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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) April 19, 1999.
INTERNATIONAL BUSINESS MACHINES CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-2360 13-0871985
(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification No.)
Armonk, New York 10504
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 914-499-1900
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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. 333-70521 on Form S-3, which registration
statement was declared effective on March 9, 1999, the document included as
Exhibit 1 hereto, relating to the offering of up to $4,140,000,000 aggregate
principal amount of Medium-Term debt securities of the Registrant.
The following exhibit is hereby filed with this report:
Exhibit
Number Description
(1) Agency Agreement dated March 11, 1999, among International
Business Machines Corporation, Chase Securities Inc., Credit
Suisse First Boston Corporation, Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley &
Co. Incorporated, and Salomon Smith Barney Inc.
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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/ Andrew Bonzani
-----------------------------------
Name: Andrew Bonzani
Title: Assistant Secretary
Date: April 22, 1999.
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Exhibit Index
Exhibit
Number Description
(1) Agency Agreement dated March 11, 1999, among International
Business Machines Corporation, Chase Securities Inc., Credit
Suisse First Boston Corporation, Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley &
Co. Incorporated, and Salomon Smith Barney Inc.
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Exhibit 1
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$4,140,000,000
International Business Machines Corporation
U.S. Medium-Term Notes
AGENCY AGREEMENT
March 11, 1999
Chase Securities Inc.
270 Park Avenue
New York, New York 10017-2070
Credit Suisse First Boston Corporation
11 Madison Avenue
5th Floor
New York, New York 10010
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower
New York, New York 10281-1315
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Salomon Smith Barney Inc.
7 World Trade Center
New York, New York 10048
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Dear Sirs:
1. INTRODUCTION. International Business Machines Corporation, a New York
corporation (the "Issuer"), confirms its agreement with each of you
(individually an "Agent" and collectively the "Agents") with respect to the
issue and sale from time to time by the Issuer on or after the date hereof of up
to $4,140,000,000 in aggregate initial offering price of its Medium-Term
Securities (or for Medium-Term Securities denominated in currencies or currency
units other than U.S. dollars, the equivalent thereof based on the prevailing
exchange rates at the respective times such Medium-Term Securities are first
offered) (the "Securities") issued under Article Three of the Indenture, dated
as of October 1, 1993 (the "Trustee"), as supplemented by the First Supplemental
Indenture thereto dated as of December 15, 1995 (the "Indenture"), between the
Issuer and The Chase Manhattan Bank, as trustee. The Securities will be issued,
and the terms thereof established, from time to time by the Issuer in accordance
with the Indenture and the Procedures (as defined in Section 3(d) hereof).
2. REPRESENTATIONS AND WARRANTIES OF THE ISSUER. The Issuer represents and
warrants to, and agrees with, each Agent as follows:
(a) Registration statements of the Issuer (Nos. 333-70521 and
333-40669), relating to securities of the Issuer (collectively the
"Registered Securities"), including the Securities, have been filed with
the Securities and Exchange Commission (the "Commission") and have become
effective (such registration statements, as amended as of the Closing Date
(as defined in Section 3(e) hereof), including all material incorporated
by reference therein, being hereinafter collectively referred to as the
"Registration Statement," and the prospectus dated March 9, 1999, a form
of which is included in Registration Statement No. 333-70521, as
supplemented as of the Closing Date, including all material incorporated
by reference therein, being hereinafter referred to as the "Prospectus").
Any reference in this Agreement to amending or supplementing the
Prospectus shall be deemed to include the filing of materials incorporated
by reference in the Prospectus after the Closing Date and any reference in
this Agreement to any amendment or supplement to the Prospectus shall be
deemed to include any such materials incorporated by reference in the
Prospectus after the Closing Date.
(b) On the effective date of each registration statement included in
the definition of Registration Statement, such registration statement
conformed, and on the Closing Date the Prospectus as then amended or
supplemented will conform, in all material respects to the requirements of
the Securities Act of 1933 (the "Act"), the Securities Exchange Act of
1934 (the "Exchange Act"), the Trust Indenture Act of 1939 (the "Trust
Indenture Act") and the rules and regulations of the Commission thereunder
(the "Rules and Regulations"), and on its effective date each registration
statement did not, and such Prospectus will not, include any untrue
statement of a material fact or omit to state any
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material fact required to be stated therein or necessary to make the
statements therein not misleading, except that the foregoing does not
apply to statements in or omissions from any of such documents based upon
written information furnished to the Issuer by any Agent specifically for
use therein.
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3. APPOINTMENT AS AGENT; SOLICITATIONS AS AGENT.
(a) Subject to the terms and conditions stated herein, the Issuer
hereby appoints each of the Agents an agent of the Issuer for the purpose
of soliciting or receiving offers to purchase the Securities from the
Issuer by others. Nothing contained in this Agreement shall be construed
to prevent the Issuer from selling at any time to any person any
Registered Securities, including the Securities, directly on its own
behalf or in a firm commitment underwriting pursuant to an underwriting
agreement that does not provide for a continuous offering of such
Securities. Each Agent agrees to use its reasonable efforts to solicit
purchases of the Securities on the terms and subject to the conditions set
forth herein and in the Procedures (as defined below).
(b) On the basis of the representations and warranties contained
herein, but subject to the terms and conditions herein set forth, each
Agent agrees, as agent of the Issuer, to solicit offers to purchase the
Securities upon the terms and conditions set forth in the Prospectus, as
from time to time amended or supplemented.
Upon receipt of notice from the Issuer as contemplated by Section
4(b) hereof, the Agents shall suspend solicitation of offers to purchase
the Securities until such time as the Issuer shall have furnished them
with an amendment or supplement to the Registration Statement or the
Prospectus, as the case may be, contemplated by Section 4(b) and shall
have advised the Agents that such solicitation may be resumed.
The Issuer reserves the right, in its sole discretion, to suspend
solicitation of offers to purchase the Securities commencing at any time
for any period of time or permanently. Upon receipt of notice from the
Issuer, the Agents will forthwith suspend solicitation of offers to
purchase the Securities from the Issuer until such time as the Issuer has
advised the Agents that such solicitation may be resumed. During any such
suspension, the Issuer's obligations under Sections 6(a), 6(b), 6(c) and
6(d) shall be suspended, except with respect to Notes held by an Agent for
resale during the first 180 days after the Agent's purchase thereof and
identified in a notice from the Agent to the Issuer as being held by such
Agent for resale during such period.
Unless otherwise mutually agreed upon between the Issuer and the
Agent soliciting such offer, the Agents are authorized to solicit offers
to purchase Securities only in fully registered form in denominations of
$1,000 or any multiple thereof. The authorized denominations of Securities
not denominated in U.S. dollars will be determined by the Issuer at the
time of sale. Each Agent shall communicate to the Issuer, orally or in
writing, each reasonable offer to purchase the Securities received by it
as Agent. The Issuer shall have the sole right to accept offers to
purchase the Securities and may reject any such offer, in whole or in
part. Each Agent shall have the right, in its
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discretion reasonably exercised, without notice to the Issuer, to reject
any offer to purchase the Securities received by it, in whole or in part,
and any such rejection shall not be deemed a breach of its agreement
contained herein.
No Security which the Issuer has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold, by
the Issuer until such Security shall have been delivered to the purchaser
thereof against payment by such purchaser.
(c) At the time of delivery of, and payment for, any Securities sold
by the Issuer as a result of a solicitation made by, or offer to purchase
received by, an Agent, the Issuer agrees to pay such Agent a commission in
accordance with the schedule set forth in Exhibit A hereto, unless
otherwise agreed.
(d) Administrative procedures respecting the sale of Securities (the
"Procedures") shall be agreed upon from time to time by the Agents and the
Issuer. The initial Procedures, which are set forth in Exhibit B hereto,
shall remain in effect until changed by agreement among the Issuer and the
Agents. Each Agent and the Issuer agree to perform the respective duties
and obligations specifically provided to be performed by each of them
herein and in the Procedures. The Issuer will furnish to the Trustee a
copy of the Procedures as from time to time in effect.
(e) The documents required to be delivered by Section 5 hereof shall
be delivered at the offices of the Issuer in Armonk, New York, or counsel
for the Issuer in New York City, not later than 10:00 A.M., New York City
time, on the date of this Agreement or at such other place, and at such
later time and date as may be mutually agreed by the Issuer and the
Agents, such time and date being herein called the "Closing Date."
4. CERTAIN AGREEMENTS OF THE ISSUER. The Issuer agrees with the Agents
that, in connection with each offering of Securities,
(a) The Issuer will advise each Agent promptly of any proposal to
amend or supplement the Registration Statement or the Prospectus (other
than an amendment or supplement (i) providing solely for a change in the
terms of the Securities, (ii) by means of the filing of materials
incorporated by reference in the Prospectus, (iii) relating to an offering
by the Issuer of Registered Securities other than the Securities or (iv)
that is a pricing amendment or supplement relating to Securities the
purchase of which was not solicited by any Agent) and will afford the
Agents a reasonable opportunity to comment on any such proposed amendment
or supplement; and the Issuer will also advise each Agent of the filing of
any such amendment or supplement and of the institution by the Commission
of any stop order proceedings in respect of the Registration Statement or
of any part thereof and will use its best efforts to prevent the issuance
of any such stop order
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and to obtain as soon as possible its lifting, if issued.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is
delivered, not misleading, or if it is necessary at any time to amend the
Registration Statement or the Prospectus to comply with the Act, the
Exchange Act or the Rules and Regulations (other than as contemplated in
the parenthetical clause of Section 4(a) hereof), the Issuer will promptly
notify each Agent to suspend solicitation of offers to purchase the
Securities; and if the Issuer shall decide so to amend or supplement the
Registration Statement or the Prospectus, it will promptly advise each
Agent by telephone (with confirmation in writing) and will promptly
prepare and file with the Commission an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance. Notwithstanding the foregoing, if, at the time of any
notification to suspend solicitations, any Agent shall own any of the
Securities with the intention of reselling them as contemplated by Section
11 hereof, or the Issuer has accepted an offer to purchase Securities but
the related settlement has not occurred, the Issuer, subject to the
provisions of subsection (a) of this Section, will promptly prepare and
file with the Commission an amendment or supplement which will correct
such statement or omission or an amendment which will effect such
compliance.
(c) The Issuer, during the period when a prospectus relating to the
Securities is required to be delivered under the Act, will file promptly
all documents required to be filed with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act. The Issuer will promptly
furnish each Agent with copies of all material press releases or
announcements to the general public which are not filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act and are not otherwise available on the IBM home page on the Internet,
at "http://www.ibm.com." The Issuer will also immediately notify each
Agent of any downgrading in the rating of the Securities or any other debt
securities of the Issuer, or any proposal to downgrade the rating of the
Securities or any other debt securities of the Issuer, by any "nationally
recognized statistical rating organization" (as defined for purposes of
Rule 436(g) under the Act), as soon as the Issuer learns of such
downgrading or proposal to downgrade.
(d) The Issuer will furnish to each Agent copies of the Prospectus
and all amendments and supplements thereto, and all amendments to the
Registration Statement after the date hereof (other than an amendment or
supplement (i) relating to an offering by the Issuer of Registered
Securities other than the Securities or (ii) that solely specifies the
terms of the Securities the purchase of which was not solicited by any
Agent), in each
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case as soon as available and in such quantities as are reasonably
requested.
(e) The Issuer will arrange for the qualification of the Securities
for sale and the termination of their eligibility for investment under the
laws of such jurisdictions as the Agents designate and will continue such
qualifications in effect so long as required for the distribution of the
Securities.
(f) So long as any Securities are outstanding, if so requested by
the Agents, the Issuer will furnish to the Agents, (i) as soon as
practicable after the end of each fiscal year, a copy of its annual report
to stockholders for such year, (ii) as soon as available, a copy of each
report or definitive proxy statement of the Issuer, if any, filed with the
Commission under the Exchange Act or mailed to stockholders, and (iii)
from time to time, such other information concerning the Issuer as the
Agents may reasonably request.
(g) The Issuer will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse each Agent for any
expenses (including fees and disbursements of counsel) incurred by it in
connection with qualification of the Securities for sale and determination
of their eligibility for investment under the laws of such jurisdictions
as such Agent may designate and the printing of memoranda relating
thereto, for any fees charged by investment rating agencies for the rating
of the Securities, for expenses incurred in distributing the Prospectus
and all supplements thereto, any preliminary prospectuses and any
preliminary prospectus supplements, to each Agent and for the reasonable
fees and disbursements of counsel to the Agents.
5. CONDITIONS OF OBLIGATIONS. The obligation of each Agent, as agent of
the Issuer, under this Agreement at any time to solicit offers to purchase the
Securities is subject to the accuracy, on the date hereof, on the Closing Date,
on the date of each such solicitation, and at each of the times of acceptance
and of delivery referred to in Section 6(a) hereof and at each Representation
Date (as defined in Section 6(b)), of the representations and warranties of the
Issuer herein, to the accuracy, on each such date, of the statements of the
Issuer's officers in any certificates made pursuant to the provisions hereof, to
the performance, on or prior to each such date, by the Issuer of its obligations
hereunder, and to each of the following additional conditions precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement or of any part thereof shall have been issued and no proceedings
for that purpose shall have been instituted or, to the knowledge of the
Issuer or any Agent, shall be contemplated by the Commission.
(b) The Prospectus, as amended or supplemented as of the Closing
Date, the date of such solicitation or any Representation Date, shall not
contain any untrue statement of
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fact which, in the opinion of any Agent, is material or omits to state a
fact which, in the opinion of any Agent, is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
(c) There shall not have occurred between each trade and settlement
date (i) any change, or any development involving a prospective change, in
or affecting particularly the business or properties of the Issuer or its
subsidiaries which, in the judgment of such Agent, materially impairs the
investment quality of the Securities; (ii) any downgrading in the rating
of the Issuer's debt securities or public announcement that such debt
securities are under surveillance or review, with possible negative
implications, by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act);
(iii) any suspension or limitation of trading in securities generally on
the New York Stock Exchange, or any setting of minimum prices for trading
on such exchange, or any suspension of trading of any securities of the
Issuer on any exchange or in the over-the-counter market; (iv) any banking
moratorium declared by Federal or New York authorities; or (v) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial
national or international calamity or emergency if, in the judgment of
such Agent, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
solicitations of purchases of, or sales of, Securities.
(d) At the Closing Date, the Agents shall have received:
(i) the opinion of the General Counsel of the Issuer (or any
Assistant General Counsel, Associate General Counsel, or other
Counsel of the Issuer having knowledge of and responsibility for
securities or financial matters, the "Issuer
Counsel"), or the opinion of Cravath, Swaine & Moore, counsel
for the Issuer, dated the Closing Date, to the effect that:
(A) the Issuer (x) has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of New York, with full corporate power and authority
to own its properties and conduct its business as described in
the Prospectus and (y) is duly qualified to do business as a
foreign corporation and is in good standing under the laws of
each jurisdiction within the United States which requires such
qualification wherein it owns or leases material properties or
conducts material business where such failure so to qualify may
have a material adverse effect on the financial condition,
earnings, business or properties of the Issuer;
(B) to the knowledge of opining counsel, there is no
pending or
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threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator
involving the Issuer or any of its subsidiaries, of a character
required to be disclosed in the Registration Statement which is
not adequately disclosed in the Prospectus, and there is no
franchise, contract or other document of a character required to
be described in the Registration Statement or Prospectus, or to
be filed as an exhibit, which is not described or filed as
required; and the statements in the Prospectus describing the
terms of the Securities and the provisions of the Indenture
fairly summarize the matters therein described; and
(C) none of the issue and sale of the Securities, the
consummation of any other of the transactions contemplated herein
or the fulfillment of the terms hereof will conflict with, result
in a breach of, or constitute a default under, (x) the charter or
by-laws of the Issuer; (y) the terms of any indenture or other
agreement or instrument known to such counsel and to which the
Issuer or any of its subsidiaries is a party or bound, or (z) any
order or regulation known to such counsel to be applicable to the
Issuer or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Issuer or any of its subsidiaries.
(D) the authorized Securities conform in all material
respects to the description thereof contained in the Prospectus;
(E) the Indenture has been duly authorized, executed and
delivered by the Issuer, has been duly qualified under the Trust
Indenture Act and constitutes a valid and binding instrument
enforceable against the Issuer in accordance with its terms
(subject to applicable bankruptcy, reorganization, insolvency,
fraudulent transfer, moratorium or other similar laws affecting
creditors' rights generally from time to time in effect and to
general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at
law); and the Securities have been duly authorized by resolutions
of the Board of Directors of the Issuer for issuance for a period
of two years following the effective date of the Registration
Statement (the "Period"), subject to the establishment of certain
terms of the Securities by officers of the Issuer authorized by
such resolutions to establish such terms, and, when the terms of
any such Security have been established as provided in such
resolutions and in the Indenture and such has been executed and
authenticated during such period in accordance with the
provisions of the Indenture and delivered to and paid for by the
purchaser thereof in accordance with the terms of this Agreement,
each such Security, assuming it does not
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violate any applicable law then binding on the Issuer, will
constitute a valid and binding obligation of the Issuer entitled
to the benefits of the Indenture;
(F) the Registration Statement and any amendments
thereto have become effective under the Act, and, to the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement, as amended, has been
issued, and no proceedings for that purpose have been instituted
or threatened;
(G) this Agreement has been duly authorized, executed
and delivered by the Issuer; and
(H) no consent, approval, authorization or order of any
United States Federal or New York governmental agency or
regulatory body is required for the consummation of the
transactions contemplated herein, except such as have been
obtained under the Act and such as may be required under the blue
sky laws of any jurisdiction in connection with the issue and
sale of the Securities and such other approvals (specified in
such opinion) as have been obtained.
(ii) such counsel shall also furnish a letter, dated the
Closing Date, that shall state that such counsel has no reason to
believe that: (A) the Registration Statement or any amendment thereof
at the time it became effective 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, as amended or supplemented,
includes an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading (in each case, except for the financial statements and
other information of an accounting or financial nature included
therein, and the Statement of Eligibility (Form T-1), included as an
exhibit to the Registration Statement, as to which such counsel need
express no view); and (B) the Registration Statement and the
Prospectus as amended or supplemented (except the financial
statements and other information of an accounting or financial nature
included therein, and the Statement of Eligibility (Form T-1),
included as an exhibit to the Registration Statement, as to which
such counsel need express no view), were not appropriately responsive
in all material respects to the requirements of the Act and the Trust
Indenture Act and the applicable rules and regulations thereunder.
(e) At the Closing Date, the Agents shall have received a
certificate, dated the
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Closing Date, of the Chief Executive Officer or any Vice President and the
Treasurer, any Assistant Treasurer, or any principal financial or
accounting officer of the Issuer in which such officers, to the best of
their knowledge after reasonable investigation, shall state that (i) the
representations and warranties of the Issuer in this Agreement are true
and correct, (ii) the Issuer has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, (iii) no stop order suspending
the effectiveness of the Registration Statement or of any part thereof has
been issued and no proceedings for that purpose have been instituted or
are threatened by the Commission, and (iv) subsequent to the date of the
most recent financial statements in the Prospectus, there has been no
material adverse change in the financial position or results of operations
of the Issuer and its subsidiaries, except as set forth in or contemplated
by the Prospectus or as described in such certificate.
(f) At the Closing Date, the Agents shall have received a letter,
dated such date, of PricewaterhouseCoopers LLP ("PWC"), confirming that
they are independent public accountants within the meaning of the Act and
the Exchange Act and the respective applicable published Rules and
Regulations thereunder, that the response, if any, to Item 10 of the
Registration Statement is correct insofar as it relates to them and
stating in effect that:
(i) in their opinion, the audited financial statements and
schedules thereto included or incorporated in the Registration
Statement and Prospectus and reported on by them comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published Rules and Regulations
thereunder with respect to financial statements and financial
statement schedules included or incorporated in annual reports on
Form 10-K under the Exchange Act;
(ii) on the basis of a reading of the unaudited financial
statements included or incorporated in the Registration Statement
and Prospectus and of the latest unaudited financial statements made
available by the Issuer and its subsidiaries; carrying out certain
specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set
forth in such letter; a reading of the minutes of the Board of
Directors of the Issuer and the Pricing Committee appointed by the
Board of Directors of the Issuer, if any; and inquiries of certain
officials of the Issuer who have responsibility for financial and
accounting matters as to transactions and events subsequent to the
date of the most recent financial statements included or
incorporated in the Registration Statement and the Prospectus,
nothing came to their attention that caused them to believe that:
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(A) any unaudited financial statements included or
incorporated in the Registration Statement and Prospectus do not
comply as to form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on Form
10-Q under the Exchange Act; or said unaudited financial
statements are not fairly presented (except as permitted by Form
10-Q) in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the
audited financial statements included or incorporated in the
Registration Statement and Prospectus; or
(B) any unaudited capsule information included or
incorporated in the Registration Statement and Prospectus does
not agree with the amounts set forth in the unaudited
consolidated financial statements from which it was derived or
was not determined on a basis substantially consistent with that
of the audited financial statements included or incorporated in
the Registration Statement and Prospectus; and
(iii) they have performed certain other procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Issuer) set forth in the
Registration Statement and the Prospectus, including the information
included or incorporated in Items 1 and 7 of the Issuer's Annual
Report on Form 10-K incorporated therein or in "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" included or incorporated in any of the Issuer's
Quarterly Reports on Form 10-Q incorporated therein, agrees with the
accounting records of the Issuer and its subsidiaries, excluding any
questions of legal interpretation.
References to the Registration Statement and the Prospectus in this
subsection (f) are to such documents as amended and supplemented at the
date of the letter.
(g) The Agents shall have received from Davis Polk & Wardwell,
counsel for the Agents, such opinion or opinions, dated the Closing Date,
with respect to the validity of the Securities, the Registration
Statement, the Prospectus and other related matters as they may require,
and the Issuer shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(h) With respect to any Security denominated in a currency other
than the U.S. dollar, more than one currency or a composite currency or
any Security the principal or
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interest of which is indexed to such currency, currencies or composite
currency, there shall not have occurred a suspension or material
limitation in foreign exchange trading in such currency, currencies or
composite currency by a major international bank, a general moratorium on
commercial banking activities in the country or countries issuing such
currency, currencies or composite currency, the outbreak or escalation of
hostilities involving, the occurrence of any material adverse change in
the existing financial, political or economic conditions of, or the
declaration of war or a national emergency by, the country or countries
issuing such currency, currencies or composite currency or the imposition
or proposal of exchange controls by any governmental authority in the
country or countries issuing such currency, currencies or composite
currency.
The obligation of each Agent, as agent of the Issuer, under this
Agreement to solicit offers to purchase Securities at any time after the
end of the Period is also subject to the delivery to the Agents before
that date and thereafter, periodically as appropriate, of an opinion from
either Issuer Counsel or Cravath, Swaine & Moore, to the effect of
subparagraph (d)(i)(E) above with respect to the Securities to be issued
during the period set forth therein (which shall include the period of
contemplated solicitation) and such other documents and certificates
(including an opinion of Davis Polk & Wardwell to the effect of
subparagraph (g) above) as the Agents may reasonably request before that
date and the Issuer shall have furnished to Davis Polk & Wardwell such
documents as they may reasonably request before that date for the purpose
of enabling them to render such opinion.
The Issuer will furnish the Agents with such conformed copies of
such opinions, certificates, letters and documents as they reasonably
request.
6. ADDITIONAL COVENANTS OF THE ISSUER. The Issuer agrees that:
(a) Each acceptance by the Issuer of an offer for the purchase of
Securities solicited by any Agent pursuant hereto shall be deemed to be an
affirmation that its representations and warranties contained in this
Agreement are true and correct at the time of such acceptance and a
covenant that such representations and warranties will be true and correct
at the time of delivery to the purchaser of the Securities relating to
such acceptance as though made at and as of each such time, it being
understood that such representations and warranties shall relate to the
Prospectus as amended or supplemented at each such time. Each such
acceptance by the Issuer of an offer for the purchase of Securities shall
be deemed to constitute an additional representation, warranty and
agreement by the Issuer that, as of the settlement date for the sale of
such securities, after giving effect to the issuance of such Securities,
of any other Securities to be issued on or prior to such settlement date
and of any other Registered Securities to be issued and sold by the Issuer
on or prior to such settlement date, the aggregate amount of Registered
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Securities (including any Securities) which have been issued and sold by
the Issuer will not exceed the amount of Registered Securities registered
pursuant to the Registration Statement.
(b) Each time that the Registration Statement or the Prospectus
shall be amended or supplemented (other than by an amendment or supplement
(i) that relates to an offering by the Issuer of Registered Securities
other than the Securities or (ii) that solely specifies the terms of the
Securities) (each such time being herein referred to as a "Representation
Date"), the Issuer shall, concurrently with such amendment or supplement,
furnish the Agents with a certificate, dated the date of delivery thereof,
of the Chief Executive Officer or any Vice President and the Treasurer,
any Assistant Treasurer, or any principal financial or accounting officer
of the Issuer, in form satisfactory to the Agents, to the effect that the
statements contained in the certificate covering the matters set forth in
Section 5(e) hereof which was last furnished to the Agents are true and
correct at the time of such amendment or supplement as though made at and
as of such time (except that such statements shall be deemed to relate to
the Registration Statement and the Prospectus as amended or supplemented
at such time and except that the statements contained in the certificate
covering the matters set forth in clause (ii) of Section 5(e) shall be
deemed to relate to the time of delivery of such certificate) or, in lieu
of such certificate, a certificate of the same tenor as the certificate
referred to in Section 5(e), modified as necessary to relate to the
Registration Statement and the Prospectus as amended or supplemented at
the time of delivery of such certificate and, in the case of the matters
set forth in clause (ii) of Section 5(e), to the time of delivery of such
certificate; provided, however, that the Issuer shall deliver such
certificate with respect to a Representation Date arising from the
incorporation by reference into the Prospectus of a current report on Form
8-K or a quarterly report on Form 10-Q only upon the reasonable request of
the Agents.
(c) At each Representation Date, the Issuer shall, if reasonably
requested by the Agents, concurrently furnish the Agents with a written
opinion or opinions, dated the date of such Representation Date, of Issuer
Counsel or Cravath, Swaine & Moore, in form satisfactory to the Agents, to
the effect set forth in Section 5(d) hereof, but modified, as necessary,
to relate to the Registration Statement and the Prospectus as amended or
supplemented at such Representation Date; provided, however, that in lieu
of such opinion or opinions, counsel may furnish the Agents with a letter
or letters to the effect that the Agents may rely on a prior opinion
delivered under Section 5(d) or this Section 6(c) to the same extent as if
it were dated the date of such letter (except that statements in such
prior opinion shall be deemed to relate to the Registration Statement and
the Prospectus as amended or supplemented at such Representation Date).
(d) At each Representation Date on which the Registration Statement
or the
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Prospectus shall be amended or supplemented to include additional
financial information as a result of filing of the Issuer's Annual Report
on Form 10-K, and upon the reasonable request of the Agents, the Issuer
shall cause PWC concurrently to furnish the Agents with a letter,
addressed jointly to the Issuer and the Agents and dated the date of such
Representation Date, in form and substance satisfactory to the Agents, to
the effect set forth in Section 5(f) hereof but modified to relate to the
Registration Statement and the Prospectus as amended or supplemented at
such Representation Date, with such changes as may be necessary to reflect
changes in the financial statements and other information derived from the
accounting records of the Issuer; provided, however, that if the
Registration Statement or the Prospectus is amended or supplemented solely
to include financial information as of and for a fiscal quarter, PWC may
limit the scope of such letter to the audited financial statements
included in such amendment or supplement unless there is contained therein
any other accounting, financial or statistical information that, in the
reasonable judgment of the Agents, should be covered by such letter, in
which event such letter shall also cover such other information and
procedures as shall be agreed upon by the Agents.
(e) The Issuer agrees that any obligation of a person who has agreed
to purchase Securities as the result of solicitation by any Agent pursuant
hereto to make payment for and take delivery of such Securities shall be
subject to (i) the accuracy, on the related settlement date fixed pursuant
to the Procedures, of the Issuer's representation and warranty deemed to
be made to the Agents pursuant to the last sentence of subsection (a) of
this Section 6, and (ii) the satisfaction, on such settlement date, of
each of the conditions set forth in Sections 5(a), (b) and (c), it being
understood that under no circumstance shall any Agent have any duty or
obligation to exercise the judgment permitted under Section 5(b) or (c) on
behalf of any such person.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Issuer agrees to indemnify and hold harmless each Agent and
each person who controls such Agent within the meaning of either the Act
or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become
subject, under the Act, the Exchange Act or other Federal or State
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement
relating to the Registered Securities as originally filed or in any
amendment thereto, or in any preliminary prospectus or the Prospectus, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and agrees to reimburse each Agent
for any legal or other expenses reasonably incurred by
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such Agent in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that (i) the Issuer
will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made
in any of such documents in reliance upon and in conformity with written
information furnished to the Issuer by any Agent specifically for use in
connection with the preparation thereof and (ii) such indemnity with
respect to any preliminary prospectus or the Prospectus shall not inure to
the benefit of any Agent (or any person controlling such Agent) through
which the person asserting any such loss, claim, damage or liability
purchased the Securities which are the subject thereof if such person did
not receive a copy of the Prospectus (or the Prospectus as so amended or
supplemented), excluding documents incorporated therein by reference, at
or prior to the earlier of the confirmation of the sale of such Securities
or the delivery of the 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 any preliminary prospectus or the Prospectus
was corrected in the Prospectus (or the Prospectus as amended or
supplemented prior to the confirmation of the sale of such Securities to
such person). This indemnity agreement will be in addition to any
liability which the Issuer may otherwise have.
(b) Each Agent agrees to indemnify and hold harmless the Issuer,
each of its directors, each of its officers who signed the Registration
Statement or any amendment thereto, and each person who controls the
Issuer within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Issuer to such Agent, but
only with reference to written information relating to such Agent
furnished to the Issuer by such Agent specifically for use in the
preparation of the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which such Agent
may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may
have to any indemnified party otherwise than under this Section 7. In case
any such action is brought against any indemnified party, and it notifies
the indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there
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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 assert such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to
such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying
party will not be liable to such indemnified party under this Section 7
for any legal or other expenses subsequently incurred by such indemnified
party in connection with the defense thereof unless (i) the indemnified
party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next
preceding sentence (it being understood, however, that the indemnifying
party shall not be liable for the expenses of more than one separate
counsel, approved by the Agents in the case of subparagraph (a),
representing the indemnified parties under subparagraph (a) who are
parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment
of counsel for the indemnified party at the expense of the indemnifying
party; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such
clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a)
of this Section 7 is due in accordance with its terms but is for any
reason held by a court to be unavailable from the Issuer on grounds of
policy or otherwise, the Issuer and each Agent shall contribute to the
aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or
defending same) to which the Issuer and such Agents may be subject in such
proportion so that each Agent is responsible for that portion represented
by the percentage that the sum of aggregate commissions received by such
Agent pursuant to Section 3(c) hereof in connection with the sale of the
Securities to which such loss, claim, damage or liability relates to the
aggregate principal amount of such Securities and the Issuer is
responsible for the balance; provided, however, that (y) in no case shall
any Agent be responsible for any amount in excess of the commissions
received by it for such Securities to which such loss, claim, damage or
liability relates, and (z) no person found liable for fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall
be entitled to contribution from any person who was found not liable for
such fraudulent misrepresentation. For purposes of this Section 7, each
person who controls any Agent within the meaning of either the Act or the
Exchange Act shall have the same rights to contribution as such Agent, and
each person who controls the Issuer within the meaning of either the Act
or the Exchange Act, each officer of the Issuer who shall have signed the
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Registration Statement or any amendment thereto, and each director of the
Issuer shall have the same rights to contribution as the Issuer, subject
in each case to clause (y) of this paragraph (d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim
for contribution may be made against another party or parties under this
paragraph (d), notify such party or parties from whom contribution may be
sought, but the omission to notify such party or parties shall not relieve
the party or parties from whom contribution may be sought from any
obligation it or they may have hereunder or otherwise than under this
paragraph (d).
8. STATUS OF EACH AGENT. In soliciting offers to purchase the Securities
from the Issuer pursuant to this Agreement and in assuming its other obligations
hereunder (other than offers to purchase pursuant to Section 11 hereof), each
Agent is acting solely as agent for the Issuer and not as principal. Each Agent
will make reasonable efforts to assist the Issuer in obtaining performance by
each purchaser whose offer to purchase Securities from the Issuer has been
solicited by such Agent and accepted by the Issuer, but such Agent shall have no
liability to the Issuer in the event any such purchase is not consummated for
any reason. If the Issuer shall default on its obligations to deliver Securities
to a purchaser who has agreed to purchase Securities as a result of solicitation
by any Agent pursuant hereto, and whose offer the Issuer has accepted, the
Issuer (i) shall hold the Agents harmless against any loss, claim or damages
arising from or as a result of such default by the Issuer, and (ii) in
particular, shall pay to the Agents any commission to which they would be
entitled in connection with such sale.
9. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Issuer or its officers and of the Agents set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation,
or statement as to the results thereof, made by or on behalf of any Agent, the
Issuer or any of their respective representatives, officers or directors or any
controlling person and will survive delivery of and payment for the Securities.
If this Agreement is terminated pursuant to Section 10 or for any other reason,
the Issuer shall remain responsible for the expenses to be paid or reimbursed by
it pursuant to Section 4(g) and the obligations of the Issuer under Section 4(f)
and the respective obligations of the Issuer and the Agents pursuant to Section
7 shall remain in effect. In addition, if any such termination shall occur
either (i) at a time when any Agent shall own any of the Securities with the
intention of reselling them as contemplated by Section 11 hereof or (ii) after
the Issuer has accepted an offer to purchase Securities solicited by any Agent
pursuant hereto and prior to the related settlement, the obligations of the
Issuer under the last sentence of Section 4(b), under Sections 4(a), 4(c), 4(d),
4(e), 6(a), and 6(e) and, in the case of a termination occurring as described in
(ii) above, under Section 3(c) and under the last sentence of Section 8, shall
also remain in effect.
10. TERMINATION. This Agreement may be terminated for any reason at any
time by
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the Issuer as to any Agent or, in the case of any Agent, by such Agent insofar
as this Agreement relates to such Agent, upon the giving of one day's written
notice of such termination to the other parties hereto. Any settlement with
respect to Securities placed by an Agent occurring after termination of this
Agreement shall be made in accordance with the Procedures and each Agent agrees,
if requested by the Issuer, to take the steps therein provided to be taken by
such Agent in connection with such settlement.
11. PURCHASES AS PRINCIPAL. From time to time, any Agent may agree with
the Issuer to purchase Securities from the Issuer as principal. In such case the
purchasing Agent and the Issuer may set forth the terms of such purchase in a
separate agreement (a "Purchase Agreement") to be entered into between such
Agent and the Issuer in the form attached hereto as Exhibit C. Upon acceptance
by the Issuer of an offer to purchase Securities, unless the Issuer and the
purchasing Agent otherwise agree in writing, any such Purchase Agreement or
other written confirmation or communication transmitted by the purchasing Agent
to the Issuer or, in the absence of a Purchase Agreement or other written
confirmation or communication from the purchasing Agent, the oral agreement with
respect to the terms of the Securities and of their offer and sale evidenced by
the offer communicated by the purchasing Agent and accepted by the Issuer, in
each case together with the provisions of this Agreement, shall constitute an
agreement between the purchasing Agent and the Issuer for the sale and purchase
of such Securities (whether or not any Purchase Agreement or other written
confirmation or communication shall have been executed by the Issuer or the
purchasing Agent). In connection with any resale of Securities so purchased,
such Securities may be resold by such Agent at varying prices from time to time
or at a fixed public offering price or that such Agent may use a selling or
dealer group. Such Agent may reallow to any broker or dealer any portion of the
discount or commission payable pursuant hereto. A Purchase Agreement, to the
extent set forth therein, may incorporate by reference specified provisions of
this Agreement.
12. NOTICES. Except as otherwise provided herein, all notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of telecommunication.
Except as otherwise provided in the Procedures:
To the Issuer:
Notices to International Business Machines Corporation shall be directed
to it at New Orchard Road, Armonk, New York 10504, Attention: Treasurer (Fax:
914-499-2883).
To the Agents:
Notices to Chase Securities Inc. shall be directed to it at 270 Park
Avenue, New York,
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New York, Attention: Medium-Term Note Desk (Fax:
212-834-6081).
Notices to Credit Suisse First Boston Corporation shall be directed to it
at 11 Madison Avenue, 5th Floor, New York, New York 10010, Attention: Short and
Medium-Term Note Department (Fax: 212-325-8183).
Notices to Goldman, Sachs & Co. shall be directed to it at 85 Broad
Street, New York, New York 10004, Attention: Credit Department, Credit Control
- -- Medium Term Notes (Fax: 212-357-8680).
Notices to Merrill Lynch, Pierce, Fenner & Smith Incorporated shall be
directed to it at North Tower, 10th Floor, World Financial Center, New York, New
York 10281, Attention: MTN Product Management (Fax: 212-449-2234).
Notices to Morgan Stanley & Co. Incorporated shall be directed to it at
1585 Broadway, 2nd Floor, New York, New York 10036, Attention: Manager -
Continuously Offerred Products (Fax: 212-761-0780), with a copy directed to it
at 1585 Broadway, 34th Floor, New York, New York 10036, Attention: Peter Cooper
- - Investment Banking Information Center (Fax: 212-761-0260).
Notices to Salomon Smith Barney Inc. shall be directed to it at 7 World
Trade Center, New York, New York 10048, Attention: Medium-Term Note Department
(Fax: 212-783-2274; Phone: 212-783-5897).
In the case of any party hereto, alternatively notice may be directed to
such other address or person as such party shall specify to each other party by
a notice given in accordance given in accordance with the provisions of this
Section 12. Any such notice shall take effect at the time of receipt.
13. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto, their respective successors, the officers and directors
and controlling persons referred to in Section 7 and, to the extent provided in
Section 6(e), any person who has agreed to purchase Securities from the Issuer
as the result of solicitation by any Agent pursuant hereto, and no other person
will have any right or obligation hereunder.
14. GOVERNING LAW; COUNTERPARTS. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the conflicts of laws principles thereof. This Agreement may be
executed in counterparts and the executed counterparts shall together constitute
a single instrument.
15. ENTIRE AGREEMENT. This Agreement incorporates the entire agreement
between
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the parties hereto with respect to the transactions contemplated herein.
All prior negotiations and agreements between the parties are merged in, and
superseded by, this Agreement and there are no agreements, representations or
warranties between the parties other than those set forth or provided for
herein.
If the foregoing correctly sets forth our agreement, please indicate your
acceptance hereof in the space provided for that purpose below.
Very truly yours,
INTERNATIONAL BUSINESS
MACHINES CORPORATION
By
-------------------------
Title:
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CONFIRMED AND ACCEPTED, as of the
date first above written:
CHASE SECURITIES INC.
By__________________________
Title:
CREDIT SUISSE FIRST BOSTON CORPORATION
By__________________________
Title:
GOLDMAN SACHS & CO.
By__________________________
Title
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By__________________________
Title:
MORGAN STANLEY & CO. INCORPORATED
By__________________________
Title
SALOMON SMITH BARNEY INC.
By__________________________
Title:
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EXHIBIT A
The Issuer agrees to pay the relevant Agent a commission which will
be no more than the following percentage of the principal amount of Securities
sold to purchasers solicited by such Agent:
Commission Rate
(as a percentage
TERM OF PRINCIPAL AMOUNT)
---- --------------------
12 months to less than 18 months .15
18 months to less than 24 months .20
24 months to less than 30 months .25
30 months to less than 3 years .30
3 years to less than 4 years .35
4 years to less than 5 years .45
5 years to less than 7 years .50
7 years to less than 10 years .55
10 years to less than 15 years .625
15 years to less than 20 years .700
20 years to 30 years .750
More than 30 years as negotiated
between the Company and the
relevant Agent at the time of
sale
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Administrative Procedures
EXHIBIT B
The Medium-Term Notes due one year or more from their issue date
(the "Notes") are to be offered on a continuing basis by International Business
Machines Corporation (the "Issuer"). Chase Securities Inc., Credit Suisse First
Boston Corporation, Goldman, Sachs & Co., Merrill Lynch & Co., Morgan Stanley &
Co. Incorporated and Salomon Smith Barney Inc., as agents (each individually an
"Agent" and collectively the "Agents"), have agreed to use reasonable efforts to
solicit purchases of the Notes pursuant to an Agency Agreement dated February
__, 1999 (the "Agency Agreement"), among the Issuer and the Agents. No Agent
will be obligated to purchase Notes for its own account. The Notes will be
issued pursuant to an Indenture, dated as of October 1, 1993 (the "Indenture"),
between the Issuer and The Chase Manhattan Bank (National Association), as
trustee (the "Trustee"), as supplemented by the First Supplemental Indenture
thereto dated as of December 15, 1995. The Notes will rank equally with all
other unsecured and unsubordinated indebtedness of the Issuer and have been
registered with the Securities and Exchange Commission (the "Commission").
Each Note will be represented initially by either a global security
registered in the name of a nominee of The Depository Trust Company, as
Depositary ("DTC") (a "BookEntry Note") or a certificate issued in definitive
form (a "Certificate Note"). It is currently contemplated that both Fixed Rate
Notes (as defined below) and Floating Rate Notes (as defined below) may be
issued as Book-Entry Notes.
Administrative procedures and specific terms of the Notes and the
offering, to the extent Notes are offered and sold through the Agents, are
explained below. Administrative and
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record-keeping responsibilities will be handled for the Issuer by its Treasury
Department. The Issuer will advise each Agent in writing of those persons
handling administrative responsibilities with whom each Agent is to communicate
regarding offers to purchase Notes and the details of their delivery. To the
extent that the following procedures conflict with the provisions of the Notes,
the Indenture or the Letter (as defined below), the relevant provisions of the
Note, the Indenture or the Letter shall control.
I. CERTIFICATE NOTES AND GENERAL TERMS
Unless otherwise agreed by the Issuer and the relevant agent, the
following administrative procedures and specific terms are applicable to
Certificate Notes and, except to the extent otherwise specified under II below,
Book-Entry Notes.
ORIGINAL ISSUE DATE: Each Note will be dated the date of its authentication.
Each Note will also bear an original issue date which,
with respect to any Note (or portion thereof), shall
mean the date of its original issuance and shall be
specified therein. The original issue date shall remain
the same for all Notes subsequently issued upon
transfer, exchange or substitution of a Note, regardless
of their dates of authentication.
MATURITIES: Each Note will mature on a date, selected by the
purchaser and agreed to by the Issuer, which will be at
least one year after the date of issue; PROVIDED,
HOWEVER, that each Floating Rate Note (as defined below)
will mature on an Interest Payment Date (as defined
below) for such Note.
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REDEMPTION: The Floating Rate Notes will not be redeemable prior to
maturity, unless otherwise specified in the applicable
Pricing Supplement. The Fixed Rate Notes (as defined
below) either (i) will not be redeemable prior to
maturity, or (ii) will be redeemable at the option of
the Issuer on or after a specified date prior to
maturity at par or at prices which will decline annually
by a fixed percentage from a specified initial premium
to par. Unless otherwise specified in the applicable
pricing supplement, Redemption Dates for redeemable
Fixed Rate Notes will correspond with the Interest
Payment Dates for such Notes.
PRICE TO PUBLIC: Each Note will be issued at 100% of principal amount,
unless otherwise agreed between the Issuer and the
relevant Agent.
DENOMINATIONS: Unless otherwise agreed between the Issuer and the
relevant Agent, the denominations of the Notes will be
$1,000 or any multiple thereof. The denominations of
Notes denominated in currencies or currency units other
than U.S. dollars will be as agreed between the Issuer
and the relevant Agent.
REGISTRATION: Notes will be issued only in fully registered form.
INTEREST PAYMENT: Unless otherwise specified in a Pricing Supplement, each
Note will bear interest from and including its original
issue date or, in the case of Notes issued upon
replacement, transfer or exchange, from the most recent
Interest Payment Date to which interest has been paid or
provided for, to but excluding the maturity date of such
Note; PROVIDED, HOWEVER, that a Floating Rate Note which
has a rate of interest that is reset weekly will bear
interest from and including its original issue date or
the day following the most recent Record Date (as
defined below) for the most recent
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Interest Payment Date to which interest on such Note has
been paid or provided for. Each Note will bear interest
(i) in the case of Notes bearing interest at a Fixed
Rate (the "Fixed Rate Notes"), at the annual rate stated
on the face thereof, payable semiannually in arrears on
April 1 and October 1 (each an "Interest Payment Date"
with respect to such Fixed Rate Note) and at maturity
and (ii) in the case of Notes bearing interest at a rate
or rates determined by reference to an interest rate
formula (the "Floating Rate Notes"), at a rate
determined pursuant to the formula stated on the face
thereof, payable in arrears on such dates as are
specified therein and in the related Pricing Supplement
(each an "Interest Payment Date" with respect to such
Floating Rate Note). Interest payable on a Fixed Rate
Note (including payments for partial periods) will be
calculated and paid on the basis of a 360-day year of 12
30-day months. Interest payable on a Floating Rate Note
will be calculated and paid on the basis of the actual
number of days elapsed in the interest period and a year
of 360 days; PROVIDED, HOWEVER, that interest payable on
a Floating Rate Note which has a rate of interest
determined in accordance with the Treasury Rate will be
calculated on the basis of the actual number of days in
the year. Interest will be payable on each Interest
Payment Date to the person in whose name the Note is
registered at the close of business 15 calendar days
prior to such Interest Payment Date whether or not such
day is a Business Day (as defined in the Indenture) (the
"Record Date") except that (a) on any Note originally
issued after a Record Date and prior to the next
succeeding Interest Payment Date, the first payment of
interest on such Note will be made on the Interest
Payment Date following the next succeeding Regular
Record Date to the registered owner on such next Regular
Record Date and (b) interest payable at maturity (or, in
the case of a Fixed Rate Note, upon redemption) will be
payable to the person to whom principal shall be
payable. With respect to Fixed Rate Notes, each payment
of interest shall include interest accrued to but
excluding the date of such payment. All interest
payments (excluding interest payments made at maturity)
will be made by check mailed to the person entitled
thereto as provided above.
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ACCEPTANCE OF OFFERS: Each Agent will promptly advise the Issuer of each
reasonable offer to purchase Notes received by it, other
than those rejected by such Agent. Each Agent may, in
its discretion reasonably exercised, without notice to
the Issuer, reject any offer received by it, in whole or
in part. The Issuer will have the sole right to accept
offers to purchase Notes and may reject any such offer,
in whole or in part. If the Issuer rejects an offer
solicited by an Agent, the Issuer will promptly notify
the Agent involved.
SETTLEMENT: All offers accepted by the Issuer will be settled on the
third Business Day next succeeding the date of
acceptance unless otherwise agreed by any purchaser and
the Issuer. Prior to 3:00 p.m., New York City time, on
the Business Day next preceding the settlement date, the
Issuer will instruct the Trustee to authenticate and
deliver the Notes no later than 2:15 p.m., New York City
time, on the settlement date.
DETAILS FOR SETTLEMENT: For each offer solicited by an Agent that is accepted by
the Issuer, the Agent who presented the offer (the
"Presenting Agent") shall communicate to the Issuer's
Treasury Department by telephone, facsimile transmission
or other acceptable means the following information (the
"Purchase Information"):
1. Exact name in which the Note or Notes are to be
registered ("registered owner").
2. Exact address of registered owner.
3. Taxpayer identification number of registered
owner.
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4. Principal amount of each Note to be delivered
to the registered owner.
5. Issue price, interest rate if fixed or initial
interest rate if floating, interest rate basis, spread
or spread multiplier, maximum or minimum interest rates,
index maturity, Interest Determination Dates, Interest
Reset Dates (as such terms are defined in the applicable
Prospectus Supplement) interest reset period, interest
payment period and Interest Payment Dates of Notes, in
each case, to the extent applicable.
6. The currency, currencies, currency unit or
currency units in which the Note or Notes are to be
denominated and (if not the same) payable.
7. Maturity date of Notes.
8. Initial redemption date of Notes, if any.
9. Optional redemption price (including the fixed
percentage by which the premium, if any, annually
declines) of Notes, if any.
10. Original issue date of Notes.
11. Settlement date for Notes.
12. Presenting Agent's commission (to be paid in
the form of a discount from the proceeds
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remitted to the Issuer upon settlement).
The original issue date of, and the settlement date for,
Notes will be the same. Before accepting any offer to
purchase Notes to be settled in less than three days,
the Issuer shall verify that the Trustee will have
adequate time to prepare and authenticate the Notes.
After receiving the details for each offer from the
Presenting Agent, the Issuer will, after recording the
details and any necessary calculations, communicate the
Purchase Information by telephone, facsimile
transmission or other acceptable means, to the Trustee.
Prior to preparing the Notes for delivery, the Trustee
will confirm the Purchase Information by telephone with
the Presenting Agent. The Trustee will assign to and
enter on each Note a transaction number.
Special provisions relating to Certificate Notes
denominated or payable in a currency, currencies, a
currency unit or currency units other than U.S. dollars
may be agreed by the Issuer and the Agents at a later
time.
CONFIRMATION: For each accepted offer solicited by an Agent, the
Presenting Agent will issue a confirmation to the
purchaser, with a copy to the Issuer's Treasury
Department and the Trustee, setting forth the Purchase
Information and delivery and payment instructions.
NOTE DELIVERIES Upon the receipt of appropriate
AND CASH PAYMENT: documentation and instructions, which may be by
telephone to be confirmed in writing from the Issuer,
and verification thereof, the Trustee will cause the
Notes to be prepared and authenticated and hold the
Notes for delivery against payment.
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The Trustee will deliver the Notes, in accordance with
instructions from the Issuer, to the Presenting Agent,
as the Issuer's agent, for the benefit of the purchaser
only against delivery of a receipt therefor.
AGENTS' ADDRESSES FOR DELIVERY OF CERTIFICATE NOTES:
Chase Securities Inc.
55 Water Street
Room 226
New York, New York 10041
Attention: Window 17 or Window 18
(tel: 212-638-6787)
(fax: 212-638-5618)
Credit Suisse First Boston
Corporation
MTN Department
5 World Trade Center, 7th Floor
New York, NY 10048
Attention: Paul Riley/Bill Ahearn
(tel: 212-322-1606)
Goldman, Sachs & Co.
Medium-Term Notes Desk
85 Broad Street, 26th Floor
New York, NY 10004
Attention: Karen Robertson
(fax: 212-902-0658)
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
Money Markets Clearance
55 Water Street
3rd Floor
N.S.C.C. Window
New York, NY 10041
Attention: Al Mitchell
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(tel: 212-558-2405)
(fax: 212-558-2457)
The Bank of New York
Dealer Clearance Department
1 Wall Street-3rd Floor-Window 3B
New York, NY 10005
Attention: For the account of Morgan
Stanley & Co. Incorporated
Salomon Smith Barney, Inc., in care
of:
The Bank of New York
1 Wall Street-3rd Floor
New York, NY 10005
Attention: Dealer Clearance
The Presenting Agent, as the Issuer's agent, will
deliver the Notes (with the written confirmation
provided for above) to the purchaser thereof against
payment by such purchaser in immediately available funds
and will give instructions for payment to be made to the
Issuer of an amount equal to the face amount of the
Notes less the Presenting Agent's commission. Delivery
of any confirmation or Note will be made in compliance
with "Delivery of Prospectus" below.
FAILS: In the event that a purchaser shall fail to accept
delivery of and make payment for a Note on the
settlement date, the Presenting Agent will notify the
Trustee and the Issuer by telephone, confirmed in
writing. If the Note has been delivered to the
Presenting Agent, as the Issuer's agent, the Presenting
Agent shall return such Note to the Trustee. If funds
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have been advanced by the Presenting Agent for the
purchase of such Note, the Issuer will, immediately upon
receipt of such notice, refund the payment previously
made to it by the Presenting Agent in immediately
available funds. Such payments will be made on the
settlement date, if possible, and in any event not later
than the Business Day following the settlement date. If
such failure shall have occurred for any reason other
than the failure of the Presenting Agent to provide the
Purchase Information to the Issuer or to provide a
confirmation to the purchaser, the Issuer will reimburse
the Presenting Agent on an equitable basis for its loss
of the use of funds during the period when they were
credited to the account of the Issuer.
Immediately upon receipt of the note in respect of which
the failure occurred, the trustee will cause the
security registrar to make appropriate entries to
reflect the fact that the note was never issued and will
destroy the note.
PROCEDURE FOR The Issuer and the Agents will discuss from time to time
RATE CHANGES: the rates to be borne by the Notes that may be sold as a
result of the solicitation of offers by the
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Agents. Once any Agent has recorded any indication of
interest in Notes upon certain terms, and communicated
with the Issuer, if the Issuer plans to accept an offer
to purchase Notes upon such terms, it will prepare a
pricing sticker reflecting the terms of such Notes and,
after approval from the Agents, will arrange to have the
required number of copies of the sticker filed with the
Commission within two Business Days following such
acceptance and will supply at least five copies of such
sticker to the Presenting Agent. No settlements with
respect to Notes upon such terms may occur prior to such
filing and the Agents will not, prior to such filing,
mail confirmations to customers who have offered to
purchase Notes upon such terms. After such filing,
sales, mailing of confirmations and settlements may
occur with respect to Notes upon such terms, subject to
the provisions of "Delivery of Prospectus" below.
If the Issuer decides to "post" fixed interest rates and
a decision has been reached to change interest rates,
the Issuer will promptly notify each Agent. Each Agent
will forthwith suspend solicitation of purchases. At
that time, the Agents will recommend and the Issuer
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will establish fixed interest rates to be so posted.
Following establishment of posted fixed interest rates
and prior to the filing of the pricing sticker described
in the preceding paragraph, the Agents may only record
indications of interest in purchasing Fixed Rate Notes
at the posted fixed interest rates. After such filing,
sales, mailing of confirmations and settlements at the
posted rates may resume, subject to the provisions of
"Delivery of Prospectus" below.
Outdated stickers, and copies of the prospectus to which
they are attached (other than those retained for files),
will be destroyed.
SUSPENSION OF As provided in the Agency Agreement, the Issuer may
SOLICITATION suspend Amendment or solicitation of purchases at any
AMENDMENT OR time and, upon receipt of notice from the Issuer, each
SUPPLEMENT: Agent will forthwith suspend solicitation until such
time as the Issuer has advised them that solicitation of
purchases may be resumed.
If the agents receive the notice from the issuer
contemplated by section 4(b) of the agency agreement,
they will promptly suspend solicitation and will only
resume solicitation as provided in the agency agreement.
If the issuer decides to amend or supplement the
registration statement or the prospectus relating to the
notes (other than
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by an amendment or supplement that (i) only specifies
the terms of the securities or (ii) relates to an
offering by the issuer of registered securities other
than the securities), it will promptly advise each agent
and will furnish each agent with the proposed amendment
or supplement in accordance with the terms of the agency
agreement. The issuer will promptly file or mail to the
commission for filing such amendment or supplement,
provide the agents with copies of any such amendment or
supplement, confirm to the agents that such amendment or
supplement has been filed with the commission and advise
the agents that solicitation may be resumed.
Any such suspension shall not affect the issuer's
obligations under the agency agreement; and in the event
that at the time the issuer suspends solicitation of
offers to purchase notes there shall be any offers
already accepted by the issuer outstanding for
settlement, the issuer will have the sole
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responsibility for fulfilling such obligations. The
issuer will in addition promptly advise the agents and
the trustee if such offers are not to be settled and if
copies of the prospectus as in effect at the time of the
suspension may not be delivered in connection with the
settlement of such offers.
DELIVERY OF With respect to each purchase resulting from a
PROSPECTUS: solicitation by any Agent, a copy of the Prospectus, as
most recently amended or supplemented on the date of
delivery thereof (except as provided below), but
excluding materials incorporated by reference therein,
must be delivered to a purchaser prior to or together
with the earlier of delivery of (i) the written
confirmation provided for above, and (ii) any Note
purchased by such purchaser as a result of such
solicitation. The Issuer shall ensure that the
Presenting Agent receives the required number of copies
of the Prospectus and each amendment or supplement
thereto (including appropriate pricing stickers), but
excluding materials incorporated by reference therein,
by telecopy or overnight express (for delivery not later
than 11:00 a.m. on the Business Day next following the
trade date) to enable the Presenting Agent to deliver
such confirmation or Note to such purchaser as
contemplated by these procedures and in compliance with
the preceding sentence. If, since the date of acceptance
of such pur chaser's offer, the Prospectus shall have
been supplemented solely to reflect any sale of Notes on
terms different from those agreed to between the Issuer
and such purchaser or a change in posted rates not
applicable to such
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purchaser, such purchaser shall not receive the
Prospectus as supplemented by such new supplement, but
shall receive the Prospectus as supplemented to reflect
the terms of the Notes being purchased by such purchaser
and otherwise as most recently amended or supplemented
on the date of delivery of the Prospectus.
AGENTS' ADDRESSES FOR DELIVERY OF PRICING SUPPLEMENTS:
Chase Securities Inc.
270 Park Avenue
New York, NY 10017-2070
Attention: Medium-Term Note Desk
(tel: 212-834-4421)
(fax: 212-834-6081)
Credit Suisse First Boston
Corporation
Prospectus Department
5 World Trade Center, 7th Floor
New York, NY 10048
Attention: Joan Bryan
(tel: 212-322-5105)
(fax: 212-803-4096)
with a copy to:
Credit Suisse First Boston
Corporation
11 Madison Avenue, 5th Floor
New York, NY 10010
Attention: Short and Medium-Term
Finance Department
(tel: 212-325-7198)
(fax: 212-325-8183)
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Goldman, Sachs & Co.
Medium-Term Notes Desk
85 Broad Street, 26th Floor
New York, NY 10004
Attention: Karen Robertson
(fax: 212-902-0658)
for Merrill Lynch, Pierce, Fenner &
Smith Incorporated, for overnight,
express or special delivery packages
ONLY:
Tritech Services
44B Colonial Drive
Piscataway, NJ 08854
Attention: Prospectus
Operations/Nachman Kimerling
(tel: 908-885-2768)
(fax: 908-885-2774/2775/2776)
For other types of deliveries, use
address:
Tritech Services
#4 Corporate Place
Corporate Park 287
Piscataway, NJ 08854
For all deliveries, with a copy to:
Merrill Lynch, Pierce, Fenner &
Smith Incorporated
World Financial Center, North Tower
10th Floor
New York, NY 10281-1310
Attention: MTN Product Management
(tel: 212-449-7476)
(fax: 212- 449-2234)
Morgan Stanley & Co. Incorporated
1585 Broadway, 2nd Floor
New York, NY 10036
Attention: Medium-Term Note Trading
Desk,
Carlos Cabrera
(tel: 212-761-4000)
(fax: 212-761-0780)
Salomon Smith Barney Inc.
Brooklyn Army Terminal
14058th Street, 5th Floor
New York, NY 11220
Attention: Diane Graham
(tel: 718-765-6744)
(fax: 718-765-6734)
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AUTHENTICITY OF The Issuer will cause the Trustee to furnish the Agents
SIGNATURES: from time to time with the specimen signatures of each
of the Trustee's officers, employees or agents who have
been authorized by the Trustee to authenticate Notes,
but the Agents will have no obligation or liability to
the Issuer or the Trustee in respect of the authenticity
of the signature of any officer, employee or agent of
the Issuer or the Trustee on any Note.
ADVERTISING COST: The Issuer will determine with the Agents the amount of
advertising that may be appropriate in offering the
Notes. Advertising expenses will be paid by the Issuer.
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II. BOOK-ENTRY NOTES
The following procedures supplement and, to the extent inconsistent
therewith, replace the procedures set forth above with respect to the offering
of Book-Entry Notes. In connection with the qualification of the Book-Entry
Notes for eligibility in the book-entry system maintained by DTC, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representation (the "Letter") from the Issuer and the Trustee to be entered into
with DTC and a Medium-Term Note Certificate Agreement between the Trustee and
DTC dated as of March 10, 1989, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS"). Both Fixed and
Floating Rate Notes may be issued in book-entry form.
ISSUANCE: On any date of settlement (as defined under "Settlement"
below) for one or more Book-Entry Notes, the Issuer will
issue a single global security in fully registered form
without coupons (a "Global Security") representing up to
$200,000,000 principal amount of all such Notes that
have the same maturity date, redemption pro visions, if
any, repayment pro visions, if any, Interest Payment
Dates, interest rate basis, spread or spread multiplier,
maximum or minimum interest rates, index maturity,
Interest Determination Dates, Interest Reset Dates (as
such terms are defined in the applicable Prospectus
Supplement), interest reset period, original issue date
and original issue discount provisions, in each case, to
the extent applicable (collectively, the "Terms"). Each
Global Security will be dated and issued as of the date
of its authentication by the Trustee. Each Global
Security will bear an "Issue Date", which will be (i)
with respect to an original Global Security (or any
portion thereof), its original issue date, and (ii)
following a consolidation of Global Securities, the most
recent Interest Payment Date to which interest has been
paid or duly provided for on the predecessor Global
Securities, regardless of the date of authentication of
such subsequently issued Global Security. No Global
Security will represent any Certificated Note.
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IDENTIFICATION NUMBERS: The Issuer will arrange with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP Service
Bureau") for the reservation of a series of CUSIP
numbers, consisting of approximately 900 CUSIP numbers
relating to Global Securities representing Book Entry
Notes. The Issuer will obtain from the CUSIP Service
Bureau a written list of such series of reserved CUSIP
numbers and will deliver to the Trustee and DTC a
written list of CUSIP numbers of such series. The
Trustee will assign CUSIP numbers to Global Securities
as described below under Settlement Procedure "C". DTC
will notify the CUSIP Service Bureau periodically of the
CUSIP numbers that the Trustee has assigned to Global
Securities. The Trustee will notify the Issuer at any
time when fewer than 100 of the reserved CUSIP numbers
remain unassigned to Global Securities, and if it deems
necessary, the Issuer will reserve additional CUSIP
numbers for assignment to Global Securities representing
Book-Entry Notes. Upon obtaining such additional CUSIP
numbers, the Issuer shall deliver a list of such
additional CUSIP numbers to the Trustee and DTC.
REGISTRATION: Each Global Security will be registered in the name of
Cede & Co., as nominee for DTC, on the Securities
Register maintained under the Indenture. The beneficial
owner of a Book-Entry Note (or one or more indirect
participants in DTC designated by such owner) will
designate one or more participants in DTC (with respect
to such Note, the "Participants") to act as agent or
agents for such owner in connection with the book-entry
system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions
provided by such Participants, a credit balance with
respect to such Note in the account of such
Participants. The ownership interest of such beneficial
owner in such Note will be recorded through the records
of such Participants or through the separate records of
such Participants and one or more
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indirect participants in DTC.
TRANSFERS: Transfers of a Book-Entry Note will be accomplished by
book entries made by DTC and, in turn, by Participants
(and, in certain cases, one or more indirect
participants in DTC) acting on behalf of beneficial
transferors and transferees of such Note.
EXCHANGES: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice of consolidation (a
copy of which shall be attached to the Global Security
resulting from such consolidation) specifying (i) the
CUSIP numbers of two or more Outstanding Global
Securities that represent Book-Entry Notes having the
same Terms (other than original issue date) and for
which interest has been paid to the same date, (ii) a
date, occurring at least 30 days after such written
notice is delivered and at least 30 days before the next
Interest Payment Date for such Book-Entry Notes, on
which such Global Securities shall be exchanged for a
single replacement Global Security and (iii) a new CUSIP
number to be assigned to such replacement Global
Security. Upon receipt of such a notice, DTC will send
to its Participants (including the Trustee) a written
reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified exchange
date, the Trustee will deliver to the CUSIP Service
Bureau a written notice setting forth such exchange date
and the new CUSIP number and stating that, as of such
exchange date, the CUSIP numbers of the Global
Securities to be exchanged will no longer be valid. On
the specified exchange date, the Trustee will exchange
such Global Securities for a single Global Security
bearing the new CUSIP number and a new original issue
date and the CUSIP numbers of the exchanged Global
Securities will, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned.
Notwithstanding the
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foregoing, if the Global Securities to be exchanged
exceed $200,000,000 in aggregate principal amount, one
Global Security will be authenti cated and issued to
represent each $200,000,000 of principal amount of the
exchanged Global Securities and an additional Global
Security will be authenticated and issued to represent
any remaining principal amount of such Global Securities
(see "Denominations" below).
NOTICE OF REPAYMENT With respect to each Book-Entry Note that is repayable
TERMS: at the option of the Holder, the Trustee will furnish
DTC on or not more than 60 days prior to the settlement
date pertaining to such Book-Entry Note a notice setting
forth the terms of such repayment option. Such terms
shall include the start date and end dates of the first
exercise period, the purchase date following such first
exercise period, the frequency that such exercise
periods occur ( I.E., quarterly, semiannually, annually,
etc.) and, if the repayment option expires before
maturity, the same information (except frequency)
concerning the last exercise period. It is understood
that the exercise period shall be at least 15 calendar
days long and that the purchase date shall be at least 7
calendar days, after the last day of the exercise
period.
REDEMPTION AND The Trustee will comply with the terms of the Letter
REPAYMENT: with regard to redemptions and repayments of the Notes.
If a Global Security is to be redeemed or repaid in
part, the Trustee will exchange such Global Security for
two Global Securities, one of which shall represent the
portion of the Global Security being
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redeemed or repaid and shall be canceled immediately
after issuance and the other of which shall represent
the remaining portion of such Global Security and shall
bear the CUSIP number of the surrendered Global
Security.
DENOMINATIONS: Unless otherwise agreed between the Issuer and the
relevant Agent, Book-Entry Notes will be issued in
principal amounts of $1,000 or any multiple thereof.
Global Securities will be denominated in principal
amounts not in excess of $200,000,000. If one or more
Book-Entry Notes having an aggregate principal amount in
excess of $200,000,000 would, but for the preceding
sentence, be represented by a single Global Security,
then one Global Security will be issued to represent
each $200,000,000 principal amount of such Book-Entry
Note or Notes and an additional Global Security will be
issued to represent any remaining principal amount of
such Book-Entry Note or Notes. In such a case, each of
the Global Securities representing such Book-Entry Note
or Notes shall be assigned the same CUSIP number.
INTEREST: PUBLICATION. Standard & Poor's Corporation will use the
information received in the pending deposit message
described under the Settlement Procedure "C" below in
order to include the amount of any interest payable and
certain other information regarding the related Global
Security in the appropriate weekly bond report published
by Standard & Poor's Corporation.
NOTICE OF INTEREST On the first Business Day of January, April, July and
PAYMENT AND REGULAR October of each year, the Trustee will deliver to the
RECORD DATES: Issuer and DTC a written list of Regular Record Dates
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and Interest Payment Dates that will occur with respect
to Book-Entry Notes during the six-month period
beginning on such first Business Day. Promptly after
each Interest Determination Date or Calculation Date, as
applicable (as defined in the applicable Note) for
Floating Rate Notes, the Company, upon receiving notice
thereof, will notify Standard & Poor's Corporation of
the interest rate determined on such Interest
Determination Date or Calculation Date, as applicable.
PAYMENTS OF PRINCIPAL PAYMENTS OF INTEREST ONLY. Promptly after each Regular
AND INTEREST: Record Date, the Trustee will deliver to the Issuer and
DTC a written notice specifying by CUSIP number the
amount of interest to be paid on each Global Security on
the following Interest Payment Date (other than an
Interest Payment Date coinciding with maturity) and the
total of such amounts. The Issuer will confirm with the
Trustee the amount payable on each Global Security on
such Interest Payment Date. DTC will confirm the amount
payable on each Global Security on such Interest Payment
Date by reference to the daily or weekly bond reports
published by Standard & Poor's Corporation. The Issuer
will pay to the Trustee the total amount of interest due
on such Interest Payment Date (other than at maturity),
and the Trustee will pay such amount to DTC at the times
and in the manner set forth below under "Manner of
Payment". If any Interest Payment Date for a Book-Entry
Note is not a Business Day, the payment due on such day
shall be made on the next succeeding Business Day and no
interest shall accrue
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on such payment for the period from and after such
Interest Payment Date.
Payments at maturity. On or about the first business day
of each month, the trustee will deliver to the issuer
and DTC a written list of principal and interest to be
paid on each global security maturing either at stated
maturity or on a redemption or repayment date in the
following month. The issuer, the trustee and DTC will
confirm the amounts of such principal and interest
payments with respect to each such global security on or
about the fifth business day preceding the maturity of
such global security. The issuer will pay to the
trustee, as the paying agent, the principal amount of
such global security, together with interest due at such
maturity. The trustee will pay such amounts to DTC at
the times and in the manner set forth below under
"manner of payment". If any maturity of a global
security representing book-entry notes is not a business
day, the payment due on such day shall be made on the
next succeeding business day and no interest shall
accrue on such payment for the period from and after
such maturity. Promptly after payment to DTC of the
principal and interest due at the maturity of such
global security, the trustee will cancel and destroy
such global security in accordance with the terms of the
indenture and deliver a certificate of destruction to
the issuer.
Manner of payment. The total amount of any principal and
interest due on global securities on any interest
payment date or at maturity shall be paid by the issuer
to the
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trustee in funds available for use by the trustee as of
9:30 a.m. (New York City time), or as soon as
practicable thereafter on such date. The issuer will
make such payment on such global securities by wire
transfer to the trustee. The issuer will confirm
instructions regarding payment in writing to the
trustee. Prior to 10:00 a.m. (New York City time) on
each maturity date or as soon as possible thereafter,
following receipt of such funds from the issuer, the
trustee will pay by separate wire transfer (using
fedwire message entry instructions in a form previously
specified by DTC) to an account at the Federal Reserve
Bank of New York previously specified by DTC, in funds
available for immediate use by DTC, each payment of
principal (together with interest thereon) due on global
securities on any maturity date. On each interest
payment date, interest payment shall be made to DTC in
same-day funds in accordance with existing arrangements
between the trustee and DTC. Thereafter, on each such
date, DTC will pay, in accordance with its SDFS
operating procedures then in effect, such amounts in
funds available for immediate use to the respective
participants in whose names the book-entry notes
represented by such global securities are recorded in
the book-entry system maintained by DTC. Neither of the
issuer or the trustee shall have any direct
responsibility or liability for the payment by DTC to
such participants of the principal of and interest on
the book-entry notes.
Withholding Taxes. The amount of any taxes required
under applicable law to be withheld from any interest
payment on a book-entry note will be determined and
withheld by the participant, indirect participant in DTC
or other person responsible for forwarding payments and
materials directly to the beneficial owner of such note.
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SETTLEMENT: The receipt by the Issuer of immediately available funds
in payment for a Book-Entry Note and the authentication
and issuance of the Global Security or Global Securities
representing such Note shall constitute "settlement"
with respect to such Note. All orders accepted by the
Issuer will be settled on the fifth Business Day from
the date of the sale pursuant to the timetable for
settlement set forth below unless the Issuer and the
purchaser agree to settlement on another day.
SETTLEMENT PROCEDURES: Settlement Procedures with regard to each Book-Entry
Note sold by the Issuer through a Presenting Agent as
agent shall be as follows:
A. The Presenting Agent shall communicate to the
Issuer's Treasury Department by telephone,
facsimile transmission or other acceptable means
the Purchase Information.
B. After receiving the details for each offer from
the Presenting Agent, the Issuer will, after
recording the details and any necessary
calculations, communicate the Purchase Information
by telephone, facsimile transmission or other
acceptable means, to the Trustee.
C. The Trustee will assign a CUSIP number to the
Global Security representing such Note and will
telephone the Issuer and advise the Issuer of such
CUSIP number. The Trustee will enter a pending
deposit message through DTC's Participant Terminal
System, providing the following settlement
information to DTC (which shall route such
information to Standard & Poor's Corporation and
Interactive Data Services) and the Presenting
Agent:
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1. The applicable information set forth in Settlement
Procedure "A".
2. Identification as a Fixed Rate Book-Entry Note or
a Floating Rate Book-Entry Note.
3. Interest payment period.
4. Initial Interest Payment Date for such Note,
number of days by which such date succeeds the
related DTC record date (which, in the case of
Floating Rate Notes which reset weekly shall be
the date five calendar days immediately preceding
the applicable Interest Payment Date and in the
case of all other Notes shall be the Regular
Record Date as defined in the Note) and amount of
interest payable on such Interest Payment Date per
$1,000 principal amount of Notes.
5. Participants' account numbers maintained by DTC on
behalf of the Trustee and the Presenting Agent.
6. CUSIP number of the Global Security representing
such Note.
7. Whether such Global Security will represent any
other Book-Entry Note (to the extent known at such
time).
D. The Issuer will deliver to the Trustee a Global
Security representing such Note.
E. The Trustee will complete and authenticate the
Global Security representing such Note. Prior to
preparing the Global Security for delivery, the
Trustee will confirm the Purchase Information by
telephone with the Presenting Agent.
F. DTC will credit such Note to the Trustee's
participant account at DTC.
G. The Trustee will enter an SDFS deliver order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Note to the
Trustee's participant account and credit such Note
to the Presenting Agent's participant account and
(ii) debit the Presenting Agent's settlement
account and credit the Trustee's settlement
account for an amount equal to the price of such
Note less the Presenting Agent's commission. The
entry of such a delivery
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order shall constitute a representation and
warranty by the Trustee to DTC that (i) the Global
Security representing such Book-Entry Note has
been executed, delivered and authenticated and
(ii) the Trustee is holding such Global Security
pursuant to the Medium-Term Note Certificate
Agreement between the Trustee and DTC.
H. The Presenting Agent will enter an SDFS deliver
order through DTC's Participant Terminal System
instructing DTC (i) to debit such Note to the
Presenting Agent's participant account and credit
such Note to the participant accounts of the
Participants with respect to such Note and (ii) to
debit the settlement accounts of such Participants
and credit the settlement account of The
Presenting Agent for an amount equal to the price
of such Note.
I. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "G" and
"H" will be settled in accordance with SDFS
operating procedures in effect on the settlement
date.
J. The Trustee, upon confirming receipt of such
funds, will wire transfer to the account of the
Issuer maintained at Chase Manhattan Bank, New
York N.Y., Account of International Business
Machines Corporation, Cash Concentration, ABA
Number 021000021, Account Number 323 213 499, in
funds available for immediate use in the amount
transferred to the Trustee in accordance with
Settlement Procedure "G".
K. The Presenting Agent will confirm the purchase of
such Note to the purchaser either by transmitting
to the Participants with respect to such Note a
confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
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SETTLEMENT PROCEDURES For orders of Book-Entry Notes solicited by an Agent and
TIMETABLE: accepted by the Issuer for settlement on the first
Business Day after the sale date, Settlement Procedures
"A" through "K" set forth above shall be completed as
soon as possible but not later than the respective times
(New York City time) set forth below:
SETTLEMENT
PROCEDURE TIME
---------- ----
A 11:00 a.m. on the sale date
B 12:00 noon on the sale date
C 2:00 p.m. on the sale date
D 3:00 p.m. on the sale date
E 9:00 a.m. on settlement date
F 10:00 a.m. on settlement date
G-H 2:00 p.m. on settlement date
I 4:45 p.m. on settlement date
J-K 5:00 p.m. on settlement date
If a sale is to be settled two Business Days after the
sale date, Settlement Procedures "A", "B" and "C" shall
be completed as soon as practicable but no later than
11:00 a.m., 12:00 noon and 2:00 p.m., as the case may
be, on the first Business Day after the sale date.
If a sale is to be settled more than two business days
after the sale date, settlement procedure "a" shall be
completed as soon as practicable but no later than 11:00
a.m. on the first business day after the sale date and
settlement procedures "b" and "c" shall be completed as
soon as practicable but no later than 12:00 noon and
2:00 p.m., as the case may be, on the second business
day after the sale date. If the initial interest rate
for a floating rate book-entry note has not been
determined at the time that settlement procedure "a" is
completed, settlement
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procedures "b" and "c" shall be completed as soon as
such rate has been determined but no later than 12:00
noon and 2:00 p.m., respectively, on the business day
before the settlement date. Settlement procedure "i" is
subject to extension in accordance with any extension of
fedwire closing deadlines and in the other events
specified in the SDFS operating procedures in effect on
the settlement date.
If settlement of a book-entry note is rescheduled or
canceled, the trustee, upon receipt of notice, will
deliver to DTC, through DTC's participant terminal
system, a cancellation message to such effect by no
later than 2:00 p.m. on the business day immediately
preceding the scheduled settlement date.
FAILURE TO SETTLE: If the Trustee fails to enter an SDFS deliver order with
respect to a Book-Entry Note pursuant to Settlement
Procedure "G", the Trustee may deliver to DTC, through
DTC's Participant Terminal System, as soon as
practicable, a withdrawal message instructing DTC to
debit such Note to the Trustee's participant account.
DTC will process the withdrawal message, provided that
the Trustee's participant account contains a principal
amount of the Global Security representing such Note
that is at least equal to the principal amount
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to be debited. If a withdrawal message is processed with
respect to all the Book-Entry Notes represented by a
Global Security, the Trustee will mark such Global
Security "canceled", make appropriate entries in its
records and send such canceled Global Security to the
Issuer. The cusip number assigned to such Global
Security shall, in accordance with CUSIP Service Bureau
procedures, be canceled and not immediately reassigned.
If a withdrawal message is processed with respect to one
or more, but not all, the Book-Entry Notes represented
by a Global Security, the Trustee will exchange such
Global Security for two Global Securities, one of which
shall represent such Book-Entry Note or Notes and shall
be canceled immediately after issuance and the other of
which shall represent the remaining Book-Entry Notes
previously represented by the surrendered Global
Security and shall bear the CUSIP number of the
surrendered Global Security.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such
Note by the beneficial purchaser thereof (or a Person,
including an indirect participant in DTC, acting on
behalf of such purchaser), such Participants and, in
turn, the Presenting Agent may enter SDFS deliver orders
through DTC's Participant Terminal System reversing the
orders entered pursuant to Settlement Procedures "H" and
"G", respectively. Thereafter, the Trustee will deliver
the withdrawal message and take the applicable related
actions described in the preceding paragraph. If such
failure shall have occurred for any reason other than
the failure of the Presenting Agent to provide the
Purchase Information to the Issuer or to provide a
confirmation to the purchaser, the Issuer will reimburse
the Presenting Agent on an equitable basis for its loss
of the use of funds during the period when they were
credited to the account of the Issuer.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may take
any actions in accordance with its SDFS operating
procedures then in effect. In the event of a failure to
settle with respect to one or more, but not all, the
Book-Entry Notes to have been represented by a Global
Security, the Trustee will provide, in accordance with
Settlement Procedure "E", for the authentication and
issuance of a Global Security representing the other
Book-Entry Notes to have been represented by such Global
Security and will make appropriate entries in its
records.
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EXHIBIT C
PURCHASE AGREEMENT
, 19
International Business Machines Corporation Armonk, NY
10504
Attention: Treasurer
The undersigned agrees to purchase the following
principal amount of the Securities described in the
Agency Agreement dated February __, 1999 (the "Agency
Agreement"):
Principal Amount
$______________________
Interest Rate
______________________
Maturity Date
_______________, 19___
Discount
________% of Principal Amount
Price to be paid to Issuer
(in immediately available funds)
$______________________
Settlement Date
_______________________
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Except as otherwise expressly provided herein, all terms
used herein which are defined in the Agency Agreement shall have the same
meanings as in the Agency Agreement. The terms Agent or Agents, as used in the
Agency Agreement, shall be deemed to refer to the undersigned for purposes of
this Agreement.
This Agreement incorporates by reference Sections 3(c),
4, 6, 7, 12 and 13 of the Agency Agreement, the first and last sentences of
Section 9 thereof and, to the extent applicable, the Procedures. You and we
agree to perform, to the extent applicable, our respective duties and
obligations specifically provided to be performed by each of us in the
Procedures.
Our obligation to purchase Securities hereunder is
subject to the accuracy on the above Settlement Date of your representations and
warranties contained in Section 2 of the Agency Agreement (it being understood
that such representations and warranties shall relate to the Registration
Statement and the Prospectus as amended at such Settlement Date) and to your
performance and observance of all covenants and agreements contained in Sections
4 and 6 thereof. Our obligation hereunder is also subject to the following
conditions:
(a) the satisfaction, at such Settlement Date, of each
of the conditions set forth in subsections (a) and (b) and (d) through (g) of
Section 5 of the Agency Agreement (it being understood that each document so
required to be delivered shall be dated such Settlement Date and that each such
condition and the statements contained in each such document that relate to the
Registration Statement or the Prospectus shall be deemed to relate to the
Registration Statement or the Prospectus, as the case may be, as amended or
supplemented at the time of settlement on such Settlement Date and except that
the opinion described in Section 5(d) of the Agency Agreement shall be modified
so as to state that the Securities being sold on such Settlement Date, when
delivered against payment therefor as provided in the Indenture and this
Agreement, will have been duly executed, authenticated, issued and delivered and
will constitute valid and legally binding obligations of the Issuer enforceable
in accordance with their terms, subject only to the exceptions as to enforcement
set forth in clause (ii) of Section 5(d) of the Agency Agreement, and will
conform to the description thereof contained in the Prospectus as amended or
supplemented at such Settlement Date); and
(b) there shall not have occurred (i) any change, or any
development involving a prospective change, in or affecting particularly the
business or properties of the Issuer or its subsidiaries which, in our judgment,
materially impairs
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the investment quality of the Securities; (ii) any downgrading in the rating of
the Issuer's debt securities or public announcement that such debt securities
are under surveillance or review, with possible negative implications, by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act); (iii) any suspension or limitation of trading in
securities generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of the Issuer on any exchange or in the over-the-counter market; (iv)
any banking moratorium declared by Federal or New York authorities; or (v) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial national
or international calamity or emergency if, in our judgment, the effect of any
such outbreak, escalation, declaration, calamity or emergency makes it
impractical or inadvisable to proceed with completion of the sale of and payment
for the Securities.
[In further consideration of our agreement hereunder,
you agree that between the date hereof and the above Settlement Date, you will
not offer or sell, or enter into any agreement to sell, any debt securities of
the Issuer in the United States, other than sales of Securities, borrowings
under your revolving credit agreements and lines of credit, the private
placement of securities and issuances of your commercial paper.]
If for any reason our purchase of the above Securities
is not consummated, you shall remain responsible for the expenses to be paid or
reimbursed by you pursuant to Section 4 of the Agency Agreement and the
respective obligations of you and the undersigned pursuant to Section 7 shall
remain in effect. If for any reason our purchase of the above Securities is not
consummated other than because of our default or a failure to satisfy a
condition set forth in clause (iii), (iv) or (v) of paragraph (b) above, you
shall reimburse us, severally, for all out-of-pocket expenses reasonably
incurred by us in connection with the offering of the above Securities and not
otherwise required to be reimbursed pursuant to Section 4 of the Agency
Agreement.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. This Agreement may be
executed in counterparts and the executed counterparts shall together constitute
a single instrument.
[Insert Name of Purchaser]
By_________________________
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CONFIRMED AND ACCEPTED, as of
the date first above written:
International Business Machines Corporation
By:___________________________
Title:________________________
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