed as a full faith and credit obligation by
such government, which, in either case under clause (i) or (ii), are not
callable or redeemable at the option of the issuer thereof.
"U.S. Government Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its
full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality
of the United States of America the timely payment of which is
unconditionally guaranteed as a full faith and credit obligation of the
United States of America, which, in either case under clause (i) or
(ii), are not callable or redeemable at the option of the issuer
thereof, and will also include a depository receipt issued by a bank or
trust company as custodian with respect to any such U.S. Government
Obligation or a specific payment of interest on or principal of any such
U.S. Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by
law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation
or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.
ARTICLE SIX
Remedies
SECTION 601. Events of Default. "Event of Default" with respect to any
series of Securities means each one of the events specified below in this
Section 601, unless it is either inapplicable to a particular series or is
specifically deleted or modified in or pursuant to the supplemental
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44
indenture, Board Resolution or Medium-Term Debt Securities Certificate
establishing such series of Securities:
(1) default in the payment of any installment of interest upon any of
the Securities of such series, as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(2) default in the payment of the principal of or premium, if any, on
any of the Securities of such series, as and when the same shall become
due and payable (subject to clause (3) below) either at maturity, upon
redemption, by declaration or otherwise; or
(3) default in the making of any payment for a sinking, purchase or
analogous fund provided for in respect of such series of Securities, as
and when the same shall become due and payable, and continuance of such
default for a period of 30 days; or
(4) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in
respect of the Securities of such series, or in this Indenture contained
with respect to such series, for a period of 90 days after the date on
which written notice of such failure requiring the Company to remedy the
same and stating that such notice is a `Notice of Default' hereunder,
shall have been given, by registered or certified mail, to the Company
by the Trustee, or to the Company and the Trustee by the holders of at
least 25% in aggregate principal amount of the Securities of such series
at the time Outstanding; or
(5) entry of a decree or order for relief in respect of the Company by
a court having jurisdiction in the premises in an involuntary case under
any applicable Federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the
Company or for any substantial part of its property, or ordering the
winding-up or liquidation of its affairs and such decree or order shall
remain unstayed and in effect for a period of 60 consecutive days; or
(6) commencement by the Company of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or consent by the Company to the appointment
of or taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the Company or
for any substantial part of its property, or any general assignment by
the Company for the benefit of creditors, or failure by the Company
generally to pay its debts as they become due, or the taking by the
Company of any corporate action in furtherance of any of the foregoing;
or
(7) any other Event of Default provided with respect to Securities of
that series.
SECTION 602. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in each and every such case,
either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Outstanding Securities of that series or, in the
case of an Event of Default specified in Clause (5) or (6) of Section 601,
of all series (voting as a class) with respect to which
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45
such Event of Default has occurred and is continuing, may declare the
principal amount (or, if the Securities of that series are Original Issue
Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) of all of the Securities of that
series, together with accrued interest thereon, if any, to be due and
payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders), and upon any such declaration such principal
amount (or specified amount), together with accrued interest thereon, if
any, shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor in such
Securities, and
(D) in Dollars all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel;
and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 613.
No such rescission shall affect any subsequent default or impair any right
consequent thereon,
SECTION 603. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if
(1) default shall be made in the payment of any installment of
interest on any Security or Coupon as and when the same shall become due
and payable, and such default shall have continued for the period of
grace provided for with respect to such Security or Coupon, as the case
may be,
(2) default shall be made in the payment of the principal of or
premium, if any, on any Security as and when the same shall have become
due and payable (subject to clause (3) below), whether at maturity of
the Security or upon redemption or by declaration or otherwise, and
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46
such default shall have continued for any period of grace provided for
with respect to such Security, or
(3) default shall be made in the payment for any sinking, purchase or
analogous fund provided for in respect of any Security as and when the
same shall become due and payable, and such default shall have continued
for any period of grace provided for with respect to such Security,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities and Coupons, if any, the whole amount then
due and payable on such Securities and Coupons, if any, for principal (and
premium, if any) and interest, if any, and, to the extent that payment of
such interest shall be legally enforceable, interest on any overdue
principal (and premium, if any) and on any overdue installments of
interest, if any, at the rate or rates prescribed therefor in such
Securities and Coupons, if any, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the
same against the Company or any other obligor upon such Securities and
Coupons, if any, and collect the moneys adjudged or decreed to be payable
in the manner provided by law out of the property of the Company or any
other obligor upon such Securities and Coupons, if any, wherever situated.
If an Event of Default with respect to Securities and Coupons, if any,
of any series occurs and is continuing, the Trustee may in its discretion
proceed to protect and enforce its rights and the rights of the Holders of
Securities and/or Coupons of such series by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce
any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.
SECTION 604. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative
to the Company or any other obligor upon the Securities or the property of
the Company or of such other obligor or their creditors, the Trustee
(irrespective of whether the principal of the Securities shall then be due
and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the
Company for the payment of overdue principal or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (and
premium, if any) and interest, if any, owing and unpaid in respect of
the Securities and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances
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47
of the Trustee, its agents and counsel) and of the Holders allowed in
such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized
by each Holder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under
Section 707.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities and/or Coupons or the rights of any Holder thereof or to
authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.
SECTION 605. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities and Coupons, if any, may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or Coupons, if any,
or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for
the ratable benefit of the Holders of the Securities and Coupons, if any,
in respect of which such judgment has been recovered.
SECTION 606. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution
of such money on account of principal (or premium, if any) or interest,
upon presentation of the Securities and Coupons, if any, and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: to the payment of all amounts due the Trustee under
Section 707;
SECOND: to the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on the Securities and
Coupons, if any, in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities and/or
Coupons for principal (and premium, if any) and interest, if any,
respectively; and
THIRD: the balance, if any, to the Person or Persons entitled thereto.
SECTION 607. Limitation on Suits. No Holder of Securities of any series
shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or
trustee, or for any other remedy hereunder, unless
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48
(1) an Event of Default with respect to Securities of such series
shall have occurred and bc continuing and such Holder has previously
given written notice to the Trustee of such continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series or, in the case of an Event of
Default specified in Clause (5) or (6) of Section 601, of all series
(voting as a class) with respect to which such Event of Default has
occurred and is continuing, shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series or, in the
case of an Event of Default specified in Clause (5) or (6) of
Section 601, of all series (voting as a class) with respect to which
such Event of Default has occurred and is continuing;
it being understood and intended that no one or more of such Holders shall
have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture (including without limitation the provisions of
Section 612) to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over
any other of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and ratable benefit
of all such Holders.
SECTION 608. Unconditional Right of Holders To Receive Principal,
Premium and Interest. Notwithstanding any other provision in this
Indenture, the Holder of any Security or any Coupon shall have the right,
which is absolute and unconditional, to receive payment of the principal of
(and premium, if any) and (subject to Section 406) interest, if any, on
such Security or Coupon on the Stated Maturity or Maturities expressed in
such Security (or, in the case of redemption, on the Redemption Date) and
to institute suit for the enforcement of any such payment, and such rights
shall not be impaired without the consent of such Holder.
SECTION 609. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for
any reason, or has been determined adversely to the Trustee or to such
Holder, then and in every such case, subject to and determination in such
proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall
continue as though no such proceeding had been instituted.
SECTION 610. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities and/or Coupons,
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49
if any, in the last paragraph of Section 405, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to
be exclusive of any other right or remedy, and every right and remedy
shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 611. Delay or Omission Not Waiver. No delay or omission of the
Trustee or of any Holder of any Securities and/or Coupons to exercise any
right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Subject to the provisions of Section 607, every right
and remedy given by this Article or by law to the Trustee or to the Holders
may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 612. Control by Holders. The Holders of not less than a majority
in principal amount of the Outstanding Securities of any series shall have
the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Securities of such series;
provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture.
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 701, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Trust Officer or Officers of the Trustee,
determine that the action so directed would involve the Trustee in
personal liability.
SECTION 613. Waiver of Past Defaults. The Holders of not less than a
majority in principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such series waive any
past default hereunder with respect to such series and its consequences,
except a default
(1) in the payment of the principal of (or premium, if any) or
interest, if any, on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Ten cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist with respect to
such series, and any Event of Default with respect to such series arising
therefrom shall be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other
default or impair any right consequent thereon.
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SECTION 614. Undertaking for Costs. All parties to this Indenture agree,
and each Holder of a Security and/or Coupon by his acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture,
or in any suit against the Trustee for any action taken, suffered or
omitted by it as Trustee, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys'
fees and expenses, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Company, to any suit instituted by the Trustee, to
any suit instituted by any Holder, or group of Holders, holding in the
aggregate more than 10% in principal amount of the Outstanding Securities
of any series, or to any suit instituted by any Holder for the enforcement
of the payment of the principal of (or premium, if any) or interest, if
any, on any Security or the payment of interest on any Coupon on or after
the Stated Maturity or Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date).
SECTION 615. Waiver of Stay or Extension Laws. The Company covenants (to
the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any
time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE SEVEN
The Trustee
SECTION 701. Certain Duties and Responsibilities. (a) Except during the
continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall be
under a duty to examine the same to determine whether or not they conform
to the requirements of this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct
of his own affairs.
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(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Trust Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series, given pursuant to Section 612,
relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture with respect to the
Securities of such series; and
(4) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 702. Notice of Defaults. Within 90 days after the occurrence of
any default hereunder with respect to the Securities of any series, the
Trustee shall transmit to the Holders of Securities of such series notice
as provided in Section 106 of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided, however,
that, except in the case of a default in the payment of the principal of
(or premium, if any, on) or interest on any Security of such series or in
the payment of any sinking fund installment with respect to Securities of
such series, the Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee or a trust
committee of directors or Responsible Trust Officers of the Trustee in good
faith determines that the withholding of such notice is in the interest of
the Holders of Securities of such series; provided further that in the case
of any default of the character specified in Section 601(4) with respect to
Securities of such series, no such notice to Holders shall be given until
at least 30 days after the occurrence of such default. For the purpose of
this Section, the term "default" means any event which is, or after notice
or lapse of time or both would become, an Event of Default with respect to
Securities of such series.
SECTION 703. Certain Rights of Trustee. Subject to the provisions of
Section 701:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting in reliance upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon, other evidence of
indebtedness or
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52
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon, other evidence of indebtedness or other
paper or document;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
counsel, and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or counsel appointed with due care
(and, in the case of any agent, with the prior written consent of the
Company; provided, however, that the Company's prior written consent
shall not be required in connection with the appointment of an agent as
a result of or in connection with a default or an Event of Default) by
it hereunder; and
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture.
SECTION 704. Not Responsible for Recitals or Issuance of Securities. The
recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 705. May Hold Securities. The Trustee, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or
any other capacity, may become the owner
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53
or pledgee of Securities or warrants to purchase Securities and, subject to
Sections 708 and 713, may otherwise deal with the Company with the same
rights it would have if it were not Trustee, Paying Agent, Security
Registrar or such other agent.
SECTION 706. Money Held in Trust. Except as provided in Section 114,
money held by the Trustee or any Paying Agent in trust hereunder need not
be segregated from other funds except to the extent required by law. The
Trustee or any Paying Agent shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 707. Compensation and Reimbursement. The Company agrees
(1) to pay to the Trustee from time to time in Dollars such
compensation as shall be agreed to in writing between the Company and
the Trustee for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee in Dollars upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify the Trustee in Dollars for, and to hold it harmless
against, any and all loss, liability, damage, claim or expense,
including taxes (other than taxes based upon, or measured or determined
by, the income of the Trustee) incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except
funds held in trust for the payment of principal of, premium, if any, or
interest, if any, on particular Securities.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 601(5) and Section 601(6), the
expenses (including the reasonable charges and expenses of its counsel) and
the compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency
or other similar law. The provisions of this Section shall survive the
termination of this Indenture.
SECTION 708. Disqualification; Conflicting Interests. If the Trustee has
or shall acquire any conflicting interest, as defined in Section 310(b) of
the Trust Indenture Act, with respect to the Securities of any series, it
shall, within 90 days after ascertaining that it has such conflicting
interest, either eliminate such conflicting interest or resign with respect
to the Securities of that series in the manner and with the effect provided
by, and subject to the provisions of, Section 310(b) of the Trust Indenture
Act and this Indenture.
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In the event that the Trustee shall fail to comply with the provisions
of the preceding sentence with respect to the Securities of any series, the
Trustee shall, within 10 days after the expiration of such 90-day period,
transmit, in the manner and to the extent provided in Section 106, to all
Holders of Securities of that series notice of such failure.
Nothing herein shall prevent the Trustee from filing with the Commission
the application referred to in the penultimate paragraph of Section 310(b)
of the Trust Indenture Act.
To the extent permitted by the Trust Indenture Act, the Trustee shall
not be deemed to have a conflicting interest with respect to the Securities
of any series by virtue of being Trustee with respect to the Securities of
any particular series of Securities other than that series.
SECTION 709. Corporate Trustee Required; Eligibility. There shall at all
times be a Trustee for each series of Securities hereunder which shall be
either (1) a corporation organized and doing business under the laws of the
United States of America, any State thereof or the District of Columbia,
which is authorized under such laws to exercise corporate trust powers and
is subject to supervision or examination by Federal or State authority and
having its Corporate Trust Office located in The City of New York or (2) a
corporation or other Person organized and doing business under the laws of
a foreign government that is permitted to act as Trustee pursuant to a
rule, regulation or order of the Commission, which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by authority of such foreign government or a political
subdivision thereof substantially equivalent to supervision or examination
applicable to United States institutional trustees; in either case having a
combined capital and surplus of at least $50,000,000. If such corporation
or Person publishes reports of condition at least annually, pursuant to law
or to the requirements of said supervising or examining authority, then for
the purposes of this Section, the combined capital and surplus of such
corporation or Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
Neither the Company nor any Person directly or indirectly controlling,
controlled by, or under common control with the Company shall serve as
trustee for the Securities of any series issued hereunder. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
SECTION 710. Resignation and Removal; Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 711.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If
the instrument of acceptance by a successor Trustee required by Section 711
shall not have been delivered to the resigning Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
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(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 708 after written
request therefor by the Company or by any Holder who has been a bona
fide Holder of a Security of a series as to which the Trustee has a
conflicting interest for at least six months, or
(2) the Trustee for a series shall cease to be eligible under
Section 709 and shall fail to resign after written request therefor by
the Company or by any Holder of Securities of such series, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove
the Trustee with respect to all Securities, or (ii) subject to Section 614,
any Holder who has been a bona fide Holder of a Security for at least six
months (and, in the case of Clause (1) above, who is a holder of a Security
of a series as to which the Trustee has a conflicting interest) may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any
cause, with respect to the Securities of one or more series, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee or
Trustees with respect to the Securities of that or those series (it being
understood that any such successor Trustee may be appointed with respect to
the Securities of one or more of or all such series and that at any time
there shall be only one Trustee with respect to the Securities of any
particular series) and such successor Trustee or Trustees shall comply with
the applicable requirements of Section 711. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon
its acceptance of such appointment in accordance with the applicable
requirements of Section 711, become the successor Trustee with respect to
the Securities of such series and to that extent supersede the successor
Trustee appointed by the Company. If no successor Trustee with respect to
the Securities of any series shall have been so appointed by the Company or
the Holders and accepted appointment in the manner required by Section 711,
any Holder who has been a bona fide Holder of a Security of such series for
at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment
of a successor Trustee with respect to the Securities of such series.
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(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any
series by giving notice of such event to all Holders of Securities of such
series as provided by Section 106. Each notice shall include the name of
the successor Trustee with respect to the Securities of such series and the
address of its Corporate Trust Office.
SECTION 711. Acceptance of Appointment by Successor. (a) In case of the
appointment hereunder of a successor Trustee with respect to all
Securities, every such successor Trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers
and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company,
the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series as to which the retiring Trustee
is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees cotrustees
of the same trust and that each such Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery
of such supplemental indenture, the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly
assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of such
successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all
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such rights, powers and trusts referred to in paragraph (a) or (b) of this
Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and
eligible under this Article.
SECTION 712. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided that such corporation shall be otherwise qualified and
eligible under this Article, without the execution or filing of any paper
or any further act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor
Trustee had itself authenticated such Securities.
SECTION 713. Preferential Collection of Claims Against Company.
(a) Subject to Subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of
the Company within three months prior to a default, as defined in
Subsection (c) of this Section, or subsequent to such a default, then,
unless and until such default shall be cured, the Trustee shall set apart
and hold in a special account for the benefit of the Trustee individually,
the Holders of the Securities and Coupons, if any, and the holders of other
indenture securities, as defined in Subsection (c) of this Section:
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or
interest, effected after the beginning of such three-month period and
valid as against the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any property
described in paragraph (2) of this Subsection, or from the exercise of
any right of set-off which the Trustee could have exercised if a
petition in bankruptcy had been filed by or against the Company upon the
date of such default; and
(2) all property received by the Trustee in respect of any claims as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such three-
month period, or an amount equal to the proceeds of any such property,
if disposed of, subject, however, to the rights, if any, of the Company
and its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account (i) payments made on account of
any such claim by any Person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim
by the Trustee to a third Person, and (iii) distributions made in
cash, securities or other property in respect of claims filed against
the Company
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in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal Bankruptcy Act or applicable State law;
(B) to realize, for its own account, upon any property held by it
as security for any such claim, if such property was so held prior to
the beginning of such three-month period;
(C) to realize, for its own account, but only to the extent of the
claim hereinafter mentioned, upon any property held by it as security
for any such claim, if such claim was created after the beginning of
such three-month period and such property was received as security
therefor simultaneously with the creation thereof, and if the Trustee
shall sustain the burden of proving that at the time such property was
so received the Trustee had no reasonable cause to believe that a
default, as defined in Subsection (c) of this Section, would occur
within three months; or
(D) to receive payment on any claim referred to in paragraph (B) or
(C), against the release of any property held as security for such
claim as provided in paragraph (B) or (C), as the case may be, to the
extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such three-month period for property held as
security at the time of such substitution shall, to the extent of the fair
value of the property released, have the same status as the property
released, and, to the extent that any claim referred to in any of such
paragraphs is created in renewal of or in substitution for or for the
purpose of repaying or refunding any pre-existing claim of the Trustee as
such creditor, such claim shall have the same status as such pre-existing
claim.
If the Trustee shall be required to account, the funds and property held
in such special account and the proceeds thereof shall be apportioned among
the Trustee, the Holders and the holders of other indenture securities in
such manner that the Trustee, the Holders and the holders of other
indenture securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Act or applicable State law, the same percentage of
their respective claims, figured before crediting to the claim of the
Trustee anything on account of the receipt by it from the Company of the
funds and property in such special account and before crediting to the
respective claims of the Trustee and the Holders and the holders of other
indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to
the Federal Bankruptcy Act or applicable State law, but after crediting
thereon receipts on account of the indebtedness represented by their
respective claims from all sources other than from such dividends and from
the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include
any distribution with respect to such claim, in bankruptcy or receivership
for proceedings for reorganization pursuant to the Federal Bankruptcy Act
or applicable State law, whether such distribution is made in cash,
securities or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in
which such bankruptcy, receivership or proceedings for reorganization is
pending shall have jurisdiction (i) to apportion among the Trustee, the
Holders and the holders of other indenture securities, in
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accordance with the provisions of this paragraph, the funds and property
held in such special account and the proceeds thereof, or (ii) in lieu of
such apportionment, in whole or in part, to give to the provisions of this
paragraph due consideration in determining the fairness of the
distributions to be made to the Trustee and the Holders and the holders of
other indenture securities with respect to their respective claims, in
which event it shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special account or as
security for any such claim, or to make a specific allocation of such
distributions as between the secured and unsecured portions of such claims,
or otherwise to apply the provisions of this paragraph as a mathematical
formula.
Any Trustee which has resigned or been removed after the beginning of
such three-month period shall be subject to the provisions of this
Subsection as though such resignation or removal had not occurred. If any
Trustee has resigned or been removed prior to the beginning of such three-
month period, it shall be subject to the provisions of this Subsection if
and only if the following conditions exist:
(i) the receipt of property or reduction of claim, which would have
given rise to the obligation to account, if such Trustee had continued
as Trustee, occurred after the beginning of such three-month period; and
(ii) such receipt of property or reduction of claim occurred within
three months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of this
Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year
or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction, or by this Indenture, for the purpose of
preserving any property which shall at any time be subject to the lien
of this Indenture or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the Holders at
the time and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar,
custodian, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or
securities sold in a cash transaction, as defined in Subsection (c) of
this Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve
Act, as amended, which is directly or indirectly a creditor of the
Company; and
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60
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within
the classification of self-liquidating paper, as defined in
Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment in full of
the principal of (or premium, if any, on) or interest on any of the
Securities or upon the other indenture securities when and as such
principal or interest becomes due and payable;
(2) the term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture
(i) under which the Trustee is also trustee, (ii) which contains
provisions substantially similar to the provisions of this Section, and
(iii) under which a default exists at the time of the apportionment of
the funds and property held in such special account;
(3) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after
delivery of the goods or securities in currency or in checks or other
orders drawn upon banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or
incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security; provided the security
is received by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the making, drawing,
negotiating or incurring of the draft, bill of exchange, acceptance or
obligation;
(5) the term "Company" means any obligor upon the Securities; and
(6) the term "Federal Bankruptcy Act" means the Bankruptcy Act or
Title 11 of the United States Code.
SECTION 714. Judgment Currency. If, for the purpose of obtaining a
judgment in any court with respect to any obligation of the Company
hereunder or under any Security or Coupon, it shall become necessary to
convert into any other currency or currency unit any amount in the currency
or currency unit due hereunder or under such Security or Coupon, then such
conversion shall be made at the Conversion Rate (as defined below) as in
effect on the date the Company shall make payment to any Person in
satisfaction of such judgment. If pursuant to any such judgment, conversion
shall be made on a date other than the date payment is made and there shall
occur a change between such Conversion Rate and the Conversion Rate as in
effect on the date of payment or distribution, the Company agrees to pay
such additional amounts (if any) as may be necessary to ensure that the
amount paid is the amount in such other currency or currency unit which,
when converted at the Conversion Rate as in effect on the date of payment
or distribution, is the amount then due hereunder or under such Security or
Coupon. Any amount due from the Company under
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61
this Section 714 shall be due as a separate debt and is not to be affected
by or merged into any judgment being obtained for any other sums due
hereunder or in respect of any Security or Coupon so that in any event the
Company's obligations hereunder or under such Security or Coupon will be
effectively maintained as obligations in such currency or currency unit. In
no event, however, shall the Company be required to pay more in the
currency or currency unit stated to be due hereunder or under such Security
or Coupon.
For purposes of this Section 714, "Conversion Rate" shall mean, as of
any date, for any currency or currency unit into which an amount due
hereunder or under any Security or Coupon is to be converted, the noon
buying rate in the other currency or currency unit for that currency or
currency unit for cable transfers quoted in New York City on such date as
certified for customs purposes by the Federal Reserve Bank of New York. If
such rates are not available for any reason with respect to one or more
currencies or currency units for which a Conversion Rate is required, the
Exchange Rate Agent shall use, in its sole discretion and without liability
on its part, such quotation of the Federal Reserve Bank of New York as of
the most recent available date, or quotations from one or more major banks
in New York City or in the country of issue of the currency in question, or
such other quotations as the Exchange Rate Agent shall deem appropriate.
Unless otherwise specified by the Exchange Rate Agent, if there is more
than one market for dealing in a currency or currency unit by reason of
foreign exchange regulations or otherwise, the market to be used in respect
of such currency or currency unit shall be that upon which a nonresident
issuer of securities designated in such currency or currency unit would, as
determined in its sole discretion and without liability on the part of the
Exchange Rate Agent, purchase such currency or currency unit in order to
make payments in respect of such Securities. If there does not exist a
quoted exchange rate in any currency or currency unit (the "First
Currency") for another currency unit (the "Second Currency"), then the
Conversion Rate for the Second Currency shall be equal to equivalent amount
in the First Currency obtained by converting the Specified Amount of each
Component Currency of the Second Currency into the First Currency at the
Conversion Rate (determined as provided above) for each such Component
Currency on such date (or, if the First Currency is a currency unit for
which there is no quoted exchange rate in any Component Currency, by
converting the Specified Amount of each Component Currency of the Second
Currency into the Specified Amount of each Component Currency of the First
Currency at the Conversion Rate (determined as provided above) for each
such Component Currency on such date).
SECTION 715. Appointment of Authenticating Agent. The Company may
appoint an Authenticating Agent or Agents with respect to one or more
series of Securities which shall be authorized to act on behalf of the
Trustee to authenticate Securities of such series issued upon original
issue or upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 405, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication
and delivery on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Trustee and shall at all times be a corporation having a combined capital
and surplus of not less than the equivalent of $50,000,000 and subject
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62
to supervision or examination by Federal, state or District of Columbia
authority or the equivalent foreign authority, in the case of an
Authenticating Agent who is not organized and doing business under the laws
of the United States of America, any state thereof or the District of
Columbia. If such Authenticating Agent publishes reports of condition at
least annually, pursuant to law or to the requirements of said supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section, such
Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of such Authenticating Agent,
shall continue to be an Authenticating Agent; provided such corporation
shall be otherwise eligible under this Section, without the execution or
filing of any paper or any further act on the part of the Trustee or such
Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Company may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Trustee. Upon receiving
such a notice of resignation or upon such a termination, or in case at any
time such Authenticating Agent shall cease to be eligible in accordance
with the provisions of this Section, the Company may appoint a successor
Authenticating Agent which shall be acceptable to the Trustee and shall
mail, or cause to be mailed, written notice of such appointment by first-
class mail, postage prepaid, to all Holders of Registered Securities, if
any, of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its
predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
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63
This is one of the Securities of the series designated herein issued
under the within-mentioned Indenture.
, As Trustee
By
---------------------------
As Authenticating Agent
By
---------------------------
Authorized [Officer] [Signatory]
If all the Securities of a series may not be originally issued at one
time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment or other
place where the Company wishes to have Securities of such series
authenticated upon original issuance, the Company shall appoint in
accordance with this Section an Authenticating Agent (which may be an
Affiliate of the Company if eligible to be appointed as an Authenticating
Agent hereunder) having an office in such Place of Payment or other place
designated by the Company with respect to such series of Securities.
ARTICLE EIGHT
Holders' Lists and Reports by Trustee and Company
SECTION 801. Company To Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semiannually, not later than January 15 and July 15 in each year,
a list in such form as the Trustee may reasonably require, of the names
and addresses of the Holders of each series of Registered Securities as
of the preceding January 1 or July 1, as the case may be, and such
information concerning the Holders of Bearer Securities which is known
to the Company or any Paying Agent other than the Company; provided,
however, that the Company and such Paying Agents shall have no
obligation to investigate any matter relating to any Holder of a Bearer
Security or a Coupon; and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content, such list to be dated as of a date not more
than 15 days prior to the time such list is furnished, and such
information concerning the Holders of Bearer Securities which is known
to the Company or any such Paying Agent; provided, however, that the
Company and such Paying Agents shall have no obligation to investigate
any matter relating to any Holder of a Bearer Security or a Coupon;
notwithstanding the foregoing subsections (a) and (b), at such times as the
Trustee is the Security Registrar and Paying Agent with respect to a
particular series of Securities, no such list shall be required to be
furnished in respect of such series.
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64
SECTION 802. Preservation of lnformation; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of each series contained in
the most recent list furnished to the Trustee as provided in Section 801
and the names and addresses of Holders of each series received by the
Trustee in any capacity as Security Registrar or Paying Agent. The Trustee
may destroy any list furnished to it as provided in Section 801 upon
receipt of a new list so furnished.
(b) If three or more Holders of Securities of any series (herein
referred to as "applicants") apply in writing to the Trustee, and furnish
to the Trustee reasonable proof that each such applicant has owned a
Security of such series for a period of at least six months preceding the
date of such application, and such application states that the applicants
desire to communicate with other Holders of Securities of such series with
respect to their rights under this Indenture or under such Securities and
is accompanied by a copy of the form of proxy or other communication which
such applicants propose to transmit, then the Trustee shall, within five
business days after the receipt of such application, at its election,
either
(i) afford such applicants access to the information preserved at the
time by the Trustee in accordance with Section 802(a), or
(ii) inform such applicants as to the approximate number of Holders of
Securities of such series whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with
Section 802(a), and as to the approximate cost of mailing to such
Holders the form of proxy or other communication, if any, specified in
such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of Securities of such series whose name and
address appear in the information preserved at the time by the Trustee in
accordance with Section 802(a) a copy of the form of proxy or other
communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and
of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender the Trustee shall mail
to such applicants and file with the Commission, together with a copy of
the material to be mailed, a written statement to the effect that, in the
opinion of the Trustee, such mailing would be contrary to the best interest
of the Holders of such series or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified
in the written statement so filed, shall enter an order refusing to sustain
any of such objections or if, after the entry of an order sustaining one or
more of such objections, the Commission shall find, after notice and
opportunity for hearing, that all the objections so sustained have been met
and shall enter an order so declaring, the Trustee shall mail copies of
such material to all such Holders with reasonable promptness after the
entry of such order and the renewal of such tender; otherwise the Trustee
shall be relieved of any obligation or duty to such applicants respecting
their application.
(c) Every Holder of Securities or Coupons, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any agent of either of them shall be held accountable by
reason of the disclosure of any such information as to the names and
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65
addresses of the Holders in accordance with Section 802(b), regardless of
the source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material pursuant to
a request made under Section 802(b).
SECTION 803. Reports by Trustee. (a) Within 60 days after September 15
of each year commencing with the September 15 occurring after the initial
issuance of Securities hereunder, the Trustee shall transmit by mail to the
Holders of Securities, as provided in Subsection (d) of this Section, a
brief report dated as of such September 15 with respect to any of the
following events which may have occurred during the twelve months preceding
the date of such report (but if no such event has occurred within such
period, no report need be transmitted):
(1) any change to its eligibility under Section 609 and its
qualifications under Section 608;
(2) the creation of or any material change to a relationship specified
in Section 310(b)(1) through Section 310(b)(10) of the Trust Indenture
Act;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof)
made by the Trustee (as such) which remain unpaid on the date of such
report, and for the reimbursement of which it claims or may claim a lien
or charge, prior to that of the Securities, on any property or funds
held or collected by it as Trustee, except that the Trustee shall not be
required (but may elect) to report such advances if such advances so
remaining unpaid aggregate not more than 1/2 of 1% of the principal
amount of the Securities Outstanding on the date of such report;
(4) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of
such report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 713(b)(2), (3),
(4) or (6);
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any additional issue of Securities which the Trustee has not
previously reported; and
(7) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities, except action in respect of a
default, notice of which has been or is to be withheld by the Trustee in
accordance with Section 602.
(b) The Trustee shall transmit by mail to all Holders, as provided in
Subsection (d) of this Section, a brief report with respect to the
character and amount of any advances (and if the Trustee elects so to
state, the circumstances surrounding the making thereof) made by the
Trustee (as such) since the date of the last report transmitted pursuant to
Subsection (a) of this Section (or if no such report has yet been so
transmitted, since the date of execution of this instrument) for the
reimbursement of which it claims or may claim a lien or charge, prior to
that of the Securities, on property or funds held or collected by it as
Trustee and which it has not previously reported pursuant to this
Subsection, except that the Trustee shall not be required (but may elect)
to report
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66
such advances if such advances remaining unpaid at any time aggregate 10%
or less of the principal amount of the Securities Outstanding at such time,
such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each United States stock exchange
upon which any Securities are listed, with the Commission and with the
Company.
(d) Reports pursuant to Section 803(a) and 803(b) shall be transmitted
by mail (i) to all Holders, as their names and addresses appear in the
Security Register, (ii) to all Holders as have, within two years preceding
such transmission, filed their names and addresses with the Trustee for
such purpose, and (iii) except in the case of reports pursuant to
Section 803(b), to all Holders whose names and addresses have been
furnished or received by the Trustee pursuant to Sections 801 and 802.
SECTION 804. Reports by Company. The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934; or, if the Company
is not required to file information, documents or reports pursuant to
either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from
time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to
Section 13 of the Securities Exchange Act of 1934 in respect of a
security listed and registered on a national securities exchange as may
be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with rules
and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance
by the Company with the conditions and covenants of this Indenture as
may be required from time to time in such rules and regulations;
(3) transmit by mail to all Holders of Securities, in the manner and
to the extent provided in Section 803(d) with respect to reports to be
transmitted pursuant to Section 803(a), within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents
and reports required to be filed by the Company pursuant to paragraph
(1) of (2) of this Section as may be required by rules and regulations
prescribed from time to time by the Commission; and
(4) promptly notify the Trustee when any Securities are listed on any
stock exchange.
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67
ARTICLE NINE
Consolidation, Merger, Conveyance or Transfer
SECTION 901. Company May Consolidate, etc., Only on Certain Terms. The
Company shall not consolidate with or merge into any other corporation or
convey or transfer its properties and assets substantially as an entirety
to any Person, unless:
(1) the corporation formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Company substantially as an entirety
shall be a corporation organized and existing under the laws of the
United States of America or any state or the District of Columbia, and
shall expressly assume, by an indenture supplemental hereto, executed
and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of, and premium, if any, and
interest, if any, on all the Securities and the performance or
observance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both,
would become an Event of Default, shall have occurred and be continuing;
and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance or transfer and such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating
to such transaction have been complied with.
SECTION 902. Successor Corporation Substituted. Upon any consolidation
or merger, or any conveyance or transfer of the properties and assets of
the Company substantially as an entirety in accordance with Section 901,
the successor corporation formed by such consolidation or into which the
Company is merged or to which such conveyance or transfer is made shall
succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such
successor corporation had been named as the Company herein; and in the
event of any such conveyance or transfer, the Company (which term shall for
this purpose mean the Person named as the "Company" in the first paragraph
of this instrument or any successor corporation which shall have
theretofore become such in the manner prescribed in Section 901) shall be
discharged from all liability under this Indenture and in respect of the
Securities and may be dissolved and liquidated.
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ARTICLE TEN
Supplemental Indentures
SECTION 1001. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by or
pursuant to a Board Resolution, and the Trustee, at any time and from time
to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities;
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that
such covenants are expressly being included solely for the benefit of
such series) or to surrender any right or power herein conferred upon
the Company;
(3) to add any additional Events of Default with respect to all or any
series of the Securities (and, if such Event of Default is applicable to
less than all series of Securities, specifying the series to which such
Event of Default is applicable);
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to facilitate the issuance of
Securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons; to change or eliminate
any restrictions on the payment of principal of or any premium or
interest on Bearer Securities, to permit Bearer Securities to be issued
in exchange for Registered Securities, to permit Bearer Securities to be
issued in exchange for Bearer Securities of other authorized
denominations; provided that any such addition or change shall not
adversely affect the interests of the Holders of Securities of any
series or any related Coupons in any material respect;
(5) to change or eliminate any of the provisions of this Indenture;
provided that any such change or elimination shall become effective only
when there is no Security Outstanding of any series created prior to the
execution of such supplemental indenture which is adversely affected by
such change in or elimination of such provision;
(6) to establish the form or terms of Securities of any series as
permitted by Sections 202 and 301;
(7) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 711(b);
(8) if allowed under applicable laws and regulations, to permit
payment in the United States of principal, premium or interest on Bearer
Securities or Coupons, if any;
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69
(9) to provide for the issuance of uncertificated Securities of one or
more series in additionto or in place of certificated Securities;
(10) to cure any ambiguity or to correct or supplement any provision
herein which may be defective or inconsistent with any other provision
herein; or
(11) to make any other provisions with respect to matters or questions
arising under this Indenture; provided such other provisions as may be
made shall not adversely affect the interests of the Holders of
outstanding Securities of any series in any material respect.
SECTION 1002. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of
the Outstanding Securities of all series affected by such supplemental
indenture (acting as one class), by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by or pursuant to a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities of such
series under this indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each outstanding
Security affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
602, or change any Place of Payment where, or the currency, currencies
or currency unit or units in which, any Security or any premium or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption
Date), or affect adversely the terms, if any, of conversion of any
Security into stock or other securities of the Company or of any other
corporation,
(2) 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 this
Indenture or certain defaults hereunder and their consequences) provided
for in this Indenture,
(3) 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 Section 1102 for such series, or
(4) modify any of the provisions of this Section or Section 613,
except to increase any such percentage 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 (which provision may be made
pursuant to Section 202 or Section 301, as the case may be, without the
consent of any Holder) or to provide that certain other provisions of
this
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Indenture cannot be modified or waived without the consent of the Holder
of each Outstanding Security affected thereby; provided, however, that
this clause shall not be deemed to require the consent of any Holder
with respect to changes in the references to "the Trustee" and
concomitant changes in this Section, or the deletion of this proviso, in
accordance with the requirements of Section 711(b) and 1001(7).
For purposes of this Section 1002, if the Securities of any series are
issuable upon the exercise of warrants, each holder of an unexercised and
unexpired warrant with respect to such series shall be deemed to be a
Holder of Outstanding Securities of such series in the amount issuable upon
the exercise of such warrant. For such purposes, the ownership of any such
warrant shall be determined by the Company in a manner consistent with
customary commercial practices. The Trustee for such series shall be
entitled to rely on an Officers' Certificate as to the principal amount of
Securities of such series in respect of which consents shall have been
executed by holders of such warrants.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed not to affect
the rights under this Indenture of the Holders of Securities of any other
series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 1003. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive (in
addition to the opinion which the Trustee is entitled to receive pursuant
to Section 202), and (subject to Section 701) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such
supplemental indenture which affects the Trustee's own rights, duties,
immunities or liabilities under this Indenture or otherwise.
SECTION 1004. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall
form a part of this Indenture for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 1005. Conformity with Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act as then in effect.
SECTION 1006. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine,
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new Securities of any series so modified as to conform, in the opinion of
the Trustee and the Company, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE ELEVEN
Covenants
SECTION 1101. Payment of Principal, Premium and Interest. The Company
covenants and agrees for the benefit of each series of Securities and
Coupons, if any, that it will duly and punctually pay the principal of (and
premium, if any, on) and interest. if any, on the Securities and Coupons,
if any, of that series in accordance with the terms of the Securities and
Coupons, if any, of such series and this Indenture.
SECTION 1102. Maintenance of Office or Agency. If Securities of a series
are issuable only as Registered Securities, the Company will maintain in
each Place of Payment for such series an office or agency where Securities
of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer
or exchange and where notices and demands to or upon the Company in respect
of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as both Registered or Bearer Securities
or only as Bearer Securities, the Company will maintain (A) in the Borough
of Manhattan, The City of New York, an office or agency where any
Registered Securities of that series may be presented or surrendered for
payment, where any Registered Securities of that series may be surrendered
for registration of transfer, where Securities of that series may be
surrendered for exchange, where notices and demands to or upon the Company
in respect of the Securities of that series and this Indenture may be
served and where Bearer Securities of that series and related Coupons may
be presented or surrendered for payment in the circumstances described in
the proviso contained in the last sentence of this first paragraph of
Section 1102 (and not otherwise), (B) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series which is located
outside the United States, an office or agency where Securities of that
series and related Coupons may be presented and surrendered for payment
(including payment of any additional amounts payable on Securities of that
series pursuant to Section 1105); provided, however, that if the Securities
of that series are listed on any stock exchange located outside the United
States and such stock exchange shall so require, the Company will maintain
a Paying Agent for the Securities of that series in any required city
located outside the United States, so long as the Securities of that series
are listed on such exchange, and (C) subject to any laws or regulations
applicable thereto, in a Place of Payment for that series located outside
the United States, an office or agency where any Registered Securities of
that series may be surrendered for registration of transfer, where
Securities of that series may be surrendered for exchange and where notices
and demands to or upon the Company in respect of the Securities of that
series and this Indenture may be served. The Company will give prompt
written notice to the Trustee and the Holders of the location, and any
change in the location, of any such office or agency. If at any time the
Company shall fail to maintain any such required office or agency in
respect of any series of Securities or shall fail to furnish the Trustee
with the address thereof, such presentations and surrenders of Securities
of that series may be made and notices and demands may be made or served at
the Corporate Trust Office of the Trustee, except that Bearer Securities of
that series and the related
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Coupons may be presented and surrendered for payment (including payment of
any additional amounts payable on Bearer Securities of that series pursuant
to Section 1105) at the London office of the Trustee (or an agent with a
London office appointed by the Trustee and acceptable to the Company), and
the Company hereby appoints the same as its agent to receive such
respective presentations, surrenders, notices and demands. No payment of
principal, premium or interest on Bearer Securities shall be made at any
office or agency of the Company in the United States or by check mailed to
any address in the United States or by transfer to an account maintained
with a bank located in the United States; provided, however, that, if the
Securities of a series are denominated and payable in Dollars, payment of
principal of and any premium and interest on any Bearer Security (including
any additional amounts payable on Securities of such series pursuant to
Section 1105) shall be made at the office of the Company's Paying Agent in
the Borough of Manhattan, The City of New York, if (but only if) payment in
Dollars of the full amount of such principal, premium, interest or
additional amounts, as the case may be, at all offices or agencies outside
the United States maintained for the purpose by the Company in accordance
with this Indenture is illegal or effectively precluded by exchange
controls or other similar restrictions.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in accordance with the requirements set forth
above for Securities of any series for such purposes. The Company will give
prompt written notice to the Trustee and the Holders of any such
designation or rescission and of any change in the location of any such
other office or agency.
SECTION 1103. Money for Securities Payments To Be Held in Trust. If the
Company shall at any time act as its own Paying Agent with respect to any
series of Securities, it will, on or before each due date of the principal
of (and premium, if any, on) or interest, if any, on any of the Securities
of that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum in the relevant currency (or a sufficient number of
currency units, as the case may be) sufficient to pay the principal (and
premium, if any, on) or interest so becoming due until such sums shall be
paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, at or prior to the opening of business on each due
date of the principal of (and premium, if any, on) or interest, if any, on
any Securities of that series, deposit with a Paying Agent a sum sufficient
to pay the principal (and premium, if any) or interest so becoming due,
such sum to be held in trust for the benefit of the Persons entitled to
such principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of its action or
failure so to act.
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The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument
in which such Paying Agent shall agree with the Trustee, subject to the
provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any, on) or interest, if any, on Securities of that series
in trust for the benefit of the Persons entitled thereto until such sums
shall be paid to such Persons or otherwise disposed of as herein
provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in making of any
payment of principal (and premium, if any, on) or interest, if any, on
the Securities of that series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and charge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Company or such Paying Agent, such sums to be held by
the Trustee upon the same trusts as those upon which such sums were held by
the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium,
if any, on) or interest, if any, on any Security of any series and
remaining unclaimed for two years after such principal (and premium, if
any) or interest has become due and payable shall be paid to the Company,
or (if then held by the Company) shall be discharged from such trust; and
the Holder of such Security and Coupons, if any, shall thereafter, as an
unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such
trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense and at
the direction of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business
Day and of general circulation in the Borough of Manhattan, The City of New
York, notice that such money remains unclaimed and that, after a date
specified herein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will
be repaid to the Company. All moneys payable to the Company by the Trustee
or any Paying Agent as provided in the preceding sentence shall be paid to
the Company on May 31 of each year.
SECTION 1104. Statement by Officers as to Default. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year,
a written certificate signed by the principal executive officer, the
principal financial officer or the principal accounting officer of the
Company, stating that:
(1) a review of the activities of the Company during such year and of
performance under this Indenture has been made under such officer's
supervision; and
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(2) to such officer's knowledge, based on such review, the Company has
fulfilled all its obligations, and has complied with all conditions and
covenants, under this Indenture throughout such year, or, if there has
been a default in the fulfillment of any such obligation, condition or
covenant, specifying each such default known to him and the nature and
status thereof. For purposes of this Section 1104, compliance shall be
determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture.
SECTION 1105. Additional Amounts. If the Securities of a series provide
for the payment of additional amounts, the Company will pay to the Holder
of any Security of such series or any related Coupon additional amounts as
provided therein. Whenever in this Indenture there is mentioned, in any
context, the payment of the principal of or any premium or interest on, or
in respect of, any Security of any series or payment of any related Coupon
or the net proceeds received on the sale or exchange of any Security of any
series, such mention shall be deemed to include mention of the payment of
additional amounts provided for in this Section to the extent that, in such
context, additional amounts are, were or would be payable in respect
thereof pursuant to the provisions of this Section and express mention of
the payment of additional amounts (if applicable) in any provisions hereof
shall not be construed as excluding additional amounts in those provisions
hereof where such express mention is not made.
If the Securities of a series provide for the payment of additional
amounts, at least 10 days prior to the first Interest Payment Date with
respect to that series of Securities (or if the Securities of that series
will not bear interest prior to Maturity, the first day on which a payment
of principal and any premium is made), and at least 10 days prior to each
date of payment of principal and any premium or interest if there has been
any change with respect to the matters set forth in the below-mentioned
Officers' Certificate, the Company will furnish the Trustee and the
Company's Paying Agent or Paying Agents, if other than the Trustee, with an
Officers' Certificate instructing the Trustee and such Paying Agent or
Paying Agents whether such payment of principal of and any premium or
interest on the Securities of that series shall be made to Holders of
Securities of that series or any related Coupons who are United States
Aliens (as defined in such Securities) without withholding for or on
account of any tax, assessment or other governmental charge described in
the Securities of that series. If any such withholding shall be required,
then such Officers' Certificate shall specify by country the amount, if
any, required to be withheld on such Payments to such Holders of Securities
or Coupons and the Company will pay to the Trustee or such Paying Agent the
additional amounts required by this Section. The Company covenants to
indemnify the Trustee and any Paying Agent for, and to hold them harmless
against, any loss, liability or expense reasonably incurred without
negligence or bad faith on their part arising out of or in connection with
actions taken or omitted by any of them in reliance on any Officers'
Certificate furnished pursuant to this Section.
ARTICLE TWELVE
Redemption of Securities
SECTION 1201. Applicability of Article. Securities of any series which
are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise
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specified as contemplated by Section 202 or Section 301, as the case may
be, for Securities of any series) in accordance with this Article.
SECTION 1202. Election To Redeem; Notice to Trustee. If the Company
shall desire to exercise the right to redeem all, or, as the case may be,
any part of the Securities of any series, the Company shall, at least
60 days prior to the Redemption Date fixed by the Company (unless a shorter
notice shall be satisfactory to the Trustee), notifying the Trustee of such
Redemption Date and of the principal amount of Securities of such series to
be redeemed. In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of
such Securities or elsewhere in this Indenture, the Company shall furnish
the Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 1203. Selection by Trustee of Securities To Be Redeemed. If less
than all the Securities of any series are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to
the Redemption Date by the Trustee, from the Outstanding Securities of such
series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the
principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 1204. Notice of Redemption. Notice of redemption shall be given
not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, as provided in Section 106.
Each such notice of redemption shall specify the Redemption Date, the
Redemption Price, the Place or Places of Payment, that the Securities of
such series are being redeemed at the option of the Company pursuant to
provisions contained in the terms of the Securities of such series or in a
supplemental indenture establishing such series, if such be the case,
together with a brief statement of the facts permitting such redemption,
that on the Redemption Date the Redemption Price will become due and
payable upon each Security redeemed, that payment will be made upon
presentation and surrender of the applicable Securities, that all Coupons,
if any, maturing subsequent to the date fixed for redemption shall be void,
that any interest accrued to the Redemption Date will be paid as specified
in said notice, that the redemption is pursuant to the sinking fund, if
such is the case, and that on and after said Redemption Date any interest
thereon or on the portions thereof to be redeemed will cease to accrue. If
less than all the Securities of any series are to be redeemed, the notice
of redemption shall specify the registration and, if any, CUSIP
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numbers of the Securities of such series to be redeemed, and, if only
Bearer Securities of any series are to be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities, the last date on
which exchanges of Bearer Securities for Registered Securities not subject
to redemption may be made. In case any Security of any series is to be
redeemed in part only, the notice of redemption shall state the portion of
the principal amount thereof to be redeemed and shall state that on and
after the Redemption Date, upon surrender of such Security and any Coupons
appertaining thereto, a new Security or Securities of such series in
principal amount equal to the unredeemed portion thereof and with
appropriate Coupons will be issued, or, in the case of Registered
Securities providing appropriate space for such notation, at the option of
the Holders, the Trustee, in lieu of delivering a new Security or
Securities as aforesaid, may make a notation on such Security of the
payment of the redeemed portion thereof.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1205. Deposit of Redemption Price. On or before the opening of
business on any Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its own paying
Agent, segregate and hold in trust as provided in Section 1103) an amount
of money in the relevant currency (or a sufficient number of currency
units, as the case may be) sufficient to pay the Redemption Price of, and
(except if the Redemption Date shall be an Interest Payment Date) accrued
interest on, all the Securities which are to be redeemed on that date.
SECTION 1206. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified, and from and after such date (unless the Company
shall default in the payment of the Redemption Price and accrued interest)
such Securities shall cease to bear interest and the Coupons for such
interest appertaining to any Bearer Securities so to be redeemed, except to
the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
Coupons, if any, appertaining thereto maturing after the Redemption Date,
such Security shall be paid by the Company at the Redemption Price,
together with accrued interest to the Redemption Date; provided, however,
that installments of interest on Bearer Securities whose Stated Maturity is
on or prior to the Redemption Date shall be payable only at an office or
agency located outside the United States (except otherwise provided in
Section 1102) and, unless otherwise specified as contemplated by
Section 202 or Section 301, as the case may be, only upon presentation and
surrender of Coupons for such interest; provided further that, unless
otherwise specified as contemplated by Section 202 or Section 301, as the
case may be, installments of interest on Registered Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities,
registered as such at the close of business on the relevant Record Dates
according to their terms and the provisions of Section 406.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant Coupons maturing after the Redemption Date,
such Security may be paid after deducting from the
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Redemption Price an amount equal to the face amount of all such missing
Coupons, or the surrender of such missing Coupon or Coupons may be waived
by the Company and the Trustee if there be furnished to them such security
or indemnity as they may require to save each of them and any Paying Agent
harmless. If thereafter the Holder of such Security shall surrender to the
Trustee or any Paying Agent any such missing Coupon in respect of which a
deduction shall have been made from the Redemption Price, such Holder shall
be entitled to receive the amount so deducted; provided, however, that
interest represented by Coupons shall be payable only at an office or
agency located outside the United States (except as otherwise provided in
Section 1102) and, unless otherwise specified as contemplated by
Section 202 or Section 301, as the case may be, only upon presentation and
surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 1207. Securities Redeemed in Part. Any Security which is to be
redeemed only in part shall be surrendered at a Place of Payment therefor
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities (with
appropriate Coupons) of the same series and Stated Maturity, of any
authorized denomination as requested by such Holder, in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal
of the Security so surrendered or, in the case of Registered Securities
providing appropriate space for such notation, at the option of the Holder,
the Trustee, in lieu of delivering a new Security or Securities as
aforesaid, may make a notation on such Security of the Payment of the
redeemed portion thereof.
ARTICLE THIRTEEN
Sinking Funds
SECTION 1301. Applicability of Article. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of
a series, except as otherwise specified as contemplated by Section 202 or
Section 301, as the case may be, for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein referred to as an
"optional sinking fund payment". If provided for by the terms of Securities
of any series, the cash amount of any sinking fund payment may be subject
to reduction as provided in Section 1302. Each sinking fund payment shall
be applied to the redemption of Securities of any series as provided for by
the terms of Securities of such series.
SECTION 1302. Satisfaction of Sinking Fund Payments with Securities. The
Company (1) may deliver Outstanding Securities (including all unmatured
Coupons appertaining thereto) of a series (other than any previously called
for redemption) and (2) may apply as a credit Securities of a
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series which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of such series required to be
made pursuant to the terms of such Securities as provided for by the terms
of such series; provided that such Securities have not been previously so
credited. Such Securities shall be received and the outstanding principal
amount thereof credited for such purpose by the Trustee at the Redemption
Price specified in such Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 1303. Redemption of Securities for Sinking Fund. Not less than
60 days prior to each sinking fund payment date for any series of
Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment
for that series pursuant to the terms of that series, the portion thereof,
if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 1302 and will also deliver to
the Trustee any Securities (including all unmatured Coupons appertaining
thereto) to be so delivered. Not less than 30 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section 1203
and cause notice of the redemption thereof to given in the name of and at
the expense of the Company in the manner provided in Section 1204. Such
notice having been duly given, the redemption of such Securities shall be
made upon the terms and in the manner stated in Section 1206 and 1207.
ARTICLE FOURTEEN
Meetings of Holders of Securities
SECTION 1401. Purposes for Which Meetings May Be Called. A meeting of
Holders of Securities of any series may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided
by this Indenture to be made, given or taken by Holders of Securities of
such series.
SECTION 1402. Call, Notice and Place of Meetings. (a) The Trustee may
at any time call a meeting of Holders of Securities of any series for any
purpose specified in Section 1401, to be held at such time and at such
place in the Borough of Manhattan, The City of New York, or in London, as
the Trustee shall determine. Notice of every meeting of Holders of
Securities of any series, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such
meeting, shall be given, in the manner provided in Section 106, not less
than 20 nor more than 180 days prior to the date fixed for the meeting.
(b) In case at any time the Company, by or pursuant to a Board
Resolution, or the Holders of at least 10% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to
call a meeting of the Holders of Securities of such series for any purpose
specified in Section 1401, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the Trustee
shall not have made the first publication of the notice of such
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meeting within 20 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then
the Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, The City of New York, or in London, for such meeting
and may call such meeting for such purposes by giving notice thereof as
provided in subsection (a) of this Section.
SECTION 1403. Persons Entitled To Vote at Meetings. To be entitled to
vote at any meeting of Holders of Securities of any series, a Person shall
be (1) a Holder of one or more Outstanding Securities of such series or
(2) a Person appointed by an instrument in writing as proxy for a Holder or
Holders of one or more Outstanding Securities of such series by such Holder
or Holders. The only Persons who shall be entitled to be present or to
speak at any meeting of Holders of Securities of any series shall be the
Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of
the Company and its counsel.
SECTION 1404. Quorum; Action. The Persons entitled to vote a majority in
principal amount of the Outstanding Securities of a series shall constitute
a quorum for a meeting of Holders of Securities of such series. In the
absence of a quorum within 30 minutes of the time appointed for any such
meeting, the meeting shall, if convened at the request of Holders of
Securities of such series, be dissolved. In any other case the meeting may
be adjourned for a period of not less than 10 days as determined by the
chairman of the meeting prior to the adjournment of such meeting. In the
absence of a quorum at any such adjourned meeting, such adjourned meeting
may be further adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall
be given as provided in Section 1402(a), except that such notice need be
given only once not less than five days prior to the date on which the
meeting is scheduled to be reconvened.
Except as limited by the proviso to Section 1002, and subject to the
provisions described in the next succeeding paragraph, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a
quorum is present as aforesaid may be adopted by the affirmative vote of
the Holders of a majority in principal amount of the Outstanding Securities
of that series; provided, however, that any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture expressly provides may be made, given or taken
by the Holders of a specified percentage, which is equal to or less than a
majority, in principal amount of the Outstanding Securities of a series may
be adopted at a meeting or an adjourned meeting duly reconvened and at
which a quorum is present as aforesaid by the affirmative vote of the
Holders of such specified percentage in principal amount of the Outstanding
Securities of that series. Any resolution passed or decision taken at any
meeting of Holders of Securities of any series duly held in accordance with
this Section shall be binding on all the Holders of Securities of such
series and the related Coupons, whether or not present or represented at
the meeting.
With respect to any consent, waiver or other action which this Indenture
expressly provides may be given by the Holders of a specified percentage of
Outstanding Securities of all series affected thereby (acting as one
class), only the principal amount of Outstanding Securities of any
<PAGE>
80
series represented at a meeting or adjourned meeting duly reconvened at
which a quorum is present, held in accordance with this Section, and voting
in favor of such action, shall be counted for purposes of calculating the
aggregate principal amount of Outstanding Securities of all series affected
thereby favoring such action.
SECTION 1405. Determination of Voting Rights; Conduct and Adjournment of
Meetings. (a) Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities of a series in regard to proof of the
holding of Securities of such series and of the appointment of proxies and
in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of
the right to vote, and such other matters concerning the conduct of the
meeting as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Securities shall be proved
in the manner specified in Section 104 and the appointment of any proxy
shall be proved in the manner specified in Section 104 or by having the
signature of the person executing the proxy witnessed or guaranteed by any
trust company, bank or banker authorized by Section 104 to certify to the
holder of Bearer Securities. Such regulations may provide that written
instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other
proof.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1402(b), in
which case the Company or the Holders of Securities of the series calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting
shall be elected by vote of the Persons entitled to vote a majority in
principal amount of the outstanding Securities of such series represented
at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 (or the equivalent thereof)
principal amount of the Outstanding Securities of such series held or
represented by him; provided, however, that no vote shall be cast or
counted at any meeting in respect of any Security challenged as not
Outstanding and ruled by the chairman of the meeting to be not Outstanding.
The chairman of the meeting shall have no right to vote, except as a Holder
of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1402 at which a quorum is present may be adjourned from
time to time by Persons entitled to vote a majority in principal amount of
the Outstanding Securities of such series represented at the meeting; and
the meeting may be held as so adjourned without further notice.
SECTION 1406. Counting Votes and Recording Action of Meetings. The vote
upon any resolution submitted to any meeting of Holders of Securities of
any series shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities of such series or of their
representatives by proxy and the principal amounts and serial numbers of
the Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and
who shall make and file with the secretary of the meeting their verified
written
<PAGE>
81
reports in duplicate of all votes cast at the meeting. A record, at least
in duplicate, of the proceedings of each meeting of Holders of Securities
of any series shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more
persons having knowledge of the facts setting forth a copy of the notice of
the meeting and showing that said notice was given as provided in Section
1402 and, if applicable, Section 1404. Each copy shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one such copy shall be delivered to the Company, and another to
the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting. Any record so signed and verified
shall be conclusive evidence of the matters therein stated.
ARTICLE FIFTEEN
Subordination
SECTION 1501. Agreement To Subordinate. The Company agrees, and each
Holder by accepting a Security agrees, that the indebtedness evidenced by
the Securities is subordinated in right of payment, to the extent and in
the manner provided in this Article Fifteen, to the prior payment of all
Senior Indebtedness, and that such subordination is for the benefit of and
enforceable by the holders of Senior Indebtedness. Only indebtedness of the
Company which is Senior Indebtedness shall rank senior to the Securities in
accordance with the provisions set forth herein. All provisions of this
Article Fifteen shall be subject to Section 1512.
SECTION 1502. Liquidation, Dissolution, Bankruptcy. Upon any payment or
distribution of the assets of the Company to creditors upon a total or
partial liquidation or a total or partial dissolution of the Company or in
a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to the Company or its respective properties:
(1) holders of Senior Indebtedness shall be entitled to receive
payment in full of the Senior Indebtedness before the Holders of
Securities shall be entitled to receive any payment of principal of or
interest on other amounts with respect to the Securities; and
(2) until the Senior Indebtedness is paid in full, any distribution to
which the Holders of Securities would be entitled but for this Article
Fifteen shall be made to holders of Senior Indebtedness as their
interests may appear, except that Holders of Securities may receive
shares of stock and any debt securities that are subordinated to Senior
Indebtedness to at least the same extent as the Securities and do not
provide for the payment of principal prior to the Stated Maturity of all
Senior Indebtedness.
SECTION 1503. Default on Senior Indebtedness. The Company may not pay
the principal of or interest on or other amounts with respect to the
Securities, make any deposit pursuant to Section 1103 or repurchase, redeem
or otherwise retire any Securities (collectively, "pay the Securities") if
(i) any Senior Indebtedness is not paid when due or (ii) any other default
on Senior Indebtedness occurs and the maturity of such Senior Indebtedness
is accelerated in accordance with its terms unless, in either case, (x) the
default has been cured or waived and any such acceleration has been
rescinded or (y) such Senior Indebtedness has been paid in full; provided,
however, that the Company may pay the Securities without regard to the
foregoing if the Company and the
<PAGE>
82
Trustee receive written notice approving such payment from the
Representatives of the Senior Indebtedness with respect to which either of
the events set forth in clause (i) or (ii) of the immediately preceding
sentence has occurred or is continuing. During the continuance of any
default (other than a default described in clause (i) or (ii) of the
preceding sentence) with respect to any Senior Indebtedness, pursuant to
which the maturity thereof may be accelerated immediately without further
notice (except such notice as may be required to effect such acceleration)
or the expiration of any applicable grace periods, the Company may not pay
the Securities for a period (a "Payment Blockage Period") commencing upon
the receipt by the Trustee (with a copy to the Company) of written notice
(a "Blockage Notice") of such default from the Representative of such
Senior Indebtedness specifying an election to effect a Payment Blockage
Period and ending 179 days thereafter (or earlier if such Payment Blockage
Period is terminated (i) by written notice to the Trustee and the Company
from the Person or Persons who gave such Blockage Notice, (ii) by repayment
in full of such Senior Indebtedness, or (iii) because the default giving
rise to such Blockage Notice is no longer continuing). Notwithstanding the
provisions described in the immediately preceding sentence (but subject to
the provisions contained in the first sentence of this Section), unless the
holders of such Senior Indebtedness or the Representative of such holders
shall have accelerated the maturity of such Senior Indebtedness, the
Company may resume payments on the Securities after such Payment Blockage
Period. Not more than one Blockage Notice may be given in any consecutive
360-day period, irrespective of the number of defaults with respect to
Senior Indebtedness during such period.
SECTION 1504. Acceleration of Payment of Securities. If payment of the
Securities is accelerated because of an Event of Default, the Company or
the Trustee shall promptly notify the holders of the Senior Indebtedness
(or their Representatives) of the acceleration. If any Senior Indebtedness
is outstanding, the Company may not pay the Securities until five Business
Days after Representatives of the Senior Indebtedness receive notice of
such acceleration and, thereafter, may pay the Securities only if this
Article Fifteen otherwise permits payments at that time.
SECTION 1505. When Distributions Must Be Paid Over. If a distribution is
made to the Holders of Securities that because of this Article Fifteen
should not have been made to them, the Holders of Securities who receive
the distribution shall hold it in trust for holders of Senior Indebtedness
and pay it over to them as their interests may appear.
SECTION 1506. Subrogation. After all Senior Indebtedness is paid in full
and until the Securities are paid in full, Holders of Securities shall be
subrogated to the rights of holders of Senior Indebtedness to receive
distributions applicable to Senior Indebtedness. A distribution made under
this Article Fifteen to holders of Senior Indebtedness which otherwise
would have been made to Holders of Securities is not, as between the
Company and Holders of Securities, a payment by the Company on Senior
Indebtedness.
SECTION 1507. Relative Rights. This Article Fifteen defines the relative
rights of Holders of Securities and holders of Senior Indebtedness. Nothing
in this Indenture shall:
(1) impair, as between the Company and Holders of Securities, the
obligation of the Company, which is absolute and unconditional, to pay
principal of and interest on the Securities in accordance with their
terms; or
<PAGE>
83
(2) prevent the Trustee or any Holder of Securities from exercising
its available remedies upon an Event of Default, subject to the rights
of holders of Senior Indebtedness to receive distributions otherwise
payable to Holders of Securities.
SECTION 1508. Subordination May Not Be Impaired by Company. No right of
any holder of Senior Indebtedness to enforce the subordination of the
indebtedness evidenced by the Securities shall be impaired by any act or
failure to act by the Company or by the failure of the Company to comply
with this Indenture.
SECTION 1509. Rights of Trustee and Paying Agent. Notwithstanding
Section 1503, the Trustee or Paying Agent may continue to make payments on
the Securities and shall not be charged with knowledge of the existence of
facts that would prohibit the making of any such payments unless, not less
than two Business Days prior to the date of such payment, a trust officer
of the Trustee receives notice satisfactory to it that payments may not be
made under this Article Fifteen. The Company, the Registrar or co-
registrar, the Paying Agent, a Representative or a holder of Senior
Indebtedness may give the notice; provided, however, that, if an issuer of
Senior Indebtedness has a Representative, only the Representative may give
the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness with the same rights it would have if it were not Trustee. The
Registrar and co-registrar and the Paying Agent may do the same with like
rights. The Trustee shall be entitled to all the rights set forth in this
Article Fifteen with respect to any Senior Indebtedness, which may at any
time be held by it, to the same extent as any other holder of Senior
Indebtedness; and nothing in Article Seven shall deprive the Trustee of any
of its rights as such holder. Nothing in this Article Fifteen shall apply
to claims of, or payments to, the Trustee under or pursuant to Article
Seven.
SECTION 1510. Distribution or Notice to Representative. Whenever a
distribution is to be made or a notice given to holders of Senior
Indebtedness, the distribution may be made and the notice given to their
Representatives (if any).
SECTION 1511. Article Fifteen Not To Prevent Events of Default or Limit
Right To Accelerate. The failure to make a payment pursuant to the
Securities by reason of any provision in this Article Fifteen shall not be
construed as preventing the occurrence of an Event of Default. Nothing in
this Article Fifteen shall have any effect on the right of the Holders of
Securities or the Trustee to accelerate the maturity of the Securities.
SECTION 1512. Trust Moneys Not Subordinated. Notwithstanding anything
contained herein to the contrary, payments from money or the proceeds of
U.S. government obligations held in trust under Section 1103 by the Trustee
for the payment of principal of and interest on the Securities shall not be
subordinated to the prior payment of any Senior Indebtedness, or subject to
the restrictions set forth in this Article Fifteen, and none of the Holders
of Securities shall be obligated to pay over any such amount to the
Company, or any holder of Senior Indebtedness of the Company or any other
creditor of the Company.
SECTION 1513. Trustee Entitled to Rely. Upon any payment or distribution
pursuant to this Article Fifteen, the Trustee and the Holders of Securities
shall be entitled to rely (i) upon any order or decree of a court of
competent jurisdiction in which any proceedings of the nature referred to
<PAGE>
84
in Section 1502 are pending, (ii) upon a certificate of the liquidating
trustee or agent or other Person making such payment or distribution to the
Trustee or to the Holders of Securities or (iii) upon the Representatives
for the holders of Senior Indebtedness for the purpose of ascertaining the
Persons entitled to participate in such payment or distribution, the
holders of the Senior Indebtedness, and other indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this
Article Fifteen. In the event that the Trustee determines, in good faith,
that evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Fifteen, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and other
facts pertinent to the rights of such Person under this Article Fifteen,
and, if such evidence is not furnished, the Trustee may defer any payment
to such Person pending judicial determination as to the right of such
Person to receive such payment.
SECTION 1514. Trustee To Effectuate Subordination. Each Holder of
Securities by accepting a Security authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination between the Holders of
Securities and the holders of Senior Indebtedness as provided in this
Article Fifteen and appoints the Trustee as attorney-in-fact for any and
all such purposes.
SECTION 1515. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall
mistakenly pay over or distribute to Holders of Securities, the Company, or
any other Person, money or assets to which any holders of Senior
Indebtedness shall be entitled by virtue of this Article Fifteen or
otherwise.
SECTION 1516. Reliance by Holders of Senior Indebtedness on
Subordination Provisions. Each Holder of Securities by accepting a Security
acknowledges and agrees that the foregoing subordination provisions are,
and are intended to be, an inducement and a consideration to each holder of
any Senior Indebtedness whether such Senior Indebtedness was created or
acquired before or after the issuance of the Securities, to acquire and
continue to hold, or to continue to hold, such Senior Indebtedness and such
holder of Senior Indebtedness shall be deemed
<PAGE>
85
conclusively to have relied on such subordination provisions in acquiring
and continuing to hold, or in continuing to hold, such Senior Indebtedness.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
INTERNATIONAL BUSINESS
MACHINES CORPORATION,
by
----------------------------
Name:
Title:
[SEAL]
Attest:
- ---------------------
Name:
Title:
, as Trustee,
by
----------------------------
Name:
Title:
[SEAL]
Attest:
- ------------------------
Name:
Title:
<PAGE>
86
STATE OF NEW YORK )
) ss.:
COUNTY OF WESTCHESTER)
On the day of , 199 , before me personally came
--- ---------
, to me known, who, being by me duly sworn, did depose
- ---------------------
and say that he is a of INTERNATIONAL BUSINESS MACHINES
---------------
CORPORATION, one of the corporations described in and which executed the
foregoing instrument; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation; and
that he signed his name thereto by like authority.
------------------------------
Notary Public
Name:
Notary Public, State of New York
No.:
Qualified in:
Commission Expires:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
On the day of , 199 , before me personally came
--- ----------
, to me known, who, being by me duly sworn, did depose
- --------------------
and say that he is a of , one of the corporations described
---------------
in and which executed the foregoing instrument; that he knows the seal of
said corporation; that the seal affixed to said instrument is such
corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
------------------------------
Notary Public
Name:
Notary Public, State of New York
No.:
Qualified in:
Commission Expires:
<PAGE>
Exhibit A.1
INTERNATIONAL BUSINESS MACHINES CORPORATION
MEDIUM-TERM NOTE
(Due 9 months or more from date of issue)
(Fixed Rate Non-Redeemable)
[Form of Face]
Registered No. Original Issue Date:
Designation: Maturity Date:
Principal Amount: $ Regular Record Dates: Each
Interest Rate: Issue Price (as a percentage of Principal
Amount):
Interest Payment Dates: Each CUSIP No.:
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
or registered assigns the principal sum of
Dollars, at the office or agency of the Company in the Borough of
Manhattan, The City and State of New York, on the Maturity Date specified
above 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 on the Interest Payment Dates specified above of
each year on said principal sum at said office or agency, in like coin or
currency, at the Interest Rate per annum specified above, from the Interest
Payment Date next preceding the date of authentication of this Note to
which interest has been paid, unless the date of authentication of this
Note is a date to which interest has been paid, in which case from the date
of authentication of this Note, or unless no interest has been paid on this
Note, in which case from the Original Issue Date specified above, until
payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date of authentication of this Note
is after a Regular Record Date specified above and before the next
following Interest Payment Date, this Note shall bear interest from such
Interest Payment Date, unless the Company shall default in the payment of
interest due on such Interest Payment Date, in which case this Note shall
bear interest from the next preceding Interest Payment Date to which
interest has been paid, or unless no interest has been paid on this Note,
in which case this Note shall bear interest from the original Issue Date.
The interest so payable on any Interest Payment Date will be paid to the
person in whose name this Note is registered at the close of business on
the Regular Record Date next preceding such Interest Payment Date, unless
the original Issue Date is after a Regular Record Date and before the next
following
<PAGE>
2
Interest Payment Date, in which case interest so payable on such Interest
Payment Date will be paid to the person in whose name this Note was
initially registered on the original Issue Date, or unless the company
shall default in the payment of interest due on any 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 Note 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 Notes
(as defined on the reverse hereof) not less than 10 days preceding such
special record date or may be paid in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Notes 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. Notwithstanding the foregoing, interest payable at
maturity shall be payable to the person to whom the principal is payable.
Interest on the Notes shall be calculated on the basis of a 360-day year
composed of twelve 30-day months. In any case where the date for any
payment on the Notes is not a Business Day, such payment shall be made on
the next succeeding Business Day. A Business Day is any day that is not a
Saturday or Sunday and that, in The City of New York, is not a day on which
banking institutions are authorized or obligated by law, regulation or
executive order to close.
Reference is made to the further provisions of this Note 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 Note 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 by
OF AUTHENTICATION
-----------------------------------------
[Title]
<PAGE>
3
This is one of the Securities
of the Series designated herein
issued under the within-mentioned
indenture. by
--------------------------------
[Title]
,
as Trustee
by
---------------------------
Authorized Signatory
<PAGE>
4
[Form of reverse]
INTERNATIONAL BUSINESS MACHINES CORPORATION
MEDIUM-TERM NOTE
(Fixed Rate Non-Redeemable)
This Note 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
(hereinafter called the "Indenture"), duly executed and delivered by the
Company to ), as trustee (hereinafter called the "Trustee"), to
which Indenture 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 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 Note is one of a series designated on the face hereof
(hereinafter called the "Notes") issued under the indenture.
In case an Event of Default with respect to the Notes as defined
in the Indenture shall have occurred and be continuing, the principal
hereof together with accrued interest 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 modifying in any
manner the rights of the holders of the Securities of such series;
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
<PAGE>
5
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 Note
shall be conclusive and binding upon such holder and upon all future
holders and owners of this Note and any Notes which may be issued in
exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Note at the place, at the respective
times, at the rate and in the coin or currency herein prescribed.
The Indenture permits the Company to Discharge its obligations
with respect to the Notes 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 Notes.
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 Note, all on the terms set forth
in the Indenture.
The Notes are issuable in registered form without coupons in
denominations of $1,000 or any multiple thereof. In the manner and subject
to the limitations provided in the Indenture, but without the payment of
any service charge. Notes may be exchanged for an equal aggregate
principal amount of Notes 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.
Upon due presentment for registration of transfer of this Note 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 Note or Notes 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
Note, the Company, the Trustee and any agent of the Company or the Trustee
may treat the registered holder hereof as the owner of this Note (whether
or not this Note shall be overdue) for the purpose of receiving payment of
the principal of and interest on this Note, 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 to 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 Note.
No recourse for the payment of the principal of or interest on
this Note, or for any claim based hereon or otherwise in respect hereof,
and no recourse under or upon any obligation,
<PAGE>
6
covenant or agreement of the Company in the Indenture or any indenture
supplemental thereto or in any Note 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 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 Note, all terms used in this
Note which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
This Note shall be governed by and construed in accordance with
the laws of the State of New York.
-------------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM--as tenants in common
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship and not as tenants
in common
UNIF GIFT MIN ACT-- Custodian
-------- --------
(Cust) (Minor)
Under Uniform Gifts to Minors Act
-----------
(State)
Additional abbreviations may also be used though not in the above list.
---------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE
- ---------------------------
| |
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE
<PAGE>
7
- ---------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting
and appointing
attorney to transfer
- ----------------------------------------------------
said Note on the books of the Corporation, with full power of substitution
in the premises.
Dated:
--------- -------------------------------------------------------
NOTICE: The signature to this assignment must correspond
with the name as written upon the face of the within
instrument in every particular, without alteration or
enlargement or any change whatever.
<PAGE>
Exhibit A.2
INTERNATIONAL BUSINESS MACHINES CORPORATION
MEDIUM-TERM NOTE
(Due 9 months or more from date of issue)
(Fixed Rate Redeemable)
[Form of Face]
Registered No. Original Issue Date:
Designation: Maturity Date:
Principal Amount: $ Regular Record Dates: Each
Interest Rate: Issue Price (as a percentage
of Principal Amount):
Interest Payment Dates: Each Initial Redemption Date:
CUSIP No.:
The Optional Redemption Price shall initially be % of the
principal amount of the Note to be redeemed and shall decline at each
anniversary of the Initial Redemption Date by % of the principal amount
to be redeemed until the Optional Redemption Price is 100% of such
principal amount.
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
or registered assigns the principal sum of
Dollars, at the office or agency of the Company in the Borough of
Manhattan, The City and State of New York, on the Maturity Date specified
above 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 on the Interest Payment Dates specified above of
each year on said principal sum at said office or agency, in like coin or
currency, at the Interest Rate per annum specified above, from the Interest
Payment Date next preceding the date of authentication of this Note to
which interest has been paid, unless the date of authentication of this
Note is a date to which interest has been paid, in which case from the date
of authentication of this Note, or unless no interest has been paid on this
Note, in which case from the Original Issue Date specified above, until
payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date of authentication of this Note
is after a Regular Record Date specified above and before the next
following Interest Payment Date,
<PAGE>
2
this Note shall bear interest from such Interest Payment Date, unless the
Company shall default in the payment of interest due on such Interest
Payment Date, in which case this Note shall bear interest from the next
preceding Interest Payment Date to which interest has been paid, or unless
no interest has been paid on this Note, in which case this Note shall bear
interest from the Original Issue Date. The interest so payable on any
Interest Payment Date will be paid to the person in whose name this Note
is registered at the close of business on the Regular Record Date next
preceding such Interest Payment Date, unless the Original Issue Date is
after a Regular Record Date and before the next following Interest Payment
Date, in which case interest so payable on such Interest Payment Date will be
paid to the person in whose name this Note was initially registered on the
Original Issue Date, or unless the Company shall default in the payment of
interest due on any 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 Note 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 Notes (as defined on the reverse hereof) not less than 10 days
preceding such special record date or may be paid in any other lawful manner
not inconsistent with the requirements of any securities exchange on which
the Notes 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. Notwithstanding the foregoing, interest payable at
maturity and upon redemption shall be payable to the person to whom the
principal is payable. Interest on the Notes shall be calculated on the basis
of a 360-day year composed of twelve 30-day months. In any case, where the
date for any payment on the Notes is not a Business Day, such payment shall
be made on the next succeeding Business Day. A Business Day is any day that
is not a Saturday or Sunday and that, in The City of New York, is not a day on
which banking institutions are authorized or obligated by law, regulation or
executive order to close.
Reference is made to the further provisions of this Note 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.
<PAGE>
3
This Note 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 by
OF AUTHENTICATION -------------------------------
[Title]
This is one of the Securities
of the Series designated herein
issued under the within-mentioned
indenture. by
-----------------------------
,
as Trustee
by
--------------------------
Authorized Signatory
<PAGE>
4
[Form of reverse]
INTERNATIONAL BUSINESS MACHINES CORPORATION
MEDIUM-TERM NOTE
(Fixed Rate Redeemable)
This Note 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), as trustee
(hereinafter called the "Trustee"), to which Indenture 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 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 Note is one of a series
designated on the face hereof (hereinafter called the "Notes") issued under
the Indenture.
In case an Event of Default with respect to the Notes as defined
in the Indenture shall have occurred and be continuing, the principal
hereof together with accrued interest 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 modifying in any
manner the rights of the holders of the Securities of such series;
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
<PAGE>
5
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 Note shall be conclusive and
binding upon such holder and upon all future holders and owners of this
Note and any Notes which may be issued in exchange or substitution herefor,
irrespective of whether or not any notation thereof is made upon this Note
or such other Notes.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Note at the place, at the respective
times, at the rate and in the coin or currency herein prescribed.
The Indenture permits the Company to Discharge its obligations
with respect to the Notes 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 Notes.
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 Note, all on the terms set forth
in the Indenture.
The Notes are issuable in registered form without coupons in
denominations Of $1,000 or any multiple thereof. In the manner and subject
to the limitations provided in the Indenture, but without the payment of
any service charge, Notes may be exchanged for an equal aggregate principal
amount of Notes 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 Notes may be redeemed at the option of the Company as a
whole, or from time to time in part, on any date on or after the Initial
Redemption Date specified above and prior to the Maturity Date, 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 Notes at their
last registered addresses, all as provided in the Indenture, at the
Optional Redemption Price; specified above (expressed in
<PAGE>
6
percentages of the principal amount) together in each case with accrued
interest to the date fixed for redemption.
Upon due presentment for registration of transfer of this Note 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 Note or Notes 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
Note, the Company, the Trustee and any agent of the Company or the Trustee
may deem and treat the registered holder hereof as the owner of this Note
(whether or not this Note shall be overdue) for the purpose of receiving
payment of the principal of, premium, if any, and interest on this Note, 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 to 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
Note.
No recourse for the payment of the principal of, premium, if any,
or interest on this Note, 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 Note 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
any successor corporation, whether by virtue of any constitution, statute
or role 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 Note, all terms used in this
Note which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
This Note shall be governed by and construed in accordance with
the laws of the State of New York.
<PAGE>
7
-----------------
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out
in full according to applicable laws or regulations:
TEN COM--as tenants in common
TEN ENT--as tenants by the entireties
JT TEN--as joint tenants with right of survivorship and not as tenants
in common
UNIF GIFT MIN ACT--________Custodian________
(Cust) (Minor)
Under Uniform Gifts to Minors Act ___________
(State)
Additional abbreviations may also be used though not in the above list.
-----------------
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER
IDENTIFYING NUMBER OF
ASSIGNEE
- ----------------------
| |
| |
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
OF ASSIGNEE
- ---------------------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting
and appointing
attorney to transfer
- ---------------------------------------------------
said Note on the books of the Corporation, with full power of substitution
in the premises.
Dated:
--------- -------------------------------------------------------
NOTICE: The signature to this assignment must correspond
with the name as written upon the face of the within
instrument in every particular, without alteration or
enlargement or any change whatever.
<PAGE>
Exhibit A.3
INTERNATIONAL BUSINESS MACHINES CORPORATION
MEDIUM-TERM NOTE
(Due 9 months or more from date of issue)
(Floating Rate Non-Redeemable)
[Form of face]
Registered No. Original Issue Date:
Designation: Maturity Date:
Principal Amount: $ Regular Record Dates:
Interest Rate Basis: Issue Price (as a percentage
of Principal Amount):
Initial Interest Rate: Maximum Interest Rate:
Minimum Interest Rate: Interest Reset Dates:
Interest Reset Period: Interest Payment Period:
Spread: q Spread Multiplier:
Interest Payment Dates: Interest Determination Dates:
Index Maturity: CUSIP No.:
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
or registered assigns the principal sum of
Dollars at the office or agency of the Company in the Borough of Manhattan,
The City and State of New York, on the Maturity Date specified above 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 on the Interest Payment Dates specified above of each
year on said principal sum at said office or agency, in like coin or
currency, at the Initial Interest Rate specified above until the first
Interest Reset date specified above and thereafter monthly, quarterly,
semi-annually or annually as specified above under Interest Payment Period
at the Interest Rate Basis specified above in accordance with the
applicable provisions set forth on the reverse hereof, from the Interest
Payment Date next preceding the date of authentication of this Note to
which interest has been paid, unless the date of authentication of this
Note is a date to which interest has been paid, in which case from the date
of authentication of this Note, or unless no interest has been paid on this
Note, in which case from the
<PAGE>
2
Original Issue Date specified above, until payment of said principal sum
has been made or duly provided for. In the case of Notes (as defined on
the reverse hereof) with a weekly Interest Reset Period, interest payments
will include accrued interest from the Original Issue Date or from the last
date in respect of which interest has been paid, as the case may be, to and
including the next preceding Regular Record Date, except that at the
Maturity Date the interest payment will include accrued interest accrued
to, but excluding, the Maturity Date. Notwithstanding the foregoing, if
the date of authentication of this Note is after a Regular Record Date
specified above and before the next following Interest Payment Date, this
Note shall bear interest from such Interest Payment Date, unless the
Company shall default in the payment of interest due on such Interest
Payment Date, in which case this Note shall bear interest from the next
preceding Interest Payment Date to which interest has been paid, or unless
no interest has been paid on this Note, in which case this Note shall bear
interest from the Original Issue Date. The interest so payable on any
Interest Payment Date will be paid to the person in whose name this Note is
registered at the close of business on the Regular Record Date next
preceding such Interest Payment Date, unless the Original Issue Date is
after a Record Date and before the next following Interest Payment Date, in
which case interest so payable on such Interest Payment Date will be paid
to the person in whose name this Note was initially registered on the
Original Issue Date, or 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 Note is registered at the close of business on a special record
date for the payment of such defaulted interest established by notice to
registered holders of Notes not less than 10 days preceding such special
record date or may be paid in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the Notes 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.
Notwithstanding the foregoing, interest payable at maturity shall be
payable to the person to whom the principal is payable. In any case where
the date for any payment on any Note is not a Business Day, such payment
shall be made on the next succeeding Business Day, except that with respect
to any LIBOR Note, if such date falls in the next calendar month, such
Interest Payment Date will be the next preceding Business Day. A Business
Day is any day that is not a Saturday or Sunday and that, in The City of
New York, is not a day on which banking institutions are authorized or
obligated by law, regulation or executive order to close (and also, with
respect to any LIBOR Note, is a day in which dealings in deposits of U.S.
dollars are transacted in the London interbank market).
Reference is made to the further provisions of this Note 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.
<PAGE>
3
This Note 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
This is one of the Securities of
the Series designated herein issued
under the within-mentioned Indenture.
___________________________
, as Trustee [Title]
by by
________________________ ___________________________
Authorized Signatory [Title]
<PAGE>
4
[Form of reverse]
INTERNATIONAL BUSINESS MACHINES CORPORATION
Medium-Term Note
(Floating Rate Non-Redeemable)
This Note is one of a duly authorized issue of unsecured
debentures, notes or other evidences of indebtedness of the Company
(hereinafter called the "Securities"), or 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 , as trustee (hereinafter
called the "Trustee"), to which Indenture 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 be subject to different redemption
provisions, covenants and Events of Default and may otherwise vary as in
the Indenture provided. This Note is one of a series designated on the
face hereof (hereinafter called the "Notes") issued under the indenture.
The Interest payable hereon on each Interest Payment Date will
include accrued interest from the Original Issue Date or from the last date
in respect of which interest has been paid, as the case may be, to, but
excluding, such Interest Payment Date; provided, however, that if the
-------- -------
Interest Reset Period is weekly, the interest payable on each Interest
Payment Date, other than the Maturity Date, will include accrued interest
from the Original Issue Date or from the last date in respect of which
interest has been paid, as the case may be, to, and including, the next
preceding Record Date and the interest payable on the Maturity Date will
include accrued interest from the Original Issue Date or from the last date
in respect of which interest has been paid, as the case may be, to, but
excluding, the Maturity Date. Accrued interest will be calculated by
multiplying the principal amount hereof by an accrued interest factor.
This accrued interest factor shall be computed by adding the interest
factors calculated for each day in the period for which accrued interest is
being calculated. The interest factor (rounded to the nearest one-hundred
thousandth of a percent) for each such day shall be computed by dividing
the interest rate applicable to such day by 360 if the Interest Rate Basis
is LIBOR or Commercial Paper Rate, as indicated on the face hereof, or by
the actual number of days in the year if the Interest Rate Basis is
Treasury Rate, as indicated on the face hereof. The interest rate in
effect on each day will be (a) if such day is an Interest Reset Date, the
interest rate with respect to the Interest Determination Date pertaining to
such Interest Reset Date or (b) if such day is not an Interest Reset Date,
the interest rate with respect to the Interest Determination Date
pertaining to the next preceding Interest Reset Date; provided, however,
-------- -------
(i) the interest rate in effect from the Original Issue Date to the first
Interest Reset Date will be the Initial Interest Rate and (ii) the interest
rate in effect for the ten calendar days immediately prior to the Maturity
Date will be that in effect on the tenth calendar day preceding the
Maturity Date. Notwithstanding the foregoing, the interest rate hereon
shall not be greater than the Maximum Interest Rate, if any, or less than
the Minimum Interest Rate, if any, shown on the face hereof. In addition,
the interest rate hereon shall in no event be higher than the maximum rate
permitted by New York State law as the same may be modified by
United States law of general application. Commencing with the first
Interest Reset Date specified on the face hereof following the Original
Issue Date and thereafter upon each succeeding Interest Reset Date
specified on the face hereof, the rate at which interest on this Note is
payable shall be adjusted weekly, monthly, quarterly, semi-annually or
annually as specified on the face hereof under Interest Reset Period;
provided,
- --------
<PAGE>
5
however, that if any Interest Reset Date would otherwise be a day that is
- -------
not a Business Day, such Interest Reset Date shall be postponed to the next
succeeding day that is a Business Day, except that if the Interest Rate
Basis is LIBOR and such Business Day is in the next succeeding calendar
month such Interest Reset Date shall be the immediately preceding Business
Day; and provided further, however, that if any action referred to below
-------- ------ -------
under "Determination of Treasury Rate" falls on an Interest Reset Date for
a Note with an Interest Rate Basis of Treasury Rate, such Interest Reset
Date shall be the first Business Day succeeding such auction date. Subject
to applicable provisions of law and except as specified herein, on each
Interest Reset Date the rate of interest shall be the rate determined in
accordance with the provisions of the applicable heading below.
Determination of LIBOR. If the Interest Rate Basis is LIBOR, as
-----------------------
indicated on the face hereof, such interest rate shall equal the arithmetic
mean (as calculated by the Calculation Agent referred to below and rounded
to the nearest one-hundred thousandth of a percent) of offered rates for
deposits in U.S. dollars having the Index Maturity specified on the face
hereof, commencing on the second day on which dealings in deposits in U.S.
dollars are transacted in the London interbank market (a "London Business
Day") immediately following the Interest Determination Date specified on
the face hereof, which appear on the Reuters Screen LIBO Page as of
11:00 A.M., London time, on such Interest Determination Date, adjusted by
the addition or subtraction of the Spread, if any, specified on the face
hereof, or by multiplication by the Spread Multiplier, if any, specified on
the face hereof; provided, however, that if fewer than two such offered
-------- -------
rates so appear, the Calculation Agent shall request the principal London
office of each or four major banks in the London interbank market selected
by the Calculation Agent to provide a quotation of the rate at which such
bank offered to prime banks in the London interbank market at approximately
11:00 A.M., London time, on such Interest Determination Date, on deposits
in U.S. dollars having the Index Maturity specified on the face hereof
commencing on the second London Business Day immediately following such
Interest Determination Date and in a principal amount equal to an amount
not less than U.S. $1,000,000 that is representative for a single
transaction in such market at such time, and such rate of interest hereon
shall equal the arithmetic mean (rounded to the nearest one-hundred
thousandth of a percent) of (a) such quotations, if at least two quotations
are provided, or (b) if fewer than two quotations are provided, the rates
quoted at approximately 11:00 A.M., New York City time, on such Interest
Determination Date by three major banks in The City of New York selected by
the Calculation Agent for loans in U.S. dollars to leading European banks
having the Index Maturity specified on the face hereof commencing on the
second London Business Day immediately following such Interest
Determination Date and in a principal amount as aforesaid, in either case
adjusted by the addition or subtraction of the Spread, if any, specified on
the face hereof or by multiplication by the Spread Multiplier, if any,
specified on the face hereof; provided, however, that if the three banks
-------- -------
selected as aforesaid by the Calculation Agent are not quoting as mentioned
above, the interest rate in effect hereon until the Interest Reset Date
next succeeding the Interest Reset Date to which such Interest
Determination Date relates shall be the rate in effect on the Interest
Determination Date.
Determination of Treasury Rate. If the Interest Rate Basis is
-------------------------------
Treasury Rate as indicated on the face hereof, such interest rate shall
equal the rate for the most recent auction of direct obligations of the
United States ("Treasury bills") having the Index Maturity shown on the
face hereof as published by the Board of Governors of the Federal Reserve
System in "Statistical Release H.15(519), Selected Interest Rates" or any
successor publication of the Board of Governors of the Federal Reserve
System, under the heading "Treasury bills--auction average (investment)" on
the Interest Determination Date specified on the face hereof or, if not so
published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, the
<PAGE>
6
auction average rate, expressed as a Bond Equivalent Yield (as defined
below), as otherwise announced by the United States Department of the
Treasury, in either case adjusted by the addition or subtraction of the
Spread, if any, specified on the face hereof, or by multiplication by the
Spread Multiplier, if any, specified on the face hereof. In the event that
the results of the auction of Treasury bills having the Index Maturity
shown on the face hereof are not published or reported as provided above by
3:00 P.M., New York City time, on such Calculation Date or if no such
auction is held in a particular week, then the rate of interest hereon
shall be calculated by the Calculation Agent and shall be a yield to
maturity, expressed as a Bond Equivalent Yield, of the arithmetic mean of
the secondary market bid rates, as of approximately 3:30 P.M.,
New York City time, on such Interest Determination Date of three leading
primary United States government securities dealers selected by the
Calculation Agent for the issue of Treasury bills with a remaining maturity
closest to the Index Maturity shown on the face hereof, adjusted by the
addition or subtraction of the Spread, if any, specified on the face
hereof, or by multiplication by the Spread Multiplier, if any, specified on
the face hereof; provided, however, that if the dealers selected as
-------- -------
aforesaid by the Calculation Agent are not quoting as mentioned in this
sentence, the interest rate in effect hereon until the Interest Reset Date
next succeeding the Interest Reset Date to which such Interest
Determination Date relates shall be the rate in effect on the Interest
Determination Date. The Calculation Date pertaining to an Interest
Determination Date shall be the tenth calendar day after such Interest
Determination Date or, if any such day is not a Business Day, the next
succeeding Business Day.
"Bond Equivalent Yield" means a yield (expressed as a percentage
rounded to the nearest one-hundred thousandth of a percent) calculated in
accordance with the following formula:
D X N
Bond Equivalent Yield = ______________ x 100
360 - (D X M)
where "D" refers to the per annum rate for Treasury bills, quoted on a bank
discount basis and expressed as a decimal; "N" refers to the actual number
of days in the year for which interest is being calculated; and "M" refers
to the actual number of days in the interest period for which interest is
being calculated.
Determination of Commercial Paper Rate. If the Interest Rate
---------------------------------------
Basis is Commercial Paper Rate, as indicated on the face hereof, such
interest rate shall equal (a) the Money Market Yield (as defined below) on
the Interest Determination Date specified on the face hereof of the rate
for commercial paper having the Index Maturity specified on the face
hereof (1) as published by the Board of Governors of the Federal Reserve
System in "Statistical Release H.15(519), Selected Interest Rates", or any
successor publication of the Board of Governors of the Federal Reserve
System, under the heading "Commercial Paper", or (2) if such rate is not so
published by 9:00 A.M., New York City time, on the Calculation Date
pertaining to such Interest Determination Date, then as published by the
Federal Reserve Bank of New York in its daily statistical release,
"Composite 3:30 P.M. Quotations for U.S. Government Securities" under the
heading "Commercial Paper" or (b) if neither of such rates is published by
3:00 P.M., New York City time, on such Calculation Date, the Money Market
Yield of the arithmetic mean (rounded to the nearest one-hundred thousandth
of a percent) of the offered rates, as of 11:00 A.M., New York City time,
on such Interest Determination Date, of three leading dealers of commercial
paper in The City of New York, selected by the Calculation Agent, for
commercial paper ofthe Index Maturity specified on the face hereof placed
for an industrial issuer whose bond rating is AA or the equivalent, from a
nationally recognized rating agency, in each of the above cases
<PAGE>
7
adjusted by the addition or subtraction of the Spread, if any, specified on
the face hereof, or by multiplication by the Spread Multiplier, if any,
specified on the face hereof; provided, however, that if such dealers are
-------- -------
not quoting as mentioned above, the interest rate in effect hereon until
the Interest Reset Date next succeeding the Interest Reset Date to which
such Interest Determination Date relates shall be the rate in effect on the
Interest Determination Date. The Calculation Date pertaining to an
Interest Determination Date shall be the tenth calendar day after such
Interest Determination Date or, if any such day is not a Business Day, the
next succeeding Business Day.
"Money Market Yield" means a yield (expressed as a percentage
rounded to the nearest one-hundred thousandth of a percent), calculated in
accordance with the following formula:
D X 360
Bond Equivalent Yield = ______________ x 100
360 - (D X M)
where "D" refers to the per annum rate for commercial paper quoted on a
bank discount basis and expressed as a decimal; and "M" refers to the
actual number of days in the interest period for which interest is being
calculated.
All percentages resulting from any calculation will be rounded,
if necessary, to the nearest one-hundred thousandth of a percent, with five
one-millionths of a percent rounded upwards (e.g., 9.876545% (or .09876545)
being rounded to 09.87655% (or .0987655) and 9.876544% (or .09876544) being
rounded to 09.87654% (or .0987654)), and all dollar amounts used in or
resulting from such calculation will be rounded to the nearest cent (with
one-half cent being rounded upwards).
shall be the initial Calculation Agent. The Calculation Agent
will, upon the request of the holder hereof, provide the interest rate hereon
then in effect and, if determined, the interest rate which will become
effective as of the next Interest Reset Date.
In case an Event of Default with respect to the Notes as defined
in the Indenture shall have occurred and be continuing, the principal
hereof together with accrued interest 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 modifying in any
manner the rights of the holders of the Securities of such series;
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
<PAGE>
8
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 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 as 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 or waiver by the Holder of each outstanding Security of the series
affected. Any such consent or waiver by the holder of this Note shall be
conclusive and binding upon such holder and upon all future holders and
owners of this Note and any Notes which may be issued in exchange or
substitution herefor, irrespective of whether or not any notation thereof
is made upon this Note or such other Notes.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Note at the place, at the respective
times, at the rate and in the coin or currency herein prescribed.
The Indenture permits the Company to Discharge its obligations
with respect to the Notes 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 Notes.
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 Note, all on the terms set forth
in the Indenture.
The Notes are issuable in registered form without coupons in
denominations of $1,000 or any multiple thereof. In the manner and subject
to the limitations provided in the Indenture, but without the payment of
any service charge, Notes may be exchanged for an equal aggregate principal
amount of Notes 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.
Upon due presentment for registration of transfer of this Note 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 Note or Notes 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.
<PAGE>
9
Prior to due presentment for registration of transfer of this
Note, the Company, the Trustee and any agent of the Company or the Trustee
may treat the registered holder hereof as the owner of this Note (whether
or not this Note shall be overdue) for the purpose of receiving payment of
the principal and interest on this Note, 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 to 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 Note.
No recourse for the payment of the principal of or interest on
this Note, 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
Note 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 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 Note, all terms used in this
Note which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
This Note shall be governed by and construed in accordance with
the laws of the State of New York.
<PAGE>
Exhibit A.4
[Form of Temporary Global Fixed Rate Bearer Euro Medium-Term Note]
[Form of Face]
Temporary Global Fixed Rate Bearer Euro Medium-Term Note
NEITHER THIS TEMPORARY GLOBAL NOTE NOR ANY PORTION HEREOF MAY BE
OFFERED, SOLD, RESOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, TO ANY PERSON
INSIDE THE UNITED STATES OF AMERICA (INCLUDING THE STATES AND THE DISTRICT
OF COLUMBIA), ITS TERRITORIES, ITS POSSESSIONS AND OTHER AREAS SUBJECT TO
ITS JURISDICTION (THE "UNITED STATES") OR TO OR FOR THE ACCOUNT OF ANY
CITIZEN OR RESIDENT OF THE UNITED STATES, ANY CORPORATION, PARTNERSHIP OR
OTHER ENTITY CREATED OR ORGANIZED IN OR UNDER THE LAWS OF THE UNITED
STATES, OR ANY ESTATE OR TRUST THE INCOME OF WHICH IS SUBJECT TO UNITED
STATES FEDERAL INCOME TAXATION REGARDLESS OF ITS SOURCE (A "UNITED STATES
PERSON"), OTHER THAN A FINANCIAL INSTITUTION, AS DEFINED IN TREASURY
REGULATION Sec. 1.165-12(c)(1)(v), PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A CUSTOMER THAT HAS AGREED TO COMPLY WITH THE REQUIREMENTS OF
SECTION 165(j)(3)(A), (B) OR (C) OF THE INTERNAL REVENUE CODE OF 1986, AND
THE REGULATIONS THEREUNDER, AND THAT IS NOT PURCHASING FOR OFFER TO RESELL
OR FOR RESALE INSIDE THE UNITED STATES.
THIS TEMPORARY GLOBAL NOTE IS A TEMPORARY GLOBAL BEARER SECURITY,
WITHOUT COUPONS, EXCHANGEABLE FOR A DEFINITIVE GLOBAL BEARER SECURITY (THE
"DEFINITIVE NOTE"), WITHOUT COUPONS, AT THE PRINCIPAL OFFICE OF THE TRUSTEE
(AS DEFINED HEREIN) IN LONDON ON OR AFTER 45 DAYS FROM THE ISSUE DATE
HEREOF (THE "EXCHANGE DATE") UPON PRESENTATION OF THE CERTIFICATION
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). THE RIGHTS ATTACHING TO
THIS TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS
EXCHANGE FOR THE DEFINITIVE NOTE, ARE AS SPECIFIED HEREIN AND IN THE
INDENTURE.
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS TEMPORARY
GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON EXCEPT
PURSUANT TO THE PROVISIONS HEREOF.
[If an Original Issue Discount Security, insert--FOR PURPOSES OF
SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986,
AS AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS TEMPORARY GLOBAL
NOTE IS % OF ITS PRINCIPAL AMOUNT, THE ISSUE DATE IS , 19 , THE
YIELD TO MATURITY IS %, THE METHOD USED TO DETERMINE THE YIELD IS
, AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT
ACCRUAL PERIOD OF , 19 , TO , 19 , IS % OF THE PRINCIPAL
AMOUNT OF THIS TEMPORARY GLOBAL NOTE.]
<PAGE>
2
INTERNATIONAL BUSINESS MACHINES CORPORATION
EURO MEDIUM-TERM NOTE
(Due 9 months or more from date of issue)
(Fixed Rate)
Temporary Global Bearer Euro Medium-Term Note
No. B- Principal Amount: [U.S.$]
-------------- ------------------------
Original Issue Date:
-----------------------
Interest Rate: % Maturity Date:
--------------- -------------------------
Interest Payment Dates: [and ] of each year
------ ---------
This Temporary Global Note is a temporary global Bearer Security
in respect of a duly authorized issue of Bearer Securities (the "Notes") of
International Business Machines Corporation, a corporation duly organized
and existing under the laws of New York (herein called the "Company", which
term includes any successor Person under the Indenture, as defined below),
of the Principal Amount specified above (as adjusted on Schedule A hereto),
with the original Issue Date specified above and the Maturity Date
specified above and bearing interest on said Principal Amount at the per
annum Interest Rate specified above. This Temporary Global Note is issued
under an Indenture dated as of October 1, 1993 (the "Indenture"), between
the Company and , as Trustee (the
"Trustee", which term includes any additional or successor Trustees with
respect to the Notes). Unless the context otherwise requires, all terms
used in this Temporary Global Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Company, for value received, hereby promises to pay to the
bearer upon presentation and surrender of this Temporary Global Note, the
principal amount set forth above, as reduced from time to time by the
exchanges set forth on Schedule A hereto, on the Maturity Date, and to pay
interest thereon, in arrears, on the Interest Payment Dates specified
above, at a rate per annum equal to the Interest Rate specified above, from
the Interest Payment Date next preceding the date of authentication of this
Temporary Global Note to which interest has been paid, unless such date of
authentication is a date to which interest has been paid, in which case
from such date of authentication, or unless no interest has previously been
paid on this Temporary Global Note, in which case from the Original Issue
Date specified above, until the principal hereof is paid or made available
for payment[, and (to the extent that the payment of such interest shall be
legally enforceable) at the rate of % per annum on any overdue
principal and premium and on any overdue installment of interest], but only
after the exchange of this Temporary Global Note for a definitive global
Bearer Security, and, in the case of interest due on or before the Exchange
Date, only upon interim certification as provided in the Indenture.
<PAGE>
3
The provisions of the form of definitive global Note are hereby
incorporated by reference herein mutatis mutandis and, except as otherwise
----------------
provided herein, shall be binding on the Company and the Holder hereof as
if fully set forth herein. Except as otherwise provided herein, the
Company shall make all payments as and when provided in the form of
definitive global Note and shall be bound by all its covenants set forth
therein.
This Temporary Global Note is exchangeable in whole or from time
to time in part for a definitive global Note with the same Issue Date,
Maturity Date and Interest Rate and, if this Temporary Global Note is an
original Issue Discount Note, with the same Issue Price specified in the
legend above, upon the request of Morgan Guaranty Trust Company of New
York, Brussels office, as operator of the Euro-clear System ("Euro-clear"),
or Centrale de Livraisons de Valeurs Mobilieres, S.A. ("Cedel"), at the
office of the Trustee in London only (i) on or after the Exchange Date and
(ii) upon compliance with the procedures and certification requirements set
forth herein and in the Indenture. Upon exchange of any portion of this
Temporary Global Note for a definitive global Note, the Trustee shall
endorse Schedule A of this Temporary Global Note to reflect the reduction
of its Principal Amount by an amount equal to the aggregate principal
amount to be entered on the grid attached to the definitive global Note,
whereupon the Principal Amount hereof shall be reduced for all purposes by
the amount as exchanged and noted. Except as otherwise provided herein or
in the Indenture, until exchanged in full for a definitive global Note,
this Temporary Global Note shall in all respects be subject to and entitled
to the same benefits and conditions under the Indenture as the duly
authenticated and delivered definitive global Note.
[If this Note is not interest-bearing, make appropriate changes
to the foregoing.]
[If this Note is denominated in a currency other than U.S.
dollars, make appropriate changes to the foregoing.]
Unless the certificate of authentication hereon has been executed
by the Trustee, by manual signature of an authorized officer, this
Temporary Global Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Attest: INTERNATIONAL BUSINESS
MACHINES CORPORATION
[SEAL]
By
- -------------------- --------------------------------------
[Assistant] Secretary Title:
Dated:
<PAGE>
4
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the
Series designated herein issued under
the within-mentioned Indenture.
, as Trustee
By
--------------------------
Authorized Signatory
<PAGE>
5
SCHEDULE A
EXCHANGES FOR A
DEFINITIVE GLOBAL BEARER NOTE
The following exchanges of a part of this Temporary Global Note
for all or a portion of a definitive global bearer Note have been made:
Principal
Amount Notation
Principal Outstanding Made by or
Date of Amount After on Behalf of
Exchange Exchanged Exchange Trustee
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
-------- --------- ----------- -------------
<PAGE>
Exhibit A.5
[Form of Definitive Global Fixed Rate Bearer Euro Medium-Term Note]
[Form of Face]
Definitive Global Bearer Euro Medium-Term Note
NEITHER THIS GLOBAL NOTE NOR ANY PORTION HEREOF MAY BE OFFERED,
SOLD, RESOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, TO ANY PERSON INSIDE THE
UNITED STATES OF AMERICA (INCLUDING THE STATES AND THE DISTRICT OF
COLUMBIA), ITS TERRITORIES, ITS POSSESSIONS AND OTHER AREAS SUBJECT TO ITS
JURISDICTION (THE "UNITED STATES") OR TO OR FOR THE ACCOUNT OF ANY CITIZEN
OR RESIDENT OF THE UNITED STATES, ANY CORPORATION, PARTNERSHIP OR OTHER
ENTITY CREATED OR ORGANIZED IN OR UNDER THE LAWS OF THE UNITED STATES, OR
ANY ESTATE OR TRUST THE INCOME OF WHICH IS SUBJECT TO UNITED STATES FEDERAL
INCOME TAXATION REGARDLESS OF ITS SOURCE (A "UNITED STATES PERSON"), OTHER
THAN A FINANCIAL INSTITUTION, AS DEFINED IN TREASURY REGULATION Sec. 1.165-
12(c)(1)(v), PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
CUSTOMER THAT HAS AGREED TO COMPLY WITH THE REQUIREMENTS OF
SECTION 165(j)(3)(A), (B) OR (C) OF THE INTERNAL REVENUE CODE OF 1986, AND
THE REGULATIONS THEREUNDER, AND THAT IS NOT PURCHASING FOR OFFER TO RESELL
OR FOR RESALE INSIDE THE UNITED STATES.
THIS GLOBAL NOTE IS A GLOBAL BEARER SECURITY, WITHOUT COUPONS.
INTERESTS IN THIS GLOBAL NOTE ARE EXCHANGEABLE FOR DEFINITIVE BEARER NOTES,
WITH COUPONS, AT THE PRINCIPAL OFFICE OF THE TRUSTEE (AS DEFINED HEREIN) IN
LONDON UPON 30 DAYS' NOTICE TO THE TRUSTEE. THE RIGHTS ATTACHING TO THIS
GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
THE DEFINITIVE BEARER NOTES, ARE AS SPECIFIED HEREIN AND IN THE INDENTURE
(AS DEFINED HEREIN).
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS GLOBAL NOTE
SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON EXCEPT PURSUANT TO
THE PROVISIONS HEREOF.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS GLOBAL NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE
BY [ ], THE COMMON DEPOSITARY, TO A NOMINEE OF THE COMMON
DEPOSITARY OR BY A NOMINEE OF THE COMMON DEPOSITARY TO THE COMMON
DEPOSITARY OR ANOTHER NOMINEE OF THE COMMON DEPOSITARY OR BY THE COMMON
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR COMMON DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR COMMON DEPOSITARY.
[If an Original Issue Discount Security, insert--FOR PURPOSES OF
SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE, THE
AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS GLOBAL NOTE IS % OF ITS
PRINCIPAL AMOUNT, THE ISSUE DATE IS
, 19 , THE YIELD TO MATURITY IS %, THE METHOD USED TO
DETERMINE THE YIELD IS , AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT
APPLICABLE TO THE SHORT ACCRUAL PERIOD OF , 19 , TO
19 , IS % OF THE PRINCIPAL AMOUNT OF THIS GLOBAL NOTE.]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING
THE LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL
REVENUE CODE.
<PAGE>
2
INTERNATIONAL BUSINESS MACHINES CORPORATION
EURO MEDIUM-TERM NOTE
(Due 9 months or more from date of issue)
(Fixed Rate)
Definitive Global Bearer Euro Medium-Term Note
No. B- Principal Amount:
-----------------------------------
[U.S.$]
--------------------
Original Issue Date:
-------------------
Interest Rate: % Maturity Date:
------------- -----
- ----------------------------
Interest Payment Dates: [and ] of each year
----------------- ------------------
This Global Note is a global Bearer Security in respect of a duly
authorized issue of Bearer Securities (the "Notes") of International
Business Machines Corporation, a corporation duly organized and existing
under the laws of New York (herein called the "Company", which term
includes any successor Person under the Indenture), of the Principal Amount
specified above (as adjusted on Schedule A hereto), with the Original Issue
Date specified above and the Maturity Date specified above and bearing
interest on said Principal Amount at the per annum Interest Rate specified
above. This Global Note is issued under an Indenture dated as of
October 1, 1993 (the "Indenture"), between the Company and
, as Trustee (the "Trustee", which term
includes any additional or successor Trustees with respect to the Notes).
Unless the context otherwise requires, all terms used in this Global Note
which are defined in the Indenture shall have the meanings assigned to them
in the Indenture.
The Company, for value received, hereby promises to pay to the
bearer upon presentation and surrender of this Global Note, the principal
sum of [U.S. DOLLARS], on the Maturity Date,
------------------------------
and to pay interest thereon, in arrears, on the Interest Payment Dates
specified above, at a rate per annum equal to the Interest Rate specified
above, from the Interest Payment Date next preceding the date of
authentication of this Global Note to which interest has been paid, unless
such date of authentication is a date to which interest has been paid, in
which case from such date of authentication, or unless no interest has
previously been paid on this Global Note, in which case from the Original
Issue Date specified above, until the principal hereof is paid or made
available for payment[, and (to the extent that the payment of such
interest shall be legally enforceable) at the rate of % per annum on
any overdue principal and premium and on any overdue installment of
interest]. Unless otherwise provided herein, such payments (including
premium, if any) shall be made to each of Morgan Guaranty Trust Company of
New York, Brussels office, as operator of the Euro-clear System ("Euro-
clear"), or Cedel Bank Societe Anonyme ("CEDEL") with respect to that
portion of this Global Note held for its account, by [United States dollar]
check drawn on a bank in The City of New York or by transfer of [United
States dollars] to an account maintained by the payee with a bank located
outside the United States. No payment of principal, premium or interest on
this Global Note shall be made at any office or agency of the Company in
the United States or by check mailed to any address in the United States or
by transfer to an account maintained with a bank located in the United
States; [If this Note is denominated and payable in United States dollars,
-----------------------------------------------------------------
insert-provided, however, unless otherwise provided herein, that payment of
- --------------- -------
principal of (and premium, if any) and interest on this Note (including any
additional amounts that may be payable as provided below) shall be made at
the office of the Company's Paying Agent in the Borough of Manhattan, The
City of New York, if (but only if) payment in United States dollars of the
full amount of such principal, premium, interest or additional amounts, as
the case may be, at all offices or agencies outside the United States
maintained
<PAGE>
3
for that purpose by the Company in accordance with the Indenture is illegal
or effectively precluded by exchange controls or other similar
restrictions.]
Upon exchange of any portion of the temporary global Note for a
portion of this definitive Global Note, the Trustee shall cause Schedule A
of this Global Note to be endorsed to reflect the increase of its aggregate
principal amount by an amount equal to the principal amount of the portion
of such temporary global Note so exchanged.
This Global Note is exchangeable upon not less than 30 days'
notice to the Trustee, in whole or from time to time in part for definitive
Notes in bearer form, with coupons attached, if any, or in registered form,
of any authorized denominations, upon the request of Euro-clear or CEDEL to
the Trustee upon compliance with the procedures set forth in the Indenture.
No definitive Note in bearer form delivered in exchange for a portion of
this Global Note shall be mailed or otherwise delivered to any location in
the United States in connection with such exchange. Upon exchange of any
portion of this Global Note for a definitive Note or Notes, the Trustee
shall cause Schedule A of this Global Note to be endorsed to reflect the
reduction of its principal amount by an amount equal to the aggregate
principal amount of such definitive Note or Notes, whereupon the principal
amount hereof shall be reduced for all purposes by the amount so exchanged
and noted. Except as otherwise provided herein, until exchange in full for
definitive Notes, this Global Note shall in all respects be entitled to the
same benefits under the Indenture as duly authenticated and delivered
definitive Notes.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS GLOBAL
NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR
ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
[If this Note is not interest-bearing, make appropriate changes
to the foregoing.]
[If this Note is denominated in a currency other than U.S.
dollars, make appropriate changes to the foregoing.]
Unless the certificate of authentication hereon has been executed
by the Trustee, by manual signature of an authorized officer, this Global
Note shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
<PAGE>
4
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Attest: INTERNATIONAL BUSINESS MACHINES CORPORATION
[SEAL)
By
- -------------------- -------------------------
[Assistant] Secretary Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the Series
designated herein issued under the
within-mentioned Indenture.
,
as Trustee
By
----------------------
Authorized Signatory
<PAGE>
5
[Form of Definitive Global Fixed Rate Bearer Euro Medium-Term Note]
[Form of Reverse]
INTERNATIONAL BUSINESS MACHINES CORPORATION
EURO MEDIUM-TERM NOTE
This Global Note 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 ,
as trustee (hereinafter called the "Trustee"), to which Indenture 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 payable, as to principal, premium, if any, and interest, if
any, in different currencies or currency units, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided. This Global Note is a global note representing all or a portion
of a series designated on the face hereof (hereinafter called the "Notes")
issued under the Indenture.
The Notes of this series are issuable as temporary or definitive
Bearer Securities in global form, without coupons ("Global Notes"), or as
definitive Bearer Securities, with interest coupons attached, in the
denomination of [U.S. $ ,] ("Bearer Notes") and as
--------------------
definitive Registered Securities, without coupons, in denominations of
[U.S. $ ] and any integral multiple thereof ("Registered
-----------------
Notes"). As provided in the Indenture and subject to certain limitations
therein set forth, Bearer Notes and Registered Notes of this series are
exchangeable for a like aggregate principal amount of Registered Notes of
this series and of like tenor, of any authorized denominations, as
requested by the Holder surrendering the same, upon surrender of the Note
or Notes to be exchanged, with all unmatured coupons and all matured
coupons in default thereto appertaining, at any office or agency described
below where Registered Notes of this series may be presented for
registration of transfer; provided, however, that Bearer Notes surrendered
-------- -------
in exchange for Registered Notes between a (i) Regular Record Date and the
relevant Interest Payment Date or (ii) a Special Record Date and the
related proposed date for payment of Defaulted Interest shall be
surrendered without the coupon relating to such Interest Payment Date or
proposed date for payment of Defaulted Interest.
The Company will, subject to the limitations and exceptions set
forth below, pay to a Holder of a Note or any coupon appertaining thereto
who is a United States Alien (as defined below) such additional amounts
("Additional Amounts") as may be necessary so that every payment in respect
of such Note or coupon, after deduction or withholding for or on account of
any current or future tax, assessment or other governmental charge imposed
upon such Holder, or by reason of the making of such payment, by the United
States or any political subdivision or taxing authority thereof or therein
will not be less than the amount provided for in such Note or coupon to be
then due and payable. However, the Company shall not be required to make
any payment of Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge that would
not have been imposed but for (i) the existence of any present or
former connection between such Holder (or between a fiduciary,
settlor, beneficiary, member or shareholder of, or possessor of a
power
<PAGE>
6
over, such Holder, if such Holder is an estate, trust, partnership or
corporation) and the United States, including, without limitation,
such Holder (or such fiduciary, settlor, beneficiary, member,
shareholder or possessor) being or having been a citizen or resident
thereof or being or having been present or engaged in trade or
business therein or having or having had a permanent establishment
therein or (ii) the presentation of a Note or coupon for payment on a
date more than 10 days after the date on which such payment became due
and payable or the date on which payment thereof is duly provided for,
whichever occurs later;
(b) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or other governmental charge;
(c) any tax, assessment or other governmental charge imposed by
reason of such Holder's past or present status as a passive foreign
investment company, personal holding company or foreign personal
holding company with respect to the United States, as a private
foundation or other tax-exempt organization or as a corporation that
accumulates earnings to avoid United States Federal income tax;
(d) any tax, assessment or other governmental charge that is
payable otherwise than by deduction or withholding from payments of
principal of, or interest on, the Notes;
(e) any tax, assessment or other governmental charge required to
be deducted or withheld by any Paying Agent from any payment of
principal of, or interest on, any Note, if such payment can be made
without such deduction or withholding by any other Paying Agent;
(f) any tax, assessment or other governmental charge that would
not have been imposed but for the failure to comply with
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity or
connections with the United States of the Holder or beneficial owner
of such Note or coupon, if such compliance is required by statute or
by regulation of the United States Treasury Department as a
precondition to relief or exemption from such tax, assessment or other
governmental charge;
(g) any tax, assessment or other governmental charge imposed on a
Holder that actually or constructively owns 10% or more of the total
combined voting power of all classes of stock of the Company entitled
to vote or that is a controlled foreign corporation related to the
Company through stock ownership; or
(h) any combination of items (a), (b), (c), (d), (e), (f) and
(g);
nor shall Additional Amounts be paid to any Holder who is a fiduciary or
partnership or other than the sole beneficial owner of the Note or coupon
to the extent a beneficiary or settlor with respect to such fiduciary or a
member of such partnership or a beneficial owner of the Note or coupon
would not have been entitled to payment of the Additional Amounts had such
beneficiary, settlor, member or beneficial owner been the Holder of the
Note or coupon.
The term "United States Alien" means any corporation, individual,
fiduciary or partnership that is, as to the United States, a foreign
corporation, nonresident alien individual, nonresident alien fiduciary of a
foreign estate or trust, or foreign partnership to the extent that one or
more members are, as to the United States, foreign corporations,
nonresident alien individuals or nonresident alien fiduciaries of foreign
estates or trusts and "United States" means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
<PAGE>
7
If the Company shall determine (the "Determination") that any
payment made outside the United States by the Company or any of its Paying
Agents of the full amount of the next scheduled payment of principal or
interest due in respect of any Note or coupon appertaining thereto would,
under any present or future laws or regulations of the United States
affecting taxation or otherwise, be subject to any certification,
information, documentation or other reporting requirement of any kind, the
effect of which requirement is the disclosure to the Company, any Paying
Agent or any governmental authority of the nationality, residence or
identity (other than status as a United States Alien) of a beneficial owner
of such Note or coupon who is a United States Alien (other than such a
requirement that (i) would not be applicable to a payment made to a
custodian, nominee or other agent of the beneficial owner or which can be
satisfied by such a custodian, nominee or other agent certifying to the
effect that such beneficial owner is a United States Alien; provided,
--------
however, in each case that payment by such custodian, nominee or agent to
- -------
such beneficial owner is not otherwise subject to any requirement referred
to in this sentence, (ii) is applicable only to a payment by a custodian,
nominee or other agent of the beneficial owner to such beneficial owner or
(iii) would not be applicable to a payment made by any other Paying Agent
of the Company), the Company shall redeem the Notes, as a whole but not in
part, at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to the date fixed for redemption, such
redemption to take place on such date, not later than one year after the
publication of notice of the Determination, as the Company shall elect by
notice to the Trustee at least 60 days before the date fixed for
redemption. The Company shall make the Determination as soon as
practicable and give prompt notice thereof in accordance with the
Indenture, stating in the notice the effective date of such certification,
information, documentation or other reporting requirement and the date by
which the redemption shall take place. Upon receipt of the notice from the
Company as to the redemption date, the Trustee shall cause notice thereof
to be duly published as provided in the Indenture. Notwithstanding the
foregoing, the Company shall not so redeem the Notes if the Company shall
subsequently determine, not less than 30 days prior to the date fixed for
redemption, that subsequent payments would not be subject to any such
requirement, in which case the Company shall give prompt notice of such
determination in accordance with the Indenture and any earlier redemption
notice given pursuant to this paragraph shall be revoked and of no further
effect. Prior to the publication of any notice pursuant to this paragraph,
the Company shall deliver to the Trustee an Officers' Certificate of the
Company stating that the Company is obligated (or no longer obligated) to
effect such redemption and setting forth a statement of facts showing that
the conditions precedent to the obligation of the Company so to redeem have
occurred (or are no longer applicable) and an opinion of independent
counsel, to such effect.
Notwithstanding the foregoing, if and so long as the
certification, information, documentation or other reporting requirement
referred to in the preceding paragraph would be fully satisfied by payment
of a backup withholding tax or similar charge, the Company may elect, prior
to publication of the notice of the Determination, to have the provisions
of this paragraph apply in lieu of the provisions of the preceding
paragraph. In such event, the Company will pay as Additional Amounts such
amounts as may be necessary so that every payment made following the
effective date of such requirement outside the United States by the Company
or any of its Paying Agents of principal or interest due in respect of any
Note or any coupon appertaining thereto to a Holder who is a United States
Alien (but without any requirement that the nationality, residence or
identity of the beneficial owner of such Note or coupon be disclosed to the
Company, a Paying Agent or any governmental authority (other than
certification of status as a United States Alien)), after deduction or
withholding for or on account of such backup withholding tax or similar
charge (other than a backup withholding tax or similar charge that
(i) would not be applicable in the circumstances referred to in the third
parenthetical of the first sentence of the preceding paragraph, or (ii) is
imposed as a result of presentation of such Note or coupon for payment more
than 10 days after the date on which such payment becomes due and payable
or on which payment thereof is duly provided for, whichever occurs later),
will not be less than the amount provided for in such Note or such coupon
to be then due and payable. In the event that the
<PAGE>
8
Company elects to pay Additional Amounts pursuant to this paragraph, the
Company, at its option (subject to the provisions of the last two sentences
of the preceding paragraph), may at any time redeem the Notes as a whole,
but not in part, upon publication of a notice of redemption as described in
the following paragraph, at a redemption price equal to 100% of the
outstanding principal amount thereof, together with accrued interest to the
date fixed for redemption. If the Company elects to pay Additional Amounts
pursuant to this paragraph and the condition specified in the first
sentence of this paragraph can no longer be satisfied, then the Company
shall redeem the Notes as a whole at a redemption price equal to 100% of
the principal amount thereof, together with accrued interest to the date
fixed for redemption, subject to the provisions of the last two sentences
of the immediately preceding paragraph. Any redemption payments made by
the Company pursuant to the two immediately preceding sentences shall be
subject to the continuing obligation of the Company to pay Additional
Amounts pursuant to this paragraph.
The Company, at its option, may redeem the Notes as a whole, but
not in part, upon publication of a notice of redemption as described below,
at any time at a redemption price equal to 100% of the principal amount
thereof, together with accrued interest to the date fixed for redemption,
if the Company shall determine that as a result of (a) any change in, or
amendment to, the laws (or any regulations or rulings promulgated
thereunder) of the United States or of any political subdivision or taxing
authority thereof or therein affecting taxation, or any change in
application or official interpretation of such laws, regulations or
rulings, or (b) any action taken by a taxing authority of the United States
or any political subdivision or taxing authority thereof or therein
affecting taxation, which action is generally applied or is taken with
respect to the Company, or (c) a decision rendered by a court of competent
jurisdiction in the United States, or any political subdivision thereof,
whether or not such decision was rendered with respect to the Company, or
(d) a technical advice memorandum issued by the National Office of the
United States Internal Revenue Service on substantially the same facts as
those affecting the Company, the Company has or will become obligated to
pay Additional Amounts with respect to the Notes as described above and
such obligation cannot be avoided by the use of reasonable measures
(consistent with practices and interpretations generally followed or in
effect at the time such measures could be taken) then available to the
Company. Prior to the publication of any notice of redemption pursuant to
this paragraph, the Company shall deliver to the Trustee an Officers'
Certificate, stating that the Company is entitled to effect such redemption
and setting forth a statement of facts showing that the conditions
precedent to the right of the Company so to redeem have occurred, and an
opinion of independent counsel to such effect.
Notice of intention to redeem the Notes pursuant to the preceding
paragraph shall not be given earlier than 90 days prior to the earliest
date that the obligation to pay Additional Amounts referred to above would
arise were a payment in respect of the Notes then due. Such notice shall
be given by publication in accordance with the Indenture and shall be
published at least once a week for two successive weeks prior to the date
fixed for redemption, the first such publication to be not less than
30 days or more than 60 days prior to the date fixed for redemption. From
and after any redemption date, if monies for the redemption of the Notes
pursuant to this paragraph or the third preceding paragraph hereof shall
have been made available for redemption on such redemption date, the Notes
shall cease to bear interest and the only right of the Holders of such
Notes and the coupons appertaining thereto shall be to receive payment of
the redemption price of the Notes and all unpaid interest accrued to such
redemption date. In the event of any redemption on a date other than an
interest payment date, interest will be calculated on the basis of a 360-
day year of twelve 30-day months.
Interest payments for this Note will include interest accrued to
but excluding the Interest Payment Date. Interest payments for this Note
shall be computed and paid on the basis of a 360-day year of twelve 30-day
months.
<PAGE>
9
The interest rate on this Note will in no event be higher than
the maximum rate permitted by New York law as the same may be modified by
United States law of general applicability. Under present New York law,
the maximum rate of interest is 25% on a simple interest basis. This limit
may not apply if $2,500,000 or more has been invested in this Note.
In case an Event of Default with respect to the Notes as defined
in the Indenture shall have occurred and be continuing, the principal
hereof together with accrued interest 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 modifying in any
manner the rights of the holders of the Securities of such series;
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 Note shall be conclusive and
binding upon such holder and upon all future holders and owners of this
Note and any Notes which may be issued in exchange or substitution herefor,
irrespective of whether or not any notation thereof is made upon this Note
or such other Notes.
[If this Note is denominated in a currency other than U.S.
dollars, make appropriate changes to the foregoing.]
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this Note at the place, at the respective
times, at the rate and in the coin or currency herein prescribed.
<PAGE>
10
The Indenture permits the Company to Discharge its obligations
with respect to the Notes 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 Notes.
[If this Note is denominated in a currency other than U.S.
dollars, make appropriate changes to the foregoing.]
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 Note, all on the terms set forth
in the Indenture.
Title to Bearer Notes and coupons appertaining thereto shall pass
by delivery. As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of Registered Notes is
registrable in the Security Register, upon surrender of such Registered
Note for registration of transfer at the Corporate Trust Office of the
Trustee or such other office or agency as may be designated by it in the
Borough of Manhattan, The City of New York, or, subject to any applicable
laws or regulations and to the right of the Company (limited as provided in
the Indenture) to rescind the designation of any such transfer agent, at
the main offices of in or at
-------------------- ----------------------
such other offices or agencies as the Company may designate, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory
to the Company and the Security Registrar or any such transfer agent duly
executed by, the holder thereof or his attorney duly authorized in writing,
and thereupon one or more new Registered Notes of this series and of like
tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Company, the Trustee and any agent of the Company or the
Trustee may treat the bearer of a Bearer Note of any series and any coupon
appertaining thereto, and prior to due presentment of a Registered Note for
registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Note is
registered, as the owner thereof for all purposes, whether or not such Note
or such coupon is overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.
No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith.
The Indenture, the Notes and any coupons appertaining hereto
shall be governed by and construed in accordance with the laws of the State
of New York.
No recourse for the payment of the principal of, premium, if any,
or interest on this Note, 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 Note 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
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.
---------
<PAGE>
11
SCHEDULE A
EXCHANGES FOR DEFINITIVE NOTES
AND FROM TEMPORARY GLOBAL BEARER NOTES
The following exchanges of a part of this Global Note for one or
more definitive Notes, and from one or more temporary global Notes have
been made:
Principal
Principal Amount Principal
Amount Exchanged Amount Notation
Exchanged from Outstanding Made by or
for Definitive Temporary After on Behalf
Date of Exchange Notes Global Notes Exchange of Trustee
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
--------------- ------------- ------------ ---------- ----------
<PAGE>
Exhibit A.6
[Form of Definitive Fixed Rate Bearer Euro Medium-Term Note]
[Form of Face]
Definitive Fixed Rate Bearer Note
NOTE NUMBER AGENT'S NAME
INTERNATIONAL BUSINESS
MACHINES CORPORATION
- ---------------------------------------------
PRINCIPAL AMOUNT TRADE DATE DATE OF NOTE
[U.S.$ ] [ORIGINAL ISSUE DATE]
- --------------------------------------------------------------------------------
MATURITY TRUSTEE'S TRUSTEE'S TAXPAYER ID TRANSFERRED
DATE CUST.NO. TICKET NO. OR SOC.SEC. NO.
OF PURCHASER
- --------------------------------------------------------------------------------
EURO MEDIUM-TERM
NOTE
CONFIRMATION
TRUSTEE-PAYING AGENT
_____________
- --------------------------------------------------------------------------------
CUSTOMER'S RETAIN FOR THE TIME OF THE PLEASE SIGN AND SEE
COPY TAX TRANSACTION WILL BE RETURN REVERSE
PURPOSES FURNISHED UPON REQUEST ENCLOSED RECEIPT SIDE
OF THE CUSTOMER
- --------------------------------------------------------------------------------
BEARER ANY UNITED STATES PERSON WHO HOLDS BEARER
THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES
INCOME TAX LAWS, INCLUDING THE
LIMITATIONS PROVIDED IN SECTIONS
165(j) AND 1287(a) OF THE INTERNAL
REVENUE CODE.
[If an Original Issue Discount Security, insert--FOR PURPOSES OF
----------------------------------------------
SECTIONS 1273 AND 1275 OF THE UNITED STATES INTERNAL REVENUE CODE OF 1986,
AS AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT ON THIS NOTE IS ___% OF
ITS PRINCIPAL AMOUNT, THE ISSUE DATE IS ____________, 19__, AND THE YIELD
TO MATURITY IS ___%, THE METHOD USED TO DETERMINE THE YIELD IS __________,
AND THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE SHORT ACCRUAL
PERIOD OF ___________________19__ TO ______________19__ IS ___% OF THE
PRINCIPAL AMOUNT OF THIS NOTE.]
INTERNATIONAL BUSINESS MACHINES CORPORATION
EURO MEDIUM-TERM NOTE
(Due from 9 months to 30 years from date of issue)
(Fixed Rate)
<PAGE>
2
No. B- Original Issue Date:
Designation: Maturity Date:
Principal Amount: $ Record Date[s]: [Each]
Interest Rate: Issue Price (as a percentage
of Principal Amount):
Interest Payment Dates: ______and______of
each year
If subject to optional redemption:
Initial Redemption Date:
CUSIP No.:
The Optional Redemption Price shall initially be % of the
principal amount of the Note to be redeemed and shall decline at each
anniversary of the Initial Redemption Date by % of the principal
amount to be redeemed until the Optional Redemption Price is 100% of
such principal amount.
INTERNATIONAL BUSINESS MACHINES CORPORATION, a corporation duly
organized and existing under the laws of New York (herein called the
"Company", which term includes any successor Person under the Indenture
referred to on the reverse hereof), for value received, hereby promises to
pay to bearer upon presentation and surrender of this Note, the principal
sum of
[U.S. DOLLARS], on
the Maturity Date set forth above, and to pay interest thereon from the
Original Issue Date set forth above or from the most recent Interest
Payment Date preceding the date of authentication of this Note to which
interest has been paid or duly provided for, on each Interest Payment Date
set forth above in each year, at the rate of % per annum, until the
principal hereof is paid or made available for payment, [if applicable,
--------------
insert--and (to the extent that the payment of such interest shall be
- ------
legally enforceable) at the rate of % per annum on any overdue
principal and premium and on any overdue installment of interest];
provided, however, that if the Original Issue Date falls between a Regular
- -------- -------
Record Date and an Interest Payment Date, the first payment of interest
will be made on the Interest Payment Date following the next succeeding
Regular Record Date. Such payments (including premium, if any) shall be
made, subject to any laws or regulations applicable thereto and to the
right of the Company (limited as provided in the Indenture) to rescind the
designation of any such Paying Agent, at the main offices of
________________________in _________________, ________________________in
_________________, ________________________in _________________,
_______________________ in _______________ and ________________________in
_________________, or at such other offices or agencies outside the United
States (as defined below) as the Company may designate by [United States
dollar] check drawn on a bank in The City of New York. Interest on this
Note due on or before the Stated Maturity shall be payable only upon
presentation and surrender at such an office or agency of the interest
coupons hereto attached as they severally mature. No payment of principal,
premium or interest on this Note shall be made at any office or agency of
the Company in the United States or by check mailed to any address in the
United States or by transfer to an account maintained with a bank located
in the United States; [If Security is denominated and payable in United
------------------------------------------------
States dollars, insert--provided, however, that payment of principal of
- ---------------------- -------- -------
(and premium, if any) and interest on this Note (including any additional
amounts that may be payable as provided below) shall be made at the office
of the Company's Paying Agent in the Borough of Manhattan, The City of Now
York, if (but only if) payment in United States dollars of the full amount
of such principal, premium, interest or additional amounts, as the case may
be, at all offices or agencies outside the United States maintained for
that purpose by the Company in accordance with the Indenture is illegal or
effectively precluded by exchange controls or other similar restrictions.]
[If this Note is not interest-bearing, make appropriate changes to the
foregoing.]
<PAGE>
3
[If this Note is denominated in a currency other than U.S. dollars,
make appropriate changes to the foregoing.]
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, by manual signature of an
authorized officer, this Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal and coupons bearing the facsimile
signature of its authorized officer to be annexed hereto.
Attest: INTERNATIONAL BUSINESS MACHINES
CORPORATION
[SEAL]
By
- -------------------- -------------------------
[Assistant] Secretary Title
Dated:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities of
the Series designated herein issued
under the within-mentioned Indenture.
, as
Trustee
By
-----------------------
Authorized Signatory
<PAGE>
4
[Form of Definitive Fixed Rate Bearer Note]
[Form of Reverse]
INTERNATIONAL BUSINESS MACHINES CORPORATION
EURO MEDIUM-TERM NOTE
This Note 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
, as
trustee (hereinafter called "Trustee"), to which Indenture 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 payable, as to principal, premium, if any, and interest, if
any, in different currencies or currency units, may be subject to different
covenants and Events of Default and may otherwise vary as in the Indenture
provided. This Note is one of a series designated on the face hereof
(hereinafter called the "Notes") issued under the Indenture.
The Notes of this series are issuable as a definitive Bearer Security
in global form, without coupons, or as Bearer Securities, with interest
coupons attached, in the denomination of [U.S. $________________________]
("Bearer Notes") and as Registered Securities, without coupons, in
denominations of [U.S. $________________________] and any integral multiple
thereof ("Registered Notes"). As provided in the Indenture and subject to
certain limitations therein set forth, Bearer Notes and Registered Notes of
this series are exchangeable for a like aggregate principal amount of
Registered Notes of this series and of like tenor, of any authorized
denominations, as requested by the Holder surrendering the same, upon
surrender of the Note or Notes to be exchanged, with all unmatured coupons
and all matured coupons in default thereto appertaining, at any office or
agency described below where Registered Notes of this series may be
presented for registration of transfer; provided, however, that Bearer
-------- -------
Notes surrendered in exchange for Registered Notes between a Record Date
and the relevant Interest Payment Date shall be surrendered without the
coupon relating to such Interest Payment Date.
The Company will, subject to the limitations and exceptions set forth
below, pay to a Holder of a Note or any coupon appertaining thereto who is
a United States Alien (as defined below) such additional amounts
("Additional Amounts") as may be necessary so that every payment in respect
of such Note or coupon, after deduction or withholding for or on account of
any current or future tax, assessment or other governmental charge imposed
upon such Holder, or by reason of the making of such payment, by the United
States or any political subdivision or taxing authority thereof or therein
will not be less than the amount provided for in such Note or coupon to be
then due and payable. However, the Company shall not be required to make
any payment of Additional Amounts for or on account of:
(a) any tax, assessment or other governmental charge that would
not have been imposed but for (i) the existence of any present or
former connection between such Holder (or between a fiduciary,
settlor, beneficiary, member or shareholder of, or possessor of a
power over, such Holder, if such Holder is an estate, trust,
partnership or corporation) and the United States, including, without
limitation, such Holder (or such fiduciary, settlor, beneficiary,
member, shareholder or possessor) being or having been a citizen or
resident thereof or being or having been present or engaged in trade
or business therein or having or having had a permanent establishment
therein or (ii) the presentation of a Note or coupon for payment on a
date more than 10 days after the date on which such payment became due
and payable or the date on which payment thereof is duly provided for,
whichever occurs later;
<PAGE>
5
(b) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or other governmental charge;
(c) any tax, assessment or other governmental charge imposed by
reason of such Holder's past or present status as a passive foreign
investment company, personal holding company or foreign personal
holding company with respect to the United States, as a private
foundation or other tax-exempt organization or as a corporation that
accumulates earnings to avoid United States Federal income tax;
(d) any tax, assessment or other governmental charge that is
payable otherwise than by deduction or withholding from payments of
principal of, or interest on, the Notes;
(e) any tax, assessment or other governmental charge required to
be deducted or withheld by any Paying Agent from any payment of
principal of, or interest on, any Note, if such payment can be made
without such deduction or withholding by any other Paying Agent;
(f) any tax, assessment or other governmental charge that would
not have been imposed but for the failure to comply with
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity or
connections with the United States of the Holder or beneficial owner
of such Note or coupon, if such compliance is required by statute or
by regulation of the United States Treasury Department as a
precondition to relief of exemption from such tax, assessment or other
governmental charge;
(g) any tax, assessment of other governmental charge imposed on a
Holder that actually or constructively owns 10% or more of the total
combined voting power of all classes of stock of the Company entitled
to vote or that is a controlled foreign corporation related to the
Company through stock ownership; or
(h) any combination of items (a), (b), (c), (d), (e), (f) and
(g);
nor shall Additional Amounts be paid to any Holder who is a fiduciary or
partnership or other than the sole beneficial owner of the Note or coupon
to the extent a beneficiary or settlor with respect to such fiduciary or a
member of such partnership or a beneficial owner of the Note or coupon
would not have been entitled to payment of the Additional Amounts had such
beneficiary, settlor, member or beneficial owner been the Holder of the
Note or coupon.
The term "United States Alien" means any corporation, individual,
fiduciary or partnership that is, as to the United States, a foreign
corporation, nonresident alien individual, nonresident alien fiduciary of a
foreign estate or trust, or foreign partnership to the extent that one or
more members are, as to the United States, foreign corporations,
nonresident alien individuals or nonresident alien fiduciaries of foreign
estates or trusts and "United States" means the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction.
If the Company shall determine (the "Determination") that any payment
made outside the United States by the Company or any of its Paying Agents
of the full amount of the next scheduled payment of principal or interest
due in respect of any Note or coupon appertaining thereto would, under any
present or future laws or regulations of the United States affecting
taxation or otherwise, be subject to any certification, information,
documentation or other reporting requirement of any kind, the effect of
which requirement is the disclosure to the Company, any Paying Agent or any
governmental authority of the nationality, residence or identity (other
than status as a United States Alien) of a beneficial owner of such Note or
coupon who is a United States Alien (other than such a requirement that
(i) would not be applicable to a payment made to a custodian, nominee or
other agent of the beneficial owner or which can be satisfied by such a
custodian, nominee or other agent certifying to the effect that such
beneficial owner is a United States Alien; provided, however, in each case
-------- -------
that payment by such custodian, nominee or agent to such beneficial owner
is not otherwise subject to any requirement referred to in this sentence,
(ii) is applicable only to a payment by a custodian, nominee or other agent
of the beneficial owner to such beneficial owner or (iii) would not be
applicable to a payment made by any other Paying Agent of the Company), the
Company shall redeem the Notes, as a whole but not in part, at a redemption
price equal to 100% of the principal amount thereof, together with accrued
interest to the date fixed for redemption, such redemption to
<PAGE>
6
take place on such date, not later than one year after the publication of
notice of the Determination, as the Company shall elect by notice to the
Trustee at least 60 days before the date fixed for redemption. The Company
shall make the Determination as soon as practicable and give prompt notice
thereof in accordance with the Indenture, stating in the notice the
effective date of such certification, information, documentation or other
reporting requirement and the date by which the redemption shall take
place. Upon receipt of the notice from the Company as to the redemption
date, the Trustee shall cause notice thereof to be duly published as
provided in the Indenture. Notwithstanding the foregoing, the Company
shall not so redeem the Notes if the Company shall subsequently determine,
not less than 30 days prior to the date fixed for redemption, that
subsequent payments would not be subject to any such requirement, in which
case the Company shall give prompt notice of such determination in
accordance with the Indenture and any earlier redemption notice given
pursuant to this paragraph shall be revoked and of no further effect.
Prior to the publication of any notice pursuant to this paragraph, the
Company shall deliver to the Trustee an Officers' Certificate of the
Company stating that the Company is obligated (or no longer obligated) to
effect such redemption and setting forth a statement of facts showing that
the conditions precedent to the obligation of the Company so to redeem have
occurred (or are no longer applicable) and an opinion of independent
counsel, to such effect.
Notwithstanding the foregoing, if and so long as the certification,
information, documentation or other reporting requirement referred to in
the preceding paragraph would be fully satisfied by payment of a backup
withholding tax or similar charge, the Company may elect, prior to
publication of the notice of the Determination, to have the provisions of
this paragraph apply in lieu of the provisions of the preceding paragraph.
In such event, the Company will pay as Additional Amounts such amounts as
may be necessary so that every payment made following the effective date of
such requirement outside the United States by the Company or any of its
Paying Agents of principal or interest due in respect of any Note or any
coupon appertaining thereto to a Holder who is a United States Alien (but
without any requirement that the nationality, residence or identity of the
beneficial owner of such Note or coupon be disclosed to the Company, a
Paying Agent or any governmental authority (other than certification of
status as a United States Alien)), after deduction or withholding for or on
account of such backup withholding tax or similar charge (other than a
backup withholding tax or similar charge that (i) would not be applicable
in the circumstances referred to in the third parenthetical of the first
sentence of the preceding paragraph, or (ii) is imposed as a result of
presentation of such Note or coupon for payment more than 10 days after the
date on which such payment becomes due and payable or on which payment
thereof is duly provided for, whichever occurs later), will not be less
than the amount provided for in such Note or such coupon to be then due and
payable. In the event that the Company elects to pay Additional Amounts
pursuant to this paragraph, the Company, at its option (subject to the
provisions of the last two sentences of the preceding paragraph), may at
any time redeem the Notes as a whole, but not in part, upon publication of
a notice of redemption as described in the following paragraph, at a
redemption price equal to 100% of the outstanding principal amount thereof,
together with accrued interest to the date fixed for redemption. If the
Company elects to pay Additional Amounts pursuant to this paragraph and the
condition specified in the first sentence of this paragraph can no longer
be satisfied, then the Company shall redeem the Notes as a whole at a
redemption price equal to 100% of the principal amount thereof, together
with accrued interest to the date fixed for redemption, subject to the
provisions of the last two sentences of the immediately preceding
paragraph. Any redemption payments made by the Company pursuant to the two
immediately preceding sentences shall be subject to the continuing
obligation of the Company to pay Additional Amounts pursuant to this
paragraph.
The Company, at its option, may redeem the Notes as a whole, but not
in part, upon publication of a notice of redemption as described below, at
any time at a redemption price equal to 100% of the principal amount
thereof, together with accrued interest to the date, fixed for redemption,
if the Company shall determine that as a result of (a) any change in, or
amendment to, the laws (or any regulations or rulings promulgated
thereunder) of the United States or of any political subdivision or taxing
authority thereof or therein affecting taxation, or any change in
application or official interpretation of such laws, regulations or
rulings, or (b) any action taken by a taxing authority of the United States
or any political subdivision or taxing authority thereof or therein
affecting taxation, which action is generally applied or is taken with
respect to the Company, or (c) a decision rendered by a court of competent
jurisdiction in the United States, or any political subdivision thereof,
whether or not such decision was rendered with respect to the Company, or
(d) a technical advice memorandum issued by the National Office of the
United States Internal Revenue Service on substantially the same facts as
those affecting the Company, the Company has or will become obligated to
pay Additional Amounts with respect to the Notes as described above and
such obligation cannot be avoided by the use of reasonable measures
(consistent with practices and interpretations generally followed or in
effect at the time such measures could be taken) then available to the
<PAGE>
7
Company. Prior to the publication of any notice of redemption pursuant to
this paragraph, the Company shall deliver to the Trustee an Officers'
Certificate, stating that the Company is entitled to effect such redemption
and setting forth a statement of facts showing that the conditions
precedent to the right of the Company so to redeem have occurred, and an
opinion of independent counsel to such effect.
Notice of intention to redeem the Notes pursuant to the preceding
paragraph shall not be given earlier than 90 days prior to the earliest
date that the obligation to pay Additional Amounts referred to above would
arise were a payment in respect of the Notes then due. Such notice shall
be given by publication in accordance with the Indenture and shall be
published at least once a week for two successive weeks prior to the date
fixed for redemption, the first such publication to be not less than
30 days or more than 60 days prior to the date fixed for redemption. From
and after any redemption date, if monies for the redemption of the Notes
pursuant to this paragraph or the third preceding paragraph hereof shall
have been made available for redemption on such redemption date, the Notes
shall cease to bear interest and the only right of the Holders of such
Notes and the coupons appertaining thereto shall be to receive payment of
the redemption price of the Notes and all unpaid interest accrued to such
redemption date. In the event of any redemption on a date other than an
interest payment date, interest will be calculated on the basis of a 360-
day year of twelve 30-day months.
If subject to optional redemption, the Notes may be redeemed at the
option of the Company as a whole, or from time to time in part, on any date
on or after the Initial Redemption Date specified above and prior to the
Maturity Date, 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 Notes at their last registered addresses, all as provided in the
Indenture, at the Optional Redemption Prices specified above (expressed in
percentages of the principal amount) together in each case with accrued
interest to the date fixed for redemption.
Interest payments for this Note will include interest accrued to but
excluding the Interest Payment Date. Interest payments for this Note shall
be computed and paid on the basis of a 360-day year of twelve 30-day
months.
The interest rate on this Note will in no event be higher than the
maximum rate permitted by New York law as the same may be modified by
United States law of general applicability. Under the present New York
law, the maximum rate of interest is 25% on a simple interest basis. This
limit may not apply if $2,500,000 or more has been invested in this Note.
In case in Event of Default with respect to the Notes as defined in
the Indenture shall have occurred and be continuing, the principal hereof
together with accrued interest 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 modifying in any
manner the rights of the holders of the Securities of such series;
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
<PAGE>
8
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 of 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 Note shall be conclusive and
binding upon such holder and upon all future holders and owners of this
Note and any Notes which may be issued in exchange or substitution herefor,
irrespective of whether or not any notation thereof is made upon this Note
or such other Notes.
[If this Note is denominated in a currency other than U.S. dollars,
make appropriate changes to the foregoing.]
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any,
and interest on this Note at the place, at the respective times, at the
rate and in the coin or currency herein prescribed.
The Indenture permits the Company to Discharge its obligations with
respect to the Notes 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 Notes.
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 Note, all on the terms set forth in the
Indenture.
[If this Note is denominated in a currency other than U.S. dollars,
make appropriate changes to the foregoing.]
Title to Bearer Notes and coupons appertaining thereto shall pass by
delivery. As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of Registered Securities is registrable in
the Security Register, upon surrender of such Registered Note for
registration of transfer at the Corporate Trust Office of the Trustee or
such other office or agency as may be designated by it in the Borough of
Manhattan, The City of New York, or, subject to any applicable laws or
regulations and to the right of the Company (limited as provided in the
Indenture) to rescind the designation of any such transfer agent, at the
main offices of ___________________ in _____________ or at such other
offices or agencies as the Company may designate, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar or any such transfer agent duly executed
by, the holder thereof or his attorney duly authorized in writing, and
thereupon one or more new Registered Notes of this series and of like
tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Company, the Trustee and any agent of the Company or the Trustee
may treat the bearer of a Bearer Note of any series and any coupon
appertaining thereto, and prior to due presentment of a Registered Note for
registration of transfer, the Company, the Trustee and any agent of the
Company or the Trustee may treat the Person in whose name such Note is
registered, as the owner thereof for all purposes, whether or not such Note
or such coupon is overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
The Indenture, the Notes and any coupons appertaining hereto shall be
governed by and construed in accordance with the laws of the State of New
York.
<PAGE>
9
No recourse for the payment of the principal of, premium, if any, or
interest on this Note, 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 Note 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
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 the context otherwise requires, all terms used in this Note
which are defined in the Indenture shall have the meanings assigned to them
in the Indenture.
--------------------------
<PAGE>
10
[Form of Coupon]
[Form of Face]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE
LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE
CODE.
INTERNATIONAL BUSINESS MACHINES CORPORATION Principal Amount:
Note No.: [U.S. $ I
Interest Payment Date: Issue Date of Note:
Interest Amount: Maturity Date of
Note:
This coupon appertains to an International Business Machines
Corporation Medium-Term Note of the Principal Amount and with the Issue
Date and the Maturity Date specified above (the "Note"), the number of
which is set forth above.
Unless the Note shall have been called for previous redemption and
payment thereof shall have been duly provided for, on the Interest Payment
Date set forth above, International Business Machines Corporation (herein
called the "Company") will pay to bearer, upon surrender hereof, the
Interest Amount shown above (together with any additional amounts in
respect thereof that the Company may be required to pay according to the
terms of said Note and the Indenture referred to therein) at the offices of
the Paying Agents set out on the reverse hereof or at such other offices or
agencies (which, except as otherwise provided in the Note to which this
coupon appertains, shall be located outside the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction (the "United
States"))as the Company may designate from time to time, at the option of
the Holder, by United States dollar check drawn on a bank in The City of
New York or by transfer of United States dollars to an account maintained
by the payee with a bank located outside the United States, being [one
year's] [six months'] [other period as applicable] interest then payable on
said Note.
This coupon shall be governed by, and construed in accordance with,
the laws of the State of New York.
[If this coupon is payable in a currency other than U.S. dollars, make
appropriate changes to the foregoing.]
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By
------------------------------
Title:
<PAGE>
11
[Form of Reverse]
[Identify Trustee and Paying Agents]
Interest Payment Dates: ___________and___________of
each year
If subject to optional redemption:
Initial Redemption Date:
CUSIP No.:
The Optional Redemption Price shall initially be % of the
principal amount of the Note to be redeemed and shall decline at each
anniversary of the Initial Redemption Date by % of the principal
amount to be redeemed until the Optional Redemption Price is 100% of
such principal amount.
INTERNATIONAL BUSINESS MACHINES CORPORATION, a corporation duly
organized and existing under the laws of New York (herein called the
"Company", which term includes any successor Person under the Indenture
referred to on the reverse hereof), for value received, hereby promises to
pay to bearer upon presentation and surrender of this Note, the principal
sum of
[U.S. DOLLARS], on the Maturity Date set forth above, and
to pay interest thereon from the Original Issue Date set forth above
or from the most recent Interest Payment Date preceding the date
of authentication of this Note to which interest has been paid or duly
provided for, on each Interest Payment Date set forth above in each year,
at the rate of % per annum, until the principal hereof is paid or made
available for payment, [if applicable, insert--and (to the extent that the
---------------------
payment of such interest shall be legally enforceable) at the rate of
% per annum on any overdue principal and premium and on any overdue
installment of interest]; provided, however, that if the Original Issue
-------- -------
Date falls between a Regular Record Date and an Interest Payment Date, the
first payment of interest will be made on the Interest Payment Date
following the next succeeding Regular Record Date. Such payments
(including premium, if any) shall be made, subject to any laws or
regulations applicable thereto and to the right of the Company (limited as
provided in the Indenture) to rescind the designation of any such Paying
Agent, at the main offices of ________________________in _________________,
________________________in _________________, ________________________in
_________________ and ________________________in _________________, or at
such other offices or agencies outside the United States (as defined below)
as the Company may designate by [United States dollar] check drawn on a
bank in The City of New York. Interest on this Note due on or before the
Stated Maturity shall be payable only upon presentation and surrender at
such an office or agency of the interest coupons hereto attached as they
severally mature. No payment of principal, premium or interest on this
Note shall be made at any office or agency of the Company in the United
States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States;
[If Security is denominated and payable in United States dollars, insert--
-----------------------------------------------------------------------
provided, however, that payment of principal of (and premium, if any) and
- -------- -------
interest on this Note (including any additional amounts that may be payable
as provided below) shall be made at the office of the Company's Paying
Agent in the Borough of Manhattan, The City of New York, if (but only if)
payment in United States dollars of the full amount of such principal,
premium, interest or additional amounts, as the case may be, at all offices
or agencies outside the United States maintained for that purpose by the
Company in accordance with the Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions.]
[If this Note is not interest-bearing, make appropriate changes to the
foregoing.]
[If this Note is denominated in a currency other than U.S. dollars,
make appropriate changes to the foregoing.]
<PAGE>
12
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS SECURITY
SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL
PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH IN FULL AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof, by manual signature of an
authorized officer, this Note shall not be entitled to any benefit under
the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal and coupons bearing the facsimile
signature of its authorized officer to be annexed hereto.
Attest:
INTERNATIONAL BUSINESS MACHINES CORPORATION
[SEAL]
By__________________________________________________
[Assistant] Secretary Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the
Series designated herein issued under
the within-mentioned Indenture.
, as
Trustee
By______________________________________
Authorized Signatory
<PAGE>
EXHIBIT A.7
(Form of Fixed Rate
Security with Optional
Redemption Provisions)
(Form of Face of [Note] 1/ Due )
-
No.: $
----------- ---------
CUSIP No.:
-------------------------
% [Note] Due
-------
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 or registered assigns, the principal sum
of Dollars, at the office or agency of the Company in the Borough of
Manhattan, The City of New York, on , 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
semiannually on and of each year, on said principal sum at
said office or agency, in like coin or currency, at the rate of % per
annum, from the or the , as the case may be, next
preceding the date of this [Note] 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 [Note], or unless no interest has been paid on the
[Notes] due (as defined on the reverse hereof), in which case from
--------
until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after
or ,as the case may be, and before the following or
, this [Note] shall bear interest from such
or , provided, however, that if the Company
-------- -------
shall default in the payment of interest due on such
or , then this [Note] shall bear interest from the
next preceding or to which interest
has been paid, or, if not interest has been paid on the [Notes] due
_______, from . The interest so payable on any
or will, subject to certain exceptions provided in
the Indenture referred to on the reverse hereof, be paid to the person in
whose name this [Note] is registered at the close of business on next
such or , as the case may be, next preceding such
or , 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
[Note] 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 [Notes] not less than 10 days preceding such special
record date or may be paid in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the [Notes] due
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.
- --------------------
1/ Bracketed references to "Note" or "Notes" should be changed to
-
reflect the designation of the series of Securities being issued.
<PAGE>
2
Reference is made to the further provisions of this [Note] 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 [Note] 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]
by
--------------------------
by
--------------------------
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities of the
Series designated herein issued under the
within-mentioned indenture.
, as
Trustee,
by
-----------------------
Authorized Signatory
<PAGE>
3
(Form of Reverse of [Note] Due )
This [Note] 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 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 [Note] is one of a
series designated as the % [Notes] due of the Company
(hereinafter called the "[Notes] due ") issued under the
Indenture, limited in aggregate principal amount to $ .
In case an Event of Default with respect to the [Notes] due
, 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
<PAGE>
4
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 [Note]
shall be conclusive and binding upon such which may be issued in exchange
or substitution herefor, irrespective or whether or not any notation
thereof is made upon this [Note) or such other [Notes] due .
No reference herein to the Indenture and no provision of this
[Note] or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this [Note] at the place, at the
respective times, at the rate and in the coin or currency herein
prescribed.
The Indenture permits the Company to Discharge its obligations
with respect to the [Notes] due on the 91st day following the
satisfaction of the conditions act 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 [Notes] due .
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 [Note], all on the terms set
forth in the Indenture.
The [Notes] due are issuable in registered form
without coupons in denominations of $1,000 or any multiple thereof. In the
manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge, [Notes] due may be
exchanged for an equal aggregate principal amount of [Notes] due
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 [Notes] may be redeemed at the option of the Company as a
whole, or from time to time in part, on any date on or after
, and prior to maturity, 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 Securities at their last registered
addresses, all as provided in the Indenture, at the following optional
redemption price (expressed in percentages of the principal amount)
together in each case with accrued interest to the date fixed for
redemption.
If redeemed during the twelve-month period beginning
Year Percentage
---- ----------
Upon due presentment for registration of transfer of this [Note]
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 [Note] or [Notes] 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.
<PAGE>
5
Prior to due presentment for registration of transfer of this
[Note], 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 [Note] (whether or not this [Note] shall be overdue) for the
purpose of receiving payment of the principal of, premium, if any, and
interest on this Note, 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 to 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 [Note].
No recourse for the payment of the principal of, premium, if any,
or interest on this [Note], 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 [Note], 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, 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 of the issue hereof, expressly waived and released.
Unless otherwise defined in this [Note], all terms used in this
[Note] which are defined in the Indenture shall have the meanings assigned
to them in the Indenture.
This [Note] shall be governed by and construed in accordance with
the laws of the State of New York.
<PAGE>
EXHIBIT A.8
(Form of Fixed Rate
Security with Optional
Redemption and Sinking Fund Provision)
(Form of Face of [Note] 1/ Due )
-
No.: $
------------------------------
CUSIP No.:
---------------------------
% [Note] Due
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 or registered assigns, the
principal sum of Dollars, at the office or agency of the Company
in the Borough of Manhattan, The City and State of New York, 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, semiannually on and of each year, on said
principal sum at said office or agency, in like coin or currency, at the
rate of % per annum, from the or the , as the case may be, next
preceding the date of this [Note] 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 [Note], or unless no interest has been paid on the
[Notes] due (as defined on the reverse hereof), in
which case from , until payment of said principal sum has been
made or duly provided for. Notwithstanding the foregoing, if the date
hereof is after , and before the following or this [Note]
shall bear interest from such or ;
provided, however, that if the Company shall default in the payment of
- -------- -------
interest due on such or , then this [Note]
shall bear interest from the next preceding or to which
interest has been paid, or, if no interest has been paid on the [Notes]
due,
from . The interest so payable on any
or will, subject to certain exceptions provided in the
Indenture referred to on the reverse hereof, be paid to the person in whose
name this [Note] is registered at the close of business on
such or as the case may be, next preceding such or
, 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
[Note] 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 [Notes] not less than 10 days preceding such Special
Record Date or may be paid in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the [Notes] due
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.
- --------------------
1/ Bracketed references to "Note" or "Notes" should be
-
changed to reflect the designation of the series of
Securities being issued.
<PAGE>
2
Reference is made to the further provisions of this [Note] 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 [Note] 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,
by
----------------
[Seal]
by
----------------
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Securities
of the Series designated herein issued
under the within-mentioned Indenture.
, as Trustee
by
-----------------------------
Authorized Signatory
<PAGE>
3
(Form of Reverse of [Note] Due )
This [Note] 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 , 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 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 [Note] is one of a series designated as the
% [Notes] due of the Company (hereinafter
called the "[Notes] due ") issued under the
Indenture, limited in aggregate principal amount to $ .
In case an Event of Default with respect to the [Notes]
due , 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 provision 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 with respect to the Securities of such
series under the Indenture and its consequences, except a default in the
payment
<PAGE>
4
of the principal of, premium, if any, or interest on any Securities 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 [Note]
shall be conclusive and binding upon such holder and upon all future
holders and owners of this [Note] and any [Notes] due which may be
issued in exchange or substitution herefor, irrespective of whether or not
any notation thereof is made upon this [Note] or such other [Note]
due .
No reference herein to the Indenture and no provision of this
[Note] or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of,
premium, if any, and interest on this [Note] at the place, at the
respective times, at the rate and in the coin or currency herein
prescribed.
The Indenture permits the Company to Discharge its obligations
with respect to the [Notes] due 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 [Notes] due .
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 [Note], all on the terms set
forth in the Indenture.
The [Notes] due are issuable in registered form without
coupons in denominations of $1,000 or any multiple thereof. In the manner
and subject to the limitations provided in the Indenture, but without the
payment of any service charge, [Notes] due may be exchanged for an
equal aggregate principal amount of [Notes] due 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 [Notes] due may be redeemed at the option of the
Company as a whole, or from time to time in part, on any date on or after
, and prior to maturity, 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 Securities at their last registered
addresses, all as provided in the Indenture, at the following optional
redemption prices (expressed in percentages of the principal amount)
together in each case with accrued interest to the date fixed for
redemption:
If redeemed during the twelve-month period beginning ,
Year Percentage
---- ----------
The Company also will pay on or before the day next
preceding which is a day of the year in The City of New
York, State of New York, which is not a legal holiday or a day
<PAGE>
5
on which banking institutions are authorized by law to close (a "Business
Day"), and at least one Business Day before each thereafter to
and including , to the Trustee in trust as and for a mandatory sinking
fund (the "Mandatory Sinking Fund") for the redemption of [Notes], an
amount in cash (a "Mandatory Sinking Fund Payment") sufficient in each
instance to redeem, at 100% of the principal amount thereof, together with
accrued interest to the date fixed for redemption hereunder (said
percentage of principal amount and accrued interest being hereinafter
called the "Sinking Fund Redemption Price"), [Notes] due , in the
principal amount of $ (or such lesser amount equal to the total
principal amount of [Notes] due then outstanding); provided,
--------
however, that the obligation of the Company to make any Mandatory Sinking
- -------
Fund Payment in cash may, at the option of the Company and as specified by
it in writing to the Trustee on or before the next preceding any such
, be reduced and satisfied to the extent of the aggregate principal
amount of either or both (a) any [Notes] due delivered to the Trustee
by the Company for cancelation prior to such or (b) any [Notes] due
acquired or redeemed prior to such Mandatory Redemption Date
otherwise than through the operation of the Mandatory Sinking Fund, and in
either case not theretofore made the basis for the reduction of a Mandatory
Sinking Fund Payment.
At its option, the Company may pay, as an Optional Sinking Fund
(the "Optional Sinking Fund"; the Mandatory Sinking Fund and the Optional
Sinking Fund being hereinafter collectively referred to as the "Sinking
Fund") for the redemption of [Notes] due , at least one Business Day
before of any one or more of the years to , inclusive, an
additional amount in cash (hereinafter called an "Optional Sinking Fund
Payment") sufficient to redeem at the Sinking Fund Redemption Price [Notes]
due in a principal amount up to but not exceeding $ . If the
Company intends to exercise its right to make an Optional Sinking Fund
Payment in any year, it shall deliver to the Trustee not later than
in such year a Company Request stating that the Company intends to
make before the next ensuing a specified Optional Sinking Fund
Payment. To the extent that such right is not exercised in any year, it
shall not be cumulative or carried forward (except as provided in the
following paragraph) to any subsequent year.
The Trustee shall not redeem any [Notes] due with Sinking
Fund moneys or mail any notice of redemption of [Notes] due
by operation of the Sinking Fund or through optional redemption in part
during the continuance of a default in payment of interest on the [Notes]
due or of any Event of Default (other than an Event of
Default occurring as a consequence of this paragraph), except that if the
notice of redemption of any [Notes] due shall theretofore have been
mailed in accordance with the provisions hereof, the Trustee shall redeem
such [Notes] due if moneys sufficient for that purpose shall be
deposited with the Trustee for that purpose in accordance with the
provisions hereof. Except as aforesaid, any moneys in the Sinking Fund or
held by the Trustee with respect to an optional redemption in part at the
time when any such default or Event of Default shall occur and any moneys
thereafter paid into the Sinking Fund shall, during the continuance of such
default or Event of Default, be held as security for the payment of all the
[Notes] due ; provided, however, that in case such Event of Default or
-------- -------
default shall have been cured or waived as provided herein and in the
Indenture, such moneys shall thereafter be applied on the next date on
which such moneys may be applied pursuant to the provisions hereof and of
the Indenture.
As soon as practicable after in each year commencing with
, the Trustee shall take the action specified in the Indenture to call
for redemption on the next succeeding , at the Sinking Fund
Redemption Price, an amount of [Notes] due sufficient to exhaust, as
nearly as practicable, the sums then held by it in the Sinking Fund or to
be paid to it prior to such for the Sinking Fund pursuant
to the terms hereof; provided, however, that if such sums
--------- -------
<PAGE>
6
aggregate less than $ , such action shall not be taken except upon a
Company Request. The Company hereby irrevocably authorizes the Trustee to
give notice in the name of the Company of the redemption of such [Notes]
due , in the manner and with the effect specified herein and in
the Indenture.
Upon due presentment for registration of transfer of this [Note]
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 [Note] or [Notes] due
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
[Note], 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 [Note] (whether or not this [Note] shall be overdue) for the
purpose of receiving payment of the principal of, premium, if any, and
interest on this [Note] 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 to 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 [Note].
No recourse for the payment of the principal of, premium, if any,
or interest on this [Note], 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 [Note] due 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 [Note], all terms used in this
[Note] which are defined in the Indenture shall have the meanings assigned
to them in the Indenture.
This [Note] shall be governed by and construed in accordance with
the laws of the State of New York.
<PAGE>
Exhibit A.9
(Form of Extendible
Security with Optional
Redemption Provision)
(Form of Face of [ -Year] Extendible Note [Due ])
No.: $ __________
CUSIP No._________
[ -Year) Extendible Note [Due ]
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 or registered assigns,
the principal sum of Dollars, at the office or
agency of the Company in the Borough of Manhattan, The City and State of
New York, on , , 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 (at the
rate per annum from time to time in effect as described below),
semiannually on the and , of each year, on said
principal sum at said office or agency, in like coin or currency, from the
or the , as the case may be, next preceding the date
of this Note 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
Note, or unless no interest has been paid on the Notes of this series, in
which case from , until payment of said principal sum has been
made or duly provided for, with interest on any overdue principal and (to
the extent legally enforceable) overdue installment of interest at the rate
borne by this Note during the [ -month period) [Interest Period] in
which such principal or interest, as the case may be, became due and
payable. Notwithstanding the foregoing, if the date hereof is after
or , as the case may be, and before the following
or , this Note shall bear interest from
such or ; provided, however,
-------- -------
that if the Company shall default in the payment of interest due on such
or , then this Note shall bear interest from the next
preceding or to which interest has been paid, or, if
no interest has been paid on the Notes of this series, from .
The interest so payable on any or will be paid to
the person in whose name this Note is registered at the close of business
on such or , as the case may be, next preceding such
or , 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 Note is registered at the close of business on a special record
date for the payment of such defaulted interest established by notice to
the holders of Notes not less than 10 days preceding such special record
date or may be paid in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Notes of this series
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.
[Interest on the Notes of this series is payable at the rate
of % per annum for the Interest Period from through
, and at a rate per annum established by the Company for each
Interest Period thereafter. The Company shall establish the Interest
Period or Periods, and the
<PAGE>
2
interest rates for such Interest Period or Periods and certain other terms,
in its discretion without limitation, in the manner described on the
reverse hereof.]
[Interest on the Notes of this series is payable at the rate of
% per annum from through , and for each -
month period beginning , and , at a
rate per annum (rounded to the nearest five hundredths of a percentage
point) equal to a percentage (not less than %), established by the
Company on the , preceding each such , of the Effective
Interest Rate on U.S. -Year Treasury Obligations [insert alternate
method or basis for interest rate] (as defined on the reverse side hereof)
determined as of the following such
. In the event that the Company determines on
the preceding such that
during the 10 calendar days preceding such no Weekly
-Year Treasury Rate (as defined on the reverse side
hereof) has been published and the Alternate Treasury Rate (as defined on
the reverse side hereof) could not be determined, the Company shall on
such establish an interest rate in its discretion
without limitation. The Company shall establish such percentage or, if it
has determined an interest rate pursuant to the preceding sentence, the
interest rate by delivery to the Trustee of an Officers' Certificate on
such which Officers' Certificate shall specify the percentage
established by the Company, the method to be used in ascertaining the
interest rate on the following and the interest rate that would
have been applicable to such -month period had such determination been
made as of such or, if the Company has established an interest
rate pursuant to the preceding sentence, shall certify as to the reason why
it did not establish a percentage and shall specify the interest rate
established by the Company. Upon delivery to the Trustee of the Officers'
Certificate, the percentage or interest rate so established shall be
binding upon the Company and the holders of the Notes.
On or before the prior to the commencement of the
-month period to which it applies, the Trustee shall cause notice to
be mailed to each holder of the Notes of this series, which notice shall
specify such percentage, the method to be used in ascertaining the interest
rate on the following and the interest rate that would have been
applicable to such -month period had such determination been made as
of such or, in the absence of such percentage, the interest rate
established by the Company, all as specified in the aforesaid Officers'
Certificate.
The interest rate for any such -month period will be
determined as of the preceding such
-month period based on the percentage established by the Company on the
preceding or, in the absence of such
percentage, will be the interest rate established on such . The
Company shall establish such interest rate based on the aforesaid
percentage applicable to any -month period by
delivery to the Trustee of an Officers' Certificate on or before such
. The Officers' Certificate shall specify the interest rate so
established by the Company and shall certify the method of ascertaining
such rate. Upon delivery to the Trustee, the interest rate so established
shall be binding upon the Company and the holders of the Notes. The
Company shall cause notice of the interest rate established as of the
preceding the commencement of the -month period
to be enclosed with the interest payment checks mailed to the holders of
the Notes for the period ending on the following
such .]
The Notes of this series are subject to repayment on [insert
payment dates], at the option of the holders thereof exercisable on or
before the , but not prior to the
<PAGE>
3
preceding such , at a Repayment Price equal to the principal
amount thereof to be repaid, together with interest payable thereon to the
Repayment Date, as described on the reverse side hereof.
The Notes in this series are redeemable at the option of the
Company, in whole or in part, during the -year period beginning
, at % of their principal amount plus accrued interest to
the date fixed for redemption. [The provisions for redemption of the Notes
at the option of the Company (at not less than 100% of their principal
amount) applicable to any Interest Period thereafter will be determined by
the Company in its discretion without limitation, as described on the
reverse hereof.]
Reference is made to the further provisions of the Note 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 Note 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 by
AUTHENTICATION ___________________
This is one of the Securities of the
Series designated herein issued under the by
within-mentioned Indenture ___________________
, as Trustee
by
_______________________________
Authorized Signatory
<PAGE>
4
(Form of Reverse of [ -Year] Extendible Note
[Due ])
This Note 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
, 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 be subject to different sinking, purchase or analogous
funds (if any), may be subject to different redemption provisions (if any),
may be subject to different covenants and Events of Default and may
otherwise vary as in the Indenture provided. This Note is one of a series
designated as the "[ -Year] Extendible Notes [Due ]" of the
Company issued under the Indenture, limited in aggregate principal amount
to $ (the "Notes").
["Effective Interest Rate on U.S. -Year Treasury
Obligations" means as of any (i) if available, the most recent
Weekly -Year Treasury Rate published during the period beginning on
the preceding such and ending on such or
(ii) if such Weekly -Year Treasury Rate is not available, the
Alternate Treasury Rate as of such . "Weekly -Year Treasury
Rate" means the weekly average yield to maturity values adjusted to a
constant maturity of years as read from the yield curves of the most
actively traded marketable U.S. Treasury fixed interest rate securities
constructed daily by the U.S. Treasury Department as published by the
Federal Reserve Board or any Federal Reserve Bank or by any United States
Government department or agency. Since February 1977, Weekly -Year
Treasury Rates have been published by the Federal Reserve Board weekly in
"Statistical Release H. 15 (519), Selected Interest Rates" as "U.S.
Government securities--Treasury constant maturities". "Alternate Treasury
Rate" means the average yields to maturity of the daily closing bids (or
less frequently if daily quotations shall not be available), quoted by at
least three recognized U.S. Government securities dealers selected by the
Company, for all marketable U.S. Treasury securities with a maturity of at
least months but not more than months from such
(other than securities which can, at the option of the
holder, be surrendered at face value in payment of any Federal estate tax)
for the most recent five consecutive Business Days during which there had
been at least three days on which daily closing bids are quoted within the
period beginning on the preceding such and ending
prior to such .]
[An "Interest Period" shall be a period of one or more whole
years ending on of any year through . The initial
Interest Period shall be the -year period ending . Interest
on the Notes is payable during the initial Interest Period at the rate of
% per annum and for each Interest Period thereafter at a rate per
annum established by the Company in its discretion without limitation as
provided below. The Company shall establish in its discretion without
limitation (except for the percentage limitation set forth in clause (iv)
below) (i) subject to modification as provided in the second succeeding
paragraph, the interest rate or the formula for determining the interest
rate (the "Interest Rate Formula"), (ii) the length of the subsequent
Interest Period, (iii) the period, if any, during such subsequent Interest
Period, in which the Notes are redeemable at the option of the Company (a
"Redeemable Period") and (iv) the percentage or percentages (not less than
100%) of principal amount of the Notes at which the Notes are redeemable
during such Redeemable Period, all
<PAGE>
5
by delivery to the Trustee of an Officers' Certificate on or before the
preceding the commencement of such Interest Period. Any
Interest Rate Formula shall provide for determining the interest rate for
such Interest Period on or prior to the preceding such Interest
Period. If the Company fails to deliver to the Trustee an Officers'
Certificate in the manner described above, (x) the length of the next
Interest Period shall be one year, and (y) the interest rate (subject to
modification as provided in the second succeeding paragraph) and the
redemption provisions applicable during the year in which such failure
occurred shall be applicable during such next Interest Period.]
[On or before the second Business Day following the preceding
commencement of the next Interest Period, the Trustee shall cause notice,
as provided in the Indenture, to be mailed to each holder of the Notes of
(i) the interest rate or the Interest Rate Formula, as the case may be,
and, if the Interest Rate Formula is used, the interest rate that would be
applicable to such Interest Period if such Interest Rate Formula had been
applied as of such , (ii) the length of such
Interest Period, (iii) the Redeemable Period, if any, and (iv) the
percentage or percentages of principal amount of the Notes at which the
Notes are redeemable during such Redeemable Period, all as determined
above.]
[Promptly after the following the giving of the notice
referred to above (but not later than ), the Company may, at its
option, establish an interest rate for the next succeeding Interest Period
higher than the interest rate determined as provided above by causing to be
published in The Wall Street Journal--Eastern Edition (or, if such
-----------------------
newspaper is not then published, a comparable edition or publication) a
notice (a "Wall Street Journal Notice") setting forth, with respect to the
Interest Period commencing on the next , such higher interest
rate. The Wall Street Journal Notice shall be irrevocable and shall be
deemed to amend the notice sent to the holders of the Notes, and the
interest rate for the Interest Period commencing on the next ].
[The Company shall cause notice of the interest rate determined
as provided above to be enclosed with the interest payment checks mailed to
the holders of the Notes for the semiannual period ending on the
preceding the commencement of such Interest Period.]
"Business Day" shall mean a day of the year which in The City of
New York, State of New York, is not a legal holiday or a day on which
banking institutions are authorized by law to close.
The Notes may be redeemed at the option of the Company as a
whole, or from time to time in part, on any date (i) on or after
, and prior to (ii) [during any Redeemable Period]
[insert additional redemption periods], 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 Notes at their last registered addresses,
all as provided in the Indenture. The redemption price [during the period
specified in clause (i) above] shall be % of the principal amount [and
in each period specified in clause (ii) above shall be the percentage
established by the Company] together with accrued interest to the date
fixed for redemption. If this Note is redeemed in part, the principal
amount which remains outstanding shall not be less than $ .
In case an Event of Default with respect to the Notes, 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.
<PAGE>
6
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 provision 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 with respect to the Securities of such
series under the Indenture and its consequences, except a default in the
payment of the principal of, premium, if any, or interest on any Securities
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 Note
shall be conclusive and binding upon such holder and upon all future
holders and owners of this Note and any Notes which may be issued in
exchange or substitution herefor, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Note at the place, at the respective times, at the rate
and in the coin or currency herein prescribed.
The Indenture permits the Company to Discharge its obligations
with respect to the Notes 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 Notes.
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 Note, all on the terms set forth
in the Indenture.
<PAGE>
7
The Notes are subject to repayment in whole, or in part, on
[insert repayment dates] (individually a "Repayment Date"), in increments
of $ or integral multiples of $ in excess of
$ , provided that the portion of the principal amount of any Note
not being repaid shall be at least $ , at the option of the
holders thereof at a repayment price equal to the principal amount thereof
to be repaid, together with interest payable thereon to the Repayment Date
(the "Repayment Price"). For this Note to be repaid at the option of the
holder, the Company must receive at its office or agency in the Borough of
Manhattan, The City and State of New York, on or before the or,
if such is not a Business Day, the next
succeeding Business Day, but not earlier than the
prior to the on which the Repayment
Price will be paid, (i) this Note, with the form entitled "Option to Elect
Repayment" on the reverse side duly completed, or (ii) a telegram, telex,
facsimile transmission or letter from a member of a national securities
exchange or the National Association of Securities Dealers, Inc., or a
commercial bank or a trust company in the United States of America setting
forth the name of the holder of the Note, the principal amount of the Note,
the amount of such Note to be repaid, a statement that the option to elect
repayment is being made thereby and a guarantee that the Note to be repaid
with the form entitled "Option to Elect Repayment" on the reverse side duly
completed will be received by the Company no later than five Business Days
after the date of such telegram, telex, facsimile transmission or letter,
and such Note and form duly completed are received by the Company by such
fifth Business Day. Either form of notice duly received shall be
irrevocable[; provided, however, that if a Wall Street Journal Notice has
-------- -------
been published, such notice may be revoked by the person giving such
notice, by telegram, telex, facsimile transmission or letter if received by
the Company at its office or agency in the Borough of Manhattan, The City
of New York, not later than 5:00 p.m., New York City time, on the first
Business Day following publication of the Wall Street Journal Notice (or
such greater number of Business Days, not exceeding four, as shall be set
forth by the Company in the Wall Street Journal Notice). Such revocation
shall be irrevocable.] All questions as to the validity, eligibility
(including time of receipt) and acceptance of any Notes for repayment will
be determined by the Company, whose determination shall be final and
binding.
The Company may elect, with respect to any Notes which the
registered holders have surrendered for repayment, to designate a purchaser
that will purchase the Notes at a price equal to their principal amount on
the Repayment Date. The Purchaser may resell or otherwise dispose of the
Notes. By surrendering the Notes the holder consents to sell such Notes to
any such purchaser.
The Notes are issuable in registered form without coupons in
denominations of [$100,000] and integral multiples of $1,000 in excess of
$[100,000]. In the manner and subject to the limitations provided in the
Indenture, but without the payment of any service charge, Notes may be
exchanged for an equal aggregate principal amount of Notes 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.
Upon due presentment for registration of transfer of this Note 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 Note or Notes 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
Note, the Company, the Trustee, and any agent of the Company or the Trustee
may deem and treat the registered holder hereof
<PAGE>
8
as the absolute owner of this Note (whether or not this Note shall be
overdue) for the purpose of receiving payment of the principal of, premium,
if any, and interest on this Note, 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 to 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 Note.
No recourse for the payment of the principal of or interest on
this Note, 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
Note 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 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 Note, all terms used in this
Note which are defined in the Indenture shall have the meanings assigned to
them in the Indenture.
This Note shall be governed by and construed in accordance with
the laws of the State of New York.
<PAGE>
9
(Form of Option to Elect Repayment)
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Company to repay the within Note (or portion thereof specified below)
pursuant to its terms at a price equal to the principal amount thereof,
together with interest to the Repayment Date, to the undersigned at
________________________________________________________________________
________________________________________________________________________
(Please Print or Typewrite
Name and Address of the Undersigned)
For this Note to be repaid the Company must receive at its office
-----------------------------------------------------------------
or agency in the Borough of Manhattan, The City and State of New York, or
- -------------------------------------------------------------------------
at such additional place, or places of which the Company shall from time to
- ---------------------------------------------------------------------------
time notify the holder of the within Note, on or before the or,
- --------------------------------------------------------------------------
if such is not a Business Day, the next succeeding Business Day,
- ---------------------------------------------------------------------------
but not earlier than the , prior to [insert repayment dates],
- -----------------------------------------------------------------------
(i) this Note with this "Option to Elect Repayment" form duly completed or
- --------------------------------------------------------------------------
(ii) a telegram, telex, facsimile transmission or letter from a member of a
- ---------------------------------------------------------------------------
national securities exchange or the National Association of Securities
- ----------------------------------------------------------------------
Dealers Inc., or a commercial bank or a trust company in the United States
- --------------------------------------------------------------------------
of America setting forth the name of the holder of the Note, the principal
- --------------------------------------------------------------------------
amount of the Note, the amount of the Note to be repaid, a statement that
- -------------------------------------------------------------------------
the option to elect repayment is being made thereby and a guarantee that
- ------------------------------------------------------------------------
the Note to be repaid with the form entitled "Option to Elect Repayment" on
- ---------------------------------------------------------------------------
the reverse of the Note duly completed will be received by the Company not
- --------------------------------------------------------------------------
later than five Business Days after the date of such telegram, telex,
- ---------------------------------------------------------------------
facsimile transmission or letter, and such Note and form duly completed are
- ---------------------------------------------------------------------------
received by the Company by such fifth Business Day [; and, provided that,
- -------------------------------------------------------------------------
if a Wall Street Journal Notice has been published, either form of notice
- -------------------------------------------------------------------------
has not been revoked as provided in such Note.]
- -----------------------------------------------
If less than the entire principal amount of the within Note is to
be repaid, specify the portion thereof (which shall be $ or an
integral multiple of $ in excess of $ ) which the holder
elects to have repaid: $ ; and specify the denomination or
denominations (which shall be $ or an integral multiple of
$ in excess of $ ) of the Note or
<PAGE>
10
Notes to be issued to the holder for the portion of the within Notes not
being repaid (in the absence of any such specification, one such Note will
be issued for the portion not being repaid): $ .
Dated:
______________________________
Note: The signature to this Option to Elect
Repayment must correspond with the name as
written upon the face of the Note in every
particular without alteration or enlargement.
<PAGE>
Exhibit A.10
(Form of Zero Coupon
Security with
Optional Redemption
Provision.)
(Form of Face of Zero Coupon Security Due )
For purposes of Sections 1273 and 1275 of the United States
Internal Revenue Code of 1986, as amended, the amount of original issue
discount on this [Note] 1/ is % of its principal amount,
-
and the issue date is , 19 , and the yield to maturity is
%. The method used to determine the yield is , and the amount of
original issue discount applicable to the short accrual period of
, 19 , to , 19 , is % of the principal amount of
the [Note].
No.: $
----------------------
CUSIP No.:
---------------------
Zero Coupon [Note] Due
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 or registered assigns, the
principal sum of Dollars, on (such date being
hereinafter referred to as the "Stated Maturity" of this [Note]). The
principal of this [Note] shall not bear interest except in the case of a
default in payment of principal upon acceleration, redemption or Stated
Maturity, and in such case the overdue principal of this [Note] shall bear
interest at the rate of % per annum (to the extent that the payment of
such interest shall be enforceable by applicable law), which shall accrue
from the date of such default in payment to the date payment of such
principal has been made or duly provided for. The principal of and any
such interest on this [Note] are payable in such coin or currency of the
United States of America as at the time of payment is legal tender for
payment of public and private debts, at the office or agency maintained by
the Company for such purposes in the Borough of Manhattan, The City and
State of New York.
Reference is made to the further provisions of this [Note] 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 [Note] 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.
- --------------------
1/ Bracketed references to "Note" or "Notes" should be changed to
-
reflect the designation of the series of Securities being issued.
<PAGE>
2
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated: INTERNATIONAL BUSINESS
MACHINES CORPORATION,
[SEAL]
by
---------------------
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities of by
the Series designated herein issued
under the within-mentioned Indenture.
---------------------
, as Trustee
by
----------------------------------------
Authorized Signatory
<PAGE>
3
(Form of Reverse of Zero Coupon [Note] Due )
This [Note] 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), 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 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 [Note] is one of a series designated as the Zero Coupon
[Notes] due of the Company (hereinafter called the "Zero Coupon
[Notes]") issued under the Indenture, limited in aggregate principal amount
to $ at Stated Maturity.
If an Event of Default with respect to the Zero Coupon [Notes]
shall occur and be continuing, the Trustee or the holders of not less than
25% in principal amount of the Zero Coupon [Notes] outstanding may declare
to be due and payable immediately in the manner and with the effect
provided in the Indenture an amount of principal equal to the sum of
(i) the initial public offering price of the Zero Coupon [Notes], (ii) the
aggregate of the portions of the original issue discount which shall be
added cumulatively each and , computed as provided in
the next succeeding sentence, (iii) accrued amortization of original issue
discount (computed in accordance with generally accepted accounting
practices in effect on ) from the preceding or
to the date of declaration. The portion of the original issue
discount added on each and for the six-month
period ended on such date shall be one-half the yield to maturity times the
amount calculated in accordance with the immediately preceding sentence at
the or next preceding such or
. For the purpose of this computation the initial public
offering price of the Zero Coupon [Notes] is % of their principal amount
and the yield to maturity on the issue date is %. Upon any declaration
such principal together with accrued interest thereon, if any, shall become
immediately due and payable. Upon payment of this amount, all the
Company's obligations in respect of the payment of the principal of and
interest on the Zero Coupon [Notes] shall terminate.
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 provision of the
<PAGE>
4
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 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 with respect to the Securities of such series under the Indenture
and its consequences except a default in the payment of the principal of,
premium, if any, or interest on any of the Securities 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 [Note] shall be conclusive
and binding upon such holder and upon all future holders and owners of this
[Note] and any Zero Coupon [Notes] which may be issued in exchange or
substitution herefor, irrespective of whether or not any notation thereof
is made upon this [Note] or such other Zero Coupon [Notes].
The Indenture permits the Company to Discharge its obligations
with respect to the Zero Coupon [Notes] 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 Zero Coupon [Notes].
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 [Note], all on the terms set
forth in the Indenture.
No reference herein to the Indenture and no provisions of this
[Note] or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of this
[Note] (or any interest on overdue principal) at the place, at the
respective times, at the rate and in the coin or currency herein
prescribed.
The Zero Coupon [Notes] are issuable in registered form without
coupons in denominations of $1,000 or any multiple thereof. In the manner
and subject to the limitations provided in the Indenture, but without the
payment of any service charge, Zero Coupon [Notes] may be exchanged for an
equal aggregate principal amount at Stated Maturity of Zero Coupon [Notes]
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 Zero Coupon [Notes] may be redeemed at the option of the
Company as a whole, or from time to time in part, on [insert redemption
dates] 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 Zero
<PAGE>
5
Coupon [Notes] at their last registered addresses, all as provided in the
Indenture, at [insert redemption price or table].
Upon due presentment for registration of transfer of this [Note]
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 Zero Coupon [Note] or
[Notes] of authorized denominations for an equal aggregate principal amount
at Stated Maturity 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
[Note], 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 [Note] (whether or not this [Note] shall be overdue) for the
purpose of receiving payment of the principal of, premium, if any, and
interest on this Note, 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 to 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 [Note].
No recourse for the payment of the principal of or any interest
on this [Note], 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 Zero Coupon [Note], 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 Note, all terms used in this
[Note] which are defined in the Indenture shall have the meanings assigned
to them in the Indenture.
This [Note] shall be governed by and construed in accordance with
the laws of the State of New York.
<PAGE>
Exhibit A.11
(Form of Original
Issue Discount
Fixed Rate Security
with Optional
Redemption
Provision.)
(Form of Face of Original Issue Discount Security Due )
For purposes of Sections 1273 and 1275 of the United States
Internal Revenue Code of 1986, as amended, the amount of original issue
discount on this Note is % of its principal amount, the issue date is
, 19 , and the yield to maturity is %, the method used to
determine the yield is , and the amount of original issue discount
applicable to the short accrual period of 19 to
19 is % of the principal amount of this Note.
No.: $_____________
CUSIP No.:___________
[Note] Due
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 or registered assigns,
the principal sum of Dollars, at the
office or agency of the Company in the Borough of Manhattan, The City and
State of New York, on (such date being hereinafter
referred to as the "Stated Maturity" of this [Note]), in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts, and to pay interest,
semi-annually, on and of each year,
on said principal sum at said office or agency, in like coin or currency,
at the rate of % per annum, from the or the
, as the case may be, next preceding the date of this [Note]
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 [Note], or
unless no interest has been paid on the [Notes] (as defined on the reverse
hereof), in which case from , until payment of said principal
sum has been made or duly provided for, with interest on any overdue
principal and (to the extent legally enforceable) overdue installment of
interest at the rate of % per annum. Notwithstanding the foregoing,
if the date hereof is after or , as the case
may be, and before the following or
, this [Note] shall bear interest from such
or ; provided, however, that if the Company
-------- -------
shall default in the payment of interest due on such or
, then this [Note] shall bear interest from the next preceding
or to which interest has
been paid, or, if no interest has been paid on the [Notes], from
. The interest so payable on any or
will, subject to certain exceptions provided in the Indenture referred to
on the reverse hereof, be paid to the person in whose name this [Note] is
registered at the close of business on such or , as
the case may be, next preceding such or , 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 [Note] is
<PAGE>
2
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 [Notes] not less than 10 days preceding such special record
date. Payment of interest may, at the option of the Company, be made by
check mailed to the registered address of the person entitled thereto or
may be paid in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the [Notes] may be listed.
Reference is made to the further provisions of this [Note] 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 [Note] 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 by
OF AUTHENTICATION
_______________________________
This is one of the Securities of by
_______________________________
the Series designated herein issued
under the within-mentioned Indenture.
, as Trustee
by
_______________________________________
Authorized Signatory
<PAGE>
3
(Form of Reverse of [Note] Due )
This [Note] 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), 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 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 [Note] is one of a series designated as the
[Notes] due of the Company (hereinafter
called the "[Notes]") issued under the Indenture, limited in aggregate
principal amount to $ at Stated Maturity.
If an Event of Default with respect to the [Notes] shall occur
and be continuing, the Trustee or the holders of not less than 25% in
principal amount of the [Notes] outstanding may declare to be due and
payable immediately in the manner and with the effect provided in the
Indenture an amount of principal and interest equal to the sum of (i) the
initial public offering price of the [Notes], (ii) the aggregate of the
portions of the original issue discount which shall be added cumulatively
each and
, computed as provided in the next succeeding sentence,
(iii) accrued amortization of original issue discount (computed in
accordance with generally accepted accounting practices in effect on
) from the preceding or to the date
of declaration, and (iv) accrued and unpaid interest to the date of
declaration. The portion of the original issue discount added on each
and for the six-month period ended on such date
shall be one-half the yield to maturity times the amount calculated in
accordance with the immediately preceding sentence at the or next
preceding such or . For the purpose of this computation the
initial public offering price of the [Notes] is % of their principal
amount and the yield to maturity on the issue date is %. Upon any
declaration such principal together with accrued interest, if any, shall
become immediately due and payable. Upon payment of this amount, all the
Company's obligations in respect of the payment of the principal of and
interest on the [Notes] shall terminate.
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 provision of the Indenture or
<PAGE>
4
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 a series waive any past default
with respect to the Securities of such series under the Indenture and its
consequences except a default in the payment of the principal of, premium,
if any, or interest on any Securities 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 [Note] shall be conclusive and
binding upon such holder and upon all future holders and owners of this
[Note] and any [Notes] which may be issued in exchange or substitution
therefor, irrespective of whether or not any notation thereof is made upon
this [Note] or such other [Notes].
No reference herein to the Indenture and no provisions of this
[Note] or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this [Note] at the place, at the respective times, at the rate
and in the coin or currency herein prescribed.
The Indenture permits the Company to Discharge its obligations
with respect to the [Notes] 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
[Notes].
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 [Note], all on the terms set
forth in the Indenture.
The [Notes] are issuable in registered form without coupons in
denominations of $[100,000] and any integral multiple of $1,000 in excess
of $[100,000]. In the manner and subject to the limitations provided in
the Indenture, but without the payment of any service charge, [Notes] may
be exchanged for an equal aggregate principal amount at Stated Maturity of
[Notes] 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 [Notes] may be redeemed at the option of the Company as a
whole, or from time to time in part, on [insert redemption dates] 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 [Notes] at their
last registered addresses, all as provided in the Indenture, at [insert
redemption price or table], together in each case with accrued interest to
the date fixed for redemption.
<PAGE>
5
Upon due presentment for registration of transfer of this [Note]
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 [Note] or [Notes] of
authorized denominations for an equal aggregate principal amount at Stated
Maturity 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
[Note], 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 [Note] (whether or not this [Note] shall be overdue) for the
purpose of receiving payment of the principal of, premium, if any, and
interest on this [Note], 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 to 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 [Note].
No recourse for the payment of the principal of or any interest
on this [Note], 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 [Note], 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 [Note], all terms used in this
[Note] which are defined in the Indenture shall have the meanings assigned
to them in the Indenture.
This [Note] shall be governed by and construed in accordance with
the laws of the State of New York.
<PAGE>
EXHIBIT B.1
[FORMS OF CERTIFICATION]
[FORM OF CERTIFICATE TO BE GIVEN BY
PERSON ENTITLED TO RECEIVE BEARER SECURITY]
CERTIFICATE
INTERNATIONAL BUSINESS MACHINES CORPORATION
[Insert title or sufficient description
of Securities to be delivered]
This is to certify that the above-captioned Securities are not
being acquired by or on behalf of a United States person, or for offer to
resell or for resale to a United States person or any person inside the
United States, or, if a beneficial interest in the Securities is being
acquired by a United States person, that such United States person is a
financial institution as defined in Section 1.165-12(c)(1)(v) of the United
States Treasury Regulations, or is acquiring through a financial
institution, and that the Securities are held by a financial institution
that has agreed to comply with the requirements of Section 165(j)(3)(A),
(B) or (C) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder and that it is not purchasing for offer to resell or
for resale inside the United States.
As used herein, "United States person" means any citizen or
resident of the United States, any corporation, partnership or other entity
created or organized in or under the laws of the United States, or any
estate or trust the income of which is subject to United States Federal
income taxation regardless of its source, and "United States" means the
United States of America (including the states and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction.
We undertake to advise you by telex if the above statement as to
beneficial ownership is not correct on the date of delivery of the above-
captioned Securities in bearer form as to all such Securities.
<PAGE>
2
We understand that this certificate may be required in connection
with certain tax legislation in the United States. If administrative or
legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to
produce this certificate or a copy thereof to any interested party in such
proceedings.
Dated: , 19
------------------ --
[To be dated on or after
, 19 the
- -------------------- --
date determined as provided in
the Indenture]
[Name of Person Entitled
to Receive Bearer
Security]
-------------------------
(Authorized Signatory)
Name:
Title:
<PAGE>
EXHIBIT B.2
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
AND CEDEL BANK SOCIETE ANONYME
IN CONNECTION WITH THE EXCHANGE OF A PORTION OF A
TEMPORARY GLOBAL SECURITY]
CERTIFICATE
INTERNATIONAL BUSINESS MACHINES CORPORATION
[Insert title or sufficient description
of Securities to be delivered]
This is to certify with respect to $___________ principal amount
of the above-captioned Securities (i) that we have received from each of
the persons appearing in our records as persons entitled to a portion of
such principal amount (our "Qualified Account Holders") a certificate with
respect to such portion substantially in the form attached hereto and
(ii) that we are not submitting herewith for exchange any portion of the
temporary global Security representing the above-captioned Securities
excepted in such certificates.
We further certify that as of the date hereof we have not
received any notification from any of our Qualified Account Holders to the
effect that the statements made by such Qualified Account Holders with
respect to any portion of the part submitted herewith for exchange are no
longer true and cannot be relied upon as of the date hereof.
Date: ____________, 19__
[To be dated no earlier
than the Exchange Date]
[MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
BRUSSELS OFFICE, as Operator of the
Euro-clear System]
[CEDEL BANK SOCIETE ANONYME]
By ___________________________
<PAGE>
EXHIBIT B.3
[FORM OF CERTIFICATE TO BE GIVEN BY EURO-CLEAR
AND CEDEL BANK SOCIETE ANONYME TO OBTAIN
INTEREST PRIOR TO AN EXCHANGE DATE]
CERTIFICATE
INTERNATIONAL BUSINESS MACHINES CORPORATION
[Insert title or sufficient
description of Securities]
We confirm that the interest payable on the Interest Payment Date
on [Insert Date] will be paid to each of the persons appearing in our
records as being entitled to interest payable on such date from whom we
have received a written certification, dated not earlier than such Interest
Payment Date, substantially in the form attached hereto. We undertake to
retain certificates received from our member organizations in connection
herewith for four years from the end of the calendar year in which such
certificates are received.
We undertake that any interest received by us and not paid as
provided above shall be returned to the Trustee for the above Securities
immediately prior to the expiration of two years after such Interest
Payment Date in order to be repaid by such Trustee to the above issuer at
the end of two years after such Interest Payment Date.
Date:____________, 19__
[To be dated on or after the
relevant Interest Payment Date]
[MORGAN GUARANTY TRUST COMPANY
OF NEW YORK, BRUSSELS OFFICE,
as Operator of the Euro-clear
System]
[CEDEL BANK SOCIETE ANONYME]
By ___________________________
<PAGE>
EXHIBIT B.4
[FORM OF CERTIFICATE TO BE GIVEN BY BENEFICIAL OWNERS
TO OBTAIN INTEREST PRIOR TO AN EXCHANGE DATE]
CERTIFICATE
INTERNATIONAL BUSINESS MACHINES CORPORATION
[Insert title or sufficient
description of Securities]
This is to certify that as of the Interest Payment Date on
[Insert Date] and except as provided in the third paragraph hereof, the
above-captioned Securities held by you for our account are not beneficially
owned by a United States person, and have not been acquired by or on behalf
of a United States person, or for offer to resell or for resale to a
United States person or any person inside the United States, or, if any of
such Securities held by you for our account are beneficially owned by a
United States person, (i) such United States person is a financial
institution within the meaning of Section 1.165-12(c)(1)(v) of the
United States Treasury Regulations purchasing for its own account or has
acquired such Securities through a financial institution and (ii) such
Securities are held by a financial institution that has agreed to comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder and that
it did not purchase for offer to resell or for resale inside the
United States.
As used herein, "United States person" means any citizen or
resident of the United States, any corporation, partnership or other entity
created or organized in or under the laws of the United States or any
estate or trust the income of which is subject to United States Federal
income taxation regardless of its source, and "United States" means the
United States of America (including the states and the District of
Columbia), its territories, its possessions and other areas subject to its
jurisdiction.
This certificate excepts and does not relate to U.S. $_________
principal amount of the above-captioned Securities appearing in your books
as being held for our account as to which we are not yet able to certify
and as to which we understand interest cannot be credited unless and until
we are able to so certify.
<PAGE>
2
We understand that this certificate may be required in connection
with certain tax legislation in the United States. If administrative or
legal proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to
produce this certificate or a copy thereof to any interested party in such
proceedings.
Date:____________, 19__
[To be dated on or after
the 15th day before the
relevant Interest Payment Date]
[Name of Person Entitled
to Receive Interest]
_________________________
(Authorized Signature)
Name:
Title:
<PAGE>
EXHIBIT B.5
[FORM OF CONFIRMATION TO BE SENT TO
PURCHASERS OF BEARER SECURITIES]
By your purchase of the securities referred to in the
accompanying confirmation (the "Securities"):
You represent that you are not a United States person or, if you
are a United States person, you are a financial institution as that term is
defined in Section 1.165-12(c)(1)(v) of the United States Treasury
Regulations, or are acquiring through a financial institution, and that the
Securities will be held by a financial institution that agrees to comply
with the requirements of Section 165(j)(3)(A), (B) or (C) of the
United States Internal Revenue Code of 1986, as amended, and the
regulations thereunder and are not purchasing the Securities on behalf of
any United States person other than such a financial institution or for
offer to resell or for resale inside the United States.
If you are a dealer, (a) you also represent that you have not
offered, sold or delivered, and agree that you will not offer, sell, resell
or deliver, any of such Securities, directly or indirectly, in the
United States or to any United States person other than such a financial
institution and (b) you agree that you will deliver to all purchasers of
such Securities from you a written statement in this form.
As used herein, "United States" means the United States of
America (including the states and the District of Columbia), its
territories, its possessions and other areas subject to its jurisdiction
and "United States person" means a citizen or resident of the
United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States and an estate or trust
the income of which is subject to United States Federal income taxation
regardless of its source.
EXHIBIT (5)
CRAVATH, SWAINE & MOORE
Worldwide Plaza
825 Eighth Avenue
New York, N.Y. 10019
International Business Machines Corporation
Ladies & Gentlemen:
We have acted as counsel for International Business Machines
Corporation, a New York corporation (the "Company"), in connection with the
proposed issuance and sale from time to time pursuant to Rule 415 under the
Securities Act of 1993 (the "Securities Act") of up to $2,000,000,000 of
senior or subordinated debt securities (the "Debt Securities") of the
Company to be issued under an Indenture dated as of October 1, 1993, as
supplemented by the First Supplemental Indenture thereto dated as of
December 15, 1995, (the "Senior Indenture"), between the Company and The
Chase Manhattan Bank (National Association) (the "Senior Trustee") or an
Indenture (the "Subordinated Indenture") to be entered into between the
Company and a Trustee (the "Subordinated Trustee"), preferred stock (the
"Preferred Stock") of the Company, Depositary Shares (the "Depositary
Shares") of the Company representing a fractional interest in a share of
Preferred Stock, capital stock (the "Capital Stock") of the Company and/or
warrants to purchase Debt Securities, Preferred Stock or Capital Stock (the
"Warrants") of the Company (the Debt Securities, Preferred Stock,
Depositary Shares, Capital Stock and Warrants are collectively referred to
herein as the "Securities").
In that connection, we have examined originals,or copies
certified or otherwise identified to our satisfaction, of such documents,
corporate records and other instruments as we have deemed necessary for the
purposes of this opinion, including the following: (a) the Certificate of
Incorporation of the Company, as amended; (b) the By-laws of the Company;
(c) the Senior Indenture; and (d) the forms of Subordinated Indenture and
Deposit Agreement (the "Deposit Agreement") filed as Exhibits to the
Registration Statement.
Based upon and subject to the foregoing and assuming that (i) the
Registration Statement and any
<PAGE>
2
amendments thereto (including post-effective amendments) will have become
effective and comply with all applicable laws; (ii) the Registration
Statement will be effective and will comply with all applicable laws at the
time the Securities are offered or issued as contemplated by the
Registration Statement; (iii) a Prospectus Supplement or term sheet will
have been prepared and filed with the Securities and Exchange Commission
describing the Securities offered thereby and will comply with all
applicable laws; (iv) all Securities will be issued and sold in compliance
with applicable federal and state securities laws and in the manner stated
in the Registration Statement and the appropriate Prospectus Supplement;
(v) a definitive purchase, underwriting or similar agreement with respect
to any Securities offered or issued will have been duly authorized and
validly executed and delivered by the Company and the other parties
thereto; and (vi) any Securities issuable upon conversion, exchange or
exercise of any Security being offered or issued will be duly authorized,
created and, if appropriate, reserved for issuance upon such conversion,
exchange or exercise, we are of opinion as follows:
(1) the Company is a validly existing corporation under the laws
of the Sate of New York;
(2) with respect to Debt Securities to be issued under either the
Senior Indenture or Subordinated Indenture, when (A) the Senior
Trustee or Subordinated Trustee, as applicable, is qualified to act as
Senior Trustee or Subordinated Trustee, as applicable, under the
Senior Indenture or Subordinated Indenture, as applicable, (B) the
Senior Trustee or Subordinated Trustee, as applicable, has duly
executed and delivered the Subordinated Indenture or Senior Indenture,
as applicable, (C) the Senior Indenture or Subordinated Indenture, as
applicable, has been duly authorized and validly executed and
delivered by the Company to the Senior Trustee or Subordinated
Trustee, as applicable, (D) the Senior Indenture or Subordinated
Indenture, as applicable, has been duly qualified under the Trust
Indenture Act of 1939, as amended, (E) the Board of Directors of the
Company or a duly constituted and acting committee thereof (such Board
of Directors or committee being hereinafter referred to as the
"Board") has taken all necessary corporate action to approve the
issuance and terms of such Debt Securities, the terms of the offering
thereof and related matters, and
<PAGE>
3
(F) such Debt Securities have been duly executed, authenticated,
issued and delivered in accordance with the provisions of the Senior
Indenture or Subordinated Indenture, as applicable, and the applicable
definitive purchase, underwriting or similar agreement approved by the
Board upon payment of the consideration therefor provided for therein,
such Debt Securities will be validly issued and will constitute valid
and binding obligations of the Company, enforceable against the
Company in accordance with their terms, (subject to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws affecting creditors' rights generally
from time to time in effect and subject to general principles of
equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law);
(3) with respect to shares of Preferred Stock, when both (A) the
Board has taken all necessary corporate action to approve the issuance
and terms of the shares of Preferred Stock, the terms of the offering
thereof, and related matters, including the adoption of a Certificate
of Amendment relating to such Preferred Stock (a "Certificate") and
the filing of the Certificate with the Secretary of State of the State
of New York, and (B) certificates representing the shares of Preferred
Stock have been duly executed, countersigned, registered and delivered
either (i) in accordance with the applicable definitive purchase,
underwriting or similar agreement approved by the Board upon payment
of the consideration therefor (not less than the par value of the
Preferred Stock) provided for therein or (ii) upon conversion or
exercise of any other Security, in accordance with the terms of such
Security or the instrument governing such Security providing for such
conversion or exercise as approved by the Board, for the consideration
approved by the Board (not less than the par value of the Preferred
Stock), then the shares of Preferred Stock will be validly issued,
fully paid and nonassessable;
(4) with respect to Depositary Shares, when (A) the Board has
taken all necessary corporate action to approve the issuance and terms
of the Depositary Shares, the terms of the offering thereof, and
related matters, including the adoption of a Certificate relating to
the Preferred Stock underlying such Depositary Shares and the filing
of the Certificate
<PAGE>
4
with the Secretary of State of the State of New York, (B) the Deposit
Agreement or Agreements relating to the Depositary Shares and the
related Depositary Receipts have been duly authorized and validly
executed and delivered by the Company and the Depositary appointed by
the Company, (C) the shares of Preferred Stock underlying such
Depositary Shares have been deposited with a bank or trust company
(which meets the requirements for the Depositary set forth in the
Registration Statement) under the applicable Deposit Agreement, and
(D) the Depositary Receipts representing the Depositary Shares have
been duly executed, countersigned, registered and delivered in
accordance with the appropriate Deposit Agreement and the applicable
definitive purchase, underwriting or similar agreement approved by the
Board upon payment of the consideration therefor provided for therein,
the Depositary Shares will be validly issued;
(5) With respect to shares of Capital Stock when both (A) the
Board has taken all necessary corporate action to approve the issuance
of and the terms of the offering of the shares of Capital Stock and
related matters and (B) certificates representing the shares of
Capital Stock have been duly execute, countersigned, registered and
delivered either (i) in accordance with the applicable definitive
purchase, underwriting or similar agreement approved by the Board upon
payment of the consideration therefor (not less than the par value of
the Capital Stock) provided for therein or (ii) upon conversion or
exercise of any other Security, in accordance with the terms of such
Security or the instrument governing such Security providing for such
conversion or exercise as approved by the Board, for the consideration
approved by the Board (not less than the par value of the Capital
Stock), then the shares of Capital Stock will be validly issued, fully
paid and nonassessable; and
(6) with respect to the Warrants, when (A) the Board has taken
all necessary corporate action to approve the creation of and the
issuance and terms of the Warrants, the terms of the offering thereof,
and related matters, (B) the Warrant Agreement or Agreements relating
to the Warrants have been duly authorized and validly executed and
delivered by the Company and the Warrant Agent appointed by the
Company, and (C) the Warrants or certificates representing the
<PAGE>
5
Warrants have been duly executed, countersigned, registered and
delivered in accordance with the appropriate Warrant Agreement or
Agreements and the applicable definitive purchase, underwriting or
similar agreement approved by the Board upon payment of the
consideration therefor provided for therein, the Warrants will be
validly issued.
We know that we may be referred to, as counsel who has passed
upon the validity of the Debt Securities or the issuance of the Preferred
Stock, Depositary Shares, Capital Stock or Warrants on behalf of the
Company, in a supplement to the Prospectus forming a part of the
Registration Statement on Form S-3 relating to the Securities filed with
the Securities and Exchange Commission pursuant to the Securities Act, and
we hereby consent to such use of our name in said Registration Statement
and to the use of this opinion for filing with said Registration Statement
as Exhibit (5) thereto.
Very truly yours,
/s/ Cravath, Swaine & Moore
-----------------------------
CRAVATH, SWAINE & MOORE
International Business Machines Corporation,
Armonk, New York 10504
EXHIBIT (12)
INTERNATIONAL BUSINESS MACHINES CORPORATION
AND SUBSIDIARY COMPANIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK
DIVIDENDS FOR THE ENTERPRISE AS A WHOLE
(DOLLARS IN MILLIONS)
(UNAUDITED)
<TABLE><CAPTION>
9 MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------------------ --------------------------------------------------------
1995 1994 1994 1993 1992 1991(2) 1990(2)
---- ---- ---- ---- ---- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings before income
taxes and changes in
accounting
principle(1)....... $15,329 $3,172 $5,253 $(8,432) $(8,861) $ 234 $10,229
Add:
Fixed charges,
excluding
capitalized interest 1,514 2,021 2,450 2,853 3,348 3,269 3,160
------ ------ ------ ------- ------- ------- -------
Earnings as adjusted... $6,843 $5,193 $7,703 $(5,579) $(5,513) $ 3,503 $13,389
====== ====== ====== ======= ======= ======= =======
Fixed charges:
Interest expense..... $1,209 $1,621 $2,025 $ 2,291 $ 2,645 $ 2,584 $ 2,525
Capitalized
interest............. 16 18 20 46 101 143 122
Portion of rental
expense
representative of
interest........... 305 400 425 562 703 685 635
------ ------ ------ ------- ------- ------- -------
Total fixed charges.... $1,530 $2,039 $2,470 $ 2,899 $ 3,449 $ 3,412 $ 3,282
Preferred stock
dividends(3)......... 32 108 144 47 0 0 0
Combined fixed charges
and preferred stock
dividends............ $1,562 $2,147 $2,614 $ 2,946 $ 3,449 $ 3,412 $ 3,282
====== ====== ====== ======= ======= ======= =======
Ratio of earnings to
fixed charges........ 4.5 2.5 3.1 (A) (A) 1.0 4.1
Ratio of earnings to
combined fixed charges
and preferred stock
dividends........... 4.4 2.4 2.9 (A) (A) 1.0 4.1
</TABLE>
- ------------
(1) Earnings before income taxes and changes in accounting principle excludes
the company's share in the income and losses of less than fifty percent
owned affiliates.
(2) Restated for AICPA Statement of Position, "Software Revenue Recognition."
(3) The company reported on Form 10-Q for the nine months ended September 30,
1995 preferred stock dividends and transaction costs totaling $57 million.
Excluded from the ratio computation are transaction costs of $42 million
relating to the repurchase of Series A 7 1/2 percent preferred stock
depositary shares. Included are preferred stock dividends of $15 million, or
$32 million representing the pre-tax earnings which would be required to
cover such dividend requirements based on IBM's effective income tax rate.
For the periods ending September 30 and December 31, 1994, preferred stock
dividends are also on a pre-tax earnings basis.
(A) No ratios are shown for these periods as earnings were insufficient to cover
fixed charges and, in 1993, combined fixed charges and preferred stock
dividends. As a result of the net loss incurred for the year ended December
31, 1993, earnings were inadequate to cover fixed charges and combined fixed
charges and preferred stock dividends by $8,478 million and $8,525 million,
respectively. As a result of the net loss incurred for the year ended
December 31, 1992, earnings were inadequate to cover fixed charges by $8,962
million.
EXHIBIT(23)(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 20, 1995, which appears on page 35 of the 1994 Annual Report to
Stockholders of International Business Machines Corporation, which is
incorporated by reference in International Business Machines Corporation's
Annual Report on Form 10-K for the year ended December 31, 1994. We also consent
to the incorporation by reference of our report on the Financial Statement
Schedules, which appears on page 7 of such Annual Report on Form 10-K and to the
reference to us under the heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, NY 10036
December 18, 1995
EXHIBIT (24)(a)-1
POWER OF ATTORNEY OF LOUIS V. GERSTNER, JR.
-------------------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned
Chairman of the Board of Directors and Chief Executive Officer of
International Business Machines Corporation, a New York corporation (the
"Corporation"), which may file with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., under the provisions of the Securities Act
of 1933, a shelf registration statement pursuant to Rule 415 under the
Securities Act of 1933 of up to an aggregate of $2,000,000,000 (including
$250,000,000 issuable pursuant to Registration Statement No. 33-50537), of
Indebtedness, Preferred Stock, Depositary Shares, Capital Stock and
Warrants (collectively the "Securities") of the Corporation, hereby
constitute and appoint G. Richard Thoman, Lawrence R. Ricciardi, Jeffrey
D. Serkes, James M. Alic and John E. Hickey, and each of them, my true and
lawful attorneys-in-fact and agents, with full power to act, together or
each without the others, for me and in my name, place and stead, in any and
all capacities, to sign, or cause to be signed electronically, such
registration statement and any and all amendments to the aforementioned
registration statement, and to file said registration statement and
amendments thereto so signed with all exhibits thereto, and any and all
other documents in connection therewith, with the SEC, hereby granting unto
said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as I might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any of them may lawfully do
or cause to be done by virtue hereof.
This authorization shall remain if effect from November 28, 1995
through November 30, 1997.
<PAGE>
2
IN WITNESS WHEREOF, I, the undersigned, have executed this Power
of Attorney as of this 28th day of November, 1995.
/s/ Louis V. Gerstner, Jr.
------------------------------
Louis V. Gerstner, Jr.
Chairman of the Board of
Directors and Chief
Executive Officer
EXHIBIT (24)(a)-2
POWER OF ATTORNEY OF G. RICHARD THOMAN
--------------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned Senior
Vice President and Chief Financial Officer (Principal Financial Officer) of
International Business Machines Corporation, a New York corporation (the
"Corporation"), which may file with the Securities and Exchange Commission
(the "SEC"), Washington, D.C., under the provisions of the Securities Act
of 1933, a shelf registration statement pursuant to Rule 415 under the
Securities Act of 1933 of up to an aggregate of $2,000,000,000 (including
$250,000,000 issuable pursuant to Registration Statement No. 33-50537), of
Indebtedness, Preferred Stock, Depositary Shares, Capital Stock and
Warrants (collectively the "Securities") of the Corporation, hereby
constitute and appoint Lawrence R. Ricciardi, Jeffrey D. Serkes, James A.
Alic and John E. Hickey, and each of them, my true and lawful attorneys-in-
fact and agents, with full power to act, together or each without the
others, for me and in my name, place and stead, in any and all capacities,
to sign, or cause to be signed electronically, such registration statement
and any and all amendments to the aforementioned registration statement,
and to file said registration statement and amendments thereto so signed
with all exhibits thereto, and any and all other documents in connection
therewith, with the SEC, hereby granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform any
and all acts and things requisite and necessary to be done in and about the
premises, as fully to all intents and purpose as I might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents or any of them may lawfully do or cause to be done by virtue hereof.
This authorization shall remain in effect from November 28, 1995
through November 30, 1997.
<PAGE>
2
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 15th day of December, 1995.
/s/ G. Richard Thoman
------------------------------
G. Richard Thoman
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
Exhibit (24)(a)-3
POWER OF ATTORNEY OF JAMES M. ALIC
----------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I the undersigned Vice
President and Controller (Principal Accounting Officer) of International
Business Machines Corporation, a New York corporation (the "Corporation"),
which may file with the Securities and Exchange Commission (the "SEC"),
Washington, D.C., under the provisions of the Securities Act of 1933, a
shelf registration statement pursuant to Rule 415 under the Securities Act
of 1933 of up to an aggregate of $2,000,000,000 (including $250,000,000
issuable pursuant to Registration Statement No. 33-50537), of Indebtedness,
Preferred Stock, Depositary Shares, Capital Stock and Warrants
(collectively the "Securities") of the Corporation, hereby constitute and
appoint G. Richard Thoman, Lawrence R. Ricciardi, Jeffrey D. Serkes, and
John E. Hickey, and each of them, my true and lawful attorneys-in-fact and
agents, with full power to act, together or each without the others, for me
and in my name, place and stead, in any and all capacities, to sign, or
cause to be signed electronically, such registration statement and any and
all amendments to the aforementioned registration statement, and to file
said registration statement and any and all amendments thereto so signed
with all exhibits thereto, with the SEC, hereby granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to
do and perform any and all acts and things requisite and necessary to be
done in and about the premises, as fully to all intents and purposes as I
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them may lawfully do or cause to be
done by virtue hereof.
This authorization shall remain in effect from November 28, 1995
through November 30, 1997.
<PAGE>
2
IN WITNESS WHEREOF, I, the undersigned, have executed this Power of
Attorney as of this 28th day of November, 1995.
/s/ James M. Alic
-----------------------------
James M. Alic
Vice President and Controller
(Principal Accounting Officer)
EXHIBIT (24)(a)-4
POWER OF ATTORNEY OF IBM DIRECTOR
---------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned
Director of International Business Machines Corporation, a New York
corporation (the "Corporation"), which may file with the Securities and
Exchange Commission (the "SEC"), Washington, D.C., under the provisions of
the Securities Act of 1933, a shelf registration statement pursuant to
Rule 415 under the Securities Act of 1933 of up to an aggregate of
$2,000,000,000 (including $250,000,000 issuable pursuant to Registration
Statement No. 33-50537), of Indebtedness, Preferred Stock, Depositary
Shares, Capital Stock and Warrants (collectively the "Securities") of the
Corporation, hereby constitute and appoint Louis V. Gerstner, Jr.,
G. Richard Thoman, Lawrence R. Ricciardi, Jeffrey D. Serkes, James M. Alic
and John E. Hickey, and each of them, my true and lawful attorneys-in-fact
and agents, with full power to act, together or each without the others,
for me and in my name, place and stead, in any and all capacities, to sign,
or cause to be signed electronically, such registration statement and any
and all amendments to the aforementioned registration statement, and to
file said registration statement and amendments thereto so signed with all
exhibits thereto, and any and all other documents in connection therewith,
with the SEC, hereby granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them may lawfully do or cause to be done by virtue hereof.
This authorization shall remain if effect from November 28, 1995
through November 30, 1997.
<PAGE>
2
IN WITNESS WHEREOF, I, the undersigned, have executed this Power
of Attorney as of this 28th day of December, 1995.
/s/ Cathleen Black
-------------------------
Director
EXHIBIT (24)(a)-5
POWER OF ATTORNEY OF IBM DIRECTOR
---------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned
Director of International Business Machines Corporation, a New York
corporation (the "Corporation"), which may file with the Securities and
Exchange Commission (the "SEC"), Washington, D.C., under the provisions of
the Securities Act of 1933, a shelf registration statement pursuant to
Rule 415 under the Securities Act of 1933 of up to an aggregate of
$2,000,000,000 (including $250,000,000 issuable pursuant to Registration
Statement No. 33-50537), of Indebtedness, Preferred Stock, Depositary
Shares, Capital Stock and Warrants (collectively the "Securities") of the
Corporation, hereby constitute and appoint Louis V. Gerstner, Jr.,
G. Richard Thoman, Lawrence R. Ricciardi, Jeffrey D. Serkes, James M. Alic
and John E. Hickey, and each of them, my true and lawful attorneys-in-fact
and agents, with full power to act, together or each without the others,
for me and in my name, place and stead, in any and all capacities, to sign,
or cause to be signed electronically, such registration statement and any
and all amendments to the aforementioned registration statement, and to
file said registration statement and amendments thereto so signed with all
exhibits thereto, and any and all other documents in connection therewith,
with the SEC, hereby granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them may lawfully do or cause to be done by virtue hereof.
This authorization shall remain if effect from November 28, 1995
through November 30, 1997.
<PAGE>
2
IN WITNESS WHEREOF, I, the undersigned, have executed this Power
of Attorney as of this 28th day of December, 1995.
/s/ Harold Brown
-----------------------
Director
EXHIBIT (24)(a)-6
POWER OF ATTORNEY OF IBM DIRECTOR
---------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned
Director of International Business Machines Corporation, a New York
corporation (the "Corporation"), which may file with the Securities and
Exchange Commission (the "SEC"), Washington, D.C., under the provisions of
the Securities Act of 1933, a shelf registration statement pursuant to
Rule 415 under the Securities Act of 1933 of up to an aggregate of
$2,000,000,000 (including $250,000,000 issuable pursuant to Registration
Statement No. 33-50537), of Indebtedness, Preferred Stock, Depositary
Shares, Capital Stock and Warrants (collectively the "Securities") of the
Corporation, hereby constitute and appoint Louis V. Gerstner, Jr.,
G. Richard Thoman, Lawrence R. Ricciardi, Jeffrey D. Serkes, James M. Alic
and John E. Hickey, and each of them, my true and lawful attorneys-in-fact
and agents, with full power to act, together or each without the others,
for me and in my name, place and stead, in any and all capacities, to sign,
or cause to be signed electronically, such registration statement and any
and all amendments to the aforementioned registration statement, and to
file said registration statement and amendments thereto so signed with all
exhibits thereto, and any and all other documents in connection therewith,
with the SEC, hereby granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them may lawfully do or cause to be done by virtue hereof.
This authorization shall remain if effect from November 28, 1995
through November 30, 1997.
<PAGE>
2
IN WITNESS WHEREOF, I, the undersigned, have executed this Power
of Attorney as of this 28th day of December, 1995.
/s/ Fritz Gerber
-----------------------
Director
EXHIBIT (24)(a)-7
POWER OF ATTORNEY OF IBM DIRECTOR
---------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned
Director of International Business Machines Corporation, a New York
corporation (the "Corporation"), which may file with the Securities and
Exchange Commission (the "SEC"), Washington, D.C., under the provisions of
the Securities Act of 1933, a shelf registration statement pursuant to
Rule 415 under the Securities Act of 1933 of up to an aggregate of
$2,000,000,000 (including $250,000,000 issuable pursuant to Registration
Statement No. 33-50537), of Indebtedness, Preferred Stock, Depositary
Shares, Capital Stock and Warrants (collectively the "Securities") of the
Corporation, hereby constitute and appoint Louis V. Gerstner, Jr.,
G. Richard Thoman, Lawrence R. Ricciardi, Jeffrey D. Serkes, James M. Alic
and John E. Hickey, and each of them, my true and lawful attorneys-in-fact
and agents, with full power to act, together or each without the others,
for me and in my name, place and stead, in any and all capacities, to sign,
or cause to be signed electronically, such registration statement and any
and all amendments to the aforementioned registration statement, and to
file said registration statement and amendments thereto so signed with all
exhibits thereto, and any and all other documents in connection therewith,
with the SEC, hereby granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them may lawfully do or cause to be done by virtue hereof.
This authorization shall remain if effect from November 28, 1995
through November 30, 1997.
<PAGE>
2
IN WITNESS WHEREOF, I, the undersigned, have executed this Power
of Attorney as of this 28th day of December, 1995.
/s/ Nannerl O. Keohane
-------------------------
Director
EXHIBIT (24)(a)-8
POWER OF ATTORNEY OF IBM DIRECTOR
---------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned
Director of International Business Machines Corporation, a New York
corporation (the "Corporation"), which may file with the Securities and
Exchange Commission (the "SEC"), Washington, D.C., under the provisions of
the Securities Act of 1933, a shelf registration statement pursuant to
Rule 415 under the Securities Act of 1933 of up to an aggregate of
$2,000,000,000 (including $250,000,000 issuable pursuant to Registration
Statement No. 33-50537), of Indebtedness, Preferred Stock, Depositary
Shares, Capital Stock and Warrants (collectively the "Securities") of the
Corporation, hereby constitute and appoint Louis V. Gerstner, Jr.,
G. Richard Thoman, Lawrence R. Ricciardi, Jeffrey D. Serkes, James M. Alic
and John E. Hickey, and each of them, my true and lawful attorneys-in-fact
and agents, with full power to act, together or each without the others,
for me and in my name, place and stead, in any and all capacities, to sign,
or cause to be signed electronically, such registration statement and any
and all amendments to the aforementioned registration statement, and to
file said registration statement and amendments thereto so signed with all
exhibits thereto, and any and all other documents in connection therewith,
with the SEC, hereby granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them may lawfully do or cause to be done by virtue hereof.
This authorization shall remain if effect from November 28, 1995
through November 30, 1997.
<PAGE>
2
IN WITNESS WHEREOF, I, the undersigned, have executed this Power
of Attorney as of this 28th day of December, 1995.
/s/ Charles F. Knight
-------------------------
Director
EXHIBIT (24)(a)-9
POWER OF ATTORNEY OF IBM DIRECTOR
---------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned
Director of International Business Machines Corporation, a New York
corporation (the "Corporation"), which may file with the Securities and
Exchange Commission (the "SEC"), Washington, D.C., under the provisions of
the Securities Act of 1933, a shelf registration statement pursuant to
Rule 415 under the Securities Act of 1933 of up to an aggregate of
$2,000,000,000 (including $250,000,000 issuable pursuant to Registration
Statement No. 33-50537), of Indebtedness, Preferred Stock, Depositary
Shares, Capital Stock and Warrants (collectively the "Securities") of the
Corporation, hereby constitute and appoint Louis V. Gerstner, Jr.,
G. Richard Thoman, Lawrence R. Ricciardi, Jeffrey D. Serkes, James M. Alic
and John E. Hickey, and each of them, my true and lawful attorneys-in-fact
and agents, with full power to act, together or each without the others,
for me and in my name, place and stead, in any and all capacities, to sign,
or cause to be signed electronically, such registration statement and any
and all amendments to the aforementioned registration statement, and to
file said registration statement and amendments thereto so signed with all
exhibits thereto, and any and all other documents in connection therewith,
with the SEC, hereby granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them may lawfully do or cause to be done by virtue hereof.
This authorization shall remain if effect from November 28, 1995
through November 30, 1997.
<PAGE>
2
IN WITNESS WHEREOF, I, the undersigned, have executed this Power
of Attorney as of this 28th day of December, 1995.
/s/ Lucio A. Noto
-------------------------
Director
EXHIBIT (24)(a)-10
POWER OF ATTORNEY OF IBM DIRECTOR
---------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned
Director of International Business Machines Corporation, a New York
corporation (the "Corporation"), which may file with the Securities and
Exchange Commission (the "SEC"), Washington, D.C., under the provisions of
the Securities Act of 1933, a shelf registration statement pursuant to
Rule 415 under the Securities Act of 1933 of up to an aggregate of
$2,000,000,000 (including $250,000,000 issuable pursuant to Registration
Statement No. 33-50537), of Indebtedness, Preferred Stock, Depositary
Shares, Capital Stock and Warrants (collectively the "Securities") of the
Corporation, hereby constitute and appoint Louis V. Gerstner, Jr.,
G. Richard Thoman, Lawrence R. Ricciardi, Jeffrey D. Serkes, James M. Alic
and John E. Hickey, and each of them, my true and lawful attorneys-in-fact
and agents, with full power to act, together or each without the others,
for me and in my name, place and stead, in any and all capacities, to sign,
or cause to be signed electronically, such registration statement and any
and all amendments to the aforementioned registration statement, and to
file said registration statement and amendments thereto so signed with all
exhibits thereto, and any and all other documents in connection therewith,
with the SEC, hereby granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them may lawfully do or cause to be done by virtue hereof.
This authorization shall remain if effect from November 28, 1995
through November 30, 1997.
<PAGE>
2
IN WITNESS WHEREOF, I, the undersigned, have executed this Power
of Attorney as of this 28th day of December, 1995.
/s/ John B. Slaughter
-------------------------
Director
EXHIBIT (24)(a)-11
POWER OF ATTORNEY OF IBM DIRECTOR
---------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned
Director of International Business Machines Corporation, a New York
corporation (the "Corporation"), which may file with the Securities and
Exchange Commission (the "SEC"), Washington, D.C., under the provisions of
the Securities Act of 1933, a shelf registration statement pursuant to
Rule 415 under the Securities Act of 1933 of up to an aggregate of
$2,000,000,000 (including $250,000,000 issuable pursuant to Registration
Statement No. 33-50537), of Indebtedness, Preferred Stock, Depositary
Shares, Capital Stock and Warrants (collectively the "Securities") of the
Corporation, hereby constitute and appoint Louis V. Gerstner, Jr.,
G. Richard Thoman, Lawrence R. Ricciardi, Jeffrey D. Serkes, James M. Alic
and John E. Hickey, and each of them, my true and lawful attorneys-in-fact
and agents, with full power to act, together or each without the others,
for me and in my name, place and stead, in any and all capacities, to sign,
or cause to be signed electronically, such registration statement and any
and all amendments to the aforementioned registration statement, and to
file said registration statement and amendments thereto so signed with all
exhibits thereto, and any and all other documents in connection therewith,
with the SEC, hereby granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them may lawfully do or cause to be done by virtue hereof.
This authorization shall remain if effect from November 28, 1995
through November 30, 1997.
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IN WITNESS WHEREOF, I, the undersigned, have executed this Power
of Attorney as of this 28th day of December, 1995.
/s/ Alex Trotman
-------------------------
Director
EXHIBIT (24)(a)-12
POWER OF ATTORNEY OF IBM DIRECTOR
---------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned
Director of International Business Machines Corporation, a New York
corporation (the "Corporation"), which may file with the Securities and
Exchange Commission (the "SEC"), Washington, D.C., under the provisions of
the Securities Act of 1933, a shelf registration statement pursuant to
Rule 415 under the Securities Act of 1933 of up to an aggregate of
$2,000,000,000 (including $250,000,000 issuable pursuant to Registration
Statement No. 33-50537), of Indebtedness, Preferred Stock, Depositary
Shares, Capital Stock and Warrants (collectively the "Securities") of the
Corporation, hereby constitute and appoint Louis V. Gerstner, Jr.,
G. Richard Thoman, Lawrence R. Ricciardi, Jeffrey D. Serkes, James M. Alic
and John E. Hickey, and each of them, my true and lawful attorneys-in-fact
and agents, with full power to act, together or each without the others,
for me and in my name, place and stead, in any and all capacities, to sign,
or cause to be signed electronically, such registration statement and any
and all amendments to the aforementioned registration statement, and to
file said registration statement and amendments thereto so signed with all
exhibits thereto, and any and all other documents in connection therewith,
with the SEC, hereby granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them may lawfully do or cause to be done by virtue hereof.
This authorization shall remain if effect from November 28, 1995
through November 30, 1997.
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2
IN WITNESS WHEREOF, I, the undersigned, have executed this Power
of Attorney as of this 28th day of December, 1995.
/s/ Lodewijk C. van Wachem
------------------------------
Director
EXHIBIT (24)(a)-13
POWER OF ATTORNEY OF IBM DIRECTOR
---------------------------------
KNOW ALL PERSONS BY THESE PRESENTS, that I, the undersigned
Director of International Business Machines Corporation, a New York
corporation (the "Corporation"), which may file with the Securities and
Exchange Commission (the "SEC"), Washington, D.C., under the provisions of
the Securities Act of 1933, a shelf registration statement pursuant to
Rule 415 under the Securities Act of 1933 of up to an aggregate of
$2,000,000,000 (including $250,000,000 issuable pursuant to Registration
Statement No. 33-50537), of Indebtedness, Preferred Stock, Depositary
Shares, Capital Stock and Warrants (collectively the "Securities") of the
Corporation, hereby constitute and appoint Louis V. Gerstner, Jr.,
G. Richard Thoman, Lawrence R. Ricciardi, Jeffrey D. Serkes, James M. Alic
and John E. Hickey, and each of them, my true and lawful attorneys-in-fact
and agents, with full power to act, together or each without the others,
for me and in my name, place and stead, in any and all capacities, to sign,
or cause to be signed electronically, such registration statement and any
and all amendments to the aforementioned registration statement, and to
file said registration statement and amendments thereto so signed with all
exhibits thereto, and any and all other documents in connection therewith,
with the SEC, hereby granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform any and all acts
and things requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as I might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any
of them may lawfully do or cause to be done by virtue hereof.
This authorization shall remain if effect from November 28, 1995
through November 30, 1997.
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2
IN WITNESS WHEREOF, I, the undersigned, have executed this Power
of Attorney as of this 28th day of December, 1995.
/s/ Charles M. Vest
-------------------------
Director
EXHIBIT (24)(b)
INTERNATIONAL BUSINESS MACHINES CORPORATION
Certificate of the Secretary
The undersigned, John E. Hickey, Secretary of International
Business Machines Corporation (the "Corporation") does hereby certify that
attached hereto as Exhibit A is a true, correct and complete copy of a
resolution adopted by the Corporation Board of Directors authorizing the
Corporation's officers to execute the Registration Statement, to which this
certificate is attached as an exhibit, by power of attorney.
IN WITNESS WHEREOF, the undersigned has executed this certificate
this 18th day of December, 1995.
INTERNATIONAL BUSINESS
MACHINES CORPORATION,
by /s/ John E. Hickey
------------------------
Name: John E. Hickey
Title: Secretary
<PAGE>
EXHIBIT A
RESOLUTIONS REGARDING THE ISSUANCE OF DEBT AND EQUITY
- -----------------------------------------------------
SECURITIES, THE FILING OF A REGISTRATION STATEMENT, LISTING
- -----------------------------------------------------------
AGREEMENTS AND RELATED MATTERS
- ------------------------------
RESOLVED, that the Board of Directors of the Corporation hereby
authorizes (in addition to the authority previously granted by the
Board of Directors by resolutions dated April 25, 1994 and July 25,
1995, as well as resolutions dated as of the date hereof relating to a
Euro Medium Term Note Programme, all of which other resolutions remain
in full force and effect) the issuance and sale by the Corporation
during the period from November 28, 1995 through November 30, 1997
(the "Period") of up to an aggregate of two billion dollars
($2,000,000,000) (which aggregate amount shall be deemed to include
two hundred fifty million dollars otherwise available pursuant to
authority previously granted by the Board of Directors on July 25,
1995) of: (a) notes, debentures or other debt instruments (the
"Indebtedness"); (b) shares of preferred stock, $.01 par value, of the
Corporation (the "Preferred Stock") or depositary shares representing
ownership of and entitlement to all rights and preferences of a
fraction of a share of Preferred Stock (the "Depositary Shares");
(c) shares of Capital Stock, $1.25 par value, of the Corporation (the
"Capital Stock"); and (d) warrants or other rights to acquire Capital
Stock, Preferred Stock or Indebtedness of the Corporation or
securities of any other corporation (the "Warrants"). The
Indebtedness, Preferred Stock, Depositary Shares, Capital Stock and
Warrants shall sometimes hereinafter be referred to collectively as
the "Securities."
INDEBTEDNESS
------------
RESOLVED, that the Indebtedness, for purposes of these
resolutions, shall exclude all debt having a maturity of less than one
year at the time of issuance, and all notes issued to banks pursuant
to lines of credit. The Indebtedness shall include, without
limitation, debt denominated in U.S. dollars or in a foreign currency
computed as a conversion rate prevailing on dates determined by either
the Chief Executive Officer, the Senior Vice President and Treasurer
to be relevant to the issuance of such Indebtedness, with such
Indebtedness to be registered
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under the Securities Act of 1933 or sold pursuant to an exemption
therefrom or outside the scope thereof; and
RESOLVED, that the Chief Executive Officer, the Senior Vice
President and Chief Financial Officer, and the Vice President and
Treasurer, or any of them acting individually, be, and they hereby
are, delegated full power and authority to authorize and approve
during the Period the issuance of Indebtedness of the Corporation
pursuant to the foregoing resolutions and, in connection therewith, to
determine the terms and provisions of such Indebtedness and of the
issuance and sale thereof, including, without limitation, the
following: (i) the principal amount of such Indebtedness, (ii) the
final maturity date of such Indebtedness and any sinking fund or other
repayment provisions, (iii) the effective rate of interest of such
Indebtedness, (iv) the price at which such Indebtedness shall be sold
by the Corporation, (v) the provisions, if any, for the redemption of
such Indebtedness and the premiums, if any, to be paid upon any such
redemption, (vi) the right to convert such Indebtedness into or
exchange such Indebtedness for shares or other securities of the
Corporation or any other corporation or to issue warrants or other
rights to acquire shares or other securities of the Corporation or any
other corporation in conjunction with such Indebtedness, and all terms
of such conversion or exchange provisions or warrants or other rights,
including the conversion, exchange or exercise prices and any
antidilution provisions, and the authorization of the issuance of any
shares and the delivery of such shares or other securities of the
Corporation or any other corporation upon the conversion or exchange
of such Indebtedness or the exercise of such warrants or other rights,
(vii) the form, terms and provisions of any indentures, fiscal agency
agreements or other instruments under which such Indebtedness may be
issued and the banks or trust companies to act as trustees, fiscal
agents and paying agents thereunder, (viii) the preparation and filing
of all documents necessary or appropriate in connection with the
registration of the Indebtedness under the Securities act of 1933, the
qualification of an indenture under the Trust Indenture Act of 1939
and the qualification under any other applicable Federal, foreign,
state, local or other governmental requirements, (ix) the preparation
of any offering
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memorandum or other descriptive material relating to the issuance of
such Indebtedness, (x) the listing of the Indebtedness on any United
States or non-United States stock exchange, and (xi) underwriting
arrangements.
CAPITAL STOCK AND PREFERRED STOCK
---------------------------------
RESOLVED, that the Executive Committee of the Board of Directors,
is delegated, without further action of the Board of Directors, full
power and authority to authorize the issuance and sale by the
Corporation during the Period of Capital Stock, Preferred Stock and
Depositary Shares. In connection therewith, the Executive Committee
be, and it hereby is, delegated full power and authority to determine
the terms and provisions of the Preferred Stock and of the issuance
and sale thereof, including, without limitation, with respect to:
(i) whether the holders thereof shall be entitled to cumulative,
noncumulative or partially cumulative dividends and, with respect to
shares entitled to dividends, the dividend rate or rates, including,
without limitation the methods and procedures for determining such
rate or rates, and any other terms and conditions relating to such
dividends, (ii) whether, and if so to what extent and upon what terms
and conditions, the holders thereof shall be entitled to rights upon
the liquidation of, or upon any distribution of the assets of, the
Company, (iii) whether, and if so upon what terms and conditions, such
shares shall be convertible into, or exchangeable for, shares or other
securities of the corporation or any other corporation, (iv) whether,
and if so upon what terms and conditions, such shares shall be
redeemable, (v) whether the shares shall be redeemable and subject to
any sinking fund provided for the purchase or redemption of such
shares and, if so, the terms of such fund, (vi) whether the holders
thereof shall be entitled to voting rights and, if so, the terms and
conditions for the exercise thereof, subject to the provisions of
Section 2(f) of Article Four of the Certificate of Incorporation, and
(vii) whether the holders thereof shall be entitled to any other
preferences or rights and, if so, the qualifications, limitations, or
restrictions of such preferences or rights.
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WARRANTS
--------
RESOLVED, that the Executive Committee of the Board of Directors,
is delegated, without further action of the Board of Directors, full
power and authority to authorize the issuance and sale by the
Corporation during the Period of Warrants, and the Executive Committee
be, and it hereby is, delegated power and authority to determine the
terms and provisions of the Warrants and of the issuance and sale
thereof, including, without limitation, with respect to: (i) whether
such warrants will be for Indebtedness, Preferred Stock, Depositary
Shares or Capital Stock, and (ii) the form, terms and provisions of
any warrant agreements.
GENERAL AUTHORIZATION
---------------------
RESOLVED, that the proper officers of the Corporation be, and
hereby are, authorized, and directed to prepare for filing with the
Securities and Exchange Commission (the "SEC"), Washington, D.C.,
under the provisions of the Securities Act of 1933, a shelf
registration statement pursuant to Rule 415 under the Securities Act
of 1933, of up to an aggregate of $2,000,000,000 (including
$250,000,000 issuable pursuant to Registration Statement No. 33-
50537), of Indebtedness, Preferred Stock, Depositary Shares, Capital
Stock and Warrants (collectively the "Securities") of the Corporation
that may be issued in the future pursuant to these resolutions, and
that each of Louis V. Gerstner, Jr., G. Richard Thoman, Lawrence R.
Ricciardi, Jeffrey D. Serkes, James M. Alic and John E. Hickey, to be,
and each of them is hereby vested with full power to act, together or
each without the others, in any and all capacities, in the name and on
behalf of the Corporation to sign, or cause to be signed
electronically, such registration statement (which may constitute a
post-effective amendment to a registration statement previously filed
with the SEC) and any and all amendments to the aforementioned
registration statement, and to file said registration statement and
amendments thereto so signed with all exhibits thereto, and any and
all other documents in
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connection therewith, with the SEC, and all actions in connection with
the preparation, execution and filing of said registration statement
with the SEC on behalf of and as attorneys for the Corporation are
hereby ratified, approved and adopted in all respects; and
RESOLVED, that the proper officers of the Corporation be, and
they hereby are, authorized in the name and on behalf of the
Corporation, to take any and all action which they may deem necessary
or advisable in order to effect the registration or qualification (or
exemption therefrom) of the Securities for issue, offer, sale or trade
under the Blue Sky or securities laws of any of the States of the
United States of America as well as in any foreign jurisdiction and
political subdivisions thereof, and in connection therewith to
execute, acknowledge, verify, deliver, file or cause to be published
any applications, reports, consents to service of process,
appointments of attorneys to receive service of process and other
papers and instruments which may be required under such laws, and to
take any and all further action which they may deem necessary or
advisable in order to maintain any such registration, qualification or
exemption for as long as they deem necessary or as required by law,
and that the execution by such officers of any such paper or document,
or the doing by them of any act in connection with the foregoing
matters shall conclusively establish their authority therefor from the
Corporation and the ratification by the Corporation of the papers and
documents so executed and the actions so taken; and
RESOLVED, that the Corporation is hereby authorized to list the
Securities on any public exchanges, and that the proper officers of
the Corporation are hereby authorized on behalf of the Corporation to
execute all listing applications, fee agreements and other documents
in connection with the foregoing; and
RESOLVED, that the proper officers of the Corporation be, and
they hereby are, authorized to take all such further action and to
execute all such further instruments and documents in the name and on
behalf of the Corporation and under its corporate seal or otherwise,
and to pay all expenses and taxes as in their judgment shall be
necessary, proper or advisable
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in order fully to carry out the intent and accomplish the purposes of
the foregoing Resolutions; and
RESOLVED, that the proper officers of the Corporation shall have
the authority to further delegate, in whole or in part, the authority
provided in these Resolutions to any other officer or employee of the
Corporation.
