Exhibit (4)(f)


 




 





 


 


GUARANTEE
AGREEMENT


made by


INTERNATIONAL
BUSINESS MACHINES CORPORATION


as Guarantor


dated as of


[           ],
2007




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
   

  	
   

  	
   

  
	
  Definitions and
  Other Provisions of General Application

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.01.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  	
   

  
	
  Guarantee

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Unconditional Guarantee

  	
  7

  
	
  SECTION 2.02.

  	
  Execution of Guarantee

  	
  8

  
	
  SECTION 2.03.

  	
  Subordination of Subrogation and Other
  Rights

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  
	
   

  	
   

  	
   

  
	
  Consolidation,
  Merger, Conveyance, Transfer or Lease

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Guarantor May Consolidate, Etc., Only on
  Certain Terms

  	
  8

  
	
  SECTION 3.02.

  	
  Successor Corporation Substituted

  	
  9

  
	
  SECTION 3.03.

  	
  Assignment to the Guarantor of the
  Company’s Obligations

  	
  9

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  
	
   

  	
   

  	
   

  
	
  Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Amendments Without Consent of Holders

  	
  9

  
	
  SECTION 4.02.

  	
  Amendment With Consent of Holders

  	
  9

  
	
  SECTION 4.03.

  	
  Execution of Amendments

  	
  10

  
	
  SECTION 4.04.

  	
  Effect of Amendments

  	
  10

  
	
  SECTION 4.05.

  	
  Conformity With Trust Indenture Act

  	
  10

  
	
  SECTION 4.06.

  	
  Reference in Guarantees to Amendments

  	
  10

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  	
   

  
	
  Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Money for Security Payments To Be Held in
  Trust

  	
  11

  
	
  SECTION 5.02.

  	
  Limitation on Secured Indebtedness

  	
  11

  
	
  SECTION 5.03.

  	
  Limitation on Sale and Leaseback Transactions

  	
  11

  
	
  SECTION 5.04.

  	
  Waiver of Certain Covenants

  	
  12

  
	
  SECTION 5.05.

  	
  Reports by Guarantor

  	
  12

  
	
  SECTION 5.06.

  	
  Related Indentures

  	
  12

  



 


 

















 


	
  ARTICLE VI

  	
   

  
	
   

  	
   

  	
   

  
	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Trust Indenture Act

  	
  12

  
	
  SECTION 6.02.

  	
  Effect of Headings and Table of Contents

  	
  13

  
	
  SECTION 6.03.

  	
  Successors and Assigns

  	
  13

  
	
  SECTION 6.04.

  	
  Separability Clause

  	
  13

  
	
  SECTION 6.05.

  	
  Benefits of Agreement

  	
  13

  
	
  SECTION 6.06.

  	
  Governing Law

  	
  13

  
	
  SECTION 6.07.

  	
  Notices, Etc., to the Guarantor

  	
  13

  
	
  SECTION 6.08.

  	
  Counterparts; Facsimile

  	
  13

  



 


ii

















 


GUARANTEE AGREEMENT (this “Agreement”), dated as of [           ],
2007, made by International Business Machines Corporation, a New York
corporation (the “Guarantor”), whose principal place of  business is New Orchard Road, Armonk, New
York, 10504, the ultimate parent of IBM International Group Capital LLC, a
limited liability company organized under the laws of Delaware (the “Company”),
in favor of the Holders (as defined in the Indenture referred to below) and the
Trustee (as defined below).


 


Reference is
made to the Indenture (as the same may be amended, restated, supplemented or
modified from time to time, the “Indenture”) between the Company and The Bank
of New York as trustee (the “Trustee”) dated as of [           ],
2007, relating to the securities issued thereunder (the “Securities”).


 


RECITALS OF THE GUARANTOR


 


The Guarantor
has duly authorized the execution and delivery of this Agreement and has agreed
to guarantee the Securities pursuant to the terms of the Indenture and this
Agreement;


 


All things
necessary to make this Agreement a valid agreement of the Guarantor, in
accordance with its terms, have been done.


 


NOW,
THEREFORE, THIS AGREEMENT WITNESSETH:


 


That in order
to declare the terms and conditions upon which the guarantee of the securities
(the “Guarantee”) is made, executed, authenticated and delivered, the Guarantor
covenants and agrees, for the equal and proportionate benefit of all Holders
(as defined below) of the Securities or of any series thereof, as follows:


 


ARTICLE I


Definitions
and Other Provisions of General Application


 


SECTION 1.01. Definitions.
For all purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:


 


(a) the terms defined in this Article I have the meanings assigned
to them in this Article I and include the plural as well as the singular;


 


(b) the capitalized terms not defined in this Agreement have the
meanings assigned to them in the Indenture;


 


(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term “generally
accepted accounting principles” with respect to any computation required or
permitted hereunder shall mean such 


 


 





















 


accounting
principles as are generally accepted in the United States of America at the
date of such computation; and


 


(d) the words “herein,” “hereof” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or other subdivision.


 


“Attributable
Debt” means, as of the date of its 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” means, 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 all Outstanding Securities
and all securities issued and outstanding (as defined in the 1985 Indenture)
under the 1985 Indenture to which Sections 605 and 606 of the 1985 Indenture
apply (and whose application has not been waived).


 


“Board of
Directors” means either the board of directors of the Guarantor, any
executive officer of the Guarantor duly authorized to act in the name of or on
behalf of that board or any committee consisting of two or more persons (who
need not be directors) duly authorized to act in the name of or on behalf of
that board.


 


“Board
Resolution” means a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Guarantor to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification.


 


“Consolidated
Net Tangible Assets” means, at any date, the total assets appearing on the
most recently prepared consolidated balance sheet of the Guarantor and the
Subsidiaries as of the end of a fiscal quarter of the Guarantor, prepared in
accordance with generally accepted accounting principles, less (a) all current
liabilities as shown on such balance sheet and (b) intangible assets. “Intangible
assets” means the value (net of any applicable reserves), as shown on or
reflected in such balance sheet, 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 


 


2

















 


unamortized
premium; but in no event shall the term “intangible assets” include program
products.


 


“corporation”
includes corporations, associations, companies (including limited liability
companies) and business trusts.


 


“Funded
Debt” means any Indebtedness maturing by its terms more than one year from
the date of the issuance thereof, including any Indebtedness renewable or
extendible at the option of the obligor to a date later than one year from the
date of the original issuance thereof.


 


“Indebtedness”
of any corporation means all indebtedness representing money borrowed which is
created, assumed, incurred or guaranteed in any manner by such corporation or
for which such corporation is otherwise responsible or liable (whether by
agreement to purchase indebtedness of, or to supply funds to or invest in,
others).


 


“Lien”
means any mortgage, pledge, security interest, lien, charge or other
encumbrance, but does not include any of the foregoing types of encumbrances
that are incidental to the conduct of the business of the Guarantor or any
Restricted Subsidiary or the ownership of the property and assets of any of
them and that were not incurred in connection with the incurrence of any
Indebtedness. Such incidental encumbrances that are to be excluded from the
term “Liens” include without limitation: pledges or deposits made to secure
obligations of the Guarantor or a Restricted Subsidiary under workmen’s
compensation laws or similar legislation; 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; governmental (Federal,
state or municipal) liens arising out of contracts for the purchase of products
of the Guarantor or a Restricted Subsidiary, and deposits or pledges to obtain
the release of any of the foregoing liens; liens created by or resulting from
any litigation or legal proceeding that is currently being contested in good
faith by appropriate proceedings; leases made or existing on Principal Property
entered into in the ordinary course of business by the Guarantor or a
Restricted Subsidiary; landlords’ liens under leases of Principal Property to
which the Guarantor or a Restricted Subsidiary is a party; zoning restrictions,
easements, licenses or restrictions on the use of Principal Property or minor
irregularities in the title thereto; deposits in connection with bids, tenders
or contracts (other than for the payment of money) to which the Guarantor or
any Restricted Subsidiary is a party; deposits to secure public or statutory
obligations of the Guarantor or any Restricted Subsidiary; 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; deposits of
cash or obligations of the United States of America to secure surety, appeal or
customs bonds to which the Guarantor or any Restricted Subsidiary is a party;
and 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.


 


“Officers’
Certificate” means a certificate signed by the Chairman of the Board, the
President or any Vice President, and by the Treasurer, the Controller, the
Secretary or any Assistant Treasurer, Assistant Controller or Assistant
Secretary, of the Guarantor, and delivered to the Trustee.


 


3

















 


“Paying
Agent” means the Trustee or any other Person authorized by the Guarantor to
pay the principal of (and premium, if any) or interest, if any, on any
Securities on behalf of the Guarantor.


 


“Principal
Property” means any land, land improvements, buildings and associated
factory, laboratory and office equipment (excluding all products marketed by
the Guarantor 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
the Guarantor 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 Internal Revenue Code of 1986 (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 may by Board
Resolution declare is not of material importance to the Guarantor and the
Restricted Subsidiaries taken as a whole, and (iii) any such facility, or
portion thereof, owned or leased jointly or in common with one or more Persons
other than the Guarantor and any Subsidiary and in which the interest of the
Guarantor and all Subsidiaries does not exceed 50%.


 


“Restricted
Securities” means any shares of the capital stock or Indebtedness of any
Restricted Subsidiary.


 


“Restricted
Subsidiary” means (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 Principal Property, and (iii) in which the investment of the Guarantor 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 the
Guarantor and the Subsidiaries or any of them, or (y) engaged in the business
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 the Guarantor 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 


 


4

















 


all or any
substantial part of the business or assets of the Guarantor or any Restricted
Subsidiary; and (b) any other Subsidiary which is hereafter designated by the
Board of Directors as a Restricted Subsidiary.


 


“Sale and
Leaseback Transaction” means any arrangement with any Person providing for
the leasing by the Guarantor 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 the Guarantor 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 the Guarantor 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.


 


“Secured
Indebtedness” means (a) Indebtedness of the Guarantor or a Restricted
Subsidiary which is secured by any Lien upon any Principal Property or
Restricted Securities and (b) Indebtedness of the Guarantor or a Restricted
Subsidiary in respect of any conditional sale or other title retention
agreement covering Principal Property or Restricted Securities; but “Secured
Indebtedness” shall not include any of the following:


 


(i) Indebtedness of the Guarantor 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) Indebtedness which is 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 Indebtedness
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 Indebtedness secured by any such Lien or agreement exceeds
the cost to the Guarantor or such Restricted Subsidiary of the related
acquisition, construction or improvement shall be considered to be “Secured
Indebtedness”;


 


5





















 


(iii) Indebtedness which is 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 the
Guarantor or a Restricted Subsidiary;


 


(iv) Indebtedness of Restricted Subsidiaries owing to the Guarantor or
any other Restricted Subsidiary and Indebtedness of the Guarantor owing to any
Restricted Subsidiary;


 


(v) in the case of any corporation which shall have become or becomes
(by any manner whatsoever), as the case may be, a Restricted Subsidiary after
July 15, 1985, Indebtedness which is 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 the Guarantor of Secured Indebtedness and
Attributable Debt of any Restricted Subsidiaries and guarantees by a Restricted
Subsidiary of Secured Indebtedness and Attributable Debt of the Guarantor and
any other Restricted Subsidiaries;


 


(vii) Indebtedness arising from any Sale and Leaseback Transaction;


 


(viii) Indebtedness secured by Liens on property of the Guarantor or a
Restricted Subsidiary in favor of the United States of America or Canada, 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 Canada, 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 Indebtedness 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 Indebtedness secured by any
such Lien exceeds the cost to the Guarantor or such Restricted Subsidiary of
the related acquisition or construction shall be considered to be “Secured
Indebtedness”; and


 


(ix) the replacement, extension or renewal (or successive replacements,
extensions or renewals) of any Indebtedness (in whole or in part) excluded from
the definition of “Secured Indebtedness” by subparagraphs (i) through (viii)
above; provided, however, that no Lien securing, or conditional
sale or title retention agreement with respect to, such Indebtedness shall
extend to or cover any Principal Property or any Restricted Securities, other
than such property which secured the Indebtedness 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 Indebtedness
secured by such Lien or was or is in a principal amount in excess of the
principal amount of Indebtedness excluded 


 


6





















 


from the
definition of “Secured Indebtedness” by subparagraphs (i) through (viii) above,
the amount of such increase or excess shall be considered to be “Secured
Indebtedness”.


 


In no event
shall the foregoing provisions be interpreted to mean or their operation to
cause the same Indebtedness to be included more than once in the calculation of
“Secured Indebtedness” as that term is used in this Agreement.


 


“Subsidiary”
means any corporation a majority of the Voting Shares of which are at the time
owned or controlled, directly or indirectly, by the Guarantor or by one or more
Subsidiaries, or by the Guarantor and one or more Subsidiaries.


 


“1985
Indenture” means the Indenture dated as of July 15, 1985, between the
Guarantor and The Bank of New York (successor to Morgan Guaranty Trust Company
of New York), as Trustee, as supplemented and amended by the Instrument of
Resignation, Appointment and Acceptance dated as of May 1, 1996, among the
Guarantor, Morgan Guaranty Trust Company of New York and The Bank of New York.


 


ARTICLE II



Guarantee


 


SECTION 2.01. Unconditional
Guarantee. The Guarantor hereby unconditionally guarantees to each Holder
of a Security authenticated by the Trustee and to the Trustee and its
successors and assigns that:  the
principal of, premium thereon (if any) and interest on each series of
Securities will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration or otherwise, and interest
on any overdue principal and interest on any overdue interest on each series of
Securities and all other obligations of the Company to the Holders or the
Trustee hereunder or under the Indenture or such series of Securities will be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof. The Guarantor hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Indenture or
any series of Securities, the absence of any action to enforce the same, any
waiver or consent by any Holder or the Trustee with respect to any provisions
of the Indenture, any series of Securities or of this Agreement, the recovery
of any judgment against the Company, any action to enforce the same or any
other circumstance which might otherwise constitute a legal or equitable
discharge or defense of the Guarantor. The Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that the Guarantee will not be discharged except by complete performance of the
obligations contained in the Indenture and each series of Securities. If any
Holder or Trustee is required by any court or otherwise to return to the Company
or the Guarantor or any custodian, trustee, liquidator or other similar
official acting in relation to the Company or the Guarantor, any amount paid by
the Company or Guarantor to the Trustee or such Holder, the Guarantee, to the
extent theretofore discharged, shall be reinstated in full force and effect.


 


7





















 


SECTION 2.02. Execution
of Guarantee. To further evidence the Guarantee to the Holders, the
Guarantor hereby agrees to execute a Guarantee substantially in the form of
Exhibit A hereto, to be endorsed on and made a part of each Security
ordered to be authenticated and delivered by the Trustee. The Guarantor hereby
agrees that its Guarantee set forth in Section 2.01 shall remain in full
force and effect notwithstanding any failure to endorse on each Security a
Guarantee. Each such Guarantee shall be signed on behalf of the Guarantor by
its Chairman of the Board, its President or one of its Vice Presidents prior to
the authentication of the Security on which it is endorsed, and the delivery of
such Security by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Guarantee on behalf of the Guarantor. Such
signature upon the Guarantee may be a manual or facsimile signature of such
officer and may be imprinted or otherwise reproduced on the Guarantee, and in
case such officer who shall have signed the Guarantee shall cease to be such
officer before the Security on which Guarantee is endorsed shall have been
authenticated and delivered by the Trustee or disposed of by the Company, the
Security nevertheless may be authenticated and delivered or disposed of as
though the Person who signed the Guarantee had not ceased to be such officer of
the Guarantor.


 


SECTION 2.03. Subordination
of Subrogation and Other Rights. The Guarantor hereby agrees that any claim
against the Company that arises from the payment, performance or enforcement of
the Guarantor’s obligations under the Guarantee or the Indenture, including,
without limitation, any right of subrogation, shall be subject and subordinate
to, and no payment with respect to any such claim of the Guarantor shall be
made before, the payment in full in cash of all outstanding Securities of each
series in accordance with the provisions provided therefor in the Indenture.


 


ARTICLE III



Consolidation, Merger, Conveyance, Transfer or Lease


 


SECTION 3.01. Guarantor
May Consolidate, Etc., Only on Certain Terms. The Guarantor shall not
consolidate with or merge into any other Person or convey or transfer its
properties and assets substantially as an entirety to any Person, unless:


 


(a) the Person formed by such consolidation or into which the Guarantor
is merged or the Person which acquires by conveyance or transfer the properties
and assets of the Guarantor substantially as an entirety shall be a Person
organized and existing under the laws of the United States of America or any
state or the District of Columbia, and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal of,
and premium, if any, and interest, if any, on all the Securities and the
performance or observance of every covenant of this Agreement on the part of
the Guarantor to be performed or observed;


 


(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of  time, or both, would become an Event of
Default, shall have occurred and be continuing; and


 


8





















 


(c) the Guarantor has delivered to the Trustee an Officers’ Certificate
and an Opinion of Counsel each stating that such  consolidation, merger, conveyance or transfer
and such supplemental agreement comply with this Article and that all  conditions precedent herein provided for
relating to such  transaction have been
complied with.


 


SECTION 3.02. Successor
Corporation Substituted. Upon any consolidation or merger, or any
conveyance or transfer of the properties and assets of the Guarantor
substantially as an entirety in accordance with Section 3.01, the
successor corporation formed by such consolidation or into which the Guarantor
is merged or to which such conveyance or transfer is made shall succeed to, and
be substituted for, and may exercise every right and power of, the Guarantor
under this Agreement with the same effect as if such successor corporation had
been named as the Guarantor herein; and in the event of any such conveyance or
transfer, the Guarantor (which term shall for this purpose mean the Person
named as the “Guarantor” in the first paragraph of this instrument) shall be
discharged from all liability under this Agreement and in respect of the
Securities and may be dissolved and liquidated.


 


SECTION 3.03. Assignment
to the Guarantor of the Company’s Obligations. It is acknowledged that,
pursuant to Section 9.03 of the Indenture, the Company may assign its
obligations under any series of Securities and the Indenture to the Guarantor
or any Subsidiary of the Guarantor in accordance with Section 9.03 and, if
the Company assigns its obligations to the Guarantor in accordance with
Section 9.03 with respect to any series of Securities, all Guarantees of
outstanding Securities of such series shall automatically terminate and be
discharged.


 


ARTICLE IV



Amendments


 


SECTION 4.01. Amendments
Without Consent of Holders. Without the consent of any Holders, the
Guarantor, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more agreements, in form
satisfactory to the Trustee, for any of the following purposes:


 


(a) to evidence the succession of another corporation to the Guarantor
and the assumption by any such successor of the covenants of the Guarantor
herein; or


 


(b) to add to the covenants of the Guarantor for the benefit of the
Holders of all or any series of Securities, or to surrender any right or power
conferred upon the Guarantor; or


 


(c) to secure the Securities; or


 


(d) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make
any other provisions with respect to matters or questions arising under this
Agreement; provided such action shall not adversely affect the interests
of the Holders in any material respect.


 


SECTION 4.02. Amendment
With Consent of Holders. With the consent of the Holders of not less than a
majority in principal amount of the Securities at the time Outstanding 


 


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of all series affected by such amendment
(each such series voting as a separate class), by Act of said Holders delivered
to the Guarantor and the Trustee, the Guarantor, when authorized by a Board
Resolution, and the Trustee may enter into an amendment to this Agreement for
the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Holders of Securities of such series under this
Agreement; provided, however, that no such amendment shall,
without the consent of the Holder of each outstanding Security affected
thereby,


 


(a) modify Article II or the definitions used in Article II
in a manner which adversely affects the Holders of Outstanding Securities in
any material respect, or


 


(b) modify any of the provisions of this Section 4.02, except to
increase any such percentage or to provide that certain other provisions of
this Agreement cannot be modified or waived without the consent of the Holder
of each Outstanding  Security affected
thereby.


 


An amendment
that changes or eliminates any covenant or other provision of this Agreement
which has expressly been included solely for the benefit of one or more
particular series of Securities, or that modifies the rights of the Holders of
Securities of such series with respect to such covenant or other provision,
shall be deemed not to affect the rights under this Agreement of the Holders of
Securities of any other series.


 


It shall not
be necessary for any Act of Holders under this Section 4.02 to approve the
particular form of any proposed amendment, but it shall be sufficient if such
Act shall approve the substance thereof.


 


SECTION 4.03. Execution
of Amendments. In executing any amendment permitted by this Article IV,
the Trustee shall be entitled to receive, and shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement. The Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Trustee’s own rights, duties or immunities under this Agreement or otherwise.


 


SECTION 4.04. Effect
of Amendments. Upon the execution of any amendment under this Article IV,
this Agreement shall be modified in accordance therewith, and such amendment
shall form a part of this Agreement for all purposes; and every Holder of
Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.


 


SECTION 4.05. Conformity
With Trust Indenture Act. Every amendment executed pursuant to this Article IV
shall conform to the requirements of the Trust Indenture Act as then in effect.


 


SECTION 4.06. Reference
in Guarantees to Amendments. The Guarantees endorsed on Securities
authenticated and delivered after the execution of any amendment pursuant to
this Article IV may, and shall, if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
amendment. If the Guarantor shall so determine, new Securities so modified as
to conform, in the opinion of the Trustee and the 


 


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Board of Directors, to any such amendment may
be prepared and executed by the Guarantor and authenticated and delivered by
the Trustee in exchange for Outstanding Securities.


 


ARTICLE V



Covenants


 


SECTION 5.01. Money
for Security Payments To Be Held in Trust. If the Guarantor shall at any
time act as Paying Agent with respect to any series of Securities, it will, on
or before each due date of the principal of (or premium, if any) or interest,
if any, on any of the Securities of that series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the principal
(or premium, if any) or interest, if any, so becoming due until such sums shall
be paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure to so act.


 


SECTION 5.02. Limitation
on Secured Indebtedness. Unless specified, as contemplated by the Indenture
or this Agreement, as the case may be, not to be applicable to Securities of
any series, this Section shall be applicable to Securities of each series for
the benefit of the Securities of such series as long as any Securities of such
series are Outstanding. The Guarantor will not, and will not permit any
Restricted Subsidiary to, create, assume, incur or guarantee any Secured
Indebtedness without making provision whereby all the Securities shall be
secured equally and ratably with (or prior to) such Secured Indebtedness
(together with, if the Guarantor shall so determine, any other indebtedness of
the Guarantor or such Restricted Subsidiary then existing or thereafter created
which is not subordinate to the Securities) so long as such Secured
Indebtedness shall be outstanding unless such Secured Indebtedness, when added
to (a) the aggregate amount of all Secured Indebtedness then outstanding (not
including in this computation Secured Indebtedness if the Guarantees are
secured equally and ratably with (or prior to) such Secured Indebtedness and
further not including in this computation any Secured Indebtedness 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 the Guarantor 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 10% of Consolidated Net
Tangible Assets.


 


SECTION 5.03. Limitation
on Sale and Leaseback Transactions. Unless specified, as contemplated by
the Indenture or this Agreement, as the case may be, not to be applicable to
Securities of any series, this Section shall be applicable to Securities of
each series for the benefit of the Securities of such series as long as any
Securities of such series are Outstanding. The Guarantor 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 outstanding pursuant to all other Sale and Leaseback Transactions entered
into by the Guarantor 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 Indebtedness then
outstanding (not including in this computation Secured Indebtedness if the
Guarantees are secured equally and ratably with (or prior to) such Secured
Indebtedness) would 


 


11





















 


not exceed 10% of Consolidated Net Tangible
Assets or (b) an amount equal to the greater of (i) the net proceeds to
the Guarantor 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
the Guarantor or any Restricted Subsidiaries (other than Funded Debt which is
subordinated to the Securities or which is owing to the Guarantor or any
Restricted Subsidiaries) within 180 days after the consummation of such Sale
and Leaseback Transaction.


 


SECTION 5.04. Waiver
of Certain Covenants. The Guarantor may omit in any particular instance to
comply with any covenant or condition set forth in this Article V if,
before or after the time for such compliance, the Holders of at least a
majority in principal amount of the Outstanding Securities of each series
shall, by notice to the Trustee, either waive such compliance in such instance
or generally waive compliance with such covenant or condition, but no such
waiver shall extend to or affect such covenant or condition except to the
extent so expressly waived, and, until such waiver shall become effective, the
obligations of the Guarantor and the duties of the Trustee in respect of any
such covenant or condition shall remain in full force and effect.


 


SECTION 5.05. Reports
by Guarantor. (a)  The Guarantor shall
file with the Trustee, within 15 days after the Guarantor is required to file
the same with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules and regulations
prescribe) which the Guarantor is required to file with the Commission pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of
1934, as amended and shall otherwise comply with Section 314(a) of the
Trust Indenture Act.


 


(b)  The Guarantor shall furnish to the Trustee,
within 120 days after the end of each fiscal year (which as of the date
hereof ends on December 31), a brief certificate from the principal executive
officer, principal financial officer or principal accounting officer as to his
or her knowledge of the Guarantor’s compliance with all conditions and
covenants under this Agreement. For purposes of this paragraph (b), such
compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Agreement.


 


SECTION 5.06. Related
Indentures. There shall be excluded from the terms of Section 310(b)
of the Trust Indenture Act, the Indenture, dated as of October 1, 1993, as
amended and supplemented, and all series of the Guarantor’s debt securities
issued and outstanding thereunder.


 


ARTICLE VI



Miscellaneous


 


SECTION 6.01. Trust
Indenture Act. The Guarantor understands that this Agreement may be
qualified under the Trust Indenture Act and any provision of this Agreement
required by the Trust Indenture Act or deemed to be included in this Agreement
by virtue of the Trust Indenture Act is hereby incorporated by reference. If
any provision hereof limits, qualifies 


 


12





















 


or conflicts with another provision which is
required or deemed to be included in this Agreement by any of the provisions of
the Trust Indenture Act, such required or deemed provision shall control. If
any provision of this Agreement modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall
be deemed to apply to this Agreement as so modified or to be excluded, as the
case may be.


 


SECTION 6.02. Effect
of Headings and Table of Contents. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.


 


SECTION 6.03. Successors
and Assigns. All covenants and agreements in this Agreement by the
Guarantor shall bind its successors and assigns, whether so expressed or not.


 


SECTION 6.04. Separability
Clause. In case any provision in this Agreement or in the Guarantee shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.


 


SECTION 6.05. Benefits
of Agreement. Nothing in this Agreement or in the Guarantee, express or
implied, shall give to any Person, other than the Guarantor and its successor
hereunder and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Agreement.


 


SECTION 6.06. Governing
Law. This Agreement and the Guarantee shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
applicable principles of conflicts of laws to the extent the law of another
jurisdiction would be required thereby.


 


SECTION 6.07. Notices,
Etc., to the Guarantor. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Holders or other document provided or
permitted by this Agreement to be made upon, given or furnished to, or filed
with the Guarantor by the Trustee or by any Holder shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Guarantor addressed to
it at the address of its principal office specified in the first paragraph of
this Agreement or at any other address previously furnished in writing to the
Trustee by the Guarantor, Attention: 
Assistant Treasurer.


 


SECTION 6.08. Counterparts;
Facsimile. This Agreement may be executed in any number of counterparts and
by the parties hereto in separate counterparts, and signature pages may be
delivered by facsimile, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.


 


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IN WITNESS
WHEREOF, the Guarantor has duly executed this Agreement as of the date first
above written.


 


	
   

  	
  INTERNATIONAL BUSINESS MACHINES
  CORPORATION, as Guarantor,

  
	
   

  	
   

  
	
   

  	
   

  	
  by

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
  Agreed and Accepted:

  	
   

  
	
   

  	
   

  
	
  THE BANK OF NEW YORK

  	
   

  
	
  as Trustee under the Indenture

  	
   

  
	
   

  	
   

  
	
  by

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
							



 


14

















 


EXHIBIT A


 


FORM OF GUARANTEE


 


GUARANTEE


 


The
undersigned Guarantor (capitalized terms used herein have the meanings given
such terms in the Indenture referred to in the Security upon which this
notation is endorsed) hereby unconditionally guarantees (such guarantee being
referred to herein as the “Guarantee”) the due and punctual payment of the
principal of, premium, if any, and interest on the [     ]% Notes due [    ] (the “Securities”) which this Guarantee accompanies,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on the overdue principal, premium and interest on the Securities,
and the due and punctual performance of all other obligations of the Company to
the Holders or the Trustee, all in accordance with the terms set forth in
Article Two of the Guarantee Agreement.


 


This Guarantee
shall not be valid or obligatory for any purpose until the certificate of
authentication on the Securities upon which this Guarantee is noted shall have
been executed by the Trustee under the Indenture by the manual signature of one
of its authorized officers.


 


This Guarantee
shall be governed by and construed in accordance with the laws of the State of
New York.


 


This Guarantee
is subject to release upon the terms set forth in the Guarantee Agreement.


 


	
   

  	
  INTERNATIONAL BUSINESS MACHINES CORPORATION,

  
	
   

  	
   

  
	
   

  	
  by

  
	
   

  	
   

  	
   

  
	
   

  	
   Name:

  
	
   

  	
   Title: