SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported) July 30, 1997.
INTERNATIONAL BUSINESS MACHINES CORPORATION
(Exact name of registrant as specified in its charter)
1-2360 13-0871985
New York (Commission File (I.R.S. Employer
(State of Incorporation Number) Identification No.)
Armonk, New York 10504
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: 914-765-1900
<PAGE>
Item 7. Financial Information, Pro Forma Financial Information and
Exhibits.
This Current Report on Form 8-K is being filed to incorporate by
reference into Registration Statement No. 333-21073 on Form S-3,
effective March 6, 1997, the documents included as Exhibits 1 and 2
hereto, relating to $3,000,000,000 aggregate principal amount of debt
securities of the Registrant.
The following exhibits are hereby filed with this report:
Exhibit
Number Description
(1) Underwriting Agreement dated July 30,
1997, among International Business
Machines Corporation, Morgan Stanley &
Co. Incorporated, Bear, Stearns & Co. Inc.,
Goldman, Sachs & Co., Lehman Brothers
Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated and Salomon Brothers
Inc.
(2) Form of 6.45% Note due 2007.
(3) Form of 6.22% Debenture due 2027.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
INTERNATIONAL BUSINESS MACHINES CORPORATION
(Registrant)
By: /s/ Janet Andersen
Name: Janet Andersen
Title: Assistant Treasurer
Date: August 1, 1997.
<PAGE>
Exhibit Index
Page in
Sequentially
Exhibit Numbered
Number Description Copy
(1) Underwriting Agreement dated
July 30, 1997, among International
Business Machines Corporation,
Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co.
Inc., Goldman, Sachs & Co.,
Lehman Brothers Inc., Merrill
Lynch, Pierce, Fenner & Smith
Incorporated and Salomon Brothers
Inc.
(2) Form of 6.45% Note due 2007.
(3)- Form of 6.22% Debenture due 2027.
INTERNATIONAL BUSINESS MACHINES CORPORATION
Debt Securities
$500,000,000 6.45% Notes due 2007
$500,000,000 6.22% Debentures due 2027
UNDERWRITING AGREEMENT
New York, New York
To the Representatives named in Schedule I hereto July 30, 1997
of the Underwriters named in Schedule II hereto
Dear Sirs:
International Business Machines Corporation, a New York corporation
(the "Company"), proposes to sell to the underwriters named in
Schedule II hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), the principal amount of its
Securities identified in Schedule I hereto (the "Securities"), to be
issued under an indenture dated as of October 1, 1993 (the
"Indenture"), between the Company and The Chase Manhattan Bank, as
trustee (the "Trustee"), as supplemented by the First Supplemental
Indenture dated as of December 15, 1995. If the firm or firms listed
in Schedule II hereto include only the firm or firms listed in
Schedule I hereto, then the terms "Underwriters" and
"Representatives", as used herein shall each be deemed to refer to
such firm or firms.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933 (the "Act") and has filed with the
Securities and Exchange Commission (the "Commission") a
registration statement or statements (the file number or numbers of
which is or are set forth in Schedule I hereto), including a
related preliminary prospectus, on such Form for the registration
under the Act of the offering and sale of the Securities. The
Company may have filed one or more amendments thereto, including
the related preliminary prospectus, and has filed a preliminary
prospectus in accordance with Rules 415 and 424(b)(5), each of
which has previously been furnished to you. The Company will next
file with the Commission one of the following: (i) prior to
effectiveness of such registration statement, a further amendment
thereto, including the form of final prospectus, (ii) a final
prospectus in accordance with Rules 430A and 424(b)(1) or (4), or
(iii) a final prospectus in accordance with Rules 415 and 424(b)(2)
or (5). In the case of clause (ii), the Company has included in
such registration statement or statements, as amended at the
Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in the
Prospectus with respect to the Securities and the offering thereof.
As filed, such amendment and form of final prospectus, or such
final prospectus, shall include all Rule 430A Information and,
except to the extent the Representatives shall agree in writing to
a modification, shall be in all substantive respects in the form
furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in
the latest Preliminary Prospectus) as the Company has advised you,
prior to the Execution Time, will be included or made therein. If
the Registration Statement contains the undertaking specified by
Regulation S-K Item 512(a), the Registration Statement, at the
Execution Time, meets the requirements set forth in Rule
415(a)(1)(x).
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The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term the "Effective Date" shall mean
each date that the Registration Statement and any post-effective
amendment or amendments thereto became or become effective.
"Execution Time" shall mean the date and time that this Agreement
is executed and delivered by the parties hereto. "Preliminary
Prospectus" shall mean any preliminary prospectus referred to in
the preceding paragraph and any preliminary prospectus included in
the Registration Statement at the Effective Date that omits Rule
430A Information. "Prospectus" shall mean the prospectus relating
to the Securities that is first filed pursuant to Rule 424(b) after
the Execution Time or, if no filing pursuant to Rule 424(b) is
required, shall mean the form of final prospectus included in the
Registration Statement at the Effective Date. "Registration
Statement" shall mean the registration statement or statements
referred to in the preceding paragraph, including incorporated
documents as of the filing of the Company's Quarterly Report on
Form 10-Q for the three month period ended March 31, 1997, exhibits
and financial statements, in the form in which it or they has or
have or shall become effective and, in the event any post-effective
amendment thereto becomes effective prior to the Closing Date (as
hereinafter defined), shall also mean such registration statement
or statements as so amended. Such term shall include Rule 430A
Information deemed to be included therein at the Effective Date as
provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation S-K" refer to such rules under the Act. "Rule 430A
Information" means information with respect to the Securities and
the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A. Any
reference herein to the Registration Statement, a Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934 (the "Exchange Act") on or before the effective date of
the Registration Statement or the date of such Preliminary
Prospectus or the Prospectus, as the case may be; and any reference
herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include the
filing of any document under the Exchange Act after the effective
date of the Registration Statement, or the date of any Preliminary
Prospectus or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Prospectus
(and any supplements thereto) will, comply in all material respects
with the applicable requirements of the Act and the Exchange Act
and the respective rules thereunder; on the Effective Date and on
the Closing Date the Indenture did or will comply in all material
respects with the requirements of the Trust Indenture Act of 1939
(the "Trust Indenture Act") and the rules thereunder; on the
Effective Date, the Registration Statement did not or will not
contain any untrue statement of a material fact required to be
stated therein or necessary in order to make the statements therein
not misleading; and, on the Effective Date, the Prospectus, if not
filed pursuant to Rule 424(b), did not or will not, and on the date
of any filing pursuant to Rule 424(b) and on the Closing Date, the
Prospectus (together with any supplement thereto) will not, include
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no
representations or warranties as to (i) that part of the
Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture
Act of the Trustee or (ii) the information contained in or omitted
from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with
information furnished in writing to the Company by or on
<PAGE>
behalf of any Underwriter through the Representatives specifically
for use in connection with the preparation of the Registration
Statement or the Prospectus (or any supplement thereto).
2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, at
the purchase price set forth in Schedule I hereto, the respective
principal amounts of the Securities set forth opposite each respective
Underwriter's name in Schedule II hereto, except that, if Schedule I
hereto provides for the sale of Securities pursuant to delayed
delivery arrangements, the respective principal amounts of Securities
to be purchased by the Underwriters shall be as set forth in Schedule
II hereto, less the respective amounts of Contract Securities
determined as provided below. Securities to be purchased by the
Underwriters are herein sometimes called the "Underwriters'
Securities" and Securities to be purchased pursuant to Delayed
Delivery Contracts as hereinafter provided are herein called "Contract
Securities".
If so provided in Schedule I hereto, the Underwriters are
authorized to solicit offers to purchase Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts"),
substantially in the form of Schedule III hereto but with such changes
therein as the Company may authorize or approve. The Underwriters will
endeavor to make such arrangements and, as compensation therefor, the
Company will pay to the Representatives, for the account of
underwriters, on the Closing Date, the percentage set forth in
Schedule I hereto of the principal amount of the Securities for which
Delayed Delivery Contracts are made. Delayed Delivery Contracts are to
be with institutional investors, including commercial and savings
banks, insurance companies, pension funds, investment companies and
educational and charitable institutions. The Company will make Delayed
Delivery Contracts in all cases where sales of Contract Securities
arranged by the Underwriters have been approved by the Company but,
except as the Company may otherwise agree, each such Delayed Delivery
Contract must be for not less than the minimum principal amount set
forth in Schedule I hereto and the aggregate principal amount of
Contract Securities may not exceed the maximum aggregate principal
amount set forth in Schedule I hereto. The Underwriters will not have
any responsibility in respect of the validity or performance of
Delayed Delivery Contracts. The principal amount of Securities to be
purchased by each Underwriter as set forth in Schedule II hereto shall
be reduced by an amount which shall bear the same proportion to the
total principal amount of Contract Securities as the principal amount
of Securities set forth opposite the name of such Underwriter bears to
the aggregate principal amount set forth in Schedule II hereto, except
to the extent that you determine that such reduction shall be
otherwise than in such proportion and so advise the Company in
writing; provided, however, that the total principal amount of
Securities to be purchased by all Underwriters shall be the aggregate
principal amount set forth in Schedule II hereto, less the aggregate
principal amount of Contract Securities.
3. Delivery and Payment. Delivery of and payment for the
Underwriters' Securities shall be made at the office, on the date and
at the time specified in Schedule I hereto, which date and time may be
postponed by agreement between the Representatives and the Company or
as provided in Section 8 hereof (such date and time of delivery and
payment for the Securities being called the "Closing Date"). Delivery
of the Underwriters' Securities shall be made to the Representatives
for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Company by
certified or official bank check or checks payable, or wire transfers,
in immediately available funds. The Debentures shall be delivered in
definitive global form through the facilities of The Depository Trust
Company.
<PAGE>
4. Agreements.
(A) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, and any amendment thereof, if not effective
at the Execution Time, to become effective. If the Registration
Statement has become or becomes effective pursuant to Rule 430A, or
filing of the Prospectus is otherwise required under Rule 424(b),
the Company will file the Prospectus, properly completed, pursuant
to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly
advise the Representatives (i) when the Registration Statement
shall have become effective, (ii) when any amendment to the
Registration Statement relating to the Securities shall have become
effective, (iii) of any request by the Commission for any amendment
of the Registration Statement or amendment of or supplement to the
Prospectus or for any additional information, (iv) of the issuance
by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the Company
of any notification with respect to the suspension of the
qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any
such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof. The Company will not file any amendment of the
Registration Statement or supplement to the Prospectus unless the
Company has furnished you a copy for your review prior to filing
and will not file any such proposed amendment or supplement to
which you reasonably object.
(b) If, at any time when a prospectus relating to the Securities
is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein in
the light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company will give the
Representatives immediate notice of the occurrence of such event
and promptly will prepare and file with the Commission, subject to
the first sentence of paragraph (a) of this Section 4, an amendment
or supplement which will correct such statement or omission or an
amendment which will effect such compliance.
(c) The Company will make generally available to its security
holders and to the Representatives as soon as practicable, but not
later than 45 days after the end of the 12-month period beginning
at the end of the current fiscal quarter of the Company, an
earnings statement (which need not be audited) of the Company and
its subsidiaries, covering a period of at least 12 months beginning
after the end of the current fiscal quarter of the Company, which
will satisfy the provisions of Section 11(a) of the Act.
(d) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, copies of the Registration
Statement (including exhibits thereto) and each amendment thereto
which shall become effective on or prior to the Closing Date and,
so long as delivery of a prospectus by an Underwriter or dealer may
be required by the Act, as many copies of any Preliminary Final
Prospectus and the Final Prospectus and any amendments thereof and
supplements thereto as the Representatives may reasonably request.
(e) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in
effect so long as required for
<PAGE>
the distribution of the Securities and will arrange for the
determination of the legality of the Securities for purchase by
institutional investors.
(f) Until the earlier of the day on which the distribution of the
Securities is completed or the business day following the Closing
Date, the Company will not, without the consent of the
Representatives, offer or sell, or announce the offering of, any
debt securities covered by the Registration Statement or any other
registration statement filed under the Act.
(B) The several Underwriters agree with the Company that:
(a) The several Underwriters will pay the expenses of printing
all documents relating to the offering.
(b) The several Underwriters will pay the reasonable fees and
disbursements of outside counsel for the Company relating to the
offering.
(c) The several Underwriters will pay any fees of Moody's
Investors Service, Inc. and Standard & Poor's Ratings Group, a
division of the McGraw-Hill Companies, Inc. relating to the rating
of the Securities.
(d) The several Underwriters will pay the fees and disbursements
of Price Waterhouse LLP relating to the preparation of the letter
required by Section 5(e) of this Agreement.
5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwriters'
Securities shall be subject to the accuracy of the representations and
warranties on the part of the Company contained herein as of the
Execution Time, as of the date of the effectiveness of any amendment
to the Registration Statement filed prior to the Closing Date
(including the filing of any document incorporated by reference
therein) and as of the Closing Date, to the accuracy of the statements
of the Company made in any certificates pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing
to a later time, the Registration Statement shall have become
effective not later than (i) 6:00 P.M. New York City time, on the
date of determination of the public offering price, if such
determination occurred at or prior to 3:00 P.M. New York City time
on such date or (ii) 12:00 Noon on the business day following the
day on which the public offering price was determined, if such
determination occurred after 3:00 P.M. New York City time on such
date; if filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Prospectus shall have been
filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have furnished to the Representatives:
(i) the opinion of the General Counsel, an Assistant General
Counsel or an Associate General Counsel of the Company, dated the
Closing Date, to the effect that:
(A) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the State of New York, with full corporate power and authority
to own its properties and conduct its business as described in
the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good
<PAGE>
standing under the laws of each jurisdiction within the United
States which requires such qualifications wherein it owns or
leases material properties or conducts material business;
(B) the Securities conform in all material respects to the
description thereof contained in the Prospectus;
(C) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture
Act, and constitutes a legal, valid and binding obligation
enforceable against the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time in
effect, and subject, as to enforceability, to general
principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at
law); and the Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions
of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement, in the case of the
Underwriters' Securities, or by the purchasers thereof
pursuant to Delayed Delivery Contracts, in the case of any
Contract Securities, will constitute legal, valid and binding
obligations of the Company entitled to the benefits of the
Indenture (subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and other
similar laws affecting creditors' rights generally from time
to time in effect);
(D) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries,
of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus,
and there is no franchise, contract or other document of a
character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit, which
is not described or filed as required;
(E) the Registration Statement and any amendments thereto
have become effective under the Act; any required filing of
the Prospectus and any supplement thereto pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued, no
proceedings for that purpose have been instituted or are
pending or contemplated under the Act;
(F) this Agreement and any Delayed Delivery Contracts have
been duly authorized, executed and delivered by the Company;
(G) no authorization, approval or other action by, and no
notice to, consent of, order of, or filing with, any United
States Federal or New York governmental authority or
regulatory body is required for the consummation of the
transactions contemplated herein or in any Delayed Delivery
Contracts, except such as have been obtained under the Act and
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the Securities and such other approvals (specified in such
opinion) as have been obtained;
(H) such counsel has no reason to believe that (1) the
Registration Statement and the Prospectus (except the
financial statements and the notes thereto and other
information of an accounting or financial
<PAGE>
nature included therein, and the Statement of Eligibility
(Form T-1) included as an exhibit to the Registration
Statement, as to which such counsel need express no view) were
not appropriately responsive in all material respects to
requirements of the Act and the applicable rules and
regulations of the Commission thereunder and (2) the
Registration Statement or any amendment thereof at the time it
became effective contained any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as amended or supplemented,
contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading (in each case except for the financial
statements and the notes thereto and other information of an
accounting or financial nature included therein, as to which
such counsel need express no view); and
(I) none of the issue and sale of the Securities, the
consummation of any other of the transactions herein
contemplated or the fulfillment of the terms hereof or of any
Delayed Delivery Contracts will conflict with, result in a
breach of, or constitute a default under, the charter or
by-laws of the Company or the terms of any indenture or other
agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound, or any
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.
The statements described in one or more of paragraphs (B),
(C), (E), (F), (G) and (H)(1) of this subsection 5(b)(i) may
be omitted from the opinion of such counsel; provided,
however, that in such event the Company shall also have
furnished to the Representatives the corresponding opinion or
letter of Cravath, Swaine & Moore, counsel for the Company,
described in subsection 5(b)(ii) or 5(b)(iii) immediately
following.
(ii) in the event that the statements described in one or more
of paragraphs (B), (C), (E), (F) or (G) of foregoing subsection
5(b)(i) is omitted from the opinion delivered pursuant to such
subsection, the opinion of Cravath, Swaine & Moore, counsel for
the Company, dated the Closing Date, to the effect of the
statements so omitted.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction
other than the State of New York or the United States, to the
extent they deem proper and specified in such opinion, upon
the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for
the Underwriters; and (B) as to matters of fact, to the extent
they deem proper, on certificates of responsible officers of
the Company and public officials.
(iii) in the event that the statements in paragraph (H)(1) of
subsection 5(b)(i) are omitted from the opinion provided pursuant
to such subsection, a letter of Cravath, Swaine & Moore dated the
Closing Date to the effect that, having participated in
conferences with certain officers of, and with the accountants
for, the Company and having made certain inquiries and
investigations in connection with the preparation of the
Registration Statement and the Prospectus, such counsel has no
reason to believe that (i) the Registration Statement and the
Prospectus (except the financial statements and the notes thereto
and other information of an
<PAGE>
accounting or financial nature included therein, and the
Statement of Eligibility (Form T-1) included as an exhibit to the
Registration Statement, as to which such counsel need express no
view) were not appropriately responsive in all material respects
with requirements of the Act and the applicable rules and
regulations of the Commission thereunder and (ii) the
Registration Statement at the Effective Date contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus on the Closing
Date includes any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading (in each case except for the financial
statements and the notes thereto and other information of an
accounting or financial nature included therein, as to which such
counsel need express no view).
(c) The Representatives shall have received from Davis Polk &
Wardwell, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of
the Securities, the Indenture, any Delayed Delivery Contracts, the
Registration Statement, the Prospectus and other related matters as
the Representatives may reasonably require, and the Company shall
have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the principal financial or
accounting officer (or Vice President and Treasurer) of the
Company, dated the Closing Date, to the effect that the signer of
such certificate has carefully examined the Registration Statement,
the Prospectus, any supplement to the Prospectus and this Agreement
and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as
of the Closing Date with the same effect as if made on the
Closing Date and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued and no
proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus, there has been no material adverse
change in the condition (financial or other), earnings, business
or properties of the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus.
(e) At the Closing Date, Price Waterhouse LLP shall have
furnished to the Representatives a letter or letters (which may
refer to a letter previously delivered to one or more of the
Representatives), dated as of the Closing Date, in form and
substance satisfactory to the Representatives, confirming that they
are independent accountants within the meaning of the Act and the
Exchange Act and the respective applicable published rules and
regulations thereunder, that the response, if any, to Item 10 of
the Registration Statement is correct insofar as it relates to them
and stating in effect that:
(i) in their opinion the audited financial statements and
schedules thereto included or incorporated in the Registration
Statement and the Prospectus and reported on by them comply as to
form in all material
<PAGE>
respects with the applicable accounting requirements of the
Exchange Act and the published rules and regulations
thereunder with respect to financial statements and financial
statement schedules included or incorporated in annual reports
on Form 10-K under the Exchange Act;
(ii) on the basis of a reading of the unaudited financial
statements included or incorporated in the Registration Statement
and the Prospectus and of the latest unaudited financial
statements made available by the Company and its subsidiaries;
carrying out certain specified procedures (but not an examination
in accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and
executive committees of the Company and the Subsidiaries since
the date of the latest audited balance sheet, through a specified
date not more than five business days prior to the date of the
letter; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events
subsequent to the date of the most recent financial statements
incorporated in the Registration Statement and the Prospectus,
nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Prospectus
do not comply as to form in all material respects with
applicable accounting requirements and with the published rules
and regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act; and said unaudited financial
statements are not stated on a basis substantially consistent
with that of the audited financial statements included or
incorporated in the Registration Statement and the Prospectus;
or
(2) with respect to the period subsequent to the date of the
most recent financial statements incorporated in the
Registration Statement and the Prospectus, there were, at a
specified date not more than five business days prior to the
date of the letter, any increases in long-term debt of the
Company and its subsidiaries or decreases in the capital stock
of the Company or decreases in the stockholders' equity of the
Company and its subsidiaries as compared with the amounts shown
on the most recent consolidated balance sheet included or
incorporated in the Registration Statement and the Prospectus,
except in all instances for increases or decreases set forth in
such letter, in which case the letter shall be accompanied by
an explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the
Representatives; and
(iii) they have performed certain other procedures as a result
of which they determined that the information described in a
schedule to be delivered on behalf of the Underwriters of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general ledger of the Company) set forth in the Registration
Statement, as amended, the Prospectus, as amended or
supplemented, and in Exhibit 12 to the Registration Statement
(including selected accounting, financial or statistical
information included or incorporated in the Company's Annual
Report on Form 10-K incorporated in the Prospectus or any of the
Company's Quarterly Reports on Form l0-Q incorporated therein),
agrees with the general ledger of the Company and its
subsidiaries, excluding any questions of legal interpretation.
References to the Prospectus in this paragraph (e) include any
supplements thereto at the date of the letter.
<PAGE>
(f) Subsequent to the respective dates of which information is
given in the Registration Statement and the Prospectus, there shall
not have been (i) any change or decrease specified in the letter or
letters referred to in paragraph (e) of this Section 5 or (ii) any
change, or any development involving a prospective change, in or
affecting the business or properties of the Company and its
subsidiaries the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the judgment of the Representatives, so
material and adverse as to make it impractical or inadvisable to
proceed with the public offering or the delivery of the Securities
as contemplated by the Registration Statement and the Prospectus.
(g) Prior to the Closing Date, the Company shall have furnished
to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
(h) The Company shall have accepted Delayed Delivery Contracts in
any case where sales of Contract Securities arranged by the
Underwriters have been approved by the Company.
(i) Subsequent to the Execution Time, there shall not have been
any decrease in the ratings of any of the Securities by Moody's
Investor's Service, Inc. ("Moody's") or Standard & Poor's
Corporation ("S&P") and neither Moody's nor S&P shall have publicly
announced that it has placed any of the Securities on a credit
watch with negative implications.
If any of the conditions specified in this Section 5 shall not have
been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above
or elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives
and their counsel, this Agreement and all obligations of the
Underwriters hereunder may be cancelled at, or at any time prior to,
the Closing Date by the Representatives. Notice of such cancelation
shall be given to the Company in writing or by telephone or telegraph
confirmed in writing.
6. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section
5 hereof is not satisfied or because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or
comply with any provision hereof other than by reason of a default by
any of the Underwriters, the Company will reimburse the Underwriters
severally upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of
the Securities.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person who
controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement for the registration of the Securities as
originally filed or in any amendment thereof, or in any Preliminary
Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party for
any legal or other expenses reasonably incurred, as incurred, by them
in connection with investigating or defending any such loss, claim,
damage,
<PAGE>
liability or action; provided, however, that (i) the Company will not
be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission
made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any
Underwriter through the Representatives specifically for use in
connection with the preparation thereof, and (ii) such indemnity with
respect to any Preliminary Prospectus shall not inure to the benefit
of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting any such loss, claim, damage or liability
purchased the Securities which are the subject thereof if such person
did not receive a copy of the Prospectus (or the Prospectus as
supplemented) excluding documents incorporated therein by reference at
or prior to the confirmation of the sale of such Securities to such
person in any case where such delivery is required by the Act and the
untrue statement or omission of a material fact contained in such
Preliminary Prospectus was corrected in the Prospectus (or the
Prospectus as supplemented prior to the confirmation of the sale of
such Securities to such person). This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, to
the same extent as the foregoing indemnity from the Company to each
Underwriter, but only with reference to written information relating
to such Underwriter furnished to the Company by or on behalf of such
Underwriter through the Representatives specifically for use in the
preparation of the documents referred to in the foregoing indemnity.
This indemnity agreement will be in addition to any liability which
any Underwriter may otherwise have. The Company acknowledges that the
statements set forth in the last paragraph of the cover page of the
Prospectus and under the heading "Underwriting" or "Plan of
Distribution" and, if Schedule I hereto provides for sales of
Securities pursuant to delayed delivery arrangements, in the last
sentence under the heading "Delayed Delivery Arrangements" in any
Preliminary Prospectus and the Prospectus, constitute the only
information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus, and you, as the Representatives, confirm that such
statements are correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise
than under this Section 7. In case any such action is brought against
any indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
appoint counsel satisfactory to such indemnified party to represent
the indemnified party in such action; provided, however, if the
defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or
other indemnified parties which are different from or additional to
those available to the indemnifying party, the indemnified party or
parties shall have the right to select separate counsel to defend such
action on behalf of such indemnified party or parties. Upon receipt of
notice from the indemnifying party to such indemnified party of its
election so to appoint counsel to defend such action and approval by
the indemnified party of counsel, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or
other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in
<PAGE>
accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to any
local counsel), approved by the Representatives in the case of
paragraph (a) of this Section 7, representing the indemnified parties
under such paragraph (a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the
indemnifying party; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph
(a) of this Section 7 is due in accordance with its terms but is for
any reason held by a court to be unavailable from the Company on
grounds of policy or otherwise, the Company and the Underwriters shall
contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection
with investigating or defending same) to which the Company and one or
more of the Underwriters may be subject in such proportion so that the
Underwriters are responsible for that portion represented by the
percentage that the underwriting discount bears to the sum of such
discount and the purchase price of the Securities set forth on
Schedule I hereto and the Company is responsible for the balance;
provided, however, that (y) in no case shall any Underwriter (except
as may be provided in any agreement among underwriters relating to the
offering of the Securities) be responsible for any amount in excess of
the underwriting discount applicable to the Securities purchased by
such Underwriter hereunder and (z) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 7,
each person who controls an Underwriter within the meaning of either
the Act or the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person who controls the Company within
the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as
the Company, subject in each case to clauses (y) and (z) of this
paragraph (d). Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be
made against another party or parties under this paragraph (d), notify
such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the
party or parties from whom contribution may be sought from any other
obligation it or they may have hereunder or otherwise than under this
paragraph (d).
8. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be
purchased by such Underwriter or Underwriters hereunder and such
failure to purchase shall constitute a default in the performance of
its or their obligations under this Agreement, the remaining
Underwriters shall be obligated severally to take up and pay for (in
the respective proportions which the amount of Securities set forth
opposite their names in Schedule II hereto bears to the aggregate
amount of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in
the event that the aggregate amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed
10% of the aggregate amount of Securities set forth in Schedule II
hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all
the Securities, this
<PAGE>
Agreement will terminate without liability to any nondefaulting
Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 8, the Closing Date shall be
postponed for such period, not exceeding seven days, as the
Representatives shall determine in order that the required changes in
the Registration Statement and the Final Prospectus or in any other
documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability,
if any, to the Company and any nondefaulting Underwriter for damages
occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the
Company prior to delivery of and payment for the Securities, if prior
to such time (i) trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall
have been established on such Exchange, (ii) a banking moratorium
shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or
material escalation of hostilities or other calamity or crisis the
effect of which on the financial markets of the United States is such
as to make it, in the judgment of the Representatives, impracticable
to market the Securities.
10. Representations and Indemnities to Survive. The respective
agreement representations, warranties, indemnities and other
statements of the Company or its officers and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force
and effect, regardless of any investigation made by or on behalf of
any Underwriter or the Company or any of the officers, directors or
controlling persons referred to in Section 7 hereof, and will survive
delivery of and payment for the Securities. The provisions of Sections
6 and 7 hereof shall survive the termination or cancellation of this
Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will
be mailed, delivered or telegraphed and confirmed to them, at the
address specified in Schedule I hereto; or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it, at
Armonk, New York 10504; attention of the Treasurer.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and
the officers and directors and controlling persons referred to in
Section 7 hereof, and no other person will have any right or
obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding
agreement among the Company and the several Underwriters.
Very truly yours,
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By:/s/ Janet Andersen
Name: Janet Andersen
Title: Assistant Treasurer
The foregoing Agreement is hereby
confirmed and accepted on the
date specified in Schedule I hereto.
Morgan Stanley & Co. Incorporated
Bear, Stearns & Co. Inc.
Goldman, Sachs & Co.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Salomon Brothers Inc
By: Morgan Stanley & Co. Incorporated
By:/s/ Harold J. Hendershot III
Name: Harold J. Hendershot III
Title: Vice President
For themselves and the other several
Underwriters, if any, named in
Schedule II to the foregoing Agreement.
<PAGE>
Schedule I
Underwriting Agreement dated July 30, 1997.
Registration No. 333-21073.
Representatives:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285-2400
Merrill Lynch, Pierce, Fenner & Smith Incorporated
250 Vesey Street
World Financial Center-North Tower
New York, New York 10281
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Title, Purchase Price and Description of Securities:
A. 6.45% Notes due 2007
Title: 6.45% Notes due 2007.
Principal amount: $500,000,000.
Purchase price: 99.044% of the principal amount of Notes plus
accrued interest from August 1, 1997.
Offering price: 99.694% of the principal amount of Notes plus
accrued interest from August 1, 1997.
Interest: Payable on February 1 and August 1 of each year,
commencing on February 1, 1998.
Sinking fund provisions: None.
Redemption provisions: The Notes are redeemable in whole or in
part, at the option of the Company at any time, at a
redemption price equal to the greater of (i) 100% of the
principal amount of such Notes and (ii) the sum of the present
values of the Remaining Scheduled Payments (as defined in the
Prospectus) thereon discounted at the Treasury Rate (as
defined in the Prospectus) plus 10 basis points, plus in
either case accrued interest to the date of redemption.
B. 6.22% Debentures due 2027
Title: 6.22% Debentures due 2027.
Principal amount: $500,000,000.
Purchase price: 99.375% of the principal amount of Debentures plus
accrued interest from August 1, 1997.
Offering price: 100.000% of the principal amount of Debentures plus
accrued interest from August 1, 1997.
Interest: Payable on February 1 and August 1 of each year,
commencing on February 1, 1998.
<PAGE>
Sinking fund provisions: None.
Redemption provisions: The Debentures are redeemable as a whole or
in part, at the option of the Company at any time on or after
August 2, 2004, at a redemption price equal to the greater of (i)
100% of the principal amount of such Debentures and (ii) the sum
of the present values of the Remaining Scheduled Payments (as
defined in the Prospectus) thereon discounted at the Treasury
Rate (as defined in the Prospectus) plus 10 basis points, plus in
either case accrued interest to the date of redemption. The
Debentures are also redeemable at the option of the holders
thereof on August 1, 2004, at 100% of their principal amount plus
accrued interest.
Closing Date, Time and Location: August 4, 1997, 10:00 A.M., at the
offices of Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth
Avenue, New York, New York.
Delayed Delivery Arrangements: None.
Items specified pursuant to Section 5(e)(iii) to be covered by the
letter from Price Waterhouse LLP delivered pursuant to Section
5(e): As set forth in a schedule delivered on the date hereof on
behalf of the Underwriters.
<PAGE>
Schedule II
International Business Machines Corporation
$500,000,000 6.45% Notes due 2007
$500,000,000 6.22% Debentures Due 2027
Underwriters Principal Amount Principal Amount of
of Notes to be Debentures to be
Purchased Purchased
Morgan Stanley & Co.
Incorporat $83,335,000 $83,335,000
Bear, Stearns & Co. Inc. 83,333,000 83,333,000
Goldman, Sachs & Co. 83,333,000 83,333,000
Lehman Brothers Inc. 83,333,000 83,333,000
Merrill Lynch, Pierce,
Fenner & Smith Incorporated 83,333,000 83,333,000
Salomon Brothers Inc 83,333,000 83,333,000
-------------- --------------
Total................... $500,000,000 $500,000,000
=============== ==============
<PAGE>
Schedule III
Delayed Delivery Contract
[Insert name and address
of lead Representative]
,199
Dear Sirs:
The undersigned hereby agrees to purchase from International
Business Machines Corporation (the "Company"), and the Company agrees
to sell to the undersigned, on , 199 , (the
"Delivery Date"), $ principal amount of the
Company's (the "Securities") offered by the
Company's Final Prospectus dated , 199 , receipt of a
copy of which is hereby acknowledged, at a purchase price of %
of the principal amount thereof, plus accrued , if any,
thereon from , 19 , to the date of payment and
delivery, and on the further terms and conditions set forth in this
contract.
Payment for the Securities to be purchased by the undersigned shall
be made on or before 11:00 A.M. on the Delivery Date to or upon the
order of the Company in New York Clearing House (next day) funds, at
your office or at such other place as shall be agreed between the
Company and the undersigned upon delivery to the undersigned of the
Securities in definitive, fully registered form and in such authorized
denominations and registered in such names as the undersigned may
request by written or telegraphic communication addressed to the
Company not less than five full business days prior to the Delivery
Date. If no request is received, the Securities will be registered in
the name of the undersigned and issued in a denomination equal to the
aggregate principal amount of Securities to be purchased by the
undersigned on the Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for Securities on the Delivery Date, and the obligation of the
Company to sell and deliver Securities on the Delivery Date, shall be
subject to the conditions (and neither party shall incur any liability
by reason of the failure thereof) that (1) the purchase of Securities
to be made by the undersigned, which purchase the undersigned
represents is not prohibited on the date hereof, shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to
which the undersigned is subject, and (2) the Company, on or before
the Delivery Date, shall have sold to certain underwriters (the
"Underwriters") such principal amount of the Securities as is to be
sold to them pursuant to the Underwriting Agreement referred to in the
Final Prospectus mentioned above. Promptly after completion of such
sale to the Underwriters, the Company will mail or deliver to the
undersigned at its address set forth below notice to such effect,
accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith. The obligation
of the undersigned to take delivery of and make payment for the
Securities, and the obligation of the Company to cause the Securities
to be sold and delivered, shall not be affected by the failure of any
purchaser to take delivery of and make payment for the Securities
pursuant to other contracts similar to this contract.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be
assignable by either party hereto without the written consent of the
other.
It is understood that acceptance of this contract and other similar
contracts is in the Company's sole discretion and, without limiting
the foregoing, need not be on a first come, first served basis. If
this contract is acceptable to the Company, it is required that the
Company sign the form of acceptance below and mail or deliver one of
the counterparts hereof to the undersigned at its address set forth
below. This will become a binding contract between the Company and the
undersigned, as of the date first above written, when such counterpart
is so mailed or delivered.
<PAGE>
This agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Very truly yours,
(Name of Purchaser)
By
(Signature and Title)
(Address)
Accepted:
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede &
Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
INTERNATIONAL BUSINESS MACHINES CORPORATION
6.45% Note due 2007
CUSIP 459200 AQ4
No.: R $
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 August 1, 2007, in such coin or
currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts,
and to pay interest, semi-annually on February 1 and August 1 of
each year, on said principal sum at said office or agency, in like
coin or currency, at the rate of 6.45% per annum, from the February 1
or the August 1, 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 August 1,
1997, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is
after January 15 or July 15, as the case may be, and before the
following February 1 or August 1, this Note shall bear interest from
such February 1 or August 1; provided, however, that if the Company
shall default in the payment of interest due on such February 1 or
August 1, then this Note shall bear interest from the next preceding
February 1 or August 1 to which interest has been paid, or, if no
interest has been paid on the Notes, from August 1,
<PAGE>
1997. The interest so payable on any February 1 or August 1 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 January 15 or July 15, as
the case may be, next preceding such February 1 or August 1, 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 ten 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.
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
<PAGE>
shall have been signed by the Trustee under the Indenture referred to
on the reverse hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated: INTERNATIONAL BUSINESS MACHINES
CORPORATION
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION by______________________________
This is one of the
Securities of the Series
designated herein issued
under the within-
mentioned Indenture. by______________________________
THE CHASE MANHATTAN BANK, as Trustee
by ______________________________
Authorized Signatory
This Note is one of a duly authorized issue of unsecured Notes,
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, a New York banking
corporation, as trustee (hereinafter called the "Trustee"), to which
Indenture and all indentures supplemental thereto reference is hereby
made for a description of the respective rights and duties thereunder
of the Trustee, the Company and the holders of the Securities. The
Securities may be issued in one or more series, which different series
may be issued in various aggregate principal amounts, may mature at
different times, may bear interest at different rates, may have
different conversion prices (if any), may be subject to different
redemption provisions, may be subject to different sinking, purchase
or analogous funds, may be subject to different covenants and Events
of Default and may otherwise vary as in the Indenture provided. This
Note is one of a
<PAGE>
series designated as the 6.45% Notes due 2007 of the Company
(hereinafter called the "Notes") issued under the Indenture, limited
in aggregate principal amount to $500,000,000.
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.
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
<PAGE>
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,
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.
<PAGE>
The Notes are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000. In the
manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge, 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 as a whole or in part, at the option of
the Company at any time, upon mailing a notice of such redemption not
less than 30 nor more than 60 days prior to the date fixed for
redemption to the holders of the Notes at their last registered
addresses, all as provided in the Indenture, at a redemption price
equal to the greater of (i) 100% of the principal amount of the Notes
to be redeemed and (ii) the sum of the present values of the Remaining
Scheduled Payments thereon discounted to the redemption date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 10 basis points, plus in either case
accrued interest on the principal amount being redeemed to the date of
redemption.
"Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Notes to be redeemed
that would be utilized, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the remaining term of such
Notes. "Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Trustee after consultation with the
Company.
"Comparable Treasury Price" means with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third business day preceding such redemption
date, as set forth in the
<PAGE>
daily statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or
any successor release) is not published or does not contain such
prices on such business day, (A) the average of the Reference Treasury
Dealer Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (B)
if the Trustee obtains fewer than four such Reference Treasury Deal
Quotations, the average of all such Quotations. "Reference Treasury
Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expected in each case as a percentage of its principal amount) quoted
in writing to the Trustee by such Reference Treasury Dealer at 5:00
p.m. on the third business day preceding such redemption date.
"Reference Treasury Dealer" means each of Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co. Inc., Goldman, Sachs & Co., Lehman
Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Salomon Brothers Inc, and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to any Note,
the remaining scheduled payments of the principal thereof to be
redeemed and interest thereon that would be due after the related
redemption date but for such redemption; provided, however, that, if
such redemption date is not an interest payment date with respect to
such Note, the amount of the next succeeding scheduled interest
payment thereon will be reduced by the amount of interest accrued
thereon to such redemption date.
Upon due presentation 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
<PAGE>
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 of the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid,
effectually satisfy and discharge liability for moneys payable on this
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, 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.
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede &
Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
INTERNATIONAL BUSINESS MACHINES CORPORATION
6.22% Debenture due 2027
CUSIP 459200 AR2
No.: R $
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 August 1, 2027, in such coin or
currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts,
and to pay interest, semi-annually on February 1 and August 1 of each
year, on said principal sum at said office or agency, in like coin or
currency, at the rate of 6.22% per annum, from the February 1 or the
August 1, as the case may be, next preceding the date of this Debenture
to which interest has been paid, unless the date hereof is a date to
which interest has been paid, in which case from the date of this
Debenture, or unless no interest has been paid on the Debentures
(as defined on the reverse hereof), in which case from August 1, 1997,
until payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date hereof is after January 15
or July 15, as the case may be, and before the following February 1
or August 1, this Debenture shall bear interest from such February 1
or August 1; provided, however, that if the Company shall default in
the payment of interest due on such February 1 or August 1, then this
Debenture shall bear interest from the next preceding February 1 or
August 1 to which interest has been paid, or, if no interest has been
<PAGE>
paid on the Debentures, from August 1, 1997. The interest so payable
on any February 1 or August 1 will, subject to certain exceptions
provided in the Indenture referred to on the reverse hereof, be paid
to the person in whose name this Debenture is registered at the close
of business on such January 15 or July 15, as the case may be, next
preceding such February 1 or August 1, unless the Company shall
default in the payment of interest due on such interest payment date,
in which case such defaulted interest, at the option of the Company,
may be paid to the person in whose name this Debenture is registered
at the close of business on a special record date for the payment of
such defaulted interest established by notice to the registered
holders of Debentures not less than ten days preceding such special
record date or may be paid in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the
Debentures may be listed. Payment of interest may, at the option of
the Company, be made by check mailed to the registered address of the
person entitled thereto.
Reference is made to the further provisions of this Debenture set
forth on the reverse hereof. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.
This Debenture shall not be valid or become obligatory for any
purpose until the certificate of authentication
<PAGE>
hereon shall have been signed by the Trustee under the Indenture
referred to on the reverse hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated: INTERNATIONAL BUSINESS MACHINES
CORPORATION
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION by______________________________
This is one of the
Securities of the Series
designated herein issued
under the within-
mentioned Indenture. by______________________________
THE CHASE MANHATTAN BANK, as Trustee
by ______________________________
Authorized Signatory
This Debenture is one of a duly authorized issue of unsecured
debentures, notes or other evidences of indebtedness of the Company
(hereinafter called the "Securities"), of the series hereinafter
specified, all issued or to be issued under an indenture dated as of
October 1, 1993 (hereinafter called the "Indenture"), duly executed
and delivered by the Company to The Chase Manhattan Bank, a New York
banking corporation, as trustee (hereinafter called the "Trustee"), to
which Indenture and all indentures supplemental thereto reference is
hereby made for a description of the respective rights and duties
thereunder of the Trustee, the Company and the holders of the
Securities. The Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts,
may mature at different times, may bear interest at different rates,
may have different conversion prices (if any), may be subject to
different redemption provisions, may be subject to different sinking,
purchase or analogous funds, may be subject to different covenants and
Events of Default and may otherwise vary as in
<PAGE>
the Indenture provided. This Debenture is one of a series designated
as the 6.22% Debentures due 2027 of the Company (hereinafter called
the "Debentures") issued under the Indenture, limited in aggregate
principal amount to $500,000,000.
In case an Event of Default with respect to the Debentures, 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
<PAGE>
with respect to any particular series the right to condition the
effectiveness of any supplemental indenture as to that series on the
consent of the holders of a specified percentage of the aggregate
principal amount of outstanding Securities of such series or to
provide that certain other provisions of the Indenture cannot be
modified or waived without the consent of the holder of each
outstanding Security affected thereby. It is also provided in the
Indenture that the holders of a majority in aggregate principal amount
of the Securities of a series at the time outstanding may on behalf of
the holders of all the Securities of such series waive any past
default under the Indenture with respect to such series and its
consequences, except a default in the payment of the principal of,
premium, if any, or interest, if any, on any Security of such series
or in respect of a covenant or provision which cannot be modified
without the consent of the Holder of each outstanding Security of the
series affected. Any such consent or waiver by the holder of this
Debenture shall be conclusive and binding upon such holder and upon
all future holders and owners of this Debenture and any Debentures
which may be issued in exchange or substitution herefor, irrespective
of whether or not any notation thereof is made upon this Debenture or
such other Debentures.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal
of, if any, and interest on this Debenture at the place, at the
respective times, at the rate and in the coin or currency herein
prescribed.
The Indenture permits the Company to Discharge its obligations
with respect to the Debentures on the 91st day following the
satisfaction of the conditions set forth in the Indenture, which
include the deposit with the Trustee of money or U.S. Government
Obligations or a combination thereof sufficient to pay and discharge
each installment of principal of (including premium, if any, on) and
interest, if any, on the outstanding Debentures.
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
<PAGE>
as the "Company" on the face of this Debenture, all on the terms set
forth in the Indenture.
The Debentures are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000. In the
manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge, Debentures may be exchanged
for an equal aggregate principal amount of Debentures of other
authorized denominations at the office or agency of the Company
maintained for such purpose in the Borough of Manhattan, The City and
State of New York.
The Debentures may be redeemed as a whole or in part, at the
option of the Company at any time on or after August 2, 2004, upon
mailing a notice of such redemption not less than 30 nor more than 60
days prior to the date fixed for redemption to the holders of the
Debentures at their last registered addresses, all as provided in the
Indenture, at a redemption price equal to the greater of (i) 100% of
the principal amount of the Debentures to be redeemed and (ii) the sum
of the present values of the Remaining Scheduled Payments thereon
discounted to the redemption date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate
plus 10 basis points, plus in either case accrued interest on the
principal amount being redeemed to the date of redemption.
"Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of
the Comparable Treasury Issue, assuming a price for the Comparable
Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date.
"Comparable Treasury Issue" means the United States Treasury
security selected by an Independent Investment Banker as having a
maturity comparable to the remaining term of the Debentures to be
redeemed that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the remaining term
of such Debentures. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after consultation
with the Company.
<PAGE>
"Comparable Treasury Price" means with respect to any redemption
date, (i) the average of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third business day preceding such redemption
date, as set forth in the daily statistical release (or any successor
release) published by the Federal Reserve Bank of New York and
designated "Composite 3:30 p.m. Quotations for U.S. Government
Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, (A)
the average of the Reference Treasury Dealer Quotations for such
redemption date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than
four such Reference Treasury Deal Quotations, the average of all such
Quotations. "Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Trustee, of the bid and asked prices for
the Comparable Treasury Issue (expected in each case as a percentage
of its principal amount) quoted in writing to the Trustee by such
Reference Treasury Dealer at 5:00 p.m. on the third business day
preceding such redemption date.
"Reference Treasury Dealer" means each of Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co. Inc., Goldman, Sachs & Co., Lehman
Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Salomon Brothers Inc, and their respective successors; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Company shall substitute therefor another Primary
Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to any
Debenture, the remaining scheduled payments of the principal thereof
to be redeemed and interest thereon that would be due after the
related redemption date but for such redemption; provided, however,
that, if such redemption date is not an interest payment date with
respect to such Debenture, the amount of the next succeeding scheduled
interest payment thereon will be reduced by the amount of interest
accrued thereon to such redemption date.
The Debentures will be redeemable on August 1, 2004, at the
option of the holders thereof, at 100% of their principal amount,
together with interest payable to the date
<PAGE>
of redemption. Less than the entire principal amount of any Debenture
may be redeemed, provided the principal amount which is to be redeemed
is equal to $1,000 or an integral multiple of $1,000. The Company must
receive at the principal office of the Paying Agent, during the period
from and including June 1, 2004 to and including July 1, 2004: (i) the
Debenture with the form entitled "Option to Elect Repayment" on the
reverse of the Debenture duly completed; or (ii)(x) a telegram,
facsimile transmission or letter form 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 registered holder of the
Debenture, the principal amount of the Debenture, the amount of the
Debenture to be repaid, a statement that the option to elect repayment
is being exercised thereby and a guarantee that the Debenture to be
repaid with the form entitled "Option to Elect Repayment" on the
reverse of the Debenture duly completed, will be received by the
Company not later than five business days after the date of such
telegram, facsimile transmission or letter; and (y) such Debenture and
form duly completed are received by the Company by such fifth business
day. Any such notice received by the Company during the period from
and including June 1, 2004 to and including July 1, 2004 shall be
irrevocable. All questions as to the validity, eligibility (including
time of receipt) and the acceptance of any Debenture for repayment
will be determined by the Company, whose determination will be final
and binding. For all purposes of this paragraph, if August 1, 2004 is
not a business day, it shall be deemed to refer to the next succeeding
business day.
Upon due presentation for registration of transfer of this
Debenture at the office or agency of the Company for such registration
in the Borough of Manhattan, The City and State of New York, a new
Debenture or Debentures of authorized denominations for an equal
aggregate principal amount will be issued to the transferee in
exchange herefor, subject to the limitations provided in the
Indenture, without charge except for any tax or other governmental
charge imposed in connection therewith.
Prior to due presentment for registration of transfer of this
Debenture, the Company, the Trustee and any agent of the Company or
the Trustee may deem and treat the registered holder hereof as the
absolute owner of this Debenture
<PAGE>
(whether or not this Debenture shall be overdue) for the purpose of
receiving payment of the principal of, premium, if any, and interest
on this Debenture, as herein provided, and for all other purposes, and
neither the Company nor the Trustee nor any agent of the Company or
the Trustee shall be affected by any notice of the contrary. All
payments made to or upon the order of such registered holder shall, to
the extent of the sum or sums paid, effectually satisfy and discharge
liability for moneys payable on this Debenture.
No recourse for the payment of the principal of, premium, if any,
or interest on this Debenture, or for any claim based hereon or
otherwise in respect hereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in the Indenture or
any indenture supplemental thereto or in any Debenture, or because of
the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, officer or director, as such,
past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of
law or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
Unless otherwise defined in this Debenture, all terms used in
this Debenture which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
THIS DEBENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the
Company to repay this Debenture (or portion hereof specified below)
pursuant to its terms at a price equal to the principal amount
thereof, together with interest to August 1, 2004, to the undersigned
at
- ---------------------------------------------------------
(Name, Address and Tax I.D. Number of the undersigned)
For this Debenture to be repaid, the Company must receive at the
office of the Paying Agent, during the period from and including June
1, 2004 to and including July 1, 2004 (i) this Debenture with this
"Option to Elect Repayment" form duly completed or (ii)(x) 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 registered holder of the
Debenture, the principal amount of the Debenture, the amount of the
Debenture to be repaid, a statement that the option to elect repayment
is being exercised thereby and a guarantee that the Debenture, with
this "Option to Elect Repayment" form 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 (y) this
Debenture and the form duly completed are received by the Company by
such fifth business day.
If less than the entire principal amount of this Debenture is to
be repaid, specify the portion thereof (which shall be $1,000 or an
integral multiple of $1,000) which the Holder elects to have repaid
$________. One Debenture will be issued for the portion not being
repaid.
- -------------------- ----------------------------
Date Signature
NOTICE: The signature on this Option to Elect Repayment must
correspond with the name as written upon the face of this Debenture in
every particular without alternation or enlargement or any other
change whatsoever.
