Exhibit (b)
EXECUTION COPY
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$10,000,000,000
CREDIT AGREEMENT
among
INTERNATIONAL BUSINESS MACHINES
CORPORATION
The Several Lenders
from Time to Time Parties Hereto
and
CHEMICAL BANK,
as Administrative Agent
Dated as of December 22, 1993
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS .................................................... 1
1.1 Defined Terms ..................................................... 1
1.2 Other Definitional Provisions ..................................... 21
SECTION 2. AMOUNT AND TERMS OF US$ FACILITIES ............................. 22
2.1 Revolving Credit Commitments ...................................... 22
2.2 Procedure for Revolving Credit Borrowing .......................... 22
2.3 Conversion and Continuation Options for Revolving Credit Loans .... 23
2.4 Minimum Amounts and Maximum Number of Eurodollar Tranches ......... 24
2.5 Swing Line Loans .................................................. 24
2.6 Optional Prepayments of Revolving Credit Loans and Swing Line Loans 26
2.7 The Competitive Loans ............................................. 26
2.8 Procedure for Competitive Loan Borrowing .......................... 26
2.9 Repayment of US$ Loans; Evidence of Debt .......................... 29
2.10 Interest Rates and Payment Dates ................................. 30
2.11 Fees ............................................................. 31
2.12 Computation of Interest and Fees ................................. 31
2.13 Termination or Reduction of Revolving Credit Commitments ......... 32
2.14 Inability to Determine Interest Rate ............................. 32
2.15 Pro Rata Treatment and Payments .................................. 33
2.16 Illegality ....................................................... 34
2.17 Requirements of Law .............................................. 34
2.18 Taxes ............................................................ 36
2.19 Indemnity ........................................................ 39
2.20 Change of Lending Office ......................................... 39
SECTION 3. LOCAL CURRENCY FACILITIES ....................................... 40
3.1 Terms of Local Currency Facilities ................................ 40
3.2 Currency Fluctuations, etc ........................................ 42
3.3 Refunding of Local Currency Loans ................................. 44
SECTION 4. REPRESENTATIONS AND WARRANTIES .................................. 46
4.1 Organization; Powers .............................................. 46
4.2 Authorization ..................................................... 46
4.3 Enforceability .................................................... 46
4.4 Governmental Approvals ............................................ 47
4.5 Financial Statements .............................................. 47
4.6 No Material Adverse Change ........................................ 47
4.7 No Material Litigation, etc ....................................... 47
4.8 Federal Reserve Regulations ....................................... 47
4.9 Investment Company Act, etc ....................................... 48
4.10 Tax Returns ...................................................... 48
4.11 No Material Misstatements ........................................ 48
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4.12 ERISA .......................................................... 48
4.13 Use of Proceeds ................................................ 48
SECTION 5. CONDITIONS PRECEDENT ............................................ 48
5.1 Conditions to Initial US$ Loans ................................. 48
5.2 Conditions to Each US$ Loan ..................................... 50
SECTION 6. AFFIRMATIVE COVENANTS ........................................... 51
6.1 Existence; Business and Properties .............................. 51
6.2 Financial Statements, Reports, etc .............................. 52
6.3 Notices ......................................................... 53
SECTION 7. NEGATIVE COVENANTS .............................................. 53
7.1 Limitation on Secured Debt and Sale and Leaseback Transactions .. 53
7.2 Mergers, Consolidations and Sales of Assets ..................... 54
7.3 Margin Regulations .............................................. 54
7.4 Consolidated Net Interest Expense Ratio ......................... 55
SECTION 8. EVENTS OF DEFAULT ............................................... 55
SECTION 9. THE ADMINISTRATIVE AGENT ........................................ 57
9.1 Appointment ..................................................... 57
9.2 Delegation of Duties ............................................ 57
9.3 Exculpatory Provisions .......................................... 57
9.4 Reliance by Administrative Agent ................................ 58
9.5 Notice of Default ............................................... 58
9.6 Non-Reliance on Administrative Agent and Other Lenders .......... 58
9.7 Indemnification ................................................. 59
9.8 Administrative Agent in Its Individual Capacity ................. 59
9.9 Successor Administrative Agent .................................. 60
SECTION 10. GUARANTEE ...................................................... 60
10.1 Guarantee ...................................................... 60
10.2 No Subrogation, Contribution, Reimbursement or Indemnity ....... 61
10.3 Amendments, etc. with respect to the Subsidiary Borrower
Obligations ................................................. 61
10.4 Guarantee Absolute and Unconditional ........................... 62
10.5 Reinstatement .................................................. 63
10.6 Payments ....................................................... 63
10.7 Judgments Relating to Guarantee ................................ 63
10.8 Independent Obligations ........................................ 64
SECTION 11. MISCELLANEOUS .................................................. 64
11.1 Amendments and Waivers ......................................... 64
11.2 Notices ........................................................ 65
11.3 No Waiver; Cumulative Remedies ................................. 65
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11.4 Survival of Representations and Warranties ..................... 66
11.5 Payment of Expenses ............................................ 66
11.6 Participations ................................................. 67
11.7 Transfers of Competitive Loans ................................. 67
11.8 Assignments .................................................... 69
11.9 The Register; Disclosure; Pledges to Federal Reserve Banks ..... 69
11.10 Changing Designations of Swing Line Lenders and Competitive Loan
Lenders ..................................................... 70
11.11 Replacement of Lenders under Certain Circumstances ............ 71
11.12 Adjustments; Set-off .......................................... 71
11.13 Counterparts .................................................. 72
11.14 Severability .................................................. 72
11.15 Integration ................................................... 72
11.16 GOVERNING LAW ................................................. 72
11.17 Submission To Jurisdiction; Waivers ........................... 72
11.18 Judgments Relating to Subsidiary Borrowers .................... 73
11.19 Acknowledgements .............................................. 74
11.20 WAIVERS OF JURY TRIAL ......................................... 74
11.21 Confidentiality ............................................... 74
11.22 Binding Effect; Successors and Assigns ........................ 75
SCHEDULES
SCHEDULE 1.1A Revolving Credit Commitments and Swing Line Commitments
of Lenders
SCHEDULE 1.1B Existing Credit Agreements
SCHEDULE 6.2(c) Compliance Certificate
EXHIBITS
EXHIBIT A-1 Form of Competitive Loan Confirmation
EXHIBIT A-2 Form of Competitive Loan Offer
EXHIBIT A-3 Form of Competitive Loan Request
EXHIBIT B-1 Form of Subsidiary Borrower Notice and Designation
EXHIBIT B-2 Form of Subsidiary Borrower Request
EXHIBIT C Form of Closing Certificate
EXHIBIT D-1 Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
EXHIBIT D-2 Form of Opinion of Cravath, Swaine & ▇▇▇▇▇
EXHIBIT D-3 Form of Opinion of Associate General Counsel of IBM
EXHIBIT E Form of Assignment and Acceptance
EXHIBIT F Form of Local Currency Facility Addendum
EXHIBIT G-1 Form of Revolving Credit Loan Promissory Note
EXHIBIT G-2 Form of Competitive Loan Promissory Note
EXHIBIT H Form of Addendum
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CREDIT AGREEMENT, dated as of December 22, 1993, among
INTERNATIONAL BUSINESS MACHINES CORPORATION, a New York corporation
("IBM"), each Subsidiary Borrower (as hereinafter defined), the several banks
and other financial institutions from time to time parties to this Agreement
(the "Lenders"), and CHEMICAL BANK, a New York banking corporation, as
administrative agent for the Lenders hereunder (in such capacity, the
"Administrative Agent").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in effect
on such day, (b) the Base CD Rate in effect on such day plus 1% and (c) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes
hereof: "Prime Rate" shall mean the rate of interest per annum publicly
announced from ▇▇▇▇.▇▇ time by Chemical Bank as its prime rate in effect at its
principal office in New York City (each change in the Prime Rate to be effective
on the date such change is publicly announced); "Base CD Rate" shall mean the
sum of (a) the product of (i) the Three- Month Secondary CD Rate and (ii) a
fraction, the numerator of which is one and the denominator of which is one
minus the CD Reserve Percentage and (b) the CD Assessment Rate; "Three-Month
Secondary CD Rate" shall mean, for any day, the secondary market rate for
three-month certificates of deposit reported as being in effect on such day (or,
if such day shall not be a Business Day, the next preceding Business Day) by the
Board through the public information telephone line of the Federal Reserve Bank
of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day), or, if such rate shall not be so reported on such day or
such next preceding Business Day, the average of the secondary market quotations
for three- month certificates of deposit of major money center banks in New York
City received at approximately 10:00 A.M., New York City time, on such day (or,
if such day shall not be a Business Day, on the next preceding Business Day) by
the Administrative Agent from three New York City negotiable certificate of
deposit dealers of recognized standing selected by it; "CD Reserve Percentage"
shall mean, for any day, that percentage (expressed as a decimal) which is in
effect on such day, as prescribed by the Board, for determining the maximum
reserve requirement for a Depositary Institution (as defined in Regulation D of
the Board) in respect of new non-personal time deposits in Dollars having a
maturity of 30 days or more; and "CD Assessment Rate" shall mean, for any day,
the annual assessment rate in effect on such day which is payable by a member of
the Bank Insurance Fund classified as "well-capitalized" and within supervisory
subgroup "A" (or a comparable successor assessment risk classification) within
the meaning of 12 C.F.R. Sec. 327.3(e) (or any successor provision)
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to the Federal Deposit Insurance Corporation (or any successor) for such
Corporation's (or such successor's) insuring time deposits at offices of such
institution in the United States. If for any reason the Administrative Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Base CD Rate or the Federal Funds
Effective Rate, or both, for any reason, including the inability or failure of
the Administrative Agent to obtain sufficient quotations in accordance with the
terms thereof, the ABR shall be determined without regard to clause (b) or (c),
or both, of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
ABR due to a change in the Prime Rate, the Three-Month Secondary CD Rate, the CD
Reserve Percentage, the CD Assessment Rate or the Federal Funds Effective Rate
shall be effective on the effective day of such change in the Prime Rate, the
Three=Month Secondary CD Rate, the CD Reserve Percentage, the CD Assessment Rate
or the Federal Funds Effective Rate, respectively.
"ABR Loans": Revolving Credit Loans the rate of interest applicable to
which is based upon the ABR.
"Addendum" means an instrument, substantially in the form of Exhibit H,
by which a Lender becomes a party to this Agreement.
"Aggregate Outstanding Revolving Extensions of Credit": as to any Lender
at any time, the aggregate principal amount of all Revolving Credit Loans,
Swing Line Loans and Local Currency Loans (US$ Equivalent) made by such Lender
then outstanding.
"Aggregate Outstanding US$ Revolving Extensions of Credit": as to any
Lender at any time, the aggregate principal amount of all Revolving Credit Loans
and Swing Line Loans made by such Lender then outstanding.
"Agreement": this Credit Agreement, as amended supplemented or otherwise
modified from time to time.
"Applicable Eurodollar Margin": with respect to each Eurodollar Loan at
any date, the applicable percentage per annum set forth below based upon the
Status and Utilization on such date (provided that if the Revolving Credit
Commitments have been terminated on or prior to such date, the Utilization for
such date shall be deemed to be greater than 50%):
Level I Level II Level III Level IV Level V
Status Status Status status status
If Utilization is less
than or equal to 50%: 0.2000% 0.2250% 0.3125% 0.4000% 0.5000%
If Utilization is greater
than 50%: 0.3250% 0.3500% 0.4375% 0.5250% 0.6250%
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"Applicable Index Rate": in respect of any Index Rate Competitive Loan of
a specified maturity requested pursuant to an Index Rate Competitive Loan
Request, the rate of interest, determined on the basis of the rate for deposits
in Dollars with a maturity comparable to the maturity applicable to such Index
Rate Competitive Loan, appearing on Page 3750 of the Telerate screen as of 11:00
A.M., London time, two Business Days prior to the Borrowing Date in respect of
such Index Rate Competitive Loan. In the event that such rate does not appear on
Page 3750 of the Tolerate Service (or otherwise on such service), the
"Applicable Index Rate" shall be determined by reference to such other publicly
available service for displaying eurodollar rates as may be agreed upon by the
Administrative Agent and IBM or, in the absence of such agreement, the
"Applicable Index Rate" shall instead be the average (rounded upward, if
necessary, to the nearest 1/16 th of 1%) of the respective rates notified to the
Administrative Agent by each of the Reference Lenders as the rate at which such
Reference Lender is offered Dollar deposits at or about 10:00 A.M., New York
City time, two Business Days prior to the Borrowing Date in respect of such
Index Rate Competitive Loan, in the interbank eurodollar market where the
eurodollar and foreign currency and exchange operations in respect of its
Eurodollar Loans are then being conducted for delivery on such Borrowing Date
with a maturity comparable to the maturity applicable to such Index Rate
Competitive Loan and in an amount comparable to the amount of such Index Rate
Competitive Loan.
"Attributable Debt": as of any date of determination, the present value
(discounted semiannually at the Attributable Interest Rate) of the obligation of
a lessee for rental payments pursuant to any Sale and Leaseback Transaction
(reduced by the amount of the rental obligations of any sublessee of all or part
of the same property) during the remaining term of such Sale and Leaseback
Transaction (including any period for which the lease relating thereto has been
extended), such rental payments not to include amounts payable by the lessee for
maintenance and repairs, insurance, taxes, assessments and similar charges and
for contingent rents (such as those based on sales). In the case of any Sale and
Leaseback Transaction in which the lease is terminable by the lessee upon the
payment of a penalty, such rental payments shall be considered for purposes of
this definition to be the lesser of (a) the rental payments to be paid under
such Sale and Leaseback Transaction until the first date (after the date of such
determination) upon which it may be so terminated plus the then applicable
penalty upon such termination and (b) the rental payments required to be paid
during the remaining term of such Sale and Leaseback Transaction (assuming such
termination provision is not exercised).
"Attributable Interest Rate": as of the date of its determination, the
weighted average of the interest rates (or the effective rate in the case of
original issue discount securities or discount securities) of (a) all
Outstanding Securities (as such term is defined in the 1990 Indenture) of IBM
under the 1990 Indenture and all securities of IBM issued and outstanding (as
defined in the 1985 Indenture) under the ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ to which Sections 6.05
and 6.06 of the 1985 Indenture apply (and whose application has not been
waived), or (b) at any time when no securities of IBM
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referred to in clause (a) of this sentence are outstanding, all outstanding
Loans and all other outstanding Funded Debt of IBM.
"Available Revolving Credit Commitment": as to any Lender, at any time of
determination, an amount equal to such Lender's Revolving Credit Commitment at
such time minus such Lender's Aggregate Outstanding Revolving Extensions of
Credit at such time.
"Banking Day": in respect of any city, any day on which commercial banks
are open for business (including dealings in foreign exchange and foreign
currency deposits) in that city.
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrower": as applicable, IBM or the relevant Subsidiary Borrower.
"Borrower Obligations": any and all obligations of any Borrower for the
payment of money hereunder or in respect hereof, whether absolute or contingent
(including, in the case of IBM, its obligations pursuant to the guarantee,
contained in Section 10).
"Borrowing Date": any Business Day specified in a notice pursuant to
Section 2.2, 2.5 or 2.8 as a date on which the relevant Borrower requests US$
Loans to be made hereunder and, for the purposes of Section 3, any other date on
which the relevant Borrower requests Local Currency Loans to be made under a
Local Currency Facility.
"Business Day": a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required by law to
close, except that, when used in connection with a Eurodollar Loan or an Index
Rate Competitive Loan with respect to which the Eurodollar Rate or the
Applicable Index Rate is determined based upon the Tolerate screen in accordance
with the definition of Eurodollar Rate or Applicable Index Rate, as the case may
be, "Business Day" shall mean any Business Day on which dealings in foreign
currencies and exchange between banks may be carried on in London, England and
New York, New York.
"Calculation Date": the last Business Day of each calendar week.
"Capital Lease": with respect to any Person, any obligation of such
Person to pay rent or other amounts under a lease with respect to any
property (whether real, personal or mixed) acquired or leased by such Person
that is required to be accounted for as a liability on a balance sheet of such
Person in accordance with GAAP.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
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"Commitment Percentage": as to any Lender at any time, the percentage
which such Lender's Revolving Credit Commitment then constitutes of the
aggregate Revolving Credit Commitments (or, at any time after the Revolving
Credit Commitments shall have expired or terminated, the percentage which the
aggregate principal amount of such Lender's Loans then outstanding constitutes
of the aggregate principal amount of the Loans of all Lenders then outstanding).
"Commitments": the collective reference to the Revolving Credit
Commitments and any commitments to make Local Currency Loans under any
Local Currency Facility.
"Competitive Loan": each loan made pursuant to Section 2.7.
"Competitive Loan Assignee": as defined in Section 11.7(a).
"Competitive Loan Assignment": any assignment by a Competitive Loan
Lender to a Competitive Loan Assignee of a Competitive Loan; any such
Competitive Loan Assignment to be registered in the Register must set forth, in
respect of the Competitive Loan Assignee thereunder, the full name of such
Competitive Loan Assignee, its address for notices, its lending office address
(in each case with telephone and facsimile transmission numbers) and payment
instructions for all payments to such Competitive Loan Assignee, and must
contain an agreement by such Competitive Loan Assignee to comply with the
provisions of Sections 2.18, 2.20, 11.7 and 11.21.
"Competitive Loan Borrowing Period'': the period from and including the
Effective Date until the earlier of (a) the date which is 14 days prior to the
Termination Date and (b) the last day of the Revolving Credit Commitment Period.
"Competitive Loan Confirmation": each confirmation by the relevant
Borrower of its acceptance of Competitive Loan Offers, which Competitive
Loan Confirmation shall be substantially in the form of Exhibit A-1 and shall be
delivered to the Administrative Agent in writing or by facsimile transmission.
"Competitive Loan Lender": each Lender that has agreed to offer to make
Competitive Loans hereunder and each other Lender that shall hereafter be
designated as a Competitive Loan Lender in accordance with the provisions of
Section 11.8 and 11.10.
"Competitive Loan Maturity Date": as to any Competitive Loan, the date
specified by the relevant Borrower pursuant to Section 2.8(d)(ii) in its
acceptance of the related Competitive Loan Offer.
"Competitive Loan Offer": each offer by a Competitive Loan Lender to make
Competitive Loans pursuant to a Competitive Loan Request, which Competitive Loan
Offer shall contain the information specified in Exhibit A-2 and shall be
delivered to
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the Administrative Agent by telephone, immediately confirmed by facsimile
transmission.
"Competitive Loan Request": each request by the relevant Borrower for
Competitive Loan Lenders to submit bids to make Competitive Loans, which request
shall contain the information in respect of such requested Competitive
Loans specified in Exhibit A-3 and shall be delivered to the Administrative
Agent in writing or by facsimile transmission, or by telephone, immediately
confirmed by facsimile transmission.
"Consolidated Adjusted Cash Flow": for any period, earnings before income
taxes of IBM and its consolidated Subsidiaries for such period, excluding
gains or losses from the divestiture or sale of a business, plus, to the extent
deducted in arriving at earnings before income taxes of IBM and its consolidated
Subsidiaries for such period, the sum of (i) Consolidated Net Interest Expense,
(ii) depreciation expense, (iii) amortization expense and (iv) restructuring
charges made after the Effective Date minus the sum of (a) cash payments made
during such period in respect of restructuring charges made after the Effective
Date, (b) payments made during such period for plant, rental machines and other
property excluding acquisitions of businesses (net of proceeds received during
such period from dispositions of plant, rental machines and other property
excluding divestitures or sales of businesses) and (c) investment in software
for such period, all as determined on a consolidated basis in accordance with
GAAP and, where applicable, determined by reference to the consolidated
statement of earnings or (including in the case of clauses (b) and (c) above)
statement of cash flows of IBM and its consolidated Subsidiaries.
"Consolidated Net Interest Expense": for any period, (a) total interest
cost of IBM and the Subsidiaries for such period minus (b) interest income
of IBM and the Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP.
"Consolidated Net Interest Expense Ratio": for any period, the ratio of
Consolidated Adjusted Cash Flow for such period to Consolidated Net Interest
Expense for such period.
"Consolidated Net Tangible Assets": at any date, the total assets
appearing on the consolidated statement of financial position of IBM and
the Subsidiaries most recently delivered to the Administrative Agent pursuant to
Section 4.5, 6.2(a) or 6.2(b), as the case may be, less (a) all current
liabilities as shown on such statement and Co) intangible assets. As used
herein, "intangible assets" means the value (net of any applicable reserves) as
shown on or reflected in such statement, of: (i) all trade names, trademarks,
licenses, patents, copyrights and goodwill; (ii) organizational and development
costs; (iii) deferred charges (other than prepaid items such as insurance,
taxes, interest, commissions, rents and similar items and tangible assets being
amortized); and (iv) unamortized debt discount and expense, less unamortized
premium; but in no event shall the term "intangible assets" include program
products.
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"Controlled Person": any corporation, partnership or other entity of
which shares of stock or other ownership interests having ordinary voting
power (other than stock or such other ownership interests having such power only
by reason of the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or other entity are
at the time owned, or the management of which is otherwise controlled, directly
or indirectly through one or more intermediaries, or both, by IBM.
"Debt": with respect to any Person, without duplication, all indebtedness
representing money borrowed which is created, assumed, incurred or
guaranteed in any manner by such Person or for which such Person is otherwise
responsible or liable (whether by agreement to purchase indebtedness of, or to
supply funds to or invest in, others).
"Default": any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any
other condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United States of
America.
"Domestic Subsidiary Borrower": any Subsidiary Borrower which (a) is
organized under the laws of the United States of America, any state,
Territory or possession thereof or the District of Columbia or (b) conducts a
substantial portion of its business or maintains a substantial portion of its
property or assets in any one or more of the foregoing jurisdictions.
"Effective Date": as defined in Section 11.22(a).
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the rules and regulations promulgated thereunder, as from
time to time in effect.
"Eurodollar Loans": Revolving Credit Loans the rate of interest
applicable to which is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate of interest determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Telerate screen as of 11:00 A.M., London time, two Business Days
prior to the beginning of such Interest Period. In the event that such rate does
not appear on Page 3750 of the Telerate Service (or otherwise on such service),
the "Eurodollar Rate" shall be determined by reference to such other publicly
available service for displaying eurodollar rates as may be agreed upon by the
Administrative Agent and IBM or, in the absence of such agreement, the
"Eurodollar Rate" shall instead be the rate per annum equal to the average
(rounded upward, if necessary, to the nearest 1/16th of 1%) of the respective
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rates notified to the Administrative Agent by each of the Reference Lenders
as the rate at which such Reference Lender is offered Dollar deposits at or
about 10:00 A.M., New York City time, two Business Days prior to the beginning
of such Interest Period, in the interbank eurodollar market where the eurodollar
and foreign currency and exchange operations in respect of its Eurodollar Loans
are then being conducted for delivery on the fast day of such Interest Period
for the number of days comprised therein and in an mount comparable to the
amount of its Eurodollar Loan to be outstanding during such Interest Period.
"Eurodollar Tranche": the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the
same date and end on the same later date (whether or not such Eurodollar Loans
shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 8, provided
that any requirement for the giving of notice, the lapse of time, or both,
or any other condition, has been satisfied.
"Exchange Rate": with respect to any Local Currency on a particular
date, the rate at which such Local Currency may be exchanged into
Dollars',. as set forth on such date on the relevant Reuters currency page. In
the event that such rate does not appear on any Reuters currency page, the
"Exchange Rate" with respect to such Local Currency shall be determined by
reference to such other publicly available service for displaying exchange rates
as may be agreed upon by the Administrative Agent and IBM or, in the absence of
such agreement, such "Exchange Rate" shall instead be the Administrative Agent's
spot rate of exchange in the interbank market where its foreign currency
exchange operations in respect of such Local Currency are then being conducted,
at or about 10:00 A.M., local time, at such date for the purchase of Dollars
with such Local Currency, for delivery two Banking Days later; provided, that if
at the time of any such determination, for any reason, no such spot rate is
being quoted, the Administrative Agent may use any reasonable method as it deems
applicable to determine such rate, and such determination shall be conclusive
absent manifest error.
"Existing Credit Agreements": the collective reference to the agreements
listed on Schedule 1.1B.
"Facility Fee Rate": for any day, the rate per annum set forth below
opposite the Status in effect on such day:
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Facility Fee
Status Rate
------ ------------
Level I Status 0.1000%
Level II Status 0.1250%
Level III Status 0.1500%
Level IV Status 0.2250%
Level V Status 0.3750%
"Federal Funds Effective Rate": for any day, the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for such day for such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by it.
"Fixed Rate Competitive Loan Request": any Competitive Loan Request
requesting the Competitive Loan Lenders to offer to make Fixed Rate Competitive
Loans.
"Fixed Rate Competitive Loans": Competitive Loans the rate of interest
applicable to which is equal to a fixed percentage rate per annum specified by
the Competitive Loan Lender making such Loan in its Competitive Loan Offer (as
opposed to a rate composed of the Applicable Index Rate plus or minus a margin).
"Foreign Subsidiary Borrower": any Subsidiary Borrower other than a
Domestic Subsidiary Borrower.
"Funded Debt": any Debt maturing by its terms more than one year from the
date of the issuance thereof, including any Debt renewable or extendible at
the option of the obligor to a date later than one year from the date of the
original issuance thereof.
"GAAP": generally accepted accounting principles in the United States of
America in effect from time to time, provided, that for the purposes of
Section 7.4 and the terms used therein, "GAAP" shall mean generally accepted
accounting principles used to prepare the financial statements of IBM for the
fiscal quarter ending September 30, 1993.
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"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Indebtedness": with respect to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services other than indebtedness to trade creditors and
service providers incurred in the ordinary course of business, (b) obligations,
contingent or otherwise, of such Person in connection with (i) letter of credit
facilities or bankers' acceptance facilities and (ii) interest rate swap
agreements, interest rate cap agreements or similar arrangements used by a
Person to fix or cap a floating rate of interest to a negotiated maximum rate or
amount, or other similar facilities including currency swaps, (c) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all obligations of such Person to pay rent or
other amounts under a Capital Lease, (f) all indebtedness referred to in clause
(a), (b), (c), (d) or (e) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property owned by such Person, even though such Person has
not assumed or become liable for the payment of such indebtedness, and (g) all
Indebtedness of others guaranteed by such Person. For purposes of this
Agreement, the amount of any Indebtedness referred to in clause (b)(ii) of the
preceding sentence shall be the amounts, including any termination payments,
required to be paid to a counterparty rather than any notional amount with
regard to which payments may be calculated. For purposes of this Agreement,
Indebtedness shall not include any indebtedness or other obligations issued by
any Person (or by a trust or other entity established by such Person or any of
its affiliates) which are primarily serviced by the cash flows of a discrete
pool of receivables, leases or other financial assets which have been sold or
transferred by IBM or any Subsidiary in securitization transactions
("Securitization Transactions") which, in accordance with GAAP, are accounted
for as sales for financial reporting purposes. The definitions of Debt and
Indebtedness in this Section 1.1 shall be independent in construction,
interpretation and application.
"Index Rate Competitive Loan": Competitive Loans the rate of interest
applicable to which is equal to the Applicable Index Rate plus or minus a
margin.
"Index Rate Competitive Loan Request": any Competitive Loan Request
requesting the Competitive Loan Lenders to offer to make Index Rate Competitive
Loans.
"Interest Payment Date": (a) as to any ABR Loan (other than Swing Line
Loans which do not constitute Unrefunded Swing Line Loans), the last day of each
March, June, September and December to occur while such Loan is outstanding and
11
the Termination Date, (b) as to any Swing Line Loan which does not constitute an
Unrefunded Swing Line Loan, the last day such Loan is outstanding, (c) as to any
Eurodollar Loan having an Interest Period of three months or less, the last
day of such Interest Period, (d) as to any Eurodollar Loan having an Interest
Period longer than three months, each day which is three months, or a whole
multiple thereof, after the first day of such Interest Period and the last day
of such Interest Period. (e) as to any Fixed Rate Competitive Loan, each
interest payment date specified by the relevant Borrower for such Loan in the
related Competitive Loan Request (including, in any event, the Competitive Loan
Maturity Date in respect of such Loan) and (f) as to any Index Rate Competitive
Loan, (i) the Competitive Loan Maturity Date in respect of such Loan and (ii)
each date (if any) occurring prior to such Competitive Loan Maturity Date which
is three months, or a whole multiple thereof, after the Borrowing Date in
respect of such Loan.
"Interest Period": with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or conversion date,
as the case may be, with respect to such Eurodollar Loan and ending one,
two, three or six months thereafter, as selected by the relevant Borrower in its
notice of borrowing or notice of conversion, as the case may be, given with
respect thereto; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three or six months thereafter, as selected by the relevant Borrower
by irrevocable notice to the Administrative Agent not less than three Business
Days prior to the last day of the then current Interest Period with respect
thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such Interest
Period into another calendar month in which event such Interest Period shall end
on the immediately preceding Business Day;
(2) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date; and
(3) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month.
"Level I Status": exists at any date if, at such date, IBM has a
long-term senior unsecured debt rating of AA- or better by S&P and Aa3 or
better by Moody's.
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"Level II Status": exists at any date if, at such date, Level I Status
does not exist and IBM has a long-term senior unsecured debt rating of A+
or better by S&P and A1 or better by Moody's.
"Level III Status": exists at any date if, at such date, neither Level I
Status nor Level II Status exists and IBM has a long-term senior unsecured
debt rating of A- or better by S&P and A3 or better by Moody's.
"Level IV Status": exists at any date if, at such date, neither Level I
Status, Level II Status nor Level III Status exists and IBM has a long-term
senior unsecured debt rating of BBB- or better by S&P and Baa3 or better by
Moody's.
"Level V Status": exists at any date if, at such date, none of Level I
Status, Level II Status, Level III Status or Level IV Status exists.
"Lien": with respect to any asset. any mortgage, pledge, security
interest, lien, charge or other encumbrance whatsoever.
"Loan": any. US$ Loan or Local Currency Loan.
"Local Currency": Dollars and any currency other than Dollars as to which
an Exchange Rate may be calculated.
"Local Currency Facility": any credit facility designated as a "Local
Currency Facility" pursuant to a Local Currency Facility Addendum and
providing for borrowings in a Local Currency.
"Local Currency Facility Addendum": a Local Currency Facility Addendum
received by the Administrative Agent substantially in the form of Exhibit F and
conforming to the requirements of Section 3.
"Local Currency Facility Maximum Borrowing Amount": as defined in Section
3.1(b).
"Local Currency Facility Stated Maximum Borrowing Amount": the stated
amount of any Local Currency Facility Maximum Borrowing Amount, without giving
effect to any reductions thereof effected pursuant to Section 3.2(c) or (d).
"Local Currency Lender": any Lender (or, if applicable, any affiliate,
branch or agency thereof) party to a Local Currency Facility.
"Local Currency Lender Maximum Borrowing Amount": as defined in Section
3.1(b).
13
"Local Currency Lender Stated Maximum Borrowing Amount": the stated
amount of any Local Currency Lender Maximum Borrowing Amount, without giving
effect to any reductions thereof pursuant to Section 3.2(c) or (d).
"Local Currency Loan": any loan made pursuant to a Local Currency
Facility.
"Local Currency Loans (US$ Equivalent)": the US$ Equivalent of the
relevant Local Currency Loans.
"Margin Stock": as defined under Regulation U.
"Material Adverse Effect": a material adverse effect on (a) the financial
condition of IBM and the Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or the rights or remedies of the Administrative
Agent and the Lenders hereunder.
"Maximum Subsidiary Borrowing Amount": as defined in Section 5.2(d).
"Moody's": ▇▇▇▇▇'▇ Investors Service, Inc. and its successors.
"1985 Indenture": the Indenture, dated as of July 15, 1985, between IBM
and The Bank of New York (successor to ▇▇▇▇▇▇ Guaranty Trust Company of New
York), as Trustee.
"1990 Indenture": the Indenture, dated as of March 1, 1990, between IBM
and The Bank of New York, as Trustee.
"Non-Excluded Taxes": as defined in Section 2.18(a).
"Participant": as defined in Section 11.6.
"Permitted Liens": (a) pledges or deposits made to secure obligations of
IBM or a Restricted Subsidiary under workmen's compensation laws or similar
legislation; (b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's, vendors', repairmen's or other like Liens incurred in the
ordinary course of business; (c) governmental (Federal, state or municipal)
Liens arising out of contracts for the purchase of products of IBM or a
Restricted Subsidiary, and deposits or pledges to obtain the release of any of
the foregoing Liens; (d) Liens created by or resulting from any litigation or
legal proceeding that is currently being contested in good faith by appropriate
proceedings; (e) leases made or existing on Principal Property entered into in
the ordinary course of business by IBM or a Restricted Subsidiary; (f)
landlords' Liens under leases of Principal Property to which IBM or a Restricted
Subsidiary is a party; (g) zoning restrictions, easements, licenses or
restrictions on the use of Principal Property or minor irregularities in the
title thereto that in any such case do not interfere materially with the use of
such Principal Property by IBM or any Restricted Subsidiary; (h) deposits in
connection with bids, tenders or contracts (other than for
14
the payment of money) to which IBM or any Restricted Subsidiary is a party; (i)
deposits to secure public or statutory obligations of IBM or any Restricted
Subsidiary; (j) deposits in connection with obtaining or maintaining
self-insurance or to obtain the benefits of any law, regulation or arrangement
pertaining to unemployment insurance, old age pensions, social security or
similar matters; (k) deposits of cash or obligations of the United States of
America to secure surety, appeal or customs bonds to which IBM or any Restricted
Subsidiary is a party; and (1) Liens for taxes or assessments or governmental
charges or levies not yet due or delinquent, or which can thereafter be paid
without penalty, or which are being contested in good faith by appropriate
proceedings.
"Person": an individual, partnership, corporation, business trust, joint
stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Principal Property": any land, land improvements, buildings and
associated factory, laboratory and office equipment (excluding all products
marketed by IBM or any Subsidiary) constituting a manufacturing facility,
development facility, warehouse facility, service facility or office facility
(including any portion thereof), which facility (a) is owned by or leased to IBM
or any Restricted Subsidiary, (b) is located within the United States, and (c)
has an acquisition cost plus capitalized improvements in excess of 0.15% of
Consolidated Net Tangible Assets as of the date of such determination, other
than (i) any such facility, or portion thereof, which has been financed by
obligations issued by or on behalf of a state, a Territory or a possession of
the United States, or any political subdivision of any of the foregoing, or the
District of Columbia, the interest on which is, or at the time of issuance of
such obligations was determined by counsel to be, excludable from the gross
income of the holders thereof (other than a "substantial user" of such facility
or a "related person" as those terms were used in Section 147 of the Code)
pursuant to the provisions of Section 103 and related Sections of the Code (or
any similar provisions hereafter enacted) as in effect at the time of issuance
of such obligations, (ii) any such facility which the Board of Directors of IBM,
or a duly authorized committee thereof, may by resolution declare is not of
material importance to IBM and the Restricted Subsidiaries, taken as a whole
(provided that IBM has delivered written notice of such declaration to the
Administrative Agent), and (iii) any such facility, or portion thereof, owned or
leased jointly or in common with one or more Persons other than IBM and any
Subsidiary and in which the interest of IBM and all Subsidiaries does not exceed
50%.
"Purchasing Lender": as defined in Section 11.8(a).
"Reference Lenders": Chemical Bank Credit Suisse and ▇▇▇▇▇▇ Guaranty
Trust Company of New York.
"Register": as defined in Section 11.9(a).
15
"Regulation G": Regulation G of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
"Regulation T": Regulation T of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
"Regulation U": Regulation U of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
"Regulation X": Regulation X of the Board as from time to time in effect
and all official rulings and interpretations thereunder or thereof.
"Required Lenders": at any date, the holders of 51% of the aggregate
Revolving Credit Commitments, or, if the Revolving Credit Commitments have been
terminated or for the purposes of determining whether to accelerate the Loans
pursuant to Section 8, of the aggregate unpaid principal amount of the Loans.
"Requirement of Law": as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person,
and any law, treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or assets or to which such Person or any
of its property or assets is subject.
"Reset Date": as defined in Section 3.2(a).
"Responsible Officer": the Chief Executive Officer, the Chief Financial
Officer, the Vice President and Treasurer, the Vice President and Controller,
any Assistant Controller and any Assistant Treasurer of IBM.
"Restricted Securities": any capital stock or Indebtedness of any
Restricted Subsidiary.
"Restricted Subsidiary": (a) any Subsidiary (i) which has substantially
all its property within the United States of America, (ii) which owns or is
a lessee of any property that would be a Principal Property but for clause (a)
of the definition of such term contained in this Section 1.1, and (iii) in which
the investment of IBM and all other Subsidiaries exceeds 0.15% of Consolidated
Net Tangible Assets as of the date of such determination; provided, however,
that the term "Restricted Subsidiary" shall not include (A) any Subsidiary (x)
primarily engaged in the business of purchasing, holding, collecting, servicing
or otherwise dealing in and with installment sales contracts, leases, trust
receipts, mortgages, commercial paper or other financing instruments, and any
collateral or agreements relating thereto, including in the business,
individually or through partnerships, of financing (whether through long- or
short-term borrowings, pledges, discounts or otherwise) the sales, leasing or
other operations of IBM and the Subsidiaries or any of them, or (y) engaged in
the business
16
of financing the assets and operations of third parties, and (z) in any
case, not, except as incidental to such financing business, engaged in owning,
leasing or operating any property which but for this proviso would qualify as
Principal Property or (B) any Subsidiary acquired or organized after July 15,
1985, for the purpose of acquiring the stock or business or assets of any Person
other than IBM or any Restricted Subsidiary, whether by merger, consolidation,
acquisition of stock or assets or similar transaction analogous in purpose or
effect, so long as such Subsidiary shall not have, since such date, and does not
hereafter acquire by merger, consolidation, acquisition of stock or assets or
similar transaction analogous in purpose or effect all or any substantial part
of the business or assets of IBM or any Restricted Subsidiary; and (b) any other
Subsidiary which is hereafter designated by the Board of Directors of IBM, or a
duly authorized committee thereof, as a Restricted Subsidiary.
"Revolving Credit Borrowing Share": for any borrowing of Revolving Credit
Loans, with respect to any Lender, an amount equal to such Lender's Adjusted
Revolving Credit Commitment Percentage of the amount of such borrowing. As used
in this definition, "Adjusted Revolving Credit Commitment Percentage" means, as
to any Lender, at any time of determination, the percentage which such Lender's
Available Revolving Credit Commitment then constitutes of the aggregate
Available Revolving Credit Commitments of all Lenders at such time.
"Revolving Credit Commitment": as to any Lender, the obligation of such
Lender to make Revolving Credit Loans to the Borrowers hereunder in an aggregate
principal amount at any one time outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule 1.1A, as such amount may be changed from
time to time in accordance with the provisions of this Agreement.
"Revolving Credit Commitment Period": the period from and including the
date hereof to but not including the Termination Date or such earlier date on
which the Revolving Credit Commitments shall terminate as provided herein.
"Revolving Credit Loans": as defined in Section 2.1.
"S&P": Standard & Poor's Corporation and its successors.
"Sale and Leaseback Transaction": any arrangement with any Person
providing for the leasing by IBM or any Restricted Subsidiary of any
Principal Property (whether such Principal Property is now owned or hereafter
acquired) that has been or is to be sold or transferred by IBM or such
Restricted Subsidiary to such Person, other than (a) temporary leases for a
term, including renewals at the option of the lessee, of not more than three
years; (b) leases between IBM and a Restricted Subsidiary or between Restricted
Subsidiaries; and (c) leases of Principal Property executed by the time of, or
within 180 days after the latest of, the acquisition, the completion of
construction or improvement (including any improvements on property which will
result in such property becoming Principal Property), or the commencement of
commercial operation of such Principal Property.
17
"SEC': the Securities and Exchange Commission and any successor agency.
"Secured Debt": (a) Debt of IBM or a Restricted Subsidiary which is
secured by any Lien other than a Permitted Lien upon any Principal Property
or Restricted Securities and (b) Indebtedness of IBM or a Restricted Subsidiary
in respect of any conditional sale or other title retention agreement covering
Principal Property or Restricted Securities; but "Secured Debt" shall not
include any of the following:
(i) Debt of IBM and the Restricted Subsidiaries outstanding on July 15,
1985, secured by then existing Liens upon, or incurred in connection with
conditional sales agreements or other title retention agreements with respect
to, Principal Property or Restricted Securities;
(ii) Debt of IBM or a Restricted Subsidiary secured by (A) purchase
money Liens upon Principal Property or Restricted Securities acquired after
July 15, 1985, or (B) Liens placed on Principal Property after July 15, 1985,
during construction or improvement thereof (including any improvements on
property which resulted or will result in such property becoming Principal
Property) or placed thereon within 180 days after the later of acquisition,
completion of construction or improvement or the commencement of
commercial operation of such Principal Property or improvement, or placed on
Restricted Securities acquired after July 15, 1985, or (C) conditional sale
agreements or other title retention agreements with respect to any Principal
Property or Restricted Securities acquired after July 15, 1985, if (in each case
referred to in this subparagraph (ii)) (x) such Lien or agreement secures all or
any part of the Debt incurred for the purpose of financing all or any part of
the purchase price or cost of construction of such Principal Property or
improvement or Restricted Securities and (y) such Lien or agreement does not
extend to any Principal Property or Restricted Securities other than the
Principal Property or Restricted Securities so acquired or the Principal
Property, or portion thereof, on which the property so constructed, or such
improvement, is located; provided, however, that the amount by which the
aggregate principal amount of Debt secured by any such Lien or agreement
exceeds the cost to IBM or such Restricted Subsidiary of the related
acquisition, construction or improvement shall be considered to be "Secured
Debt";
(iii) Debt of IBM or a Restricted Subsidiary secured by Liens on
Principal Property or Restricted Securities, which Liens exist at the time of
acquisition (by any manner whatsoever) of such Principal Property or
Restricted Securities by IBM or a Restricted Subsidiary;
(iv) Debt of Restricted Subsidiaries owing to IBM or any other
Restricted Subsidiary or Debt of IBM owing to any Restricted Subsidiary;
(v) in the case of any corporation which becomes (by any manner
whatsoever), as the case may be, a Restricted Subsidiary after the date hereof,
18
Debt secured by Liens upon, or conditional sale agreements or other title
retention agreements with respect to, its property which constitutes Principal
Property or Restricted Securities, which Liens shall have existed or exist, as
the case may be, at the time such corporation shall have become or becomes,
as the case may be, a Restricted Subsidiary;
(vi) guarantees by IBM of Secured Debt and Attributable Debt of any
Restricted Subsidiaries and guarantees by a Restricted Subsidiary of Secured
Debt and Attributable Debt of IBM and any other Restricted Subsidiaries;
(vii) Debt arising from any Sale and Leaseback Transaction;
(viii) Debt secured by Liens on property of IBM or a Restricted
Subsidiary in favor of the United States of America, any state, Territory or
possession thereof, or the District of Columbia, or any department, agency or
instrumentality or political subdivision of the United States of America or any
state, Territory or possession thereof, or the District of Columbia, or in favor
of any other country or any political subdivision thereof, if such Debt was
incurred for the purpose of financing all or any part of the purchase price or
the cost of construction of the property subject to such Liens; provided,
however, that the amount by which the aggregate principal amount of Debt
secured by any such Lien exceeds the cost to IBM or such Restricted
Subsidiary of the related acquisition or construction shall be considered to be
"Secured Debt"; and
(ix) the replacement, extension or renewal (or successive replacements,
extensions or renewals) of any Debt (in whole or in part) excluded from the
definition of "Secured Debt" by subparagraphs (i) through (viii) above;
provided, however, that no Lien securing, or conditional sale or title retention
agreement with respect to, such Debt shall extend to or cover any Principal
Property or any Restricted Securities, other than such property which secured
the Debt so replaced, extended or renewed (plus improvements on or to any
such Principal Property); provided, further, however, that to the extent that
such replacement, extension or renewal increased or increases the principal
amount of Debt secured by such Lien or was or is in a principal amount in excess
of the principal amount of Debt excluded from the definition of "Secured Debt"
by subparagraphs (i) through (viii) above, the amount of such increase or
excess shall be considered to be "Secured Debt".
In no event shall the foregoing provisions be interpreted to mean or their
operation to cause the same Debt to be included more than once in the
calculation of "Secured Debt" as that term is used herein.
"Securitization Transactions": as defined in the definition of
Indebtedness.
19
"Significant Subsidiary": any Subsidiary that would be a "significant
subsidiary" within the meaning of Rule 1-02 of the SEC's Regulation S-X.
"Status": as to IBM, the existence of Level I Status, Level II Status,
Level III Status, Level IV Status or Level V Status, as the case may be.
"Subsidiary": (a) any corporation of which IBM owns or controls more than
50% of the outstanding Voting Stock or (b) any such corporation of which such
percentage of shares of outstanding Voting Stock shall at the time be owned or
controlled by IBM or one or more Subsidiaries as defined in clause (a) or by one
or more such Subsidiaries.
"Subsidiary Borrower": a Subsidiary or Controlled Person (a) which is
designated as a Subsidiary Borrower by IBM with the consent of the
Administrative Agent, (b) which has delivered to the Administrative Agent a
Subsidiary Borrower Request and (c) whose designation as a Subsidiary
Borrower has not been terminated pursuant to Section 5.2(d).
"Subsidiary Borrower Notice and Designation": a notice and designation,
substantially in the form of Exhibit B-1, which may be delivered by IBM, and
received and consented to by the Administrative Agent, and which shall identify
a Subsidiary Borrower and the Maximum Subsidiary Borrowing Amount with respect
to such Subsidiary Borrower, and shall be accompanied by a Subsidiary Borrower
Request.
"Subsidiary Borrower Obligations": with respect to each Subsidiary
Borrower, the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans made to such
Borrower and interest accruing after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to such Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the US$ Loans and Local
Currency Loans made to such Borrower and all other obligations and liabilities
of such Borrower to the Administrative Agent or to any Lender, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any Local Currency Facility or any other document made, delivered or
given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of counsel
(including the allocated costs of internal counsel) to the Administrative Agent
or to any Lender that are required to be paid by such Borrower pursuant to this
Agreement or any Local Currency Facility) or otherwise.
"Subsidiary Borrower Request": a request, substantially in the form of
Exhibit B-2, which is received by the Administrative Agent in connection
with a Subsidiary Borrower Notice and Designation.
20
"Swing Line Borrower": IBM and, subject to the approval of the
Administrative Agent (which approval shall not be unreasonably withheld), any
Subsidiary Borrower designated as a "Swing Line Borrower" in the relevant
Subsidiary Borrower Notice and Designation.
"Swing Line Borrowing Share": for any borrowing of Swing Line Loans, with
respect to any Swing Line Lender, an amount equal to such Swing Line Lender's
Adjusted Swing Line Commitment Percentage of the amount of such borrowing.
As used in this definition:
"Adjusted Swing Line Commitment Percentage" means, as to any Swing
Line Lender, at any time of determination, the percentage which such
Swing Line Lender's Available Swing Line Commitment then constitutes
of the aggregate Available Swing Line Commitments of all Swing Line
Lenders at such time.
"Available Swing Line Commitment": as to any Swing Line Lender, at
any time of determination, an amount equal to the lesser of (a) such
Swing Line Lender's Swing Line Commitment at such time minus the
aggregate principal amount of all Swing Line Loans made by such Swing
Line Lender then outstanding and (b) such Swing Line Lender's
Revolving Credit Commitment at such time minus such Swing Line
Lender's Aggregate Outstanding Revolving Extensions of Credit at such
time.
"Swing Line Commitment": as to any Swing Line Lender, the obligation of
such Lender to make Swing Line Loans to the Swing Line Borrowers hereunder in an
aggregate principal amount at any one time outstanding not to exceed the
amount set forth opposite such Swing Line Lender's name on Schedule 1.1A, as
such amount may be changed from time to time in accordance with the provisions
of this Agreement.
"Swing Line Lender": each of the Lenders that have agreed to make Swing
Line Loans hereunder as indicated on Schedule 1.1A and each other Lender
that shall hereafter be designated as a Swing Line Lender in accordance with the
provisions of Sections 11.8 and 11.10.
"Swing Line Loan": as defined in Section 2.5(a).
"Termination Date": the fifth anniversary of the date hereof.
"Transactions": as defined in Section 4.2.
"Transferee": as defined in Section 11.9.
21
"Type": (a) as to any Revolving Credit Loan, its nature as a ABR Loan or
a Eurodollar Loan and (b) as to any Competitive Loan, its nature as a Fixed Rate
Competitive Loan or an Index Rate Competitive Loan.
"Unrefunded Swing Line Loans": as defined in Section 2.5(c).
"US$ Equivalent": on any date of determination, with respect to any
amount in any Local Currency, the equivalent in Dollars of such amount,
determined by the Administrative Agent using the Exchange Rate with respect to
such Local Currency then in effect as determined pursuant to Section 3.
"US$ Facility Overage": an amount equal to the excess of (a) the
aggregate Revolving Credit Commitments over (b) the aggregate amount of all
Local Currency Facility Maximum Borrowing Amounts (determined, if applicable,
after giving effect to any reduction therein made pursuant to Section 3.2(c)).
"US$ Loan": any Revolving Credit Loan, Swing Line Loan or Competitive
Loan made pursuant to this Agreement.
"US$ Revolving Credit Overage": with respect to any Lender, an amount
equal to the excess, if any, of (a) such Lender's Revolving Credit
Commitment over (b) the aggregate Local Currency Lender Stated Maximum Borrowing
Amounts with respect to all Local Currency Facilities to which such Lender is a
party.
"Utilization": as of any date, the quotient (expressed as a percentage)
of (a) the aggregate principal amount of US$ Loans and Local Currency Loans
CUSS Equivalent) outstanding as of such date (after giving effect to any
borrowing or payment on such date) and (b) the aggregate Revolving Credit
Commitments of all Lenders as of such date (after giving effect to any reduction
of the Revolving Credit Commitments on such date).
"Voting Stock": with respect to any Person, outstanding capital stock of
such Person ordinarily (and apart from fights exercisable upon the
occurrence of any contingency) having the power to vote in the election of
directors of such Person.
1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined
meanings when used in any instrument, certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in any instrument, certificate or other
document made or delivered pursuant hereto, accounting terms relating to
IBM and the Subsidiaries not defined in Section 1.1 and accounting terms partly
defined in Section 1.1, to the extent not defined, shah have the respective
meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any
22
particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified. References herein
do not include references to any provision of any Local Currency Facility or
Loans outstanding thereunder unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF US$ FACILITIES
2.1 Revolving Credit Commitments. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit
loans in Dollars ("Revolving Credit Loans") to any of IBM or any Subsidiary
Borrower from time to time during the Revolving Credit Commitment Period. During
the Revolving Credit Commitment Period each Borrower may use the Revolving
Credit Commitments by borrowing, prepaying the Revolving Credit Loans in whole
or in part, and reborrowing, all in accordance with the terms and conditions
hereof. Notwithstanding anything to the contrary contained in this Agreement, in
no event may Revolving Credit Loans be borrowed under this Section 2 if, after
giving effect thereto, (i) the aggregate principal amount of the US$ Loans and
Local Currency Loans (US$ Equivalent) then outstanding would exceed the
aggregate Revolving Credit Commitments then in effect, (ii) the aggregate
principal amount of US$ Loans and Local Currency Loans CUSS Equivalent) made to
any Subsidiary Borrower then outstanding would exceed the Maximum Subsidiary
Borrowing Amount with respect to such Subsidiary Borrower set forth in the most
recent Subsidiary Borrower Notice and Designation delivered by IBM pursuant to
Section 5.2(d) or (iii) the aggregate principal amount of Revolving Credit
Loans, Swing Line Loans and Local Currency Loans CUSS Equivalent) made by any
Lender then outstanding would exceed such Lender's Revolving Credit Commitment.
(b) The Revolving Credit Loans may from time to time be (i)
Eurodollar Loans, (ii) ABR Loans or (iii) a combination thereof, as
determined by the relevant Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.3, provided that no Revolving Credit Loan
shall be made as a Eurodollar Loan after the day that is one month prior to the
Termination Date.
2.2 Procedure for Revolving Credit Borrowing. Each Borrower may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day; provided that such Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to (a) 11:00 A.M., New York City time, three
Business Days prior to the requested Borrowing Date, if all or any part of the
requested Revolving Credit Loans are to be initially Eurodollar Loans or (b)
11:00 A.M. New York City lime, one Business Day prior to the requested Borrowing
Date, otherwise), specifying (i) the amount to be borrowed, (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of Eurodollar Loans, ABR
Loans or a combination thereof and (iv) if the borrowing is to be entirely or
partly of Eurodollar Loans, the respective amounts of each such Loan and the
respective lengths of the initial Interest Periods therefor.
23
Each borrowing under the Revolving Credit Commitments shah be in a minimum
aggregate principal amount of the lesser of (i) $50,000,000 or an integral
multiple of $5,000,000 in excess thereof and (ii) the aggregate amount of the
then Available Revolving Credit Commitments. Upon receipt of any such notice
from any Borrower, the Administrative Agent shall promptly notify each Lender of
the aggregate amount of such borrowing and of the amount of such Lender's
Revolving Credit Borrowing Share (if any) thereof. Each Lender will make the
amount of its Revolving Credit Borrowing Share of each such borrowing available
to the Administrative Agent for the account of the relevant Borrower at the
office of the Administrative Agent specified in Section 11.2 prior to 2:00 P.M.,
New York City time, on the Borrowing Date requested by such Borrower in funds
immediately available to the Administrative Agent. Such borrowing will then be
made available to the relevant Borrower by the Administrative Agent crediting
the account of such Borrower on the books of such office with the aggregate of
the amounts made available to the Administrative Agent by the Lenders and in
like funds as received by the Administrative Agent; provided that if on the
Borrowing Date of any Revolving Credit Loans to be made to any Borrower, any
Swing Line Loans made to such Borrower shall be then outstanding, the proceeds
of such Revolving Credit Loans shall first be applied to pay in full such Swing
Line Loans, with any remaining proceeds to be made available to such Borrower as
provided above.
2.3 Conversion and Continuation Options for Revolving Credit
Loans. (a) Each Borrower may elect from time to time to convert Eurodollar
Loans to ABR Loans, by giving the Administrative Agent at least one Business
Day's prior irrevocable notice of such election; provided that if any such
conversion of Eurodollar Loans is made other than on the last day of an Interest
Period with respect thereto, such Borrower shall pay any amounts due to the
Lenders pursuant to Section 2.19 as a result of such conversion. Each Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election. Any such notice of conversion to Eurodollar Loans shall
specify the length of the initial Interest Period or Interest Periods therefor.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each Lender thereof. All or any part of outstanding Eurodollar Loans or ABR
Loans may be convened as provided herein; provided that (i) no Loan may be
convened into a Eurodollar Loan when any Default or Event of Default has
occurred and is continuing and the Administrative Agent or the Required Lenders
have determined in its or their sole discretion that such a conversion is not
appropriate, (ii) any such conversion may only be made if, after giving effect
thereto, Section 2.4 shall not have been contravened and (iii) no Loan may be
convened into a Eurodollar Loan alter the date that is one month prior to the
Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
relevant Borrower giving at least three Business Days' prior irrevocable notice
to the Administrative Agent, in accordance with the applicable provisions of the
term "Interest Period" set forth in Section 1.1, of the length of the next
Interest Period to be applicable to such Loans; provided that no Eurodollar Loan
may be continued as such (i) when any Default or Event of Default has occurred
and is continuing and the Administrative Agent or the Required Lenders have
determined in its or their sole discretion that such a continuation is not
appropriate, (ii) if, after giving effect thereto,
24
Section 2.4 would be contravened or (iii) after the date that is one month
prior to the Termination Date and provided, further, that if such Borrower shall
fail to give any required notice as described above in this Section 2.3 or if
such continuation is not permitted pursuant to the preceding proviso such Loans
shall automatically be converted to ABR Loans on the last day of such then
expiring Interest Period.
2.4 Minimum Amounts and Maximum Number of Eurodollar Tranches.
All borrowings, optional prepayments, conversions and continuations of
Eurodollar Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections so that, after
giving effect thereto, (a) the aggregate principal amount of the Eurodollar
Loans comprising each Eurodollar Tranche shall be equal to $50,000,000 or a
whole multiple of $5,000,000 in excess thereof and (b) there shall be no more
than twenty Eurodollar Tranches outstanding at any one time.
2.5 Swing Line Loans. (a) Subject to the terms and conditions
hereof, each Swing Line Lender severally agrees to make swing line loans in
Dollars (individually, a "Swing Line Loan"; collectively, the "Swing Line
Loans") to any Swing Line Borrower from time to time during the Revolving Credit
Commitment Period in accordance with the procedures set forth in this Section
2.5; provided, that (i) the aggregate principal amount of all Swing Line Loans
shall not exceed $1,000,000,000 at any one time outstanding, (ii) the principal
amount of any borrowing of Swing Line Loans may not exceed the aggregate amount
of the Available Revolving Credit Commitments of all Lenders immediately prior
to such borrowing, (iii) in no event may Swing Line Loans be borrowed hereunder
if, after giving effect thereto, (x) the aggregate principal amount of Swing
Line Loans, Revolving Credit Loans and Local Currency Loans (US$ Equivalent)
made by any Swing Line Lender then outstanding would exceed such Swing Line
Lender's Revolving Credit Commitment, (y) the aggregate principal amount of US$
Loans and Local Currency Loans (US$ Equivalent) made to any Subsidiary Borrower
then outstanding would exceed the Maximum Subsidiary Borrowing Amount with
respect to such Subsidiary Borrower set forth in the most recent Subsidiary
Borrower Notice and Designation delivered by IBM pursuant to Section 5.2(d) or
(z) the aggregate principal amount of Swing Line Loans made by any Swing Line
Lender then outstanding would exceed the Swing Line Commitment of such Swing
Line Lender and (iv) in no event may Swing Line Loans be borrowed hereunder if
(x) the Administrative Agent shall have received notice from the Required
Lenders specifying that a Default or Event of Default shall have occurred and be
continuing and (y) such Default or Event of Default shall not have been
subsequently cured or waived. Amounts borrowed by any Swing Line Borrower under
this Section 2.5 may be repaid and, up to but excluding the Termination Date,
reborrowed. All Swing Line Loans shall at all times be ABR Loans. The relevant
Swing Line Borrower shall give the Administrative Agent irrevocable notice of
any Swing Line Loans requested hereunder (which notice must be received by the
Administrative Agent prior to 11:00 A.M., New York City time, on the requested
Borrowing Date) specifying (A) the amount to be borrowed, and (B) the requested
Borrowing Date. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Swing Line Lender of the aggregate amount of such borrowing
and of the amount of such Swing Line Lender's Swing Line Borrowing Share (if
any) thereof. Not later than 2:00 P.M., New York City time, on the Borrowing
Date specified in such notice each Swing Line Lender shall make its Swing Line
25
Borrowing Share of such Swing Line Loans available to the Administrative
Agent for the account of the relevant Swing Line Borrower at the office of the
Administrative Agent set forth in Section 11.2 in funds immediately available to
the Administrative Agent. The proceeds of such borrowing will then be made
available to the relevant Swing Line Borrower by the Administrative Agent
crediting the account of such Swing Line Borrower on the books of such office
with the aggregate of the amounts made available to the Administrative Agent by
the Swing Line Lenders and in like funds as received by the Administrative
Agent. Each borrowing pursuant to this Section 2.5 shall be in a minimum
aggregate principal amount of the lesser of (i) $20,000,000 or an integral
multiple of $5,000,000 in excess thereof and (ii) the aggregate amount of the
then Available Swing Line Commitments.
(b) Notwithstanding the occurrence of any Default or Event of
Default or noncompliance with the conditions precedent set forth in Section
5 or the minimum borrowing amounts specified in Section 2.2, if any Swing Line
Loans shall remain outstanding at 10:00 A.M., New York City time, on the seventh
Business Day following the Borrowing Date thereof and if by such time on such
seventh Business Day the Administrative Agent shall have received neither (i) a
notice of borrowing delivered by the relevant Swing Line Borrower pursuant to
Section 2.2 requesting that Revolving Credit Loans be made pursuant to Section
2.1 on the immediately succeeding Business Day in an amount at least equal to
the aggregate principal amount of such Swing Line Loans, nor (ii) any other
notice satisfactory to the Administrative Agent indicating such Swing Line
Borrower's intent to repay all such Swing Line Loans on the immediately
succeeding Business Day with funds obtained from other sources, the
Administrative Agent shall be deemed to have received a notice from such Swing
Line Borrower pursuant to Section 2.2 requesting that ABR Loans be made pursuant
to Section 2.1 on such immediately succeeding Business Day in an amount equal to
the aggregate amount of such Swing Line Loans, and the procedures set forth in
Section 2.2 shall be followed in making such ABR Loans, provided, that for the
purposes of determining each Lender's Revolving Credit Borrowing Share with
respect to such borrowing, the outstanding principal amount of Swing Line Loans
shall be deemed to be zero. The proceeds of such ABR Loans shall be applied to
repay such Swing Line Loans.
(c) If, for any reason, ABR Loans may not be, or are not, made
pursuant to paragraph (b) of this Section 2.5 to repay Swing Line Loans as
required by such paragraph, effective on the date such ABR Loans would otherwise
have been made, each Lender severally, unconditionally and irrevocably agrees
that it shall, without regard to the occurrence of any Default or Event of
Default, purchase a participating interest in such Swing Line Loans ("Unrefunded
Swing Line Loans") in an amount equal to the amount of ABR Loans which would
otherwise have been made by such Lender pursuant to paragraph (b) of this
Section 2.5. Each Lender will immediately transfer to the Administrative Agent,
in immediately available funds, the amount of its participation, and the
proceeds of such participation shall be distributed by the Administrative Agent
to each Swing Line Lender in such amount as will reduce the amount of the
participating interest retained by such Swing Line Lender in its Swing Line
Loans to the amount of the ABR Loans which were to have been made by it pursuant
to paragraph (b) of this Section 2.5. All payments in respect of Unrefunded
Swing Line Loans and participations therein shall be made in accordance with
Section 2.15.
26
2.6 Optional Prepayments of Revolving Credit Loans and Swing Line
Loans. Each Borrower may at any time and from time to time prepay the
Revolving Credit Loans and the Swing Line Loans (subject, in the case of
Eurodollar Loans, to compliance with the terms of Sections 2.4 and 2.19), in
whole or in part, without premium or penalty, upon at least one Business Day's
irrevocable notice to the Administrative Agent, specifying the date and amount
of prepayment and whether the prepayment is of Eurodollar Loans (including the
Eurodollar Tranche(s) to which such prepayment is to be applied), ABR Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each, provided, that notice of any prepayment of Swing Line Loans may be
delivered to the Administrative Agent as late as, but no later than, 12:00 Noon,
New York City time, on the date of such prepayment. Upon receipt of any such
notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with (except in the
case of ABR Loans) accrued interest to such date on the amount prepaid. Partial
prepayments of Revolving Credit Loans shall be in an aggregate principal amount
of $50,000,000 or a whole multiple of $5,000,000 in excess thereof (or, if less,
the remaining outstanding principal amount thereof). Partial prepayments of
Swing Line Loans shall be in an aggregate principal amount of $20,000,000 or a
whole multiple of $5,000,000 in excess thereof (or, if less, the remaining
outstanding principal amount thereof).
2.7 The Competitive Loans. Subject to the terms and conditions of
this Agreement, each Borrower may borrow Competitive Loans in Dollars from
time to time during the Competitive Loan Borrowing Period on any Business Day,
provided, that in no event may Competitive Loans be borrowed hereunder if, after
giving effect thereto (a) the aggregate principal amount of US$ Loans and Local
Currency Loans (US$ Equivalent) then outstanding would exceed the aggregate
amount of the Revolving Credit Commitments at such time or (b) the aggregate
principal amount of US$ Loans and Local Currency Loans (US$ Equivalent) made to
any Subsidiary Borrower then outstanding would exceed the Maximum Subsidiary
Borrowing Amount with respect to such Subsidiary Borrower set forth in the most
recent Subsidiary Borrower Notice and Designation delivered by IBM pursuant to
Section 5.2(d). Within the limits and on the conditions hereinafter set forth
with respect to Competitive Loans, each Borrower from time to time may borrow,
repay and reborrow Competitive Loans.
2.8 Procedure for Competitive Loan Borrowing. (a) The relevant
Borrower shall request Competitive Loans by delivering a Competitive Loan
Request to the Administrative Agent, not later than 12:00 Noon (New York City
time) four Business Days prior to the proposed Borrowing Date (in the case of an
Index Rate Competitive Loan Request), and not later than 10:00 A.M. (New York
City time) one Business Day prior to the proposed Borrowing Date (in the case of
a Fixed Rate Competitive Loan Request). Each Competitive Loan Request may
solicit bids for Competitive Loans in an aggregate principal amount of
$20,000,000 or an integral multiple of $5,000,000 in excess thereof and having
not more than three alternative maturity dates. The maturity date for each Fixed
Rate Competitive Loan shall be not less than 14 days nor more than 180 days
after the Borrowing Date therefor and the maturity date for each Index Rate
Competitive Loan shall be not less than one month nor more than six months after
the Borrowing Date therefor, and in any event
27
shall be not later than the Termination Date. The Administrative Agent
shall notify each Competitive Loan Lender promptly by facsimile transmission of
the contents of each Competitive Loan Request received by the Administrative
Agent.
(b) In the case of an Index Rate Competitive Loan Request, upon
receipt of notice from the Administrative Agent of the contents of such
Competitive Loan Request, each Competitive Loan Lender may elect, in its sole
discretion, to offer irrevocably, subject to Section 5, to make one or more
Competitive Loans at the Applicable Index Rate plus or minus a margin determined
by such Competitive Loan Lender in its sole discretion for each such Competitive
Loan. Any such irrevocable offer shall be made by delivering a Competitive Loan
Offer to the Administrative Agent, before 10:30 A.M. (New York City time) on the
day that is three Business Days before the proposed Borrowing Date, setting
forth:
(i) the maximum amount of Competitive Loans for each maturity
date and the aggregate maximum amount of Competitive Loans for all maturity
dates which such Competitive Loan Lender would be willing to make (which amounts
may, subject to Section 2.7, exceed such Competitive Loan Lender's Revolving
Credit Commitment); and
(ii) the margin above or below the Applicable Index Rate at which
such Competitive Loan Lender is willing to make each such Competitive Loan.
The Administrative Agent shall advise the relevant Borrower before 11:00
A.M. (New York City time) on the date which is three Business Days before the
proposed Borrowing Date of the contents of each such Competitive Loan Offer
received by it. If the Administrative Agent, in its capacity as a Competitive
Loan Lender, shall elect, in its sole discretion, to make any such Competitive
Loan Offer, it shall advise the relevant Borrower of the contents of its
Competitive Loan Offer before 10:15 A.M. (New York City time) on the date which
is three Business Days before the proposed Borrowing Date.
(c) In the case of a Fixed Rate Competitive Loan Request, upon
receipt of notice from the Administrative Agent of the contents of such
Competitive Loan Request, each Competitive Loan Lender may elect, in its sole
discretion, to offer irrevocably, subject to Section 5, to make one or more
Competitive Loans at a rate of interest determined by such Competitive Loan
Lender in its sole discretion for each such Competitive Loan. Any such
irrevocable offer shall be made by delivering a Competitive Loan Offer to the
Administrative Agent before 9:30 A.M. (New York City time) on the proposed
Borrowing Date, setting forth:
(i) the maximum amount of Competitive Loans for each maturity
date, and the aggregate maximum amount for all maturity dates, which such
Competitive Loan Lender would be willing to make (which amounts may, subject to
Section 2.7, exceed such Competitive Loan Lender's Revolving Credit Commitment);
and
(ii) the rate of interest at which such Competitive Loan Lender
is willing to make each such Competitive Loan.
28
The Administrative Agent shall advise the relevant Borrower before 10:00
A.M. (New York City time) on the proposed Borrowing Date of the contents of each
such Competitive Loan Offer received by it. If the Administrative Agent, in its
capacity as a Competitive Loan Lender, shall elect, in its sole discretion, to
make any such Competitive Loan Offer, it shall advise the relevant Borrower of
the contents of its Competitive Loan Offer before 9:15 A.M. (New York City time)
on the proposed Borrowing Date.
(d) Before 11:30 A.M. (New York City time) three Business Days
before the proposed Borrowing Date (in the case of Index Rate Competitive
Loans) and before 10:30 A.M. (New York City time) on the proposed Borrowing Date
(in the case of Fixed Rate Competitive Loans), the relevant Borrower, in its
absolute discretion, shall:
(i) cancel such Competitive Loan Request by giving the
Administrative Agent telephone notice to that effect, or
(ii) by giving telephone notice to the Administrative Agent
(immediately confirmed by delivery to the Administrative Agent of a
Competitive Loan Confirmation in writing or by facsimile transmission) (1)
subject to the provisions of Section 2.8(e), accept one or more of the
offers made by any Competitive Loan Lender or Competitive Loan Lenders
pursuant to Section 2.8(b) or Section 2.8(c), as the case may be, of the
amount of Competitive Loans for each relevant maturity date and (2) reject
any remaining offers made by Competitive Loan Lenders pursuant to Section
2.8(b) or Section 2.8(c), as the case may be.
(e) Each Borrower's acceptance of Competitive Loans in response
to any Competitive Loan Request shall be subject to the following
limitations:
(i) The amount of Competitive Loans accepted for each maturity
date specified by any Competitive Loan Lender in its Competitive Loan Offer
shall not exceed the maximum amount for such maturity date specified in
such Competitive Loan Offer;
(ii) the aggregate amount of Competitive Loans accepted for all
maturity dates specified by any Competitive Loan Lender in its Competitive
Loan Offer shall not exceed the aggregate maximum amount specified in such
Competitive Loan Offer for all such maturity dates;
(iii) a Borrower may not accept offers for Competitive Loans for
any maturity date in an aggregate principal amount in excess of the maximum
principal amount requested in the related Competitive Loan Request; and
(iv) if a Borrower accepts any of such offers, (1) it must accept
such offers based solely upon pricing for such relevant maturity date
(including any amounts which shall be payable to the relevant Competitive
Loan Lender in respect of the relevant Competitive Loans pursuant to
Section 2.17) and upon no other criteria whatsoever and (2) if (x) two or
more Competitive Loan Lenders submit offers for any
29
maturity date at identical pricing and such Borrower accepts any of such
offers but does not wish to (or by reason of the limitations set forth in
Section 2.7 or in this Section 2.8, cannot) borrow the total amount offered
by such Competitive Loan Lenders with such identical pricing, such Borrower
shall accept offers from all of such Competitive Loan Lenders in amounts
allocated among them pro rata according to the amounts offered by such
Competitive Loan Lenders (or as nearly pro rata as shall be practicable
after giving effect to the requirement that Competitive Loans made by a
Competitive Loan Lender on a Borrowing Date for each relevant maturity date
shall be in a principal amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof) or (y) a Competitive Loan Lender submits
offers for multiple maturity dates specifying a maximum aggregate principal
amount for all maturity dates, and the relevant Borrower accepts offers
from such Competitive Loan Lender for more than one maturity date, then
such Borrower shall instruct the Administrative Agent how to apportion such
Borrower's acceptances among such offers for different maturity dates to
the extent, if any, necessary to provide for acceptance of offers from such
Competitive Loan Lender equal to but not exceeding such specified maximum
aggregate amount.
(f) If the relevant Borrower notifies the Administrative Agent
that a Competitive Loan Request is cancelled pursuant to Section 2.8(d)(i), the
Administrative Agent shall give prompt telephone notice thereof to the
Competitive Loan Lenders.
(g) If the relevant Borrower accepts pursuant to Section 2.8(d)
(ii) one or more of the offers made by any one or more Competitive Loan
Lenders, the Administrative Agent promptly shall notify each Competitive Loan
Lender which has made such a Competitive Loan Offer of (i) the aggregate amount
of such Competitive Loans to be made on such Borrowing Date for each maturity
date, (ii) the acceptance or rejection of any offers to make such Competitive
Loans made by such Competitive Loan Lender and (iii) in the case of Index Rate
Competitive Loans, the Applicable Index Rate in respect thereof. Before 12:00
Noon (New York City time) on the Borrowing Date specified in the applicable
Competitive Loan Request, each Competitive Loan Lender whose Competitive Loan
Offer has been accepted shall make available to the Administrative Agent at its
office set forth in Section 11.2 the amount of Competitive Loans to be made by
such Competitive Loan Lender, in immediately available funds. The Administrative
Agent will make such funds available to the relevant Borrower as soon as
practicable on such date at the Administrative Agent's aforesaid address. As
soon as practicable after each Borrowing Date, the Administrative Agent shall
notify each Competitive Loan Lender of the aggregate amount of Competitive Loans
advanced on such Borrowing Date, the respective maturity dates thereof and the
respective interest rates applicable thereto.
(h) Nothing in Section 2.7 or this Section 2.8 shall be construed
as a right of first offer in favor of the Lenders or to otherwise limit the
ability of any Borrower to request and accept credit facilities from any
Person (including any of the Lenders).
2.9 Repayment of US$ Loans; Evidence of Debt. (a) Each Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the relevant
30
Lenders (i) on the Termination Date (or such earlier date as the US$ Loans
become due and payable pursuant to Section 2.6 or Section 8), the unpaid
principal amount of each US$ Loan (including, without limitation, each Swing
Line Loan) made to it by each such Lender and (ii) on the Competitive Loan
Maturity Date in respect thereof, the unpaid principal amount of each
Competitive Loan made to it by each such Lender. No Borrower shall have the
right to prepay any principal amount of any Competitive Loan. Each Borrower
hereby further agrees to pay interest in immediately available funds at the
office of the Administrative Agent on the unpaid principal amount of the US$
Loans from time to time from the date hereof until payment in full thereof at
the rates per annum, and on the dates, set forth in Section 2.10.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of each
Borrower to the appropriate lending office of such Lender resulting from each
US$ Loan made by such lending office of such Lender from time to time, including
the amounts of principal and interest payable and paid to such lending office of
such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant
to Section 11.9(a), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount of each US$ Loan
made hereunder, whether such US$ Loan is a Revolving Credit Loan, a Swing Line
Loan or a Competitive Loan, the Type of each US$ Loan made and the Interest
Period or maturity date (if any) applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from each
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder from each Borrower and each Lender's share
thereof.
(d) The entries made in the Register and accounts maintained
pursuant to paragraphs (b) and (c) of this Section 2.9 shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of each Borrower therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
account, such Register or such subaccount, as applicable, or any error therein,
shall not in any manner affect the obligation of any Borrower to repay (with
applicable interest) the US$ Loans made to such Borrower by such Lender in
accordance with the terms of this Agreement.
2.10 Interest Rates and Payment Dates. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
Interest Period plus the Applicable Eurodollar Margin. Interest in respect of
Eurodollar Loans shall accrue from and including the first day of an Interest
Period to but excluding the last day of such Interest Period.
(b) Each ABR Loan shall bear interest at a rate per annum equal
to the ABR.
(c) Each Competitive Loan shall bear interest for each day from
the applicable Borrowing Date to (but excluding) the applicable Competitive
Loan Maturity Date at the rate of interest specified in the Competitive Loan
Offer accepted by the relevant Borrower in connection with such Competitive
Loan.
31
(d) If all or a portion of (i) the principal amount of any Loan,
(ii) any interest payable thereon or (iii) any facility fee or other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is (x) in the case of overdue principal (except as otherwise
provided in clause (y) below), the rate that would otherwise be applicable
thereto pursuant to the foregoing provisions of this Section 2.10 plus 2% or (y)
in the case of principal of any Competitive Loan which remains overdue past the
stated maturity date thereof, or any overdue interest, facility fee or other
amount, the rate described in Section 2.10(b) plus 2%, in each case from the
date of such non-payment to (but excluding) the date on which such amount is
paid in full (as well after as before judgment).
(e) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to Section 2.10(d) shall be
payable from time to time on demand.
2.11 Fees. (a) IBM agrees to pay to the Administrative Agent, for
the account of each Lender, a facility fee for each day during the
Revolving Credit Commitment Period. Such fee shall be payable quarterly in
arrears on the last day of each March, June, September and December and on the
Termination Date and shall be computed for each day during such period at a rate
per annum equal to the Facility Fee Rate in effect on such day on the aggregate
amount of the Revolving Credit Commitments in effect on such day (or, if the
Revolving Credit Commitments shall have been terminated, on the average
aggregate outstanding principal amount of the Loans on such day).
(b) IBM shall pay to the Administrative Agent, for its own
account, and, to the extent mutually agreed upon by the Administrative
Agent and the Lenders, for the account of the Lenders, the fees in the amounts
and on the dates previously agreed to in writing by IBM.
2.12 Computation of Interest and Fees. (a) Facility fees and
interest (other than interest calculated on the basis of the Prime Rate)
shall be calculated on the basis of a 360-day year for the actual days elapsed.
Interest calculated on the basis of the Prime Rate shall be calculated on the
basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable notify the
relevant Borrower and the Lenders of each determination of a Eurodollar Rate.
Any change in the interest rate on a US$ Loan resulting from a change in the ABR
shall become effective as of the opening of business on the day on which such
change becomes effective. The Administrative Agent shall as soon as practicable
notify the relevant Borrower and the Lenders of the effective date and the
amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the relevant Borrower, deliver to
such Borrower a statement showing the quotations furnished by the Reference
Lenders (if any) used by the Administrative Agent in determining any interest
rate with respect to a Eurodollar Loan or an Index Rate Competitive Loan.
32
(c) If any Reference Lender shall for any reason no longer have a
Revolving Credit Commitment, such Reference Lender shall thereupon cease to
be a Reference Lender, and if, as a result, there shall only be one Reference
Lender remaining, the Administrative Agent (with the consent of IBM) shall, by
notice to the Borrowers and the Lenders, designate another Lender as a Reference
Lender so that there shall at all times be at least two Reference Lenders.
(d) Each Reference Lender shall use its best efforts to furnish
quotations of rates to the Administrative Agent on a timely basis as
contemplated hereby. If any of the Reference Lenders shall be unable or shall
otherwise fail to supply such rates to the Administrative Agent upon its
request, the rate of interest shall, subject to the provisions of Section 2.14,
be determined on the basis of the quotations of the remaining Reference Lenders
or Reference Lender.
2. 13 Termination or Reduction of Revolving Credit Commitments.
IBM shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or, from
time to time, to reduce the amount of the Revolving Credit Commitments; provided
that no such termination or reduction of Revolving Credit Commitments shall be
permitted if, after giving effect thereto and to any repayments of the Loans
made on the effective date thereof, (a) the aggregate principal amount of the
US$ Loans and Local Currency Loans (US$ Equivalent) then outstanding would
exceed the aggregate Revolving Credit Commitments then in effect or (b) the
aggregate principal amount of Revolving Credit Loans, Swing Line Loans and Local
Currency Loans (US$ Equivalent) made by any Lender then outstanding would exceed
such Lender's Revolving Credit Commitment. Any such reduction shall be in an
amount equal to $50,000,000 or a whole multiple of $5,000,000 in excess thereof
and shall reduce permanently the Revolving Credit Commitments then in effect.
2.14 Inability to Determine Interest Rate. If prior to the first
day of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrowers) that, by
reason of circumstances affecting the relevant market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Rate for such Interest
Period, or
(b) the Administrative Agent shall have received notice from the
Required Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or maintaining
their affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof
to the Borrowers and the Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans and (y) any US$ Loans that,
on the first day of such Interest Period, were to have been
33
converted to or continued as Eurodollar Loans shall be continued as or
converted to ABR Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall any Borrower have the right to convert ABR Loans to Eurodollar
Loans.
2.15 Pro Rata Treatment and Payments. (a) Each reduction of the
Revolving Credit Commitments of the Lenders shall be made pro rata
according to the Lenders' respective Commitment Percentages. Each payment
(including each prepayment other than any prepayment made pursuant to Section
3.2(f)) by a Borrower on account of principal of and interest on Revolving
Credit Loans which are ABR Loans shall be made pro rata according to the
respective outstanding principal amounts of such ABR Loans then held by the
Lenders. Each payment (including each prepayment other than any prepayment made
pursuant to Section 3.2(f)) by a Borrower on account of principal of and
interest on Eurodollar Loans designated by a Borrower to be applied to a
particular Eurodollar Tranche shall be made pro rata according to the respective
outstanding principal amounts of such Eurodollar Loans then held by the Lenders.
Each payment (including each prepayment other than any prepayment made pursuant
to Section 3.2(f)) by any Swing Line Borrower on account of principal of and
interest on Swing Line Loans shall be made pro rata according to the respective
outstanding principal amounts of the Swing Line Loans or participating
interests therein, as the case may be, then held by the relevant Lenders. All
payments (including prepayments) to be made by a Borrower hereunder, whether on
account of principal, interest, fees or otherwise, shall be made without setoff
or counterclaim and shall be made prior to 12:00 Noon, New York City time, on
the due date thereof to the Administrative Agent, for the account of the
Lenders, at the Administrative Agent's office specified in Section 11.2, in
Dollars and in immediately available funds. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received. If any payment hereunder (other than payments on Eurodollar Loans or
Index Rate Competitive Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
Eurodollar Loan or an Index Rate Competitive Loan becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day (and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension) unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make
the amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the relevant
Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender
34
makes such amount immediately available to the Administrative Agent. A
certificate of the Administrative Agent submitted to any Lender with respect to
any amounts owing under this Section 2.15(b) shall be conclusive in the absence
of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans hereunder, on demand, from the relevant Borrower.
2.16 Illegality. Notwithstanding any other provision herein, if
the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain Eurodollar Loans or Index Rate Competitive Loans as
contemplated by this Agreement, (a) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert ABR Loans
to Eurodollar Loans shall forthwith be cancelled, (b) such Lender's Revolving
Credit Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law and (c) the relevant Borrower shall, with respect to any Index
Rate Competitive Loan of such Lender, take such action as such Lender may
reasonably request.
2.17 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law applicable to any Lender or in the interpretation or
application thereof or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof (or, in the case of
Index Rate Competitive Loans, made subsequent to acceptance by a Borrower of
such Loan):
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement or any Eurodollar Loan or Index Rate Competitive
Loan made by it, or change the basis of taxation of payments to such Lender in
respect thereof (except for taxes covered by Section 2.18 and net income taxes
and franchise taxes imposed in lieu of income taxes);
(ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or
other liabilities in or for the account of, advances, loans or other extensions
of credit by, or any other acquisition of funds by, any office of such Lender
which is not otherwise included pursuant to Section 2.17(c) in the determination
of the Eurodollar Rate or the Applicable Index Rate, as the case may be; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such
Lender, by an amount which such Lender deems to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or Index Rate
Competitive Loans, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the relevant Borrower shall
35
promptly pay such Lender, upon its demand, any additional amounts necessary
to compensate such Lender for such increased cost or reduced amount receivable.
If any Lender becomes entitled to claim any additional amounts pursuant to this
Section 2.17(a), it shall promptly notify the relevant Borrower, through the
Administrative Agent, of the event by reason of which it has become so entitled.
Notwithstanding the foregoing, no Lender shall be entitled to request
compensation under this Section 2.17(a) with respect to any Index Rate
Competitive Loan if it shall have obtained actual knowledge of the change giving
rise to such request at the time of submission of such Lender's Competitive Loan
Offer pursuant to which such Competitive Loan shall have been made, unless
notice of such Lender's entitlement to such compensation shall have been
furnished to the relevant Borrower at or prior to such time.
(b) If any Lender shall have determined that any change in any
Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority, in each case made
subsequent to the date hereof, does or shall have the effect of reducing the
rate of return on such Lender's or such corporation's capital as a consequence
of its obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such application or compliance (taking
into consideration such Lender's or such corporation's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, after submission by such Lender to the relevant Borrower (with a
copy to the Administrative Agent) of a written request therefor, such Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction.
(c) Each Borrower agrees to pay to each Lender which requests
compensation under this Section 2.17(c) (by notice to such Borrower), on
the last day of each Interest Period with respect to any Eurodollar Loan made by
such Lender or on the Competitive Loan Maturity Date with respect to any Index
Rate Competitive Loan made by such Lender, as the case may be, so long as such
Lender shall be required to maintain reserves against "Eurocurrency liabilities"
under Regulation D of the Board (or, so long as such Lender may be required by
the Board or by any other Governmental Authority to maintain reserves against
any other category of liabilities which includes deposits by reference to which
the interest rate on Eurodollar Loans or Index Rate Competitive Loans is
determined as provided in this Agreement or against any category of extensions
of credit or other assets of such Lender which includes any Eurodollar Loans or
Index Rate Competitive Loans), an additional amount (determined by such Lender
and notified to the relevant Borrower) representing such Lender's calculation
or, if an accurate calculation is impracticable, reasonable estimate (using such
reasonable means of allocation as such Lender shall determine) of the actual
costs, if any, incurred by such Lender during such Interest Period or during the
period such Index Rate Competitive Loan was outstanding (a "Competitive Loan
Period"), as the case may be, as a result of the applicability of the foregoing
reserves to such Eurodollar Loans or Index Rate Competitive Loans, which amount
in any event shall not exceed the product of the following for each day of such
Interest Period or Competitive Loan Period:
36
(i) the principal amount of the Eurodollar Loans or Index Rate
Competitive Loans, as the case may be, made by such Lender to which
such Interest Period or Competitive Loan Period relates and outstanding
on such day; and
(ii) the difference between (x) a fraction the numerator of which
is the Eurodollar Rate or the Applicable Index Rate, as the case may be
(expressed as a decimal) applicable to such Eurodollar Loan or Index
Rate Competitive Loan, and the denominator of which is one minus the
maximum rate (expressed as a decimal) at which such reserve
requirements are imposed by the Board or other Governmental
Authority on such date minus (y) such numerator; and
(iii) a fraction the numerator of which is one and the
denominator of which is 360.
Any Lender which gives notice under this Section 2.17(c) shall promptly
withdraw such notice (by written notice of withdrawal given to the
Administrative Agent and the relevant Borrowers) in the event such Lender is no
longer required to maintain such reserves or the circumstances giving rise to
such notice shall otherwise cease to exist. Notwithstanding the foregoing, no
Lender shall be entitled to request compensation under this Section 2.17(c) with
respect to any Index Rate Competitive Loan if it shall have obtained actual
knowledge of the change giving rise to such request at the time of submission of
such Lender's Competitive Loan Offer pursuant to which such Competitive Loan
shall have been made, unless notice of such Lender's entitlement to such
compensation shall have been furnished to the relevant Borrower at or prior to
such time.
(d) A certificate as to any additional amounts payable pursuant
to this Section 2.17 submitted by any Lender, through the Administrative
Agent, to the relevant Borrower shall specify in reasonable detail the basis for
the request for compensation of such additional amounts and the method of
computation thereof and shall be conclusive in the absence of manifest error.
Subject to the provisions of the next succeeding sentence, the relevant Borrower
shall (except as otherwise provided in Section 2.17(c)) pay each Lender the
amount shown as due on any such certificate delivered by it within 30 days after
receipt thereof. Notwithstanding any other provision of this Section 2.17, each
Lender shall be entitled to compensation under this Section 2.17 for only such
costs as are incurred or reductions as are suffered as to which a certificate
has been delivered in accordance with the terms of this paragraph (d) within 180
days after such Lender obtained actual knowledge of such costs or reductions.
Each Lender agrees to use its best efforts to notify the relevant Borrower as
promptly as practicable after obtaining knowledge of any such costs or
reductions. The obligations of the Borrowers pursuant to this Section 2.17 shall
survive the termination of this Agreement and the payment of the US$ Loans and
all other amounts payable hereunder.
2.18 Taxes. (a) Unless otherwise required by applicable law, all
payments made by the Borrowers under this Agreement shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future income, stamp or other
37
taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Administrative Agent, any Lender or
any Transferee as a result of a present or former connection between the
Administrative Agent or such Lender (or Transferee) and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Administrative Agent or such Lender (or Transferee) having executed,
delivered or performed its obligations or received a payment under, or enforced,
this Agreement). If any such non- excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non- Excluded Taxes") are required
to be withheld from any amounts payable to the Administrative Agent or any
Lender (or Transferee) hereunder, the amounts so payable to the Administrative
Agent or such Lender (or Transferee) shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (or Transferee) (after
payment of all Non-Excluded Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement;
provided, however, that no Borrower shall be required to increase any such
amounts payable to any Lender (or Transferee) that is not organized under the
laws of the United States of America or a state thereof if such Lender (or
Transferee) fails to comply with the requirements of Section 2.18(b); and
provided further, however, that no Transferee shall be entitled to receive
any greater payment under this paragraph, (a) than the transferor would have
been entitled to receive with respect to the right assigned, participated or
otherwise transferred. Whenever any Non-Excluded Taxes are payable by any
Borrower, as promptly as possible thereafter such Borrower shall send to the
Administrative Agent for its own account or for the account of such Lender
(or Transferee), as the case may be, a certified copy of an original official
receipt received by such Borrower showing payment thereof. If any Borrower
fails to pay any Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts
or other required documentary evidence, such Borrower shall indemnify the
Administrative Agent and the Lenders (or Transferees) for any incremental
taxes, interest or penalties that may become payable by the Administrative
Agent or any Lender (or Transferee) as a result of any such failure.
The obligations contained in this Section 2.18 shall survive the
termination of this Agreement and the payment of all other amounts
payable hereunder.
(b) Each Lender (or Transferee) that is not incorporated under
the laws of the United States of America or a state thereof shall:
(i) on the date it becomes a Lender or Transferee, deliver to IBM
and the Administrative Agent (A) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor applicable form,
as the case may be, and shall certify that it is entitled to receive
payments under this Agreement without deduction or withholding (or at a
reduced rate of deduction or withholding) of any United States Federal
income taxes and (B) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be and shall certify that it is
entitled to an exemption from United States backup withholding tax;
38
(ii) deliver to IBM and the Administrative Agent two further
copies of any such form or certification on or before the date that any
such form or certification described above expires or becomes obsolete and
after the occurrence of any event requiring a change in the most recent
form previously delivered by it to IBM; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by IBM or the
Administrative Agent;
except that the forms and certificates described in clauses (ii) and (iii)
above shall not be required if any change in Requirement of Law has occurred
prior to the date on which any such delivery would otherwise be required which
renders all such forms inapplicable or which would prevent such Lender (or
Transferee) from duly completing and delivering any such form with respect to it
and such Lender (or Transferee) so advises IBM and the Administrative Agent. If
the form provided by a Lender at the time such Lender first becomes a party to
this Agreement indicates a United States federal withholding tax rate on any
payments under this Agreement in excess of zero, then withholding tax at such
rate or any subsequent lower rate shall not be treated as a "Non-Excluded Tax"
as defined in Section 2.18(a) at such time or any time thereafter with respect
to such Lender or any Transferee of such Lender and the relevant Borrower or the
Administrative Agent shall withhold such tax from payments to such Lender or
Transferee, as the case may be, at the applicable rate.
(c) Each Person that shall become a Participant pursuant to
Section 11.6, a Competitive Loan Assignee pursuant to Section 11.7, or a
Lender pursuant to Section 11.8, including for this purpose a Lender that
arranges a US$ Loan through or transfers a US$ Loan to a different branch of
such Lender, shall, upon the effectiveness of the related designation or
transfer, be required to provide all of the forms and statements required
pursuant to this Section 2.18, provided that in the case of a Participant such
Participant shall furnish all such required forms and statements to the Lender
from which the related participation shall have been purchased.
(d) If any Lender (or Transferee) or the Administrative Agent
shall become aware that it is entitled to receive a refund or credit (such
credit to include any increase in any foreign tax credit) as a result of
Non-Excluded Taxes (including any penalties or interest with respect thereto) as
to which it has been indemnified by any Borrower pursuant to this Section 2.18,
it shall promptly notify such Borrower of the availability of such refund or
credit and shall, within 30 days after receipt of a request by such Borrower,
apply for such refund or credit at such Borrower's expense, and in the case of
any application for such refund or credit by such Borrower, shall, if legally
able to do so, deliver to such Borrower such certificates, forms or other
documentation as may be reasonably necessary to assist such Borrower in such
application. If any Lender (or Transferee) or the Administrative Agent receives
a refund or credit (such credit to include any increase in any foreign tax
credit) in respect to any Non-Excluded Taxes as to which it has been indemnified
by any Borrower pursuant to this Section 2.18, it shall promptly notify such
Borrower of such refund or credit and shall, within 30 days after receipt of
such refund or the benefit of such credit (such benefit to include any reduction
of the taxes for which any Lender (or Transferee) or the Administrative Agent
would otherwise be liable due to any increase in any foreign tax credit
39
available to such Lender (or Transferee) or the Administrative Agent),
repay the amount of such refund or benefit of such credit (with respect to the
credit, as determined by the Lender, Transferee or Administrative Agent in its
sole, reasonable judgment) to such Borrower (to the extent of amounts that have
been paid by such Borrower under this Section 2.18 with respect to Non-Excluded
Taxes giving rise to such refund or credit), plus any interest received with
respect thereto, net of all reasonable out-of-pocket expenses of such Lender (or
Transferee) or the Administrative Agent and without interest (other than
interest actually received from the relevant taxing authority or other
Governmental Authority with respect to such refund or credit); provided,
however, that such Borrower, upon the request of such Lender (or Transferee) or
the Administrative Agent, agrees to return the amount of such refund or benefit
of such credit (plus interest) to such Lender (or Transferee) or the
Administrative Agent in the event such Lender (or Transferee) or the
Administrative Agent is required to repay the amount of such refund or benefit
of such credit to the relevant taxing authority or other Governmental Authority.
2.19 Indemnity. Each Borrower agrees to indemnify each Lender and
to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by such Borrower in making a
borrowing of Eurodollar Loans or Competitive Loans, or in the conversion into or
continuation of Eurodollar Loans, after such Borrower has given a notice
requesting or accepting the same in accordance with the provisions of this
Agreement, (b) default by such Borrower in making any prepayment after such
Borrower has given a notice thereof in accordance with the provisions of this
Agreement, or (c) the making of a prepayment of Eurodollar Loans or Competitive
Loans on a day which is not the last day of an Interest Period or the applicable
Competitive Loan Maturity Date, as the case may be, with respect thereto. Such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the relevant Interest Period (or proposed Interest Period) or, in the case of
Competitive Loans, the applicable Competitive Loan Maturity Date (or proposed
Competitive Loan Maturity Date), in each case at the applicable rate of interest
for such Loans provided for herein (excluding, however, the Applicable Margin or
any positive margin applicable to Index Rate Competitive Loans included therein,
if any) over (ii) the amount of interest (as reasonably determined by such
Lender) which would have accrued to such Lender on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market. The obligations contained in this Section 2.19 shall survive
the termination of this Agreement and the payment of all other amounts payable
hereunder.
2.20 Change of Lending Office. Each Lender (or Transferee) agrees
that, upon the occurrence of any event giving rise to the operation of
Section 2.16, 2.17 or 2.18 with respect to such Lender (or Transferee), it will,
if requested by IBM, use reasonable efforts (subject to overall policy
considerations of such Lender (or Transferee)) to designate another lending
office for any Loans affected by such event with the object of avoiding the
consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no material economic, legal or regulatory disadvantage, and
provided, further, that nothing in this Section
40
2.20 shall affect or postpone any of the obligations of any Borrower or the
fights of any Lender (or Transferee) pursuant to Section 2.16, 2.17 and 2.18.
SECTION 3. LOCAL CURRENCY FACILITIES
3.1 Terms of Local Currency Facilities. (a) Subject to the
provisions of this Section 3, each Lender hereby agrees that IBM may in its
discretion from time to time designate any credit facility to which any one or
more Borrowers and any one or more Lenders is a party as a "Local Currency
Facility", with the consent of each such Lender in its sole discretion, by
delivering a Local Currency Facility Addendum to the Administrative Agent and
the Lenders (through the Administrative Agent) executed by IBM, each such
Borrower and each such Lender, provided, that on the effective date of such
designation (i) an Exchange Rate with respect to each Local Currency covered by
such Local Currency Facility shall be determinable by reference to the Reuters
currency pages (or comparable publicly available screen) and (ii) no Event of
Default shall have occurred and be continuing. Concurrently with the delivery of
a Local Currency Facility Addendum, IBM or the relevant Borrower shall furnish
to the Administrative Agent or its counsel copies of all documentation executed
and delivered by any Borrower in connection therewith, together with, if
applicable, an English translation thereof (provided, that IBM may instead
furnish an English translation of a summary term sheet in respect thereof
describing all material terms thereof so long as an English translation of all
such documentation is furnished to the Administrative Agent or its counsel
within 90 days after the date of delivery of such Local Currency Facility
Addendum). Except as otherwise provided in this Section 3, the terms and
conditions of each Local Currency Facility shall be determined by mutual
agreement of the relevant Borrower(s) and Local Currency Lender(s). The
documentation governing each Local Currency Facility shall contain an express
acknowledgment that such Local Currency Facility shall be subject to the
provisions of this Section 3. Each of IBM and, by agreeing to any Local Currency
Facility designation as contemplated hereby, each relevant Local Currency Lender
(if any) which is an affiliate, branch or agency of a Lender, acknowledges and
agrees that each reference in this Agreement to any Lender shall, to the extent
applicable, be deemed to be a reference to such Local Currency Lender. In the
event of any inconsistency between the terms of this Agreement and the terms of
any Local Currency Facility, the terms of this Agreement shall prevail.
(b) The documentation governing each Local Currency Facility
shall set forth (i) the maximum amount (expressed in Dollars) available to
be borrowed from all Local Currency Lenders under such Local Currency Facility
(as the same may be reduced from time to time pursuant to Section 3.2(e) or (d),
a "Local Currency Facility Maximum Borrowing Amount") and (ii) with respect to
each Local Currency Lender party to such Local Currency Facility, the maximum
amount (expressed in Dollars) available to be borrowed from such Local Currency
Lender thereunder (as the same may be reduced from time to time pursuant to
Section 3.2(c) or (d), a "Local Currency Lender Maximum Borrowing Amount"). In
no event shall (i) the aggregate of all Local Currency Facility Stated Maximum
Borrowing Amounts at any time exceed $4,000,000,000 or (ii) the aggregate of all
Local Currency Lender Stated Maximum Borrowing Amounts in respect of any Local
Currency Lender at any time exceed
.
41
such Lender's Revolving Credit Commitment. The making of Local Currency
Loans by a Local Currency Lender under a Local Currency Facility shall under no
circumstances reduce the amount available to be borrowed from such Lender under
any other Local Currency Facility to which such Lender is a party.
(c) Except as otherwise required by applicable law, in no event
shall the Local Currency Lenders party to a Local Currency Facility have
the right to accelerate the Local Currency Loans outstanding thereunder, or to
terminate their Commitments (if any) to make such Loans prior to the stated
termination date in respect thereof, except, in each case, in connection with an
acceleration of the Loans or a termination of the Commitments pursuant to
Section 8 of this Agreement, provided, that nothing in this paragraph (c) shall
be deemed to require any Local Currency Lender to make a Local Currency Loan if
the applicable conditions precedent to the making of such Local Currency Loan
set forth in the relevant Local Currency Facility have not been satisfied. No
Local Currency Loan may be made under a Local Currency Facility if (i) an Event
of Default shall have occurred and be continuing or would result therefrom or
(ii) after giving effect thereto, (x) the aggregate principal amount of the US$
Loans and Local Currency Loans (US$ Equivalent) then outstanding would exceed
the aggregate Revolving Credit Commitments then in effect, (y) the aggregate
principal amount of US$ Loans and Local Currency Loans (US$ Equivalent) made to
any Subsidiary Borrower then outstanding would exceed the Maximum Subsidiary
Borrowing Amount with respect to such Subsidiary Borrower set forth in the most
recent Subsidiary Borrower Notice and Designation delivered by IBM pursuant to
Section 5.2(d) or (z) the aggregate principal amount of Revolving Credit Loans,
Swing Line Loans and Local Currency Loans (US$ Equivalent) made by any Lender
then outstanding would exceed such Lender's Revolving Credit Commitment.
(d) The relevant Local Currency Lenders, or, if so specified in
the relevant Local Currency Facility, an agent acting on their behalf,
shall finish to the Administrative Agent, immediately upon its request, a
statement setting forth the outstanding Local Currency Loans made under such
Local Currency Facility and the amount and terms of any pending prepayment
notices or borrowing requests received by such Lenders or agent through the date
of the Administrative Agent's request.
(e) The relevant Borrower shall furnish to the Administrative
Agent or its counsel copies of any amendment, supplement or other
modification (including any change in commitment amounts or in the Lenders
participating in any Local Currency Facility) to the terms of any Local Currency
Facility promptly after the effectiveness thereof (together with, if applicable,
an English translation thereof). If any such amendment, supplement or other
modification to a local Currency Facility shall (i) add a Lender as a Local
Currency Lender thereunder or (ii) change the Local Currency Facility Stated
Maximum Borrowing Amount or any Local Currency Lender Stated Maximum Borrowing
Amount with respect thereto, IBM shall promptly furnish an appropriately revised
Local Currency Facility Addendum, executed by IBM, the relevant Borrower and the
affected Local Currency Lenders (or any agent acting on their behalf), to the
Administrative Agent and the Lenders (through the Administrative Agent).
42
(f) IBM may terminate its designation of a facility as a Local
Currency Facility, with the consent of each Local Currency Lender party
thereto in its sole discretion, by written notice to the Administrative Agent,
which notice shall be executed by IBM, the relevant Borrower and each Lender
party to such Local Currency Facility (or any agent acting on their behalf).
Once notice of such termination is received by the Administrative Agent, such
Local Currency Facility and the loans and other obligations outstanding
thereunder shall immediately cease to be subject to the terms of this
Agreement (including the guarantee of IBM contained in Section 10).
Notwithstanding anything to the contrary in this Agreement, any loans made under
a Local Currency Facility at any time when an exchange rate with respect to the
relevant Local Currency cannot be calculated by the Administrative Agent in
accordance with the definition of "Exchange Rate" contained in Section 1.1 shall
be deemed not to constitute "Local Currency Loans" for the purposes of this
Agreement unless and until an exchange rate with respect to such loans may be so
calculated.
(g) Nothing in this Section 3 shall be deemed to limit the
ability of IBM or any of the Subsidiaries or Controlled Persons to enter
into credit facilities which do not constitute Local Currency Facilities.
3.2 Currency Fluctuations, etc. (a) No later than 2:00 P.M., New
York City time, on each Calculation Date, the Administrative Agent shall
(i) determine the Exchange Rate as of such Calculation Date with respect to each
Local Currency covered by a Local Currency Facility and (ii) give notice thereof
to the Lenders, IBM and the relevant Borrowers. Except as otherwise provided in
Section 3.3, the Exchange Rates so determined shall become effective on the
first Business Day immediately following the relevant Calculation Date (a
"Reset Date") and shall remain effective until the next succeeding Reset Date.
(b) No later than 2:00 P.M. New York City time, on each Reset
Date and each Borrowing Date, the Administrative Agent shall (i) determine
the US$ Equivalent of the Local Currency Loans then outstanding under each Local
Currency Facility (after giving effect to any Local Currency Loans to be made or
repaid on such date) and (ii) notify the Lenders, IBM and the relevant Borrowers
of the results of such determination.
(c) If, on any Reset Date or any Borrowing Date (after giving
effect to (i) any Loans to be made or repaid on such date and (ii) any
amendment, supplement or other modification to any Local Currency Facility
effective on such date of which the Administrative Agent has received notice),
the Aggregate Outstanding US$ Revolving Extensions of Credit of any Lender
exceed the US$ Revolving Credit Overage of such Lender (the amount of such
excess, the "US$ Revolving Credit Excess"), then the Local Currency Lender
Maximum Borrowing Amount under each Local Currency Facility to which such Lender
is a party shall be reduced on such date by an amount equal to the product of
such US$ Revolving Credit Excess times a fraction the numerator of which shall
equal the Local Currency Lender Stated Maximum Borrowing Amount under such Local
Currency Facility and the denominator of which shall equal the aggregate of the
Local Currency Lender Stated Maximum Borrowing Amounts under all Local Currency
Facilities to which such Lender is a party. After giving effect to any such
reduction in Local Currency Lender Maximum Borrowing Amounts, the Local Currency
Facility Maximum Borrowing Amount with respect
43
to each Local Currency Facility shall in turn be reduced to an amount equal
to the aggregate of the Local Currency Lender Maximum Borrowing Amounts of all
Local Currency Lenders party to such Local Currency Facility. Reductions in
Local Currency Lender Maximum Borrowing Amounts and Local Currency Facility
Maximum Borrowing Amounts pursuant to this paragraph (c) shall be effective
until the amount thereof shall be recalculated by the Administrative Agent on
the next succeeding Reset Date or Borrowing Date, and shall not be deemed to
reduce the stated amount of any Commitment of any Local Currency Lender in
respect of any Local Currency Facility.
(d) If, on any Reset Date or Borrowing Date (after giving effect
to (i) any Loans to be made or repaid on such date, (ii) any amendment,
supplement or other modification to any Local Currency Facility effective on
such date of which the Administrative Agent has received notice and (iii) any
changes in any Local Currency Lender Maximum Borrowing Amounts effected pursuant
to Section 3.2(c) on such date), the aggregate outstanding principal amount of
the US$ Loans exceeds the US$ Facility Overage (the amount of such excess, the
"US$ Facility Excess"), then the Local Currency Facility Maximum Borrowing
Amount under each Local Currency Facility shall be reduced on such date by an
amount equal to the product of such US$ Facility Excess times a fraction the
numerator of which shall equal the Local Currency Facility Stated Maximum
Borrowing Amount under such Local Currency Facility and the denominator of which
shall equal the aggregate of the Local Currency Facility Stated Maximum
Borrowing Amounts with respect to all Local Currency Facilities. Each such
reduction in the Local Currency Facility Maximum Borrowing Amount under a Local
Currency Facility shall in turn reduce the respective Local Currency Lender
Maximum Borrowing Amounts of each Local Currency Lender party to such Local
Currency Facility, pro rata on the basis of the respective Local Currency Lender
Stated Maximum Borrowing Amounts of such Lenders. Reductions in Local Currency
Facility Maximum Borrowing Amounts and Local Currency Lender Maximum Borrowing
Amounts pursuant to this paragraph (d) shall be effective until the amount
thereof shall be recalculated by the Administrative Agent on the next succeeding
Reset Date or Borrowing Date, and shall not be deemed to reduce the stated
amount of any Commitment of any Local Currency Lender in respect of any Local
Currency Facility.
(e) If, on any Reset Date, the US$ Equivalent of the Local
Currency Loans outstanding under a Local Currency Facility exceeds an
amount equal to 105% of the Local Currency Facility Maximum Borrowing Amount
with respect thereto (after giving effect to any reductions therein effected
pursuant to Section 3.2(c) or (d) on such date), then the relevant Borrower
shall, within three Business Days after notice thereof from the Administrative
Agent, (i) increase the Local Currency Facility Stated Maximum Borrowing Amount
with respect to such Local Currency Facility in accordance with Section 3.1(e)
and/or (ii) prepay such Local Currency Loans in accordance with the terms of the
relevant Local Currency Facilities in an aggregate amount such that, after
giving effect thereto, (x) the US$ Equivalent of all such Local Currency Loans
shall be equal to or less than such Local Currency Facility Maximum Borrowing
Amount and (y) the US$ Equivalent of the Local Currency Loans of each relevant
Local Currency Lender shall be equal to or less than such Local Currency
Lender's Local Currency Lender Maximum Borrowing Amount with respect to such
Local Currency Facility.
44
(f) If, on any Reset Date, the Aggregate Outstanding Revolving
Extensions of Credit of any Lender exceed an amount equal to 105% of such
Lender's Revolving Credit Commitment, then, within three Business Days after
notice thereof from the Administrative Agent, IBM shall prepay and/or cause the
Subsidiary Borrowers to prepay the Loans in accordance with this Agreement or
the relevant Local Currency Facilities, as the case may be, in an aggregate
mount such that, after giving effect thereto, the Aggregate Outstanding
Revolving Extensions of Credit of such Lender shall be equal to or less than
such Lender's Revolving Credit Commitment.
(g) The Administrative Agent shall promptly notify the relevant
Lenders of the amount of any reductions in Local Currency Facility Maximum
Borrowing Amounts or Local Currency Lender Maximum Borrowing Amounts, and the
amount of any prepayments, required pursuant to paragraph (c), (d), (e) or (f)
of this Section 3.2.
3.3 Refunding of Local Currency Loans. (a) Notwithstanding
noncompliance with the conditions precedent set forth in Section 5, if any
Local Currency Loans are outstanding on (i) any date on which an Event of
Default pursuant to Section 8(f) or (g) shall have occurred with respect to IBM,
(ii) any date (the "Acceleration Date") on which the Commitments shall have been
terminated and/or the Loans shall have been declared immediately due and payable
pursuant to Section 8 or (iii) any date on which an Event of Default pursuant to
Section 8(a)(ii) shall have occurred and be continuing for three or more
Business Days and, in the ease of clause (iii) above, any Local Currency Lender
party to the affected Local Currency Facility shall have given notice thereof to
the Administrative Agent requesting that the Local Currency Loans ("Affected
Local Currency Loans") outstanding thereunder be refunded pursuant to this
Section 3.3, then, at 10:00 A.M., New York City time, on the second Business Day
immediately succeeding (x) the date on which such Event of Default occurs (in
the case of clause (i) above), (y) such Acceleration Date (in the case of clause
(ii) above) or (z) the date on which such notice is received by the
Administrative Agent (in the case of clause (iii) above), the Administrative
Agent shall be deemed to have received a notice from IBM (or any one or more
Subsidiary Borrowers designated by the Administrative Agent after consultation
with IBM, provided, that any Subsidiary Borrower so designated shall in each
case be the relevant Subsidiary Borrower party to the relevant Local Currency
Facility unless otherwise agreed by the requisite Local Currency Lenders party
to such Local Currency Facility) pursuant to Section 2.2 requesting that ABR
Loans be made pursuant to Section 2.1 on such second Business Day in an
aggregate amount equal to the US$ Equivalent of the aggregate amount of all
Local Currency Loans (in the case of clause (i) or (ii) above) or the Affected
Local Currency Loans (in the case of clause (iii) above) (calculated on the
basis of Exchange Rates determined by the Administrative Agent on the Business
Day immediately preceding such second Business Day), and the procedures set
forth in Section 2.2 shall be followed in making such ABR Loans, provided, that
(x) for the purposes of determining each Lender's Revolving Credit Borrowing
Share of such borrowing, the outstanding principal amount of Local Currency
Loans or Affected Local Currency Loans, as the case may be, shall be deemed to
be zero and (y) each Lender's Revolving Credit Borrowing Share of such borrowing
shall be reduced to the extent (if any) necessary to prevent the Aggregate
Outstanding Revolving Extensions of Credit of such Lender from exceeding its
Revolving Credit Commitment after giving effect to such borrowing. The
45
proceeds of such ABR Loans shall be applied to repay such Local Currency
Loans; it being understood, however, that IBM (or such designated Borrower or
Borrowers) shall have the right to make payment through the original Borrower or
Borrowers of such Local Currency Loans and become a creditor of such original
Borrower or Borrowers to the extent of such proceeds.
(b) If, for any reason, ABR Loans may not be made pursuant to
paragraph (a) of this Section 3.3 to repay Local Currency Loans as required
by such paragraph, effective on the date such ABR Loans would otherwise have
been made, (i) the principal amount of each relevant Local Currency Loan shall
be convened into Dollars (calculated on the basis of Exchange Rates determined
by the Administrative Agent as of the immediately preceding Business Day)
("Converted Local Currency Loans") and (ii) each Lender severally,
unconditionally and irrevocably agrees that it shall purchase in Dollars a
participating interest in such Convened Local Currency Loans in an amount equal
to the amount of ABR Loans which would otherwise have been made by such Lender
pursuant to paragraph (a) of this Section 3.3. Each Lender will immediately
transfer to the Administrative Agent, in immediately available funds, the amount
of its participation, and the proceeds of such participation shall be
distributed by the Administrative Agent to each relevant Local Currency Lender
in such mount as will reduce the amount of the participating interest retained
by such Local Currency Lender in the Converted Local Currency Loans to the
amount of the ABR Loans which were to have been made by it pursuant to
paragraph (a) of this Section 3.3. All Converted Local Currency Loans shall
bear interest at the rate which would otherwise be applicable to ABR Loans.
Each Lender shall share on a pro rata basis (calculated by reference to its
participating interest in such Converted Local Currency Loans) in any interest
which accrues thereon and in all repayments thereof.
(c) If, for any reason, ABR Loans may not be made pursuant to
paragraph (a) of this Section 3.3 to repay Local Currency Loans as required
by such paragraph and the principal amount of any Local Currency Loans may not
be converted into Dollars in the manner contemplated by paragraph (b) of this
Section 3.3, (i) the Administrative Agent shall determine the US$ Equivalent of
such Local Currency Loans (calculated on the basis of Exchange Rates determined
by the Administrative Agent as of the Business Day immediately preceding the
date on which ABR Loans would otherwise have been made pursuant to said
paragraph (a)) and (ii) effective on the date on which ABR Loans would otherwise
have been made pursuant to said paragraph (a), each Lender severally,
unconditionally and irrevocably agrees that it shall purchase in Dollars a
participating interest in such Local Currency Loans in an amount equal to the
amount of ABR Loans which would otherwise have been made by such Lender pursuant
to paragraph (a) of this Section 3.3. Each Lender will immediately transfer to
the Administrative Agent, in immediately available funds, the amount of its
participation, and the proceeds of such participation shall be distributed by
the Administrative Agent to each relevant Local Currency Lender in such amount
as will reduce the US$ Equivalent as of such date of the amount of the
participating interest retained by such Local Currency Lender in such Local
Currency Loans to the amount of the ABR Loans which were to have been made by it
pursuant to paragraph (a) of this Section 3.3. Each Lender shall share on a pro
rata basis (calculated by reference to its participating interest in such Local
Currency Loans) in any interest which accrues thereon, in all repayments of
principal thereof
.
46
and in the benefits of any collateral furnished in respect thereof and the
proceeds of such collateral.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans, IBM hereby represents and warrants,
and each Subsidiary Borrower by its execution and delivery of a Subsidiary
Borrower Request represents and warrants (to the extent specifically applicable
to such Subsidiary Borrower), to the Administrative Agent and each Lender that:
4.1 Organizational Powers. Each of IBM, each Significant
Subsidiary and each Subsidiary Borrower (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has all requisite power and authority to own its property and
assets and to carry on its business in all material respects as now conducted
and as proposed to be conducted, (c) is qualified to do business in every
jurisdiction where such qualification is required, except where the failure so
to qualify would not, individually or in the aggregate, result in a Material
Adverse Effect, and (d) in the case of each Borrower, has the power and
authority to execute, deliver and perform its obligations under this Agreement
and each other agreement or instrument contemplated hereby to which it is or
will be a party and to borrow hereunder.
4.2 Authorization. The execution, delivery and performance by
each Borrower of this Agreement and the borrowings and other transactions
contemplated hereby (collectively, the "Transactions") (a) have been duly
authorized by all requisite corporate or other organizational action and, if
required, stockholder action and (b) will not (i) violate (A) any provision of
law, statute, material role or material regulation, or of the certificate or
articles of incorporation or other constitutive documents or by-laws of IBM, any
Significant Subsidiary or any Subsidiary Borrower, (B) any material order of any
Governmental Authority or (C) any provision of any material indenture, material
agreement or other material instrument to which IBM, any Significant Subsidiary
or any Subsidiary Borrower is a party or by which any of them or any of their
property is or may be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under any
such indenture, agreement or other instrument or (iii) except as contemplated
hereby, result in the creation or imposition of any Lien upon or with respect to
any property or assets now owned or hereafter acquired by IBM, any Significant
Subsidiary or any Subsidiary Borrower.
4.3 Enforceability. This Agreement has been duly executed and
delivered by each Borrower and constitutes a legal, valid and binding
obligation of each Borrower enforceable against each such Borrower in accordance
with its terms, except as enforceability may be limited by (a) any applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer, or
similar laws relating to or affecting creditors' rights generally and (b)
general principles of equity.
47
4.4 Governmental Approvals. No action, consent or approval of,
registration or filing with, or any other action by, any Governmental
Authority is or will be required in connection with the Transactions, except (a)
such as have been made or obtained and are in full force and effect or as to
which the failure to be made or obtained or to be in full force and effect would
not result, individually or in the aggregate, in a Material Adverse Effect and
(b) such periodic and current reports, if any, as (i) are required to disclose
the Transactions and (ii) will be filed with the SEC on a timely basis.
4.5 Financial Statements. IBM has heretofore furnished to the
Lenders its consolidated statement of financial position and related
consolidated statements of earnings, cash flows and stockholders' equity as of
and for the fiscal year ended December 31, 1992, audited by and accompanied by
the opinion of Price Waterhouse, independent accountants. Such financial
statements present fairly the financial position, results of operations, cash
flows and changes in stockholders' equity of IBM and the Subsidiaries in
accordance with GAAP.
4.6 No Material Adverse Change. Except as publicly disclosed in
filings by IBM with the SEC prior to the date hereof, between September 30,
1993 and the Effective Date, there has been no development or event which has
had a Material Adverse Effect.
4.7 No Material Litigation, etc. (a) Except as set forth in the
Form 10-K of IBM for its fiscal year ended December 31, 1992 or the Form
10-Q of IBM for the fiscal quarter ended September 30, 1993, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of IBM, threatened by or against IBM
or any of the Subsidiaries or against any of its or their respective properties,
assets or revenues as of the Effective Date (a) with respect to this Agreement
or any of the Transactions, or (b) which involves a probable risk of an adverse
decision which would materially restrict the ability of IBM to comply with its
obligations under this Agreement.
(b) None of IBM or the Significant Subsidiaries is in violation
of any law, rule or regulation, or in default with respect to any order,
judgment, writ, injunction or decree of any Governmental Authority, where such
violation or default has resulted or could reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect.
4.8 Federal Reserve Regulations. (a) No Borrower is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose which entails a violation of, or
which is inconsistent with, the provisions of Regulation G, T, U or X.
(c) After giving effect to the application of the proceeds of
each Loan, not more than 25% of the value of the assets of IBM and the
Subsidiaries (as determined in good faith by IBM) subject to the provisions of
Section 7.1 will consist of or be represented by Margin Stock. In the event any
portion of the Loans made to any Borrower constitutes a "purpose credit" within
the meaning of Regulation G or U and the Loans are directly or
48
indirectly secured by any Margin Stock pursuant to the operation of Section
7.1, then, at the time of any borrowing which increases the outstanding amount
of Loans, the aggregate "maximum loan value" (within the meaning of Regulation
G or U) of all Margin Stock and all collateral other than Margin Stock which
directly or indirectly secures the Loans will be greater than the aggregate
principal amount of Loans and other extensions of credit to all Borrowers
(whether made by the Lenders or other Persons) which are subject to Regulation
G, T, U or X and which are directly or indirectly secured by such Margin Stock
or other collateral.
4.9 Investment Company Act, etc. No Borrower is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in the
Public Utility Holding Company Act of 1935 or subject to regulation under such
Act or the Federal Power Act or (except as contemplated by Section 4.8) any
foreign, federal, state or local statute or regulation limiting such Borrower's
ability to incur Borrower Obligations.
4.10 Tax Returns. Each of IBM and the Significant Subsidiaries
has filed or caused to be filed all Federal, state and local tax returns
required to have been filed by it and has paid or caused to be paid all taxes
shown to be due and payable on such returns or on any assessments received by it
except taxes, assessments, fees, liabilities, .penalties or charges that are
being contested in good faith by appropriate proceedings and for which IBM or
Significant Subsidiary shall have set aside on its books reserves in accordance
with GAAP.
4.11 No Material Misstatements. No written information, report,
financial statement, exhibit or schedule furnished by or on behalf of any
Borrower to the Administrative Agent or any Lender in connection with this
Agreement or the Transactions or included herein or delivered pursuant hereto
contained, contains or will contain any material misstatement of fact or
omitted, omits or will omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were,
are or will be made, not misleading.
4.12 ERISA. Each Borrower is in compliance with all material
provisions of ERISA, except to the extent that all failures to be in
compliance could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
4.13 Use of Proceeds. The proceeds of all US$ Loans will be used
by the Borrowers for general corporate purposes.
SECTION 5. CONDITIONS PRECEDENT
5.1 Conditions to Initial US$ Loans. The agreement of each Lender
to make the initial US$ Loan requested to be made by it is subject to the
satisfaction, on or prior to the date of such US$ Loan, of the following
conditions precedent:
49
(a) Effective Date. The Effective Date shall have occurred in accordance
with Section 11.22.
(b) Closing Certificate. The Administrative Agent shall have received a
certificate of IBM, dated the Effective Date, substantially in the form of
Exhibit C, with appropriate insertions, satisfactory in form and substance to
the Administrative Agent, executed by the President or any Vice President and
the Secretary or any Assistant Secretary of IBM, and attaching the documents
referred to in Section 5.1(c) and (d).
(c) Corporate Proceedings of IBM. The Administrative Agent shall have
received, with a copy for each Lender, a copy of the resolutions, in form
and substance satisfactory to the Administrative Agent, of the Board of
Directors of IBM (or a duly authorized committee thereof) authorizing (i) the
execution, delivery and performance of this Agreement and (ii) the borrowings
contemplated hereunder.
(d) Corporate Documents. The Administrative Agent shall have received,
with a copy for each Lender, true and complete copies of the certificate of
incorporation and by-laws of IBM.
(e) Fees. The Administrative Agent shall have received the fees to be
received on or prior to the Effective Date referred to in Section 2.11(b).
(f) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions, with a copy for each Lender.
(i) the executed legal opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel
to the Administrative Agent, substantially in the form of Exhibit D- 1;
(ii) the executed legal opinion of Cravath, Swaine & ▇▇▇▇▇, counsel to
IBM, substantially in the form of Exhibit D-2; and
(iii) the executed legal opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Associate
General Counsel of IBM, substantially in the form of Exhibit D-3.
(g) Existing Credit Agreements. The Administrative Agent shall have
received satisfactory evidence that each of the Existing Credit Agreements
shall have been terminated pursuant to an irrevocable notice of termination of
commitments and that any amounts owing thereunder by IBM or IBM Credit
Corporation, as the case may be, shall have been (or shall upon the occurrence
of the Effective Date be) paid in full. Without affecting any terms of any
Existing Credit Agreement which expressly survive the termination of such
Existing Credit Agreement, each Lender party to any one or more of the Existing
Credit Agreements hereby waives any requirement of advance notice of such
termination contained in any Existing Credit Agreement and hereby agrees that
such Existing Credit Agreements and the commitments thereunder (subject to
receipt of any other required consents of any other Person) shall terminate
50
simultaneously with the satisfaction by IBM of the conditions to borrowing set
forth in this Section 5.1.
5.2 Conditions to Each US$ Loan. The agreement of each Lender to
make any US$ Loan requested to be made by it on any date (including,
without limitation, its initial US$ Loan) is subject to the satisfaction of the
following conditions precedent:
(a) Notice. The Administrative Agent shall have received notice
of such borrowing in conformity with the applicable requirements of this
Agreement
(b) Representations and Warranties. Each of the representations
and warranties made by any Borrower in or pursuant to this Agreement shall
be true and correct in all material respects on and as of such date as if
made on and as of such date, except to the extent such representations
and warranties expressly relate to an earlier date.
(c) No Default. No Default or Event of Default shall have
occurred and be continuing on such date or shall occur after giving effect
to the borrowing of the US$ Loans requested to be made on such date.
(d) Subsidiary Borrower Notice and Designation; Subsidiary
Borrower Request. If the relevant Borrower is a Subsidiary Borrower, IBM
shall have delivered to the Administrative Agent a Subsidiary Borrower
Notice and Designation for such Subsidiary Borrower specifying the maximum
amount (the "Maximum Subsidiary Borrowing Amount") which may be borrowed by
such Subsidiary Borrower, and such Subsidiary Borrower shall have furnished
to the Administrative Agent a Subsidiary Borrower Request. IBM may from
time to time deliver a subsequent Subsidiary Borrower Notice and
Designation with respect to such Subsidiary Borrower, countersigned by such
Subsidiary Borrower, for the purpose of changing the Maximum Subsidiary
Borrowing Amount specified therein or terminating such Subsidiary
Borrower's designation as such, so long as (i) in the case of any reduction
of any Maximum Subsidiary Borrowing Amount, on the effective date of such
reduction, the aggregate principal amount of US$ Loans and Local Currency
Loans (US$ Equivalent) made to such Subsidiary Borrower shall not exceed
the Maximum Subsidiary Borrowing Amount as so reduced and (ii) in the case
of any termination of such designation, on the effective date of such
termination, all Subsidiary Borrower Obligations in respect of such
Subsidiary Borrower shall have been paid in full. In addition, if on any
date a Subsidiary Borrower shall cease to be a Subsidiary or Controlled
Person, all Subsidiary Borrower Obligations in respect of such Subsidiary
Borrower shall automatically become due and payable on such date and no
further Loans may be borrowed by such Subsidiary Borrower hereunder or
under any Local Currency Facility.
(e) Closing Certificate of Subsidiary Borrower. If the relevant
Borrower is a Subsidiary Borrower, the Administrative Agent shall have
received, as promptly as reasonably practicable after the effective date of
the relevant Subsidiary Borrower
51
Notice and Designation and prior to the date of such US$ Loan, a
certificate of such Subsidiary Borrower, substantially in the form of
Exhibit C, with appropriate insertions and attachments, satisfactory in
form and substance to the Administrative Agent, executed by the President,
any Vice President, the Treasurer or any other senior officer and the
Secretary or any Assistant Secretary (or, in either case, comparable
officers) of such Subsidiary Borrower.
(f) Opinions of Counsel to Subsidiary Borrower. If the relevant
Borrower is a Subsidiary Borrower, the Administrative Agent shall have
received, with a copy for each Lender, as promptly as reasonably
practicable after the effective date of the relevant Subsidiary Borrower
Notice and Designation and prior to the date of such US$ Loan, executed
legal opinions with respect to such Subsidiary Borrower, in form and
substance reasonably satisfactory to the Administrative Agent and
including, to the extent applicable, the opinions set forth in Exhibits D-2
and D-3.
Each borrowing of a US$ Loan by a Borrower shall constitute a representation
and warranty by such Borrower (and, in the case of a Subsidiary Borrower, IBM)
as of the date of such US$ Loan that the conditions contained in paragraphs
(b) and (c) of this Section 5.2 have been satisfied.
SECTION 6.AFFIRMATIVE COVENANTS
IBM and each Subsidiary Borrower by its execution and delivery of
a Subsidiary Borrower Request agrees that, so long as the Commitments
remain in effect, any Loan remains outstanding and unpaid or any other amount is
owing to any Lender or the Administrative Agent hereunder, it shall and (in the
case of IBM) shall cause each of the Significant Subsidiaries to:
6.1 Existence; Business and Properties. (a) Do or cause to be
done all things necessary to preserve, renew and keep in full force and
effect its legal existence, except as would not cause or result in a Default or
Event of Default under this Agreement.
(b) Do or cause to be done all things reasonably necessary to
preserve and keep in full force and effect the rights, licenses, permits,
franchises, authorizations, patents, copyrights, trademarks and trade names
material to the conduct of its business; except in each case where the failure
to do so would not result in a Material Adverse Effect; and at all times
maintain and preserve all property material to the conduct of its business and
keep such property in good repair, working order and condition and from time to
time make, or cause to be made, all needful and proper repairs, renewals,
additions, improvements and replacements thereto necessary in order that the
business carried on in connection therewith may be properly conducted at all
times; provided, however, that nothing in this Section 6.1(b) shall prevent IBM,
any Subsidiary or any Subsidiary Borrower from (x) discontinuing any of its
businesses no longer deemed advantageous to it or discontinuing the operation
and maintenance of any of its properties no longer deemed useful in the conduct
of its business or
52
(y) selling or disposing of any assets, Subsidiaries or capital stock thereof,
in a transaction not prohibited by Section 7.2.
6.2 Financial Statements, Reports, etc. In the case of IBM,
furnish to the Administrative Agent for distribution to the Lenders:
(a) as soon as available and in any event within 105 days after
the end of each fiscal year, copies of the report filed by IBM with the SEC
on Form 10-K in respect of such fiscal year, each accompanied by IBM's
annual report in respect of such fiscal year or, if IBM is not required to
file such a report in respect of such fiscal year, the consolidated
statements of financial position and related consolidated statements of
earnings, cash flows and stockholders' equity of IBM and the Subsidiaries,
as of the close of such fiscal year, all audited by Price Waterhouse or
other independent accountants of recognized national standing and
accompanied by an opinion of such accountants to the effect that such
consolidated financial statements fairly present the financial position,
results of operations, cash flows and changes in stockholders' equity of
IBM and the Subsidiaries, in accordance with GAAP;
(b) as soon as available and in any event within 60 days after
the end of each of the first three quarterly periods of each fiscal year,
copies of the unaudited quarterly reports filed by IBM with the SEC on Form
10-Q in respect of such quarterly period, or if IBM is not required to file
such a report in respect of such quarterly period, the unaudited
consolidated statements of financial position and related unaudited
consolidated statements of earnings, cash flows and stockholders' equity of
IBM and the Subsidiaries, as of the close of such fiscal quarter, certified
by a Responsible Officer of IBM as fairly presenting the financial
position, results of operations, cash flows and changes in stockholders'
equity of IBM and the Subsidiaries, in accordance with GAAP, subject to
normal year-end audit adjustments which are not expected to be material in
amount;
(c) concurrently with any delivery of financial statements by IBM
described in paragraph (a) or (b) above (whether contained in a report
filed with the SEC or otherwise), a certificate of a Responsible Officer of
IBM substantially in the form of Schedule 6.2(c);
(d) promptly after the same become publicly available, copies of
(i) all financial statements, notices, reports and proxy materials
distributed to stockholders of IBM and (ii) all reports on Form 10-K, 10-Q
and 8-K (or their equivalents) filed by IBM with the SEC (or with any
Governmental Authority succeeding to any or all of the functions of the
SEC) pursuant to the periodic reporting requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder;
(e) promptly, from time to time, such other publicly available
documents and information regarding the operations, business affairs and
financial condition of IBM, any Significant Subsidiary or any Subsidiary
Borrower, or compliance with the terms
53
of this Agreement, as the Administrative Agent or any Lender (through the
Administrative Agent) may reasonably request; and
(f) within ten Business Days after the occurrence thereof,
written notice of any change in Status; provided that the failure to
provide such notice shall not delay or other, vise affect any change in the
Applicable Eurodollar Margin or other amount payable hereunder which is to
occur upon a change in Status pursuant to the terms of this Agreement.
With respect to the documents referred to in paragraphs (a) through (e)
above, IBM shall furnish such number of copies as the Administrative Agent or
the Lenders shall reasonably require for distribution to their personnel in
connection with this Agreement.
6.3 Notices. Promptly give notice to the Administrative Agent and
each Lender of the occurrence of any Default or Event of Default, accompanied
by a statement of a Responsible Officer of IBM setting forth details of the
occurrence referred to therein and stating what action the relevant Borrower
proposes to take with respect thereto.
SECTION 7. NEGATIVE COVENANTS
IBM and, in the case of Sections 7.2 and 7.3, each Subsidiary Borrower by
its execution and delivery of a Subsidiary Borrower Request agrees that, so long
as the Commitments remain in effect, any Loan remains outstanding and unpaid or
any other amount is owing to any Lender or the Administrative Agent hereunder.
7.1 Limitation on Secured Debt and Sale and Leaseback
Transactions. (a) IBM will not create, assume, incur or guarantee, and will
not permit any Restricted Subsidiary to create, assume, incur or guarantee, any
Secured Debt without making provision whereby all Borrower Obligations shall be
secured equally and ratably with (or prior to) such Secured Debt (together with,
if IBM shall so determine, any other Debt of IBM or such Restricted Subsidiary
then existing or thereafter created which is not by its terms subordinate to the
Borrower Obligations) so long as such Secured Debt shall be outstanding unless
such Secured Debt, when added to (a) the aggregate amount of all Secured Debt
then outstanding (not including in this computation Secured Debt if the Borrower
Obligations are secured equally and ratably with (or prior to) such Secured Debt
and further not including in this computation any Secured Debt which is
concurrently being retired) and (b) the aggregate amount of all Attributable
Debt then outstanding pursuant to Sale and Leaseback Transactions entered into
by IBM after July 15, 1985, or entered into by a Restricted Subsidiary after
July 15, 1985, or, if later, the date on which it became a Restricted Subsidiary
(not including in this computation any Attributable Debt which is concurrently
being retired), would not exceed 5% of Consolidated Net Tangible Assets.
(b) IBM will not, and will not permit any Restricted Subsidiary
to. enter into any Sale and Leaseback Transaction unless (a) the sum of (i)
the Attributable Debt to be outstanding pursuant to such Sale and Leaseback
Transaction, (ii) all Attributable Debt then
54
outstanding pursuant to all other Sale and Leaseback Transactions entered
into by IBM after July 15, 1985, or entered into by a Restricted Subsidiary
after July 15, 1985, or, if later, the date on which it became a Restricted
Subsidiary, and (iii) the aggregate of all Secured Debt then outstanding (not
including in this computation Secured Debt if the Borrower Obligations are
secured equally and ratably with (or prior to) such Secured Debt) would not
exceed 5% of Consolidated Net Tangible Assets or (b) an amount equal to the
greater of (i) the net proceeds to IBM or the Restricted Subsidiary of the sale
of the Principal Property sold and leased back pursuant to such Sale and
Leaseback Transaction and (ii) the amount of Attributable Debt to be outstanding
pursuant to such Sale and Leaseback Transaction, is applied to the retirement of
Funded Debt of IBM or any Restricted Subsidiaries (other than Funded Debt which
is subordinated to the Loans or which is owing to IBM or any Restricted
Subsidiaries) within 180 days after the consummation of such Sale and Leaseback
Transaction.
7.2 Mergers, Consolidations and Sales of Assets. No Borrower will
consolidate with or merge with or into any other Person or sell, convey or
otherwise transfer all or substantially all of its properties or assets to any
Person, except that, so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom, IBM may merge with any
other U.S. corporation and each Subsidiary Borrower may merge with any other
Person, provided that (a) in the case of any such merger involving IBM, IBM is
the surviving corporation, (b) in the case of any such merger involving a
subsidiary Borrower, the surviving corporation assumes all of such Borrower's
obligations under this Agreement and remains a "Subsidiary Borrower" and (c) on
the date of consummation of any merger involving IBM, IBM shall deliver to the
Administrative Agent a certificate of a Responsible Officer of IBM demonstrating
that, on a pro forma basis determined as if such merger had been consummated on
the date occurring twelve months prior to the last day of the most recently
ended fiscal quarter, IBM would have been in compliance with Section 7.4 as of
the last day of such fiscal quarter. For the purposes of this Section 7.2, the
consummation of a Securitization Transaction by any Subsidiary Borrower in the
ordinary course of its business shall not be deemed to constitute a sale,
conveyance or transfer of properties or assets.
7.3 Margin Regulations. (a) No Borrower will permit any part of
the proceeds of any Loan to be used in any manner that would result in a
violation of, or be inconsistent with, the provisions of Regulation G, T, U or
X. No Borrower will take, or permit the Subsidiaries to take, any action at any
time that would (A) result in a violation of the substitution and withdrawal
requirements of Regulation G, T or U, in the event the same should become
applicable to any Loans or this Agreement or (B) cause the representations and
warranties contained in Section 4.8 at any time to be other than true and
correct.
(b) Whenever required to ensure compliance with Regulations G, T,
U and X or requested by the Administrative Agent or one or more Lenders,
each Borrower will furnish to the Administrative Agent and each Lender a
statement in conformity with the requirements of Federal Reserve Form U-1
referred to in Regulation U, and any other notice or form required under
Regulation G or U, the statements made and information contained in which shall
be sufficient, in the good faith opinion of each Lender, to permit the
extensions of Loans hereunder in compliance with Regulations G and U.
55
7.4 Consolidated Net Interest Expense Ratio. IBM will not permit
the Consolidated Net Interest Expense Ratio, for any period of four
consecutive fiscal quarters taken as a single accounting period ending during
any period set forth below (commencing with the period of four consecutive
fiscal quarters ending June 30, 1994), to be less than the ratio set forth
opposite such period:
Period Ratio
------ -----
June 30, 1994 to and including December 31, 1994 1.8 to 1.0
January 1, 1995 to and including December 31, 1995 2.0 to 1.0
January 1, 1996 and thereafter 2.2 to 1.0
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) (i) Any Borrower shall (x) fail to pay any principal of any
US$ Loan when due in accordance with the applicable terms of this Agreement
or (y) fail to pay any interest on any US$ Loan, or any fee or other
amount payable hereunder or under any Local Currency Facility (other than
as provided in clause (ii) below), within five Business Days after any such
interest, fee or other amount becomes due in accordance with the terms
hereof or thereof; or (ii) any Borrower shall fail to pay any principal of
or interest on any Local Currency Loan when due in accordance with the
applicable terms of the relevant Local Currency Facility and such default
shall continue unremedied for a period of three Business Days (in the case
of principal) or five Business Days (in the case of interest) after written
notice thereof shall have been given to IBM by the Administrative Agent or
any affected Local Currency Lender (with a copy to the Administrative
Agent); or
(b) Any representation or warranty made or deemed made by any
Borrower herein or in any Local Currency Facility or which is contained in
any certificate, document or financial or other statement furnished by it
at any time pursuant to this Agreement or any Local Currency Facility shall
prove to have been incorrect in any material respect on or as of the date
made or deemed made; or
(c) IBM shall default in the observance or performance of the
agreement contained in Section 7.4; or
(d) Any Borrower shall default in the observance or performance
of any other agreement contained in this Agreement or in any Local Currency
Facility or any other event or condition constituting a default under any
Local Currency Facility shall occur (in each case other than as provided in
paragraphs (a) through (c) of this Section 8), and such default shall
continue unremedied for a period of 30 days after written notice thereof
shall have been given to IBM by the Administrative Agent or the Required
Lenders; or
56
(e) IBM or any Significant Subsidiary shall default in the
payment of any principal or interest, regardless of amount, due in respect
of any Indebtedness in an aggregate principal amount of $100,000,000 or
more. when and as the same shall become due and payable (after the
expiration of any applicable grace period); or
(f) An involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of IBM or any Significant Subsidiary, or of a
substantial part of the property or assets of IBM or any Significant
Subsidiary, under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official
for IBM or any Significant Subsidiary or for a substantial part of the
property or assets of IBM or any Significant Subsidiary or (iii) the
winding-up or liquidation of IBM or any Significant Subsidiary; and such
proceeding or petition shah continue undismissed for 90 days or an order or
decree approving or ordering any of the foregoing shall be entered; or
(g) IBM or any Significant Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11
of the United States Code, as now constituted or hereafter amended, or any
other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (ii) consent to the institution of, or fail to contest in a
timely and appropriate manner, any proceeding or the filing of any petition
described in paragraph (f) of this Section 8, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for IBM or any Significant Subsidiary or
for a substantial part of the property or assets of IBM or any Significant
Subsidiary, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors, or (vi) take any action for the
purpose of effecting any of the foregoing; or
(h) One or more judgments for the payment of money in an
aggregate amount of $100,000,000 or more shall be rendered by a court of
competent jurisdiction against IBM, any Significant Subsidiary or any
combination of IBM and Significant Subsidiaries and the same shall remain
undischarged for a period of 30 days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment
creditor to levy upon assets or properties of IBM or any Significant
Subsidiary to enforce any such judgment; or
(i) The guarantee contained in Section 10 shall cease, for any
reason, to be in full force and effect or IBM shall so assert;
then, and in any such event, (A) if such event is an Event of Default
specified in paragraph (f) or (g) above with respect to IBM, automatically the
Commitments shall immediately terminate and the Loans (with accrued interest
thereon) and all fees and other amounts owing under this Agreement and the Local
Currency Facilities shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following
57
actions may be taken: (i) with the consent of the Required Lenders, the
Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to IBM declare the Commitments to be
terminated forthwith, whereupon such Commitments shall immediately terminate;
and {ii) with the consent of the Required Lenders, the Administrative Agent may,
or upon the request of the Required Lenders, the Administrative Agent shall, by
notice to IBM, declare the Loans {with accrued interest thereon) and all fees
and other amounts owing under this Agreement and the Local Currency Facilities
to be due and payable forthwith, whereupon the same shall immediately become due
and payable. Except as expressly provided above in this Section 8, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
SECTION 9. THE ADMINISTRATIVE AGENT
9.1 Appointment. Each Lender hereby irrevocably designates and
appoints Chemical Bank as the Administrative Agent of such Lender under
this Agreement, and each such Lender irrevocably authorizes Chemical Bank, as
the Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any Local Currency Facility or otherwise exist against the
Administrative Agent.
9.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys in-fact
selected by it with reasonable care.
9.3 Exculpatory Provisions. Neither the Administrative Agent nor
any of its officers, directors. employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement (except
for its or such Person's own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Borrower or any officer thereof
contained in this Agreement or any Local Currency Facility or in any
certificate, report, statement or other document referred to or provided for in.
or received by the Administrative Agent under or in connection with, this
Agreement or any Local Currency Facility or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any Local Currency Facility or for any failure of any Borrower to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to require as to the observance or
performance of any of the agreements
58
contained in, or conditions of, this Agreement or any Local Currency
Facility, or to inspect the properties, books or records of any Borrower.
9.4 Reliance by Administrative .Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon
any writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to any Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the Lender specified in the Register
with respect to any amount owing hereunder as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
unless it shall first receive such advice or concurrence of the Required Lenders
or all Lenders, as the case may be, as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement in accordance with
a request of the Required Lenders, or all Lenders, as the case may be, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon all the Lenders and all future holders of the obligations owing by any
Borrower hereunder.
9.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Administrative Agent has received notice
from a Lender or a Borrower referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a "notice of default". In
the event that the Administrative Agent receives such a notice, the
Administrative Agent shall promptly give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
9.6 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
any Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrowers and made its
59
own decision to make its Loans and enter into this Agreement and any Local
Currency Facilities. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement or any Local Currency Facility, and to
make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrowers. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed
by the Borrowers and without limiting the obligation of the Borrowers to do so),
ratably according to their respective Commitment Percentages in effect on the
date on which indemnification is sought under this Section 9.7 (or, if
indemnification is sought after the date upon which the Revolving Credit
Commitments shall have terminated and the US$ Loans shall have been paid in
full, ratably in accordance with their Commitment Percentages immediately prior
to such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including, without limitation, at
any time following the payment of the amounts owing hereunder) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of this Agreement or any documents contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby or any
action taken or omitted by the Administrative Agent under or in connection with
any of the foregoing; provided that (a) no Lender shall be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the gross negligence or willful misconduct of the Administrative Agent and
(b) in the event that the Administrative Agent is reimbursed by any Borrower for
any amount paid to it by the Lenders pursuant to this Section 9.7, the amount of
such reimbursement shall in turn be paid over to the Lenders on a ratable basis.
The agreements in this Section 9.7 shall survive the payment of the Loans and
all other amounts payable hereunder.
9.8 Administrative Agent in Its Individual Capacity. Each of the
Administrative Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrowers as though
the Administrative Agent were not the Administrative Agent hereunder. With
respect to its Loans made or renewed by it, the Administrative Agent shall have
the same rights and powers under this Agreement as any Lender and may exercise
the same as though it were not the Administrative Agent, and the terms "Lender"
and "Lenders" shall include the Administrative Agent in its individual capacity.
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9.9 Successor Administrative Agent. Subject to the appointment
and acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign as Administrative Agent at any time by giving
notice to the Lenders and IBM. If the Administrative Agent shall resign as
Administrative Agent under this Agreement, then the Required Lenders shall
appoint from among the Lenders a successor administrative agent for the Lenders,
which successor administrative agent shall be subject to the approval of IBM
(which approval shall not be unreasonably withheld). If no successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent shall have
given notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent from among the
Lenders, which successor administrative agent shall be subject to the approval
of IBM (which approval shall not be unreasonably withheld). Upon the acceptance
of any appointment as Administrative Agent hereunder by a permitted successor,
such successor administrative agent shall succeed to the fights, powers and
duties of the Administrative Agent, and the term "Administrative Agent" shall
mean such successor administrative agent effective upon such appointment and
approval, and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the pan of such former Administrative Agent or any of the parties to
this Agreement or any holders of the obligations owing hereunder. After any
retiring Administrative Agent's resignation as Administrative Agent, the
provisions of this Section 9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under
this Agreement.
SECTION 10. GUARANTEE
10.1 Guarantee. In order to induce the Administrative Agent and
the Lenders to execute and deliver this Agreement and to make or maintain
the Loans, and in consideration thereof, IBM hereby unconditionally and
irrevocably guarantees, as primary obligor and not merely as surety, to the
Administrative Agent, for the ratable benefit of the Lenders, the prompt and
complete payment and performance by each Subsidiary Borrower when due (whether
at stated maturity, by acceleration or otherwise) of the Subsidiary Borrower
Obligations, and IBM further agrees to pay any and all expenses (including,
without limitation, all reasonable fees, charges and disbursements of counsel
(including allocated costs of internal counsel)) which may be paid or incurred
by the Administrative Agent or by the Lenders in enforcing, or obtaining advice
of counsel in respect of, any of their rights under the guarantee contained in
this Section 10. The guarantee contained in this Section 10, subject to Section
10.5, shall remain in full force and effect until the Subsidiary Borrower
Obligations are paid in full and the Commitments are terminated, notwithstanding
that from time to time prior thereto any Subsidiary Borrower may be free from
any Subsidiary Borrower Obligations.
IBM agrees that whenever, at any time, or from time to time, it
shall make any payment to the Administrative Agent or any Lender on account
of its liability under this Section 10, it will notify the Administrative Agent
and such Lender in writing that such payment is made under the guarantee
contained in this Section 10 for such purpose. No
61
payment or payments made by any Subsidiary Borrower or any other Person or
received or collected by the Administrative Agent or any Lender from any
Subsidiary Borrower or any other Person by virtue of any action or proceeding or
any setoff or appropriation or application, at any time or from time to time, in
reduction of or in payment of the Subsidiary Borrower Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of IBM under
this Section 10 which, notwithstanding any such payment or payments, shall
remain liable for the unpaid and outstanding Subsidiary Borrower Obligations
until, subject to Section 10.5, the Subsidiary Borrower Obligations are paid in
full and the Commitments are terminated.
10.2 No Subrogation, Contribution, Reimbursement or Indemnity.
Notwithstanding anything to the contrary in this Section 10, IBM hereby
irrevocably waives (a) all rights which may have arisen in connection with the
guarantee contained in this Section 10 to be subrogated to any of the rights
(whether contractual, under the Bankruptcy Code, including Section 509 thereof,
under common law or otherwise) of the Administrative Agent or any Lender against
any Subsidiary Borrower or against the Administrative Agent or any Lender for
the payment of the Subsidiary Borrower Obligations of any Domestic Subsidiary
Borrower and (b) all contractual, common law, statutory and other rights of
reimbursement, contribution, exoneration or indemnity (or any similar right)
from or against any Subsidiary Borrower or any other Person which may have
arisen in connection with the guarantee of the Subsidiary Borrower Obligations
of any Domestic Subsidiary Borrower contained in this Section 10. In addition,
notwithstanding anything to the contrary in this Section 10, IBM hereby
irrevocably waives (a) all rights which may have arisen in connection with the
guarantee contained in this Section 10 to be subrogated to any of the rights
(whether contractual, under the Bankruptcy Code, including Section 509 thereof,
under common law or otherwise) of the Administrative Agent or any Lender against
any Subsidiary Borrower or against the Administrative Agent or any Lender for
the payment of the Subsidiary Borrower Obligations of any Foreign Subsidiary
Borrower and (b) irrevocably waives all contractual, common law, statutory and
other rights of reimbursement, contribution, exoneration or indemnity (or any
similar right) from or against any Subsidiary Borrower or any other Person which
may have arisen in connection with the guarantee of the Subsidiary Borrower
Obligations of any Foreign Subsidiary Borrower contained in this Section 10, in
each case until all Subsidiary Borrower Obligations of the Foreign Subsidiary
Borrowers are paid in full. So long as the Subsidiary Borrower Obligations
remain outstanding, if any amount shall be paid by or on behalf of any
Subsidiary Borrower or any other Person to IBM on account of any of the rights
waived in this Section 10.2, such amount shall be held by IBM in trust,
segregated from other funds of IBM, and shall, forthwith upon receipt by IBM, be
turned over to the Administrative Agent in the exact form received by IBM (duly
indorsed by IBM to the Administrative Agent, if required), to be applied against
the Subsidiary Borrower Obligations, whether matured or unmatured, in such order
as the Administrative Agent may determine. The provisions of this Section 10.2
shall survive the term of the guarantee contained in this Section 10 and the
payment in full of the Subsidiary Borrower Obligations and the termination of
the Commitments.
10.3 Amendments, etc. with respect to the Subsidiary Borrower
Obligations. IBM shall remain obligated under this Section 10
notwithstanding that, without any
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reservation of rights against IBM, and without notice to or further assent
by IBM, any demand for payment of or reduction in the principal amount of any of
the Subsidiary Borrower Obligations made by the Administrative Agent or any
Lender may be rescinded by the Administrative Agent or such Lender, and any of
the Subsidiary Borrower Obligations continued, and the Subsidiary Borrower
Obligations, or the liability of any other party upon or for any part thereof,
or any collateral security or guarantee therefor or right of offset with respect
thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any Lender, and this Agreement and any other
documents executed and delivered in connection herewith may be amended,
modified, supplemented or terminated, in whole or in part, as the Lenders (or
the Required Lenders, as the case my be) may deem advisable from time to time,
and any collateral security, guarantee or right of offset at any time held by
the Administrative Agent or any Lender for the payment of the Subsidiary
Borrower Obligations may be sold, exchanged, waived, surrendered or released.
Neither the Administrative Agent nor any Lender shall have any obligation to
protect, secure, perfect or insure any lien at any time held by it as security
for the Subsidiary Borrower Obligations or for the guarantee contained in this
Section 10 or any property subject thereto.
10.4 Guarantee Absolute and Unconditional. IBM waives any and
all notice of the creation, renewal, extension or accrual of any of the
Subsidiary Borrower Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon the guarantee contained in this Section
10 or acceptance of the guarantee contained in this Section 10; the Subsidiary
Borrower Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 10; and all dealings
between IBM or the Subsidiary Borrowers, on the one hand, and the Administrative
Agent and the Lenders, on the other, shall likewise be conclusively presumed to
have been had or consummated in reliance upon the guarantee contained in this
Section 10. IBM waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon IBM or any Subsidiary Borrower with
respect to the Subsidiary Borrower Obligations. The guarantee contained in this
Section 10 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of
this Agreement, any Local Currency Facility, any of the Subsidiary Borrower
Obligations or any collateral security therefor or guarantee or right of offset
with respect thereto at any time or from time to time held by the Administrative
Agent or any Lender. (b) the legality under applicable Requirements of Law of
repayment by the relevant Subsidiary Borrower of any Subsidiary Borrower
Obligations or the adoption of any Requirement of Law purporting to render any
Subsidiary Borrower Obligations null and void, (c) any defense, setoff or
counterclaim (other than a defense of payment or performance by the applicable
Subsidiary Borrower) which may at any time be available to or be asserted by IBM
against the Administrative Agent or any Lender, or (d) any other circumstance
whatsoever (with or without notice to or knowledge of IBM or any Subsidiary
Borrower) which constitutes, or might be construed to constitute, an equitable
or legal discharge of any Subsidiary Borrower for any Subsidiary Borrower
Obligations, or of IBM under the guarantee contained in this Section 10, in
bankruptcy or in any other instance. When the Administrative Agent or any Lender
is pursuing its rights and remedies under this Section 10 against IBM, the
63
Administrative Agent or any Lender may, but shall be under no obligation
to, pursue such rights and remedies as it may have against any Subsidiary
Borrower or any other Person or against any collateral security or guarantee for
the Subsidiary Borrower Obligations or any right of offset with respect thereto,
and any failure by the Administrative Agent or any Lender to pursue such other
rights or remedies or to collect any payments from any Subsidiary Borrower or
any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of any
Subsidiary Borrower or any such other Person or of any such collateral security,
guarantee or right of offset, shall not relieve IBM of any liability under this
Section 10, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent
and the Lenders against IBM.
10.5 Reinstatement. The guarantee contained in this Section 10
shall continue to be effective, or be reinstated, as the case may be, if at
any time payment, or any part thereof, of any of the Subsidiary Borrower
Obligations is rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Subsidiary Borrower or upon or as a result
of the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, any Subsidiary Borrower or any substantial part of its
property, or otherwise, all as though such payments had not been made.
10.6 Payments. IBM hereby agrees that any payments in respect of
the Subsidiary Borrower Obligations pursuant to this Section 10 will be
paid to the Administrative Agent without setoff or counterclaim in Dollars (in
the case of Subsidiary Borrower Obligations arising under this Agreement) or, at
the option of the relevant Local Currency Lender(s), in Dollars or in the
relevant Local Currency (in the case of Subsidiary Borrower Obligations arising
under any Local Currency Facility), at (a) the office of the Administrative
Agent specified in Section 11.2 (in the case of Subsidiary Borrower Obligations
arising under this Agreement) or (b) at the office specified for payments under
the relevant Local Currency Facility or such other office as shall have been
specified by the relevant Local Currency Lender(s) in each case to the extent
permitted by applicable law (in the case of Subsidiary Borrower Obligations
arising under any Local Currency Facility).
10.7 Judgments Relating to Guarantee. (a) If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum due under
the guarantee contained in this Section 10 in one currency into another
currency, IBM agrees, to the fullest extent that it may effectively do so, that
the rate of exchange used shall be that at which in accordance with normal
banking procedures in the relevant jurisdiction the relevant Lender (or agent
acting on its behalf) could purchase the first currency with such other currency
for the first currency on the Banking Day immediately preceding the day on which
final judgment is given.
(b) The obligations of IBM in respect of any sum due under the
guarantee contained in this Section 10 shall, notwithstanding any judgment
in a currency (the "Judgment Currency") other than that in which such sum is
denominated in accordance with this Section 10 (the "Agreement Currency."), be
discharged only to the extent that, on the Banking Day
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following receipt by any Lender (or agent acting on its behalf) (the
"Applicable Creditor") of any sum adjudged to be so due in the Judgment
Currency, the Applicable Creditor may in accordance with normal banking
procedures in the relevant jurisdiction purchase the Agreement Currency with the
Judgment Currency; if the amount of the Agreement Currency so purchased is less
than the sum originally due to the Applicable Creditor in the Agreement
Currency, IBM agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify the Applicable Creditor against such loss, provided that
if the amount of the Agreement Currency so purchased exceeds the sum originally
due to the Applicable Creditor, the Applicable Creditor agrees to remit such
excess to IBM. The obligations of IBM contained in this Section 10.7 shall
survive the termination of the guarantee contained in this Section 10 and the
payment of all amounts owing hereunder.
10.8 Independent Obligations. The obligations of IBM under the
guarantee contained in this Section 10 are independent of the obligations
of each Subsidiary Borrower, and a separate action or actions may be brought and
prosecuted against IBM whether or not the relevant Subsidiary Borrower be joined
in any such action or actions. IBM waives, to the full extent permitted by law,
the benefit of any statute of limitations affecting its liability hereunder or
the enforcement thereof. Any payment by the relevant Subsidiary Borrower or
other circumstance which operates to toll any statute of limitations as to such
Subsidiary Borrower shall operate to toll the statute of limitations as to IBM.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement nor any
terms hereof may be amended, supplemented or modified except in accordance
with the provisions of this Section 11.1. The Required Lenders may, or, upon
receipt of written consent of the Required Lenders to all terms thereof, the
Administrative Agent may, from time to time, (a) enter into with the Borrowers
written amendments, supplements or modifications hereto for the purpose of
adding any provisions to this Agreement or changing in any manner the rights of
the Lenders or of the Borrowers hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or any Default or Event of Default and its consequences; provided,
.however, that no such waiver and no such amendment, supplement or modification
shall (i) reduce the amount or extend the scheduled date of maturity of any US$
Loan, or reduce the stated rate of any interest or fee payable hereunder or
extend the scheduled date of any payment thereof or increase the amount or
extend the expiration date of any Lender's Revolving Credit Commitment or Swing
Line Commitment, in each case without the consent of each Lender directly
affected thereby, or (ii) reduce any amounts payable to any Lender pursuant to
Section 2.5(b), 2.5(c), 3.3 or 10 (including, without limitation, pursuant to
any release of the guarantee contained in Section 10), or increase any amounts
payable by any Lender pursuant to Section 2.5(b), 2.5(c) or 3.3, in each case
without the consent of each Lender materially and adversely affected thereby, or
(iii) amend, modify or waive any provision of this Section 11.1 or reduce the
percentage specified in the definition of Required Lenders, or consent to the
assignment or transfer by any Borrower of any of its rights and obligations
under this Agreement, in each case without
65
the written consent of all the Lenders, or (iv) amend, modify or waive any
provision of Section 9 without the written consent of the then Administrative
Agent. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Borrowers,
the Lenders, the Administrative Agent and all future holders of the obligations
owing hereunder. In the case of any waiver, the Borrowers, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.
11.2 Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered by hand, or three Business Days
after being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows in the case of IBM and the
Administrative Agent, as set forth in the relevant Subsidiary Borrower Notice
and Designation in the case of the Subsidiary Borrowers and as set forth on its
Addendum in the case of the Lenders, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the obligations owing hereunder:
IBM: INTERNATIONAL BUSINESS MACHINES
CORPORATION
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
The Administrative Agent: CHEMICAL BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Comwell
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to: CHEMICAL BANK AGENCY SERVICES
CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative
Agent or the Lenders pursuant to Section 2.2, 2.3, 2.5, 2.6, 2.8 or 2.13 shall
not be effective until received.
11.3 No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial
66
exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other fight, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
11.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
US$ Loans hereunder.
11.5 Payment of Expenses. Each of IBM and, as applicable, each
Subsidiary Borrower agrees (a) to pay or reimburse the Administrative Agent
for all its reasonable out-of-pocket costs and expenses incurred in connection
with the development, preparation and execution of, and any amendment,
supplement or modification to, this Agreement and any other documents prepared
in connection herewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, (b) to
pay or reimburse each Lender and the Administrative Agent for all its reasonable
costs and expenses incurred in connection with the enforcement or preservation
of any rights. under this Agreement and any such other documents, including,
without limitation, the reasonable fees and disbursements of separate counsel
(including the allocated costs of internal counsel) to the Administrative Agent
and to each Lender, and (c) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under or
in respect of, this Agreement and any such other documents, and (d) to pay,
indemnify, and hold each Lender and the Administrative Agent harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements, including
reasonable fees and disbursements of counsel (including the allocated costs of
internal counsel), incurred by or asserted against such Lender or the
Administrative Agent which arise out of or in connection with any claim,
litigation or proceeding relating to this Agreement, any Loan, any such other
documents, any actual or proposed use of proceeds of any Loan or any of the
Transactions, or any failure by any Borrower to repay any Local Currency Loans
or other obligations owing under any Local Currency Facility when due in
accordance with the terms of such Local Currency Facility (all the foregoing in
this clause (d), collectively, the "indemnified liabilities"), provided, that no
Borrower shall have any obligation hereunder to the Administrative Agent or any
Lender with respect to indemnified liabilities arising from the gross negligence
or willful misconduct of the Administrative Agent or any such Lender and
provided further, that nothing contained in this Section 11.5 (other than
Section 11.5(c)) shall require IBM or any Subsidiary Borrower to pay any taxes
of the Administrative Agent, any Lender or any Transferee or any indemnity with
respect thereto. The agreements in this Section 11.5 shall survive repayment of
the Loans and the payment of all other amounts payable hereunder.
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11.6 Participations. Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time sell to one
or more banks or other entities (each, a "Participant") participating interests
in any US$ Loan owing to such Lender, any Revolving Credit Commitment of such
Lender or any other interest of such Lender hereunder. In the event of any such
sale by a Lender of a participating interest to a Participant, such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such obligation
owing to it hereunder for all purposes under this Agreement, and the Borrowers
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under this
Agreement. In no event shall any Participant under any such participation have
any right to approve any amendment or waiver of any provision of this Agreement,
or any consent to any departure by any Borrower therefrom, except to the extent
that such amendment, waiver or consent would reduce the principal of, or
interest on, the US$ Loans or any fees payable hereunder, postpone the date of
the final maturity of the US$ Loans, or release the guarantee contained in
Section 10, in each case to the extent subject to such participation. Each
Borrower agrees that, while an Event of Default shall have occurred and be
continuing, if amounts outstanding under this Agreement are due or unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided that, in
purchasing such participating interest, such Participant shall be deemed to have
agreed to share with the Lenders the proceeds thereof as provided in Section I
1.12 as fully as if it were a Lender hereunder. Each Borrower also agrees that
each Participant shall be entitled to the benefits of Sections 2.16, 2.17, 2.18
and 2.19 with respect to its participation in the Revolving Credit Commitments
and the US$ Loans outstanding from time to time as if it was a Lender; provided
that, in the case of Section 2.18, such Participant shall have complied with the
requirements of said Section and provided, further, that no Participant shall be
entitled to receive any greater amount pursuant to any such Section than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
11.7 Transfers of Competitive Loans. (a) Any Competitive Loan
Lender, in the ordinary course of its business and in accordance with
applicable law, at any time may assign to one or more banks or other entities
(each, a "Competitive Loan Assignee") any Competitive Loan owing to such
Competitive Loan Lender, pursuant to a Competitive Loan Assignment executed by
the assignor Competitive Loan Lender and the Competitive Loan Assignee.
(b) Upon such execution, from and after the date of such Competitive Loan
Assignment, the Competitive Loan Assignee shall be deemed, to the extent of
the assignment provided for in such Competitive Loan Assignment, and subject to
the provisions of Sections 11.7(c) and 11.7(d), to have the same rights and
benefits of payment and enforcement with respect to such Competitive Loan
(including, without limitation, the applicable rights set forth
68
in Sections 2.16, 2.17, 2.18 and 2.19) and the same rights of setoff and
obligation to share pursuant to Section 11.12 as it would have had if it were a
Competitive Loan Lender hereunder.
(c) Unless such Competitive Loan Assignment shall otherwise specify and a
copy of such Competitive Loan Assignment shall have been delivered to the
Administrative Agent for its acceptance and recording in the Register in
accordance with Section 11.9(a), the assignor under the Competitive Loan
Assignment shall act as collection agent for the Competitive Loan Assignee
thereunder, and the Administrative Agent shall pay all amounts received from the
relevant Borrower which are allocable to the assigned Competitive Loan directly
to such assignor without any liability to such Competitive Loan Assignee.
(d) A Competitive Loan Assignee under a Competitive Loan Assignment
shall not, by virtue of such Competitive Loan Assignment, become a party to
this Agreement or a "Competitive Loan Lender", or have any fights to consent to
or refrain from consenting to any amendment, waiver or other modification of any
provision of this Agreement or any related document; provided that (i) the
assignor under such Competitive Loan Assignment and such Competitive Loan
Assignee may, in their discretion, agree between themselves upon the manner in
which such assignor will exercise its fights under this Agreement and any
related document, and (ii) if a copy of such Competitive Loan Assignment shall
have been delivered to the Administrative Agent for its acceptance and recording
in the Register in accordance with Section 11.9(a), no such amendment, waiver or
modification may reduce or postpone any payment of principal or interest in
respect of any Competitive Loan assigned to such Competitive Loan Assignee
without the written consent of such Competitive Loan Assignee.
(e) If a Competitive Loan Assignee has caused a Competitive Loan
Assignment to be recorded in the Register in accordance with Section
11.9(a), such Competitive Loan Assignee may thereafter, in the ordinary course
of its business and in accordance with applicable law, assign the relevant
Competitive Loans to any Competitive Loan Lender, to any affiliate or subsidiary
of such Competitive Loan Assignee or to any other financial institution that has
total assets in excess of $1,000,000,000 and that in the ordinary course of its
business extends credit of the same type as the Competitive Loans, and the
foregoing provisions of this Section 11.7 shall apply, mutatis mutandis, to any
such assignment, by a Competitive Loan Assignee. Except in accordance with the
preceding sentence, Competitive Loans may not be further assigned by a
Competitive Loan Assignee, subject to any legal or regulatory requirement that
the Competitive Loan Assignee's assets must remain under its control.
(f) Upon its receipt of a Competitive Loan Assignment executed by an
assignor Competitive Loan Lender and a Competitive Loan Assignee, together
with payment to the Administrative Agent of a registration and processing fee of
$2,500 (which shall not be payable by any Borrower), the Administrative Agent
promptly shall (i) accept such Competitive Loan Assignment, (ii) record the
information contained therein in the Register and (iii) give notice of such
acceptance and recordation to the assignor Competitive Loan Lender, the
Competitive Loan Assignee and the relevant Borrower.
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11.8 Assignments. (a) Subject to clause (ii) of the second
sentence of Section 3.1 (b), any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time and from time to
time assign to any affiliate of such Lender or, with the consent of IBM and the
Administrative Agent (which consent in each case shall not be unreasonably
withheld), to any other Lender or to an additional bank, financial institution
or other entity (each, a "Purchasing Lender") all or any part of its rights and
obligations under this Agreement pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit E, executed by such Purchasing Lender and
such assigning Lender (and, in the case of a Purchasing Lender that is not an
affiliate of the relevant assigning Lender, by IBM and the Administrative Agent)
and delivered to the Administrative Agent for its acceptance and recording in
the Register, provided, that except in the case of an assignment of all of a
Lender's rights and obligations under this Agreement, the amount of the
Revolving Credit Commitment of the assigning Lender being assigned pursuant to
each such assignment (determined as of the date of the Assignment and Acceptance
with respect to such assignment) shall in no event be less than $10,000,000 or
such lesser amount as may be consented to by IBM and the Administrative Agent
and provided, further, that a Swing Line Lender may so assign all or a portion
of such rights and obligations to a Person that shall become a Swing Line Lender
hereunder only if notice of the designation of such new Swing Line Lender shall
have been delivered to the Administrative Agent prior to such assignment. Upon
such execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) the Purchasing
Lender thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Revolving Credit Commitment (and, if applicable, a Swing Line Commitment)
as set forth therein, and (y) the assigning Lender thereunder shall, to the
extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such assigning Lender shall cease to be a
party hereto).
(b) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and a Purchasing Lender (and, in the case of a Purchasing
Lender that is not an affiliate of the relevant assigning Lender, by IBM and the
Administrative Agent) together with payment to the Administrative Agent of a
registration and processing fee of $2,500 (which shall not be payable by any
Borrower), the Administrative Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto record
the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and IBM.
11.9 The Register; Disclosure; Pledges to Federal Reserve Banks.
(a) The Administrative Agent shall maintain at its address referred to in
Section 11.2 a copy of each Competitive Loan Assignment and Assignment and
Acceptance delivered to it and a register (the "Register") for the recordation
of (i) the names and addresses of the Lenders, the Revolving Credit Commitments
and Swing Line Commitments of the Lenders, and the principal amount of the US$
Loans owing to each Lender from time to time and (ii) with respect to each
Competitive Loan Assignment delivered to the Administrative Agent, the name and
address of the Competitive Loan Assignee and the principal amount of each
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Competitive Loan owing to such Competitive Loan Assignee. The entries in the
Register shall be conclusive, in the absence of clearly demonstrable error,
and the Borrowers, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register as the owner of the US$ Loan
recorded therein for all purposes of this Agreement. The Register shall be
available for inspection by the Borrowers or any Lender or Competitive Loan
Assignee at any reasonable time and from time to time upon reasonable prior
notice.
(b) Each Borrower authorizes each Lender to disclose to any Participant,
Competitive Loan Assignee or Purchasing Lender (each, a "Transferee") and
any prospective Transferee, subject to the provisions of Section 11.21 (whether
or not, in the case of any Person that is a prospective Transferee, such Person
in fact becomes a Transferee), any and all financial information in such
Lender's possession concerning the Borrowers and their respective affiliates
which has been delivered to such Lender by or on behalf of any Borrower pursuant
to this Agreement or which has been delivered to such Lender by or on behalf of
any Borrower in connection with such Lender's credit evaluation of the Borrowers
and their respective affiliates prior to becoming a party to this Agreement.
(c) Nothing herein shall prohibit any Lender from pledging or assigning
all or any portion of its Loans to any Federal Reserve Bank in accordance
with applicable law. In order to facilitate such pledge or assignment, each
Borrower hereby agrees that, upon request of any Lender at any time and from
time to time after such Borrower has made its initial borrowing hereunder, such
Borrower shall provide to such Lender, at such Borrower's own expense, a
promissory note, substantially in the form of Exhibit G-1 or G-2, as the case
may be, evidencing the Revolving Credit Loans, Swing Line Loans or Competitive
Loans, as the case may be, owing to such Lender.
11.10 Changing Designations of Swing Line Lenders and Competitive
Loan Lenders. (a) IBM shall have the right to change the designation of a
Lender or Swing Line Lender to (i) cause a Lender to become a Swing Line Lender,
(ii) change the Swing Line Commitment of a Swing Line Lender (so long as, after
giving effect thereto, (x) such Swing Line Commitment does not exceed such
Lender's Revolving Credit Commitment and (y) the aggregate amount of the Swing
Line Commitments shall not exceed $1,000,000,000) or (iii) cause a Swing Line
Lender to cease to be a Swing Line Lender, provided that no such change shall
become effective unless (x) the Lender affected thereby shall in its sole
discretion have agreed in writing to such change and (y) prior written
notification thereof shall have been delivered to the Administrative Agent and,
in the case of clause (i) above, the Administrative Agent shall have approved of
such designation (which approval shall not be unreasonably withheld).
(b) IBM shall have the right to change the designation of a
Lender or Competitive Loan Lender to (i) cause a Lender to become a
Competitive Loan Lender or (ii) cause a Competitive Loan Lender to cease to be a
Competitive Loan Lender, provided that no such change shall become effective
unless (x) the Lender affected thereby shall in its sole discretion have agreed
in writing to such change and (y) prior written notification thereof shall have
been delivered to the Administrative Agent and, in the case of clause (i) above,
the
71
Administrative Agent shall have approved of such designation (which approval
shall not be unreasonably withheld).
11.11 Replacement of Lenders under Certain Circumstances. IBM
shall be permitted to replace any Lender which (a) requests reimbursement
for amounts owing pursuant to Section 2.17 or 2.18 (other than with respect to
Index Rate Competitive Loans), (b) is affected in the manner described in
Section 2.16 (other than with respect to Index Rate Competitive Loans) and as a
result thereof any of the actions described in said Section is required to be
taken or (c) defaults in its obligation to make Revolving Credit Loans or Swing
Line Loans hereunder, with a replacement bank or other financial institution;
provided that (i) such replacement does not conflict with any Requirement of
Law, (ii) no Event of Default shall have occurred and be continuing at the time
of such replacement, (iii) IBM shall repay (or the replacement bank or
institution shall purchase, at par) all Loans and other amounts owing to such
replaced Lender prior to the date of replacement, (iv) IBM shall be liable to
such replaced Lender under Section 2.19 if any Eurodollar Loan owing to such
replaced Lender shall be prepaid (or purchased) other than on the last day of
the Interest Period relating thereto or any Competitive Loan owing to such
replaced Lender shah be paid other than on the relevant Competitive Loan
Maturity Date, (v) the replacement bank or institution, if not already a Lender,
and the terms and conditions of such replacement, shall be reasonably
satisfactory to the Administrative Agent, (vi) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section
11.8 (provided that IBM shall be obligated to pay the registration and
processing fee referred to therein), (vii) until such time as such replacement
shall be consummated, IBM shall pay all additional amounts (if any) required
pursuant to Section 2.17 or 2.18, as the case may be, and (viii) any such
replacement shall not be deemed to be a waiver of any rights which IBM, the
Administrative Agent or any other Lender shall have against the replaced Lender.
11.12 Adjustments; Set-off. (a) If any Lender (a "benefited
Lender") shall at any time receive any payment of all or part of its US$
Loans, or interest thereon, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 8(f) or (g), or otherwise), in
a greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender's US$ Loans that are then
due and payable, or interest thereon, such benefitted Lender shall purchase at
par for cash from the other Lenders a participating interest in such portion of
each such other Lender's US$ Loan, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, however, that
if all or any portion of such excess payment or benefits is thereafter recovered
from such benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to any
Borrower, any such notice being expressly waived by each Borrower to the extent
permitted by applicable law, upon any amount becoming due and payable by any
Borrower hereunder (whether at the stated
72
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or the
account of the relevant Borrower. Each Lender agrees promptly to notify IBM and
the Administrative Agent after any such set-off and application made by such
Lender, provided that the failure to give such notice shall not affect the
validity of such set-off and application.
11.13 Counterparts. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with IBM and the
Administrative Agent.
11.14 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
11.15 Integration. This Agreement represents the agreement of the
Borrowers, the Administrative Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent or any Lender relative to subject
matter hereof not expressly set forth or referred to herein.
11.16 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.17 Submission To Jurisdiction; Waivers. Each Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general
jurisdiction of the Courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
73
(c) in the case of each Subsidiary Borrower, designates and
directs IBM at its offices at Old Orchard Road, Armonk, New York, as its
agent to receive service of any and all process and documents on its behalf
in any legal action or proceeding referred to in paragraph (a) of this
Section 11.17 in the State of New York and agrees that service upon such
agent shall constitute valid and effective service upon such Subsidiary
Borrower and that failure of IBM to give any notice of such service to any
such party shall not affect or impair in any way the validity of such
service or of any judgment rendered in any action or proceeding based
thereon;
(d) in the case of each Subsidiary Borrower, to the extent that
such Subsidiary Borrower has or hereafter may acquire any immunity
(sovereign or otherwise) from any legal action, suit or proceeding, from
jurisdiction of any court or from set-off or any legal process (whether
service of notice, attachment prior to judgment, attachment in aid of
execution of judgment, execution of judgment or otherwise) with respect to
itself or any of its property or assets, waives and agrees not to plead or
claim such immunity in respect of its obligations under this Agreement (it
being understood that the waivers contained in this paragraph (d) shall
have the fullest extent permitted under the Foreign Sovereign Immunities
Act of 1976, as amended, and are intended to be irrevocable and not subject
to withdrawal for the purposes of such Act);
(e) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Borrower at its address referred to in Section 11.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(f) agrees that nothing herein shall affect the fight to effect
service of process in any other manner permitted by law or shall limit the
fight to ▇▇▇ in any other jurisdiction; and
(g) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
11.18 Judgments Relating to Subsidiary Borrowers. (a) If, for
the purpose of obtaining judgment in any court, it is necessary to convert
a sum owing hereunder by any Subsidiary Borrower to any party hereto or any
holder of the obligations of such Subsidiary Borrower hereunder into another
currency, such Subsidiary Borrower agrees, to the fullest extent that it may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures in the relevant jurisdiction such
party or holder could purchase Dollars with such other currency for Dollars on
the Banking Day immediately preceding the day on which final judgment is given.
(b) The obligations of each Subsidiary Borrower in respect of any
sum due to any party hereto or any holder of the obligations owing
hereunder (the "Applicable Creditor") shall, notwithstanding any judgment in a
currency (the "Judgment Currency."') other than
74
Dollars, be discharged only to the extent that, on the Banking Day
following receipt by the Applicable Creditor of any sum adjudged to be so due in
the Judgment Currency, the Applicable Creditor may in accordance with normal
banking procedures in the relevant jurisdiction purchase Dollars with the
Judgment Currency; if the amount of Dollars so purchased is less than the sum
originally due to the Applicable Creditor in Dollars, such Subsidiary Borrower
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Applicable Creditor against such loss, provided, that if the
amount of Dollars so purchased exceeds the sum originally due to the Applicable
Creditor, the Applicable Creditor agrees to remit such excess to such Subsidiary
Borrower. The obligations of the Subsidiary Borrowers contained in this Section
11.1 8 shall survive the termination of this Agreement and the payment of all
other amounts owing hereunder.
11.19 Acknowledgements. Each Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Borrower arising out of or in
connection with this Agreement, and the relationship between Administrative
Agent and Lenders, on one hand, and the Borrowers, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or otherwise exists by
virtue of the transactions contemplated hereby among the Lenders or among
the Borrowers and the Lenders.
11.20 WAIVERS OF JURY TRIAL. EACH OF THE BORROWERS, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY AND FOR ANY COUNTERCLAIM
THEREIN.
11.21 Confidentiality. Each Lender agrees to keep confidential any
written or oral information (a) provided to it by or on behalf of any
Borrower or any of the Subsidiaries pursuant to or in connection with this
Agreement or (b) obtained by such Lender based on a review of the books and
records of any Borrower or any of the Subsidiaries; provided that nothing herein
shall prevent any Lender from disclosing any such information (i) to the
Administrative Agent or any other Lender, (ii) to any Transferee or prospective
Transferee so long as delivery of such information is made subject to the
requirement that such information be kept confidential in the manner
contemplated by this Section 11.21, (iii) to its employees involved in the
administration of this Agreement or any Local Currency Facility, directors,
agents, attorneys, accountants and other professional advisors (each of which
shall be instructed to hold the same in confidence), (iv) upon the request or
demand of any Governmental Authority having jurisdiction over such Lender, (v)
in response to any order of
75
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (vi) which has been publicly disclosed other
than in breach of this Agreement, or (vii) in connection with the exercise of
any remedy hereunder or under any Local Currency Facility.
11.22 Binding Effect; Successors and Assigns. (a) This Agreement
shall become effective on the date (the "Effective Date") on which (i) it
shall have been executed and delivered by a duly authorized officer of each of
IBM and the Administrative Agent and (ii) the Administrative Agent shall have
received an executed Addendum (or a copy thereof by facsimile transmission) from
each Person listed on Schedule 1.1A, provided, that, notwithstanding the
foregoing, in the event that an Addendum has not been duly executed and
delivered by each Person listed on Schedule 1.1A on the date (which shall be no
earlier than the date hereof) on which this Agreement shall have been executed
and delivered by each of IBM and the Administrative Agent, this Agreement shall
nevertheless become effective on such date with respect to those Persons which
have executed and delivered an Addendum on or before such date if IBM shall
(after consultation with the Administrative Agent) have designated one or more
Persons (the "Designated Lenders") to assume, in the aggregate, all of the
Revolving Credit Commitments which would have been held by the Persons listed on
Schedule I. 1A (the 'Non-Executing Persons") which have not so executed an
Addendum (subject to each such Designated Lender's prior written consent in its
sole discretion). Schedule I. 1A shall automatically be deemed to be amended to
reflect the respective Revolving Credit Commitments of the Designated Lenders
and the omission of the Non- Executing Persons as Lenders hereunder. The
Administrative Agent shall notify the Lenders of the Effective Date promptly
after the occurrence thereof, which notice shall be accompanied, if applicable,
with a copy of Schedule 1.1A revised to give effect to any deemed amendments
thereto made pursuant to this Section 11.22(a).
(b) This Agreement shall be binding upon and inure to the benefit
of the Borrowers, the Lenders, the Administrative Agent, all future
permitted holders of the obligations hereunder and their respective successors
and permitted assigns, except that no Borrower may assign or transfer any of its
fights or obligations under this Agreement without
76
the prior written consent of each Lender. Each reference herein to any Lender
shall, to the extent applicable, be deemed to be a reference to any
affiliate, branch or agency of any Lender which is a Local Currency Lender.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By:
-----------------------------------
Title:
CHEMICAL BANK, as Administrative Agent
By:
-----------------------------------
Title:
SCHEDULE 1.1
Revolving
Credit Swing Line
Lender Commitment Commitment
----- ---------- ----------
Chemical Bank $ 300,000,000 50,000,000
The Fuji Bank, Limited 260,000,000 50,000,000
ABN AMRO Bank NV 235,000,000 50,000,000
Bank of America National
Trust and Savings
Association 235,000,000 50,000,000
Bank of Montreal 235,000,000 50,000,000
The Bank of Nova Scotia 235,000,000 50,000,000
The Bank of Tokyo Trust
Company 235,000,000
Banque Nationale de Paris 235,000,000 50,000,000
Canadian Imperial Bank
of Commerce 235,000,000 50,000,000
The Chase Manhattan Bank, N.A. 235,000,000 50,000,000
Credit Suisse 235,000,000 50,000,000
Industrial Bank of Japan 235,000,000
Istituto Bancario San Paolo
di Torino S.P.A. 235,000,000 50,000,000
▇.▇. ▇▇▇▇▇▇ 235,000,000 50,000,000
The Long-Term Credit Bank of
Japan, Limited 235,000,000
PNC Bank, N.A. 235,000,000
Sakura Bank 235,000,000
The Sanwa Bank Limited 235,000,000 50,000,000
Societe Generale 235,000,000 50,000,000
The Sumitomo Bank, Limited 235,000,000 50,000,000
Bank of Boston 195,000,000
Bayerische Landesbank
Girozentrale 195,000,000 50,000,000
Cassa di Risparmio della
Provincie Lambarde (CARIPLO) 195,000,000
Compagnie Financiere de CIC
et de l'Union Europeene 195,000,000
The Mitsubishi Trust and
Banking Corporation 195,000,000
The Nippon Credit Bank, Ltd. 195,000,000 50,000,000
The Toronto Dominion Bank 195,000,000 50,000,000
Wachovia Bank, N.A. 195,000,000 50,000,000
Deutsche Bank AG 150,000,000
DG BANK Deutsche
Genossenschaftsbank 150,000,000
Shawmut Bank, N.A. 150,000,000
Banca di Roma SpA 100,000,000
Banco Central HispanoAmericano 100,000,000
Banco Exterior 100,000,000
Banco Santander 100,000,000
Comerica Bank 100,000,000
The Dai-ichi Kangyo Bank, Ltd. 100,000,000
Daiwa Bank Trust Company 100,000,000
Hypo Bank 100,000,000
ING Bank 100,000,000
The Mitsubishi Bank, Ltd. 100,000,000
2
Revolving
Credit Swing Line
Lender Commitment Commitment
------ ---------- ----------
The Yasuda Trust and Banking
Company, Limited 100,000,000 50,000,000
Banque Paribas 100,000,000
Banca Commerciale Italiana 100,000,000
Banca Nazionale del Lavoro 100,000,000
Bayerische Vereinsbank AG 100,000,000
Commerzbank AG 100,000,000
Credit Lyonnais Cayman
Island Branch 100,000,000
Credito Italiano 100,000,000
Mellon Bank, N.A. 100,000,000
Monte Dei Paschi di Siena 100,000,000
Norinchukin Bank 100,000,000
The Tokai Bank, Limited 100,000,000
Westdeutsche Landesbank 100,000,000
Banca Nazionale dell'
Agricoltura 60,000,000
Arab Bank Plc 50,000,000
Banca Popolare di Milano 50,000,000
Banco Bilbao Vizcaya 50,000,000
Continental Bank, N.A. 50,000,000
Kredietbank N.V. 50,000,000
Landesbank Rheinland-Pfalz
Girozentrale 50,000,000
Mitsui Trust and Banking
Company, Limited 50,000,000
Sudwestdeutche Landesbank 50,000,000
Svenska Handelsbanken 50,000,000
Swiss Bank Corporation 50,000,000
First Bank, N.A. 30,000,000
Bank of Hawaii 25,000,000
Bank of Taiwan 25,000,000
Banque Worms 25,000,000
Banque Francaise du
Commerce Exterieur 25,000,000
The First National Bank
Chicago 25,000,000
ado Takughoku Bank, Ltd. 25,000,000
The Northern Trust Company 25,000,000
Republic National Bank of
New York 25,000,000
Royal Bank of Scotland 25,000,000
Toyo Trust & Banking 25,000,000
Via Bank 25,000,000
Chiba Bank 10,000,000
Joyo Bank 10,000,000
77 Bank 10,000,000
Abu Dhabi International
Bank 5,000,000
--------------- --------------
Total $10,000,000,000 $1,000,000,000
Schedule 1.1B
Existing Credit Agreements
--------------------------
1. The $300,000,000 Revolving Credit Facility Agreement dated as of May 26,
1993 among IBM Credit Corporation, the lenders party thereto (the "Banks"),
Credit Suisse, as agent and administrative agent for the Banks, Bank of America
National Trust and Savings Association, The Chase Manhattan Bank, N.A., Chemical
Bank, Societe Generale, Union Bank of Switzerland, as co-agents for the Banks,
and Credit Suisse First Boston Limited, as arranger.
2. The $1,300,000,000 Revolving Credit Facility Agreement dated as of May 26,
1993 among IBM Credit Corporation, the lenders party thereto (the "Banks"),
Credit Suisse, as agent and administrative agent for the Banks, Bank of America
National Trust and Savings Association, The Chase Manhattan Bank, N.A., Chemical
Bank, Societe Generale, Union Bank of Switzerland, as co-agents for the Banks,
and Credit Suisse First Boston Limited, as arranger.
3. The $500,000,000 Revolving Credit Facility Agreement dated as of May 26,
1993 among International Business Machines Corporation, the lenders party
thereto (the "Banks"), Credit Suisse, as agent and administrative agent for the
Banks, Bank of America National Trust and Savings Association, The Chase
Manhattan Bank, N.A., Chemical Bank, Societe Generale, Union Bank of
Switzerland, as co-agents for the Banks, and Credit Suisse First Boston Limited,
as arranger.
4. The $2,500,000,000 Revolving Credit Facility Agreement dated as of May 26,
1993 among International Business Machines Corporation, the lenders party
thereto (the "Banks"), Credit Suisse, as agent and administrative agent for the
Banks, Bank of America National Trust and Savings Association, The Chase
Manhattan Bank, N.A., Chemical Bank, Societe Generale, Union Bank of
Switzerland, as co-agents for the Banks, and Credit Suisse First Boston Limited,
as arranger.
SCHEDULE 6.2(c)
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
[For the Fiscal Quarter ending __]
[For the Fiscal Year ending __]
Pursuant to Section 6.2(c) of the Credit Agreement, dated as of
December 22, 1993 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"; terms defined therein being used herein as
therein defined unless otherwise defined herein), among International Business
Machines Corporation ("IBM"), each Subsidiary Borrower party thereto, the
Lenders named therein, and Chemical Bank, as Administrative Agent for the
Lenders (in such capacity, the "Administrative Agent"), the undersigned, the
duly elected, qualified and acting Responsible Officer of IBM, hereby certifies
that:
(a) During the period of four consecutive fiscal quarters ended
on , 199 , such Responsible Officer has obtained no knowledge of any
Default or Event of Default except as follows:
[The financial statements referred to in Section 6.2(b) of the
Credit Agreement which are delivered concurrently with the delivery of this
Compliance Certificate fairly present the financial position, results of
operations, cash flows and changes in stockholders' equity of IBM and the
Subsidiaries, in accordance with GAAP, subject to normal year-end audit
adjustments which are not expected to be material in amount.] */
[(b) The covenant calculation set forth below is based on IBM's
[unaudited] [audited] balance sheet and statements of earnings, cash flows and
stockholders' equity for the fiscal [quarter] [year] ended
, 199 , a copy of which is attached hereto.]**/
------------------
*/ Insert only in Compliance Certificates accompanying financial statements
delivered pursuant to Section 6.2(b) of the Credit Agreement.
**/ Insert only in Compliance Certificates delivered in respect of fiscal
periods ending on or after June 30, 1994.
1. Consolidated Net Interest Expense Ratio (Section 7.4)
The ratio of
(i) the difference between
A. the sum of
(1) earnings before income taxes of IBM and its
consolidated Subsidiaries for the period of four
consecutive fiscal quarters ended on the date
referred to in paragraph (b) above, excluding
gains or losses from the divestiture or sale of a
business
(2) Consolidated Net Interest Expense (to the extent
deducted in arriving at earnings before income
taxes) $_________
(3) depreciation expense (to the extent deducted in
arriving at earnings before income taxes) $_________
(4) amortization expense (to the extent deducted in
arriving at earnings before income taxes) $_________
(5) restructuring charges made after the Effective
Date (to the extent deducted in arriving at
earnings before income taxes) $_________
Total of (1), (2), (3), (4) and (5) above $_________
and
B. the sum of
(1) cash payments made during such period in respect
of restructuring charges made after the Effective
Date $_________
(2) payments made during such period for plant,
rental machines and other property excluding
acquisitions of businesses (net of proceeds
received during such period from dispositions of
plant, rental machines and other property
investment excluding divestitures or sales of
businesses)
(3) Investment in software for such period $_________
Total of (1), (2) and (3) above $_________
equals
C. Consolidated Adjusted Cash Flow
(A. minus B.) $_________
to
(ii) the difference between
A. total interest cost of IBM and the Subsidiaries
for such period $_______
and
B. interest income of IBM and the Subsidiaries for such
period equals $_______
C. Consolidated Net Interest Expense $_______
equals
(iii) the Consolidated Net Interest Expense Ratio $_______
(Ratio of Consolidated Adjusted Cash Flow (i)(C.) to
Consolidated Net Interest Expense (ii)(C.))
IN WITNESS WHEREOF, the undersigned has hereto set his name.
Dated:
---------------------------
Title: [Responsible Officer
of IBM]
EXHIBIT A-1 TO
CREDIT AGREEMENT
[FORM OF COMPETITIVE LOAN CONFIRMATION]
, 199_
Chemical Bank, as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Reference is made to the Credit Agreement, dated as of December 22, 1993,
among International Business Machines Corporation, each Subsidiary Borrower
party thereto, the Lenders named therein, and Chemical Bank, as Administrative
Agent (as the same may be amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"). Terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.
In accordance with Section 2.8(d) of the Credit Agreement, the
undersigned accepts and confirms the offers by Competitive Loan Lender(s)
to make Competitive Loans to the undersigned on , 199_ [Competitive Loan
Borrowing Date] under Section 2.8(b) [index rate] or 2.8(c) [fixed rate] in the
(respective) amount(s) set forth on the attached list of Competitive Loans
offered.
Very truly yours,
[Name of Borrower]
By
---------------------------------
Title:
[Borrower must attach Competitive Loan offer list prepared by Administrative
Agent with accepted amount entered by the Borrower to right of each
Competitive Loan offer].
EXHIBIT A-2 TO
CREDIT AGREEMENT
[FORM OF COMPETITIVE LOAN OFFER]
Chemical Bank, as Administrative Agent , 199_
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Reference is made to the Credit Agreement, dated as of December 22, 1993,
among International Business Machines Corporation, each Subsidiary Borrower
party thereto, the Lenders named therein, and Chemical Bank, as Administrative
Agent (as the same may be amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"). Terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement. In
accordance with Section 2.8(b) [index rate] or 2.8(c) [fixed rate] of the Credit
Agreement, the undersigned Competitive Loan Lender offers to make Competitive
Loans thereunder in the following amounts with the following maturity dates:
Competitive Aggregate Maximum Amount: $_________
Loan Date: ,199
--------- ---
Maturity Date 1: Maximum Amount: $
---------
,199 $ offered at *
------------ --------- --------
$ offered at *
------------ --------- --------
Maturity Date 2: Maximum Amount: $
----------
, 199 $ offered at *
------------ --------- --------
$ offered at *
------------ --------- --------
Maturity Date 3: Maximum Amount: $
, 199 $ offered at *
------------ --------- --------
$ offered at *
------------ --------- --------
Very truly yours,
[NAME OF COMPETITIVE LOAN LENDER]
By _____________________________________
Name____________________________________
Title___________________________________
Telephone No.___________________________
Fax No._________________________________
----------------------
* Insert the interest rate offered for the specified loan amount. In the
case of Index Rate Competitive Loans, insert a margin bid. In the case of
Fixed Rate Competitive Loans. insert a fixed rate bid.
EXHIBIT A-3 TO
CREDIT AGREEMENT
[FORM OF COMPETITIVE LOAN REQUEST]
,199
--------- --
Chemical Bank, as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Reference is made to the Credit Agreement, dated as of December 22, 1993,
among International Business Machines Corporation, the undersigned, each
Subsidiary Borrower party thereto, the Lenders named therein, and Chemical
Bank, as Administrative Agent (as the same may be amended, supplemented or
otherwise modified from time to time, the "Credit Agreement"). Terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
This is [an Index Rate] [a Fixed Rate] Competitive Loan Request pursuant to
Section 2.8(a) of the Credit Agreement requesting quotes for the following
Competitive Loan:
Loan 1 Loan 2 Loan 3
Aggregate Principal Amount $ $ $
Borrowing Date
Interest Period2
Maturity Date3
Interest Payment Dates4
Very truly yours,
[Name of Borrower]
By:
-------------------
Title:
--------------------
1. Pursuant to the Credit Agreement, a Competitive Loan Request may be
transmitted in writing or by facsimile transmission, or by telephone,
immediately confirmed by facsimile transmission. In any case, a Competitive
Loan Request shall contain the information specified in the second paragraph
of this form.
2. Insert only in an Index Rate Competitive Loan Request.
3. In an Index Rate Competitive Loan Request, insert last day of Interest
Period.
4. Insert only in a Fixed Rate Competitive Loan Request.
EXECUTION COPY
FIRST AMENDMENT, dated as of March 1, 1995, to the Credit Agreement dated as
of December 22, 1993 (the "Credit Agreement") among International Business
Machines Corporation ("IBM"), each Subsidiary Borrower party thereto, the banks
and other financial institutions parties thereto (the "Lenders") and Chemical
Bank, as administrative agent (in such capacity, the "Administrative Agent") for
the Lenders.
W I T N E S S E T H:
WHEREAS, IBM has requested the Lenders to amend the Credit Agreement in
order to (i) change the Applicable Eurodollar Margin and the Facility Fee Rate,
(ii) increase the maximum permitted aggregate of all Local Currency Facility
Stated Maximum Borrowing Amounts from $4,000,000,000 to $5,000,000,000 and (iii)
modify the requirement that the Lenders party to any Local Currency Facility
execute the related Local Currency Facility Addendum; and
WHEREAS, in connection with the foregoing, IBM has requested the
Administrative Agent, on behalf of the Lenders, to enter into this First
Amendment, and the Administrative Agent is willing to so consent subject to the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged the parties hereto hereby agree as follows:
I. AMENDMENTS
1. SECTION 1.1--APPLICABLE EURODOLLAR MARGIN. Section 1.1 of the Credit
Agreement is hereby amended by amending and restating the definition of
"Applicable Eurodollar Margin" in its entirety as follows:
"Applicable Eurodollar Margin": with respect to each Eurodollar Loan at
any date, the applicable percentage per annum set forth below based upon the
Status and Utilization on such date (provided that if the Revolving Credit
Commitments have been terminated on or prior to such date, the Utilization
for such date shall be deemed to be greater than 50%):
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
STATUS STATUS STATUS STATUS STATUS
------- -------- --------- -------- -------
If Utilization is less than or equal to
50%...................................... 0.1700% 0.1750% 0.2000% 0.4000% 0.5000%
If Utilization is greater than 50%....... 0.2950% 0.3000% 0.3250% 0.5250% 0.6250%
2. SECTION 1.1--FACILITY FEE RATE. Section 1.1 of the Credit Agreement is
hereby amended by amending and restating the definition of "Facility Fee Rate"
in its entirety as follows:
"Facility Fee Rate": for any day, the rate per annum set forth below
opposite the Status in effect on such day:
FACILITY FEE
STATUS RATE
------------------------------------------ ------------
Level I Status............................ 0.0800%
Level II Status........................... 0.0900%
Level III Status.......................... 0.1000%
Level IV Status........................... 0.2000%
Level V Status............................ 0.3750%
3. Section 3.1(a). Section 3.1(a) of the Credit Agreement is hereby amended
by deleting the words "executed by IBM, each such Borrower and each such Lender"
and substituting, in lieu thereof,
the words "executed by IBM and each such Borrower and executed or acknowledged
in writing by each such Lender".
4. Section 3.1(b). Section 3.1(b) of the Credit Agreement is hereby amended
by deleting the amount "$4,000,000,000" contained therein and substituting, in
lieu thereof, the amount "$5,000,000,000".
II. MISCELLANEOUS
1. DEFINED TERMS. Terms defined in the Credit Agreement shall be used in
this First Amendment with their defined meanings unless otherwise defined
herein.
2. CONDITIONS TO EFFECTIVENESS. This First Amendment shall become effective
on the date (the "Amendment Effective Date") on which (a) the Administrative
Agent shall have received from each Lender an executed consent (or a facsimile
transmission thereof) to the execution of this First Amendment by the
Administrative Agent on behalf of such Lender and (b) the Administrative Agent
shall have received a counterpart hereof (or a facsimile transmission thereof)
executed by IBM and each Subsidiary Borrower.
3. REPRESENTATIONS AND WARRANTIES: No Default or Event of Default. (a) Each
of IBM and each Subsidiary Borrower hereby represents and warrants as of the
date hereof and as of the Amendment Effective Date that each of the
representations and warranties made by it in the Credit Agreement is true and
correct in all material respects on and as of each such date as if made on and
as of each such date; (b) IBM hereby represents and warrants as of the date
hereof and as of the Amendment Effective Date that no Default or Event of
Default (other than those relating to any Local Currency Facility) has occurred
and is continuing as of each such date; and (c) each Subsidiary Borrower hereby
represents and warrants as of the date hereof and as of the Amendment Effective
Date that no Default or Event of Default relating to any Local Currency Facility
to which it is a party has occurred and is continuing as of each such date.
4. NO CHANGE. Except as expressly provided herein, this Amendment shall not
modify or amend any term or provision of the Credit Agreement, and each term and
provision of the Credit Agreement shall remain in full force and effect.
5. COUNTERPARTS. This First Amendment may be executed by the parties hereto
in any number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
6. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
INTERNATIONAL BUSINESS MACHINES
CORPORATION
By
...................................
Title:
CHEMICAL BANK, as Administrative Agent
By
...................................
Title:
2
IBM INTERNATIONAL MAINTENANCE PARTS
LOGISTICS B.V.
By
...................................
Title:
IBM NEDERLAND FINANCIERINGEN B.V.
By
...................................
Title:
IBM NEDERLAND N.V.
By
...................................
Title:
IBM INTERNATIONAL FINANCE N.V.
By
...................................
Title: Director
IBM DE MEXICO, S.A.
By
...................................
Title:
IBM DEL PERU S.A.
By
...................................
Title:
IBM IRELAND LIMITED
By
...................................
Title:
IBM CANADA LTD.
By
...................................
Title:
IBM VENEZUELA S.A.
By
...................................
Title:
INTERNATIONAL BUSINESS MACHINES, S.A.
By
...................................
Title:
IBM BRASIL INDUSTRIA, MAQUINAS E
SERVICOS, LTD.
By
...................................
Title:
IBM BRASIL LEASING ARRENDAMENTO
MERCANTIL S.A.
By
...................................
Title:
IBM URUGUAY, S.A.
By
...................................
Title:
IBM SEMEA S.P.A
By
..................................
Title:
IBM ARGENTINA, S.A.
By
...................................
Title:
IBM AUSTRALIA LIMITED
By
...................................
Title:
IBM UNITED KINGDOM HOLDINGS LIMITED
By
...................................
Title:
IBM UNITED KINGDOM LIMITED
By
...................................
Title:
IBM CREDIT CORPORATION
By
...................................
Title: