INTERNATIONAL BUSINESS MACHINES CORPORATION Debt Securities $500,000,000 4.95% Notes due 2011 UNDERWRITING AGREEMENT
Exhibit
1
Debt
Securities
$500,000,000
4.95% Notes due 2011
Dated
as
of March 19, 2007
To
the
Representatives named in Schedule I hereto
of
the
Underwriters named in Schedule II hereto
Dear
Sirs:
International
Business Machines Corporation, a New York corporation (the “Company”), proposes
to sell to the underwriters named in Schedule II hereto (the
“Underwriters”), for whom you are acting as representatives (the
“Representatives”), the principal amount of its Securities identified in
Schedule I hereto (the “Securities”), to be issued under an indenture dated
as of October 1, 1993 (the “Indenture”), between the Company and The Bank
of New York, as trustee (the “Trustee”), as supplemented by the First
Supplemental Indenture dated as of December 15, 1995. If the firm or firms
listed in Schedule II hereto include only the firm or firms listed in
Schedule I hereto, then the terms “Underwriters” and “Representatives”, as
used herein shall each be deemed to refer to such firm or firms.
1. Representations
and Warranties.
The
Company represents and warrants to, and agrees with each Underwriter
that:
(a) The
Company meets the requirements for use of Form S-3 under the Securities Act
of 1933 (the “Act”) and has filed with the Securities and Exchange Commission
(the “Commission”) a registration statement or statements (the file number of
which is set forth in Schedule I hereto), including a related basic
prospectus, on such Form for the registration under the Act of the offering
and
sale of the Securities. Such Registration Statement, including any amendments
thereto filed prior to the Execution Time, has become effective. The Company
may
have filed with the Commission as part of an amendment to the Registration
Statement or pursuant to Rule 424(b) one or more preliminary prospectus
supplements relating to the Securities, each of which has previously been
furnished to you. The Company will file with the Commission a final prospectus
supplement relating to the Securities in accordance with Rule 424(b). As
filed, such final prospectus supplement shall include all information required
by the Act and the rules thereunder, 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 Registration Statement contains the undertaking specified by
Regulation S-K Item 512(a), the Registration Statement, at the Execution
Time, meets the requirements set forth in Rule 415(a)(1)(x).
The
terms
which follow, when used in this Agreement, shall have the meanings indicated.
The term the “Effective Date” shall mean each date that the Registration
Statement and any post-effective amendment or amendments thereto became or
become effective. “Execution Time” shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. “Basic Prospectus”
shall mean the basic prospectus relating to the Registration Statement to be
used in connection with the offering the Securities. “Final Prospectus” shall
mean the prospectus supplement relating to the Securities and containing the
final terms of the Securities that is first filed pursuant to Rule 424(b)
after the Execution Time, together with the Basic Prospectus. “Registration
Statement” shall mean the registration statement referred to in the preceding
paragraph, including incorporated documents, exhibits and financial statements
and any prospectus supplement relating to the Securities that is filed with
the
Commission pursuant to Rule 424(b) and deemed part of such registration
statement pursuant to Rule 430B, in the form in which it or they has or
have or shall become effective and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Date (as hereinafter defined),
shall also mean such registration statement or statements as so amended.
“Rule 433”, “Rule 415”, “Rule 424”, “Rule 430B” and
“Regulation S-K” refer to such rules under the Act. “Disclosure Package”
shall mean (i) the Basic Prospectus, as amended and supplemented (including
any preliminary prospectus supplement issued before the Execution Time relating
to the Securities) to the Execution Time, (ii) the Issuer Free Writing
Prospectuses, if any, identified in Schedule III hereto, and (iii) any
other Free Writing Prospectus that the parties hereto shall hereafter expressly
agree in writing to treat as part of the Disclosure Package. “Free Writing
Prospectus” shall mean a free writing prospectus, as defined in Rule 405.
“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus,
as defined in Rule 433. “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, together with the Basic Prospectus. Any reference herein to the
Registration Statement, a 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
Securities Exchange Act of 1934 (the “Exchange Act”) on or before the effective
date of the Registration Statement or the date of such 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, 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
date
of any Preliminary Final Prospectus or the Final Prospectus, as the case may
be,
deemed to be incorporated therein by reference.
(b) On
the
Effective Date and at the Execution Time, the Registration Statement did, and
when the Final Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date, the Final Prospectus (and any
supplements thereto) will, comply in all material respects with the applicable
requirements of the Act and the Exchange Act and the respective rules
thereunder; on the Effective Date and on the Closing Date the Indenture did
or
will comply in all material respects with the requirements of the Trust
Indenture Act of 1939 (the “Trust Indenture Act”) and the rules thereunder; on
the Effective Date and at the Execution Time, the Registration Statement did
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; and, on the date of any filing pursuant to
Rule 424(b) 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 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 use
in
connection with the preparation of the Registration Statement or the Final
Prospectus (or any supplement thereto).
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(c) At
the
Execution Time the Disclosure Package, when taken together as a whole, does
not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The preceding sentence
does not apply to statements in or omissions from the Disclosure Package based
upon and in conformity with written information furnished to the Company by
any
Underwriter through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by or on behalf
of any Underwriter consists of the information described as such in
Section 7 hereof.
(d) At
the
earliest time after the filing of the Registration Statement that the Company
or
another offering participant made a bona fide offer (within the meaning of
Rule 164(h)(2)) of the Securities, the Company was not and is not an
Ineligible Issuer (as defined in Rule 405), without taking account of any
determination by the Commission pursuant to Rule 405 that it is not necessary
that the Company be considered an Ineligible Issuer.
(e) Each
Issuer Free Writing Prospectus and the final term sheet prepared and filed
pursuant to Section 4(A)(g) hereto do not include any information that
conflicts with the information contained in the Registration Statement,
including any document incorporated therein and any prospectus supplement deemed
to be a part thereof that has not been superseded or modified. The foregoing
sentence does not apply to statements in or omissions from the Disclosure
Package based upon and in conformity with written information furnished to
the
Company by any Underwriter through the Representative specifically for use
therein, it being understood and agreed that the only such information furnished
by or on behalf of any Underwriter consists of the information furnished by
or
on behalf of any Underwriter consists of the information described as such
in
Section 7 hereof.
2. Purchase
and Sale.
Subject to the terms and conditions and in reliance upon the representations
and
warranties herein set forth, the Company agrees to sell to each Underwriter,
and
each Underwriter agrees, severally and not jointly, to purchase from the
Company, at the purchase price set forth in Schedule I hereto, the
respective principal amounts of the Securities set forth opposite each
respective Underwriter’s name in Schedule II hereto, except that, if
Schedule I hereto provides for the sale of Securities pursuant to delayed
delivery arrangements, the respective principal amounts of Securities to be
purchased by the Underwriters shall be as set forth in Schedule II hereto,
less the respective amounts of Contract Securities determined as provided below.
Securities to be purchased by the Underwriters are herein sometimes called
the
“Underwriters’ Securities” and Securities to be purchased pursuant to Delayed
Delivery Contracts as hereinafter provided are herein called “Contract
Securities”.
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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 IV hereto but with such changes therein as the Company may
authorize or approve. The Underwriters will endeavor to make such arrangements
and, as compensation therefor, the Company will pay to the Representatives,
for
the account of underwriters, on the Closing Date, the percentage set forth
in
Schedule I hereto of the principal amount of the Securities for which
Delayed Delivery Contracts are made. Delayed Delivery Contracts are to be with
institutional investors, including commercial and savings banks, insurance
companies, pension funds, investment companies and educational and charitable
institutions. The Company will make Delayed Delivery Contracts in all cases
where sales of Contract Securities arranged by the Underwriters have been
approved by the Company but, except as the Company may otherwise agree, each
such Delayed Delivery Contract must be for not less than the minimum principal
amount set forth in Schedule I hereto and the aggregate principal amount of
Contract Securities may not exceed the maximum aggregate principal amount set
forth in Schedule I hereto. The Underwriters will not have any
responsibility in respect of the validity or performance of Delayed Delivery
Contracts. The principal amount of Securities to be purchased by each
Underwriter as set forth in Schedule II hereto shall be reduced by an
amount which shall bear the same proportion to the total principal amount of
Contract Securities as the principal amount of Securities set forth opposite
the
name of such Underwriter bears to the aggregate principal amount set forth
in
Schedule II hereto, except to the extent that you determine that such
reduction shall be otherwise than in such proportion and so advise the Company
in writing; provided,
however,
that
the total principal amount of Securities to be purchased by all Underwriters
shall be the aggregate principal amount set forth in Schedule II hereto,
less the aggregate principal amount of Contract Securities.
3. Delivery
and Payment.
Delivery of and payment for the Underwriters’ Securities shall be made at the
office, on the date and at the time specified in Schedule I hereto, which
date and time may be postponed by agreement between the Representatives and
the
Company or as provided in Section 8 hereof (such date and time of delivery
and payment for the Securities being called the “Closing Date”). Delivery of the
Underwriters’ Securities shall be made to the Representatives for the respective
accounts of the several Underwriters against payment by the several Underwriters
through the Representatives of the purchase price thereof to or upon the order
of the Company by certified or official bank check or checks payable, or wire
transfers, in immediately available funds. The Securities shall be delivered
in
definitive global form through the facilities of The Depository Trust
Company.
4. Agreements.
(A) The
Company agrees with the several Underwriters that:
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(a) The
Company will file the Final Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed and
will provide evidence satisfactory to the Representatives of such timely filing.
The Company will promptly advise the Representatives (i) when any amendment
to the Registration Statement relating to the Securities shall have become
effective, (ii) of any request by the Commission for any amendment of the
Registration Statement or amendment of or supplement to the Final Prospectus
or
for any additional information, (iii) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement or
of
any notice that would prevent its use or the institution or threatening of any
proceeding for that purpose and (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of
any
proceeding for such purpose. The Company will use its best efforts to prevent
the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof. The Company will not file any amendment of
the
Registration Statement or supplement to the Final Prospectus unless the Company
has furnished you a copy for your review prior to filing and will not file
any
such proposed amendment or supplement to which you reasonably
object.
(b) If,
at
any time when a prospectus relating to the Securities is required to be
delivered under the Act (including in circumstances where such requirement
may
be satisfied pursuant to Rule 172), any event occurs as a result of which
the Final Prospectus as then amended or supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under which they
were made not misleading, or if it shall be necessary to amend or supplement
the
Final Prospectus to comply with the Act or the Exchange Act or the respective
rules thereunder, the Company will give the Representatives immediate notice
of
the occurrence of such event and promptly will prepare and file with the
Commission, subject to the first sentence of paragraph (a) of this
Section 4, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance.
(c) The
Company will make generally available to its security holders and to the
Representatives as soon as practicable, but not later than 45 days after
the end of the 12-month period beginning at the end of the current fiscal
quarter of the Company, an earnings statement (which need not be audited) of
the
Company and its subsidiaries, covering a period of at least 12 months
beginning after the end of the current fiscal quarter of the Company, which
will
satisfy the provisions of Section 11(a) of the Act.
(d) The
Company will furnish to the Representatives and counsel for the Underwriters,
without charge, copies of the Registration Statement (including exhibits
thereto) and each amendment thereto which shall become effective on or prior
to
the Closing Date and, so long as delivery of a prospectus by an Underwriter
or
dealer may be required by the Act (including in circumstances where such
requirement may be satisfied pursuant to Rule 172), as many copies of any
Preliminary Final Prospectus and the Final Prospectus and each Issuer Free
Writing Prospectus and any amendments thereof and supplements thereto as the
Representatives may reasonably request.
(e) The
Company will arrange for the qualification of the Securities for sale under
the
laws of such jurisdictions as the Representatives may designate, will maintain
such qualifications in effect so long as required for the distribution of the
Securities and will arrange for the determination of the legality of the
Securities for purchase by institutional investors.
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(f) Until
the
earlier of the day on which the distribution of the Securities is completed
or
the business day following the Closing Date, the Company will not, without
the
consent of the Representatives, offer or sell, or announce the offering of,
any
debt securities covered by the Registration Statement or any other registration
statement filed under the Act.
(g) To
prepare a final term sheet, containing solely a description of the Securities,
in a form approved by you and to file such term sheet pursuant to
Rule 433(d) within the time required by such Rule.
(h) If
there
occurs an event or development as a result of which the Disclosure Package
would
include an untrue statement of a material fact or would omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances then prevailing, not misleading, the Company will notify promptly
the Representatives so that any use of the Disclosure Package may cease until
it
is amended or supplemented.
(i) The
Company agrees that, unless it obtains the prior written consent of the
Representatives, it has not made and will not make any offer relating to the
Securities that would constitute an Issuer Free Writing Prospectus or that
would
otherwise constitute a “free writing prospectus” (as defined in Rule 405)
required to be filed by the Company with the Commission or retained by the
Company under Rule 433, other than the final term sheet prepared and filed
pursuant to Section 4(g) hereto; provided that the prior written consent of
the
parties hereto shall be deemed to have been given in respect of the Free Writing
Prospectuses included in Schedule III hereto. Any such free writing prospectus
consented to by the Representatives is hereinafter referred to as a “Permitted
Free Writing Prospectus.” The Company agrees that (x) it has treated and will
treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer
Free Writing Prospectus and (y) it has complied and will comply, as the case
may
be, with the requirements of Rules 164 and 433 applicable to any Permitted
Free
Writing Prospectus, including in respect of timely filing with the Commission,
legending and record keeping.
(B) The
several Underwriters agree with the Company that:
(a) The
Representatives will pay the expenses of printing and distributing all documents
relating to the offering.
(b) The
Representatives will pay the reasonable fees and disbursements of outside
counsel for the Company and the Underwriters relating to the
offering.
(c) The
Representatives will pay any fees of Xxxxx’x Investors Service, Inc. and
Standard & Poor’s Ratings Group, a division of The XxXxxx-Xxxx Companies,
Inc. relating to the rating of the Securities.
(d) The
Representatives will pay the fees and disbursements of PricewaterhouseCoopers
LLP relating to the preparation of the letter required by Section 5(e) of
this Agreement.
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(e) The
Representatives will pay the reasonable fees and expenses of The Bank of New
York, as Trustee.
(f) The
Representatives will pay any and all fees associated with listing the Securities
on any United States or foreign securities exchange.
(g) The
Representatives will pay any and all travel expenses incurred by the Company
in
connection with the offering of the Securities.
(h) The
Representatives will pay any and all other miscellaneous expenses and/or taxes
associated with the offering.
(i) Each
Underwriter agrees to furnish the Company with a copy of each proposed Free
Writing Prospectus to be prepared by or on behalf of such Underwriter before
its
first use and not to use any Free Writing Prospectus, to which the Company
reasonably objects, provided, however, that without consent of the Company
each
Underwriter may use the final term sheet prepared and filed pursuant to
Section 4(A)(g) hereto and one or more preliminary term sheets relating to
the Securities containing customary information.
5. Conditions
to the Obligations of the Underwriters.
The obligations of the Underwriters to purchase the Underwriters’ Securities
shall be subject to the accuracy of the representations and warranties on the
part of the Company contained herein as of the Execution Time, as of the date
of
the effectiveness of any amendment to the Registration Statement filed prior
to
the Closing Date (including the filing of any document incorporated by reference
therein) and as of the Closing Date, to the accuracy of the statements of the
Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The
Final
Prospectus, and any supplement thereto, have been filed in the manner and within
the time period required by Rule 424(b); the final term sheet contemplated
by Section 4(A)(g) hereto, and any other material required to be filed by
the Company pursuant to Rule 433(d) under the Act, shall have been filed
with the Commission within the applicable time periods prescribed for such
filings by Rule 433; and no stop order suspending the effectiveness of the
Registration Statement, as amended from time to time, or any notice that would
prevent its use shall have been issued and no proceedings for that purpose
shall
have been instituted or threatened.
(b) The
Company shall have furnished to the Representatives:
(i)
the
opinion of the General Counsel, an Assistant General Counsel, an Associate
General Counsel or other senior counsel of the Company, dated the Closing Date,
to the effect that:
(A) the
Company has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of the State of New York, with full corporate
power
and authority to own its properties and conduct its business as described in
the
Disclosure Package and the Final Prospectus, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each
jurisdiction within the United States which requires such qualifications wherein
it owns or leases material properties or conducts material
business;
7
(B) the
Securities conform in all material respects to the description thereof contained
in the Disclosure Package and the Final Prospectus;
(C) the
Indenture has been duly authorized, executed and delivered, has been duly
qualified under the Trust Indenture Act, and constitutes a legal, valid and
binding obligation enforceable against the Company in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other similar laws affecting creditors’ rights
generally from time to time in effect, and subject, as to enforceability, to
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Securities have been
duly authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Underwriters
pursuant to this Agreement, in the case of the Underwriters’ Securities, or by
the purchasers thereof pursuant to Delayed Delivery Contracts, in the case
of
any Contract Securities, will constitute legal, valid and binding obligations
of
the Company entitled to the benefits of the Indenture (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium, and
other similar laws affecting creditors’ rights generally from time to time in
effect);
(D) to
the
best knowledge of such counsel, there is no pending or threatened action, suit
or proceeding before any court or governmental agency, authority or body or
any
arbitrator involving the Company or any of its subsidiaries, of a character
required to be disclosed in the Registration Statement which is not adequately
disclosed in the Disclosure Package and 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,
which is not described or filed as required;
(E) the
Registration Statement and any amendments thereto have become effective under
the Act; any required filing of the Basic Prospectus any Preliminary Final
Prospectus and the Final Prospectus, and any supplements thereto, pursuant
to
Rule 424(b) has been made in the manner and within the time period required
by Rule 424(b); to the best knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement, as amended, or
any
notice that would prevent its use, has been issued, no proceedings for that
purpose have been instituted or are pending or contemplated under the
Act;
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(F) this
Agreement and any Delayed Delivery Contracts have been duly authorized, executed
and delivered by the Company;
(G) no
authorization, approval or other action by, and no notice to, consent of, order
of, or filing with, any United States Federal or New York governmental authority
or regulatory body is required for the consummation of the transactions
contemplated herein or in any Delayed Delivery Contracts, except such as have
been obtained under the Act and such as may be required under the blue sky
laws
of any jurisdiction in connection with the purchase and distribution of the
Securities and such other approvals (specified in such opinion) as have been
obtained;
(H) such
counsel has no reason to believe that (1) the Registration Statement and
the Final Prospectus (except the financial statements and the notes thereto
and
other information of an accounting or financial nature included therein, and
the
Statement of Eligibility (Form T-1) included as an exhibit to the
Registration Statement, as to which such counsel need express no view) were
not
appropriately responsive in all material respects to requirements of the Act
and
the applicable rules and regulations of the Commission thereunder or
(2) the Registration Statement or any amendment thereof at the time it
became effective or at the Execution Time contained any untrue statement of
a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading or that
the
Final Prospectus, as amended or supplemented, contains any untrue statement
of a
material fact or omits to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading (in each case except for the financial statements and the notes
thereto and other information of an accounting or financial nature included
therein, as to which such counsel need express no view);
(I) none
of
the issue and sale of the Securities, the consummation of any other of the
transactions herein contemplated or the fulfillment of the terms hereof or
of
any Delayed Delivery Contracts will conflict with, result in a breach of, or
constitute a default under, the charter or by-laws of the Company or the terms
of any indenture or other agreement or instrument known to such counsel and
to
which the Company or any of its subsidiaries is a party or bound, or any decree
or regulation known to such counsel to be applicable to the Company or any
of
its subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company or any
of
its subsidiaries; and
(J) such
counsel has no reason to believe that the Disclosure Package, at the Execution
Time, contained any untrue statement of a material fact or omitted to state
any
material fact necessary in order to make the statements therein, in the light
of
circumstances under which they were made, not misleading.
9
The
statements described in one or more of paragraphs (B), (C), (E), (F),
(G), (H) and (J) of this subsection 5(b)(i) may be omitted from the opinion
of such counsel; provided, however, that in such event the Company shall also
have furnished to the Representatives the corresponding opinion or letter of
Xxxxxxx, Swaine & Xxxxx LLP, counsel for the Company, described in
subsection 5(b)(ii) or 5(b)(iii) immediately following.
(ii)
in
the
event that the statements described in one or more of paragraphs (B), (C),
(E), (F) or (G) of foregoing subsection 5(b)(i) is omitted from the opinion
delivered pursuant to such subsection, the opinion of Xxxxxxx, Swaine &
Xxxxx LLP, counsel for the Company, dated the Closing Date, to the effect of
the
statements so omitted.
In
rendering such opinions, such counsel may rely (A) as to matters involving
the application of laws of any jurisdiction other than the State of New York,
the general corporation law of the State of Delaware or the United States,
to
the extent they deem proper and specified in such opinion, upon the opinion
of
other counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters; and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers
of
the Company and public officials.
(iii)
in
the
event that the statements in paragraph (H) or (J) of
subsection 5(b)(i) are omitted from the opinion provided pursuant to such
subsection, a letter of Cravath, Swaine & Xxxxx LLP dated the Closing
Date to the effect that, having participated in conferences with certain
officers of, and with the accountants for, the Company and having made certain
inquiries and investigations in connection with the preparation of the
Registration Statement, the Disclosure Package and the Final Prospectus, such
counsel has no reason to believe that (i) the Registration Statement and
the Final Prospectus (except the financial statements and the notes thereto
and
other information of an accounting or financial nature included therein, and
the
Statement of Eligibility (Form T-1) included as an exhibit to the
Registration Statement, as to which such counsel need express no view) were
not
appropriately responsive in all material respects with requirements of the
Act
and the applicable rules and regulations of the Commission thereunder or
(ii) the Registration Statement at the Effective Date or the Execution Time
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, the Disclosure Package at the Execution Time contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or the Final Prospectus on the Closing
Date includes any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in light of
the
circumstances under which they were made, not misleading (in each case except
for the financial statements and the notes thereto and other information of
an
accounting or financial nature included therein, as to which such counsel need
express no view).
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(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, Disclosure
Package and other related matters as the Representatives may reasonably require,
and the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(d) The
Company shall have furnished to the Representatives a certificate of the
Company, signed by the principal financial or accounting officer (or Vice
President and Treasurer) of the Company, dated the Closing Date, to the effect
that the signer of such certificate has carefully examined the Registration
Statement, the Disclosure Package, the Final Prospectus and any supplements
or
amendments thereto and this Agreement and that:
(i)
the
representations and warranties of the Company in this Agreement are true and
correct in all material respects on and as of the Closing Date with the same
effect as if made on the Closing Date and the Company has complied with all
the
agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to the Closing Date;
(ii)
no
stop
order suspending the effectiveness of the Registration Statement, as amended,
or
any notice that would prevent its use 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 Disclosure Package
or 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 Disclosure
Package and the Final Prospectus.
(e) At
the
Closing Date, PricewaterhouseCoopers LLP shall have furnished to the
Representatives a letter or letters (which may refer to a letter previously
delivered to one or more of the Representatives), dated as of the Closing Date,
in form and substance satisfactory to the Representatives, confirming that
they
are independent accountants within the meaning of the Act and the Exchange
Act
and the respective applicable published rules and regulations thereunder, that
the response, if any, to Item 10 of the Registration Statement is correct
insofar as it relates to them and stating in effect that:
(i)
in
their
opinion the audited financial statements and schedules thereto included or
incorporated in the Registration Statement, the Disclosure Package and the
Final
Prospectus and reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Exchange Act and the
published rules and regulations thereunder with respect to financial statements
and financial statement schedules included or incorporated in annual reports
on
Form 10-K under the Exchange Act;
11
(ii)
on
the
basis of a reading of the unaudited financial statements included or
incorporated in the Registration Statement, the Disclosure Package and the
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, the Disclosure Package 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; and said unaudited financial statements are not stated on
a
basis substantially consistent with that of the audited financial statements
included or incorporated in the Registration Statement and the Final Prospectus;
or
(2) with
respect to the period subsequent to the date of the most recent financial
statements incorporated in the Registration Statement, the Disclosure Package
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, the
Disclosure Package and the Final Prospectus, except in all instances for
increases or decreases set forth in such letter, in which case the letter shall
be accompanied by an explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the Representatives;
and
(iii)
they
have
performed certain other procedures as a result of which they determined that
the
information described in a schedule to be delivered on behalf of the
Underwriters of an accounting, financial or statistical nature (which is limited
to accounting, financial or statistical information derived from the general
ledger of the Company) set forth in the Registration Statement, as amended,
the
Disclosure Package, 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 l0-Q incorporated therein), agrees
with the general ledger of the Company and its subsidiaries, excluding any
questions of legal interpretation.
12
References
to the Final Prospectus in this paragraph (e) include any supplements
thereto at the date of the letter.
(f) Subsequent
to the respective dates of which information is given in the Registration
Statement and the Prospectus, there shall not have been (i) any change or
decrease specified in the letter or letters referred to in paragraph (e) of
this Section 5 or (ii) any change, or any development involving a
prospective change, in or affecting the business or properties of the Company
and its subsidiaries the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the judgment of the Representatives,
so material and adverse as to make it impractical or inadvisable to proceed
with
the public offering or the delivery of the Securities as contemplated by the
Registration Statement, the Disclosure Package and the Final
Prospectus.
(g) Prior
to
the Closing Date, the Company shall have furnished to the Representatives such
further information, certificates and documents as the Representatives may
reasonably request.
(h) The
Company shall have accepted Delayed Delivery Contracts in any case where sales
of Contract Securities arranged by the Underwriters have been approved by the
Company.
(i) Subsequent
to the Execution Time, there shall not have been any decrease in the ratings
of
any of the Securities by Xxxxx’x Investor’s Service, Inc. (“Xxxxx’x”) or
Standard & Poor’s Ratings Group, a division of The XxXxxx-Xxxx
Companies, Inc. (“S&P”) and neither Xxxxx’x nor S&P shall have publicly
announced that it has placed any of the Securities on a credit watch with
negative implications.
If
any of
the conditions specified in this Section 5 shall not have been fulfilled in
all material respects when and as provided in this Agreement, or if any of
the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form and substance
to
the Representatives and their counsel, this Agreement and all obligations of
the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancelation shall be given to the
Company in writing or by telephone or telegraph confirmed in
writing.
6. Reimbursement
of Underwriters’ Expenses.
If the
sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 5
hereof is not satisfied or because of any refusal, inability or failure on
the
part of the Company to perform any agreement herein or comply with any provision
hereof other than by reason of a default by any of the Underwriters, the Company
will reimburse the Underwriters severally upon demand for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale
of
the Securities.
13
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,
the Final Prospectus or any Issuer Free Writing Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the omission
or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred, as incurred, by them in connection with investigating or defending
any
such loss, claim, damage, liability or action; provided,
however,
that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished
to
the Company by or on behalf of any Underwriter through the Representatives
specifically for use in connection with the preparation thereof. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) Each
Underwriter severally agrees to indemnify and hold harmless the Company, each
of
its directors, each of its officers who signs the Registration Statement, and
each person who controls the Company within the meaning of either the Act or
the
Exchange Act, to the same extent as the foregoing indemnity from the Company
to
each Underwriter, but only with reference to written information relating to
such Underwriter furnished to the Company by or on behalf of such Underwriter
through the Representatives specifically for use in the preparation of the
documents referred to in the foregoing indemnity. This indemnity agreement
will
be in addition to any liability which any Underwriter may otherwise have. The
Company acknowledges that the statements set forth in the last paragraph of
the cover page of the Final Prospectus and under the heading “Underwriting” or
“Plan of Distribution” and, if Schedule I hereto provides for sales of
Securities pursuant to delayed delivery arrangements, in the last sentence
under
the heading “Delayed Delivery Arrangements” in any Preliminary Final Prospectus
and the Final Prospectus, constitute the only information furnished in writing
by or on behalf of the several Underwriters for inclusion in the Basic
Prospectus, any Preliminary Final Prospectus, the Final Prospectus or any Issuer
Free Writing Prospectus, and you, as the Representatives, confirm that such
statements are correct.
(c) Promptly
after receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 7,
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party will not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 7. In case any such action is brought against any indemnified
party, and it notifies the indemnifying party of the commencement thereof,
the
indemnifying party will be entitled to appoint counsel satisfactory to such
indemnified party to represent the indemnified party in such action;
provided,
however,
if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to defend such action on behalf of such indemnified
party or parties. Upon receipt of notice from the indemnifying party to such
indemnified party of its election so to appoint counsel to defend such action
and approval by the indemnified party of counsel, the indemnifying party will
not be liable to such indemnified party under this Section 7 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless (i) the indemnified party shall have
employed separate counsel in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not
be
liable for the expenses of more than one separate counsel (in addition to any
local counsel), approved by the Representatives in the case of
paragraph (a) of this Section 7, representing the indemnified parties
under such paragraph (a) who are parties to such action), (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory
to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying
party has authorized the employment of counsel for the indemnified party at
the
expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the
counsel referred to in such clause (i) or (iii).
14
(d) In
order
to provide for just and equitable contribution in circumstances in which the
indemnification provided for in paragraph (a) of this Section 7 is due
in accordance with its terms but is for any reason held by a court to be
unavailable from the Company on grounds of policy or otherwise, the Company
and
the Underwriters shall contribute to the aggregate losses, claims, damages
and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) to which the Company and one or more
of
the Underwriters may be subject in such proportion so that the Underwriters
are
responsible for that portion represented by the percentage that the underwriting
discount bears to the sum of such discount and the purchase price of the
Securities set forth on Schedule I hereto and the Company is responsible
for the balance; provided, however,
that
(y) in no case shall any Underwriter (except as may be provided in any
agreement among underwriters relating to the offering of the Securities) be
responsible for any amount in excess of the underwriting discount applicable
to
the Securities purchased by such Underwriter hereunder and (z) no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Act) shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. For purposes of this Section 7, each
person who controls an Underwriter within the meaning of either the Act or
the
Exchange Act shall have the same rights to contribution as such Underwriter,
and
each person who controls the Company within the meaning of either the Act or
the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to clauses (y)
and (z) of this paragraph (d). Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit
or
proceeding against such party in respect of which a claim for contribution
may
be made against another party or parties under this paragraph (d), notify
such party or parties from whom contribution may be sought, but the omission
to
so notify such party or parties shall not relieve the party or parties from
whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this paragraph (d).
15
8. Default
by an Underwriter.
If any
one or more Underwriters shall fail to purchase and pay for any of the
Securities agreed to be purchased by such Underwriter or Underwriters hereunder
and such failure to purchase shall constitute a default in the performance
of
its or their obligations under this Agreement, the remaining Underwriters shall
be obligated severally to take up and pay for (in the respective proportions
which the amount of Securities set forth opposite their names in
Schedule II hereto bears to the aggregate amount of Securities set forth
opposite the names of all the remaining Underwriters) the Securities which
the
defaulting Underwriter or Underwriters agreed but failed to purchase;
provided,
however,
that in
the event that the aggregate amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10%
of
the aggregate amount of Securities set forth in Schedule II hereto, the
remaining Underwriters shall have the right to purchase all, but shall not
be
under any obligation to purchase any, of the Securities, and if such
nondefaulting Underwriters do not purchase all the Securities, this 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, the Disclosure Package and
the
Final Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter
of
its liability, if any, to the Company and any nondefaulting Underwriter for
damages occasioned by its default hereunder.
9. Termination.
This
Agreement shall be subject to termination in the absolute discretion of the
Representatives, by notice given to the Company prior to delivery of and payment
for the Securities, if prior to such time (i) trading in securities
generally on the New York Stock Exchange shall have been suspended or limited
or
minimum prices shall have been established on such Exchange, (ii) a banking
moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or material
escalation of hostilities or other calamity or crisis the effect of which on
the
financial markets of the United States is such as to make it, in the judgment
of
the Representatives, impracticable to market the Securities.
10. Representations
and Indemnities to Survive.
The
respective 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 cancelation of this Agreement.
16
11. Notices.
All
communications hereunder will be in writing and effective only on receipt,
and,
if sent to the Representatives, will be mailed, delivered or telegraphed and
confirmed to them, at the address specified in Schedule I hereto; or, if
sent to the Company, will be mailed, delivered or telegraphed and confirmed
to
it, at Armonk, New York 10504; attention of the Treasurer.
12. Successors.
This
Agreement will inure to the benefit of and be binding upon the parties hereto
and their respective successors and the officers and directors and controlling
persons referred to in Section 7 hereof, and no other person will have any
right or obligation hereunder.
13. Applicable
Law.
This
Agreement will be governed by and construed in accordance with the laws of
the
State of New York.
14. Arms-Length
Transaction.
The
Company acknowledges and agrees that (i) the purchase and sale of the Securities
pursuant to this Agreement is an arm's-length commercial transaction between
the
Company, on the one hand, and the several Underwriters, on the other, (ii)
in
connection therewith and with the process leading to such transaction each
Underwriter is acting solely as a principal and not the agent or fiduciary
of
the Company, (iii) no Underwriter has assumed an advisory of fiduciary
responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such Underwriter
has advised or is currently advising the Company on other matters) or any other
obligation to the Company except the obligations expressly set forth in this
Agreement and (iv) the Company has consulted its own legal and financial
advisors to the extent it deemed appropriate. The Company agrees that it will
not claim that the Underwriters, or any of them, has rendered advisory services
of any nature or respect, or owes a fiduciary or similar duty to the Company,
in
connection with such transaction or the process leading thereto.
17
If
the
foregoing is in accordance with your understanding of our agreement, please
sign
and return to us the enclosed duplicate hereof, whereupon this letter and your
acceptance shall represent a binding agreement among the Company and the several
Underwriters.
Very
truly
yours,
INTERNATIONAL
BUSINESS MACHINES
CORPORATION
By:
/s/
Xxxxxx Xxxxxxxxx_____________
Name:
Xxxxxx
Xxxxxxxxx
Title:
Assistant
Treasurer
The
foregoing Agreement is hereby
confirmed
and accepted on the
date
specified in Schedule I hereto.
BARCLAYS
CAPITAL INC.
XXXXXX
BROTHERS INC.
XXXXXX
XXXXXXX & CO. INCORPORATED
By:
BARCLAYS CAPITAL INC.
By:
/s/
Pamela Kendall____________
Name:
Xxxxxx Xxxxxxx
Title:
Director
For
themselves and the other several
Underwriters,
if any, named in
Scheduled
II to the foregoing Agreement.
18
SCHEDULE
I
Underwriting
Agreement dated March 19, 2007
Registration
No. 333-37034
Representatives:
Barclays Capital Inc.
Xxxxxx
Brothers Inc.
Xxxxxx
Xxxxxxx & Co. Incorporated
Title,
Purchase Price and Description of Securities:
|
Title:
|
4.95%
Notes due 2011
|
Principal
amount: $500,000,000
Purchase
price: 99.689% of the principal amount of Notes plus accrued interest from
March
22,
2007
Offering
price: 99.889% of the principal amount of Notes plus accrued interest
fromMarch
22,
2007
Interest:
Payable on March 22 and September 22 of each year, commencing on
September 22, 2007
Sinking
fund provisions: None.
Redemption
provisions: The Notes are not redeemable by the Company prior to
maturity.
Closing
Date, Time and Location: March 22, 2007, 10:00 A.M., at the offices of
Cravath, Swaine & Xxxxx LLP, Worldwide Plaza, 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx.
Delayed
Delivery Arrangements: None.
Items
specified pursuant to Section 5(e)(iii) to be covered by the letter from
PricewaterhouseCoopers LLP delivered pursuant to Section 5(e): As set forth
in a schedule delivered on the date hereof on behalf of the
Underwriters.
Other
Terms:
|
1.
|
Section 4(B)(c)
is amended to read as follows:
|
“ (c)
Each
Representative will pay $50,000 to the Company as partial reimbursement of
the
fees of Xxxxx’x Investors Service, Inc. and Standard & Poor’s Ratings
Group, a division of The XxXxxx-Xxxx Companies, Inc., relating to the rating
of
the Securities.”
|
2.
|
Section 4(B)is
hereby amended by adding at the end of Section 4(B) the following
Section 4(B)(i).
|
I-1
“ (i)
The
Representatives will pay in aggregate US$15,350 to the Company as reimbursement
of the fees of the Commission, relating to the filing of the Registration
Statement and the Prospectus as they relate to the Notes.”
|
3.
|
Each
of the Underwriters has agreed that it will not offer, sell, or deliver
any of the Securities, directly or indirectly, or distribute the
prospectus supplement or prospectus or any other offering material
relating to the Securities, in or from any jurisdiction except under
circumstances that will, to the best of the Underwriters’ knowledge and
belief, result in compliance with the applicable laws and regulations
and
which will not impose any obligations on the
Company.
|
The
Underwriters also agree to abide by the following offering
restrictions:
Each
of
the Underwriters has agreed that it will not offer, sell, or deliver any of
the
Notes, directly or indirectly, or distribute the prospectus supplement or
prospectus or any other offering material relating to the Notes, in or from
any
jurisdiction except under circumstances that will, to the best of the
underwriters’ knowledge and belief, result in compliance with the applicable
laws and regulations and which will not impose any obligations on IBM except
as
set forth in this underwriting agreement.
In
relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a Relevant Member State), each
Underwriter has represented and agreed that with effect from and including
the
date on which the Prospectus Directive is implemented in that Relevant Member
State (the Relevant Implementation Date) it has not made and will not make
an
offer of notes to the public in that Relevant Member State prior to the
publication of a prospectus in relation to the notes which has been approved
by
the competent authority in that Relevant Member State or, where appropriate,
approved in another Relevant Member State and notified to the competent
authority in that Relevant Member State, all in accordance with the Prospectus
Directive, except that it may, with effect from and including the Relevant
Implementation Date, make an offer of notes to the public in that Relevant
Member State at any time:
(a)
to
legal entities which are authorized or regulated to operate in the financial
markets or, if not so authorized or regulated, whose corporate purpose is solely
to invest in securities;
(b)
to
any legal entity which has two or more of
1.
an
average of at least 250 employees during the last financial year;
2.
a
total balance sheet of more than €43,000,000 and
3.
an
annual net turnover of more than €50,000,000, as shown in its last annual or
consolidated accounts; or
(c)
in
any other circumstances which do not require the publication by the issuer
of a
prospectus pursuant to Article 3 of the Prospectus Directive.
I-2
For
the
purposes of this provision, the expression an “offer of Notes to the public” in
relation to any Notes in any Relevant Member State means the communication
in
any form and by any means of sufficient information on the terms of the offer
and the Notes to be offered so as to enable an investor to decide to purchase
or
subscribe the Notes, as the same may be varied in that Member State by any
measure implementing the Prospectus Directive in that Member State and the
expression Prospectus Directive means Directive 2003/71/EC and includes any
relevant implementing measure in each Relevant Member State.
United
Kingdom
Each
Underwriter has represented and agreed that it and each of its
affiliates:
(a)
has
only communicated or caused to be communicated and will only communicate or
cause to be communicated an invitation or inducement to engage in investment
activity (within the meaning of section 21 of FSMA) to persons who have
professional experience in matters relating to investments falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 or in circumstances in which section 21 of FSMA does
not
apply to the company; and
(b)
has
complied with, and will comply with, all applicable provisions of FSMA with
respect to anything done by it in relation to the Notes in, from or otherwise
involving the United Kingdom.
The
Republic of Italy
Each
Dealer represents and agrees that it has not offered, sold or delivered, will
not offer, sell or deliver, has not distributed and will not distribute and
has
not made and will not make available in Italy any Notes, the prospectus nor
any
other offering material relating to the Notes other than:
(a)
to
professional investors (operatori qualificati), as defined in Article 31, second
paragraph, of Commissione Nazionale per la Società e la Borsa (CONSOB)
Regulation No. 11522 of July 1, 1998, as amended; or
(b)
in
circumstances which are exempted from the rules on solicitation of investments
pursuant to Article 100 of Legislative Decree No. 58 of February 24, 1998 (the
Financial Services Act) and Article 33, first paragraph, of CONSOB Regulation
No. 11971 of May 14, 1999, as amended.
Any
offer, sale or delivery of the Notes or distribution of copies of the prospectus
or any other document relating to the Notes in Italy under (a) or (b) above
must
be:
(i)
made
by an investment firm, bank or financial intermediary permitted to conduct
such
activities in Italy in accordance with the Financial Services Act and the
Legislative Decree No. 385 of September 1, 1993, as amended (the Banking
Act);
I-3
(ii)
in
compliance with Article 129 of the Banking Act and the implementing guidelines
of the Bank of Italy pursuant to which the issue or the offer of securities
in
Italy may need to be precedent and followed by an appropriate notice to be
filed
with the Bank of Italy depending, inter alia, on the aggregate value of the
securities issued or offered in Italy and their characteristics;
and
(iii)
in
accordance with any other applicable laws and regulations.
Japan
The
Notes
have not been and will not be registered under the Securities and Exchange
Law
of Japan (the “SEL”) and each Underwriter and each of its affiliates has
represented and agreed that it has not offered or sold, and it will not offer
or
sell, directly or indirectly, any of the Notes in or to residents of Japan
or to
any persons for reoffering or resale, directly or indirectly, in Japan or to
any
resident of Japan, except pursuant to an exemption from the registration
requirements of the SEL available thereunder and otherwise in compliance with
the SEL and the other relevant laws, regulations and guidelines of
Japan.
Hong
Kong
Each
of
the Underwriters and each of its affiliates has represented and agreed that
it
has not offered or sold, and it will not offer or sell, the Notes by means
of
any document to persons in Hong Kong other than persons whose ordinary business
it is to buy or sell shares or debentures, whether as principal or agent, or
otherwise in circumstances which do not constitute an offer to the public within
the meaning of the Hong Kong Companies Ordinance (Chapter 32 of the Laws of
Hong Kong).
4.
The
last sentence of Section 7(b) shall be deleted and replaced by the following
text:
“The
Company acknowledges that the statements set forth in the last paragraph of
the
cover page of the Preliminary Final Prospectus and the Final Prospectus, the
sentence “The underwriters have informed IBM that they intend to make a market
in the Notes but are under no obligation to do so and such market making may
be
terminated at any time without notice.” and the statements contained in the
seventh through tenth paragraphs under the caption “Underwriting” in the
Preliminary Final Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters
for
inclusion in the Basic Prospectus, any Preliminary Final Prospectus, the
Disclosure Package, any Issuer Free Writing Prospectus or the Final Prospectus,
and you, as the Representatives, confirm that such statements are
correct.
5.. The
following shall be an additional condition added to Section 5:
The
Company shall have furnished to the Representatives the opinion of Xxxxxxx,
Swaine & Xxxxx LLP, counsel to the Company, dated the Closing Date to the
effect that the statements under the caption “United States Taxation” in the
Disclosure Package and the Final Prospectus constitute a fair presentation
of
the material U.S. federal income tax consequences to holders of
Securities.
I-4
SCHEDULE
II
$500,000,000
4.95% Notes due 2011
|
Underwriters
|
Principal
Amount
of
Notes to be
Purchased
|
|
Barclays
Capital Inc.
|
$150,000,000
|
|
Xxxxxx
Brothers Inc.
|
150,000,000
|
|
Xxxxxx
Xxxxxxx & Co. Incorporated
|
150,000,000
|
|
ABN
AMRO Incorporated
|
12,500,000
|
|
Banc
of America Securities LLC
|
12,500,000
|
|
HSBC
Securities (USA) Inc.
|
12,500,000
|
|
Xxxxxxx
Capital Markets, Inc.
|
12,500,000
|
|
Total
|
$500,000,000
|
II-1
SCHEDULE
III
Schedule
of Free Writing Prospectuses included in the Disclosure
Package
Pricing
Term Sheet dated March 19, 2007, as filed pursuant to
Rule 433
III-1
SCHEDULE
IV
Delayed
Delivery Contract
[Insert
names and addresses
of
lead
Representatives]
,
200
Dear
Sirs:
The
undersigned hereby agrees to purchase from International Business Machines
Corporation (the “Company”), and the Company agrees to sell to the undersigned,
on , 200 ,
(the
“Delivery Date”), $ principal amount of the Company’s (the “Securities”) offered
by the Company’s Final Prospectus dated , 200 ,
receipt
of a copy of which is hereby acknowledged, at a purchase price of % of the
principal amount thereof, plus accrued , if any, thereon from , 200
, to the
date of payment and delivery, and on the further terms and conditions set forth
in this contract.
Payment
for the Securities to be purchased by the undersigned shall be made on or before
11:00 A.M. on the Delivery Date to or upon the order of the Company in New
York
Clearing House (next day) funds, at your office or at such other place as shall
be agreed between the Company and the undersigned upon delivery to the
undersigned of the Securities in definitive, fully registered form and in such
authorized denominations and registered in such names as the undersigned may
request by written or telegraphic communication addressed to the Company not
less than five full business days prior to the Delivery Date. If no request
is
received, the Securities will be registered in the name of the undersigned
and
issued in a denomination equal to the aggregate principal amount of Securities
to be purchased by the undersigned on the Delivery Date.
The
obligation of the undersigned to take delivery of and make payment for
Securities on the Delivery Date, and the obligation of the Company to sell
and
deliver Securities on the Delivery Date, shall be subject to the conditions
(and
neither party shall incur any liability by reason of the failure thereof) that
(1) the purchase of Securities to be made by the undersigned, which purchase
the
undersigned represents is not prohibited on the date hereof, shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject, and (2) the Company, on or before the Delivery
Date, shall have sold to certain underwriters (the “Underwriters”) such
principal amount of the Securities as is to be sold to them pursuant to the
Underwriting Agreement referred to in the Final Prospectus mentioned above.
Promptly after completion of such sale to the Underwriters, the Company will
mail or deliver to the undersigned at its address set forth below notice to
such
effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith. The obligation of the
undersigned to take delivery of and make payment for the Securities, and the
obligation of the Company to cause the Securities to be sold and delivered,
shall not be affected by the failure of any purchaser to take delivery of and
make payment for the Securities pursuant to other contracts similar to this
contract.
This
contract will inure to the benefit of and be binding upon the parties hereto
and
their respective successors, but will not be assignable by either party hereto
without the written consent of the other.
IV-1
It
is
understood that acceptance of this contract and other similar contracts is
in
the Company’s sole discretion and, without limiting the foregoing, need not be
on a first come, first served basis. If this contract is acceptable to the
Company, it is required that the Company sign the form of acceptance below
and
mail or deliver one of the counterparts hereof to the undersigned at its address
set forth below. This will become a binding contract between the Company and
the
undersigned, as of the date first above written, when such counterpart is so
mailed or delivered.
This
agreement shall be governed by and construed in accordance with the laws of
the
State of New York.
Very
truly
yours,
(Name
of
Purchaser)
By________________________
(Signature
and
Title)
(Address)
Accepted:
INTERNATIONAL
BUSINESS MACHINES
CORPORATION
By
IV-2
