Exhibit (1)(a)
INTERNATIONAL BUSINESS MACHINES CORPORATION
UNDERWRITING AGREEMENT
New York, New York
To the Representatives named in Schedule I
hereto of the Underwriters named in
Schedule II hereto
Ladies and Gentlemen:
International Business Machines Corporation, a New York
corporation (the "Company"), proposes to sell to the underwriters named in
Schedule II hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, (1) debt securities of
the Company (the "Debt Securities"); (2) shares of capital stock, par value
$1.25 per share, of the Company (the "Capital Stock"); (3) shares of
preferred stock, par value $.01 per share, of the Company (the "Preferred
Stock"); (4) depositary shares representing entitlement to all rights and
preferences of a fraction of a share of Preferred Stock of a specific
series (the "Depositary Shares"); and/or (5) warrants to purchase Debt
Securities, shares of Capital Stock, shares of Preferred Stock or
Depositary Shares (the "Warrants"). The Debt Securities, Capital Stock,
Preferred Stock, Depositary Shares and/or Warrants may be sold either
separately or as units (the "Units") together with any of the foregoing.
The terms of such sales pursuant to this Agreement are described in
Schedule I hereto. The Debt Securities, Capital Stock, Preferred Stock,
Depositary Shares and/or Warrants to be sold pursuant to this Agreement as
set forth in Schedule I hereto shall be referred to herein as the
"Securities". The Capital Stock and Preferred Stock described in Schedule
I hereto shall collectively be referred to herein as the "Equity
Securities". If the firm or firms listed in Schedule II hereto include
only the firm or firms listed in Schedule I hereto, then the terms
"Underwriters" and "Representatives", as used herein, shall each be deemed
to refer to such firm or firms.
1. Representations and Warranties. The Company represents and
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warrants to, and agrees with, each Underwriter as set forth below in this
Section 1. Certain terms used in this Section 1 are defined in paragraph
(d) hereof.
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(a) If the offering of the Securities is a Delayed Offering (as
specified in Schedule I hereto), paragraph (i) below is applicable
and, if the offering of the Securities is a Non-Delayed Offering (as
so specified), paragraph (ii) below is applicable.
(i) The Company meets the requirements for the use of
Form S-3 under the Securities Act of 1933 (the "Act") and
has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (the file number of
which is set forth in Schedule I hereto) on such Form,
including a basic prospectus, for registration under the Act
of the offering and sale of the Securities. The Company may
have filed one or more amendments thereto, and may have used
a Preliminary Final Prospectus, each of which has previously
been furnished to you. Such registration statement, as so
amended, has become effective. The offering of the
Securities is a Delayed Offering and, although the Basic
Prospectus may not include all the information with respect
to the Securities and the offering thereof required by the
Act and the rules thereunder to be included in the Final
Prospectus, the Basic Prospectus is responsive to all the
disclosure requirements of the Act and the rules and
regulations thereunder as of the Effective Date. The
Company will next file with the Commission pursuant to Rules
415, 424(b)(2) or (5) or 434 or a combination thereof a
final supplement to the form of prospectus included in such
registration statement relating to the Securities and the
offering thereof. As filed, such final prospectus
supplement shall include all required information with
respect to the Securities and the offering thereof and,
except to the extent the Representatives shall agree in
writing to a modification, shall be in all substantive
respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and
other changes (beyond that contained in the Basic Prospectus
and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Execution Time, will be included
or made therein. If the Rule 434 Delivery Alternative is
used, the Company will also file the Rule 434 Term Sheet in
accordance with Rule 434. As filed, such Rule 434 Term
Sheet shall contain all the information required by
Rule 434, and except to the extent the Representatives shall
agree in writing to a
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modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the
extent not completed at the Execution Time, shall contain
only such specific additional information and other changes
(beyond that contained in the latest Preliminary Prospectus)
as the Company has advised you, prior to the Execution Time,
will be included or made therein. Upon your request, but
not without your agreement, the Company will also file a
Rule 462(b) Registration Statement in accordance with
Rule 462(b).
(ii) The Company meets the requirements for the use of
Form S-3 under the Act and has filed with the Commission a
registration statement (the file number of which is set
forth in Schedule I hereto) on such Form, including a basic
prospectus, for registration under the Act of the offering
and sale of the Securities. The Company may have filed one
or more amendments thereto, including a Preliminary Final
Prospectus, each of which has previously been furnished to
you. The Company will next file with the Commission either
(x) a final prospectus supplement relating to the Securities
in accordance with Rules 430A and 424(b)(1) or (4) and/or
434, or (y) prior to the effectiveness of such registration
statement, an amendment to such registration statement,
including the form of final prospectus supplement. In the
case of clause (x), the Company has included in such
registration statement, as amended at the Effective Date,
all information (other than Rule 430A Information and
Rule 434 Information) required by the Act and the rules
thereunder to be included in the Final Prospectus with
respect to the Securities and the offering thereof. As
filed, such final prospectus supplement or such amendment
and form of final prospectus supplement shall contain all
Rule 430A Information, together with all other such required
information, with respect to the Securities and the offering
thereof and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to
the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes (beyond that contained in the
Basic Prospectus and any Preliminary Final Prospectus) as
the Company has advised you, prior to the Execution Time,
will be included or made therein. If the
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Rule 434 Delivery Alternative is used, the Company will also
file the Rule 434 Term Sheet in accordance with Rule 434.
As filed, such Rule 434 Term Sheet shall contain all the
information required by Rule 434, and except to the extent
the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the
form furnished to you prior to the Execution Time or, to the
extent not completed at the Execution Time, shall contain
only such specific additional information and other changes
(beyond that contained in the latest Preliminary Prospectus)
as the Company has advised you, prior to the Execution Time,
will be included or made therein. Upon your request, but
not without your agreement, the Company will also file a
Rule 462(b) Registration Statement in accordance with
Rule 462(b).
(b) On the Effective Date, the Registration Statement did or
will, and when the Final Prospectus and any Rule 434 term sheet is
first filed (if required) in accordance with Rule 424(b) and on the
Closing Date, the Final Prospectus (and any supplement thereto) will,
comply in all material respects with the applicable requirements of
the Act and the Securities Exchange Act of 1934 (the "Exchange Act")
(with respect to documents incorporated by reference in the
Registration Statement) and the respective rules thereunder; on the
Effective Date, the Registration Statement did not or will not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; on the Effective Date and on the
Closing Date the Indenture, if applicable, did or will comply in all
material respects with the requirements of the Trust Indenture Act and
the rules thereunder; and, on the Effective Date, the Final
Prospectus, if not filed pursuant to Rule 424(b), did not or will not,
or on the date of any filing pursuant to Rule 424(b) or Rule 434 and
on the Closing Date, the Final Prospectus (together with any
supplement thereto) will not, include any untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
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Company makes no representations or warranties as to (i) that part of
the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act
of the Trustee or (ii) the information contained in or omitted from
the Registration Statement or the Final Prospectus (or any supplement
thereto) in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through
the Representatives specifically for inclusion
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in the Registration Statement or the Final Prospectus (or any
supplement thereto).
(c) If the Securities are to be listed on any securities
exchange, authorization therefor has been given, subject to official
notice of issuance and evidence of satisfactory distribution, or the
Company is filing or has filed a preliminary listing application and
all required supporting documents with respect to the Securities with
such securities exchange and has no reason to believe that the
Securities will not be authorized for listing, subject to official
notice of issuance and evidence of satisfactory distribution.
(d) The terms which follow, when used in this Agreement, shall
have the following meanings:
"Basic Prospectus" shall mean the prospectus referred to in
paragraph (a) above contained in the Registration Statement at the
Effective Date including, in the case of a Non-Delayed Offering, any
Preliminary Final Prospectus.
"Delayed Offering" shall mean an offering of securities pursuant
to Rule 415 which does not commence promptly after the effective date of a
registration statement, with the result that only information required
pursuant to Rule 415 need be included in such registration statement at the
effective date thereof with respect to the securities so offered.
"Effective Date" shall mean each date that the Registration
Statement, any post-effective amendment or amendments thereto or any
Rule 462(b) Registration Statement became or becomes effective and each
date after the date hereof on which a document incorporated by reference in
the Registration Statement is filed.
"Execution Time" shall mean the date and time that this Agreement
is executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating
to the Securities that is first filed pursuant to Rule 424(b) and any term
sheet pursuant to Rule 434 after the Execution Time, together with the
Basic Prospectus or, if, in the case of a Non-Delayed Offering, no filing
pursuant to Rule 424(b) is required, shall mean the form of final
prospectus relating to the Securities, including the Basic Prospectus,
included in the Registration Statement at the Effective Date. If the
Rule 434 Delivery Alternative is used, such term shall also include the
Basic Prospectus and the Rule 434 Term Sheet, taken together.
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"Non-Delayed Offering" shall mean an offering of securities which
is intended to commence promptly after the effective date of a registration
statement, with the result that, pursuant to Rules 415 and 430A, all
information (other than Rule 430A Information) with respect to the
securities so offered must be included in such registration statement at
the effective date thereof.
"Preliminary Final Prospectus" shall mean any preliminary
prospectus supplement to the Basic Prospectus which describes the
Securities and the offering thereof and is used prior to filing of the
Final Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph (a) above, including incorporated documents,
exhibits and financial statements, as amended at the Execution Time (or, if
not effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto or any
Rule 462(b) Registration Statement becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such registration statement
as so amended. Such term shall include any Rule 430A Information and
Rule 434 Information deemed to be included therein at the Effective Date as
provided by Rule 430A and Rule 434, respectively.
"Rule 415", "Rule 424", "Rule 430A", "Rule 434", "Rule 462(b)"
and "Regulation S-K" refer to such rules or regulation under the Act.
"Rule 430A Information" means information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 434 Delivery Alternative" shall mean the delivery
alternative permitted by Rule 434. "Rule 434 Information" shall mean any
information to be included in a Rule 434 Term Sheet. "Rule 434 Term Sheet"
shall mean the term sheet or abbreviated term sheet delivered by the
Underwriters to investors and filed by the Company with the Commission
pursuant to Rule 434.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the initial Registration Statement (file
number ).
Any reference herein to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Exchange
Act on or before the
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Effective Date of the Registration Statement or the issue date of the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, as
the case may be; and any reference herein to the terms "amend", "amendment"
or "supplement" with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus shall
be deemed to refer to and include the filing of any document under the
Exchange Act after the Effective Date of the Registration Statement or the
issue date of the Basic Prospectus, any Preliminary Final Prospectus or the
Final Prospectus, as the case may be, deemed to be incorporated therein by
reference.
2. Purchase and Sale. (a) Subject to the terms and conditions
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and in reliance upon the representations and warranties herein set forth,
the Company agrees to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, at the
purchase price set forth in Schedule I hereto the principal amount or
number of shares or Units of Securities set forth opposite such
Underwriter's name in Schedule II hereto, except that, in the case of Debt
Securities, if Schedule I hereto provides for the sale of such Debt
Securities pursuant to delayed delivery arrangements, the respective
principal amount of Securities to be purchased by the Underwriters shall be
as set forth in Schedule II hereto less the respective amount of Contract
Securities determined as provided below. Securities to be purchased by the
Underwriters are herein sometimes called the "Underwriters' Securities" and
Securities to be purchased pursuant to Delayed Delivery Contracts as
hereinafter provided are herein called "Contract Securities".
(b) If so provided in Schedule I hereto, the Underwriters are
authorized to solicit offers to purchase Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts"),
substantially in the form of Schedule III hereto but with such changes
therein as the Company may authorize or approve. The Underwriters will
endeavor to make such arrangements and, as compensation therefor, the
Company will pay to the Representatives, for the account of the
Underwriters, on the Closing Date, the percentage set forth in Schedule I
hereto of the principal amount of the Debt Securities for which such
Delayed Delivery Contracts are made. Delayed Delivery Contracts are to be
with institutional investors, including commercial and savings banks,
insurance companies, pension funds, investment companies and educational
and charitable institutions. The Company will enter into Delayed Delivery
Contracts in all cases where such sales of Contract Securities arranged by
the Underwriters have been approved by the Company but, except as the
Company may otherwise agree, each such Delayed Delivery Contract must be
for not less than the minimum principal amount set forth in Schedule I
hereto and the aggregate principal amount set forth in Schedule I hereto
and the aggregate principle amount of Contract Securities may not exceed
the maximum aggregate principal amount set forth in
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Schedule I hereto. The Underwriters will not have any responsibility in
respect of the validity or performance of Delayed Delivery Contracts. The
principal amount of Securities to be purchased by each Underwriter as set
forth in Schedule II hereto shall be reduced by an amount which shall bear
the same proportion to the total principal amount of Contract Securities as
the principal amount of Securities set forth opposite the name of such
Underwriter bears to the aggregate principal amount set forth in Schedule
II hereto, except to the extent that you determine that such reduction
shall be otherwise than in such proportion and so advise the Company in
writing; provided, however, that the total principal amount of Securities
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to be purchased by all Underwriters shall be the aggregate principal amount
set forth in Schedule II hereto less the aggregate principal amount of
Contract Securities.
3. Delivery and Payment. Delivery of and payment for the
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Underwriters' Securities shall be made on the date and at the time
specified in Schedule I hereto, which date and time may be postponed by
agreement between the Representatives and the Company or as provided in
Section 8 hereof (such date and time of delivery and payment for the
Underwriters' Securities being herein called the "Closing Date"). Delivery
of the Underwriters' Securities shall be made to the Representatives for
the respective accounts of the several Underwriters against payment by the
several Underwriters through the Representatives of the purchase price
thereof to or upon the order of the Company by certified or official bank
check or checks payable in, or wire transfer or transfers of, (next day)
funds or as otherwise may be agreed as set forth on Schedule I hereto.
Delivery of the Underwriters' Securities shall be made at such location as
the Representatives shall reasonably designate at least one business day in
advance of the Closing Date and payment for the Securities shall be made at
the office specified in Schedule I hereto. Certificates for the
Underwriters' Securities shall be registered in such names and in such
denominations as the Representatives may request not less than three full
business days in advance of the Closing Date.
The Company agrees to have the Underwriters' Securities available
for inspection, checking and packaging by the Representatives in New York,
New York, not later than 1:00 PM on the business day prior to the Closing
Date.
4. Agreements. The Company agrees with the several Underwriters
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that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, to become effective. Prior to the termination
of the offering of the Securities, the Company will not file any
amendment of the Registration Statement or
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supplement (including the Final Prospectus or any Preliminary Final
Prospectus) to the Basic Prospectus unless the Company has furnished
you a copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object.
Subject to the foregoing sentence, the Company will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The
Company will promptly advise the Representatives (i) when the
Registration Statement, if not effective at the Execution Time, and
any amendment thereto, shall have become effective, (ii) when the
Final Prospectus, and any supplement thereto, shall have been filed
with the Commission pursuant to Rule 424(b), (iii) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (iv)
of any request by the Commission at any time when a prospectus
relating to the Securities is required to be delivered under the Act
for any amendment of the Registration Statement or supplement to the
Final Prospectus or for any additional information, (v) of the
issuance by the Commission at any time when a prospectus relating to
the Securities is required to be delivered under the Act of any stop
order suspending the effectiveness of the Registration Statement or
the institution or threatening of any proceeding for that purpose and
(vi) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) At any time when a prospectus relating to the Securities is
required to be delivered under the Act, if any event occurs as a
result of which the Final Prospectus as then supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or if it
shall be necessary to amend the Registration Statement or supplement
the Final Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) prepare and
file with the Commission, subject to the second sentence of paragraph
(a) of this Section 4, an amendment or supplement which will correct
such statement or omission or effect such compliance and (ii) supply
any supplemented Prospectus to you in such quantities as you may
reasonably request.
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(c) As soon as practicable, but not later than the Availability
Date, the Company will make generally available to its security
holders and to the Representatives an earnings statement or statements
of the Company and its subsidiaries which will satisfy the provisions
of Section 11(a) of the Act and Rule 158 under the Act. For the
purpose of the preceding sentence, "Availability Date" means the 45th
day after the end of the fourth fiscal quarter following the fiscal
quarter that includes the Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(d) The Company will furnish to the Representatives and counsel
for the Underwriters, without charge, copies of the Registration
Statement (including exhibits thereto) and, so long as delivery of a
prospectus by an Underwriter or dealer may be required by the Act, as
many copies of any Preliminary Final Prospectus and the Final
Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(e) The Company will arrange for the qualification of the
Securities and any Debt Securities, Capital Stock, Preferred Stock,
Warrants or Depositary Shares that may be issuable pursuant to the
exercise, conversion or exchange, as the case may be, of the
Securities offered by the Company, for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of
the Securities (except that in no event will the Company be required
in connection therewith to qualify as a foreign corporation or to
execute a general consent to service of process), will arrange for the
determination of the legality of the Securities for purchase by
institutional investors, and will pay the fee of the National
Association of Securities Dealers, Inc., in connection with its
review, if any, of the offering.
(f) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida,
Chapter 92-198, An Act Relating to Disclosure of Doing Business with
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Cuba, and the Company further agrees that if it commences engaging in
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business with the government of Cuba or with any person or affiliate
located in Cuba after the date the Registration Statement becomes or
has become effective with the Commission or with the Florida
Department of Banking and Finance (the "Department"), whichever date
is later, or if the information reported in the Prospectus, if any,
concerning
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the Company's business with Cuba or with any person or affiliate
located in Cuba changes in any material way, the Company will provide
the Department notice of such business or change, as appropriate, in a
form acceptable to the Department.
(g) The Company also agrees to comply with such other covenants
as may be set forth on Schedule I hereto.
5. Conditions to the Obligations of the Underwriters. The
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obligations of the Underwriters to purchase the Underwriters' Securities
shall be subject to the accuracy of the representations and warranties on
the part of the Company contained herein as of the Execution Time and the
Closing Date, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder and to the following additional
conditions:
(a) If the Registration Statement has not become effective prior
to the Execution Time, unless the Representatives agree in writing to
a later time, the Registration Statement will become effective not
later than (i) 6:00 PM New York City time, on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or
(ii) 12:00 Noon on the business day following the day on which the
public offering price was determined, if such determination occurred
after 3:00 PM New York City time on such date; if filing of the Final
Prospectus, or any supplement thereto, is required pursuant to Rule
424(b), the Final Prospectus, and any such supplement, shall have been
filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for
that purpose shall have been instituted or threatened.
(b) (1) The Company shall have furnished to the Representatives
the opinion of the General Counsel or Associate General Counsel of the
Company, dated the Closing Date and to the effect that:
(i) the Company (A) has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of New York, with full corporate power and authority
to own its properties and conduct its business as described in
the Final Prospectus and (B) is duly qualified to do business as
a foreign corporation and in good standing under the laws of each
jurisdiction within the United States
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which requires such qualification wherein it owns or leases material
properties or conducts material business;
(ii) all the outstanding shares of capital stock of the
Company and each of IBM World Trade Corporation, IBM World Trade
Europe/Middle East/Africa Corporation and IBM Credit Corporation
(collectively, the "Subsidiaries") have been duly and validly
authorized and issued and are fully paid and nonassessable, and
all outstanding shares of capital stock of the Subsidiaries are
owned by the Company either directly or through wholly owned
subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any
other security interests, claims, liens or encumbrances;
(iii) (A) the Company's authorized equity capitalization is
as set forth in the Final Prospectus; and (B) the holders of
outstanding shares of capital stock of the Company are not
entitled to preemptive or other rights to subscribe to the
Securities;
(iv) to the knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries, of a character
required to be disclosed in the Registration Statement which is
not adequately disclosed in the Final Prospectus, and there is no
franchise, contract or other document of a character required to
be described in the Registration Statement or Final Prospectus,
or to be filed as an exhibit to the Registration Statement, which
is not described or filed as required;
(v) neither the execution and delivery of the Indenture,
the issue and sale of the Securities, nor the consummation of any
other of the transactions contemplated herein or therein nor the
fulfillment of the terms hereof or thereof or of any Delayed
Delivery Contracts will conflict with, result in a breach or
violation of, or constitute a default, under (A) the charter or
by-laws of the Company; (B) the terms of any indenture or other
agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound or (C) any
judgment, order, decree or regulation known to such counsel to
be applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over the Company or any of its
subsidiaries;
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(vi) there are no contracts or instruments known to such
counsel between the Company and any person granting such person
the right to require the Company to include such securities in
the securities registered pursuant to the Registration Statement;
and no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement;
and
(vii) such other legal opinions with respect to the Securities
as are set forth on Schedule I hereto.
(2) The Company also shall have furnished to the Representatives
the opinion of Cravath, Swaine & Xxxxx, counsel to the Company, dated
the Closing Date, to the effect that:
(i) the Company is validly existing as a corporation in good
standing under the laws of the State of New York, with full
corporate power and authority to own its properties and conduct
its business as described in the Final Prospectus;
(ii) (A) the Company's authorized equity capitalization is
as set forth in the Final Prospectus; and (B) the Securities
conform in all material respects to the description thereof
contained in the Final Prospectus;
(iii) in the case of an offering of Debt Securities,
(A) the indenture governing such Debt Securities (the
"Indenture") has been duly authorized, executed and delivered by
the Company; (B) the Indenture has been duly qualified under the
Trust Indenture Act of 1939; (C) the Indenture constitutes a
valid and binding instrument enforceable against the Company in
accordance with its terms (subject to applicable bankruptcy,
reorganization, insolvency, fraudulent transfer, moratorium or
other similar laws affecting creditors' rights generally from
time to time in effect and to general principles of equity,
regardless of whether such enforceability is considered in a
proceeding at law or in equity); (D) the Debt Securities have
been duly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to
and paid for by the Underwriters pursuant to this Agreement, in
the case of the Underwriters' Securities, or by the purchasers
thereof pursuant to Delayed Delivery Contracts, in the case of
any Contract Securities, will constitute valid and binding
obligations of the Company, be convertible or exchangeable for
other
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securities of the Company in accordance with their terms as set
forth in the Final Prospectus, as the case may be, and will be
entitled to the benefits of the Indenture; (E) if the Debt
Securities are convertible or exchangeable into Equity
Securities, the shares of Equity Securities issuable upon such
conversion or exchange will have been duly authorized and
reserved for issuance upon such conversion or exchange and, when
issued upon such conversion or exchange in accordance with the
terms of the Indenture, will be validly issued, fully paid and
nonassessable and will conform to the description thereof
contained in the Final Prospectus; and (F) the issuance of such
shares of Equity Securities upon conversion or exchange will not
be subject to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Company;
(iv) in the case of an offering of Capital Stock, (A) the
shares of Capital Stock being delivered at such Closing Date have
been duly authorized by the Company and, when issued and
delivered and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; and (B) the
issuance of the Capital Stock is not subject to preemptive or
other similar rights arising by operation of law or under the
charter or by-laws of the Company;
(v) in the case of an offering of Preferred Stock, (A) the
shares of Preferred Stock being delivered at such Closing Date
have been duly authorized by the Company and, when issued and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; (B) the issuance
of the shares of Preferred Stock is not subject to preemptive or
other similar rights arising by operation of law or under the
charter or by-laws of the Company; and (C) the shares of such
Capital Stock or other securities initially issuable upon
conversion or exchange of such shares of Preferred Stock will
have been duly authorized and reserved for issuance upon such
conversion or exchange and, when issued upon such conversion or
exchange in accordance with the terms of the certificate of
designation for such Preferred Stock, will be validly issued,
fully paid and nonassessable and will conform to the description
thereof contained in the Final Prospectus;
(vi) in the case of an offering of Depositary Shares, (A) the
deposit agreement relating to the Securities (the "Deposit
Agreement") has been duly authorized, executed and delivered by
the Company, and,
15
assuming due authorization, execution and delivery thereof by the
Depositary named therein (the "Depositary"), constitutes a valid
and binding instrument enforceable against the Company in
accordance with its terms (subject to applicable bankruptcy,
reorganization, insolvency, fraudulent transfer, moratorium or
other similar laws affecting creditors' rights generally from
time to time in effect and to general principles of equity,
regardless of whether enforceability is considered in a
proceeding at law or in equity); and (B) assuming payment of the
purchase price by the Underwriters, each Depositary Share
represents the fractional interest set forth in the applicable
Prospectus Supplement in a validly issued, fully paid and
nonassessable share of Preferred Stock; and the Depositary Shares
have been duly authorized by the Company and, when issued under
the Deposit Agreement in accordance with the provisions of the
Deposit Agreement, will be validly issued, and, assuming due
execution and delivery of the depositary receipts relating to the
Securities by the Depositary pursuant to the Deposit agreement,
such Depositary Receipts will entitle the holders thereof to the
benefits provided therein and in the Deposit Agreement;
(vii) in the case of an offering of Warrants, (A) the warrant
agreement relating to the Securities (the "Warrant Agreement")
has been duly authorized, executed and delivered by the Company,
and, assuming due authorization, execution and delivery thereof
by the warrant agent named therein (the "Warrant Agent"),
constitutes a valid and binding instrument enforceable against
the Company in accordance with its terms (subject to applicable
bankruptcy, reorganization, insolvency, fraudulent transfer,
moratorium or other similar laws affecting creditors' rights
generally from time to time in effect and to general principles
of equity, regardless of whether enforceability is considered in
a proceeding at law or in equity); and (B) the Warrants have been
duly authorized by the Company and, when executed and
authenticated in accordance with the provisions of the Warrant
Agreement, and delivered to and paid for by the Underwriters
pursuant to this Agreement, or the purchasers thereof pursuant to
Delayed Delivery Contracts, in the case of any Contract
Securities, will constitute valid and binding obligations of the
Company entitled to the benefits of the Warrant Agreement;
(viii) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court
or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries, of a character
required to be disclosed in the
16
Registration Statement which is not adequately disclosed in the
Final Prospectus, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Final Prospectus, or to be filed as an
exhibit to the Registration Statement, which is not described or
filed as required;
(ix) this Agreement and any Delayed Delivery Contracts have
been duly authorized, executed and delivered by the Company;
(x) any Delayed Delivery Contracts are valid and binding
agreements of the Company enforceable in accordance with their
terms (subject to applicable bankruptcy, reorganization,
insolvency, fraudulent transfer, moratorium or other similar laws
affecting creditors' rights generally from time to time in effect
and to general principles of equity, regardless of whether such
enforceability is considered in a proceeding at law or in
equity);
(xi) no consent, approval, authorization or order of any
United States Federal or New York governmental authority or
regulatory body is required for the consummation of the
transactions contemplated herein or in any Delayed Delivery
Contracts, except such as have been obtained under the Act or, in
the event an application is made to list the Securities on any
exchange or automated quotation system the Exchange Act, and such
as may be required under the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities
by the Underwriters and such other United States Federal or
New York approvals (specified in such opinion) as have been
obtained;
(xii) neither the execution and delivery of the Indenture,
the issue and sale of the Securities, nor the consummation of any
other of the transactions contemplated herein or therein nor the
fulfillment of the terms hereof or thereof or of any Delayed
Delivery Contracts will conflict with, result in a breach or
violation of, or constitute a default, under (A) the charter or
by-laws of the Company; (B) the terms of any indenture or other
agreement or instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or bound or (C) any
judgment, order, decree or regulation known to such counsel to be
applicable to the Company or any of its subsidiaries of any
court, regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over the Company or any of its
subsidiaries; and
17
(xiii) the Registration Statement has become effective
under the Act; any required filing of the Basic Prospectus, any
Preliminary Final Prospectus and the Final Prospectus, and any
supplements thereto, pursuant to Rule 424(b) or Rule 434 has been
made in the manner and within the time period required by Rule
424(b) or Rule 434; to the knowledge of such counsel, no stop
order suspending the effectiveness of the Registration Statement
has been issued, no proceedings for that purpose have been
instituted or threatened.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of New York or the United States, to the extent they
deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
reasonably satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.
(b) (3) Each such counsel shall also furnish a letter that shall
state that such counsel has no reason to believe that: (i) at the
Effective Date the Registration Statement contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Final Prospectus, at the date of
such opinion, includes an untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; and (ii) the Registration Statement and the Final
Prospectus as amended or supplemented, (except the financial
statements and other information of an accounting or financial nature
included therein, and the Statement of Eligibility (Form T-1) included
as an exhibit to the Registration Statement, as to which such counsel
need express no opinion), appeared on their face to be appropriately
responsive in all material respects to the requirements of the Act and
the Trust Indenture Act of 1939 and the applicable rules and
regulations thereunder. The letter furnished by the General Counsel
or Associate General Counsel of the Company shall also state that the
documents incorporated by reference in the Final Prospectus as amended
or supplemented (except the financial statements and other financial
information of an accounting or financial nature included therein, as
to which such counsel need express no opinion), when they became
effective or were filed with the Commission, as the case may be,
complied as to form in all material respects with the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder.
18
(c) The Representatives shall have received from Xxxxx Xxxx &
Xxxxxxxx, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of the
Securities, the Indenture, any Delayed Delivery Contracts, the
Registration Statement, the Final Prospectus (together with any
supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(d) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the principal financial or
accounting officer (or Vice President or Treasurer) of the Company,
dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Final Prospectus, any supplement to the Final Prospectus and this
Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as if made on the
Closing Date and the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Final Prospectus, there has been no material
adverse change in the condition (financial or other), earnings,
business or properties of the Company and its subsidiaries
whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the Final
Prospectus.
(e) At the Closing Date, Price Waterhouse LLP shall have
furnished to the Representatives a letter or letters (which may refer
to a letter previously delivered to one or more of the
Representatives), dated as of the Closing Date, in form and substance
satisfactory to the Representatives, confirming that they are
independent accountants within the meaning of the Act and the Exchange
Act and the respective applicable published rules and regulations
thereunder,
19
that the response, if any, to Item 10 of the Registration Statement is
correct insofar as it relates to them and stating in effect that:
(i) in their opinion the audited financial statements and
schedules thereto and any pro forma financial statements of the
Company and its subsidiaries included or incorporated in the
Registration Statement and the Final Prospectus and reported on
by them comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange
Act and the published rules and regulations thereunder;
(ii) on the basis of a reading of the unaudited financial
statements included or incorporated in the Registration Statement
and Final Prospectus and of the latest unaudited financial
statements made available by the Company and its subsidiaries;
carrying out certain specified procedures (but not an examination
in accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with respect
to the comments set forth in such letter; a reading of the
minutes of the meetings of the stockholders, directors and
executive committees of the Company and the Subsidiaries since
the date of the latest audited balance sheet, through a specified
date not more than five business days prior to the date of the
letter; and inquiries of certain officials of the Company who
have responsibility for financial and accounting matters of the
Company and its subsidiaries as to transactions and events
subsequent to the date of the most recent financial statements
incorporated in the Registration Statement and the Final
Prospectus, nothing came to their attention which caused them to
believe that:
(1) any unaudited financial statements included or
incorporated in the Registration Statement and the Final
Prospectus do not comply as to form in all material respects
with applicable accounting requirements and with the
published rules and regulations of the Commission with
respect to financial statements included or incorporated in
quarterly reports on Form 10-Q under the Exchange Act; or
that said unaudited financial statements are not stated on a
basis substantially consistent with that of the audited
financial statements included or incorporated in the
Registration Statement and the Final Prospectus; or
20
(2) with respect to the period subsequent to the date
of the most recent financial statements incorporated in the
Registration Statement and the Final Prospectus, there were,
at a specified date not more than five business days prior
to the date of the letter, any increases in long-term debt
of the Company and its subsidiaries or decreases in the
capital stock of the Company or decreases in the
stockholders' equity of the Company and its subsidiaries as
compared with the amounts shown on the most recent
consolidated balance sheet included or incorporated in the
Registration Statement and the Final Prospectus, or for the
period from the date of the most recent financial statements
included or incorporated in the Registration Statement and
the Final Prospectus to such specified date there were any
deceases, as compared with the corresponding period in the
preceding year, or the preceding quarter, in total revenue,
gross profit, earnings before income taxes, net earnings or
in total or per share amounts of net earnings applicable to
common stockholders of the Company and its subsidiaries,
except in all instances for increases or decreases set forth
in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the
significance thereof unless said explanation is not deemed
necessary by the Representatives;
(iii) they have performed certain other procedures as a result
of which they determined that the information described in a
schedule to be delivered on behalf of the Underwriters of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general ledger of the Company) set forth in the Registration
Statement, as amended, the Final Prospectus, as amended or
supplemented, and in Exhibit 12 to the Registration Statement
(including selected accounting, financial or statistical
information included or incorporated in the Company's Annual
Report on Form 10-K incorporated in the Final Prospectus or any
of the Company's Quarterly Reports on Form 10-Q incorporated
therein), agrees with the general ledger of the Company and its
subsidiaries, excluding any questions of legal interpretation;
and
(iv) if unaudited pro forma financial statements are included
or incorporated in the Registration Statement or the Final
Prospectus, on the basis of a reading of the unaudited pro forma
financial statements, carrying out certain specified procedures,
inquiries of certain officials of
21
the Company and the acquired company who have responsibility for
financial and accounting matters, and proving the arithmetic
accuracy of the application of the pro forma adjustments to the
historical amounts in the pro forma financial statements, nothing
came to their attention which caused them to believe that the
pro forma financial statements do not comply in form in all
material respects with the applicable accounting requirements of
Rule 11-02 of Regulation S-X or that the pro forma adjustments
have not been properly applied to the historical amounts in the
compilation of such statements.
References to the Final Prospectus in this paragraph (e) include
any supplements thereto at the date of the letter.
(f) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement and the
Final Prospectus, there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (e) of
this Section 5 or (ii) any change, or any development involving a
prospective change, in or affecting the business or properties of the
Company and its subsidiaries the effect of which, in any case referred
to in clause (i) or (ii) above, is, in the reasonable judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement and the Final
Prospectus.
(g) On or after the Execution Time (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities or
preferred stock by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes
of Rule 438(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's
debt securities or preferred stock.
(h) Prior to the Closing Date, the Company shall have furnished
to the Representatives such further legal opinions, information,
certificates and documents as the Representatives may reasonably
request.
(i) The Company shall have accepted Delayed Delivery Contracts
in any case where sales of Contract Securities arranged by the
Underwriters have been approved by the Company.
22
(j) The Company also agrees to comply with such other conditions
as may be set forth on Schedule I hereto.
If any of the conditions specified in this Section 5 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to the Representatives and
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the
Closing Date by the Representatives. Notice of such cancellation shall be
given to the Company in writing or by telephone or telegraph confirmed in
writing.
6. Reimbursement of Underwriters' Expenses. If the sale of the
----------------------------------------
Securities provided for herein is not consummated because any condition to
the obligations of the Underwriters set forth in Section 5 hereof is not
satisfied or because of any refusal, inability or failure on the part of
the Company to perform any agreement herein or comply with any provision
hereof other than by reason of a default by any of the Underwriters, the
Company will reimburse the Underwriters severally through the
Representatives upon demand for all out-of-pocket expenses (including
reasonable fees and disbursements of one Underwriter's counsel) approved by
the Representatives that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
7. Indemnification and Contribution. (a) The Company agrees to
---------------------------------
indemnify and hold harmless each Underwriter and each person who controls
any Underwriter within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in
any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the Company will not be
-------- -------
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or
23
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion therein, and (ii) such indemnity with respect to
any untrue statement or omission of a material fact made in any Preliminary
Final Prospectus shall not inure to the benefit of any Underwriter (or any
person controlling such Underwriter) from whom the person asserting any
such loss, claim, damage or liability purchased the Securities which are
the subject thereof if such person did not receive a copy of the Final
Prospectus (or the Final Prospectus as supplemented), excluding documents
incorporated therein by reference, at or prior to the confirmation of the
sale of such Securities to such person in any case where such delivery is
required by the Act and the untrue statement or omission of a material fact
contained in such Preliminary Final Prospectus was corrected in the Final
Prospectus (or the Final Prospectus as supplemented prior to the
confirmation of the sale of such Securities to such person). This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within
the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such action or claim. This
indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. The Company acknowledges that the
statements set forth in the last paragraph of the cover page, under the
heading "Underwriting" or "Plan of Distribution" and, if Schedule I hereto
provides for sales of Securities pursuant to delayed delivery arrangements,
in the last sentence under the heading "Delayed Delivery Arrangements" in
any Preliminary Final Prospectus or the Final Prospectus constitute the
only information furnished in writing by or on behalf of the several
Underwriters for inclusion in the documents referred to in the foregoing
indemnity, and you, as the Representatives, confirm that such statements
are correct.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under paragraph
24
(a) or (b) above unless and to the extent it did not otherwise learn of
such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a)
or (b) above. The indemnifying party shall be entitled to appoint counsel
of the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided,
--------
however, that such counsel shall be satisfactory to the indemnified party.
-------
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding. An indemnifying party shall
not be liable under this Section 7 to any indemnified party regarding any
settlement or compromise or consent to the entry of any judgement with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or consent is
consented to by such indemnifying party, which consent shall not be
unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or
(b) of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party
25
for any reason, the Company and the Underwriters agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which the Company and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and by the Underwriters from
the offering of the Securities; provided, however, that in no such case
-------- -------
shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for
any amount in excess of the underwriting discount or commission applicable
to the Securities purchased by such Underwriter hereunder. If the
allocation provided by the immediately preceding sentence is unavailable
for any reason, the Company and the Underwriters shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Company and of the Underwriters in
connection with the statements or omissions which resulted in such Losses
as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from
the offering (before deducting expenses), and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting
discounts and commissions, in each case as set forth on the cover page of
the Final Prospectus. Relative fault shall be determined by reference to
whether any alleged untrue statement or omission relates to information
provided by the Company or the Underwriters. The Company and the
Underwriters agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation
which does not take account of the equitable considerations referred to
above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section
7, each person who controls an Underwriter within the meaning of either the
Act or the Exchange Act and each director, officer, employee and agent of
an Underwriter shall have the same rights to contribution as such
Underwriter, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, each officer of the Company who shall
have signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject in each
case to the applicable terms and conditions of this paragraph (d).
8. Default by an Underwriter. If any one or more Underwriters
--------------------------
shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be
obligated severally to take up and pay for (in the
26
respective proportions which the amount of Securities set forth opposite
their names in Schedule II hereto bears to the aggregate amount or number
of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the
-------- -------
event that the aggregate amount or number of Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount or number of Securities set forth in
Schedule II hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Securities, and if such nondefaulting Underwriters do not purchase all the
Securities, this Agreement will terminate without liability to any
nondefaulting Underwriter or the Company. In the event of a default by any
Underwriter as set forth in this Section 8, the Closing Date shall be
postponed for such period, not exceeding seven days, as the Representatives
shall determine in order that the required changes in the Registration
Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company
and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
9. Termination. This Agreement shall be subject to termination
------------
in the absolute discretion of the Representatives, by notice given to the
Company prior to delivery of and payment for the Securities, if prior to
such time (i) trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have
been established on such Exchange, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii)
there shall have occurred any outbreak or escalation of hostilities,
declaration by the United States of a national emergency or war or other
calamity or crisis the effect of which on financial markets is such as to
make it, in the reasonable judgment of the Representatives, impracticable
or inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Final Prospectus.
10. Representations and Indemnities to Survive. The respective
-------------------------------------------
agreements, representations, warranties, indemnities and other statements
of the Company or its officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter or the Company
or any of the officers, directors or controlling persons referred to in
Section 7 hereof, and will survive delivery of and payment for the
Securities. The provisions of Sections 6 and 7 hereof shall survive the
termination or cancellation of this Agreement.
27
11. Notices. All communications hereunder will be in writing
--------
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telegraphed and confirmed to them, at the address
specified in Schedule I hereto; or, if sent to the Company, will be mailed,
delivered or telegraphed and confirmed to it at Xxx Xxx Xxxxxxx Xxxx,
Xxxxxx, Xxx Xxxx 00000, attention of the Treasurer.
12. Successors. This Agreement will inure to the benefit of and
-----------
be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 7
hereof, and no other person will have any right or obligation hereunder.
13. Applicable Law. This Agreement will be governed by and
---------------
construed in accordance with the laws of the State of New York without
reference to principles of conflicts of laws.
28
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding
agreement among the Company and the several Underwriters.
Very truly yours,
International Business Machines
Corporation,
By:
------------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
By:
-------------------------------
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
SCHEDULE I
Common Stock
Preferred Stock
Depositary Shares
Warrants
Underwriting Agreement dated
Registration Statement No. 33-
Representative(s):
Designation, Purchase Price and Description:
Designation:
Liquidation preference per share:
Number of shares:
Purchase price per share (include accrued dividends, if any):
Other provisions:
Over-allotment option:
[Subject to the terms and conditions and in reliance upon the
representations and warranties set forth in the Underwriting Agreement, the
Company hereby grants an option to the several Underwriters named in
Schedule II hereto to purchase, severally and not jointly, up to
[ ] additional shares of [ ] (the "[U.S.] Option Securities",
[together with the International Option Securities (as hereinafter
defined]), the "Option Securities") at the same purchase price per share as
the Underwriters shall pay for the Securities. Said option may be
exercised only to cover over-allotments in the sale of the Securities by
the Underwriters. Said option
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may be exercised in whole or in part at any time (but not more than once)
on or before the th day after the date of the Final Prospectus, upon
written or telegraphic notice by the Representatives to the Company setting
forth the number of shares of [U.S.] Option Securities as to which the
several Underwriters are exercising the option and the Settlement Date, as
defined in the Underwriting Agreement. The number of shares of
[U.S.] Option Securities to be purchased by each Underwriter shall be the
same percentage of the total number of shares of [U.S.] Option Securities
to be purchased by the several Underwriters as such Underwriter is
purchasing of the securities, as set forth in Schedule II hereto, subject
to such adjustments as the Representatives in their absolute discretion
shall make to eliminate any fractional shares.
If the option provided for herein is exercised after the
business day prior to the Closing Date, as defined in the Underwriting
Agreement, the Company will deliver (at the expense of the Company) to the
Representatives, at [ ], New York, New York, on the
date specified by the Representatives (which shall be within three business
days after exercise of said option) (the "Settlement Date"), certificates
for [U.S.] Option Securities in such names and denominations as the
Representatives shall have requested not less than three full business days
in advance of the Settlement Date unless the parties otherwise agree
against payment of the purchase price thereof to or upon the order of the
Company by certified or official bank check or checks payable in, or wire
transfers of, (next day) funds. If settlement for [U.S.] Option Securities
occurs after the Closing Date, the Company will deliver to the
Representatives on the Settlement Date for [U.S.] Option Securities, and
the obligation of the Underwriters to purchase the [U.S.] Option Securities
shall be conditioned upon receipt of, supplemental opinions, certificates
and letters confirming as of such date the opinions, certificates and
letters delivered on the Closing Date pursuant to Section 5 of the
Underwriting Agreement.]
Other provisions of or Amendments to Underwriting Agreement:
[The Company is concurrently entering into an International
Underwriting Agreement dated the date hereof (the "International
Underwriting Agreement") providing for the issue and sale by the Company of
[ ] outside the United States and Canada through arrangements
with certain underwriters outside the United States and Canada (the
"International Underwriters"), for whom [ ] are acting as
representatives (the "International Representatives"), and providing for
the grant to the International Underwriters of an option to purchase from
the Company up to [ ] additional shares of [ ] (the
"International Option Securities"). It is further understood and agreed
that the Underwriters and the
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International Underwriters have entered into an Agreement dated the date
hereof (the "Agreement between Underwriters and International
Underwriters"), pursuant to which, among other things, the International
Underwriters may purchase from the Underwriters a portion of the Securities
to be sold pursuant to the Underwriting Agreement and the Underwriters may
purchase from the International Underwriters a portion of the Securities to
be sold pursuant to the International Underwriting Agreement.
It is understood that two forms of Preliminary Final Prospectuses
and two forms of Final Prospectuses are to be used in connection with the
offering and sale of the Securities pursuant to the Underwriting Agreement
and International Underwriting Agreement: one form of Preliminary Final
Prospectus and one form of Final Prospectus relating to the Securities,
which are to be offered and sold to United States and Canadian Persons, and
one form of Preliminary Final Prospectus and one form of Final Prospectus
relating to the Securities, which are to be offered and sold to persons
other than United States and Canadian Persons. The two forms of
Preliminary Final Prospectuses and the two forms of Final Prospectuses are
identical except for the outside front cover page, the discussion under the
heading "Underwriting" and the outside back cover page. The form of
Preliminary Final Prospectus, the form of Final Prospectus and the form of
any Rule 434 term sheet relating to the Securities which are to be offered
to U.S. and Canadian Persons, as first filed pursuant to Rule 424(b) or
Rule 434 or, if no filing pursuant to Rule 424(b) is made, such form of
Preliminary Final Prospectus, Final Prospectus and any Rule 434 term sheet
included in the Registration Statement at the Effective Date, is
hereinafter called the "U.S. Prospectus"; such form of Preliminary Final
Prospectus, such form of Final Prospectus and such form of any Rule 434
term sheet relating to the Securities which are to be offered to Persons
other than United States and Canadian Persons, as first filed pursuant to
Rule 424(b) or Rule 434 or, if no filing pursuant to Rule 424(b) is made,
such form of Preliminary Final Prospectus, such form of Final Prospectus
and such form of any Rule 434 terms sheet included in the Registration
Statement at the Effective Date, is hereinafter called the "International
Prospectus"; and the U.S. Prospectus and the International Prospectus are
hereinafter collectively called the "Prospectuses."
Each Underwriter agrees that (i) it is not purchasing any of the
Securities or Option Securities for the account of anyone other than a
United States or Canadian Person, (ii) it has not offered or sold, and will
not offer or sell, directly or indirectly, any of the Securities or Option
Securities or distribute any U.S. Prospectus to any person outside the
United States or Canada, or to anyone other than a United States or
Canadian Person, and (iii) any dealer to whom it may sell any of the
Securities will represent that it is not purchasing for the account of
anyone other than
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a United States or Canadian Person and agree that it will not offer or
resell, directly or indirectly, any of the Securities or Option Securities
outside the United States or Canada, or to anyone other than a United
States or Canadian Person or to any other dealer who does not so represent
and agree; provided, however, that the foregoing shall not restrict
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(a) purchases and sales between the Underwriters on the one hand and the
International Underwriters on the other hand pursuant to the Agreement
between Underwriters and International Underwriters, (b) stabilization
transactions contemplated under the Agreement between Underwriters and
International Underwriters, conducted through [ ] as part of
the distribution of the Securities or Option Securities, and (c) sales to
or through (or distributions of U.S. Prospectuses or U.S. Preliminary
Prospectuses to) United States or Canadian Persons who are investment
advisors, or who otherwise exercise investment discretion, and who are
purchasing for the account of anyone other than a United States or Canadian
Person.
The agreements of the Underwriters and International Underwriters
set forth above shall terminate upon the earlier of the following events:
(i) a mutual agreement of the Representatives and the
International Representatives to terminate the selling
restrictions set forth above and in Schedule I of the
International Underwriting Agreement; or
(ii) the expiration of a period of 30 days after the Closing
Date, unless (A) the Representatives shall have given notice
to the Company and the International Representatives that
the distribution of the Securities by the Underwriters has
not yet been completed or (B) the International
Representatives shall have given notice to the Company and
the Underwriters that the distribution of the International
Securities by the International Underwriters has not yet
been completed. If such notice by the Representatives or
the International Representatives is given, the agreements
set forth above shall survive until the earlier of (1) the
event referred to in clause (i) above or (2) the expiration
of an additional period of 30 days from the date of any such
notice].
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Additional Covenants Pursuant to Section 4:
[Until the [ ], the Company will
not, without the consent of the Representatives, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any securities issued or guaranteed by the
Company (other than the Securities).]
[The Company will arrange for the listing of the Equity
Securities upon notice of issuance on [designate any national
securities exchange or automated quotation system].]
Additional Covenants Pursuant to Section 5:
Supplemental matters to be covered by the opinion of Cravath, Swaine &
Xxxxx and/or the General Counsel or Associate General Counsel of the
Company, to be delivered pursuant to Section 5(b):
Modification of items to be covered by the letter from Price Waterhouse LLP
delivered pursuant to Section 5(e) at the Execution Time:
Section 5(h) provisions, if any:
Deposit Agreement: Terms and Conditions
Warrant Agreement: Terms and Conditions
Purchased Securities Closing Date and Time:
Method of Payment of Underwriters' Securities:
Delayed Delivery Arrangements:
Fee:
Minimum principal amount of each contract:
Maximum aggregate principal amount of all contracts:
Convertibility:
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Exchangeability into Debt Securities:
Closing Date and Time:
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SCHEDULE I
Debt Securities
---------------
Underwriting Agreement dated
Registration Statement No. 33-
Representatives:
Title of Securities:
Principal Amount:
Interest Rate:
Purchase Price:
Offering Price:
Interest Payment Dates:
Subordination Provisions:
Optional Redemption:
Sinking Fund Provisions:
Delayed Delivery:
Closing Date and Time:
Method of Payment of Underwriters' Securities:
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Other provisions of or Amendments to
Underwriting Agreement:
Additional Covenants Pursuant to
Section 4:
[Until [ ], the Company will not, without
the consent of the Representatives, offer, sell or contract to sell, or
otherwise dispose of, directly or indirectly, or announce the offering
of, any securities issued or guaranteed by the Company (other than the
Securities).]
Additional Covenants
Pursuant to Section 5:
[At or prior to the Closing Date, the Indenture dated as of the
Closing Date, between the Company and [ ], as Trustee, in
form and substance satisfactory to the Underwriters, shall have been
executed and delivered by the parties thereto and shall be in full force
and effect.]
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Units
Title and principal amount of Debt Securities or title and number of shares
of Common Stock, Preferred Stock, Warrants or Depositary Shares in one
Unit:
Purchase Price and currency:
Section 4(g) Listing upon notice of issuance on any national securities
exchange or automated quotation system:
Detachable Date:
Overallotment option:
Other provisions:
Section 5(h) provisions, if any:
Delayed Delivery:
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[None]
[Underwriters' commission shall be __% of the principal amount of
Designated Securities for which Delayed Delivery Contracts have been
entered into and the check given in payment of such commission shall be
drawn to the order of _____________]
[Maximum aggregate principal amount of Designated Securities to be offered
and sold pursuant to Delayed Delivery Contracts: [$]_______________]
[Minimum principal amount of each Delayed Delivery Contract:
[$]______________]
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SCHEDULE II
Amount
Underwriter To Be Purchased
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SCHEDULE III
Delayed Delivery Contract
[Date]
[Insert name and address
of lead Representative]
Ladies and Gentlemen:
The undersigned hereby agrees to purchase from International
Business Machines Corporation (the "Company"), and the Company agrees to
sell to the undersigned, on , 19 , (the "Delivery Date"),
principal amount of the Company's (the
"Securities") offered by the Company's Prospectus dated , 199 ,
and related Prospectus Supplement dated , 199 , receipt of a copy
of which is hereby acknowledged, at a [purchase price of % of the]
[principal amount] [thereof, plus] [accrued interest] [amortization of
original issue discount], if any, thereon from , 199 , to the
date of payment and delivery, and on the further terms and conditions set
forth in this contract.
Payment for the Securities to be purchased by the undersigned
shall be made on or before 11:00 AM, New York City time, on the Delivery
Date to or upon the order of the Company in New York Clearing House (next
day) funds, at your office or at such other place as shall be agreed
between the Company and the undersigned, upon delivery to the undersigned
of the Securities in definitive fully registered form and in such
authorized denominations and registered in such names as the undersigned
may request by written or telegraphic communication addressed to the
Company not less than five full business days prior to the Delivery Date.
If no request is received, the Securities will be registered in the name of
the undersigned and issued in a denomination equal to the aggregate
principal amount or number of Securities to be purchased by the undersigned
on the Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for Securities on the Delivery Date, and the obligation of the
Company to sell and deliver Securities on the Delivery Date, shall be
subject to the conditions (and neither
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party shall incur any liability by reason of the failure thereof) that
(1) the purchase of Securities to be made by the undersigned, which
purchase the undersigned represents is not prohibited on the date hereof,
shall not on the Delivery Date be prohibited under the laws of the
jurisdiction to which the undersigned is subject, and (2) the Company, on
or before the Delivery Date, shall have sold to certain underwriters (the
"Underwriters") such principal amount or number of Securities as is to be
sold to them pursuant to the Underwriting Agreement referred to in the
Prospectus and Prospectus Supplement mentioned above. Promptly after
completion of such sale to the Underwriters, the Company will mail or
deliver to the undersigned at its address set forth below notice to such
effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith. The obligation of
the undersigned to take delivery of and make payment for the Securities,
and the obligation of the Company to cause the Securities to be sold and
delivered, shall not be affected by the failure of any purchaser to take
delivery of and make payment for the Securities pursuant to other contracts
similar to this contract.
This contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be
assignable by either party hereto without the written consent of the other.
It is understood that acceptance of this contract and other
similar contracts is in the Company's sole discretion and, without limiting
the foregoing, need not be on a first come, first served basis. If this
contract is acceptable to the Company, it is required that the Company sign
the form of acceptance below and mail or deliver one of the counterparts
hereof to the undersigned at its address set forth below. This will become
a binding contract between the Company and the
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undersigned, as of the date first above written, when such counterpart is
so mailed or delivered.
This agreement shall be governed by and construed in accordance
with the laws of the State of New York.
Very truly yours,
-------------------------------
(Name of Purchaser)
By
-------------------------------
(Signature and Title of Officer)
-------------------------------
(Address)
Accepted:
International Business Machines Corporation,
By
-------------------------------
Name:
Title:
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