EXHIBIT (1)(b)
$----------------
International Business Machines Corporation
U.S. Medium-Term Notes
AGENCY AGREEMENT
__________ __, 199_
[Agent Addresses]
Dear Sirs:
1. Introduction. International Business Machines Corporation, a New
York corporation (the "Issuer"), confirms its agreement with each of you
(individually an "Agent" and collectively the "Agents") with respect to the
issue and sale from time to time by the Issuer on or after the date hereof of up
to $___________ 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-_____ 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 _________ __, 199_,
a form of which is included in Registration Statement No. 333-_______,
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 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.
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 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 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 th 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 "xxxx://xxx.xxx.xxx." 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 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 a 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 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) an
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 & Xxxxx,
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 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 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 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:
(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 Xxxxx Xxxx & Xxxxxxxx,
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 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 & Xxxxx, 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 o contemplated solicitation) and such other
documents and certificates (including an opinion of Xxxxx Xxxx &
Xxxxxxxx to the
effect of subparagraph (g) above) as the Agents may reasonably request
before that date and the Issuer shall have furnished to Xxxxx Xxxx &
Xxxxxxxx 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 bein 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 an 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 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 statement 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 & Xxxxx, in
form satisfactory to the Agents, to the effect set forth in Section
5(d) hereof, but modified, as necessary, to relate to the Registration
Statement and the Prospectus as amended or supplemented at such
Representation Date; provided, however, that in lieu of such opinion or
opinions, counsel may furnish the Agents with a letter or letters to
the effect that the Agents may rely on a prior opinion delivered under
Section 5(d) or this Section 6(c) to the same extent as if it were
dated the date of such letter (except that statements in such prior
opinion shall be deemed to relate to the Registration Statement and the
Prospectus as amended or supplemented at such Representation Date).
(d) At each Representation Date on which the Registration
Statement or the Prospectus shall be amended or supplemented to include
additional financial information as a result of filing of the Issuer's
Annual Report on Form 10-K, and upon the reasonable request of the
Agents and at the expense 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 Agen for any legal or other expenses reasonably
incurred by such Agent in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however,
that (i) the Issuer will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in any of such documents in reliance upon and
in conformity with written information furnished to the Issuer by any
Agent specifically for use in connection with the preparation thereof
and (ii) such indemnity with respect to any preliminary prospectus or
the Prospectus shall not inure to the benefit of any Agent (or any
person controlling such Agent) through which the person asserting any
such 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 cas any such action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the
extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and
the indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it 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. Upo 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 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 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 agre 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 Xxx Xxxxxxx Xxxx, Xxxxxx, Xxx Xxxx 00000, Attention: Treasurer
(Fax: 000-000-0000).
To the Agents:
Notices to ____________________ shall be directed to it at
______________________, Attention: ____________________ (Fax: _____________).
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 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:
CONFIRMED AND ACCEPTED, as of the date first above written:
By
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Title:
By
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Title
By
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Title:
By
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Title
By
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Title:
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
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").
, 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 _______________
(the "Agency Agreement"), among the Issuer and the Agents. No Agent will be
obligated to purchase Notes for its own account. The Notes will be issued
pursuant to an Indenture, dated as of October 1, 1993 (the "Indenture"), between
the Issuer and The Chase Manhattan Bank (National Association), as trustee (the
"Trustee"), as supplemented by the First Supplemental Indenture thereto dated as
of December 15, 1995. The Notes will rank equally with all other unsecured and
unsubordinated indebtedness of the Issuer and have been registered with the
Securities and Exchange Commission (the "Commission").
Each Note will be represented initially by either a global
security registered in the name of a nominee of The Depository Trust Company, as
Depositary ("DTC") (a "BookEntry Note") or a certificate issued in definitive
form (a "Certificate Note"). It is currently contemplated that both Fixed Rate
Notes (as defined below) and Floating Rate Notes (as defined below) may be
issued as Book-Entry Notes.
Administrative procedures and specific terms of the Notes and
the offering, to the extent Notes are offered and sold through the Agents, are
explained below. Administrative and record-keeping responsibilities will be
handled for the Issuer by its Treasury Department. The Issuer will advise each
Agent in writing of those persons handling administrative responsibilities with
whom each Agent is to communicate regarding offers to purchase Notes and the
details of their delivery. To the extent that the following procedures conflict
with the provisions of the Notes, the Indenture or the Letter (as defined
below), the relevant provisions of the Note, the Indenture or the Letter shall
control.
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.
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 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.
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.
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 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 acceptabl 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.
The Trustee will deliver the Notes, in accordance
with instructions from the Issuer, to the Presenting
Agent, as the Issuer's agent, for the benefit of the
purchaser only against delivery of a receipt
therefor.
Agents' addresses for delivery of Certificate Notes:
The Presenting Agent, as the Issuer's agent, will
deliver the Notes (with the written confirmation
provided for above) to the purchaser thereof against
payment by such purchaser in immediately available
funds and will give instructions for payment to be
made to the Issuer of an amount equal to the face
amount of the Notes less the Presenting Agent's
commission. Delivery of any confirmation or Note will
be made in compliance with "Delivery of Prospectus"
below.
Fails: In the event that a purchaser shall fail to accept
delivery of and make payment for a Note on the
settlement date, the Presenting Agent will notify the
Trustee and the Issuer by telephone, confirmed in
writing. If the Note has been delivered to the
Presenting Agent, as the Issuer's agent, the
Presenting Agent shall return such Note to the
Trustee. If funds have been advanced by the
Presenting Agent for the purchase of such Note, the
Issuer will, immediately upon receipt of such notice,
refund the paymen 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 us 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
Rate Changes: time the rates to be borne by the Notes that may be
sold as a result of the solicitation of offers by the
Agents. Once any Agent has recorded any indication of
interest in Notes upon certain terms, and
communicated with the Issuer, if the Issuer plans to
accept an offer to purchase Notes upon such terms, it
will prepare a 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 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,
Supplement: each Agent will forthwith suspend solicitation until
such time as the Issuer has advised them that
solicitation of purchases may be resumed.
If the Agents receive the notice from the Issuer
contemplated by Section 4(b) of the Agency Agreement,
they will promptly suspend solicitation and will only
resume solicitation as provided in the Agency
Agreement. If the Issuer decides to amend or
supplement the Registration Statement or the
Prospectus relating to the Notes (other than by an
amendment or supplement that (i) only specifies the
terms of the Securities or (ii) relates to an
offering by the Issuer of Registered Securities
other than the Securities), it will promptly advise
each Agent and will furnish each Agent with the
proposed amendment or supplement in accordance with
the terms of the Agency Agreement. The Issuer will
promptly file or mail to the Commission for filing
such amendment or supplement, provide the Agents with
copies of any such amendment or supplement, confirm
to the Agents that such amendment or supplement has
been filed with the Commission and advise the Agents
that
solicitation may be resumed.
Any such suspension shall not affect the Issuer's
obligations under the Agency Agreement; and in the
event that at the time the Issuer suspends
solicitation of offers to purchase Notes there shall
be any offers already accepted by the Issuer
outstanding for settlement, the Issuer will have the
sole responsibility for fulfilling such obligations.
The Issuer will in addition promptly advise the
Agents and the Trustee if such offers are not to be
settled and if copies of the Prospectus as in effect
at the time of the suspension may not be delivered in
connection with the settlement of such offers.
Delivery of With respect to each purchase resulting from a
Prospectus: solicitation by any Agent, a copy of the Prospectus,
as most recently amended or supplemented on the date
of delivery thereof (except as provided below), but
excluding materials incorporated by reference
therein, must be delivered to a purchaser prior to or
together with the earlier of delivery of (i) the
written confirmation provided for above, and (ii) any
Note purchased by such purchaser as a result of such
solicitation. The Issuer shall ensure that the
Presenting Agent receives the required number of
copies of the Prospectus and each amendment or
supplement thereto (including appropriate pricing
stickers), but excluding materials incorporated by
reference therein, by telecopy or overnight express
(for delivery not later than 11:00 a.m. on the
Business Day next following the trade date) to enable
the Presenting Agent to deliver such confirmation or
Note to such purchaser as contemplated by these
procedures and in compliance with the preceding
sentence. If, since the date of acceptance of such
purchaser'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
purchaser, such purchaser shall not receive the
Prospectus as supplemented by such new supplement,
but shall receive the Prospectus as supplemented to
reflect the terms of the Notes being purchased by
such purchaser and otherwise as most recently amended
or supplemented on the date of delivery of the
Prospectus.
Agents' addresses for delivery of Pricing
Supplements:
Authenticity of The Issuer will cause the Trustee to furnish the
Signatures: Agents from time to time with the specimen signatures
of each of the Trustee's officers, employees or
agents who have been authorized by the Trustee to
authenticate Notes, but the Agents will have no
obligation or liability to the Issuer or the Trustee
in respect of the authenticity of the signature of
any officer, employee or agent of the Issuer or the
Trustee on any Note.
Advertising Cost: The Issuer will determine with the Agents the amount
of advertising that may be appropriate in offering
the Notes. Advertising expenses will be paid by the
Issuer.
II. BOOK-ENTRY NOTES
The following procedures supplement and, to the extent
inconsistent therewith, replace the procedures set forth above with respect to
the offering of Book-Entry Notes. In connection with the qualification of the
Book-Entry Notes for eligibility in the book-entry system maintained by DTC, the
Trustee will perform the custodial, document control and administrative
functions described below, in accordance with its respective obligations under a
Letter of Representation (the "Letter") from the Issuer and the Trustee to be
entered into with DTC and a Medium-Term Note Certificate Agreement between the
Trustee and DTC dated as of March 10, 1989, and its obligations as a participant
in DTC, including DTC's Same-Day Funds Settlement System ("SDFS"). Both Fixed
and Floating Rate Notes may be issued in book-entry form.
Issuance: On any date of settlement (as defined under
"Settlement" below) for one or more Book-Entry Notes,
the Issuer will issue a single global security in
fully registered form without coupons (a "Global
Security") representing up to $200,000,000 principal
amount of all such Notes that have the same maturity
date, redemption provisions, if any, repayment
provisions, 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 origina
issue date, and (ii) following a consolidation of
Global Securities, the most recent Interest Payment
Date to which interest has been paid or duly provided
for on the predecessor Global Securities, regardless
of the date of authentication of such subsequently
issued Global Security. No Global Security will
represent any Certificated Note.
Identification 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
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 delivere
and at least 30 days before the next Interest Payment
Date for such Book-Entry Notes, on which such Global
Securities shall be exchanged for a single
replacement Global Security and (iii) a new CUSIP
number to be assigned to such replacement Global
Security. Upon receipt of such a notice, DTC will
send to its Participants (including the Trustee) a
written reorganization notice to the effect that such
exchange will occur on such date. Prior to the
specified exchange date, the Trustee will deliver to
the CUSIP Service Bureau a written notice setting
forth such exchange date and the new CUSIP number and
stating that, as of such exchange date, the CUSIP
numbers of the Global Securities to be exchanged will
no longer be valid. On the specified exchange date,
the Trustee will exchange such Global Securities for
a single Global Security bearing the new CUSIP number
and a new original issue date and the CUSIP numbers
of the exchanged Global Securities will, in
accordance with CUSIP Service Bureau procedures, be
canceled and not immediately reassigned.
Notwithstanding the
foregoing, if the Global Securities to be exchanged
exceed $200,000,000 in aggregate principal amount,
one Global Security will be authenticated 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
Terms: repayable at the option of the Holder, the Trustee
will furnish DTC on or not more than 60 days prior to
the settlement date pertaining to such Book-Entry
Note a notice setting forth the terms of such
repayment option. Such terms shall include the start
date and end dates of the first exercise period, the
purchase date following such first exercise period,
the frequency that such exercise periods occur i.e.,
quarterly, semiannually, annually, etc.) and, if the
repayment option expires before maturity, the same
information (except frequency) concerning the last
exercise period. It is understood that the exercise
period shall be at least 15 calendar days long and
that the purchase date shall be at least 7 calendar
days, after the last day of the exercise period.
Redemption and Repayment: The Trustee will comply with the terms of the Letter
with regard to redemptions and repayments of the
Notes. If a Global Security is to be redeemed or
repaid in part, the Trustee will exchange such Global
Security for two Global Securities, one of which
shall represent the portion of the Global Security
being redeemed or repaid and shall be canceled
immediately after issuance and the other of which
shall represent the remaining portion of such Global
Security and shall bear 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 Payment On the first Business Day of January, April, July and
and Regular Record Dates: October of each year, the Trustee will deliver to the
Issuer and DTC a written list of Regular Record Dates
and Interest Payment Dates that will occur with
respect 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 and Payments of Interest Only. Promptly after each
Interest: Regular Record Date, the Trustee will deliver to the
Issuer and DTC a written notice specifying by CUSIP
number the amount of interest to be paid on each
Global Security on the following Interest Payment
Date (other than an Interest Payment Date coinciding
with maturity) and the total of such amounts. The
Issuer will confirm with the Trustee the amount
payable on each Global Security on such Interest
Payment Date. DTC will confirm the amount payable on
eac Global Security on such Interest Payment Date by
reference to the daily or weekly bond reports
published by Standard & Poor's Corporation. The
Issuer will pay to the Trustee the total amount of
interest due on such Interest Payment Date (other
than at maturity), and the Trustee will pay such
amount to DTC at the times and in the manner set
forth below under "Manner of Payment". If any
Interest Payment Date for a Book-Entry Note is not a
Business Day, the payment due on such day shall be
made on the next succeeding Business Day and no
interest shall accrue on such payment for the period
from and after such Interest Payment Date.
Payments at Maturity. On or about the first Business
Day of each month, the Trustee will deliver to the
Issuer and DTC a written list of principal and
interest to be paid on each Global Security maturing
either at stated maturity or on a redemption or
repayment date in the following month. The Issuer,
the Trustee and DTC will confirm the amounts of such
principal and interest payments with respect to each
such Global Security on or about the fifth Business
Day preceding the maturity of such Global Security.
The Issuer will pay to the Trustee, as the paying
agent, the principal amount of such Global Security,
together with interest due at such maturity. The
Trustee will pay such
amounts to DTC at the times and in the manner set
forth below under "Manner of Payment". If any
maturity of a Global Security representing Book-Entry
Notes is not a Business Day, the payment due on such
day shall be made on the next succeeding Business Day
and no interest shall accrue on such payment for the
period from and after such maturity. Promptly after
payment to DTC of the principal and interest due at
the maturity of such Global Security, the Trustee
will cancel and destroy such Global Security in
accordance with the terms of the Indenture and
deliver a certificate of destruction to the Issuer.
Manner of Payment. The total amount of any principal
and interest due on Global Securities on any Interest
Payment Date or at Maturity shall be paid by the
Issuer to the Trustee in funds available for use by
the Trustee as of 9:30 a.m. (New York City time), or
as soon as 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.
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:
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 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 000000000,
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.
Settlement Procedures For orders of Book-Entry Notes solicited by
Timetable: an Agent and 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 xxx that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has
been determined but no later than 12:00 noon
and 2:00 p.m., respectively, on the Business
Day before the settlement date. Settlement
Procedure "I" is subject to extension in
accordance with any extension of Fedwire
closing deadlines and in the other events
specified in the SDFS operating procedures
in effect on the settlement date.
If settlement of a Book-Entry Note is
rescheduled or canceled, the Trustee, upon
receipt of notice, will deliver to DTC,
through DTC's Participant Terminal System, a
cancellation message to such effect by no
later than 2:00 p.m. on the Business Day
immediately preceding the scheduled
settlement date.
Failure to Settle: If the Trustee fails to enter an SDFS
deliver order with respect to a Book-Entry
Note pursuant to Settlement Procedure "G",
the Trustee may deliver to DTC, through
DTC's Participant Terminal System, as soon
as practicable, a withdrawal message
instructing DTC to debit such Note to the
Trustee's participant account. DTC will
process the withdrawal message, provided
that the Trustee's participant account
contains a principal amount of the Global
Security representing such Note that is at
least equal to the principal amount to be
debited. If a withdrawal message is
processed with respect to all the Book-Entry
Notes represented by a Global Security, the
Trustee will xxxx 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
Note to have been represented by such Global
Security and will make appropriate entries
in its records.
EXHIBIT C
, 19
International Business Machines Corporation
Xxxxxx, XX 00000
Attention: Treasurer
The undersigned agrees to purchase the
following principal amount of the Securities described in the Agency Agreement
dated __________________ (the "Agency Agreement"):
Principal Amount
$
--------------------------
Interest Rate
--------------------------
Maturity Date
_______________, 19___
Discount
________% of Principal Amount
Price to be paid
to Issuer
(in immediately
available funds)
$
--------------------------
Settlement Date
--------------------------
Except as otherwise expressly provided herein, all terms used
herein which are defined in the Agency Agreement shall have the same meanings as
in the Agency Agreement. The terms Agent or Agents, as used in the Agency
Agreement, shall be deemed to refer to the undersigned for purposes of this
Agreement.
This Agreement incorporates by reference Sections 3(c), 4, 6,
7, 12 and 13 of the Agency Agreement, the first and last sentences of Section 9
thereof and, to the extent applicable, the Procedures. You and we agree to
perform, to the extent applicable, our respective duties and obligations
specifically provided to be performed by each of us in the Procedures.
Our obligation to purchase Securities hereunder is subject to
the accuracy on the above Settlement Date of your 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 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
negativ 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_________________________
CONFIRMED AND ACCEPTED, as of
the date first above written:
International Business Machines Corporation
By:
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Title:
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