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 6, 2000.
INTERNATIONAL BUSINESS MACHINES CORPORATION
(Exact name of registrant as specified in its charter)
1-2360 13-0871985
New York (Commission File (I.R.S. Employer
(State of Incorporation) Number) Identification No.)
Armonk, New York 10504
(Address of principal 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, effective
March 9, 1999, the documents included as Exhibits 1 and 2 hereto, relating to
Yen 100,000,000,000 aggregate principal amount of debt securities of the
Registrant.
The following exhibits are hereby filed with this report:
Exhibit
Number Description
(1) Underwriting Agreement dated April 6, 2000, among International
Business Machines Corporation, Morgan Stanley & Co.
International Limited, Tokyo-Mitsubishi International PLC,
Bear, Stearns & Co. Inc., Daiwa Securities SB Captial Markets
Europe Limited, Deutsche Bank AG London, J.P. Morgan Securities
Ltd., Nomura International PLC and Salomon Brothers
International Limited.
(2) Form of 0.90% Note due 2003.
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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 13, 2000.
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Exhibit Index
Exhibit
Number Description
(1) Underwriting Agreement dated
April 6, 2000, among
International Business Machines
Corporation, Morgan Stanley &
Co. International Limited,
Tokyo-Mitsubishi International
PLC, Bear, Stearns & Co. Inc.,
Daiwa Securities SB Captial
Markets Europe Limited,
Deutsche Bank AG London, J.P.
Morgan Securities Ltd., Nomura
International PLC and Salomon
Brothers International Limited.
(2) Form of 0.90% Note due 2003.
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INTERNATIONAL BUSINESS MACHINES CORPORATION
Debt Securities
Yen 100,000,000,000 0.90% Notes due 2003
UNDERWRITING AGREEMENT
New York, New York
To the Representatives named in Schedule I hereto April 6, 2000
of the Underwriters named in Schedule II hereto
Dear Sirs:
International Business Machines Corporation, a New York corporation (the
"Company"), proposes to sell to the underwriters named in Schedule II hereto
(the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), the principal amount of its Securities identified in
Schedule I hereto (the "Securities"), to be issued under an indenture dated as
of October 1, 1993 (the "Indenture"), between the Company and The Chase
Manhattan Bank, as trustee (the "Trustee"), as supplemented by the First
Supplemental Indenture dated as of December 15, 1995. If the firm or firms
listed in Schedule II hereto include only the firm or firms listed in Schedule
I hereto, then the terms "Underwriters" and "Representatives", as used herein
shall each be deemed to refer to such firm or firms.
1. Representations and Warranties. The Company represents and warrants
to, and agrees with each Underwriter that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933 (the "Act") and has filed with the Securities and
Exchange Commission (the "Commission") a registration statement or
statements (the file number or numbers of which is or are set forth in
Schedule I hereto), including a related preliminary prospectus, on such
Form for the registration under the Act of the offering and sale of the
Securities. The Company may have filed one or more amendments thereto,
including the related preliminary prospectus, and has filed a preliminary
prospectus in accordance with Rules 415 and 424(b)(5), each of which has
previously been furnished to you. The Company will next file with the
Commission one of the following: (i) prior to effectiveness of such
registration statement, a further amendment thereto, including the form
of final prospectus, (ii) a final prospectus in accordance with Rules
430A and 424(b)(1) or (4), or (iii) a final prospectus in accordance with
Rules 415 and 424(b)(2) or (5). In the case of clause (ii), the Company
has included in such registration statement or statements, as amended at
the Effective Date, all information (other than Rule 430A Information)
required by the Act and the rules thereunder to be included in the
Prospectus with respect to the Securities and the offering thereof. As
filed, such amendment and form of final prospectus, or such final
prospectus, shall include all Rule 430A Information and, except to the
extent the Representatives shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior
to the Execution Time or, to the extent not completed at the Execution
Time, shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary Prospectus) as
the Company has advised you, prior to the Execution Time, will be
included or made therein. If the Registration Statement contains the
undertaking specified by Regulation S-K Item 512(a), the Registration
Statement, at the Execution Time, meets the requirements set forth in
Rule 415(a)(1)(x).
The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term the "Effective Date" shall mean each date
that
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the Registration Statement and any post-effective amendment or amendments
thereto became or become effective. "Execution Time" shall mean the date
and time that this Agreement is executed and delivered by the parties
hereto. "Preliminary Prospectus" shall mean any preliminary prospectus
referred to in the preceding paragraph and any preliminary prospectus
included in the Registration Statement at the Effective Date that omits
Rule 430A Information. "Prospectus" shall mean the prospectus relating to
the Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus included in the Registration
Statement at the Effective Date. "Registration Statement" shall mean the
registration statement or statements referred to in the preceding
paragraph, including incorporated documents as of the filing of the
Company's Quarterly Report on Form 10-Q for the three month period ended
March 31, 1997, exhibits and financial statements, in the form in which
it or they has or have or shall become effective and, in the event any
post-effective amendment thereto becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such registration
statement or statements as so amended. Such term shall include Rule 430A
Information deemed to be included therein at the Effective Date as
provided by Rule 430A. "Rule 415", "Rule 424", "Rule 430A" and
"Regulation S-K" refer to such rules under the Act. "Rule 430A
Information" means information with respect to the Securities and the
offering thereof permitted to be omitted from the Registration Statement
when it becomes effective pursuant to Rule 430A. Any reference herein to
the Registration Statement, a Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under
the Securities Exchange Act of 1934 (the "Exchange Act") on or before the
effective date of the Registration Statement or the date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any
reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the filing of any
document under the Exchange Act after the effective date of the
Registration Statement, or the date of any Preliminary Prospectus or the
Prospectus, as the case may be, deemed to be incorporated therein by
reference.
(b) On the Effective Date, the Registration Statement did or will,
and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date, the Prospectus (and any supplements
thereto) will, comply in all material respects with the applicable
requirements of the Act and the Exchange Act and the respective rules
thereunder; on the Effective Date and on the Closing Date the Indenture
did or will comply in all material respects with the requirements of the
Trust Indenture Act of 1939 (the "Trust Indenture Act") and the rules
thereunder; on the Effective Date, the Registration Statement did not or
will not contain any untrue statement of a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), did not or will not, and on the date of any
filing pursuant to Rule 424(b) and on the Closing Date, the Prospectus
(together with any supplement thereto) will not, include any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representations or warranties as to
(i) that part of the Registration Statement which shall constitute the
Statement of Eligibility and Qualification (Form T-1) under the Trust
Indenture Act of the Trustee or (ii) the information contained in or
omitted from the Registration Statement or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for use in
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connection with the preparation of the Registration Statement or the
Prospectus (or any supplement thereto).
2. Purchase and Sale. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees
to sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto, the respective principal amounts of the Securities set
forth opposite each respective Underwriter's name in Schedule II hereto,
except that, if Schedule I hereto provides for the sale of Securities pursuant
to delayed delivery arrangements, the respective principal amounts of
Securities to be purchased by the Underwriters shall be as set forth in
Schedule II hereto, less the respective amounts of Contract Securities
determined as provided below. Securities to be purchased by the Underwriters
are herein sometimes called the "Underwriters' Securities" and Securities to
be purchased pursuant to Delayed Delivery Contracts as hereinafter provided
are herein called "Contract Securities".
If so provided in Schedule I hereto, the Underwriters are authorized to
solicit offers to purchase Securities from the Company pursuant to delayed
delivery contracts ("Delayed Delivery Contracts"), substantially in the form
of Schedule III hereto but with such changes therein as the Company may
authorize or approve. The Underwriters will endeavor to make such arrangements
and, as compensation therefor, the Company will pay to the Representatives,
for the account of underwriters, on the Closing Date, the percentage set forth
in Schedule I hereto of the principal amount of the Securities for which
Delayed Delivery Contracts are made. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks, insurance
companies, pension funds, investment companies and educational and charitable
institutions. The Company will make Delayed Delivery Contracts in all cases
where sales of Contract Securities arranged by the Underwriters have been
approved by the Company but, except as the Company may otherwise agree, each
such Delayed Delivery Contract must be for not less than the minimum principal
amount set forth in Schedule I hereto and the aggregate principal amount of
Contract Securities may not exceed the maximum aggregate principal amount set
forth in Schedule I hereto. The Underwriters will not have any responsibility
in respect of the validity or performance of Delayed Delivery Contracts. The
principal amount of Securities to be purchased by each Underwriter as set
forth in Schedule II hereto shall be reduced by an amount which shall bear the
same proportion to the total principal amount of Contract Securities as the
principal amount of Securities set forth opposite the name of such Underwriter
bears to the aggregate principal amount set forth in Schedule II hereto,
except to the extent that you determine that such reduction shall be otherwise
than in such proportion and so advise the Company in writing; provided,
however, that the total principal amount of Securities to be purchased by all
Underwriters shall be the aggregate principal amount set forth in Schedule II
hereto, less the aggregate principal amount of Contract Securities.
3. Delivery and Payment. Delivery of and payment for the Underwriters'
Securities shall be made at the office, on the date and at the time specified
in Schedule I hereto, which date and time may be postponed by agreement
between the Representatives and the Company or as provided in Section 8 hereof
(such date and time of delivery and payment for the Securities being called
the "Closing Date"). Delivery of the Underwriters' Securities shall be made to
the Representatives for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Company by certified or
official bank check or checks payable, or wire transfers, in immediately
available funds. The Securities shall be delivered in definitive global form
through the facilities of The Depository Trust Company.
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4. Agreements.
(A) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, and any amendment thereof, if not effective at the Execution Time,
to become effective. If the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Prospectus is otherwise
required under Rule 424(b), the Company will file the Prospectus, properly
completed, pursuant to the applicable paragraph of Rule 424(b) within the time
period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Company will promptly advise the
Representatives (i) when the Registration Statement shall have become
effective, (ii) when any amendment to the Registration Statement relating to
the Securities shall have become effective, (iii) of any request by the
Commission for any amendment of the Registration Statement or amendment of or
supplement to the Prospectus or for any additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or the institution or threatening of any proceeding
for that purpose and (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Securities for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof. The Company will not file any amendment of the
Registration Statement or supplement to the Prospectus unless the Company has
furnished you a copy for your review prior to filing and will not file any
such proposed amendment or supplement to which you reasonably object.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of which
the Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under which they
were made not misleading, or if it shall be necessary to amend or supplement
the Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company will give the Representatives immediate notice
of the occurrence of such event and promptly will prepare and file with the
Commission, subject to the first sentence of paragraph (a) of this Section 4,
an amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance.
(c) The Company will make generally available to its security holders and
to the Representatives as soon as practicable, but not later than 45 days
after the end of the 12-month period beginning at the end of the current
fiscal quarter of the Company, an earnings statement (which need not be
audited) of the Company and its subsidiaries, covering a period of at least 12
months beginning after the end of the current fiscal quarter of the Company,
which will satisfy the provisions of Section 11(a) of the Act.
(d) The Company will furnish to the Representatives and counsel for the
Underwriters, without charge, copies of the Registration Statement (including
exhibits thereto) and each amendment thereto which shall become effective on
or prior to the Closing Date and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act, as many copies of any
Preliminary Final Prospectus and the Final Prospectus and any amendments
thereof and supplements thereto as the Representatives may reasonably request.
(e) The Company will arrange for the qualification of the Securities for
sale under the laws of such jurisdictions as the Representatives may
designate, will maintain such qualifications in effect so long as required for
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the distribution of the Securities and will arrange for the determination of
the legality of the Securities for purchase by institutional investors.
(f) Until the earlier of the day on which the distribution of the
Securities is completed or the business day following the Closing Date, the
Company will not, without the consent of the Representatives, offer or sell,
or announce the offering of, any debt securities covered by the Registration
Statement or any other registration statement filed under the Act.
(B) The several Underwriters agree with the Company that:
(a) The several Underwriters will pay the expenses of printing and
distributing all documents relating to the offering.
(b) The several Underwriters will pay the reasonable fees and
disbursements of outside counsel for the Company and the Underwriters
relating to the offering.
(c) The several Underwriters will pay any fees of Moody's Investors
Service, Inc. and Standard & Poor's Ratings Group, a division of the
McGraw-Hill Companies, Inc. relating to the rating of the Securities.
(d) The several Underwriters will pay the fees and disbursements of
PricewaterhouseCoopers LLC relating to the preparation of the letter
required by Section 5(e) of this Agreement.
(e) The several Underwriters will pay the reasonable fees and
expenses of The Chase Manhattan Bank as Trustee.
(f) The several Underwriters will pay any and all fees associated
with listing the Securities on any United States or foreign securities
exchange.
(g) The several Underwriters will pay any and all travel expenses
incurred by the Company in connection with the offering of the
Securities.
5. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Underwriters' Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time, as of the date of the effectiveness
of any amendment to the Registration Statement filed prior to the Closing Date
(including the filing of any document incorporated by reference therein) and
as of the Closing Date, to the accuracy of the statements of the Company made
in any certificates pursuant to the provisions hereof, to the performance by
the Company of its obligations hereunder and to the following additional
conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a
later time, the Registration Statement shall have become effective not
later than (i) 6:00 P.M. New York City time, on the date of determination
of the public offering price, if such determination occurred at or prior
to 3:00 P.M. New York City time on such date or (ii) 12:00 Noon on the
business day following the day on which the public offering price was
determined, if such determination occurred after 3:00 P.M. New York City
time on such date; if filing of the Prospectus, or any supplement
thereto, is required pursuant to Rule 424(b), the Prospectus shall have
been filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, shall have been
issued and no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have furnished to the Representatives:
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(i) the opinion of the General Counsel, an Assistant General
Counsel or an Associate General Counsel of the Company, dated the
Closing Date, to the effect that:
(A) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of New York, with full corporate power and authority to
own its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction within the United States which requires such
qualifications wherein it owns or leases material properties or
conducts material business;
(B) the Securities conform in all material respects to the
description thereof contained in the Prospectus;
(C) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture
Act, and constitutes a legal, valid and binding obligation
enforceable against the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time in
effect, and subject, as to enforceability, to general principles
of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the
Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriters pursuant to
this Agreement, in the case of the Underwriters' Securities, or
by the purchasers thereof pursuant to Delayed Delivery
Contracts, in the case of any Contract Securities, will
constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and other similar laws affecting creditors' rights
generally from time to time in effect);
(D) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any
court or governmental agency, authority or body or any
arbitrator involving the Company or any of its subsidiaries, of
a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus,
and there is no franchise, contract or other document of a
character required to be described in the Registration Statement
or Prospectus, or to be filed as an exhibit, which is not
described or filed as required;
(E) the Registration Statement and any amendments thereto
have become effective under the Act; any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424(b)
has been made in the manner and within the time period required
by Rule 424(b); to the best knowledge of such counsel, no stop
order suspending the effectiveness of the Registration
Statement, as amended, has been issued, no proceedings for that
purpose have been instituted or are pending or contemplated
under the Act;
(F) this Agreement and any Delayed Delivery Contracts have
been duly authorized, executed and delivered by the Company;
(G) no authorization, approval or other action by, and no
notice to, consent of, order of, or filing with, any United
States Federal or New York governmental authority or regulatory
body is required for the
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consummation of the transactions contemplated herein or in any
Delayed Delivery Contracts, except such as have been obtained
under the Act and such as may be required under the blue sky
laws of any jurisdiction in connection with the purchase and
distribution of the Securities and such other approvals
(specified in such opinion) as have been obtained;
(H) such counsel has no reason to believe that (1) the
Registration Statement and the Prospectus (except the financial
statements and the notes thereto and other information of an
accounting or financial nature included therein, and the
Statement of Eligibility (Form T-1) included as an exhibit to
the Registration Statement, as to which such counsel need
express no view) were not appropriately responsive in all
material respects to requirements of the Act and the applicable
rules and regulations of the Commission thereunder and (2) the
Registration Statement or any amendment thereof at the time it
became effective contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus, as amended or supplemented,
contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading (in each case except for the financial statements and
the notes thereto and other information of an accounting or
financial nature included therein, as to which such counsel need
express no view); and
(I) none of the issue and sale of the Securities, the
consummation of any other of the transactions herein
contemplated or the fulfillment of the terms hereof or of any
Delayed Delivery Contracts will conflict with, result in a
breach of, or constitute a default under, the charter or by-laws
of the Company or the terms of any indenture or other agreement
or instrument known to such counsel and to which the Company or
any of its subsidiaries is a party or bound, or any decree or
regulation known to such counsel to be applicable to the Company
or any of its subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of its subsidiaries.
The statements described in one or more of paragraphs (B),
(C), (E), (F), (G) and (H)(1) of this subsection 5(b)(i) may be
omitted from the opinion of such counsel; provided, however,
that in such event the Company shall also have furnished to the
Representatives the corresponding opinion or letter of Cravath,
Swaine & Moore, counsel for the Company, described in subsection
5(b)(ii) or 5(b)(iii) immediately following.
(ii) in the event that the statements described in one or more
of paragraphs (B), (C), (E), (F) or (G) of foregoing subsection
5(b)(i) is omitted from the opinion delivered pursuant to such
subsection, the opinion of Cravath, Swaine & Moore, counsel for the
Company, dated the Closing Date, to the effect of the statements so
omitted.
In rendering such opinions, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction
other than the State of New York or the United States, to the
extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to
be reliable and who are satisfactory to counsel for the
Underwriters; and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the
Company and public officials.
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(iii) in the event that the statements in paragraph (H)(1) of
subsection 5(b)(i) are omitted from the opinion provided pursuant to
such subsection, a letter of Cravath, Swaine & Moore dated the
Closing Date to the effect that, having participated in conferences
with certain officers of, and with the accountants for, the Company
and having made certain inquiries and investigations in connection
with the preparation of the Registration Statement and the
Prospectus, such counsel has no reason to believe that (i) the
Registration Statement and the Prospectus (except the financial
statements and the notes thereto and other information of an
accounting or financial nature included therein, and the Statement of
Eligibility (Form T-1) included as an exhibit to the Registration
Statement, as to which such counsel need express no view) were not
appropriately responsive in all material respects with requirements
of the Act and the applicable rules and regulations of the Commission
thereunder and (ii) the Registration Statement at the Effective Date
contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make
the statements therein not misleading, or that the Prospectus on the
Closing Date includes any untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading (in each case except for the financial
statements and the notes thereto and other information of an
accounting or financial nature included therein, as to which such
counsel need express no view).
(c) The Representatives shall have received from Davis Polk &
Wardwell, counsel for the Underwriters, such opinion or opinions, dated
the Closing Date, with respect to the issuance and sale of the
Securities, the Indenture, any Delayed Delivery Contracts, the
Registration Statement, the Prospectus and other related matters as the
Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the purpose
of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the principal financial or
accounting officer (or Vice President and Treasurer) of the Company,
dated the Closing Date, to the effect that the signer of such certificate
has carefully examined the Registration Statement, the Prospectus, any
supplement to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued and no
proceedings for that purpose have been instituted or, to the
Company's knowledge, threatened; and
(iii) since the date of the most recent financial statements
included in the Prospectus, there has been no material adverse change
in the condition (financial or other), earnings, business or
properties of the Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business, except
as set forth in or contemplated in the Prospectus.
(e) At the Closing Date, PricewaterhouseCoopers LLC shall have
furnished to the Representatives a letter or letters (which may refer to
a letter previously delivered to one or more of the Representatives),
dated as of the
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Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of
the Act and the Exchange Act and the respective applicable published
rules and regulations thereunder, that the response, if any, to Item 10
of the Registration Statement is correct insofar as it relates to them
and stating in effect that:
(i) in their opinion the audited financial statements and
schedules thereto included or incorporated in the Registration
Statement and the Prospectus and reported on by them comply as to
form in all material respects with the applicable accounting
requirements of the Exchange Act and the published rules and
regulations thereunder with respect to financial statements and
financial statement schedules included or incorporated in annual
reports on Form 10-K under the Exchange Act;
(ii) on the basis of a reading of the unaudited financial
statements included or incorporated in the Registration Statement and
the Prospectus and of the latest unaudited financial statements made
available by the Company and its subsidiaries; carrying out certain
specified procedures (but not an examination in accordance with
generally accepted auditing standards) which would not necessarily
reveal matters of significance with respect to the comments set forth
in such letter; a reading of the minutes of the meetings of the
stockholders, directors and executive committees of the Company and
the Subsidiaries since the date of the latest audited balance sheet,
through a specified date not more than five business days prior to
the date of the letter; and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters
of the Company and its subsidiaries as to transactions and events
subsequent to the date of the most recent financial statements
incorporated in the Registration Statement and the Prospectus,
nothing came to their attention which caused them to believe that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Prospectus do
not comply as to form in all material respects with applicable
accounting requirements and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on Form
10-Q under the Exchange Act; and said unaudited financial
statements are not stated on a basis substantially consistent
with that of the audited financial statements included or
incorporated in the Registration Statement and the Prospectus;
or
(2) with respect to the period subsequent to the date of the
most recent financial statements incorporated in the
Registration Statement and the Prospectus, there were, at a
specified date not more than five business days prior to the
date of the letter, any increases in long-term debt of the
Company and its subsidiaries or decreases in the capital stock
of the Company or decreases in the stockholders' equity of the
Company and its subsidiaries as compared with the amounts shown
on the most recent consolidated balance sheet included or
incorporated in the Registration Statement and the Prospectus,
except in all instances for increases or decreases set forth in
such letter, in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof unless
said explanation is not deemed necessary by the Representatives;
and
(iii) they have performed certain other procedures as a result
of which they determined that the information described in a schedule
to be delivered on behalf of the Underwriters of an accounting,
financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general ledger
of the Company) set
<PAGE>
14
forth in the Registration Statement, as amended, the Prospectus, as
amended or supplemented, and in Exhibit 12 to the Registration
Statement (including selected accounting, financial or statistical
information included or incorporated in the Company's Annual Report
on Form 10-K incorporated in the Prospectus or any of the Company's
Quarterly Reports on Form l0-Q incorporated therein), agrees with the
general ledger of the Company and its subsidiaries, excluding any
questions of legal interpretation.
References to the Prospectus in this paragraph (e) include any
supplements thereto at the date of the letter.
(f) Subsequent to the respective dates of which information is given
in the Registration Statement and the Prospectus, there shall not have
been (i) any change or decrease specified in the letter or letters
referred to in paragraph (e) of this Section 5 or (ii) any change, or any
development involving a prospective change, in or affecting the business
or properties of the Company and its subsidiaries the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the judgment of
the Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Registration Statement and the
Prospectus.
(g) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents
as the Representatives may reasonably request.
(h) The Company shall have accepted Delayed Delivery Contracts in any
case where sales of Contract Securities arranged by the Underwriters have
been approved by the Company.
(i) Subsequent to the Execution Time, there shall not have been any
decrease in the ratings of any of the Securities by Moody's Investor's
Service, Inc. ("Moody's") or Standard & Poor's Corporation ("S&P") and
neither Moody's nor S&P shall have publicly announced that it has placed
any of the Securities on a credit watch with negative implications.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or
if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in
form and substance to the Representatives and their counsel, this Agreement
and all obligations of the Underwriters hereunder may be cancelled at, or at
any time prior to, the Closing Date by the Representatives. Notice of such
cancelation shall be given to the Company in writing or by telephone or
telegraph confirmed in writing.
6. Reimbursement of Underwriters' Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 5 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
them in connection with the proposed purchase and sale of the Securities.
7. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person who controls any
Underwriter within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or
other Federal or state
<PAGE>
15
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement for the registration of
the Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses
reasonably incurred, as incurred, by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that (i) the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission
or alleged omission made therein in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any
Underwriter through the Representatives specifically for use in connection
with the preparation thereof, and (ii) such indemnity with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter (or
any person controlling such Underwriter) from whom the person asserting any
such loss, claim, damage or liability purchased the Securities which are the
subject thereof if such person did not receive a copy of the Prospectus (or
the Prospectus as supplemented) excluding documents incorporated therein by
reference at or prior to the confirmation of the sale of such Securities to
such person in any case where such delivery is required by the Act and the
untrue statement or omission of a material fact contained in such Preliminary
Prospectus was corrected in the Prospectus (or the Prospectus as supplemented
prior to the confirmation of the sale of such Securities to such person). This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signs the
Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for use in the preparation of the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company acknowledges
that the statements set forth in the last paragraph of the cover page of the
Prospectus and under the heading "Underwriting" or "Plan of Distribution" and,
if Schedule I hereto provides for sales of Securities pursuant to delayed
delivery arrangements, in the last sentence under the heading "Delayed
Delivery Arrangements" in any Preliminary Prospectus and the Prospectus,
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus, and you, as the Representatives, confirm that such statements are
correct.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
this Section 7, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise
than under this Section 7. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to appoint counsel
satisfactory to such indemnified party to represent the indemnified party in
such action; provided, however, if the defendants in any such action include
both the indemnified party and the
<PAGE>
16
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to appoint counsel to defend such action
and approval by the indemnified party of counsel, the indemnifying party will
not be liable to such indemnified party under this Section 7 for any legal or
other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (in addition to any local
counsel), approved by the Representatives in the case of paragraph (a) of this
Section 7, representing the indemnified parties under such paragraph (a) who
are parties to such action), (ii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of commencement of
the action or (iii) the indemnifying party has authorized the employment of
counsel for the indemnified party at the expense of the indemnifying party;
and except that, if clause (i) or (iii) is applicable, such liability shall be
only in respect of the counsel referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in paragraph (a) of
this Section 7 is due in accordance with its terms but is for any reason held
by a court to be unavailable from the Company on grounds of policy or
otherwise, the Company and the Underwriters shall contribute to the aggregate
losses, claims, damages and liabilities (including legal or other expenses
reasonably incurred in connection with investigating or defending same) to
which the Company and one or more of the Underwriters may be subject in such
proportion so that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount bears to the sum
of such discount and the purchase price of the Securities set forth on
Schedule I hereto and the Company is responsible for the balance; provided,
however, that (y) in no case shall any Underwriter (except as may be provided
in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting
discount applicable to the Securities purchased by such Underwriter hereunder
and (z) no person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 7, each person who controls an Underwriter within the meaning of
either the Act or the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, each officer of the Company who
shall have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each
case to clauses (y) and (z) of this paragraph (d). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this paragraph
(d), notify such party or parties from whom contribution may be sought, but
the omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this paragraph (d).
8. Default by an Underwriter. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
<PAGE>
17
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule II hereto bears to the aggregate amount
of Securities set forth opposite the names of all the remaining Underwriters)
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase; provided, however, that in the event that the aggregate
amount of Securities which the defaulting Underwriter or Underwriters agreed
but failed to purchase shall exceed 10% of the aggregate amount of Securities
set forth in Schedule II hereto, the remaining Underwriters shall have the
right to purchase all, but shall not be under any obligation to purchase any,
of the Securities, and if such nondefaulting Underwriters do not purchase all
the Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 8, the Closing Date shall be
postponed for such period, not exceeding seven days, as the Representatives
shall determine in order that the required changes in the Registration
Statement and the Final Prospectus or in any other documents or arrangements
may be effected. Nothing contained in this Agreement shall relieve any
defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
9. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in securities generally on the New York Stock Exchange shall have been
suspended or limited or minimum prices shall have been established on such
Exchange, (ii) a banking moratorium shall have been declared either by Federal
or New York State authorities or (iii) there shall have occurred any outbreak
or material escalation of hostilities or other calamity or crisis the effect
of which on the financial markets of the United States is such as to make it,
in the judgment of the Representatives, impracticable to market the
Securities.
10. Representations and Indemnities to Survive. The respective agreement
representations, warranties, indemnities and other statements of the Company
or its officers and of the Underwriters set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 7
hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 6 and 7 hereof shall survive the termination or
cancellation of this Agreement.
11. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telegraphed and confirmed to them, at the address
specified in Schedule I hereto; or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it, at Armonk, New York 10504;
attention of the Treasurer.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7
hereof, and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
<PAGE>
18
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By: /s/ Cassio A. Calil
------------------------
Name: Cassio A. Calil
Title: Assistant Treasurer
The foregoing Agreement is hereby
confirmed and accepted on the
date specified in Schedule I hereto.
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
TOKYO-MITSUBISHI INTERNATIONAL PLC
BEAR, STEARNS & CO. INC
DAIWA SECURITIES SB CAPITAL MARKETS EUROPE LIMITED
DEUTSCHE BANK AG LONDON
J.P. MORGAN SECURITIES LTD.
NOMURA INTERNATIONAL PLC
SALOMON BROTHERS INTERNATIONAL LIMITED
By: MORGAN STANLEY & CO. INTERNATIONAL LIMITED
By: /s/ Harry Stanley
-------------------------------
Name: Harry Stanley
Title: Principal
For themselves and the other several
Underwriters, if any, named in
Schedule II to the foregoing Agreement.
<PAGE>
19
Schedule I
Underwriting Agreement dated April 6, 2000.
Registration No. 333-70521.
Representatives: MORGAN STANLEY & CO. INTERNATIONAL LIMITED
TOKYO-MITSUBISHI INTERNATIONAL PLC
BEAR, STEARNS & CO. INC.
DAIWA SECURITIES SB CAPITAL MARKETS EUROPE LIMITED
DEUTSCHE BANK AG LONDON
J.P. MORGAN SECURITIES LTD.
NOMURA INTERNATIONAL PLC
SALOMON BROTHERS INTERNATIONAL LIMITED
Title, Purchase Price and Description of Securities:
Title: 0.90% Notes due 2003.
Principal amount: Yen 100,000,000,000.
Purchase price: 99.7825% of the principal amount of Notes plus accrued
interest from April 14, 2000.
Offering price: 99.9700% of the principal amount of Notes plus accrued
interest from April 14, 2000.
Interest: Payable on April 14 and October 14 of each year, commencing on
October 14, 2000.
Sinking fund provisions: None.
Redemption provisions: The Securities are redeemable by the Company in
whole at par upon the occurrence of certain tax events as described
in the prospectus supplement dated the date of this Agreement.
Closing Date, Time and Location: April 14, 2000, 10:00 A.M., at the offices of
Cravath, Swaine & Moore, Worldwide Plaza, 825 Eighth Avenue, New York, New
York.
Delayed Delivery Arrangements: None.
Items specified pursuant to Section 5(e)(iii) to be covered by the letter from
PricewaterhouseCoopers LLC delivered pursuant to Section 5(e): As set
forth in a schedule delivered on the date hereof on behalf of the
Underwriters.
Other Terms:
1. Section 4(B)(c) is amended to read as follows:
"The several Underwriters will separately pay $50,000 to the
Company as partial reimbursement of the fees of Moody's
Investors Service, Inc. and Standard & Poor's Ratings Group, a
division of the McGraw-Hill Companies, Inc. relating to the
rating of the Securities."
2. Each of the Underwriters has agreed that it will not offer, sell, or
deliver any of the Securities, directly or indirectly, or distribute
the prospectus supplement or prospectus or any other offering
material relating to the Securities, in or from any jurisdiction
except under circumstances that will, to the best of the
Underwriters' knowledge and belief, result in compliance with the
applicable laws and regulations and which will not impose any
obligations on the Company.
The Underwriters also agree to abide by the following offering
resrictions:
United Kingdom
Each underwriter has represented and agreed that it and each of its
affiliates:
o has not offered or sold and, prior to the expiry of the period
of six months from the time to closing, will not offer or sell
any of the Securities to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring,
holding, managing, or
<PAGE>
20
disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which
have not results and will not result in an offer to the public
in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995;
o has complied and will comply with all applicable provisions of
the Financial Services Act 1986 with respect to anything done by
it in relation to the Notes in, from or otherwise involving the
United Kingdom; and
o has only issued or passed on and will only issue or pass on in
the United Kingdom any document received by it in connection
with the issue of the Notes to a person who is of a kind
described in Article 11(3) of the Financial Services Act of 1986
(Investment Advertisements) (Exemptions) Order 1996 or is a
person to whom those documents may otherwise lawfully be issued
or passed on.
Germany
No selling prospectus (Verkaufsprospekt) has been or will be
published in respect of the Securities and each Underwriter will be
required to comply with the German Securities Selling Prospectus Act
(Wertpapier-Verkaufsprospektgesetz) of December 13, 1990, as amended.
The Netherlands
The Securities are being issued under the Euro-securities exemption
pursuant to Article 6 of the Exemption Regulation (Vrijstellinsregeling
Wet Toezicht Effectenverkeer) of December 21, 1995, as amended, of The
Netherlands' Securities Market Supervision Act 1995 (Wet Toezicht
Effectenverkeer) and accordingly each Underwriter has represented and
agreed that it has not publicly promoted and will not publicly promote
the offer or sale of the Securities by conducting a generalized
advertising or cold-calling campaign within or outside The Netherlands.
The Republic of France
The Securities are being issued outside the Republic of France and
each Underwriter has represented and agreed that, in connection with
their initial distribution, it has not offered or sold and will not offer
or sell, directly or indirectly, any of the Securities to the public in
the Republic of France and that it has not distributed and will not
distribute or cause to be distributed to the public in the Republic of
France this prospectus supplement or any other offering material relating
to the Securities.
Japan
The Securities have not been and will not be registered under the
Securities and Exchange Law of Japan (the "SEL") and each of the
Underwriters and each of its affiliates has represented and agreed that
it has not offered or sold, and it will not offer or sell directly or
indirectly, any of the Securities in or to residents of Japan or to any
persons for reoffering or resale, directly or indirectly, in Japan or to
any resident of Japan, except pursuant to an exemption from the
registration requirements of the SEL available thereunder and otherwise
in compliance with the SEL and the other relevant laws, regulations and
guidelines of Japan.
Hong Kong
Each of the Underwriters and each of its affiliates has represented
and agreed that it has not offered or sold, and it will not offer or
sell, the Securities by means of any document to persons in Hong Kong
other than persons whose ordinary business it is to buy or sell shares or
debentures, whether as principal or agent, or otherwise in circumstances
which do not constitute an offer to the public within the meaning of the
Hong Kong Companies Ordinance (Chapter 32 of the Laws of Hong Kong).
<PAGE>
21
Schedule II
International Business Machines Corporation
Yen 100,000,000,000 0.90% Notes Due 2003
Underwriters Principal Amount of
Notes to be Purchased
MORGAN STANLEY & CO. INTERNATIONAL LIMITED (Y)44,000,000,000
TOKYO-MITSUBISHI INTERNATIONAL PLC 44,000,000,000
BEAR, STEARNS & CO. INC. 2,000,000,000
DAIWA SECURITIES SB CAPITAL MARKETS
EUROPE LIMITED 2,000,000,000
DEUTSCHE BANK AG LONDON 2,000,000,000
J.P. MORGAN SECURITIES LTD. 2,000,000,000
NOMURA INTERNATIONAL PLC 2,000,000,000
SALOMON BROTHERS INTERNATIONAL LIMITED 2,000,000,000
----------------
Total........................... (Y)100,000,000,000
==================
<PAGE>
22
Schedule III
Delayed Delivery Contract
[Insert name and address
of lead Representative]
,199
Dear Sirs:
The undersigned hereby agrees to purchase from International Business
Machines Corporation (the "Company"), and the Company agrees to sell to the
undersigned, on , 199 , (the "Delivery Date"), $
principal amount of the Company's (the "Securities") offered
by the Company's Final Prospectus dated ,
199 , receipt of a copy of which is hereby acknowledged, at a purchase price
of % of the principal amount thereof, plus accrued , if any,
thereon from , 19 , to the date of payment and delivery, and on the
further terms and conditions set forth in this contract.
Payment for the Securities to be purchased by the undersigned shall be
made on or before 11:00 A.M. on the Delivery Date to or upon the order of the
Company in New York Clearing House (next day) funds, at your office or at such
other place as shall be agreed between the Company and the undersigned upon
delivery to the undersigned of the Securities in definitive, fully registered
form and in such authorized denominations and registered in such names as the
undersigned may request by written or telegraphic communication addressed to
the Company not less than five full business days prior to the Delivery Date.
If no request is received, the Securities will be registered in the name of
the undersigned and issued in a denomination equal to the aggregate principal
amount of Securities to be purchased by the undersigned on the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Securities on the Delivery Date, and the obligation of the Company to sell
and deliver Securities on the Delivery Date, shall be subject to the
conditions (and neither party shall incur any liability by reason of the
failure thereof) that (1) the purchase of Securities to be made by the
undersigned, which purchase the undersigned represents is not prohibited on
the date hereof, shall not on the Delivery Date be prohibited under the laws
of the jurisdiction to which the undersigned is subject, and (2) the Company,
on or before the Delivery Date, shall have sold to certain underwriters (the
"Underwriters") such principal amount of the Securities as is to be sold to
them pursuant to the Underwriting Agreement referred to in the Final
Prospectus mentioned above. Promptly after completion of such sale to the
Underwriters, the Company will mail or deliver to the undersigned at its
address set forth below notice to such effect, accompanied by a copy of the
opinion of counsel for the Company delivered to the Underwriters in connection
therewith. The obligation of the undersigned to take delivery of and make
payment for the Securities, and the obligation of the Company to cause the
Securities to be sold and delivered, shall not be affected by the failure of
any purchaser to take delivery of and make payment for the Securities pursuant
to other contracts similar to this contract.
This contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that acceptance of this contract and other similar
contracts is in the Company's sole discretion and, without limiting the
foregoing, need not be on a first come, first served basis. If this contract
is acceptable to the Company, it is required that the Company sign the form of
acceptance below and mail or deliver one of the counterparts hereof to the
undersigned at its address set forth below. This will become a binding
contract between the Company and the undersigned, as of the date first above
written, when such counterpart is so mailed or delivered.
<PAGE>
23
This agreement shall be governed by and construed in accordance with the
laws of the State of New York.
Very truly yours,
___________________________________
(Name of Purchaser)
By_________________________________
(Signature and Title)
___________________________________
(Address)
Accepted:
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By_____________________________________
24
[FOR DTC NOTES ONLY---Unless this certificate is presented by an
authorized representative of The Depository Trust Company, a New York
corporation ("DTC"), to the issuer or its agent for registration of transfer,
exchange or payment, and any certificate issued is registered in the name of
Cede & Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is made to Cede & Co. or to such other
entity as is requested by an authorized representative of DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.]
INTERNATIONAL BUSINESS MACHINES CORPORATION
0.90% Note due 2003
CUSIP 459200 AU5
ISIN 459200 AU59
ISIN XS0110442398
COMMON CODE 11044239
No.: R-[ ]
INTERNATIONAL BUSINESS MACHINES CORPORATION, a corporation duly organized
and existing under the laws of the State of New York (herein called the
"Company", which term includes any successor corporation under the Indenture
referred to on the reverse hereof), for value received, hereby promises to pay
to [CEDE & CO.][CHASE NOMINEES LIMITED], or registered assigns, the principal
sum as set forth in the attached Schedule of Increases and Decreases, at the
office or agency of the Company in the Borough of Manhattan, The City and
State of New York, or any other office or agency designated by the Company for
that purpose, on April 14, 2003, in such coin or currency of Japan as at the
time of payment shall be legal tender for the payment of public and private
debts, and to pay interest, semi-annually on April 14 and October 14 of each
year, on said principal sum at said office or agency, in like coin or
currency, at the rate of 0.90% per annum, from the April 14 or October 14, as
the case may be, next preceding the date of this Note to which interest has
been paid, unless the date hereof is a date to which interest has been paid,
in which case from the date of this Note, or unless no interest has been paid
on the Notes (as defined on the reverse hereof), in which case from April 14,
2000, until payment of said principal sum has been made or duly provided for.
Notwithstanding the foregoing, if the date hereof is after March 31 or
September 30, as the case may be, and before the following April 14 or October
14, this Note shall bear interest from such April 14 or October 14; provided,
however, that if the Company shall
<PAGE>
25
default in the payment of interest due on such April 14 or October 14, then
this Note shall bear interest from the next preceding April 14 or October 14
to which interest has been paid, or, if no interest has been paid on the
Notes, from April 14, 2000. The interest so payable on any April 14 or October
14 will, subject to certain exceptions provided in the Indenture referred to
on the reverse hereof, be paid to the person in whose name this Note is
registered at the close of business on such March 31 or September 30, as the
case may be, next preceding such April 14 or October 14, unless the Company
shall default in the payment of interest due on such interest payment date, in
which case such defaulted interest, at the option of the Company, may be paid
to the person in whose name this Note is registered at the close of business
on a special record date for the payment of such defaulted interest
established by notice to the registered holders of Notes not less than ten
days preceding such special record date or may be paid in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes may be listed. Payment of interest may, at the option of the
Company, be made by check mailed to the registered address of the person
entitled thereto.
Reference is made to the further provisions of this Note set forth on the
reverse hereof. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication
<PAGE>
26
hereon shall have been signed by the Trustee under the Indenture referred to
on the reverse hereof.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: April 14, 2000 INTERNATIONAL BUSINESS MACHINES
CORPORATION
[SEAL]
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION by______________________________
This is one of the
Securities of the Series
designated herein issued
under the within-
mentioned Indenture. by______________________________
THE CHASE MANHATTAN BANK, as Trustee
by ______________________________
Authorized Signatory
This Note is one of a duly authorized issue of unsecured debentures,
notes or other evidences of indebtedness of the Company (hereinafter called
the "Securities"), of the series hereinafter specified, all issued or to be
issued under an indenture dated as of October 1, 1993 (hereinafter called the
"Indenture"), duly executed and delivered by the Company to The Chase
Manhattan Bank, a New York banking corporation, as trustee (hereinafter called
the "Trustee"), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the respective rights and duties
thereunder of the Trustee, the Company and the holders of the Securities. The
Securities may be issued in one or more series, which different series may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest at different rates, may have different conversion prices (if
any), may be subject to different redemption provisions, may be subject to
different sinking, purchase or analogous funds, may be subject to different
covenants and Events of Default and may otherwise vary as in
<PAGE>
27
the Indenture provided. This Note is one of a series designated as the 0.90%
Notes due 2003 of the Company (hereinafter called the "Notes") issued under
the Indenture.
In case an Event of Default with respect to the Notes, as defined in the
Indenture, shall have occurred and be continuing, the principal hereof
together with interest accrued thereon, if any, may be declared, and upon such
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Securities at the time outstanding of all series to be
affected (acting as one class), to execute supplemental indentures adding any
provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or modifying in any manner
the rights of the holders of the Securities of such series to be affected;
provided, however, that no such supplemental indenture shall, among other
things, (i) change the fixed maturity of the principal of, or any installment
of principal of or interest on, or the currency of payment of, any Security;
(ii) reduce the principal amount thereof or the rate of interest thereon or
any premium payable upon the redemption thereof; (iii) impair the right to
institute suit for the enforcement of any such payment on or after the fixed
maturity thereof (or, in the case of redemption, on or after the redemption
date); (iv) reduce the percentage in principal amount of the outstanding
Securities of any series, the consent of whose holders is required for any
such supplemental indenture, or the consent of whose holders is required for
any waiver (of compliance with certain provisions of the Indenture or certain
defaults thereunder and their consequences) provided for in the Indenture; (v)
change any obligation of the Company, with respect to outstanding Securities
of a series, to maintain an office or agency in the places and for the
purposes specified in the Indenture for such series; or (vi) modify any of the
foregoing provisions or the provisions for the waiver of certain covenants and
defaults, except to increase any applicable percentage of the aggregate
principal amount of outstanding Securities the consent of the holders of which
is required or to provide with respect to any particular series the right to
condition the effectiveness of any supplemental indenture as to that series on
the consent of the holders of a specified percentage of the aggregate
principal amount of outstanding Securities of such series or to provide that
certain other provisions of the Indenture
<PAGE>
28
cannot be modified or waived without the consent of the holder of each
outstanding Security affected thereby. It is also provided in the Indenture
that the holders of a majority in aggregate principal amount of the Securities
of a series at the time outstanding may on behalf of the holders of all the
Securities of such series waive any past default under the Indenture with
respect to such series and its consequences, except a default in the payment
of the principal of, premium, if any, or interest, if any, on any Security of
such series or in respect of a covenant or provision which cannot be modified
without the consent of the Holder of each outstanding Security of the series
affected. Any such consent or waiver by the holder of this Note shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Note and any Notes which may be issued in exchange or substitution
herefor, irrespective of whether or not any notation thereof is made upon this
Note or such other Notes.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of, if any, and interest on
this Note at the place, at the respective times, at the rate and in the coin
or currency herein prescribed.
The Indenture permits the Company to Discharge its obligations with
respect to the Notes on the 91st day following the satisfaction of the
conditions set forth in the Indenture, which include the deposit with the
Trustee of money or Foreign Government Securities or a combination thereof
sufficient to pay and discharge each installment of principal of (including
premium, if any, on) and interest, if any, on the outstanding Notes.
If the Company shall, in accordance with Section 901 of the Indenture,
consolidate with or merge into any other corporation or convey or transfer its
properties and assets substantially as an entirety to any Person, the
successor shall succeed to, and be substituted for, the Person named as the
"Company" on the face of this Note, all on the terms set forth in the
Indenture.
The Notes are issuable in registered form without coupons in
denominations of Yen1,000,000 and any integral multiple of Yen1,000,000. In
the manner and subject to the limitations provided in the Indenture, but
without the payment of any service charge, Notes may be exchanged for an equal
aggregate principal amount of Notes other authorized denominations at the
office or agency of the Company
<PAGE>
29
maintained for such purpose in the Borough of Manhattan, The City and State of
New York.
The Company will, subject to the exceptions and limitations set forth
below, pay as additional interest on this Note such additional amounts as are
necessary in order that the net payment by the Company or a paying agent of
the principal of and interest on the Notes to a holder who is not a United
States person (as defined below), after deduction for any present or future
tax, assessment or other governmental charge of the United States or a
political subdivision or taxing authority of or in the United States, imposed
by withholding with respect to the payment, will not be less than the amount
provided in this Note to be then due and payable; provided, however, that the
foregoing obligation to pay additional amounts shall not apply:
(1) to any tax, assessment or other governmental charge that is
imposed or withheld solely by reason of the holder, or a fiduciary,
settlor, beneficiary, member or shareholder of the holder if the holder
is an estate, trust, partnership or corporation, or a person holding a
power over an estate or trust administered by a fiduciary holder, being
considered as:
(a) being or having been present or engaged in a trade or
business in the United States or having had a permanent
establishment in the United States;
(b) having a current or former relationship with the United
States, including a relationship as a citizen or resident of the
United States;
(c) being or having been a foreign or domestic personal holding
company, a passive foreign investment company or a controlled
foreign corporation with respect to the United States or a
corporation that has accumulated earnings to avoid United States
federal income tax;
(d) being or having been a "10-percent shareholder" of the
Company as defined in section 871(h)(3) of the United States
Internal Revenue Code or any successor provision; or
(e) being a bank receiving payments on an extension of credit
made pursuant to a loan agreement entered into the ordinary course
of its trade or business;
<PAGE>
30
(2) to any holder that is not the sole beneficial owner of this
Note, or a portion of this Note, or that is a fiduciary or partnership,
but only to the extent that a beneficiary or settlor with respect to the
fiduciary, a beneficial owner or member of the partnership would not have
been entitled to the payment of an additional amount had the beneficiary,
settlor, beneficial owner or member received directly its beneficial or
distributive share of the payment;
(3) to any tax, assessment or other governmental charge that is
imposed otherwise or withheld solely by reason of a failure of the holder
or any other person to comply with certification, identification or
information reporting requirements concerning the nationality, residence,
identity or connection with the United States of the holder or beneficial
owner of this Note, if compliance is required by statute, by regulation
of the United States Treasury Department or by an applicable income tax
treaty to which the United States is a party as a precondition to
exemption from such tax, assessment or other governmental charge;
(4) to any tax, assessment or other governmental charge that is
imposed otherwise than by withholding by the Company or a paying agent
from the payment;
(5) to any tax, assessment or other governmental charge that is
imposed or withheld solely by reason of a change in law, regulation, or
administrative or judicial interpretation that becomes effective more
than 15 days after the payment becomes due or is duly provided for,
whichever occurs later;
(6) to any estate, inheritance, gift, sales, excise, transfer,
wealth or personal property tax or similar tax, assessment or other
governmental charge;
(7) to any tax, assessment or other governmental charge required to
be withheld by any paying agent from any payment of principal of or
interest on this Note, if such payment can be made without such
withholding by any other paying agent; or
(8) in the case of any combination of items (1), (2), (3), (4), (5),
(6) and (7).
This Note is subject in all cases to any tax, fiscal or other law or
regulation or administrative or judicial interpretation applicable to this
Note. Except as specifically provided in this Note, the Company shall not be
<PAGE>
31
required to make any payment with respect to any tax, assessment or other
governmental charge imposed by any government or a political subdivision or
taxing authority of or in any government or political subdivision.
As used in this Note, the term "United States" means the United States of
America (including the states and the District of Columbia) and its
territories, possessions and other areas subject to its jurisdiction, "United
States person" means any individual who is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States, any state of the United States or the
District of Columbia (other than a partnership that is not treated as a United
States person under any applicable Treasury regulations), or any estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
If, as a result of any change in, or amendment to, the laws (or any
regulations or rulings promulgated under the laws) of the United States (or
any political subdivision or taxing authority of or in the United States), or
any change in, or amendments to, an official position regarding the
application or interpretation of such laws, regulations or rulings, which
change or amendment is announced or becomes effective on or after April 6,
2000, the Company becomes or, based upon a written opinion of independent
counsel selected by the Company, will become obligated to pay additional
amounts as described above with respect to this Note, then the Company may at
its option redeem, in whole, but not in part, this Note on not less than 30
nor more than 60 days prior notice, at a redemption price equal to 100% of its
principal amount, together with interest accrued but unpaid on this Note to
the date fixed for redemption.
Upon due presentation for registration of transfer of this Note at the
office or agency of the Company for such registration in the Borough of
Manhattan, The City and State of New York, or any other office or agency
designated by the Company for such purpose, a new Note or Notes of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange herefor, subject to the limitations provided in the
Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.
Prior to due presentment for registration of transfer of this Note, the
Company, the Trustee and any agent of the Company or the Trustee may deem and
treat the registered holder hereof as the absolute owner of this Note (whether
or not this Note shall be overdue) for the purpose of receiving
<PAGE>
32
payment of the principal of, premium, if any, and interest on this Note, as
herein provided, and for all other purposes, and neither the Company nor the
Trustee nor any agent of the Company or the Trustee shall be affected by any
notice of the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, effectually
satisfy and discharge liability for moneys payable on this Note.
No recourse for the payment of the principal of, premium, if any, or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether
by virtue of any constitution, statute or rule of law or by the enforcement of
any assessment or penalty or otherwise, all such liability being, by the
acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
Unless otherwise defined in this Note, all terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
<PAGE>
33
SCHEDULE OF INCREASES OR DECREASES
The initial principal amount of this Global Note is Yen[ ]. The
following increases or decreases in this Global Note have been made:
Date of Amount of decrease Amount of increase Principal amount Signature of
Exchange in Principal in Principal of this Global authorized
Amount of this Amount of this Note following signatory of
Global Note Global Note such decrease or Trustee or
increase Securities
Custodian
