Document:

Exhibit 10.3

 

EXECUTION VERSION

 

$10,250,000,000

 

AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

among

 

INTERNATIONAL BUSINESS MACHINES CORPORATION

 

The Subsidiary Borrowers Parties Hereto

 

The Several Lenders
 from Time to Time Parties Hereto

 

JPMORGAN CHASE BANK, N.A.,
 as Administrative Agent

 

BNP PARIBAS, CITIBANK, N.A., ROYAL BANK OF CANADA, and MIZUHO BANK, LTD.,
 as Syndication Agents

 

and

 

BARCLAYS BANK PLC, BANK OF AMERICA, N.A.,

DEUTSCHE BANK SECURITIES INC.,

HSBC BANK USA, NATIONAL ASSOCIATION, SOCIETE GENERALE,

and WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Documentation Agents

 

Dated as of July 19, 2018

 

JPMORGAN CHASE BANK, N.A., BNP PARIBAS SECURITIES CORP., CITIBANK, N.A. and RBC CAPITAL MARKETS(1),
 as Joint Lead Arrangers and Joint Bookrunners

 

(1)  RBC Capital Markets is a brand name for the capital markets businesses of Royal Bank of Canada and its affiliates.

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
SECTION 1.
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
1.1
    	
Defined Terms
    	
1
    
	
1.2
    	
Other Definitional   Provisions
    	
22
    
	
 
    	
 
    	
 
    
	
SECTION 2.
    	
AMOUNT AND TERMS OF US$ FACILITIES
    	
23
    
	
 
    	
 
    	
 
    
	
2.1
    	
Revolving Credit   Commitments
    	
23
    
	
2.2
    	
Procedure for Revolving   Credit Borrowing
    	
23
    
	
2.3
    	
Conversion and Continuation   Options for Revolving Credit Loans
    	
24
    
	
2.4
    	
Minimum Amounts and   Maximum Number of Eurodollar Tranches
    	
25
    
	
2.5
    	
Swing Line Loans
    	
25
    
	
2.6
    	
Optional Prepayments of   Revolving Credit Loans and Swing Line Loans
    	
26
    
	
2.7
    	
The Competitive Loans
    	
27
    
	
2.8
    	
Procedure for   Competitive Loan Borrowing
    	
27
    
	
2.9
    	
Repayment of US$ Loans;   Evidence of Debt
    	
30
    
	
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
    	
37
    
	
2.19
    	
Indemnity
    	
40
    
	
2.20
    	
Change of Lending   Office
    	
40
    
	
2.21
    	
Extension of   Termination Date
    	
40
    
	
2.22
    	
Defaulting Lenders
    	
42
    
	
 
    	
 
    	
 
    
	
SECTION 3.
    	
LOCAL CURRENCY   FACILITIES
    	
43
    
	
 
    	
 
    	
 
    
	
3.1
    	
Terms of Local Currency   Facilities
    	
43
    
	
3.2
    	
Currency   Fluctuations, etc.
    	
45
    
	
3.3
    	
Refunding of Local   Currency Loans
    	
47
    
	
3.4
    	
Existing Local Currency   Facilities, etc.
    	
48
    
	
 
    	
 
    	
 
    
	
SECTION 4.
    	
REPRESENTATIONS AND   WARRANTIES
    	
48
    
	
 
    	
 
    	
 
    
	
4.1
    	
Organization; Powers
    	
49
    
	
4.2
    	
Authorization
    	
49
    
	
4.3
    	
Enforceability
    	
49
    
	
4.4
    	
Governmental Approvals
    	
49
    
	
4.5
    	
Financial Statements
    	
49
    
	
4.6
    	
No Material Adverse   Change
    	
49
    

 

 

	
4.7
    	
No Material Litigation, etc.
    	
49
    
	
4.8
    	
Federal Reserve   Regulations
    	
50
    
	
4.9
    	
Investment Company   Act, etc.
    	
50
    
	
4.10
    	
Tax Returns
    	
50
    
	
4.11
    	
No Material   Misstatements
    	
50
    
	
4.12
    	
ERISA
    	
51
    
	
4.13
    	
Use of Proceeds
    	
51
    
	
4.14
    	
Anti-corruption Laws
    	
51
    
	
 
    	
 
    	
 
    
	
SECTION 5.
    	
CONDITIONS PRECEDENT
    	
51
    
	
 
    	
 
    	
 
    
	
5.1
    	
Conditions to Initial   US$ Loans
    	
51
    
	
5.2
    	
Conditions to Each US$ Loan
    	
52
    
	
 
    	
 
    	
 
    
	
SECTION 6.
    	
AFFIRMATIVE COVENANTS
    	
53
    
	
 
    	
 
    	
 
    
	
6.1
    	
Existence; Business and   Properties
    	
53
    
	
6.2
    	
Financial Statements,   Reports, etc.
    	
54
    
	
6.3
    	
Notices
    	
55
    
	
6.4
    	
Anti-Corruption Laws
    	
55
    
	
 
    	
 
    	
 
    
	
SECTION 7.
    	
NEGATIVE COVENANTS
    	
55
    
	
 
    	
 
    	
 
    
	
7.1
    	
Limitation on Secured   Debt and Sale and Leaseback Transactions
    	
55
    
	
7.2
    	
Mergers, Consolidations   and Sales of Assets
    	
56
    
	
7.3
    	
Margin Regulations
    	
56
    
	
7.4
    	
Consolidated Net   Interest Expense Ratio
    	
57
    
	
7.5
    	
Anti-Corruption Laws
    	
57
    
	
 
    	
 
    	
 
    
	
SECTION 8.
    	
EVENTS OF DEFAULT
    	
57
    
	
 
    	
 
    	
 
    
	
SECTION 9.
    	
THE ADMINISTRATIVE   AGENT
    	
59
    
	
 
    	
 
    	
 
    
	
9.1
    	
Appointment
    	
59
    
	
9.2
    	
Delegation of Duties
    	
59
    
	
9.3
    	
Exculpatory Provisions
    	
59
    
	
9.4
    	
Reliance by   Administrative Agent
    	
59
    
	
9.5
    	
Notice of Default
    	
60
    
	
9.6
    	
Non-Reliance on   Administrative Agent and Other Lenders
    	
60
    
	
9.7
    	
Indemnification
    	
60
    
	
9.8
    	
Administrative Agent in   Its Individual Capacity
    	
61
    
	
9.9
    	
Successor   Administrative Agent
    	
61
    
	
9.10
    	
Syndication and   Documentation Agents
    	
61
    
	
9.11
    	
Certain ERISA Matters
    	
61
    
	
 
    	
 
    	
 
    
	
SECTION 10.
    	
GUARANTEE
    	
63
    
	
 
    	
 
    	
 
    
	
10.1
    	
Guarantee
    	
63
    

 

 

	
10.2
    	
No Subrogation
    	
63
    
	
10.3
    	
Amendments, etc.   with respect to the Subsidiary Borrower Obligations
    	
64
    
	
10.4
    	
Guarantee Absolute and   Unconditional
    	
64
    
	
10.5
    	
Reinstatement
    	
65
    
	
10.6
    	
Payments
    	
65
    
	
10.7
    	
Judgments Relating to   Guarantee
    	
65
    
	
10.8
    	
Independent Obligations
    	
66
    
	
 
    	
 
    	
 
    
	
SECTION 11.
    	
MISCELLANEOUS
    	
66
    
	
 
    	
 
    	
 
    
	
11.1
    	
Amendments and Waivers
    	
66
    
	
11.2
    	
Notices
    	
67
    
	
11.3
    	
No Waiver; Cumulative   Remedies
    	
68
    
	
11.4
    	
Survival of   Representations and Warranties
    	
68
    
	
11.5
    	
Payment of Expenses
    	
68
    
	
11.6
    	
Participations
    	
69
    
	
11.7
    	
Transfers of   Competitive Loans
    	
70
    
	
11.8
    	
Assignments
    	
71
    
	
11.9
    	
The Register;   Disclosure; Pledges to Federal Reserve Banks
    	
72
    
	
11.10
    	
Changing Designations   of Swing Line Lenders and Competitive Loan Lenders
    	
72
    
	
11.11
    	
Replacement of Lenders   under Certain Circumstances
    	
73
    
	
11.12
    	
Adjustments; Set-off
    	
73
    
	
11.13
    	
Counterparts
    	
74
    
	
11.14
    	
Severability
    	
74
    
	
11.15
    	
Integration
    	
74
    
	
11.16
    	
GOVERNING LAW
    	
74
    
	
11.17
    	
Submission To   Jurisdiction; Waivers
    	
74
    
	
11.18
    	
Judgments Relating to   Subsidiary Borrowers
    	
75
    
	
11.19
    	
Acknowledgements
    	
75
    
	
11.20
    	
WAIVERS OF JURY TRIAL
    	
76
    
	
11.21
    	
Confidentiality
    	
76
    
	
11.22
    	
Binding Effect
    	
76
    
	
11.23
    	
Incremental Revolving   Credit Commitments
    	
76
    
	
11.24
    	
USA PATRIOT Act
    	
77
    
	
11.25
    	
No Fiduciary   Duty, etc.
    	
77
    
	
11.26
    	
EU Bail-In
    	
78
    
	
11.27
    	
Amendment and   Restatement
    	
78
    

 

 

	
SCHEDULES
    	
 
    
	
 
    	
 
    
	
SCHEDULE 1.1
    	
Revolving Credit Commitments and Swing Line   Commitments of Lenders
    
	
SCHEDULE 3.4
    	
Certain Existing Local Currency Facilities
    
	
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 Simpson Thacher &   Bartlett LLP
    
	
EXHIBIT D-2
    	
Form of Opinion of Assistant General Counsel of   IBM
    
	
EXHIBIT E
    	
Form of Assignment and Assumption
    
	
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-1
    	
Form of Lender Addendum
    
	
EXHIBIT H-2
    	
Form of Subsidiary Borrower Addendum
    
	
EXHIBIT I-1
    	
Form of New Lender Supplement
    
	
EXHIBIT I-2
    	
Form of Incremental Commitment Supplement
    
	
EXHIBIT J
    	
Form of Extension Request
    
	
EXHIBIT K
    	
Form of U.S. Tax Compliance Certificates
    

 

 

AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 19, 2018, 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”), JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders hereunder (in such capacity, the “Administrative Agent”), BNP PARIBAS, CITIBANK, N.A., ROYAL BANK OF CANADA and MIZUHO BANK, LTD., as syndication agents (in such capacity, the “Syndication Agents”) and BARCLAYS BANK PLC, BANK OF AMERICA, N.A., DEUTSCHE BANK SECURITIES INC., HSBC BANK USA, NATIONAL ASSOCIATION, SOCIETE GENERALE and WELLS FARGO BANK, NATIONAL ASSOCIATION, as documentation agents (in such capacity, the “Documentation Agents”).

 

WHEREAS, IBM is party to the Credit Agreement, dated as of November 10, 2011 (as amended, supplemented or otherwise modified from time to time, the “Existing Credit Agreement”) with the several banks and other financial institutions parties thereto and JPMorgan Chase Bank, N.A., as administrative agent;

 

WHEREAS, IBM, the Lenders and the Administrative Agent have, subject to the terms and conditions set forth herein, agreed to amend and restate the Existing Credit Agreement as provided in this Agreement;

 

WHEREAS, it is the intent of the parties hereto that this Agreement not constitute a novation of the obligations and liabilities existing under the Existing Credit Agreement or evidence repayment of any such obligations and liabilities and that this Agreement amend and restate in its entirety the Existing Credit Agreement and re-evidence the obligations of IBM and each Subsidiary Borrower outstanding thereunder; and

 

NOW, THEREFORE, in consideration of the above premises, IBM, each Subsidiary Borrower, each Lender and the Administrative Agent agree that on the Effective Date (as hereinafter defined) the Existing Credit Agreement shall be amended and restated in its entirety as follows:

 

SECTION 1.         DEFINITIONS

 

1.1  Defined Terms.  As used in this Agreement, the following terms shall have the following meanings:

 

“1985 Indenture”:  the Indenture, dated as of July 15, 1985, between IBM and The Bank of New York (successor to Morgan 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.

 

“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 NYFRB Rate in effect on such day plus 1/2 of 1% and (c) the Eurodollar Rate that would be calculated as of such day (or, if such day is not a Business Day, as of the next preceding Business Day) in respect of a proposed Eurodollar Loan with a one-month Interest Period plus 1.0%.  For purposes hereof:  “Prime Rate” shall mean the rate of interest per annum last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no

 

 

longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective. 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 NYFRB Rate 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) of the first sentence of this definition 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 NYFRB Rate or such Eurodollar Rate shall be effective on the effective day of such change in the Prime Rate, the NYFRB Rate or such Eurodollar Rate, respectively.  If the ABR is being used as an alternate rate of interest pursuant to Section 2.14 hereof, then the ABR shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above.  For the avoidance of doubt, if the ABR as so determined would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“ABR Loans”:  Loans the rate of interest applicable to which is based upon the ABR.

 

“Act”:  as defined in Section 11.24.

 

“Affiliate”:  as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.  For purposes of this definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 25% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management and policies of such Person, whether by contract or otherwise.

 

“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, Local Currency Loans (US$ Equivalent) and Funded Participations 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, Swing Line Loans and Funded Participations in respect of Swing Line Loans made by such Lender then outstanding.

 

“Agreement”:  this Amended and Restated Credit Agreement, as amended, supplemented or otherwise modified from time to time.

 

“Anti-Corruption Laws”: all laws, rules and regulations of any jurisdiction applicable to the Borrower or its Subsidiaries from time to time concerning or relating to bribery or corruption.

 

“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 the Reuters Screen LIBOR01 Page as of 11:00 a.m., London time, two Business Days prior to the Borrowing Date in respect of such Index Rate Competitive Loan (the “Index Screen Rate”).  In the event that such rate does not appear on such page (or otherwise on such screen), 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

 

2

 

necessary, to the nearest 1/16th 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.

 

“Applicable Margin”:  on any date, with respect to (a) any Eurodollar Loan, a rate per annum equal to the Credit Default Swap Spread in effect for Eurodollar Loans on such date or (b) any ABR Loan, a rate per annum equal to the Credit Default Swap Spread in effect for ABR Loans on such date less 1% per annum (but not less than 0%).  Notwithstanding the foregoing, (x) the non-default Applicable Margin for Eurodollar Loans in effect at any time shall not be less than the minimum applicable margin (the “Minimum Eurodollar Applicable Margin”), and shall not exceed the maximum applicable margin (the “Maximum Eurodollar Applicable Margin”) corresponding to the Status then in effect on such date of determination as set forth below and (y) the non-default Applicable Margin for ABR Loans in effect at any time shall not be less than the minimum applicable margin (the “Minimum ABR Applicable Margin”), and shall not exceed the maximum applicable margin (the “Maximum ABR Applicable Margin”) corresponding to the Status then in effect on such date of determination as set forth below.

 

	
 
    	
 
    	
Level I
   Status
    	
 
    	
Level II
   Status
    	
 
    	
Level III
   Status
    	
 
    	
Level IV
   Status
    	
 
    	
Level V
   Status
    	
 
    
	
Minimum   Eurodollar Applicable Margin
    	
 
    	
0.10
    	
%
    	
0.10
    	
%
    	
0.20
    	
%
    	
0.25
    	
%
    	
0.30
    	
%
    
	
Maximum   Eurodollar Applicable Margin
    	
 
    	
0.75
    	
%
    	
0.75
    	
%
    	
0.875
    	
%
    	
1.00
    	
%
    	
1.125
    	
%
    
	
Minimum ABR   Applicable Margin
    	
 
    	
0.00
    	
%
    	
0.00
    	
%
    	
0.00
    	
%
    	
0.00
    	
%
    	
0.00
    	
%
    
	
Maximum ABR Applicable   Margin
    	
 
    	
0.00
    	
%
    	
0.00
    	
%
    	
0.00
    	
%
    	
0.00
    	
%
    	
0.125
    	
%
    

 

If at any time the Credit Default Swap Spread is unavailable, IBM and the Lenders shall negotiate in good faith (for a period of up to thirty days after the Credit Default Swap Spread becomes unavailable (such thirty-day period, the “Negotiation Period”)) to agree on an alternative method for establishing the Applicable Margin.  The Applicable Margin at any date of determination thereof which falls during the Negotiation Period shall be based upon the then most recently available quote of the Credit Default Swap Spread.  If no such alternative method is agreed upon during the Negotiation Period, the Applicable Margin at any date of determination subsequent to the end of the Negotiation Period shall be the greater of (i) a rate per annum based upon the then most recently available quote of the Credit Default Swap Spread (but in no event (A) greater than the Maximum Eurodollar Applicable Margin or the Maximum ABR Applicable Margin, as the case may be or (B) less than the Minimum Eurodollar Applicable Margin or the Minimum ABR Applicable Margin, as the case may be) and (ii) a rate per annum equal to 75% of the Maximum Eurodollar Applicable Margin or the Maximum ABR Applicable Margin, as the case may be.

 

3

 

“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 1985 Indenture 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 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.

 

“Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

 

“Bail-In Legislation”: with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

 

“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.

 

“Bankruptcy Event”:  with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, other than via an Undisclosed Administration, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or

 

4

 

such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

 

“Beneficial Ownership Certification”: a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.

 

“Beneficial Ownership Regulation”: 31 C.F.R. § 1010.230.

 

“Benefit Plan”: any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of the Plan Asset Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

 

“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 Reuters 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”:  (a) the last Business Day of each calendar month and (b) at the Administrative Agent’s option in its sole discretion, any Business Day on which a Borrower gives the Administrative Agent a notice requesting US$ Loans to be made hereunder.

 

“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.

 

“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 and

 

5

 

Funded Participations then outstanding constitutes of the aggregate principal amount of the Loans and Funded Participations 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 Sections 11.7 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 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

 

6

 

Interest Expense, (ii) depreciation expense, (iii) amortization expense and (iv) restructuring charges minus the sum of (a) cash payments made during such period in respect of restructuring charges, (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 (b) 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.

 

“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.

 

“Credit Default Swap Spread”:  at any determination date, the credit default swap spread applicable to senior unsecured debt of IBM that is not guaranteed by any other Person or subject to any other credit enhancement interpolated to the Termination Date (or if the Termination Date is less than one year from such determination date, the credit default swap spread applicable to senior unsecured debt of IBM that is not guaranteed by any other Person or subject to any other credit enhancement with a maturity of one year), in each case determined as of the close of business on the Business Day immediately preceding such determination date, as interpolated and reported by Markit Group Limited or any successor thereto. The Credit Default Swap Spread is determined (a) in the case of ABR Loans, initially on the Effective Date and thereafter on the first Business Day of each calendar quarter, and (b) in the case of any Eurodollar Loan, on the second Business Day prior to the first day of the Interest Period of such Eurodollar Loan (and, if applicable, the last Business Day prior to the continuation of such Eurodollar Loan), and thereafter, in the case of any Eurodollar Loan having an Interest Period of greater than three months, at the end of each successive three-month period during such Interest Period, with such Credit Default Swap Spread, as so determined, to be in effect as to such Eurodollar Loan for each

 

7

 

day commencing with the first day of the applicable Interest Period until subsequently re-determined in accordance with the foregoing.

 

“Credit Party”:  the Administrative Agent and the Swing Line Lenders.

 

“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, has been satisfied.

 

“Defaulting Lender”:  any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Swing Line Loans or (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified IBM or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Swing Line Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of a Bankruptcy Event or a Bail-In Action.

 

“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.

 

“EEA Financial Institution”: (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

 

“EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

 

8

 

“EEA Resolution Authority”: any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

 

“Effective Date”:  as defined in Section 5.1.

 

“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.

 

“EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

 

“Eurodollar Loans”:  Revolving Credit Loans the rate of interest applicable to which is based upon the Eurodollar Rate.

 

“Eurodollar Rate”:  with respect to any Eurodollar Loans for any Interest Period, the London interbank offered rate as administered by the ICE Benchmark Administration (or any other Person that takes over the administration of such rate) for Dollars for a period equal in length to such Interest Period as displayed on the LIBOR01 or LIBOR02 page of the Reuters Screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; in each case, the “Screen Rate”) at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period; provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement; provided, further, that if the Screen Rate shall not be available at such time for such Interest Period (an “Impacted Interest Period”), then the Eurodollar Rate shall be the Interpolated Rate at such time.  “Interpolated Rate” means, at any time, the rate per annum determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the Screen Rate for the longest period (for which that Screen Rate is available in Dollars) that is shorter than the Impacted Interest Period and (b) the Screen Rate for the shortest period (for which that Screen Rate is available for Dollars) that exceeds the Impacted Interest Period, in each case, at such time; provided that if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

 

“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 all requirements for the giving of notice and/or the lapse of time have been satisfied.

 

“Exchange Rate”:  on any particular date, the rate at which Euros may be exchanged into Dollars, as set forth on such date on ICE Data Services as the “ask price” or as displayed on such other information service which publishes that rate of exchange from time to time in place of ICE Data Services.  In the event that such rate does not appear on ICE Data Services (or on any information service which publishes that rate of exchange from time to time in place of ICE Data Services), the “Exchange Rate” with respect to Euros 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

 

9

 

instead be the rate that the Administrative Agent determines after using any reasonable method it deems applicable to determine such rate, and such determination shall be conclusive absent manifest error.

 

“Existing Credit Agreement”:  as defined in the preamble hereto.

 

“Existing Termination Date”:  as defined in Section 2.21(c).

 

“Extension Request”:  as defined in Section 2.21(a).

 

“Extension Request Deadline”:  as defined in Section 2.21(b).

 

“Facility Fee Rate”:  for any day, the applicable rate per annum set forth below based on the Status in effect on such day:

 

	
Level I
   Status
    	
 
    	
Level II
   Status
    	
 
    	
Level III
   Status
    	
 
    	
Level IV
   Status
    	
 
    	
Level V
   Status
    	
 
    
	
0.04
    	
%
    	
0.05
    	
%
    	
0.06
    	
%
    	
0.08
    	
%
    	
0.10
    	
%
    

 

“FATCA”: Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

 

“Federal Funds Effective Rate”:  for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions (as determined in such manner as the NYFRB shall set forth on its public website from time to time) and published on the next succeeding Business Day by the NYFRB as the federal funds effective rate, provided that if the Federal Funds Effective Rate shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

 

“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.

 

“Funded Participations”:  any participations in Swing Line Loans or Local Currency Loans that have actually been funded by a Lender pursuant to Section 2.5(c), 3.3(b) or 3.3(c), as applicable, and have not been repaid or converted into Loans.

 

10

 

“GAAP”:  generally accepted accounting principles in the United States of America in effect from time to time.

 

“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.

 

“Incremental Commitment Supplement”:  as defined in Section 11.23(c).

 

“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 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

 

11

 

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:

 

(i)  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;

 

(ii)  any Interest Period that would otherwise extend beyond the Termination Date shall end on the Termination Date; and

 

(iii)  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.

 

“Joint Lead Arrangers”:  JPMorgan Chase Bank, N.A., BNP Paribas Securities Corp., Citibank, N.A. and RBC Capital Markets, as Joint Lead Arrangers and Joint Bookrunners pursuant to this Agreement.

 

“Lender Addendum”: an instrument, substantially in the form of Exhibit H-1, by which a Lender becomes a party to this Agreement as of the Effective Date.

 

“Lender Parent”: with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a Subsidiary.

 

“Lender Parties”: the Administrative Agent, the Syndication Agents, the Documentation Agents, the Swing Line Lenders and the Lenders, and any affiliate of any of the foregoing.

 

“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 or Aa2 or better by Moody’s.

 

12

 

“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 AA- or better by S&P or Aa3 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 or A1 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 A or better by S&P or A2 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).

 

“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.

 

13

 

“Local Currency Responsible Lender”:  with respect to any Lender, or affiliate, branch or agency thereof, party to a Local Currency Facility, such Lender.

 

“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”:  Moody’s Investors Services, Inc. and its successors.

 

“New Lender”:  as defined in Section 11.23(b).

 

“New Lender Supplement”:  as defined in Section 11.23(b).

 

“Non-Excluded Taxes”:  as defined in Section 2.18(a).

 

“Non-Extending Lender”:  as defined in Section 2.21(b).

 

“NYFRB”: the Federal Reserve Bank of New York.

 

“NYFRB Rate”: for any day, the greater of (a) the Federal Funds Effective Rate (which if less than zero shall be deemed zero) in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Banking Day, for the immediately preceding Banking Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a Federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates shall be less than zero, such rate shall be deemed to be zero.

 

“Other Connection Taxes”: with respect to the Administrative Agent, any Lender or any Transferee, taxes imposed as a result of a present or former connection between the Administrative Agent, such Lender or such 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, such Lender or such Transferee having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, this Agreement, or sold or assigned an interest in any Loan or this Agreement).

 

“Other Taxes”:  all present or future stamp, court, or documentary, intangible, recording, filing or similar taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, this Agreement, except any such taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment request by a Borrower under Section 11.11).

 

“Overnight Bank Funding Rate”: for any day, the rate comprised of both overnight federal funds and overnight Eurocurrency borrowings by U.S. managed banking offices of

 

14

 

depository institutions (as such composite rate shall be determined by the Federal Reserve Bank of New York as set forth on its public website from time to time) and published on the next succeeding business day by the Federal Reserve Bank of New York as an overnight bank funding rate (from and after such date as the Federal Reserve Bank of New York shall commence to publish such composite rate).

 

“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 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 (l) 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, limited liability company, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

“Plan Asset Regulations”: 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.

 

“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

 

15

 

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%.

 

“PTE”: a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

 

“Purchase Date”:  as defined in Section 2.21(c).

 

“Purchasing Lender”:  as defined in Section 11.8(a).

 

“Reference Lenders”:  JPMorgan Chase Bank, Barclays Capital, the investment banking division of Barclays Bank PLC, BNP Paribas and Citibank, N.A..

 

“Register”:  as defined in Section 11.9(a).

 

“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 more than 50% 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 and Funded Participations.

 

“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,

 

16

 

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 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 1.1, 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 Effective Date 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 Financial Services LLC 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

 

17

 

property becoming Principal Property), or the commencement of commercial operation of such Principal Property.

 

“Sanctioned Country”: at any time, a country, region or territory that is itself or whose government is the subject or target of any Sanctions (currently, Crimea, Cuba, Iran, North Korea and Syria).

 

“Sanctioned Person”: at any time, (a) any Person listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or by the United Nations Security Council, the European Union, any European Union member state or her Majesty’s Treasury of the United Kingdom, (b) any Person, organized or resident in a Sanctioned Country, or (c) any Person 50% or more owned or controlled (to the knowledge of the Borrower) by any such Person or Persons.

 

“Sanctions”: economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State or (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom .

 

“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

 

18

 

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 Effective Date, 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.

 

19

 

“Securitization Transactions”:  as defined in the definition of Indebtedness.

 

“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 Addendum”: an instrument, substantially in the form of Exhibit H-2, by which any Subsidiary that is a Subsidiary Borrower on the Effective Date becomes a party to this Agreement.

 

“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.

 

“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.

 

20

 

“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 1.1, as such amount may be changed from time to time in accordance with the provisions of this Agreement.

 

“Swing Line Exposure”:  at any time, the sum of the aggregate amount of all outstanding Swing Line Loans at such time.  The Swing Line Exposure of any Lender at any time shall be its Revolving Credit Borrowing Share of the total Swing Line Exposure at such time.

 

“Swing Line Lender”:  each of the Lenders that have agreed to make Swing Line Loans hereunder as indicated on Schedule 1.1 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).

 

“taxes”: all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including interest, additions to tax or penalties applicable thereto.

 

“Termination Date”: July 20, 2023, as such date may be extended pursuant to Section 2.21 (or if such date is not a Business Day, the Business Day immediately prior thereto).

 

“Transactions”:  as defined in Section 4.2.

 

“Transferee”:  as defined in Section 11.9.

 

“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.

 

21

 

“Undisclosed Administration”: in relation to a Lender, the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official by a supervisory authority or regulator under or based on the law in the country where such Lender is subject to home jurisdiction supervision if applicable law requires that such appointment is not to be publicly disclosed.

 

“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.

 

“Voting Stock”:  with respect to any Person, outstanding capital stock of such Person ordinarily (and apart from rights exercisable upon the occurrence of any contingency) having the power to vote in the election of directors of such Person.

 

“Write-Down and Conversion Powers”: with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

 

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, shall have the respective meanings given to them under GAAP, provided that, if IBM notifies the Administrative Agent that IBM requests an amendment of any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof (or if the Administrative Agent notifies IBM that the Required Lenders request an amendment of any provision hereof for such purpose), regardless of whether such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be applied on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.

 

22

 

(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 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.

 

(e)    Notwithstanding anything to the contrary herein, (i) in no event shall any Lender be required to fund a Loan or participation hereunder to the extent such funding would cause the aggregate outstanding principal amount of Revolving Credit Loans, Swing Line Loans, Local Currency Loans (US$ Equivalent) and Funded Participations made by such Lender to exceed such Lender’s Revolving Credit Commitment and (ii) for all purposes of calculating the outstanding amount of Swing Line Loans and Local Currency Loans held by any Lender, unless, in the judgment of the Administrative Agent, the context otherwise requires, the amount thereof shall be deemed to be reduced by the amount of Funded Participations actually received by such Lender in respect of such Swing Line Loans or Local Currency Loans, as applicable.

 

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 (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 (iii) the aggregate principal amount of Revolving Credit Loans, Swing Line Loans, Local Currency Loans (US$ Equivalent) and Funded Participations made by any Lender then outstanding would exceed such Lender’s Revolving Credit Commitment. IBM shall notify the Lenders (through the Administrative Agent) promptly after it has determined to cause any Subsidiary to become a Subsidiary Borrower, but in any event no later than the date such Subsidiary actually becomes a Subsidiary Borrower hereunder.

 

(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

 

23

 

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) 10:00 a.m., New York City time, on 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.  Each borrowing under the Revolving Credit Commitments shall 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 converted as provided herein; provided that (i) no Loan may be converted 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 converted into a Eurodollar Loan after 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, 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

 

24

 

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 outstanding principal amount of all Swing Line Loans shall not exceed $2,000,000,000 at any one time, (ii) the principal amount of any borrowing of Swing Line Loans may not exceed the aggregate amount of the Available Revolving Credit Commitments of all Lenders immediately prior to such borrowing, (iii) in no event may Swing Line Loans be borrowed hereunder if, after giving effect thereto, (x) the aggregate principal amount of Swing Line Loans, Revolving Credit Loans and Local Currency Loans (US$ 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 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 immediately 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.  The Administrative Agent and the Swing Line Lenders acknowledge that the funding provisions in respect of the Swing Line Commitments are material terms of this Agreement and that it is of importance to the Swing Line Borrowers that the funding of Swing Line Loans be made in a timely and efficient manner.  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.

 

25

 

(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, or, in the Administrative Agent’s sole discretion and subject to two Business Day’s advance notice to IBM, at 10:00 a.m., New York City time on any other Business Day following the Borrowing Date thereof designated by the Administrative Agent, and if by such time on such seventh Business Day or designated Business Day, as the case may be, 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.

 

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

 

26

 

$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 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

 

27

 

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.

 

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

 

28

 

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 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.

 

(v)           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.

 

(f)    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.

 

29

 

(g)   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 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 Margin minus the Facility Fee Rate then in effect.  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 plus the Applicable Margin minus the Facility Fee Rate then in effect.

 

(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.

 

30

 

(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 regardless of usage (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, 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.

 

(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

 

31

 

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’ irrevocable 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, Local Currency Loans (US$ Equivalent) and Funded Participations 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.  (a)  If prior to the first day of any Interest Period:

 

(i)  the Administrative Agent shall have determined (which determination shall be conclusive and binding on the Borrowers) that adequate and reasonable means do not exist for ascertaining the Eurodollar Rate or Applicable Index Rate (including because the Screen Rate or Index Screen Rate, as applicable, is not available or published on a current basis), for such Interest Period, or

 

(ii)  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,

 

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by telephone, telecopy or electronic mail as promptly 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 converted to or continued as Eurodollar Loans or Index Rate Competitive Loans, as applicable, shall be continued as or converted to ABR Loans or Fixed Rate Competitive Loans, as applicable.  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 or Fixed Rate Competitive Loans, as applicable, to Eurodollar Loans or Index Rate Competitive Loans, as applicable.

 

(b)           If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error and shall be communicated promptly to the Borrower) that (i) the circumstances set forth in clause (a)(i) have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (a)(i) have not arisen but either (w) the supervisor for the administrator of the Screen Rate or Index Screen Rate, as applicable, has made a public statement that the administrator of the Screen Rate or Index Screen Rate, as applicable, is insolvent (and there is no successor administrator that will continue publication of the Screen Rate or Index Screen Rate, as applicable), (x) the administrator of the Screen Rate or Index Screen Rate, as applicable, has made a public statement identifying a specific date after which the Screen Rate or Index Screen Rate, as applicable, will permanently or indefinitely cease to be published by it (and there is no successor

 

32

 

administrator that will continue publication of the Screen Rate or Index Screen Rate, as applicable), (y) the supervisor for the administrator of the Screen Rate or Index Screen Rate, as applicable, has made a public statement identifying a specific date after which the Screen Rate or Index Screen Rate, as applicable, will permanently or indefinitely cease to be published or (z) the supervisor for the administrator of the Screen Rate or Index Screen Rate, as applicable, or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the Screen Rate or Index Screen Rate, as applicable, may no longer be used for determining interest rates for loans, then the Administrative Agent and the Borrowers shall endeavor in good faith to establish an alternate rate of interest to the Eurodollar Rate or Applicable Index Rate, as applicable, that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into a mutually satisfactory amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be necessary or appropriate to give effect to such new rate of interest (but for the avoidance of doubt, such related changes shall not include a reduction of the Applicable Margin); provided that, if such alternate rate of interest as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.  Notwithstanding anything to the contrary in Section 11.1, such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five Business Days of the date the notice of such alternate rate of interest is provided to the Lenders, a written notice from the Required Lenders stating that such Required Lenders object to such amendment.  If an alternate rate of interest is to be established in accordance with this clause (b), then until such new rate of interest is established (but, in the case of the circumstances described in clause (ii) of the first sentence of this Section 2.14(b), only to the extent the Screen Rate or Index Screen Rate, as applicable, for such Interest Period is not available or published at such time on a current basis), (x) any conversion notice that requests the conversion of any Revolving Credit Loan to, or continuation of any Revolving Credit Loan as, a Eurodollar Loan shall be ineffective, (y) if any borrowing request requests a Eurodollar Loan, such borrowing shall be made as an ABR Loan and (z) any request for an Index Rate Competitive Loan shall be ineffective.

 

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

 

33

 

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.  The provisions of this Section 2.15(a) shall, to the extent applicable, be subject to the procedures set forth in Section 2.21.

 

(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 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

 

(c)   If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.5(b), 2.5(c), 2.15(b), 2.18(c) or 9.7, then the Administrative Agent may, in its discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter received by the Administrative Agent for the account of such Lender for the benefit of the Administrative Agent or the Swing Line Lenders to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid, and/or (ii) hold any such amounts in a segregated account as cash collateral for, and application to, any future funding obligations of such Lender under any such Section, in the case of each of clauses (i) and (ii) above, in any order as determined by the Administrative Agent in its discretion.

 

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 Effective Date (or, in the case of Index Rate Competitive Loans, made subsequent to acceptance by a Borrower of such Loan):

 

34

 

(i)            shall subject any Lender or the Administrative Agent to any taxes (other than (A) Non-Excluded Taxes and (B) taxes described in Section 2.18(a)(i) through (iv)) on its Loans, Commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

 

(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 or the Administrative Agent, by an amount which such Lender or the Administrative Agent deems to be material, of making, converting into, continuing or maintaining Eurodollar Loans or Index Rate Competitive Loans (or any Loan in the case of (i)), or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the relevant Borrower shall promptly pay such Lender or the Administrative Agent, upon its demand, any additional amounts necessary to compensate such Lender or the Administrative Agent for such increased cost or reduced amount receivable.  If any Lender or the Administrative Agent 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.

 

(b)   If any Lender shall have determined that any change in any Requirement of Law regarding capital or liquidity 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 or liquidity adequacy (whether or not having the force of law) from any Governmental Authority, in each case made subsequent to the Effective Date, 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 or liquidity 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)   Notwithstanding anything herein to the contrary, (i) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or by United States or foreign regulatory authorities, in each case pursuant to Basel III, and (ii) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives thereunder or issued in connection therewith or in implementation thereof, shall in each case be deemed to be a change in Requirements of Law, regardless of the date enacted, adopted, issued or implemented.

 

(d)   Each Borrower agrees to pay to each Lender which requests compensation under this Section 2.17(d) (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

 

35

 

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:

 

(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(d) 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(d) 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.

 

(e)   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(d)) 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, (i) 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 90 days after such Lender obtained actual knowledge of such costs or reductions and (ii) a Borrower shall not be required to compensate a Lender pursuant to this Section 2.17 for any increased costs or reductions incurred more than 90 days prior to the date that such Lender notifies such Borrower of the change giving rise to such increased costs or reductions and of such Lender’s intention to claim compensation therefor; provided that, if the change giving rise to such increased costs or reductions is retroactive, then the 90-day period referred to in this clause (ii) shall be extended to include the period of

 

36

 

retroactive effect thereof.  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.  Notwithstanding any other provision of this Section 2.17, no Lender shall demand compensation for any increased cost or reduction or other amount referred to above if such demand would be arbitrary or exceptional in light of similar circumstances under comparable provisions of other credit agreements.

 

(f)    Notwithstanding the foregoing, no Lender shall be entitled to request compensation under Section 2.17(a) or 2.17(b) with respect to any Competitive Loan if it shall have obtained actual knowledge of the change giving rise to such request at the time of, or such change shall have been publicly announced prior to, 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.

 

2.18        Taxes.  (a)  Unless otherwise required by applicable law, all payments made by or on account of 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 taxes, excluding (i) net income taxes and franchise taxes (imposed in lieu of net income taxes) and branch profits taxes imposed on the Administrative Agent, any Lender or any Transferee (x) as a result of such Administrative Agent, Lender or Transferee being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such tax (or any political subdivision thereof) or (y) that are Other Connection Taxes, (ii) U.S. Federal withholding taxes imposed on amounts payable to or for the account of a Lender with respect to an applicable interest in a Loan pursuant to a law in effect on the date on which (x) such Lender acquires such interest in the Loan (other than pursuant to an assignment request by a Borrower under Section 11.11) or (y) such Lender changes its lending office, except in each case to the extent that, pursuant to this Section 2.18, amounts with respect to such taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan or to such Lender immediately before it changed its lending office, (iii) any taxes attributable to a Lender’s failure to comply with the requirements of Section 2.18(d), and (iv) any U.S. Federal withholding taxes imposed under FATCA.  If any such non-excluded taxes, levies, imposts, duties, charges, fees deductions or withholdings imposed on or with respect to any payment made by or on account of any obligation of any Borrower under this Agreement (“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 by the applicable Borrower 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.  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)   The Borrowers shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.  The Borrowers shall jointly and severally indemnify the Administrative Agent and each

 

37

 

Lender, within 10 days after demand therefor, for the full amount of any Non-Excluded Taxes (including Non-Excluded Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by the Administrative Agent or such Lender or required to be withheld or deducted from a payment to the Administrative Agent or such Lender and any reasonable expenses arising therefrom or with respect thereto, whether or not such Non-Excluded Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

 

(c)   Each Lender shall severally, within 10 days after demand therefor, indemnify (i) the Administrative Agent for (A) any taxes attributable to such Lender (but only to the extent that any Borrower has not already indemnified the Administrative Agent for such Non-Excluded Taxes and without limiting the obligation of the Borrowers to do so) and (B) any taxes attributable to such Lender’s failure to comply with the provisions of Section 11.6 relating to the maintenance of a Participant Register and (ii) any Borrower for any taxes described in Section 2.18(a)(i) through (iv) and attributable to such Lender, in each case, that are payable or paid by the Administrative Agent or any Borrower (as applicable) in connection with this Agreement, and any reasonable expenses arising therefrom or with respect thereto, whether or not such taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent or any Borrower, as applicable, to set off and apply any and all amounts at any time owing to such Lender under this Agreement or otherwise payable by the Administrative Agent or any Borrower, as applicable, to the Lender from any other source against any amount due to the Administrative Agent or any Borrower, as applicable, under this paragraph (c).

 

(d)   To the extent permitted by law, each Lender (or Transferee) that is not a “United States person” within the meaning of Section 7701(a)(30) of the Code (such Lender (or Transferee), a “Non-U.S. Lender”) shall:

 

(i)            on the date it becomes a Lender or Transferee, deliver to each Borrower, IBM and the Administrative Agent two properly completed and duly executed originals of either (w) in the case of Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest,” United States Internal Revenue Service Form W-8BEN or W-8BEN-E (together with a certificate substantially in the form of Exhibit K-1 through K-4, as applicable, representing that such Non-U.S. Lender is not a bank for purposes of Section 861(c)(3)(A) of the Code, is not a 10 percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of any Borrower and is not a controlled foreign corporation (within the meaning of Section 861(c)(3)(C) of the Code) (a “United States Tax Compliance Certificate”)), (x) Internal Revenue Service Form W-8BEN, W-8BEN-E or Form W-8ECI, (y) to the extent a Non-U.S. Lender is not the beneficial owner (for example, where the Non-U.S. Lender is a partnership or a participating Lender), Internal Revenue Service Form W-8IMY (or any successor forms) of the Non-U.S. Lender, accompanied by a Form W-8ECI, W-8BEN, W-8BEN-E, United States Tax Compliance Certificate, Form W-9, Form W-8IMY or any other required information from each beneficial owner, as applicable (provided that, if one or more beneficial owners are claiming the

 

38

 

portfolio interest exemption, the United States Tax Compliance Certificate may be provided by such Non-U.S. Lender on behalf of such beneficial owner), or (z) any other form prescribed by applicable U.S. federal income tax laws (including the Treasury Regulations) as a basis for claiming a complete exemption from, or a reduction in, U.S. federal withholding tax on any payments to such Lender, in each case properly completed and duly executed by such Non-U.S. Lender claiming complete exemption from, or reduced rate of, U.S. federal withholding tax on payments by the Borrower under this Agreement;

 

(ii)           deliver to each Borrower, IBM and the Administrative Agent two properly completed and duly executed originals 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 each Borrower, IBM and the Administrative Agent; and

 

(iii)          obtain such extensions of time for filing and complete such forms or certifications as may reasonably be requested by each Borrower, IBM or the Administrative Agent;

 

except that the forms and certificates described 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 each Borrower, IBM and the Administrative Agent.  In addition, if a payment made to a Lender under this Agreement would be subject to U.S. federal withholding tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to IBM and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by IBM or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by IBM or the Administrative Agent as may be necessary for IBM, any Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of the preceding sentence, “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

 

(e)   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.

 

(f)    If any Lender (or Transferee) or the Administrative Agent determines, in its sole discretion exercised in good faith, that it has received a refund of 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 and shall, within 30 days after receipt of such refund, repay the amount of such refund 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), net of all reasonable out-of-

 

39

 

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); 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 (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 to the relevant taxing authority or other Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (f), in no event will any Lender (or Transferee) or the Administrative Agent be required to pay any amount to a Borrower pursuant to this paragraph (f) the payment of which would place the Lender (or Transferee) or the Administrative Agent in a less favorable net after-tax position than the Lender (or Transferee) or the Administrative Agent would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid.  This paragraph shall not be construed to require any indemnified party to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Person.

 

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 2.20 shall affect or postpone any of the obligations of any Borrower or the rights of any Lender (or Transferee) pursuant to Section 2.16, 2.17 and 2.18.

 

2.21        Extension of Termination Date.  (a)  IBM may, by written request (an “Extension Request”) to the Administrative Agent, substantially in the form of Exhibit J, delivered at any time during the 60-day period preceding each anniversary of the Effective Date, request that the Lenders extend the Termination Date then in effect by one year.

 

40

 

(b)         Upon receipt of an Extension Request, the Administrative Agent shall promptly notify each Lender thereof, and each Lender shall notify the Administrative Agent in writing by the deadline (the “Extension Request Deadline”) specified in such Extension Request, which deadline shall in any case not be later than 5:00 p.m., New York City time, on the date which is 30 days after delivery of such Extension Request, of such Lender’s election, in its sole discretion, (i) to extend the Termination Date as set forth in the Extension Request (provided that the Termination Date shall be so extended only to the extent expressly provided in paragraph (c) below) or (ii) not to extend the Termination Date by one year (any Lender not electing to extend, a “Non-Extending Lender”).  Any Lender that fails to notify the Administrative Agent in writing of its election by the Extension Request Deadline shall be deemed to be a Non-Extending Lender.

 

(c)          If Lenders whose Revolving Credit Commitments aggregate at least 51% of the Revolving Credit Commitments of all Lenders agree to extend the Termination Date, then the Termination Date shall automatically be so extended as of the Extension Request Deadline, provided that any Lender that became a Non-Extending Lender pursuant to any previous Extension Request shall be deemed to be a Non-Extending Lender in respect of each subsequent Extension Request, and provided, further, that if all Lenders do not agree to extend the Termination Date, then (i) IBM shall have the right to cancel any such extension by so notifying the Administrative Agent within five Business Days after the relevant Extension Request Deadline, in which case the Termination Date then in effect shall not be extended and (ii) in the event that such extension is not so cancelled, then, with respect to each Non-Extending Lender, IBM shall either (directly or, where applicable, through the relevant Subsidiary Borrowers):

 

(x)  (i) during the six-month period preceding the Termination Date in effect on the date of the relevant Extension Request (the “Existing Termination Date”), on each date on which US$ Loans are borrowed or continued as, or converted into, Eurodollar Loans having an Interest Period ending after the Existing Termination Date, repay the portion of such Non-Extending Lender’s Loans which would otherwise have been part of such borrowing, continuation or conversion and permanently reduce such Non-Extending Lender’s Revolving Credit Commitment by a like amount, (ii) on the Existing Termination Date, terminate the Revolving Credit Commitment and Swing Line Commitment (if any) of such Non-Extending Lender and repay the then outstanding US$ Loans made by such Non-Extending Lender, together with accrued but unpaid interest, facility fees and all other amounts then due and payable to such Non-Extending Lender hereunder, including, without limitation, amounts payable pursuant to Section 2.19, and (iii) on the Existing Termination Date either (A) terminate the Commitments of such Non-Extending Lender under any Local Currency Facility and repay the then outstanding Local Currency Loans made by such Non-Extending Lender, together with accrued but unpaid interest, facility fees and all other amounts then due and payable to such Non-Extending Lender under any Local Currency Facility or (B) to the extent the option described in clause (A) above is not exercised, obtain the written agreement of such Non-Extending Lender that the loans and other obligations outstanding under each relevant Local Currency Facility shall on the Existing Termination Date automatically cease to be subject to the terms of this Agreement (including the guarantee of IBM contained in Section 10); or

 

(y)  at any time prior to the Existing Termination Date, cause one or more banks or other financial institutions to purchase at par, pursuant to Section 11.8, such Non-Extending Lender’s Revolving Credit Commitment and outstanding US$ Loans (which purchase shall be accompanied by payment of accrued but unpaid interest, facility fees and all other amounts then due and payable to such Non-Extending Lender hereunder,

 

41

 

including, without limitation, amounts payable pursuant to Section 2.19), in which case such Non-Extending Lender shall, promptly upon request by IBM, agree to transfer its Revolving Credit Commitment and US$ Loans upon the terms and subject to the conditions of Section 11.8 to such banks or other financial institutions (provided that the registration and processing fee referred to therein shall be paid by either IBM or the relevant transferee); provided, that on the date (the “Purchase Date”) of any such purchase of such Non-Extending Lender’s Revolving Credit Commitment and US$ Loans, such Non-Extending Lender’s Swing Line Commitment (if any) shall be terminated, and provided, further, that on the Purchase Date either (A) the Commitments of such Non-Extending Lender under any Local Currency Facility shall be terminated or purchased and the then outstanding Local Currency Loans made by such Non-Extending Lender shall be repaid or purchased (which repayment or purchase shall be accompanied by payment of accrued but unpaid interest, facility fees and all other amounts then due and payable to such Non-Extending Lender under any Local Currency Facility), in each case on terms satisfactory to such Non-Extending Lender, or (B) to the extent the option described in clause (A) above is not exercised, IBM shall have obtained the written agreement of such Non-Extending Lender that the loans and other obligations outstanding under each relevant Local Currency Facility shall on such Purchase Date automatically cease to be subject to the terms of this Agreement (including the guarantee of IBM contained in Section 10).

 

2.22                        Defaulting Lenders

 

Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

 

(a)         fees shall cease to accrue on the Revolving Credit Commitment of such Defaulting Lender pursuant to Section 2.11(a);

 

(b)         the Revolving Credit Commitment and Loans of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder (including any consent to any amendment, waiver or other modification pursuant to Section 11.1); provided, that this clause (b) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender affected thereby;

 

(c)          if any Swing Line Exposure exists at the time such Lender becomes a Defaulting Lender then:

 

(i)                                  all or any part of the Swing Line Exposure of such Defaulting Lender shall be reallocated among the non-Defaulting Lenders in accordance with their respective Revolving Credit Borrowing Shares, but only to the extent sufficient Available Revolving Credit Commitments of non-Defaulting Lenders exist to support such reallocation; or

 

(ii)                                  if the reallocation described in clause (i) above cannot, or can only partially, be effected, the relevant Swing Line Borrower shall within one Business Day following notice by the Administrative Agent prepay such Swing Line Exposure; and

 

42

 

(d)         so long as such Lender is a Defaulting Lender, no Swing Line Lender shall be required to fund any Swing Line Loan unless it is satisfied that the related exposure will be 100% covered by the Available Revolving Credit Commitments of the non-Defaulting Lenders and participating interests in any newly made Swing Line Loan shall be allocated among non-Defaulting Lenders in a manner consistent with clause (c)(i) (and such Defaulting Lender shall not participate therein).

 

If a Bankruptcy Event or Bail-In Action with respect to a Lender Parent of any Lender shall occur following the date hereof and for so long as such event shall continue, each Swing Line Lender shall not be required to fund any Swing Line Loan unless such Swing Line Lender shall be satisfied that appropriate arrangements have been entered into to defease any risk to it in respect of such Lender hereunder.

 

In the event that the Administrative Agent, IBM and the Swing Line Lenders agree that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swing Line Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Credit Commitment.

 

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 executed by IBM and each such Borrower and executed or acknowledged in writing by 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 acknowledgement 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.  Each of IBM, each relevant Subsidiary Borrower and each relevant Local Currency Lender confirms that each reference to the “IBM Credit Agreement” (or any comparable term) in the documentation governing each Local Currency Facility shall mean and be a reference to this Agreement.

 

(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(c) or (d), a “Local Currency Facility Maximum Borrowing Amount”) and (ii) with respect to each Local

 

43

 

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 $5,000,000,000 or (ii) the aggregate of all Local Currency Lender Stated Maximum Borrowing Amounts in respect of any Local Currency Lender at any time exceed 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, (ii) the Termination Date has occurred or (iii) 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, Local Currency Loans (US$ Equivalent) and Funded Participations made by any Lender then outstanding would exceed such Lender’s Revolving Credit Commitment.

 

(d)         Each Local Currency Responsible Lender shall furnish to the Administrative Agent, (i) immediately upon its request (and, in any event, within one hour after any such request is made on the date that a Borrower has made a request to borrow Swing Line Loans hereunder), a statement setting forth the outstanding Local Currency Loans made under each Local Currency Facility of such Lender or any affiliate, branch or agency thereof, and the amount and terms of any pending prepayment notices or borrowing requests received pursuant to each such Local Currency Facility through the date of the Administrative Agent’s request, (ii) within one Business Day after any change in the outstanding amount of any Local Currency Loans under any Local Currency Facility of such Lender or any affiliate, branch or agency thereof, a written statement to the Administrative Agent setting forth the outstanding amount of the Local Currency Loans under such Local Currency Facility after giving effect to such change and (iii) within three Business Days after the last Business Day of each calendar quarter, either (x) a written statement setting forth the outstanding amount of Local Currency Loans under each Local Currency Facility of such Lender or any affiliate, branch or agency thereof, as of the last Business Day of such calendar quarter or (y) if no such amounts are outstanding, a written notice to that effect.  In the event that any Lender does not comply with its obligations under this Section 3.1(d) with respect to any Local Currency Facility, the Administrative Agent shall have the option to assume that no Local Currency Loans are outstanding under such Local Currency Facility.

 

(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

 

44

 

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.  In addition, upon the request of the Administrative Agent, IBM shall promptly furnish to the Administrative Agent, to the extent available to IBM, such information with respect to any Local Currency Facility or the amount of Local Currency Loans outstanding thereunder requested by the Administrative Agent.

 

(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

 

45

 

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 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.

 

(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 amount 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.

 

46

 

(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 case 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 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 converted 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 Converted 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 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

 

47

 

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 and in the benefits of any collateral furnished in respect thereof and the proceeds of such collateral.

 

(d)         Notwithstanding anything to the contrary herein, the procedures specified in Section 2.5(b) or (c), as applicable, for refunding any outstanding Swing Line Loans shall be completed before the refunding of any Local Currency Loans pursuant to this Section 3.3, and the Administrative Agent in its discretion may adjust the procedures specified in this Section 3.3 to the extent necessary to so complete such refunding of such Swing Line Loans.

 

3.4       Existing Local Currency Facilities, etc.  Each of IBM, each Subsidiary Borrower, each Lender and the Administrative Agent acknowledges and agrees that (a) effective as of the Effective Date, the “Commitments” under the Existing Credit Agreement shall be terminated, (b) each “Local Currency Facility” entered into pursuant to the Existing Credit Agreement and described on Schedule 3.4 shall, effective on the Effective Date, automatically constitute a Local Currency Facility hereunder, (c) notwithstanding the termination of the “Commitments” under the Existing Credit Agreement, all “Local Currency Loans” outstanding pursuant to each “Local Currency Facility” on the Effective Date in the amount set forth on Schedule 3.4 shall constitute Local Currency Loans outstanding pursuant hereto and (d) each reference to the Existing Credit Agreement in any document relating to any such Local Currency Facility shall be deemed to be a reference to this Agreement.

 

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 represents and warrants (to the extent specifically applicable to such Subsidiary Borrower), to the Administrative Agent and each Lender that:

 

48

 

4.1       Organization; 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 rule 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.

 

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, 2017, audited by and accompanied by the opinion of PricewaterhouseCoopers, 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 Effective Date, between December 31, 2017 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, 2017 or the Form 10-Q of IBM for the fiscal quarter ended March 31, 2018, no litigation, investigation or proceeding of or before any arbitrator or Governmental Authority is

 

49

 

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 (i) with respect to this Agreement or any of the Transactions, or (ii) 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 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 U and the Loans are directly or 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 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 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) subject to regulation under 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.  The written information, reports, financial statements, exhibits and schedules furnished by or on behalf of any Borrower to the Administrative Agent or any Lender in connection with this Agreement and the Transactions or included herein or delivered pursuant hereto, taken as a whole, do not contain any material misstatement of fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

50

 

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.

 

4.14                        Anti-corruption Laws.  The Borrower has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower, its Subsidiaries and their respective directors, officers and employees with Anti-Corruption Laws and applicable Sanctions, and the Borrower and its Subsidiaries, and to the knowledge of the Borrower, their directors, officers and employees, are in compliance with Anti-Corruption Laws and applicable Sanctions in all material respects.  None of (a) the Borrower, any Subsidiary or any of their respective directors, officers or employees, or (b) to the knowledge of the Borrower, any agent of the Borrower or any Subsidiary that will act in any capacity in connection with or receive or direct the application of proceeds from the credit facility established hereby, is a Sanctioned Person.  No Loan or use of proceeds thereof will violate Anti-Corruption Laws or applicable Sanctions.

 

SECTION 5.                            CONDITIONS PRECEDENT

 

5.1       Conditions to Initial US$ Loans.  The effectiveness of this Agreement is subject to the satisfaction of the following conditions precedent (the date on which such conditions are satisfied or waived, the “Effective Date”):

 

(a)  Effective Date; Existing Credit Agreement.  (i) The Administrative Agent shall have received executed counterparts of this Agreement executed and delivered by duly authorized officers of IBM, the Administrative Agent and each Person that is a Lender as of immediately after the effectiveness of this Agreement (and such Lenders shall constitute “Required Lenders” under and as defined in the Existing Credit Agreement).

 

(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 and attachments, 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.

 

(c)  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).

 

(d)  PATRIOT Act, etc.  The Administrative Agent and the Joint Lead Arrangers shall have received all documentation and other information about the Borrowers as has been reasonably requested in writing at least 5 days prior to the Effective Date by the Administrative Agent or the Joint Lead Arrangers that they reasonably determine is required by regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act.

 

(e)  Legal Opinions.  The Administrative Agent shall have received the following executed legal opinions, with a copy for each Lender:

 

51

 

(i)                                     the executed legal opinion of Simpson Thacher & Bartlett LLP, counsel to the Administrative Agent, substantially in the form of Exhibit D-1; and

 

(ii)                                  the executed legal opinion of Christina M. Montgomery, Vice President, Assistant General Counsel and Secretary of IBM, substantially in the form of Exhibit D-2.

 

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.

 

(i)                                     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.  Following the delivery of a Subsidiary Borrower Notice and Designation, if the designation of such Subsidiary Borrower obligates the Administrative Agent or any Lender to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, IBM shall, promptly upon the request of the Administrative Agent or any Lender, supply such documentation and other evidence as is reasonably requested by the Administrative Agent or any Lender in order for the Administrative Agent or such Lender to carry out and be satisfied it has complied with the results of all necessary “know your customer” or other similar checks under all applicable laws and regulations.  If the relevant Borrower is a Subsidiary Borrower, in the case of the initial borrowing by such Subsidiary Borrower, such Subsidiary Borrower shall have notified the Lenders (through the Administrative Agent) of its intent to give notice of a borrowing pursuant to Section 2.2 at least five Business Days prior to the date it intends to give notice of such borrowing.

 

(ii)                                  If IBM shall designate a Foreign Subsidiary Borrower hereunder any Lender may, with notice to the Administrative Agent and IBM, fulfill its Commitment by causing an affiliate of such Lender to act as the Lender in respect of such Foreign Subsidiary Borrower (and such Lender shall, to the extent of Loans made to such Foreign Subsidiary Borrower, be deemed for all purposes hereof to have pro tanto assigned such Loans to such affiliate in compliance with the provisions of Section 11.8).

 

52

 

(iii)                               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 or shall have been assigned to another Subsidiary Borrower in accordance with the relevant Local Currency Facility to which such assignee Subsidiary Borrower is a party.  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.

 

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.

 

Notwithstanding any other provision of this Agreement, no Lender shall be obligated to make any Loan to IBM, if (i) the adoption of any law, rule or regulation after the date of this Agreement, (ii) any change in any law, rule or regulation or in the interpretation or application thereof by any Governmental Authority after the date of this Agreement or (iii) compliance by any Lender with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement, shall make it unlawful for such Lender to make such Loan to IBM.

 

Notwithstanding any other provision of this Agreement, no Lender shall be obligated to make any Loan to a Subsidiary Borrower if any law, rule, regulation or interpretation or application thereof by any Governmental Authority, or compliance by any Lender with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority shall make it unlawful for such Lender to make such Loan to such Subsidiary Borrower.

 

SECTION 6.                            AFFIRMATIVE COVENANTS

 

IBM and each Subsidiary Borrower 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

 

53

 

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 (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 90 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 PricewaterhouseCoopers 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 50 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; provided, that documents required to be furnished under this paragraph (d) shall be deemed furnished when made available via the EDGAR (or any successor) system of the SEC;

 

54

 

(e)  promptly, from time to time, (i) such other publicly available documents and information regarding the operations, business affairs and financial condition of IBM, any Significant Subsidiary or any Subsidiary Borrower (including information relating to “know your customer” or similar identification procedures), or compliance with the terms of this Agreement and (ii) solely with respect to each Subsidiary Borrower (if any), information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act and the Beneficial Ownership Regulation, in each case, 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 otherwise affect any change in the Applicable 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 after any Responsible Officer or the Director of Treasury Operations of IBM obtains knowledge thereof, give notice to the Administrative Agent and each Lender of (i) the occurrence of any Default or Event of Default, accompanied by a statement of a Responsible Officer setting forth details of the occurrence referred to therein and stating what action the relevant Borrower proposes to take with respect thereto and (ii) solely with respect to each Subsidiary Borrower (if any), any change in the information provided in the Beneficial Ownership Certification delivered to such Lender that would result in a change to the list of beneficial owners identified in such certification.

 

6.4       Anti-Corruption Laws.  Maintain in effect and enforce policies and procedures designed to ensure compliance by it, its Subsidiaries and their respective directors, officers and employees, whether acting directly or through agents, with Anti-Corruption Laws and applicable Sanctions.

 

SECTION 7.                            NEGATIVE COVENANTS

 

IBM and, in the case of Sections 7.2 and 7.3, each Subsidiary Borrower 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

 

55

 

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.

 

(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 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 10% 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.  (a)  No Borrower will consolidate with or merge with or into any other Person (unless, in the case of any Subsidiary Borrower, such Subsidiary Borrower’s designation as such is terminated pursuant to Section 5.2(d) concurrently with such transaction), 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 or limited liability company, and each Subsidiary Borrower may merge with any other Person, provided that (i) in the case of any such merger involving IBM, IBM is the surviving entity, (ii) in the case of any such merger involving a Subsidiary Borrower, the surviving entity assumes all of such Borrower’s obligations under this Agreement and remains a “Subsidiary Borrower” and (iii) 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.

 

(b)         IBM will not sell, convey or otherwise transfer all or substantially all of its properties or assets to any Person, provided that this paragraph (b) shall not prohibit IBM from entering into a merger transaction expressly permitted by Section 7.2(a).

 

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 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 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 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 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 Regulation U.

 

56

 

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 to be less than 2.20 to 1.0.

 

7.5       Anti-Corruption Laws.  The Borrower and its Subsidiaries shall not use, and shall procure that the respective directors, officers and employees of the Borrower and its Subsidiaries shall not use, the proceeds of any Loan (A) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (B) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, or (C) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

 

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

 

(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 $500,000,000 or more, when and as the same shall become due and payable (after the expiration of any applicable grace period); or

 

57

 

(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 shall 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 which are due and payable in an aggregate amount of $500,000,000 (exclusive of any amount thereof covered by insurance so long as such coverage is not being disputed) 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 60 days during which execution shall not be effectively stayed (for this purpose, a judgment shall effectively be stayed during a period when it is not yet due and payable), 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 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.

 

58

 

SECTION 9.                            THE ADMINISTRATIVE AGENT

 

9.1       Appointment.  Each Lender hereby irrevocably designates and appoints JPMorgan Chase Bank as the agent of such Lender under this Agreement, and each such Lender irrevocably authorizes JPMorgan Chase 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 inquire as to the observance or performance of any of the agreements 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.

 

59

 

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 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

 

60

 

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.

 

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 rights, 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 part 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.

 

9.10                        Syndication and Documentation Agents.  The Syndication Agents and the Documentation Agents shall not have any duties or responsibilities hereunder in its capacity as such.

 

9.11                        Certain ERISA Matters.

 

(a)  Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and its Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower, that at least one of the following is and will be true:

 

(i) such Lender is not using “plan assets” (within the meaning of the Plan Asset Regulations) of one or more Benefit Plans in connection with the Loans or the Commitments,

 

(ii) the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance

 

61

 

company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, and the conditions for exemptive relief thereunder are and will continue to be satisfied in connection therewith,

 

(iii) (A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement, or

 

(iv) such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

 

(b) In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent and its Affiliates, and not, for the avoidance of doubt, to or for the benefit of any Borrower, that:

 

(i) none of the Administrative Agent or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement or any documents related hereto),

 

(ii) the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21, as amended from time to time) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),

 

(iii) the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the obligations),

 

(iv) the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Commitments and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to the Loans, the Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder, and

 

62

 

(v) no fee or other compensation is being paid directly to the Administrative Agent or any its Affiliates for investment advice (as opposed to other services) in connection with the Loans, the Commitments or this Agreement.

 

(c) The Administrative Agent hereby informs the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans or the Commitments for an amount less than the amount being paid for an interest in the Loans or the Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

 

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 reasonable expenses (including, without limitation, all reasonable fees, charges and disbursements of 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 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.  Notwithstanding any payment made by IBM pursuant to this Section 10 or any set-off or application of funds of IBM by the Administrative Agent or any Lender in connection with the guarantee contained in this Section 10, IBM shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any Lender against any Subsidiary Borrower or any

 

63

 

collateral security or guarantee or right of offset held by the Administrative Agent or any Lender for the payment of the Subsidiary Borrower Obligations, nor shall IBM seek or be entitled to seek any contribution or reimbursement from any Subsidiary Borrower in respect of payments made by IBM under this Section 10, until all amounts owing to the Administrative Agent and the Lenders on account of the Subsidiary Borrower Obligations are paid in full and the Commitments are terminated.  If any amount shall be paid to IBM on account of such subrogation rights at any time when all of the Subsidiary Borrower Obligations shall not have been paid in full, such amount shall be held by IBM in trust for the Administrative Agent and the Lenders, 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 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 may 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.  To the full extent permitted by law, 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)

 

64

 

which may at any time be available to or be asserted by IBM against the Administrative Agent or any Lender, (d) any change in ownership of the relevant Subsidiary Borrower, any merger or consolidation of the relevant Subsidiary Borrower into another Person or any loss of the relevant Subsidiary Borrower’s separate legal identity or existence, or (e) 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 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 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

 

65

 

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.  Subject to Section 2.14(b), 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 the written consent of all the Lenders, (iv) release the guaranty contained in Section 10 without the consent of each Lender or (v) 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.  Notwithstanding anything to the contrary in the foregoing, any provision of this Agreement may be amended by an agreement in writing entered into by

 

66

 

the Borrowers and the Administrative Agent to cure any ambiguity, omission, mistake, defect or inconsistency, it being agreed the Administrative Agent shall provide the Lenders at least five Business Days’ prior written notice of such amendment, and any such amendment shall be deemed approved by the Lenders unless the Administrative Agent shall have received, within five Business Days of the date of such notice to the Lenders, a written notice from the Required Lenders stating that the Required Lenders object to such amendment.

 

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 notified by each Lender to the Administrative Agent 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

One   New Orchard Road

Armonk,   New York  10504

Attention:  Vice President and Treasurer

Telecopy:  914-499-2883

 

With a copy to CHQ   Legal Department 

Telecopy:  914-499-6445
    

 

67

 

	
The Administrative   Agent:
    	
JPMORGAN LOAN AND   AGENCY SERVICES GROUP

Loan & Agency   Services - Account Manager

Talitha Humes

1111 Fannin St., 10th   Floor, Houston TX 77002

Phone:  713-427-6190

Fax:  713-750-2878

E-mail:  Talitha.L.Humes@jpmorgan.com

 

With copies to:

 

JPMORGAN CHASE BANK

John Kowalczuk

270 Park Avenue, 4th   Floor

New York  NY    10017

E-mail:  john.kowalczuk@jpmorgan.com

Telephone:  (212) 270-6782

Fax:  (212) 270-4584

 

JPMORGAN CHASE BANK

Padmini Persaud

270 Park Avenue, 15th   Floor

New York  NY    10017

E-mail:  padmini.persaud@jpmorgan.com

Telephone:  (212) 270-6155

Fax:  (212) 270-4164
    

 

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 exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, 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 a single counsel to the Administrative Agent, (b) to pay or reimburse each Lender and the Administrative Agent for all its

 

68

 

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 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, each Local Currency Lender, each Syndication Agent, each Documentation Agent, each Joint Lead Arranger, the Administrative Agent and their respective directors, officers, employees and agents (each, an “indemnified person”) 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, incurred by or asserted against such indemnified person which arise out of or in connection with any claim, litigation or proceeding relating to this Agreement or any such other documents, any Loan or 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 any indemnified person with respect to indemnified liabilities arising from the gross negligence or willful misconduct of such indemnified person, in each case as determined by a final, non-appealable judgment of a court of competent jurisdiction 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 any indemnified person or any Transferee or any indemnity with respect thereto.  No indemnified person or IBM shall be liable for any damages arising from the use by unauthorized persons of information or other materials sent through electronic, telecommunications or other information transmission systems that are intercepted by such persons.  No indemnified person shall be liable for any special, indirect, consequential or punitive damages in connection with this Agreement.  The agreements in this Section 11.5 shall survive repayment of the Loans and the payment of all other amounts payable hereunder.

 

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,

 

69

 

such Participant shall be deemed to have agreed to share with the Lenders the proceeds thereof as provided in Section 11.12 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.  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any information relating to a Participant’s interest in any Commitments, Loans or other obligations under this Agreement) except to the extent that such disclosure is necessary to establish that such Commitment, Loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

 

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 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 rights 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 rights under this Agreement and any related document, and (ii) if a copy of such Competitive Loan Assignment shall have

 

70

 

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 $3,500 (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.

 

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 or delayed, and, in the case of IBM, shall be deemed to have been given unless IBM shall object to such assignment by written notice to the Administrative Agent within ten Business Days after having received notice thereof), to any other Lender or to an additional bank, financial institution or other entity other than a Borrower, an Affiliate of a Borrower or a natural person (each, a “Purchasing Lender”) all or any part of its rights and obligations under this Agreement pursuant to an Assignment and Assumption, 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 Assumption 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 Assumption, (x) the Purchasing Lender thereunder shall be a party hereto and, to the extent provided in such Assignment and Assumption, 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 Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption 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).

 

71

 

(b)         Upon its receipt of an Assignment and Assumption 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 $3,500 (which shall not be payable by any Borrower), the Administrative Agent shall (i) promptly accept such Assignment and Assumption 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 Assumption 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 Competitive Loan owing to such Competitive Loan Assignee.  The entries in the Register shall be conclusive, in the absence of manifest 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 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 or central bank in accordance with applicable law, provided, that in the case of any such pledge or assignment to a central bank, no Borrower will be responsible for the payment of any fees, expenses, duties, imposts, taxes or other amounts in connection therewith.  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 $2,000,000,000) 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).

 

72

 

(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 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, (c) becomes a Defaulting Lender or (d) fails to consent to any proposed amendment, modification, termination, waiver or consent with respect to any provision hereof that requires the unanimous approval of all of the Lenders, the approval of all of the Lenders affected thereby or the approval of a class of Lenders, in each case in accordance with the terms of Section 11.1, so long as the consent of the Required Lenders shall have been obtained with respect to such amendment, modification, termination, waiver or consent, 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 shall 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 “benefitted 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 maturity, by acceleration or otherwise) to set-off and

 

73

 

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 email or 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 exclusive general jurisdiction of the courts of the United States of America for the Southern District of New York, and appellate courts from any thereof, or, to the extent such courts lack subject matter jurisdiction, the Courts of the State of New York, in each case located in the County of New York;

 

(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;

 

(c)          in the case of each Subsidiary Borrower, designates and directs IBM at its offices at One New 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;

 

74

 

(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 right to effect service of process in any other manner permitted by law or shall limit the right to sue 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 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 11.18 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

 

75

 

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 or any swap counterparty 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 or affiliates 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 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, (vii) in connection with the exercise of any remedy hereunder or under any Local Currency Facility, (viii) to any credit insurance provider relating to any Borrower and its obligations or any rating agency when required by it, provided that, prior to any disclosure, such credit insurance provider or rating agency shall agree in writing to preserve the confidentiality of any confidential information relating to the Borrowers received by it, (ix) to the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Loans, provided that, prior to any disclosure, the CUSIP Service Bureau or such similar agency shall agree in writing to preserve the confidentiality of any confidential information relating to the Borrowers received by it, or (x) if IBM has consented to such disclosure in writing in its sole discretion.  It is understood and agreed that IBM, its Subsidiaries and their respective affiliates may rely upon this Section 11.21 for any purpose, including without limitation to comply with Regulation FD promulgated by the SEC.

 

11.22                 Binding Effect.  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 rights or obligations under this Agreement without 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.

 

11.23                 Incremental Revolving Credit Commitments.  (a)  IBM and any one or more Lenders (including New Lenders) may from time to time agree that such Lenders shall provide incremental Revolving Credit Commitments by executing and delivering to the Administrative Agent one or more Incremental Commitment Supplements or, in the case of New Lenders, New Lender Supplements.

 

76

 

(b)         Any additional bank, financial institution or other entity which is not already a Lender, with the consent of IBM and the Administrative Agent (which consent, in the case of the Administrative Agent, shall not be unreasonably withheld), can elect to become a party to this Agreement and obtain a Revolving Credit Commitment; such party shall execute a New Lender Supplement (each, a “New Lender Supplement”) with IBM and the Administrative Agent, substantially in the form of Exhibit I-1, whereupon such bank, financial institution or other entity (herein called a “New Lender”) shall become a Lender for all purposes and to the same extent as if originally a party hereto and shall be bound by and entitled to the benefits of this Agreement.

 

(c)          Any Lender (other than any New Lender) which agrees to provide an incremental Revolving Credit Commitment pursuant to this Section 11.23 shall execute an Incremental Commitment Supplement (each, an “Incremental Commitment Supplement”) with IBM and the Administrative Agent, substantially in the form of Exhibit I-2, whereupon such Lender shall be bound by and entitled to the benefits of this Agreement with respect to the incremental Revolving Credit Commitment specified therein, and Schedule 1.1 shall be deemed to be amended to reflect such incremental Revolving Credit Commitment.

 

(d)         If, on the date upon which any Lender (including any New Lender) provides an incremental Revolving Credit Commitment pursuant to this Section 11.23, there is an unpaid principal amount of Revolving Credit Loans, IBM shall borrow Revolving Credit Loans from such Lender in an amount determined by reference to the amount of each Type of Revolving Credit Loan (and, in the case of Eurodollar Loans, of each Eurodollar Tranche) which would then have been outstanding from such Lender if (i) each such Type or Eurodollar Tranche had been borrowed on the date such Lender’s incremental Revolving Credit Commitment was provided, in each case after giving effect thereto and (ii) the aggregate amount of each such Type or Eurodollar Tranche requested to be so borrowed had been increased to the extent necessary to give effect, with respect to such Lender, to the borrowing allocation provisions of Section 2.2.  Any Eurodollar Loan borrowed pursuant to the preceding sentence shall bear interest at a rate equal to the respective interest rates then applicable to the Eurodollar Loans of the other Lenders in the same Eurodollar Tranche.

 

(e)          Notwithstanding anything to the contrary in this Section 11.23, (i) the aggregate amount of incremental Revolving Credit Commitments provided pursuant to this Section 11.23 shall not exceed $2,000,000,000 and (ii) no Lender shall have any obligation to provide an incremental Revolving Credit Commitment unless it agrees to do so in its sole discretion.

 

11.24                 USA PATRIOT Act.  Each Lender hereby notifies the Borrowers that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the Borrowers, which information includes the name and address of the Borrowers and other information that will allow such Lender to identify the Borrowers in accordance with the Act.

 

11.25                 No Fiduciary Duty, etc.  (a)  Each Borrower acknowledges and agrees that (i) no fiduciary, advisory or agency relationship between any Borrower and the Lender Parties is intended to be or has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Lender Parties have advised or are advising any Borrower on other matters, and each Borrower waives, to the fullest extent permitted by law, any claims it may have against the Lender Parties for breach of fiduciary duty or alleged breach of fiduciary duty in respect of any of the transactions contemplated by this Agreement, and agrees that the Lender Parties will have no liability (whether direct or indirect) to any Borrower in respect of such a fiduciary duty claim in respect of any of the transactions contemplated by this Agreement, (ii) the Lender Parties, on the one hand, and each Borrower, on the other hand, have an arm’s length business relationship that does not directly or indirectly give rise to, nor does

 

77

 

any Borrower rely on, any fiduciary duty to any Borrower or its affiliates on the part of the Lender Parties, (iii) each Borrower is capable of evaluating and understanding, and it understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement, (iv) each Borrower has been advised that the Lender Parties are engaged in a broad range of transactions that may involve interests that differ from any Borrower’s interests and that the Lender Parties have no obligation to disclose such interests and transactions to any Borrower, (v) each Borrower has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, (vi) each Lender Party has been, is, and will be acting solely as a principal and, except as otherwise expressly agreed in writing by it and the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for any Borrower, any of its affiliates or any other Person or entity and (vii) none of the Lender Parties has any obligation to any Borrower or its affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein or in any other express writing executed and delivered by such Lender Party and such Borrower or any such affiliate.

 

(b)                                 None of the Lender Parties shall have or be deemed to have a fiduciary relationship with any other Lender Party.  The Lender Parties are not partners or co-venturers, and no Lender Party shall be liable for the acts or omissions of, or (except as otherwise set forth herein in the case of the Administrative Agent) authorized to act for, any other Lender Party.

 

11.26                 EU Bail-In.  Notwithstanding anything to the contrary in this Agreement or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any Lender deemed to be an EEA Financial Institution arising under this Agreement may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

 

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

 

(b) the effects of any Bail-In Action on any such liability, including, if applicable:

 

(i) a reduction in full or in part or cancellation of any such liability;

 

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement; or

 

(iii) the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

 

11.27                 Amendment and Restatement.  This Agreement amends and restates the Existing Credit Agreement.  All indebtedness and obligations created by the Existing Credit Agreement referred to therein remain outstanding and in effect and are continued by this Agreement with such modifications as are set forth herein and therein. On the Effective Date, the commitments of the lenders under the Existing Credit Agreement are assigned and reallocated among the Lenders under this Agreement as set forth on Schedule 1.1. This Agreement shall not constitute a novation of the obligations and liabilities under the Existing Credit Agreement or evidence repayment of any such obligations and liabilities. All indebtedness, obligations and liabilities outstanding under the Existing Credit Agreement on such date shall continue to constitute obligations and liabilities under this Agreement.  The “Lenders” under the

 

78

 

Existing Credit Agreement that are Lenders hereunder waive any notice required under the Existing Credit Agreement to the extent that such notice relates to the amendment and restatement of the Existing Credit Agreement contemplated hereby.

 

79

 

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: 
    	
/s/ Simon J. Beaumont
    
	
 
    	
 
    	
Name:   Simon J. Beaumont
    
	
 
    	
 
    	
Title:   Vice President and Treasurer
    

 

 

	
 
    	
JPMORGAN   CHASE BANK, N.A., as Administrative Agent and a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Inderjeet Aneja
    
	
 
    	
 
    	
Name:   Inderjeet Aneja
    
	
 
    	
 
    	
Title:     Vice President
    

 

 

	
 
    	
BNP   PARIBAS
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Brendan Heneghan
    
	
 
    	
 
    	
Name:   Brendan Heneghan
    
	
 
    	
 
    	
Title:     Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Ade Adedeji
    
	
 
    	
 
    	
Name:   Ade Adedeji
    
	
 
    	
 
    	
Title:     Vice President
    

 

 

	
 
    	
CITIBANK,   N.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Susan Olsen
    
	
 
    	
 
    	
Name:   Susan Olsen
    
	
 
    	
 
    	
Title:     Vice President
    

 

 

	
 
    	
ROYAL   BANK OF CANADA
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Mark Gronich
    
	
 
    	
 
    	
Name:   Mark Gronich
    
	
 
    	
 
    	
Title:     Authorized Signatory
    

 

 

	
 
    	
MIZUHO   BANK, LTD.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Tracy Rahn
    
	
 
    	
 
    	
Name:   Tracy Rahn
    
	
 
    	
 
    	
Title:     Authorized Signatory
    

 

 

	
 
    	
BANCO   SANTANDER, S.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Itziar Letamendi
    
	
 
    	
 
    	
Name:   Itziar Letamendi
    
	
 
    	
 
    	
Title:     Managing Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Isabel Pastor
    
	
 
    	
 
    	
Name:   Isabel Pastor
    
	
 
    	
 
    	
Title:     Vice President
    

 

 

	
 
    	
BANK   OF AMERICA, N.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Molly Daniello
    
	
 
    	
 
    	
Name:   Molly Daniello
    
	
 
    	
 
    	
Title:     Vice President
    

 

 

	
 
    	
BARCLAYS   BANK PLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Ronnie Glenn
    
	
 
    	
 
    	
Name:   Ronnie Glenn
    
	
 
    	
 
    	
Title:     Director
    

 

 

	
 
    	
DEUTSCHE   BANK AG NEW YORK BRANCH
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Ming K. Chu
    
	
 
    	
 
    	
Name:   Ming K. Chu
    
	
 
    	
 
    	
Title:     Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Virginia Cosenza
    
	
 
    	
 
    	
Name:   Virginia Cosenza
    
	
 
    	
 
    	
Title:     Vice President
    

 

 

	
 
    	
HSBC   BANK USA, NATIONAL ASSOCIATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Jonathan Yip
    
	
 
    	
 
    	
Name:   Jonathan Yip
    
	
 
    	
 
    	
Title:     Director
    

 

 

	
 
    	
SOCIETE   GENERALE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Paul Dalle Molle
    
	
 
    	
 
    	
Name:   Paul Dalle Molle
    
	
 
    	
 
    	
Title:   Managing Director
    

 

 

	
 
    	
WELLS   FARGO BANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Sid Khanolkar
    
	
 
    	
 
    	
Name:   Sid Khanolkar
    
	
 
    	
 
    	
Title:   Director
    

 

 

	
 
    	
MUFG   BANK, LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Ola Anderssen
    
	
 
    	
 
    	
Name:   Ola Anderssen
    
	
 
    	
 
    	
Title:   Director
    

 

 

	
 
    	
COMMERZBANK   AG, NEW YORK BRANCH
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Jenny Shum
    
	
 
    	
 
    	
Name:   Jenny Shum
    
	
 
    	
 
    	
Title:   Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Neil Kiernan
    
	
 
    	
 
    	
Name:   Neil Kiernan
    
	
 
    	
 
    	
Title:   Director
    

 

 

	
 
    	
CREDIT   SUISSE AG, CAYMAN ISLANDS BRANCH
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Judith E. Smith
    
	
 
    	
 
    	
Name:   Judith E. Smith
    
	
 
    	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Joan Park
    
	
 
    	
 
    	
Name:   Joan Park
    
	
 
    	
 
    	
Title:   Authorized Signatory
    

 

 

	
 
    	
GOLDMAN   SACHS BANK USA
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Ryan Durkin
    
	
 
    	
 
    	
Name:   Ryan Durkin
    
	
 
    	
 
    	
Title:   Authorized Signatory
    

 

 

	
 
    	
ING   BANK N.V., DUBLIN BRANCH
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Barry Fehily
    
	
 
    	
 
    	
Name:   Barry Fehily
    
	
 
    	
 
    	
Title:   Managing Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Shaun Hawley
    
	
 
    	
 
    	
Name:   Shaun Hawley
    
	
 
    	
 
    	
Title:   Director
    

 

 

	
 
    	
SUMITOMO   MITSUI BANKING CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   James D. Weinstein
    
	
 
    	
 
    	
Name:   James D. Weinstein
    
	
 
    	
 
    	
Title:   Managing Director
    

 

 

	
 
    	
THE   TORONTO-DOMINION BANK, NEW YORK BRANCH
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Wallace Wong
    
	
 
    	
 
    	
Name:   Wallace Wong
    
	
 
    	
 
    	
Title:   Authorized Signatory
    

 

 

	
 
    	
UNICREDIT   BANK AG, NEW YORK BRANCH
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Fabio Della Malva
    
	
 
    	
 
    	
Name:   Fabio Della Malva
    
	
 
    	
 
    	
Title:   Managing Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Bryon Korutz
    
	
 
    	
 
    	
Name:   Bryon Korutz
    
	
 
    	
 
    	
Title:   Associate Director
    

 

 

	
 
    	
U.S. BANK NATIONAL   ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Matt S. Scullin
    
	
 
    	
 
    	
Name:   Matt S. Scullin
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

	
 
    	
BANK   OF CHINA, NEW YORK BRANCH
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Raymond Qiao
    
	
 
    	
 
    	
Name:   Raymond Qiao
    
	
 
    	
 
    	
Title:   Executive Vice President
    

 

 

	
 
    	
AUSTRALIA   AND NEW ZEALAND BANKING GROUP LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Thomas E. Ferguson
    
	
 
    	
 
    	
Name:   Thomas E. Ferguson
    
	
 
    	
 
    	
Title:   Director
    

 

 

	
 
    	
DBS BANK LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Loy Hwee Chuan
    
	
 
    	
 
    	
Name:   Loy Hwee Chuan
    
	
 
    	
 
    	
Title:   Senior Vice President
    

 

 

	
 
    	
PNC BANK, N.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Kristin Wenslau
    
	
 
    	
 
    	
Name:   Kristin Wenslau
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

	
 
    	
STANDARD CHARTERED BANK
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Daniel Mattern
    
	
 
    	
 
    	
Name:   Daniel Mattern
    
	
 
    	
 
    	
Title:   Associate Director
    

 

 

	
 
    	
THE BANK OF NOVA SCOTIA
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Jason Rinne
    
	
 
    	
 
    	
Name:   Jason Rinne
    
	
 
    	
 
    	
Title:   Director
    

 

 

	
 
    	
BANCO BILBAO VIZCAYA ARGENTARIA, S.A. NEW YORK   BRANCH
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Veronica Incera
    
	
 
    	
 
    	
Name:   Veronica Incera
    
	
 
    	
 
    	
Title:   Managing Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Luis Ruigomez
    
	
 
    	
 
    	
Name:   Luis Ruigomez
    
	
 
    	
 
    	
Title:   Executive Director
    

 

 

	
 
    	
BANCO BRADESCO, S.A., NEW YORK BRANCH,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Arlete M. M. B. Lacerda
    
	
 
    	
 
    	
Name:   Arlete M. M. B. Lacerda
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Márcio Martins Bonilha Neto
    
	
 
    	
 
    	
Name:   Márcio Martins Bonilha Neto
    
	
 
    	
 
    	
Title:
    

 

 

	
 
    	
CANADIAN IMPERIAL BANK   OF COMMERCE, NEW YORK BRANCH
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Andrew R. Campbell
    
	
 
    	
 
    	
Name:   Andrew R. Campbell
    
	
 
    	
 
    	
Title:   Authorized Signatory
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Dominic Sorresso
    
	
 
    	
 
    	
Name:   Dominic Sorresso
    
	
 
    	
 
    	
Title:   Authorized Signatory
    

 

 

	
 
    	
DANSKE BANK A/S
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Caitruna Lowbry
    
	
 
    	
 
    	
Name:   Caitruna Lowbry
    
	
 
    	
 
    	
Title:   Senior Relationship Manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/   Terry Browne
    
	
 
    	
 
    	
Name:   Terry Browne
    
	
 
    	
 
    	
Title:   Country Manager
    

 

 

	
 
    	
LLOYDS   BANK PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Tina Wong
    
	
 
    	
 
    	
Name:   Tina Wong
    
	
 
    	
 
    	
Title:   Assistant Manager
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Kamala Basdeo
    
	
 
    	
 
    	
Name:   Kamala Basdeo
    
	
 
    	
 
    	
Title:   Assistant Manager
    

 

 

	
 
    	
RAIFFEISEN   BANK INTERNATIONAL AG
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   P. Straubinger
    
	
 
    	
 
    	
Name:   P. Straubinger
    
	
 
    	
 
    	
Title:   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Josef Hörl
    
	
 
    	
 
    	
Name:   Josef Hörl
    
	
 
    	
 
    	
Title:   Director
    

 

 

	
 
    	
THE   NORTHERN TRUST COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Eric Siebert
    
	
 
    	
 
    	
Name:   Eric Siebert
    
	
 
    	
 
    	
Title:   Senior Vice President
    

 

 

	
 
    	
STATE   STREET BANK & TRUST COMPANY
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Adebusola Laguda
    
	
 
    	
 
    	
Name:   Adebusola Laguda
    
	
 
    	
 
    	
Title:   Vice President
    

 

 

SCHEDULE 1.1 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

	
 
    	
 
    	
Revolving Credit
   Commitment
    	
 
    	
Swing Line
   Commitment
    	
 
    
	
JPMorgan Chase   Bank, N.A.
    	
 
    	
$
    	
540,000,000
    	
 
    	
$
    	
300,000,000
    	
 
    
	
BNP Paribas
    	
 
    	
$
    	
540,000,000
    	
 
    	
$
    	
300,000,000
    	
 
    
	
Citibank, N.A.
    	
 
    	
$
    	
540,000,000
    	
 
    	
$
    	
300,000,000
    	
 
    
	
Royal Bank of   Canada
    	
 
    	
$
    	
540,000,000
    	
 
    	
$
    	
200,000,000
    	
 
    
	
Mizuho   Bank, Ltd.
    	
 
    	
$
    	
510,000,000
    	
 
    	
 
    	
 
    
	
Banco Santander,   S.A.
    	
 
    	
$
    	
430,000,000
    	
 
    	
 
    	
 
    
	
Bank of America,   N.A.
    	
 
    	
$
    	
430,000,000
    	
 
    	
 
    	
 
    
	
Barclays Bank   PLC
    	
 
    	
$
    	
430,000,000
    	
 
    	
$
    	
300,000,000
    	
 
    
	
Deutsche Bank AG   New York Branch
    	
 
    	
$
    	
430,000,000
    	
 
    	
$
    	
200,000,000
    	
 
    
	
HSBC Bank USA,   National Association
    	
 
    	
$
    	
430,000,000
    	
 
    	
 
    	
 
    
	
Societe Generale
    	
 
    	
$
    	
430,000,000
    	
 
    	
 
    	
 
    
	
Wells Fargo   Bank, N.A.
    	
 
    	
$
    	
430,000,000
    	
 
    	
$
    	
200,000,000
    	
 
    
	
MUFG   Bank, Ltd.
    	
 
    	
$
    	
350,000,000
    	
 
    	
$
    	
200,000,000
    	
 
    
	
Commerzbank AG,   New York Branch
    	
 
    	
$
    	
280,000,000
    	
 
    	
 
    	
 
    
	
Credit Suisse   AG, Cayman Islands Branch
    	
 
    	
$
    	
280,000,000
    	
 
    	
 
    	
 
    
	
Goldman Sachs   Bank USA
    	
 
    	
$
    	
280,000,000
    	
 
    	
 
    	
 
    
	
ING Bank N.V.,   Dublin Branch
    	
 
    	
$
    	
280,000,000
    	
 
    	
 
    	
 
    
	
Sumitomo Mitsui   Banking Corp.
    	
 
    	
$
    	
280,000,000
    	
 
    	
 
    	
 
    
	
The   Toronto-Dominion Bank, New York Branch
    	
 
    	
$
    	
280,000,000
    	
 
    	
 
    	
 
    
	
UniCredit Bank   AG, New York Branch
    	
 
    	
$
    	
280,000,000
    	
 
    	
 
    	
 
    
	
U.S. Bank   National Association
    	
 
    	
$
    	
280,000,000
    	
 
    	
 
    	
 
    
	
Bank of China,   New York Branch
    	
 
    	
$
    	
230,000,000
    	
 
    	
 
    	
 
    
	
Australia and   New Zealand Banking Group Limited
    	
 
    	
$
    	
190,000,000
    	
 
    	
 
    	
 
    
	
DBS Bank Ltd.
    	
 
    	
$
    	
190,000,000
    	
 
    	
 
    	
 
    
	
PNC Bank,   National Association
    	
 
    	
$
    	
190,000,000
    	
 
    	
 
    	
 
    
	
Standard   Chartered Bank
    	
 
    	
$
    	
190,000,000
    	
 
    	
 
    	
 
    
	
The Bank of Nova   Scotia
    	
 
    	
$
    	
190,000,000
    	
 
    	
 
    	
 
    
	
Banco Bilbao   Vizcaya Argentaria, S.A. New York Branch
    	
 
    	
$
    	
100,000,000
    	
 
    	
 
    	
 
    
	
Banco Bradesco   S.A., New York Branch
    	
 
    	
$
    	
100,000,000
    	
 
    	
 
    	
 
    
	
Canadian   Imperial Bank of Commerce, New York Branch
    	
 
    	
$
    	
100,000,000
    	
 
    	
 
    	
 
    
	
Danske Bank A/S
    	
 
    	
$
    	
100,000,000
    	
 
    	
 
    	
 
    
	
Lloyds Bank plc
    	
 
    	
$
    	
100,000,000
    	
 
    	
 
    	
 
    
	
Raiffeisen Bank   International AG
    	
 
    	
$
    	
100,000,000
    	
 
    	
 
    	
 
    
	
The Northern   Trust Company
    	
 
    	
$
    	
100,000,000
    	
 
    	
 
    	
 
    
	
State Street   Bank and Trust Company
    	
 
    	
$
    	
100,000,000
    	
 
    	
 
    	
 
    
	
Total:
    	
 
    	
$
    	
10,250,000,000
    	
 
    	
$
    	
2,000,000,000
    	
 
    

 

 

SCHEDULE 6.2(c) TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF COMPLIANCE CERTIFICATE]

 

COMPLIANCE CERTIFICATE

 

[For the Fiscal Quarter ending         , 20  ]

 

[For the Fiscal Year ending         , 20  ]

 

Pursuant to Section 6.2(c) of the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (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”), the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein, 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              , 20  , 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            , 20  , 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.

 

 

1.             Consolidated Net Interest Expense Ratio (Section 7.4)

 

The ratio of

 

1.     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
    	
 
    	
$             
    

 

3

 

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
    	
$
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
(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:             , 20

 

	
 
    	
 
    
	
 
    	
Title:   [Responsible Officer
    
	
 
    	
         of   IBM]
    

 

4

 

EXHIBIT A-1 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF COMPETITIVE LOAN CONFIRMATION]

 

	
 
    	
, 20
    

 

JPMorgan Chase Bank, N.A., as Administrative Agent
 270 Park Avenue
 New York, New York  10017

 

Reference is made to the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018, among International Business Machines Corporation, the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein (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            , 20   [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
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF COMPETITIVE LOAN OFFER]

 

	
JPMorgan   Chase Bank, N.A., as Administrative Agent
    	
, 20
    
	
270   Park Avenue
    	
 
    
	
New   York, New York 10017
    	
 
    

 

Reference is made to the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018, among International Business Machines Corporation, the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein (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
    Loan Date:             , 20
    	
 
    	
Aggregate Maximum Amount:   $         
    
	
 
    	
 
    	
 
    
	
Maturity Date 1:
                           ,   20
    	
 
    	
Maximum Amount: $
   $            offered at              *
   $            offered at              *
    
	
 
    	
 
    	
 
    
	
Maturity Date 2:
                           ,   20
    	
 
    	
Maximum Amount: $
   $            offered at              *
   $            offered at              *
    
	
 
    	
 
    	
 
    
	
Maturity Date 3:
                           ,   20
    	
 
    	
Maximum Amount: $
   $            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
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF COMPETITIVE LOAN REQUEST]

 

	
 
    	
, 20
    

 

JPMorgan Chase Bank, N.A., as Administrative Agent
 270 Park Avenue
 New York, New York  10017

 

Reference is made to the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018, among International Business Machines Corporation, the undersigned, the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein (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 Loans:

 

	
 
    	
 
    	
Loan 1
    	
 
    	
Loan 2
    	
 
    	
Loan 3
    	
 
    
	
Aggregate   Principal Amount
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
 
    	
 
    
	
Borrowing Date
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Interest Period***
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Maturity Date****
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Interest Payment   Dates*****
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
											

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
[Name   of Borrower]
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
Title:
    

 

**                                  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.

 

***                           Insert only in an Index Rate Competitive Loan Request.

 

****                    In an Index Rate Competitive Loan Request, insert last day of Interest Period.

 

*****             Insert only in a Fixed Rate Competitive Loan Request.

 

 

EXHIBIT B-1 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF SUBSIDIARY BORROWER NOTICE AND DESIGNATION]

 

SUBSIDIARY BORROWER NOTICE AND DESIGNATION

 

To:                                                     JPMorgan Chase Bank, N.A., as Administrative Agent

 

From:                                       International Business Machines Corporation

 

1.             This Subsidiary Borrower Notice and Designation is being delivered to you pursuant to Section 5.2(d) of the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018, among International Business Machines Corporation, the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein (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.

 

2.             The effective date of this Subsidiary Borrower Notice and Designation will be               , 20  .

 

3.             [Please be advised that the following Subsidiary or Controlled Person is hereby designated as a Subsidiary Borrower [and a Swing Line Borrower] and such Subsidiary or Controlled Person is authorized to use the credit facilities provided for under Sections 2.1[, 2.5] and 2.7 of the Credit Agreement up to the aggregate amount set forth opposite its name below:

 

	
Name and Address
   of Subsidiary Borrower
    	
 
    	
Maximum Subsidiary
   Borrowing Amount*]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    

 

[3.           Please be advised that the designation of the following Subsidiary or Controlled Person as a Subsidiary Borrower is terminated effective on the date referred to in paragraph 2 above.]

 

	
 
    	
INTERNATIONAL   BUSINESS
    
	
 
    	
MACHINES   CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    

 

*                                         If desired, IBM may specify separate Maximum Subsidiary Borrowing Amounts for US$ Loans and Local Currency Loans (US$ Equivalent), which, in either case, may be $0.

 

 

	
 
    	
[Name   of Subsidiary Borrower]**
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    

 

	
Accepted   and Acknowledged:
    	
 
    
	
 
    	
 
    
	
JPMORGAN   CHASE BANK, N.A., as
    	
 
    
	
Administrative   Agent
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
Title:
    	
 
    

 

**                                  Subsidiary Borrower signature necessary only in the case of termination of designation or any change in the Maximum Subsidiary Borrowing Amount.

 

2

 

EXHIBIT B-2 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF SUBSIDIARY BORROWER REQUEST]

 

SUBSIDIARY BORROWER REQUEST

 

To:                                                     JPMorgan Chase Bank, N.A., as Administrative Agent

 

From:                                       [Name of Subsidiary Borrower]

 

1.             This Subsidiary Borrower Request is being delivered to you pursuant to Section 5.2(d) of the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018, among International Business Machines Corporation (“IBM”), the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein (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.

 

2.             The undersigned refers to the Subsidiary Borrower Notice and Designation effective                , 20   (the “Effective Date”) delivered by IBM to you in which the undersigned is designated a Subsidiary Borrower and hereby confirms that by its execution of this Subsidiary Borrower Request, the undersigned acknowledges that it has received a copy of the Credit Agreement, confirms that the representations and warranties contained in Section 4 of the Credit Agreement (except the representations and warranties contained in Sections 4.6 and 4.7) are true and correct as to the undersigned as of the Effective Date hereof and agrees that, from and after the Effective Date, it shall be a party to the Credit Agreement and shall to be bound, as a “Borrower”, by all of the provisions thereof.

 

	
 
    	
[NAME   OF SUBSIDIARY BORROWER]
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

 

EXHIBIT C TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF CLOSING CERTIFICATE]

 

Pursuant to Section 5.1(b) of the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (the “Credit Agreement”; unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement), among International Business Machines Corporation, a New York corporation (“IBM”), the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein, the undersigned [            ] of IBM hereby certifies as follows:

 

1.             The representations and warranties of IBM contained in the Credit Agreement or in any certificate, document or financial or other statement furnished by or on behalf of IBM pursuant to or in connection with the Credit Agreement are true and correct in all material respects on and as of the date hereof with the same effect as if made on the date hereof except for representations and warranties stated to relate to a specific earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date;

 

2.             No Default or Event of Default has occurred and is continuing as of the date hereof or after giving effect to any Loans to be made on the date hereof;

 

3.                                  is and at all times since                       20  , has been the duly elected and qualified [Assistant] Secretary of IBM and the signature set forth on the signature line for such officer below is such officer’s true and genuine signature;

 

and the undersigned [Assistant] Secretary of IBM hereby certifies as follows:

 

4.             There are no liquidation or dissolution proceedings pending or to my knowledge threatened against IBM, nor to my knowledge has any other event occurred affecting or threatening the corporate existence of IBM;

 

5.             IBM is a corporation duly organized, validly existing and in good standing under the laws of [            ];

 

6.             Attached hereto as Exhibit A is a complete and correct copy of resolutions duly adopted by the Board of Directors (or a duly authorized committee thereof) of IBM on          , 20  ; such resolutions have not in any way been amended, modified, revoked or rescinded and have been in full force and effect since their adoption to and including the date hereof and are now in full force and effect; such resolutions are the

 

 

only corporate proceedings of IBM now in force relating to or affecting the matters referred to therein;

 

7.             Attached hereto as Exhibit B is a complete and correct copy of the by-laws of IBM as in effect at all times since                  , 20   to and including the date hereof; and attached hereto as Exhibit C is a true and complete copy of the certificate of incorporation of IBM as in effect at all times since                    , 20   to and including the date hereof; and

 

8.             The persons listed on Exhibit D to this closing certificate are now duly elected and qualified officers of IBM holding the offices indicated next to their respective names below, and such officers have held such offices with IBM at all times since                 , 20   to and including the date hereof, and the signatures appearing opposite their respective names below are the true and genuine signatures of such officers, and each of such officers is duly authorized to execute and deliver on behalf of IBM the Credit Agreement and any certificate or other document to be delivered by IBM pursuant to the Credit Agreement:

 

IN WITNESS WHEREOF, the undersigned have hereto set our names

 

	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title:    [           ]
    	
 
    	
Title:  [Assistant] Secretary
    
	
 
    	
 
    	
 
    
	
Date:                  ,   20  
    	
 
    	
 
    

 

2

 

EXHIBIT D-1 TO THE

AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF OPINION OF SIMPSON THACHER & BARTLETT LLP]

 

	
 
    	
July 19, 2018
    

 

To:                             JPMorgan Chase Bank, N.A., as

Administrative Agent under the Credit Agreement referred to below

383 Madison Avenue,

New York, New York 10179

 

The Lenders listed on Schedule I hereto

 

Re:                             The Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (the “Credit Agreement”), among International Business Machines Corporation, a New York corporation (“IBM”), the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein.

 

Ladies and Gentlemen:

 

We have acted as special counsel to the Administrative Agent in connection with the execution and delivery of the Credit Agreement.

 

This opinion is delivered to you pursuant to Section 5.1(e)(i) of the Credit Agreement.  Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

In arriving at the opinion expressed below, we have examined (a) a counterpart of the Credit Agreement, signed by IBM and the Administrative Agent and (b) such documents as we have deemed necessary or appropriate for the purposes of this opinion.

 

In such examination, we have assumed the genuineness of all signatures, the authenticity, regularity and completeness of all documents submitted to us as originals, the completeness of all documents submitted to us as duplicates or as certified or conformed copies and the conformity of such documents to the original documents.

 

We have also assumed that the Credit Agreement has been duly executed and delivered by IBM, that IBM is duly incorporated and validly existing under the laws of its jurisdiction of incorporation and has the corporate power and authority to execute, deliver and perform its

 

 

obligations under the Credit Agreement, that IBM is not an “investment company” within the meaning of the Investment Company Act of 1940, as amended, that the execution, delivery and performance by IBM of the Credit Agreement have been duly authorized by all necessary corporate action on the part of IBM, do not contravene its certificate of incorporation or by-laws or similar organizational documents or violate, or require any consent not obtained under, any applicable law or regulation or any order, writ, injunction or decree of any court or other Governmental Authority binding upon IBM and do not violate, or require any consent not obtained under, any contractual obligation applicable to or binding upon IBM, and that the Credit Agreement constitutes a valid and legally binding obligation of the Administrative Agent, the Lenders and each Subsidiary Borrower.

 

Based upon the foregoing, and subject to the qualifications and comments set forth below, we are of the opinion that, insofar as the law of the State of New York is concerned, the Credit Agreement (including the guarantee contained in Section 10 thereof) constitutes a valid and legally binding obligation of IBM, enforceable against IBM in accordance with its terms, except as affected by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing, except that we express no opinion as to (a) Section 11.17(b) of the Credit Agreement insofar as it relates to an action brought in the United States District Court for the Southern District of New York and note that such matters may be raised by such court; (b) any indemnification obligations of IBM under the Credit Agreement to the extent such obligations might be deemed to be inconsistent with public policy; (c) the provisions of Section 11.6 of the Credit Agreement purporting to grant to Participants a right to set-off; (d) any provision of the Credit Agreement that purports to establish an evidentiary standard for determinations by the Lenders or the Administrative Agent; (e) Section 11.12(b) of the Credit Agreement to the extent that it provides for (i) a right of set-off in respect of participating interests purchased pursuant to Section 11.12(a) of the Credit Agreement, (ii) a right of set-off in respect of claims, credits or other obligations that are contingent or (iii) a right of set-off in respect of Borrower Obligations against deposits, indebtedness or other obligations of any entity other than the entity to which such Borrower Obligations are payable; (f) Section 10.7 or Section 11.17(d) of the Credit Agreement; or (g) any Local Currency Facility.

 

With respect to our opinion as to the guarantee contained in Section 10 of the Credit Agreement or a judgment related to Subsidiary Borrowers contained in Section 11.18 of the Credit Agreement, we note that (i) a New York statute provides that with respect to a foreign currency obligation, a court of the State of New York shall render a judgment or decree in such foreign currency and such judgment or decree shall be converted into currency of the United States at the rate of exchange prevailing on the date of entry of such judgment or decree and (ii) with respect to a foreign currency obligation, a United States Federal court in New York may award judgment in United States dollars, provided that we express no opinion as to the rate of exchange such court would apply.

 

We do not express any opinion herein concerning any law other than the law of the State 

 

4

 

of New York.

 

This opinion has been rendered solely for your benefit in connection with the Credit Agreement and the transactions contemplated thereby and may not be relied upon by you for any other purpose, or relied upon by or furnished to any other Person, firm or corporation without our prior written consent.

 

	
 
    	
Very truly   yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SIMPSON   THACHER & BARTLETT LLP
    

 

5

 

SCHEDULE I

 

THE LENDERS

 

 

EXHIBIT D-2 TO

AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

FORM OF OPINION OF ASSISTANT GENERAL COUNSEL OF IBM

 

	
 
    	
July 19,   2018
    

 

International Business Machines Corporation

$10,250,000,000 Amended and Restated 5-Year Credit Agreement

dated as of July 19, 2018

 

I am Christina M. Montgomery, Vice President, Assistant General Counsel and Secretary of International Business Machines Corporation, a New York corporation (“IBM”), and have advised IBM in connection with the Amended and Restated $10,250,000,000 5-Year Credit Agreement dated as of July [·], 2018 (the “Credit Agreement”), among IBM, each Subsidiary Borrower (as defined therein), the several banks and other financial institutions from time to time party thereto (the “Lenders”), JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein.  Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.

 

In connection with this opinion, I have investigated such questions of law, received such information from officers and representatives of IBM and the Subsidiary Borrowers and examined such certificates of public officials, corporate documents and records of IBM and the Subsidiary Borrowers and other documents as I have deemed necessary or appropriate for the purposes of this opinion.  I have relied, with respect to certain factual matters not constituting conclusions of law, on the representations and warranties of IBM and the Subsidiary Borrowers contained in the Credit Agreement and assume compliance on the part of each such corporation with its covenants and agreements under the Credit Agreement.

 

In rendering my opinion, I have assumed (i) the due authorization, execution and delivery of the Credit Agreement by all parties thereto (other than IBM), (ii) the authenticity of all documents submitted to me as originals and (iii) the conformity to original documents of all documents submitted to me as copies.

 

Based upon the foregoing, I am of opinion that:

 

1.             IBM has been duly incorporated and is validly existing and in good standing under the laws of the State of New York and is duly qualified as a foreign corporation and in good standing under the laws of each jurisdiction where the failure to so qualify would have a Material Adverse Effect.  IBM has the requisite corporate power and authority to own its properties and assets and to carry on its business in all material respects as now conducted.  Each Significant Subsidiary has been duly incorporated and is validly existing and in good standing under the laws of the jurisdiction of its incorporation and is duly qualified as a foreign

 

 

corporation and in good standing under the laws of each jurisdiction where the failure to so qualify would have a Material Adverse Effect.  Each Significant Subsidiary has the requisite corporate power and authority to lease the property it operates under lease and to carry on its business in all material respects as now conducted.

 

2.             The execution, delivery and performance by IBM of the Credit Agreement (including, without limitation, Section 10 thereof) and the Transactions (a) are within the corporate power of IBM; (b) have been duly authorized by all requisite corporate action; (c) do not (i) violate (A) any provisions of law, statute, material rule or material regulation of the United States or the State of New York, or of the certificate or articles of incorporation or other constitutive documents or by-laws of IBM or any Significant Subsidiary, (B) to the best of my knowledge, any material order of any United States Federal or New York Governmental Authority or (C) any provision of any material indenture or other material agreement or material instrument known to me to which IBM or any Significant Subsidiary is a party or by which any of them or any of their property is or may be bound, (ii) conflict with, or result in a breach of or constitute (alone or with notice or lapse of time or both) a default under any such material indenture or other material agreement or material instrument or (iii) except as contemplated by Section 7.1 of the Credit Agreement, 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 or any Significant Subsidiary; and (d) do not require the consent or approval of, or any registration or filing with, or any other action by, any United States Federal or New York Governmental Authority or any other person party to those agreements described above other than (i) those that 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, (ii) such periodic and current reports, if any, as are required to be filed with the SEC to disclose the Credit Agreement or the Transactions contemplated thereunder and (iii) such filings as may hereafter be required pursuant to the provisions of Section 7.1 of the Credit Agreement to perfect security interests securing the Borrower Obligations.

 

3.             The Credit Agreement (including, without limitation, Section 10 thereof) has been duly executed and delivered by IBM.

 

4.             The Credit Agreement constitutes the legal, valid and binding obligation of IBM, enforceable in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors’ rights and by general principles of equity (including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing) regardless of whether considered in a proceeding in equity or at law, and except that (a) insofar as provisions of the Credit Agreement provide for indemnification, the enforcement thereof may be limited by public policy considerations, (b) I express no opinion as to (i) Section 11.12(b) of the Credit Agreement to the extent that it provides for (A) a right of set-off in respect of participating interests purchased pursuant to Section 11.12(a) of the Credit Agreement, (B) a right of set-off in respect of claims, credits or other obligations that are contingent or (C) a right of set-off in respect of Borrower Obligations against deposits, indebtedness or other obligations of any entity other than the entity to which such Borrower Obligations are payable, or (ii) the fourth sentence of Section 11.6 of the Credit Agreement, (c) I express no opinion as to (i)

 

2

 

whether a United States Federal court or a court of the State of New York would render a money judgment in a currency other than United States Dollars or enforce a judgment expressed in a foreign currency in a currency other than United States Dollars and (ii) the rate of exchange a United States Federal court or a court of the State of New York would apply, (d) I express no opinion as to (i) Section 11.17(b) of the Credit Agreement insofar as it relates to an action brought in the United States District Court for the Southern District of New York and note that such matters may be raised by such court or (ii) Section 11.17(d) of the Credit Agreement and (e) I express no opinion as to Section 10.7 of the Credit Agreement.

 

5.             IBM is not an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

 

6.             The use of proceeds of any Loan under the Credit Agreement, in the manner contemplated in the Credit Agreement, will not entail a violation of any of the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

 

7.             To the best of my knowledge after due inquiry, except as set forth in the Form 10-K of IBM for its fiscal year ended December 31, 2017 or the Form 10-Q of IBM for the fiscal quarter ended March 31, 2018, there are no actions, suits or proceedings at law or in equity or by or before any arbitrator or Governmental Authority now pending or threatened by or against IBM or any of the Significant Subsidiaries or against any of its or their respective properties or revenues as of the date hereof (i) which involve the Credit Agreement or any of the actions contemplated thereby or (ii) as to which there is a probable risk of an adverse decision which would materially restrict the ability of IBM to comply with its obligations under the Credit Agreement.

 

I express no opinion herein as to (i) any Local Currency Facility or (i) the creation, perfection, priority or enforceability of any lien or security interest that may hereafter be granted to secure the Borrower Obligations pursuant to the provisions of Section 7.1 of the Credit Agreement.  In rendering the opinions expressed in paragraphs 2 and 4 above, I have assumed with your permission that no Lender and no assignee or transferee of any Loan or participation therein will be a “broker” or “dealer” (as defined in Sections 3(a)(4) and 3(a)(5) of the Securities Exchange Act of 1934) or any other person which is a “creditor” as defined in Regulation T.

 

I am admitted to practice in the State of New York and express no opinion as to matters governed by any laws other than the laws of the State of New York and the Federal laws of the United States of America.

 

[Remainder of This Page Left Intentionally Blank]

 

3

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Christina   M. Montgomery
    

 

Each of the Lenders Party to the

Credit Agreement Referred to Above

In care of JPMorgan Chase Bank, N.A. as Administrative Agent

383 Madison Avenue

New York, NY 10017

 

4

 

EXHIBIT E TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF ASSIGNMENT AND ASSUMPTION]

 

This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into between the Assignor named below (the “Assignor”) and the Assignee named below (the “Assignee”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any guarantees and Swing Line Loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

 

	
1.
    	
Assignor:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
2.
    	
Assignee:
    	
 
    	
 
    
	
 
    	
 
    	
[and   is an Affiliate/Approved Fund of [identify Lender](1)]
    
	
 
    	
 
    	
 
    	
 
    
	
3.
    	
Borrower(s):
    	
 
    	
 
    

 

(1)  Select as applicable.

 

 

	
4.
    	
Administrative   Agent: JPMorgan Chase Bank, N.A., as administrative agent under the Credit   Agreement
    
	
 
    	
 
    
	
5.
    	
Credit   Agreement:
    	
Amended   and Restated 5-Year Credit Agreement, dated as of July 19, 2018, among   International Business Machines Corporation, a New York corporation, the   Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan   Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and   Documentation Agents named therein
    

 

2

 

	
6.
    	
Assigned   Interest:
    

 

	
Facility Assigned(2)
    	
 
    	
Aggregate Amount of
   Commitment/Loans
   for all Lenders
    	
 
    	
Amount of
   Commitment/Loans
   Assigned
    	
 
    	
Percentage Assigned
   of
   Commitment/Loans(3)
    	
 
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
  
    	
 
    	
 
    	
%
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
  
    	
 
    	
 
    	
%
    
	
 
    	
 
    	
$
    	
 
    	
 
    	
$
    	
  
    	
 
    	
 
    	
%
    

 

Effective Date:                          , 20   [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

The Assignee agrees to deliver to the Administrative Agent a completed administrative questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrowers and their affiliates or their respective securities) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including Federal and state securities laws.

 

The terms set forth in this Assignment and Assumption are hereby agreed to:

 

	
 
    	
ASSIGNOR
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
NAME   OF ASSIGNOR
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ASSIGNEE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
NAME   OF ASSIGNEE
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

(2)   Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. “Revolving Credit Commitment,”).

 

(3)   Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of all Lenders.

 

3

 

	
 
    	
 
    	
Consented To:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
INTERNATIONAL BUSINESS MACHINES   CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
JPMORGAN CHASE BANK,   N.A., as Administrative Agent
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Consents required only   to the extent expressly provided for in Section 11.8 of the Credit   Agreement.]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Accepted for   Recordation in the Register:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
JPMORGAN CHASE BANK, N.A., as Administrative Agent
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    

 

4

 

ANNEX 1

 

Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018, among International Business Machines Corporation, the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.  Representations and Warranties.

 

1.1   Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement (iii) the financial condition of the Borrowers, any of their Subsidiaries or affiliates or any other Person obligated in respect of the Credit Agreement or (iv) the performance or observance by the Borrowers, any of their Subsidiaries or affiliates or any other Person of any of their respective obligations under the Credit Agreement.

 

1.2.  Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section 4.5 thereof, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent or any other Lender and (v) if it is a Non-U.S. Lender, attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the Assignor 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 decisions in taking or not taking action under the Credit Agreement and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender.

 

2.   Payments.    From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

 

 

3.  General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  Delivery of an executed counterpart of a signature page of this Assignment and Assumption by email or telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption.  This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

 

2

 

EXHIBIT F TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF LOCAL CURRENCY FACILITY ADDENDUM]

 

LOCAL CURRENCY FACILITY ADDENDUM

 

To:          JPMorgan Chase Bank, N.A., as Administrative Agent

 

From:     International Business Machines Corporation

 

1.             This Local Currency Facility Addendum is being delivered to you pursuant to Section 3.1(a) of the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018, among International Business Machines Corporation, the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein (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.

 

2.             The effective date (the “Effective Date”) of this Local Currency Facility Addendum will be                          , 20  .

 

3.             Please be advised that, as of the Effective Date, the credit facility described below is hereby designated as a “Local Currency Facility” for the purposes of the Credit Agreement.

 

	
Type of Facility:(1)
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Local Currenc(y)(ies):
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Local Currency Facility
    	
 
    	
 
    	
 
    	
 
    
	
Stated Maximum Borrowing Amount:
    	
 
    	
 
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Local Currency
    	
 
    	
 
    	
 
    	
Local Currency Lender Stated
    
	
Facility Lenders:
    	
 
    	
Name of Lender
    	
 
    	
Maximum Borrowing Amount
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
$
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
List of Documentation Governing
    	
 
    	
 
    	
 
    	
 
    
	
Local Currency Facility
    	
 
    	
 
    	
 
    	
 
    
	
(the “Documentation”):(2)
    	
 
    	
 
    	
 
    	
 
    

 

(1)           Insert short description of terms of Local Currency Facility.

 

 

4.             IBM hereby represents and warrants that (i) as of the Effective Date, an Exchange Rate with respect to each Local Currency covered by such Local Currency Facility is determinable by reference to the Reuters currency pages (or comparable publicly available screen), (ii) the Documentation complies in all respects with the requirements of Section 3 of the Credit Agreement and (iii)                of               (3) contains an express acknowledgement that such Local Currency Facility shall be subject to the provisions of Section 3 of the Credit Agreement.

 

	
 
    	
 
    	
INTERNATIONAL   BUSINESS MACHINES CORPORATION
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Accepted   and Acknowledged:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
JPMORGAN   CHASE BANK, N.A., as Administrative Agent
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    

 

(2)           Copies of the Documentation must accompany the Local Currency Facility Addendum, together with, if applicable, an English translation thereof (provided, that IBM may instead furnish a summary term sheet in English so long as an English translation of the Documentation is furnished to the Administrative Agent or its counsel within 90 days after the date of delivery of the Local Currency Facility Addendum).

 

(3)           Provide citation to relevant provision from the Documentation.

 

2

 

EXHIBIT G-1 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF REVOLVING CREDIT LOAN PROMISSORY NOTE](1)

 

REVOLVING CREDIT LOAN PROMISSORY NOTE

 

	
$
    	
New   York, New York
    
	
 
    	
                     ,   20
    

 

FOR VALUE RECEIVED, the undersigned, [NAME OF BORROWER], a              corporation (the “Borrower”), hereby unconditionally promises to pay to the order of [NAME OF LENDER] (the “Lender”) at the office of JPMorgan Chase Bank, N.A. (together with its successors in such capacity, the “Administrative Agent”), located at 270 Park Avenue, New York, New York 10017, in lawful money of the United States of America and in immediately available funds, on the Termination Date the principal amount of (a) [AMOUNT IN WORDS] DOLLARS ($     ), or, if less, (b) the aggregate unpaid principal amount of all Revolving Credit Loans made by the Lender to the Borrower pursuant to Section 2.1 of the Credit Agreement, as hereinafter defined.  The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding at the rates and on the dates specified in Section 2.10 of such Credit Agreement.

 

The holder of this promissory note is authorized to endorse on the schedules annexed hereto and made a part hereof or on a continuation thereof which shall be attached hereto and made a part hereof the date, Type and amount of each Revolving Credit Loan made pursuant to the Credit Agreement and the date and amount of each payment or prepayment of principal thereof, each continuation thereof, each conversion of all or a portion thereof to another Type and, in the case of Eurodollar Loans, the length of each Interest Period with respect thereto.  Each such endorsement shall constitute prima facie evidence of the accuracy of the information endorsed. The failure to make any such endorsement or any error in such endorsement shall not affect the obligations of the Borrower in respect of any Revolving Credit Loan.

 

This promissory note (a) has been issued pursuant to Section 11.9(c) of the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among International Business Machines Corporation (“IBM”), the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein, (b) is subject to the provisions of the Credit Agreement and (c) is subject to prepayment in whole or in part as provided in the Credit Agreement.

 

(1)                                 With appropriate modifications, this form may be used to evidence Swing Line Loans.

 

 

Upon the occurrence of any one or more of the Events of Default specified in the Credit Agreement, all amounts then remaining unpaid on this promissory note shall become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect to this promissory note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

	
 
    	
[NAME   OF BORROWER]
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

2

 

Schedule A
  to Revolving Credit Note

 

LOANS, CONVERSIONS AND REPAYMENTS OF ABR LOANS

 

	
Date
    	
 
    	
Amount of ABR Loans
    	
 
    	
Amount
   Converted to
   ABR Loans
    	
 
    	
Amount of Principal of
   ABR Loans Repaid
    	
 
    	
Amount of ABR Loans
   Converted to
   Eurodollar Loans
    	
 
    	
Unpaid Principal
   Balance of ABR
   Loans
    	
 
    	
Notation Made By
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

Schedule B
  to Revolving Credit Note

 

LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF EURODOLLAR LOANS

 

	
Date
    	
 
    	
Amount of
   Eurodollar Loans
    	
 
    	
Amount
   Converted to
   Eurodollar Loans
    	
 
    	
Interest Period and
   Eurodollar Rate with
   Respect Thereto
    	
 
    	
Amount of
   Principal of
   Eurodollar Loans
   Repaid
    	
 
    	
Amount of
   Eurodollar Loans
   Converted to
   ABR Loans
    	
 
    	
Unpaid Principal
   Balance of
   Eurodollar Loans
    	
 
    	
Notation
   Made By
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

EXHIBIT G-2 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF COMPETITIVE LOAN PROMISSORY NOTE]

 

COMPETITIVE LOAN PROMISSORY NOTE

 

	
$
    	
New York, New York
    
	
 
    	
 
    
	
 
    	
, 20    
    

 

FOR VALUE RECEIVED, the undersigned, [NAME OF BORROWER], a                corporation (the “Borrower”), hereby unconditionally promises to pay to the order of [NAME OF LENDER]  (the “Competitive Loan Lender”) at the office of JPMorgan Chase Bank, N.A. (together with its successors in such capacity, the “Administrative Agent”), located at 270 Park Avenue, New York, New York 10017, in lawful money of the United States of America and in immediately available funds, the principal amount of (a) [AMOUNT IN WORDS]   DOLLARS ($    ), or, if less, (b) the aggregate unpaid principal amount of each Competitive Loan which is made by the Competitive Loan Lender to the Borrower pursuant to Section 2.7 of the Credit Agreement, as hereinafter defined.  The principal amount of each Competitive Loan evidenced hereby shall be payable on the maturity date therefor set forth on the schedule annexed hereto and made a part hereof or on a continuation of such schedule which shall be attached hereto and made a part hereof (the “Grid”).  The Borrower further agrees to pay interest in like money at such office on the unpaid principal amount of each Competitive Loan evidenced hereby, at the rate per annum set forth in respect of such Competitive Loan on the Grid, calculated on the basis of a year of 360 days and actual days elapsed from the date of such Competitive Loan until the due date thereof (whether at the stated maturity, by acceleration or otherwise), except as otherwise provided in Section 2.10 of the Credit Agreement.  Interest on each Competitive Loan evidenced hereby shall be payable on the date or dates set forth in respect of such Competitive Loan on the Grid.  Competitive Loans evidenced by this promissory note may not be prepaid.

 

The holder of this promissory note is authorized to endorse on the Grid the date, amount, interest rate, interest payment dates and maturity date in respect of each Competitive Loan made pursuant to Section 2.7 of the Credit Agreement, and each payment of principal with respect thereto.  Each such endorsement shall constitute prima facie evidence of the accuracy of the information endorsed.  The failure to make any such endorsement or any error in such endorsement shall not affect the obligations of the Borrower in respect of such Competitive Loan.

 

This promissory note has been issued pursuant to Section 11.9(c) of the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among International Business Machines Corporation (“IBM”), the Subsidiary Borrowers parties thereto, the Lenders parties

 

 

thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein, and is subject to the provisions of the Credit Agreement.

 

Upon the occurrence of any one or more of the Events of Default, all amounts then remaining unpaid on this promissory note shall become, or may be declared to be, immediately due and payable, all as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect to this promissory note, whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive presentment, demand, protest and all other notices of any kind.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

	
 
    	
[NAME   OF BORROWER]
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Title:
    

 

2

 

SCHEDULE OF COMPETITIVE LOANS
  [NAME OF BORROWER], as Borrower
 Amended and Restated 5-Year Credit Agreement dated as of July 19, 2018

 

	
Date of Loan
    	
 
    	
Amount of Loan
    	
 
    	
Interest Rate
    	
 
    	
Interest
   Payment Dates
    	
 
    	
Maturity Date
    	
 
    	
Payment Date
    	
 
    	
Authorization
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

EXHIBIT H-1 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF LENDER ADDENDUM]

 

LENDER ADDENDUM

 

AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

The undersigned (i) agrees to all of the provisions of the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018, among International Business Machines Corporation, the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and certain other parties (as the same may be amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), (ii) becomes a party thereto, as a Lender, with an obligation (A) to make Revolving Credit Loans to the Borrowers in an aggregate principal amount not to exceed the amount of its Revolving Credit Commitment as set forth opposite the undersigned Lender’s name in Schedule 1.1 to the Credit Agreement, as such amount may be changed from time to time as provided in the Credit Agreement, and (B) if so indicated on Schedule 1.1, to make Swing Line Loans to the Swing Line Borrowers pursuant to Section 2.5 of the Credit Agreement in an aggregate principal amount not to exceed the amount of its Swing Line Commitment as set forth opposite the undersigned Lender’s name in Schedule 1.1 to the Credit Agreement, as such amount may be changed from time to time as provided in the Credit Agreement, and (iii) confirms that it has received the financial statements referred to in Section 4.5 of the Credit Agreement.  Capitalized terms defined in the Credit Agreement shall have their respective defined meanings herein.

 

 

	
 
    	
Name   of Lender:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
Title:
    
				

 

Dated as of November 10, 2011

 

 

EXHIBIT H-2 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF SUBSIDIARY BORROWER ADDENDUM]

 

SUBSIDIARY BORROWER ADDENDUM

 

The undersigned hereby (i) agrees to all of the provisions of the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among International Business Machines Corporation, the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein, (ii) becomes a party thereto, as a “Subsidiary Borrower” and a “Borrower”, and agrees that it shall be bound, as a “Subsidiary Borrower” and a “Borrower”, by all of the provisions thereof, and (iii) confirms that the representations and warranties (to the extent they are specifically applicable to the undersigned) contained in Section 4 of the Credit Agreement (except the representations and warranties contained in Sections 4.6 and 4.7) are true and correct as to the undersigned as of the date hereof.  Capitalized terms defined in the Credit Agreement shall have their respective defined meanings herein.

 

 

	
 
    	
Name   of Subsidiary Borrower:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Title:
    
				

 

Dated as of

 

 

EXHIBIT I-1 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF NEW LENDER SUPPLEMENT]

 

SUPPLEMENT, dated             , 20  , to the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among International Business Machines Corporation (“IBM”), the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein.

 

W I T N E S S E T H :

 

WHEREAS, the Credit Agreement provides in Section 11.23(b) thereof that any bank, financial institution or other entity, although not originally a party thereto, may become a party to the Credit Agreement with the consent of IBM and the Administrative Agent (which consent, in the case of the Administrative Agent, shall not be unreasonably withheld) by executing and delivering to IBM and the Administrative Agent a supplement to the Credit Agreement in substantially the form of this Supplement; and

 

WHEREAS, the undersigned was not an original party to the Credit Agreement but now desires to become a party thereto;

 

NOW, THEREFORE, the undersigned hereby agrees as follows:

 

1.     The undersigned agrees to be bound by the provisions of the Credit Agreement, and agrees that it shall, on the date this Supplement is accepted by IBM and the Administrative Agent, become a Lender for all purposes of the Credit Agreement to the same extent as if originally a party thereto, with a Revolving Credit Commitment of $                  .

 

2.     The undersigned (a) represents and warrants that it is legally authorized to enter into this Supplement; (b) confirms that it has received a copy of the Credit Agreement, together with copies of the financial statements delivered pursuant to Section 4.5 thereof and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Supplement; (c) agrees that it has made and 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 decisions in taking or not taking action under the Credit Agreement or any instrument or document furnished pursuant hereto or thereto; (d) appoints and authorizes the Administrative Agent to take such action as administrative agent on its behalf and to exercise such powers and discretion under the Credit Agreement or any instrument or document furnished pursuant hereto or thereto as are delegated to the Administrative Agent by the terms thereof, together with such powers as are incidental thereto; and (e) agrees that it will be bound by the

 

 

provisions of the Credit Agreement and will perform in accordance with its terms all the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender including, without limitation, if it is organized under the laws of a jurisdiction outside the United States, its obligation pursuant to Section 2.18(d) of the Credit Agreement.

 

3.     The undersigned’s address for notices for the purposes of the Credit Agreement is as follows:

 

4.     Terms defined in the Credit Agreement shall have their defined meanings when used herein.

 

IN WITNESS WHEREOF, the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.

 

	
 
    	
 
    	
[INSERT   NAME OF LENDER]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Accepted   this       day of
    	
 
    	
 
    
	
              ,   20  .
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
INTERNATIONAL   BUSINESS MACHINES CORPORATION
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Accepted   this      day of
    	
 
    	
 
    
	
              ,   20  .
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
JPMORGAN   CHASE BANK, N.A., as Administrative Agent
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    

 

2

 

EXHIBIT I-2 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF INCREMENTAL COMMITMENT SUPPLEMENT]

 

SUPPLEMENT, dated                  , to the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (as amended from time to time, the “Credit Agreement”), among International Business Machines Corporation (“IBM”), the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein.

 

W I T N E S S E T H :

 

WHEREAS, the Credit Agreement provides in Section 11.23(c) thereof that any Lender may increase the amount of its Revolving Credit Commitment by executing and delivering to IBM and the Administrative Agent a supplement to the Credit Agreement in substantially the form of this Supplement; and

 

WHEREAS, the undersigned now desires to increase the amount of its Revolving Credit Commitment under the Credit Agreement;

 

NOW THEREFORE, the undersigned hereby agrees as follows:

 

1.     The undersigned agrees, subject to the terms and conditions of the Credit Agreement, that on the date this Supplement is accepted by IBM and the Administrative Agent it shall have its Revolving Credit Commitment increased by $              , thereby making the amount of its Revolving Credit Commitment $              .

 

2.     Terms defined in the Credit Agreement shall have their defined meanings when used herein.

 

 

IN WITNESS WHEREOF, the undersigned has caused this Supplement to be executed and delivered by a duly authorized officer on the date first above written.

 

	
 
    	
 
    	
[INSERT   NAME OF LENDER]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Accepted   this       day of
    	
 
    	
 
    
	
              ,   20  .
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
INTERNATIONAL   BUSINESS MACHINES CORPORATION
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Accepted   this      day of
    	
 
    	
 
    
	
              ,   20  .
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
JPMORGAN   CHASE BANK, N.A., as Administrative Agent
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    	
 
    

 

2

 

EXHIBIT J TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF EXTENSION REQUEST]

 

, 20  

 

JPMorgan Chase Bank, N.A., as Administrative Agent
 270 Park Avenue
 New York, New York 10017

 

Reference is made to the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among International Business Machines Corporation (“IBM”), the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein. Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

Pursuant to Section 2.21(a) of the Credit Agreement, we hereby request that the Lenders extend the Termination Date now in effect by a period of one year, to the date November   , 20  .  The Extension Request Deadline related to this Extension Request shall be            , 20  .(1)

 

The undersigned represents that as of the date of this Extension Request (i) the representations and warranties of IBM contained in the Credit Agreement are true and correct in all material respects with the same effect as if made on the date hereof (except to the extent such representations and warranties expressly relate to an earlier date) and (ii) no Default or Event of Default has occurred and is continuing.

 

	
 
    	
Very   truly yours,
    
	
 
    	
 
    
	
 
    	
INTERNATIONAL   BUSINESS MACHINES CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    
	
 
    	
Title:
    

 

(1)                                 The Extension Request Deadline shall be no later than 30 days after delivery of this Extension Request to the Administrative Agent.

 

 

EXHIBIT K-1 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]

(For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among International Business Machines Corporation (“IBM”), the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein.

 

Pursuant to the provisions of Section 2.18 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent, IBM and any Borrower with a certificate of its Non-U.S. Lender status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform any Borrower, IBM and the Administrative Agent, and (2) the undersigned shall have at all times furnished any Borrower, IBM and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

	
[NAME OF LENDER]
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Date:            , 20[  ]

 

 

EXHIBIT K-2 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among International Business Machines Corporation (“IBM”), the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein.

 

Pursuant to the provisions of Section 2.18 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with a certificate of its Non-U.S. Lender status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

	
[NAME OF PARTICIPANT]
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Date:            , 20[  ]

 

 

EXHIBIT K-3 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among International Business Machines Corporation (“IBM”), the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein.

 

Pursuant to the provisions of Section 2.18 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) a certificate of Non-U.S. Lender status on IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by a certificate of Non-U.S. Lender status on IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

	
[NAME OF PARTICIPANT]
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Date:            , 20[  ]

 

 

EXHIBIT K-4 TO
  AMENDED AND RESTATED 5-YEAR CREDIT AGREEMENT

 

[FORM OF U.S. TAX COMPLIANCE CERTIFICATE]

(For Non-U.S. Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

 

Reference is made to the Amended and Restated 5-Year Credit Agreement, dated as of July 19, 2018 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among International Business Machines Corporation (“IBM”), the Subsidiary Borrowers parties thereto, the Lenders parties thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, and the Syndication Agents and Documentation Agents named therein.

 

Pursuant to the provisions of Section 2.18 of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

 

The undersigned has furnished the Administrative Agent, IBM and any Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) a certificate of Non-U.S. Lender status on IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by a certificate of Non-U.S. Lender Status on IRS Form W-8BEN from each of such partner’s/member’s beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform any Borrower, IBM and the Administrative Agent, and (2) the undersigned shall have at all times furnished any Borrower, IBM and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

 

 

	
[NAME OF LENDER]
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
Title:
    	
 
    

 

 

Date:            , 20[  ]EX-10.1

 Exhibit 10.1 

LOAN AND SECURITY AGREEMENT 

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) dated as of July 18, 2018 (the “Effective
Date”) between SILICON VALLEY BANK, a California corporation (“Bank”), and KERYX BIOPHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), provides the terms on which Bank shall lend to
Borrower and Borrower shall repay Bank. The parties agree as follows: 
 1    ACCOUNTING AND OTHER TERMS

 Accounting terms not defined in this Agreement shall be construed following GAAP. Calculations and determinations must be made
following GAAP. Capitalized terms not otherwise defined in this Agreement shall have the meanings set forth in Section 13. All other terms contained in this Agreement, unless otherwise indicated, shall have the meaning provided by the Code to
the extent such terms are defined therein. 
 2    LOAN AND TERMS OF PAYMENT 

2.1    Promise to Pay. Borrower hereby unconditionally promises to pay Bank the outstanding principal amount
of all Credit Extensions and accrued and unpaid interest thereon as and when due in accordance with this Agreement. 

2.2    Revolving Line. 

(a)    Availability. Subject to the terms and conditions of this Agreement and to deduction of Reserves, Bank shall
make Advances not exceeding the Availability Amount. Amounts borrowed under the Revolving Line may be repaid and, prior to the Revolving Line Maturity Date, reborrowed, subject to the applicable terms and conditions precedent herein. 

(b)    Termination; Repayment. The Revolving Line terminates on the Revolving Line Maturity Date, when the
principal amount of all Advances, the unpaid interest thereon, and all other Obligations relating to the Revolving Line shall be immediately due and payable. 

2.3    Overadvances. If, at any time, the outstanding principal amount of any Advances exceeds the lesser of
either the Revolving Line or the Borrowing Base, Borrower shall immediately pay to Bank in cash the amount of such excess (such excess, the “Overadvance”). Without limiting Borrower’s obligation to repay Bank any Overadvance,
Borrower agrees to pay Bank interest on the outstanding amount of any Overadvance, on demand, at a per annum rate equal to the rate that is otherwise applicable to Advances plus five percent (5.0%). 

2.4    Payment of Interest on the Credit Extensions. 

(a)    Interest Rate. Subject to Section 2.4(b), the principal amount outstanding under the Revolving Line
shall accrue interest at a floating per annum rate equal to the greater of (i) two percent (2.0%) above the Prime Rate and (ii) six and three-quarters percent (6.75%), which interest shall be payable monthly in accordance with
Section 2.4(d) below. 
 (b)    Default Rate. Immediately upon the occurrence and during the continuance of
an Event of Default, Obligations shall bear interest at a rate per annum which is five percent (5.0%) above the rate that is otherwise applicable thereto (the “Default Rate”). Fees and expenses which are required to be paid by
Borrower pursuant to the Loan Documents (including, without limitation, Bank Expenses) but are not paid when due shall bear interest until paid at a rate equal to the highest rate applicable to the Obligations. Payment or acceptance of the increased
interest rate provided in this Section 2.4(b) is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Bank. 

(c)    Adjustment to Interest Rate. Changes to the interest rate of any Credit Extension based on changes to the
Prime Rate shall be effective on the effective date of any change to the Prime Rate and to the extent of any such change. 
 CERTAIN CONFIDENTIAL PORTIONS
OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT
PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 (d)    Payment; Interest Computation. Interest is payable monthly on
the Payment Date of each month and shall be computed on the basis of a 360-day year for the actual number of days elapsed. In computing interest, (i) all payments received after 2:00 p.m. Eastern time on
any day shall be deemed received at the opening of business on the next Business Day, and (ii) the date of the making of any Credit Extension shall be included and the date of payment shall be excluded; provided, however, that if any Credit
Extension is repaid on the same day on which it is made, such day shall be included in computing interest on such Credit Extension. 

2.5    Fees. Borrower shall pay to Bank: 

(a)    Initial Commitment Fee. A fully earned, non-refundable initial
commitment fee of One Hundred Forty Nine Thousand Forty One and 10/100 Dollars ($149,041.10), on the Effective Date; 

(b)    Additional Commitment Fee. Immediately upon the occurrence of the Consent Event, a non-refundable additional commitment fee of Two Hundred Fifty Thousand Nine Hundred Fifty Eight and 90/100 Dollars ($250,958.90) (the “Additional Commitment Fee”); 

(c)    Anniversary Fee. A non-refundable anniversary fee of Four Hundred
Thousand Dollars ($400,000.00) (the “Anniversary Fee”) is due and payable on the earlier to occur of (i) the one (1) year anniversary of the Effective Date, (ii) the termination of this Agreement, or (iii) the
occurrence of an Event of Default; provided that the Anniversary Fee shall be waived if the Borrower requests, in writing, the Consent Event and Bank declines, in writing, to provide the Consent Event and as a result, within thirty (30) days
after Bank’s written denial of the Consent Event, this Agreement is terminated by the Borrower and all Obligations are repaid; 

(d)    Termination Fee. Upon termination of this Agreement or the termination of the Revolving Line for any reason
prior to the Revolving Line Maturity Date, in addition to the payment of any other amounts then-owing, a termination fee in an amount equal to two percent (2.0%) of the Revolving Line (the “Termination Fee”), provided that no
termination fee shall be charged if (i) the credit facility hereunder is replaced with a new facility from Bank, or (ii) the Borrower requests, in writing, the Consent Event and Bank declines, in writing, to provide the Consent Event and
as a result, within thirty (30) days after Bank’s written denial of the Consent Event, this Agreement is terminated by the Borrower; 

(e)    Unused Revolving Line Facility Fee. Commencing on the last day of the first calendar quarter following the
Effective Date, and payable quarterly in arrears on the last day of each calendar quarter occurring thereafter prior to the Revolving Line Maturity Date, and on the Revolving Line Maturity Date, a fee (the “Unused Revolving Line Facility
Fee”) in an amount equal to one-quarter of one percent (0.25%) per annum of the average unused portion of the Revolving Line, as determined by Bank in its reasonable discretion, computed on the basis
of a year with the applicable number of days as set forth in Section 2.4(d). The unused portion of the Revolving Line, for purposes of this calculation, shall be calculated beginning on the ninety-first (91st) day following the Effective Date on a calendar year basis and shall equal the difference between (i) the Revolving Line, and (ii) the average for the period of the daily closing balance
of the Revolving Line outstanding and 
 (f)    Bank Expenses. All Bank Expenses (including reasonable
attorneys’ fees and expenses for documentation and negotiation of this Agreement) incurred through and after the Effective Date, when due (or, if no stated due date, upon demand by Bank). 

Unless otherwise provided in this Agreement or in a separate writing by Bank, Borrower shall not be entitled to any credit, rebate, or
repayment of any fees earned by Bank pursuant to this Agreement notwithstanding any termination of this Agreement or the suspension or termination of Bank’s obligation to make loans and advances hereunder. Bank may deduct amounts owing by
Borrower under the clauses of this Section 2.5 pursuant to the terms of Section 2.6(c). Bank shall provide Borrower written notice of deductions made from the Designated Deposit Account pursuant to the terms of the clauses of this
Section 2.5. 

  
 2 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 2.6    Payments; Application of Payments; Debit of Accounts. 

(a)    All payments to be made by Borrower under any Loan Document shall be made in immediately available funds in
Dollars, without setoff or counterclaim, before 2:00 p.m. Eastern time on the date when due. Payments of principal and/or interest received after 2:00 p.m. Eastern time are considered received at the opening of business on the next
Business Day. When a payment is due on a day that is not a Business Day, the payment shall be due the next Business Day, and additional fees or interest, as applicable, shall continue to accrue until paid. 

(b)    Bank has the exclusive right to determine the order and manner in which all payments with respect to the
Obligations may be applied. Borrower shall have no right to specify the order or the accounts to which Bank shall allocate or apply any payments required to be made by Borrower to Bank or otherwise received by Bank under this Agreement when any such
allocation or application is not specified elsewhere in this Agreement. 
 (c)    Bank may debit any of Borrower’s
deposit accounts, including the Designated Deposit Account, for principal and interest payments or any other amounts Borrower owes Bank when due. These debits shall not constitute a set-off. Bank shall provide
Borrower notice of debits made from any of Borrower’s deposit accounts pursuant to the terms of this clause (c) other than debits on account of principal or interest. 

2.7    Withholding. Payments received by Bank from Borrower under this Agreement will be made free and clear
of and without deduction for any and all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority (including any interest, additions to tax or penalties
applicable thereto). Specifically, however, if at any time any Governmental Authority, applicable law, regulation or international agreement requires Borrower to make any withholding or deduction from any such payment or other sum payable hereunder
to Bank, Borrower hereby covenants and agrees that the amount due from Borrower with respect to such payment or other sum payable hereunder will be increased to the extent necessary to ensure that, after the making of such required withholding or
deduction, Bank receives a net sum equal to the sum which it would have received had no withholding or deduction been required, and Borrower shall pay the full amount withheld or deducted to the relevant Governmental Authority; provided, however,
that to the extent Bank is refunded any portion of such excess, Bank shall remit such amount to Borrower. Borrower will, upon request, furnish Bank with proof reasonably satisfactory to Bank indicating that Borrower has made such withholding
payment; provided, however, that Borrower need not make any withholding payment if the amount or validity of such withholding payment is contested in good faith by appropriate and timely proceedings and as to which payment in full is bonded or
reserved against by Borrower. The agreements and obligations of Borrower contained in this Section 2.7 shall survive the termination of this Agreement. 

2.8    Commitment to Lend. Upon the occurrence of the Permitted Convertible Debt Default, Bank’s
obligation to make any Credit Extensions to Borrower shall immediately terminate. 
 3    CONDITIONS OF LOANS

 3.1    Conditions Precedent to Initial Credit Extension. Bank’s obligation to make the initial
Credit Extension is subject to the condition precedent that Bank shall have received, in form and substance satisfactory to Bank, such documents, and completion of such other matters, as Bank may reasonably deem necessary or appropriate, including,
without limitation: 
 (a)    duly executed signatures to the Loan Documents; 

(b)    duly executed signatures to the Control Agreement(s); 

(c)    (i) the Operating Documents and long-form good standing certificate of Borrower certified by the Secretary of State
of Delaware and (ii) a certificate of good standing/foreign qualification of Borrower for Massachusetts, Alabama, Florida, New York, Vermont, Tennessee, New Jersey, North Dakota, Maine, and Montana, each as of a date no earlier than thirty
(30) days prior to the Effective Date; 
 (d)    a secretary’s corporate borrowing certificate of Borrower
with respect to such Borrower’s Operating Documents, incumbency, specimen signatures and resolutions authorizing the execution and delivery of this Agreement and the other Loan Documents to which it is a party; 

  
 3 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 (e)    certified copies, dated as of a recent date, of financing statement
searches, as Bank may request, accompanied by written evidence (including any UCC termination statements) that the Liens indicated in any such financing statements either constitute Permitted Liens or have been or, in connection with the initial
Credit Extension, will be terminated or released; 
 (f)    the Perfection Certificate of Borrower, together with the
duly executed signature thereto; 
 (g)    with respect to Advances in which Borrower’s Eligible Inventory is
included in the Borrowing Base, a bailee’s waiver in favor of Bank for Borrower’s location at LaVergne, Tennessee in a form and substance acceptable to Bank in all respects; 

(h)    a legal opinion (authority and enforceability) of Borrower’s counsel dated as of the Effective Date together
with the duly executed signature thereto; 
 (i)    evidence satisfactory to Bank that the insurance policies and
endorsements required by Section 6.7 hereof, together with appropriate evidence showing lender loss payable and/or additional insured clauses or endorsements in favor of Bank; 

(j)    with respect to the initial Advance, a completed Borrowing Base Report (and any schedules related thereto and
including any other information requested by Bank with respect to Borrower’s Accounts); and 
 (k)    payment of
the fees and Bank Expenses then due as specified in Section 2.5 hereof. 
 3.2    Conditions Precedent to
all Credit Extensions. Bank’s obligations to make each Credit Extension, including the initial Credit Extension, is subject to the following conditions precedent: 

(a)    timely receipt of the Credit Extension request and any materials and documents required by Section 3.4; 

(b)    the representations and warranties in this Agreement shall be true, accurate, and complete in all material respects
on the date of the proposed Credit Extension and on the Funding Date of each Credit Extension; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by
materiality in the text thereof; and provided, further that those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date, and no Event of Default shall have
occurred and be continuing or immediately result from the Credit Extension. Each Credit Extension is Borrower’s representation and warranty on that date that the representations and warranties in this Agreement remain true, accurate, and
complete in all material respects; provided, however, that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that
those representations and warranties expressly referring to a specific date shall be true, accurate and complete in all material respects as of such date; and 

(c)    Bank determines to its reasonable satisfaction that there has not been any material impairment in the general
affairs, management, results of operation, financial condition of Borrower or the prospect of repayment of the Obligations, nor any material adverse deviation by Borrower from the most recent business plan of Borrower presented to and accepted by
Bank. 
 3.3    Covenant to Deliver. Borrower agrees to deliver to Bank each item required to be delivered
to Bank under this Agreement as a condition precedent to any Credit Extension. Borrower expressly agrees that a Credit Extension made prior to the receipt by Bank of any such item shall not constitute a waiver by Bank of Borrower’s obligation
to deliver such item, and the making of any Credit Extension in the absence of a required item shall be in Bank’s sole discretion. 

3.4    Procedures for Borrowing. Subject to the prior satisfaction of all other applicable conditions to the
making of an Advance set forth in this Agreement, to obtain an Advance, Borrower (via an individual duly authorized by an Administrator) shall notify Bank (which notice shall be irrevocable) by electronic mail by 12:00 p.m.

  
 4 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 
Eastern time on the Funding Date of the Advance. Such notice shall be made by Borrower through Bank’s online banking program, provided, however, if Borrower is not utilizing Bank’s
online banking program, then such notice shall be in a written format acceptable to Bank that is executed by an Authorized Signer. Bank shall have received satisfactory evidence that the Board has approved that such Authorized Signer may provide
such notices and request Advances. In connection with any such notification, Borrower must promptly deliver to Bank by electronic mail or through Bank’s online banking program such reports and information, including without limitation, sales
journals, cash receipts journals, accounts receivable aging reports, as Bank may reasonably request. Bank shall credit proceeds of an Advance to the Designated Deposit Account. Bank may make Advances under this Agreement based on instructions from
an Authorized Signer or without instructions if the Advances are necessary to meet Obligations which have become due. 

4    CREATION OF SECURITY INTEREST 

4.1    Grant of Security Interest. Borrower hereby grants Bank, to secure the payment and performance in
full of all of the Obligations, a continuing security interest in, and pledges to Bank, the Collateral, wherever located, whether now owned or hereafter acquired or arising, and all proceeds and products thereof. 

Borrower acknowledges that it previously has entered, and/or may in the future enter, into Bank Services Agreements with Bank. Regardless of
the terms of any Bank Services Agreement, Borrower agrees that any amounts Borrower owes Bank thereunder shall be deemed to be Obligations hereunder and that it is the intent of Borrower and Bank to have all such Obligations secured by the first
priority perfected security interest in the Collateral granted herein (subject only to Permitted Liens that are permitted pursuant to the terms of this Agreement to have superior priority to Bank’s Lien in this Agreement). 

If this Agreement is terminated, Bank’s Lien in the Collateral shall continue until the Obligations (other than inchoate indemnity
obligations or other obligations which by their terms survive the termination of this Agreement) are repaid in full in cash. Upon payment in full in cash of the Obligations (other than inchoate indemnity obligations or other obligations which by
their terms survive the termination of this Agreement) and at such time as Bank’s obligation to make Credit Extensions has terminated, Bank shall, at the sole cost and expense of Borrower, release its Liens in the Collateral and all rights
therein shall revert to Borrower. In the event (x) all Obligations (other than inchoate indemnity obligations or other obligations which by their terms survive the termination of this Agreement), except for Bank Services, are satisfied in full,
and (y) this Agreement is terminated, Bank shall terminate the security interest granted herein upon Borrower providing cash collateral acceptable to Bank in its good faith business judgment for Bank Services, if any. In the event such Bank
Services consist of outstanding Letters of Credit, Borrower shall provide to Bank cash collateral in an amount equal to (x) if such Letters of Credit are denominated in Dollars, then at least one hundred five percent (105.0%); and (y) if
such Letters of Credit are denominated in a Foreign Currency, then at least one hundred ten percent (110.0%), of the Dollar Equivalent of the face amount of all such Letters of Credit plus all interest, fees, and costs due or to become due in
connection therewith (as estimated by Bank in its good faith business judgment), to secure all of the Obligations relating to such Letters of Credit. 

4.2    Priority of Security Interest. Borrower represents, warrants, and covenants that the security
interest granted herein is and shall at all times continue to be a first priority perfected security interest in the Collateral (subject only to Permitted Liens that are permitted pursuant to the terms of this Agreement to have superior priority to
Bank’s Lien under this Agreement), assuming that Bank has filed a financing statement with the Secretary of State for the State of Delaware. If Borrower shall acquire a commercial tort claim with a value in excess of One Hundred Thousand
Dollars ($100,000.00), Borrower shall promptly notify Bank in a writing signed by Borrower of the general details thereof and, upon Bank’s request, grant to Bank in such writing a security interest therein and in the proceeds thereof, all upon
the terms of this Agreement, with such writing to be in form and substance reasonably satisfactory to Bank. 

4.3    Authorization to File Financing Statements. Borrower hereby authorizes Bank to file financing
statements, without notice to Borrower, with all appropriate jurisdictions to perfect or protect Bank’s interest or rights hereunder, including a notice that any disposition of the Collateral, by either Borrower or any other Person, shall be
deemed to violate the rights of Bank under the Code.    Such financing statements may indicate the Collateral as “all assets of the Debtor” or words of similar effect, or as being of an equal or lesser scope, or with
greater detail, all in Bank’s discretion. 

  
 5 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 5    REPRESENTATIONS AND WARRANTIES 

Borrower represents and warrants as follows: 

5.1    Due Organization, Authorization; Power and Authority. Borrower is duly existing and in good standing
as a Registered Organization in its jurisdiction of formation and is qualified and licensed to do business and is in good standing in any jurisdiction in which the conduct of its business or its ownership of property requires that it be qualified
except where the failure to do so could not reasonably be expected to have a material adverse effect on Borrower’s business. In connection with this Agreement, Borrower has delivered to Bank a completed certificate signed by Borrower, entitled
“Perfection Certificate” (the “Perfection Certificate”). Borrower represents and warrants to Bank that (a) Borrower’s exact legal name is that indicated on the Perfection Certificate and on the signature page
hereof; (b) Borrower is an organization of the type and is organized in the jurisdiction set forth in the Perfection Certificate; (c) the Perfection Certificate accurately sets forth Borrower’s organizational identification number or
accurately states that Borrower has none; (d) the Perfection Certificate accurately sets forth Borrower’s place of business, or, if more than one, its chief executive office as well as Borrower’s mailing address (if different than its
chief executive office); (e) Borrower (and each of its predecessors) has not, in the past five (5) years, changed its jurisdiction of formation, organizational structure or type, or any organizational number assigned by its jurisdiction;
and (f) all other information set forth on the Perfection Certificate pertaining to Borrower and each of its Subsidiaries is accurate and complete (it being understood and agreed that Borrower may from time to time update certain information in
the Perfection Certificate after the Effective Date (by delivering a new Perfection Certificate or by disclosing such updates on a Compliance Certificate) to the extent such updates are resulting from actions, transactions, circumstances or events
not prohibited by the terms of this Agreement). If Borrower is not now a Registered Organization but later becomes one, Borrower shall promptly notify Bank of such occurrence and provide Bank with Borrower’s organizational identification
number. 
 The execution, delivery and performance by Borrower of the Loan Documents to which it is a party have been duly authorized, and
do not (i) conflict with any of Borrower’s organizational documents, (ii) contravene, conflict with, constitute a default under or violate any material Requirement of Law, (iii) contravene, conflict or violate any applicable
order, writ, judgment, injunction, decree, determination or award of any Governmental Authority by which Borrower or any of its Subsidiaries or any of their property or assets may be bound or affected, (iv) require any action by, filing,
registration, or qualification with, or Governmental Approval from, any Governmental Authority (except such Governmental Approvals which have already been obtained and are in full force and effect), or (v) conflict with, contravene, constitute
a default or breach under, or result in or permit the termination or acceleration of, any material agreement by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or by which it is bound in which the
default could reasonably be expected to have a material adverse effect on Borrower’s business. 

5.2    Collateral. Borrower has good title to, rights in, and the power to transfer each item of the
Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens except Permitted Liens. Borrower has no Collateral Accounts at or with any bank or financial institution other than Bank or Bank’s Affiliates
except for the Collateral Accounts described in the Perfection Certificate delivered to Bank in connection herewith and which Borrower has taken such actions as are necessary to give Bank a perfected security interest therein, pursuant to the terms
of Section 6.8(b). The Accounts are bona fide, existing obligations of the Account Debtors. 
 The Collateral is not in the possession
of any third party bailee (such as a warehouse) except as otherwise provided in the Perfection Certificate or as permitted pursuant to Section 7.2. None of the components of the Collateral shall be maintained at locations other than as provided
in the Perfection Certificate or as permitted pursuant to Section 7.2. 
 All Inventory is in all material respects of good and
marketable quality, free from material defects. 
 Borrower is the sole owner of the Intellectual Property which it owns or purports to own
except for (a) non-exclusive licenses granted to its customers in the ordinary course of business, (b) over-the-counter
software that is commercially available to the public, and (c) material Intellectual Property licensed to Borrower and noted on the Perfection Certificate. Each Patent which it owns or purports to own and which is material to Borrower’s
business is valid and enforceable, and no part of the Intellectual Property which Borrower owns or purports to own and which is 

  
 6 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 
material to Borrower’s business has been judged invalid or unenforceable, in whole or in part. To the best of Borrower’s knowledge, no claim has been made that any part of the
Intellectual Property violates the rights of any third party except to the extent such claim would not reasonably be expected to have a material adverse effect on Borrower’s business. 

Except as noted on the Perfection Certificate or as otherwise disclosed to Bank pursuant to Section 6.10(b), Borrower is not a party to,
nor is it bound by, any Restricted License. 
 5.3    Accounts Receivable; Inventory. 

(a)    For each Account with respect to which Advances are requested, on the date each Advance is requested and made, such
Account shall be an Eligible Account. 
 (b)    All statements made and all unpaid balances appearing in all invoices,
instruments and other documents evidencing the Eligible Accounts are and shall be true and correct and all such invoices, instruments and other documents, and all of Borrower’s Books are genuine and in all respects what they purport to be. All
sales and other transactions underlying or giving rise to each Eligible Account shall comply in all material respects with all applicable laws and governmental rules and regulations. Borrower has no knowledge of any actual or imminent Insolvency
Proceeding of any Account Debtor whose accounts are Eligible Accounts in the most recent Borrowing Base Report. To the best of Borrower’s knowledge, all signatures and endorsements on all documents, instruments, and agreements relating to all
Eligible Accounts are genuine, and all such documents, instruments and agreements are legally enforceable in accordance with their terms. 

(c)    For any item of Inventory consisting of Eligible Inventory in the most recent Borrowing Base Report, such Inventory
(i) consists of finished goods, in good, new, and salable condition, which is not perishable, returned, consigned, obsolete, not sellable, damaged, or defective, and is not comprised of demonstrative or custom inventory, works in progress,
packaging or shipping materials, or supplies; (ii) meets all applicable governmental standards; (iii) has been manufactured in compliance with the Fair Labor Standards Act; (iv) is not subject to any Liens, except the first priority
Liens granted or in favor of Bank under this Agreement or any of the other Loan Documents; and (v) is located in the United States at the locations identified by Borrower in the Perfection Certificate where it maintains Inventory (or at any
location permitted under Section 7.2), and such locations are subject to landlord’s consent or bailee waiver, as applicable, in form and substance acceptable to Bank in its sole discretion. 

5.4    Litigation. There are no actions or proceedings pending or, to the knowledge of any Responsible
Officer, threatened in writing by or against Borrower or any of its Subsidiaries involving more than, individually or in the aggregate, Two Hundred Fifty Thousand Dollars ($250,000.00). 

5.5    Financial Statements; Financial Condition. All consolidated financial statements for Borrower and any
of its Subsidiaries delivered to Bank fairly present in all material respects Borrower’s consolidated financial condition and Borrower’s consolidated results of operations. There has not been any material deterioration in Borrower’s
consolidated financial condition since the date of the most recent financial statements submitted to Bank. 

5.6    Solvency. The fair salable value of Borrower’s consolidated assets (including goodwill minus
disposition costs) exceeds the fair value of Borrower’s liabilities; Borrower is not left with unreasonably small capital after the transactions in this Agreement; and Borrower is able to pay its debts (including trade debts) as they mature.

 5.7    Regulatory Compliance. Borrower is not an “investment company” or a company
“controlled” by an “investment company” under the Investment Company Act of 1940, as amended. Borrower is not engaged as one of its important activities in extending credit for margin stock (under Regulations X, T and U of
the Federal Reserve Board of Governors). Borrower (a) has complied in all material respects with all Requirements of Law, and (b) has not violated any Requirements of Law the violation of which could reasonably be expected to have a
material adverse effect on its business. None of Borrower’s or any of its Subsidiaries’ properties or assets has been used by Borrower or any Subsidiary or, to the best of Borrower’s knowledge, by previous Persons, in disposing,
producing, storing, treating, or transporting any hazardous substance other than legally. Borrower and each of its Subsidiaries have obtained all consents, approvals and authorizations of, made all declarations or filings with, and given all notices
to, all Governmental Authorities that are necessary to continue their respective businesses as currently conducted. 

  
 7 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 5.8    Subsidiaries; Investments. Borrower does not own any
stock, partnership, or other ownership interest or other equity securities except for Permitted Investments. 

5.9    Tax Returns and Payments; Pension Contributions. Borrower has timely filed all required tax returns
and reports, and Borrower has timely paid all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except (a) to the extent such taxes are being contested in good faith by appropriate proceedings
promptly instituted and diligently conducted, so long as such reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made therefor, or (b) if such taxes, assessments, deposits and
contributions do not, individually or in the aggregate, exceed Twenty Five Thousand Dollars ($25,000.00). 
 To the extent Borrower defers
payment of any contested taxes, Borrower shall (i) if such contested amount is in excess of Twenty Five Thousand Dollars ($25,000.00), notify Bank in writing of the commencement of, and any material development in, the proceedings, and
(ii) post bonds or take any other steps required to prevent the Governmental Authority levying such contested taxes from obtaining a Lien upon any of the Collateral that is other than a “Permitted Lien.” Borrower is unaware of any
claims or adjustments proposed for any of Borrower’s prior tax years which could result in additional taxes becoming due and payable by Borrower in excess of Twenty Five Thousand Dollars ($25,000.00). Borrower has paid all amounts necessary to
fund all present pension, profit sharing and deferred compensation plans in accordance with their terms, and Borrower has not withdrawn from participation in, and has not permitted partial or complete termination of, or permitted the occurrence of
any other event with respect to, any such plan which could reasonably be expected to result in any liability of Borrower, including any liability to the Pension Benefit Guaranty Corporation or its successors or any other governmental agency. 

5.10    Use of Proceeds. Borrower shall use the proceeds of the Credit Extensions solely as working capital
and to fund its general business requirements and not for personal, family, household or agricultural purposes. 

5.11    Full Disclosure. No written representation, warranty or other statement of Borrower in any
certificate or written statement given to Bank, as of the date such representation, warranty, or other statement was made, taken together with all such written certificates and written statements given to Bank, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements contained in the certificates or statements not misleading in light of the circumstances under which they were made (it being recognized by Bank that the projections
and forecasts provided by Borrower in good faith and based upon reasonable assumptions are not viewed as facts and that actual results during the period or periods covered by such projections and forecasts may differ from the projected or forecasted
results and such differences may be material). 
 5.12    Definition of “Knowledge.” For
purposes of the Loan Documents, whenever a representation or warranty is made to Borrower’s knowledge or awareness, to the “best of” Borrower’s knowledge, or with a similar qualification, knowledge or awareness means the actual
knowledge, after reasonable investigation, of any Responsible Officer. 
 6    AFFIRMATIVE COVENANTS 

Borrower shall do all of the following: 

6.1    Government Compliance. 

(a)    Maintain its and all its Subsidiaries’ legal existence and good standing in their respective jurisdictions of
formation and maintain qualification in each jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on Borrower’s business or operations. Borrower shall comply, and have each Subsidiary
comply, in all material respects, with all laws, ordinances and regulations to which it is subject. 
 (b)    Obtain all
of the Governmental Approvals necessary for the performance by Borrower of its obligations under the Loan Documents to which it is a party and the grant of a security interest to Bank in all of its property. Borrower shall promptly provide copies of
any such obtained Governmental Approvals to Bank. 

  
 8 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 6.2    Financial Statements, Reports, Certificates. Provide
Bank with the following: 
 (a)    (i) at the time of each request for an Advance if there are no Advances are
outstanding, and (ii) within fifteen (15) days following the end of each month in which Advances are outstanding, a Borrowing Base Report (and any schedules related thereto and including any other information requested by Bank with respect
to Borrower’s Accounts); 
 (b)    within thirty (30) days after the end of each month during which Advances
are outstanding, (A) monthly accounts receivable agings, aged by invoice date, (B) monthly accounts payable agings, aged by invoice date, and outstanding or held check registers, if any, (C) monthly reconciliations of accounts
receivable agings (aged by invoice date), transaction reports, detailed Account Debtor listing, and general ledger, and (D) monthly perpetual inventory reports for Inventory valued on a first-in, first-out basis at the lower of cost or market (in accordance with GAAP) or such other inventory reports as are requested by Bank in its good faith business judgment; 

(c)    within forty five (45) days after the last day of each quarter (except for the last quarter of each fiscal
year of Borrower, which shall be within ninety (90) days after the end of such quarter) a duly completed Compliance Certificate signed by a Responsible Officer, certifying that as of the end of such quarter, Borrower was in full compliance with
all of the terms and conditions of this Agreement, and setting forth calculations showing compliance with the financial covenants set forth in this Agreement and such other information as Bank may reasonably request, including, without limitation, a
statement that at the end of such month there were no held checks in excess of Fifty Thousand Dollars ($50,000.00); 

(d)    at least annually, as soon as available, but no later than thirty (30) days following approval by the Board,
and within five (5) Business Days of any amendments thereto, annual operating budgets in a form of presentation reasonably acceptable to Bank; 

(e)    within five (5) days of filing, copies of all periodic and other reports, proxy statements and other materials
filed by Borrower with the SEC, any Governmental Authority succeeding to any or all of the functions of the SEC or with any national securities exchange, or distributed to its shareholders, as the case may be. Documents required to be delivered
pursuant to the terms hereof (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts
such documents, or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address; 

(f)    within five (5) days of delivery, copies of all statements, reports and notices made available to all of
Borrower’s security holders or to any holders of Subordinated Debt. Documents required to be delivered pursuant to this Section 6.2(f) (to the extent any such documents are included in materials otherwise filed with the SEC) may be
delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which Borrower posts such documents, or provides a link thereto, on Borrower’s website on the internet at Borrower’s website address; 

(g)    a prompt report of any legal actions pending or threatened in writing against Borrower or any of its Subsidiaries
that could reasonably be expected to result in damages or costs to Borrower or any of its Subsidiaries of, individually or in the aggregate, Two Hundred Fifty Thousand Dollars ($250,000.00) or more; and 

(h)    promptly, from time to time, such other information regarding Borrower or compliance with the terms of any Loan
Documents as reasonably requested by Bank. 
 6.3    Accounts Receivable. 

(a)    Schedules and Documents Relating to Accounts. Borrower shall deliver to Bank transaction reports and
schedules of collections, as provided in Section 6.2, on Bank’s standard forms; provided, however, that Borrower’s failure to execute and deliver the same shall not affect or limit Bank’s Lien and other rights in all of
Borrower’s Accounts, nor shall Bank’s failure to advance or lend against a specific Account affect or limit Bank’s Lien and other rights therein. If requested by Bank, Borrower shall furnish Bank with copies (or, at Bank’s
request at any time when an Event of Default exists, originals) of all contracts, orders, invoices, and other similar documents, and all shipping instructions, delivery receipts, bills of lading, and other evidence of delivery, for any goods the
sale or disposition of which gave rise to such Accounts. In addition, at any time when an Event of Default 

  
 9 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 
exists, Borrower shall deliver to Bank, on its request, the originals of all instruments, chattel paper, security agreements, guarantees and other documents and property evidencing or securing
any Accounts, in the same form as received, with all necessary indorsements, and copies of all credit memos. 

(b)    Disputes. Borrower shall promptly notify Bank of all disputes or claims relating to Accounts involving Two
Hundred Thousand Dollars ($200,000.00) or more individually and in the aggregate. Borrower may forgive (completely or partially), compromise, or settle any Account for less than payment in full, or agree to do any of the foregoing so long as
(i) Borrower does so in good faith, in a commercially reasonable manner, in the ordinary course of business, in arm’s-length transactions, and reports the same to Bank in the regular reports provided
to Bank; (ii) no Event of Default has occurred and is continuing; and (iii) after taking into account all such discounts, settlements and forgiveness, the total outstanding Advances will not exceed the lesser of the Revolving Line or the
Borrowing Base. 
 (c)    Collection of Accounts. Borrower shall direct Account Debtors to deliver or transmit
all proceeds of Accounts into a lockbox account, or such other “blocked account” as specified by Bank (either such account, the “Cash Collateral Account”). Whether or not an Event of Default has occurred and is continuing,
Borrower shall promptly (but in any event, within one (1) Business Day of receipt) deliver all payments on and proceeds of Accounts to the Cash Collateral Account. Subject to Bank’s right to maintain a reserve pursuant to
Section 6.3(d), provided no Event of Default has occurred, all amounts received in the Cash Collateral Account shall be transferred on a daily basis to Borrower’s operating account with Bank. Borrower hereby authorizes Bank to transfer to
the Cash Collateral Account any amounts that Bank reasonably determines are proceeds of the Accounts (provided that Bank is under no obligation to do so and this allowance shall in no event relieve Borrower of its obligations hereunder). 

(d)    Reserves. Notwithstanding any terms in this Agreement to the contrary, at times when an Event of Default
exists, Bank may hold any proceeds of the Accounts and any amounts in the Cash Collateral Account that are not applied to the Obligations pursuant to Section 6.3(c) above (including amounts otherwise required to be transferred to
Borrower’s operating account with Bank) as a reserve to be applied to any Obligations regardless of whether such Obligations are then due and payable. 

(e)    Returns. Provided no Event of Default has occurred and is continuing, if any Account Debtor returns any
Inventory to Borrower with a value, individually or in the aggregate, in excess of One Hundred Thousand Dollars ($100,000.00), Borrower shall promptly (i) determine the reason for such return, (ii) issue a credit memorandum to the Account
Debtor in the appropriate amount, and (iii) provide a copy of such credit memorandum to Bank, upon request from Bank. In the event any attempted return occurs after the occurrence and during the continuance of any Event of Default, Borrower
shall hold the returned Inventory in trust for Bank, and immediately notify Bank of the return of the Inventory. 

(f)    Verifications; Confirmations; Credit Quality; Notifications. Bank may, from time to time when an Event of
Default exists, (i) verify and confirm directly with the respective Account Debtors the validity, amount and other matters relating to the Accounts, either in the name of Borrower or Bank or such other name as Bank may choose, and notify any
Account Debtor of Bank’s security interest in such Account and/or (ii) conduct a credit check of any Account Debtor to approve any such Account Debtor’s credit. 

(g)    No Liability. Bank shall not be responsible or liable for any shortage or discrepancy in, damage to, or loss
or destruction of, any goods, the sale or other disposition of which gives rise to an Account, or for any error, act, omission, or delay of any kind occurring in the settlement, failure to settle, collection or failure to collect any Account, or for
settling any Account in good faith for less than the full amount thereof, nor shall Bank be deemed to be responsible for any of Borrower’s obligations under any contract or agreement giving rise to an Account. Nothing herein shall, however,
relieve Bank from liability for its own gross negligence or willful misconduct. 
 6.4    Remittance of
Proceeds. Except as otherwise provided in Section 6.3(c), deliver, in kind, all proceeds arising from the disposition of any Collateral to Bank in the original form in which received by Borrower not later than the following Business Day
after receipt by Borrower, to be applied to the Obligations (a) prior to an Event of Default, pursuant to the terms of Section 6.3(c) hereof, and (b) after the occurrence and during the continuance of an Event of Default, pursuant to
the terms of Section 9.4 hereof; provided that, if no Event of Default has occurred 

  
 10 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 
and is continuing, Borrower shall not be obligated to remit to Bank the proceeds of the sale of worn out or obsolete Equipment disposed of by Borrower in good faith in an arm’s length
transaction for an aggregate purchase price of One Hundred Thousand Dollars ($100,000.00) or less (for all such transactions in any fiscal year). Borrower agrees that it will not commingle proceeds of Collateral with any of Borrower’s other
funds or property (other than any proceeds of the sale of worn out or obsolete Equipment referred to in the immediately preceding sentence), but will hold such proceeds separate and apart from such other funds and property and in an express trust
for Bank. Nothing in this Section 6.4 limits the restrictions on disposition of Collateral set forth elsewhere in this Agreement. 

6.5    Taxes; Pensions. Timely file, and require each of its Subsidiaries to timely file, all required tax
returns and reports and timely pay, and require each of its Subsidiaries to timely pay, all foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower and each of its Subsidiaries, except for deferred payment
of any taxes contested pursuant to the terms of Section 5.9 hereof, and shall deliver to Bank, on demand, appropriate certificates attesting to such payments, and pay all amounts necessary to fund all present pension, profit sharing and
deferred compensation plans in accordance with their terms. 
 6.6    Access to Collateral; Books and Records.
At reasonable times, on three (3) Business Day’s notice (provided no notice is required if an Event of Default has occurred and is continuing), Bank, or its agents, shall have the right to inspect the Collateral and the right to audit
and copy Borrower’s Books, and the right to complete an NOLV. In each case, such inspections, audits, and NOLV shall be conducted no more often than twice every twelve (12) months, unless an Event of Default has occurred and is continuing
in which case such inspections, audits, and NOLV shall occur as often as Bank shall determine is necessary. The foregoing inspections and audits shall be conducted at Borrower’s expense and the charge therefor shall be One Thousand Dollars
($1,000.00) per person per day (or such higher amount as shall represent Bank’s then-current standard charge for the same), plus reasonable and documented
out-of-pocket expenses. In the event Borrower and Bank schedule an audit more than eight (8) days in advance, and Borrower cancels or seeks to or reschedules the
audit with less than eight (8) days written notice to Bank, then (without limiting any of Bank’s rights or remedies) Borrower shall pay Bank a fee of Two Thousand Dollars ($2,000.00) plus any out-of-pocket expenses incurred by Bank to compensate Bank for the anticipated costs and expenses of the cancellation or rescheduling. Without limiting the foregoing, Borrower covenants and agrees that the
Initial Audit and the Initial NOLV shall be completed on or before ninety (90) days following the Effective Date. 

6.7    Insurance. 

(a)    Keep its business and the Collateral insured for risks and in amounts standard for companies in Borrower’s
industry and location and as Bank may reasonably request. Insurance policies shall be in a form, with financially sound and reputable insurance companies that are not Affiliates of Borrower, and in amounts that are satisfactory to Bank. All property
policies shall have a lender’s loss payable endorsement showing Bank as lender loss payee. All liability policies shall show, or have endorsements showing, Bank as an additional insured. Bank shall be named as lender loss payee and/or
additional insured with respect to any such insurance providing coverage in respect of any Collateral. 
 (b)    Ensure
that proceeds payable under any property policy are, at Bank’s option, payable to Bank on account of the Obligations. Notwithstanding the foregoing, (i) so long as no Event of Default has occurred and is continuing, Borrower shall have the
option of applying the proceeds of any casualty policy up to Two Hundred Thousand Dollars ($200,000.00) in the aggregate for all losses under all casualty policies in any one (1) year, toward the replacement or repair of destroyed or damaged
property; provided that any such replaced or repaired property (A) shall be of reasonably equal or similar value (individually or in the aggregate) as the replaced or repaired Collateral and (B) shall be deemed Collateral in which Bank has
been granted a first priority security interest, and (ii) after the occurrence and during the continuance of an Event of Default, all proceeds payable under such casualty policy shall, at the option of Bank, be payable to Bank on account of the
Obligations. 
 (c)    At Bank’s request, Borrower shall deliver certified copies of insurance policies and
evidence of all premium payments. Each provider of any such insurance required under this Section 6.7 shall agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to Bank, that it will give Bank
thirty (30) days prior written notice before any such policy or policies shall be materially altered or canceled. If Borrower fails to obtain insurance as required under this Section 6.7 or to pay any amount or furnish any required proof
of payment to third persons and Bank, Bank may make all or part of such payment or obtain such insurance policies required in this Section 6.7, and take any action under the policies Bank deems prudent. 

  
 11 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 6.8    Accounts. 

(a)    After the expiration of the Transition Period, maintain all of its and all of its Subsidiaries’ operating and
depository accounts, securities/investment accounts, and the Cash Collateral Account with Bank and Bank’s Affiliates. In addition, upon the expiration of the Transition Period, Borrower shall conduct all cash management, foreign exchange,
letter of credit banking, and business credit cards with Bank. Any Guarantor shall maintain all depository, operating and securities/investment accounts with Bank and Bank’s Affiliates. 

(b)    In addition to and without limiting the restrictions in (a), Borrower shall provide Bank five (5) days prior
written notice before establishing any Collateral Account at or with any bank or financial institution other than Bank or Bank’s Affiliates. For each Collateral Account that Borrower at any time maintains, Borrower shall cause the applicable
bank or financial institution (other than Bank) at or with which any Collateral Account is maintained to execute and deliver a Control Agreement or other appropriate instrument with respect to such Collateral Account to perfect Bank’s Lien in
such Collateral Account in accordance with the terms hereunder which Control Agreement may not be terminated without the prior written consent of Bank. The provisions of the previous sentence shall not apply: (i) prior the expiration of the
Transition Period, and (ii) to deposit accounts exclusively used for payroll, payroll taxes, and other employee wage and benefit payments to or for the benefit of Borrower’s employees and identified to Bank by Borrower as such. 

6.9    Financial Covenants. 

Maintain as of the last day of each month, unless otherwise noted, on a consolidated basis with respect to Borrower and its Subsidiaries: 

(a)    Liquidity Ratio. A Liquidity Ratio of at least 1.50:1.00. 

(b)    Minimum Revenue. Achieve minimum revenue determined in accordance with GAAP, and measured on a trailing
three month basis, and tested as of the last day of each month set forth in the chart below, as determined by Bank, of at least the following amounts: 
  

					
	 Three (3) Month Period Ended
	  	Minimum
Revenue	 
	 June 30, 2018
	  	$	[***]	 
	 July 31, 2018
	  	$	[***]	 
	 August 31, 2018
	  	$	[***]	 
	 September 30, 2018
	  	$	[***]	 
	 October 31, 2018
	  	$	[***]	 
	 November 30, 2018
	  	$	[***]	 
	 December 31, 2018
	  	$	[***]	 
	 January 31, 2019
	  	$	[***]	 
	 February 28, 2019
	  	$	[***]	 

  
 12 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

					
	 March 31, 2019
	  	$	[***]	 
	 April 30, 2019
	  	$	[***]	 
	 May 31, 2019
	  	$	[***]	 
	 June 30, 2019
	  	$	[***]	 
	 July 31, 2019
	  	$	[***]	 
	 August 31, 2019
	  	$	[***]	 
	 September 30, 2019
	  	$	[***]	 
	 October 31, 2019
	  	$	[***]	 
	 November 30, 2019
	  	$	[***]	 
	 December 31, 2019
	  	$	[***]	 
	 January 31, 2020
	  	$	[***]	 
	 February 29, 2020
	  	$	[***]	 

 With respect to each period ending after February 29, 2020, the levels of minimum revenue shall be
mutually agreed upon between Borrower and Bank based upon Borrower’s Board-approved operating plan and financial projections acceptable to Bank. Borrower’s failure to either (1) agree in writing (which agreement shall be set forth in
a written amendment to this Agreement) on or before February 29, 2020, to any such covenant levels proposed by Bank with respect to the calendar year ending December 31, 2020, or (2) notwithstanding Section 6.2(f) of this
Agreement, deliver to Bank, on or before the earlier to occur of (i) February 15, 2020 or (ii) approval by the Board, Borrower’s budgets, sales projections, operating plans and other financial information of Borrower that Bank
deems relevant, including, without limitation, Borrower’s Board-approved operating budgets, projections and plans, with respect to the calendar year ending December 31, 2020, shall result in an immediate Event of Default for which there
shall be no grace or cure period. 
 6.10    Protection of Intellectual Property Rights. 

(a)    (i) Protect, defend and maintain the validity and enforceability of its Intellectual Property; (ii) promptly
advise Bank in writing of material infringements or any other event that could reasonably be expected to materially and adversely affect the value of its Intellectual Property; and (iii) not allow any Intellectual Property material to
Borrower’s business to be abandoned, forfeited or dedicated to the public without Bank’s written consent. 

(b)    Provide written notice to Bank within thirty (30) days of entering or becoming bound by any Restricted License
(other than over-the-counter software that is commercially available to the public). Borrower shall take such steps as Bank requests to obtain the consent of, or waiver
by, any person whose consent or waiver is necessary for (i) any Restricted License to be deemed “Collateral” and for Bank to have a security interest in it that might otherwise be restricted or prohibited by law or by the terms of any
such Restricted License, whether now existing or entered into in the future, and (ii) Bank to have the ability in the event of a liquidation of any Collateral to dispose of such Collateral in accordance with Bank’s rights and remedies
under this Agreement and the other Loan Documents. 
 6.11    Litigation Cooperation. From the date hereof
and continuing through the termination of this Agreement, make available to Bank, without expense to Bank, Borrower and its officers, employees and agents and Borrower’s books and records, to the extent that Bank may deem them reasonably
necessary to prosecute or defend any third-party suit or proceeding instituted by or against Bank with respect to any Collateral or relating to Borrower. 

  
 13 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 6.12    Online Banking. 

(a)    Utilize Bank’s online banking platform for all matters requested by Bank which shall include, without
limitation (and without request by Bank for the following matters), uploading information pertaining to Accounts and Account Debtors, requesting approval for exceptions, requesting Credit Extensions, and uploading financial statements and other
reports required to be delivered by this Agreement (including, without limitation, those described in Section 6.2 of this Agreement). 

(b)    Comply with the terms of Bank’s Online Banking Agreement as in effect from time to time and ensure that all
persons utilizing Bank’s online banking platform are duly authorized to do so by an Administrator. Bank shall be entitled to assume the authenticity, accuracy and completeness on any information, instruction or request for a Credit Extension
submitted via Bank’s online banking platform and to further assume that any submissions or requests made via Bank’s online banking platform have been duly authorized by an Administrator. 

6.13    Further Assurances. Execute any further instruments and take further action as Bank reasonably
requests to perfect or continue Bank’s Lien in the Collateral or to effect the purposes of this Agreement. Deliver to Bank, within ten (10) days after the same are sent or received, copies of all correspondence, reports, documents and
other filings with any Governmental Authority regarding compliance with or maintenance of Governmental Approvals or Requirements of Law or that could reasonably be expected to have a material adverse effect on any of the Governmental Approvals or
otherwise on the operations of Borrower or any of its Subsidiaries. 
 6.14    Bailee Waiver. On or before
Borrower’s initial request for an Advance in which Borrower’s Eligible Inventory is included in the calculation of the Borrowing Base, a bailee’s waiver in favor of Bank for Borrower’s location at 3501 Mason Road, Suite 200,
LaVergne, Tennessee 37086 in a form and substance acceptable to Bank in all respects and duly executed by Borrower and Cardinal Health 105, Inc. 

7    NEGATIVE COVENANTS 

Borrower shall not do any of the following without Bank’s prior written consent: 

7.1    Dispositions. Convey, sell, lease, transfer, assign, or otherwise dispose of (collectively,
“Transfer”), or permit any of its Subsidiaries to Transfer, all or any part of its business or property, except for Transfers (a) of Inventory in the ordinary course of business; (b) of
worn-out or obsolete Equipment that is, in the reasonable judgment of Borrower, no longer economically practicable to maintain or useful in the ordinary course of business of Borrower; (c) consisting of
Permitted Liens and Permitted Investments; (d) consisting of the sale or issuance of any stock of Borrower permitted under Section 7.2 of this Agreement; (e) consisting of Borrower’s use or transfer of money or Cash Equivalents
in the ordinary course of business or in a manner that is not prohibited by the terms of this Agreement or the other Loan Documents; (f) of non-exclusive licenses for the use of the property of Borrower
or its Subsidiaries in the ordinary course of business; (g) to any other Borrower or to a Subsidiary that is a secured Guarantor; and (h) of other property with a value not exceeding One Hundred Thousand Dollars ($100,000.00) in the
aggregate in any fiscal year. 
 7.2    Changes in Business, Management, Control, or Business Locations.
(a) Engage in or permit any of its Subsidiaries to engage in any business other than the businesses currently engaged in by Borrower and such Subsidiary, as applicable, or reasonably related thereto; (b) liquidate or dissolve;
(c) fail to provide notice to Bank of any Key Person departing from or ceasing to be employed by Borrower within five (5) Business Days after his or her departure from Borrower; or (d) permit or suffer the consummation of any Change
in Control. 
 Borrower shall not, without at least thirty (30) days prior written notice to Bank: (1) add any new offices or
business locations, including warehouses (unless such new offices or business locations contain less than One Hundred Thousand Dollars ($100,000.00) in Borrower’s assets or property) or deliver any portion of the Collateral valued, individually
or in the aggregate, in excess of One Hundred Thousand Dollars ($100,000.00) to a bailee at a location other than to a bailee and at a location already disclosed in the Perfection Certificate, (2) change its jurisdiction of organization,
(3) change its organizational structure or type, (4) change its legal name, or (5) change any organizational number (if any) assigned by its jurisdiction of organization. If Borrower intends to add any new offices or business

  
 14 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 
locations, including warehouses, containing in excess of One Hundred Thousand Dollars ($100,000.00) of Borrower’s assets or property, then Borrower will first receive the written consent of
Bank, and the landlord of any such new offices or business locations, including warehouses, shall execute and deliver a landlord consent in form and substance satisfactory to Bank. If Borrower intends to deliver any portion of the Collateral
consisting of finished goods valued, individually or in the aggregate, in excess of Two Hundred Thousand Dollars ($200,000.00) to a bailee, and Bank and such bailee are not already parties to a bailee agreement governing both the Collateral and the
location to which Borrower intends to deliver the Collateral, then Borrower will first receive the written consent of Bank, and such bailee shall execute and deliver a bailee agreement in form and substance satisfactory to Bank. 

7.3    Mergers or Acquisitions. Merge or consolidate, or permit any of its Subsidiaries to merge or
consolidate, with any other Person, or acquire, or permit any of its Subsidiaries to acquire, all or substantially all of the capital stock or property of another Person (including, without limitation, by the formation of any Subsidiary). A
Subsidiary may merge or consolidate into another Subsidiary or into Borrower. 
 7.4    Indebtedness.
Create, incur, assume, or be liable for any Indebtedness, or permit any Subsidiary to do so, other than Permitted Indebtedness. 

7.5    Encumbrance. Create, incur, allow, or suffer any Lien on any of its property, or assign or convey any
right to receive income, including the sale of any Accounts, or permit any of its Subsidiaries to do so, except for Permitted Liens, permit any Collateral not to be subject to the first priority security interest granted herein, or enter into any
agreement, document, instrument or other arrangement (except with or in favor of Bank) with any Person which directly or indirectly prohibits or has the effect of prohibiting Borrower or any Subsidiary from assigning, mortgaging, pledging, granting
a security interest in or upon, or encumbering any of Borrower’s or any Subsidiary’s Intellectual Property, except as is otherwise permitted in Section 7.1 hereof and the definition of “Permitted Liens” herein. 

7.6    Maintenance of Collateral Accounts. Maintain any Collateral Account except pursuant to the terms of
Section 6.8(b) hereof. 
 7.7    Distributions; Investments. (a) Pay any dividends or make any
distribution or payment or redeem, retire or purchase any capital stock, provided that Borrower may (i) convert any of its convertible securities into other securities pursuant to the terms of such convertible securities or otherwise in
exchange thereof, (ii) pay dividends solely in common stock and/or preferred stock, and (iii) repurchase stock pursuant to the terms of employee stock purchase plans, employee restricted stock agreements, stockholder rights plans, director
or consultant stock option plans, or similar plans so long as an Event of Default does not exist at the time of any such repurchase and would not exist after giving effect to any such repurchase, provided that the aggregate amount of all such
repurchases does not exceed Five Hundred Thousand Dollars ($500,000.00) per fiscal year; or (b) directly or indirectly make any Investment (including, without limitation, by the formation of any Subsidiary) other than Permitted Investments, or
permit any of its Subsidiaries to do so. 
 7.8    Transactions with Affiliates. Directly or indirectly
enter into or permit to exist any material transaction with any Affiliate of Borrower, except for (a) transactions that are in the ordinary course of Borrower’s business, upon fair and reasonable terms that are no less favorable to
Borrower than would be obtained in an arm’s length transaction with a non-affiliated Person, (b) customary director, officer and employee compensation (including bonuses) and other benefits
(including retirement, health, stock option and other benefit plans and indemnification arrangements approved by the relevant board of directors, board of managers or equivalent corporate body), or (c) transactions permitted pursuant to
Sections 7.1 or 7.7. 
 7.9    Subordinated Debt. (a) Make or permit any payment on any Subordinated
Debt, except under the terms of the subordination, intercreditor, or other similar agreement to which such Subordinated Debt is subject, or (b) amend any provision in any document relating to the Subordinated Debt which would increase the
amount thereof, provide for earlier or greater principal, interest, or other payments thereon, or adversely affect the subordination thereof to Obligations owed to Bank. 

7.10    Compliance. Become an “investment company” or a company controlled by an “investment
company”, under the Investment Company Act of 1940, as amended, or undertake as one of its important activities 

  
 15 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 
extending credit to purchase or carry margin stock (as defined in Regulation U of the Board of Governors of the Federal Reserve System), or use the proceeds of any Credit Extension for that
purpose; fail to meet the minimum funding requirements of ERISA, permit a Reportable Event or Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards Act or violate any other law or regulation, if
the violation could reasonably be expected to have a material adverse effect on Borrower’s business, or permit any of its Subsidiaries to do so; withdraw or permit any Subsidiary to withdraw from participation in, permit partial or complete
termination of, or permit the occurrence of any other event with respect to, any present pension, profit sharing and deferred compensation plan which could reasonably be expected to result in any liability of Borrower, including any liability to the
Pension Benefit Guaranty Corporation or its successors or any other governmental agency. 
 8    EVENTS OF
DEFAULT 
 Any one of the following shall constitute an event of default (an “Event of Default”) under this
Agreement: 
 8.1    Payment Default. Borrower fails to (a) make any payment of principal or interest
on any Credit Extension when due, or (b) pay any other Obligations within three (3) Business Days after such Obligations are due and payable (which three (3) Business Day cure period shall not apply to payments due on the Revolving
Line Maturity Date). During the cure period, the failure to make or pay any payment specified under clause (b) hereunder is not an Event of Default (but no Credit Extension will be made during the cure period); 

8.2    Covenant Default. 

(a)    Borrower fails or neglects to perform any obligation in Sections 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10,
6.12, or 6.14, or violates any covenant in Section 7; or 
 (b)    Borrower fails or neglects to perform, keep, or
observe any other term, provision, condition, covenant or agreement contained in this Agreement or any Loan Documents, and as to any default (other than those specified in this Section 8) under such other term, provision, condition, covenant or
agreement that can be cured, has failed to cure the default within ten (10) days after the occurrence thereof; provided, however, that if the default cannot by its nature be cured within the ten (10) day period or cannot after diligent
attempts by Borrower be cured within such ten (10) day period, and such default is likely to be cured within a reasonable time, then Borrower shall have an additional period (which shall not in any case exceed thirty (30) days) to attempt
to cure such default, and within such reasonable time period the failure to cure the default shall not be deemed an Event of Default (but no Credit Extensions shall be made during such cure period). Cure periods provided under this section shall not
apply to financial covenants or any other covenants set forth in clause (a) above; 
 8.3    Material
Adverse Change. A Material Adverse Change occurs; 
 8.4    Attachment; Levy; Restraint on Business. 

(a)    (i) The service of process seeking to attach, by trustee or similar process, any funds of Borrower or of any entity
under the control of Borrower (including a Subsidiary), or (ii) a notice of lien or levy is filed against any of Borrower’s assets by any Governmental Authority, and the same under subclauses (i) and (ii) hereof are not, within ten
(10) days after the occurrence thereof, discharged or stayed (whether through the posting of a bond or otherwise); provided, however, no Credit Extensions shall be made during any ten (10) day cure period; or 

(b)     (i) any material portion of Borrower’s assets is attached, seized, levied on, or comes into possession of a
trustee or receiver, or (ii) any court order enjoins, restrains, or prevents Borrower from conducting all or any material part of its business; 

8.5    Insolvency. (a) Borrower is unable to pay its debts (including trade debts) as they become due
or otherwise becomes insolvent; (b) Borrower begins an Insolvency Proceeding; or (c) an Insolvency Proceeding is begun against Borrower and is not dismissed or stayed within forty five (45) days (but no Credit Extensions shall be made
while any of the conditions described in clause (a) exist and/or until any Insolvency Proceeding is dismissed); 

  
 16 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 8.6    Other Agreements. There is, under any agreement to which
Borrower or any Guarantor is a party with a third party or parties, (a) any default resulting in a right by such third party or parties, whether or not exercised, to accelerate the maturity of any Indebtedness in an amount individually or in
the aggregate in excess of Two Hundred Fifty Thousand Dollars ($250,000.00); or (b) any breach or default by Borrower or Guarantor, the result of which could reasonably be expected to have a material adverse effect on Borrower’s or any
Guarantor’s business; 
 8.7    Judgments; Penalties. One or more fines, penalties or final
judgments, orders or decrees for the payment of money in an amount, individually or in the aggregate, of at least Two Hundred Fifty Thousand Dollars ($250,000.00) (not covered by independent third-party insurance as to which liability has been
accepted by such insurance carrier) shall be rendered against Borrower by any Governmental Authority, and the same are not, within ten (10) days after the entry, assessment or issuance thereof, discharged, satisfied, or paid, or after execution
thereof, stayed or bonded pending appeal, or such judgments are not discharged prior to the expiration of any such stay (provided that no Credit Extensions will be made prior to the satisfaction, payment, discharge, stay, or bonding of such fine,
penalty, judgment, order or decree); 
 8.8    Misrepresentations. Borrower or any Person acting for
Borrower makes any representation, warranty, or other statement now or later in this Agreement, any Loan Document or in any writing delivered to Bank or to induce Bank to enter this Agreement or any Loan Document, and such representation, warranty,
or other statement is incorrect in any material respect when made; 
 8.9    Subordinated Debt. Any
document, instrument, or agreement evidencing any Subordinated Debt shall for any reason be revoked or invalidated or otherwise cease to be in full force and effect, any Person shall be in breach thereof or contest in any manner the validity or
enforceability thereof or deny that it has any further liability or obligation thereunder, or the Obligations shall for any reason be subordinated or shall not have the priority contemplated by this Agreement or any applicable subordination or
intercreditor agreement; 
 8.10    Intentionally deleted. 

8.11    Governmental Approvals. Any Governmental Approval shall have been (a) revoked, rescinded,
suspended, modified in an adverse manner or not renewed in the ordinary course for a full term or (b) subject to any decision by a Governmental Authority that designates a hearing with respect to any applications for renewal of any of such
Governmental Approval or that could result in the Governmental Authority taking any of the actions described in clause (a) above, and such decision or such revocation, rescission, suspension, modification or
non-renewal (i) causes, or could reasonably be expected to cause, a Material Adverse Change, or (ii) adversely affects the legal qualifications of Borrower or any of its Subsidiaries to hold such
Governmental Approval in any applicable jurisdiction and such revocation, rescission, suspension, modification or non-renewal could reasonably be expected to affect the status of or legal qualifications of
Borrower or any of its Subsidiaries to hold any Governmental Approval in any other jurisdiction. 

9    BANK’S RIGHTS AND REMEDIES 

9.1    Rights and Remedies. Upon the occurrence and during the continuance of an Event of Default, Bank may,
without notice or demand, do any or all of the following: 
 (a)    declare all Obligations immediately due and payable
(but if an Event of Default described in Section 8.5 occurs all Obligations are immediately due and payable without any action by Bank); 

(b)    stop advancing money or extending credit for Borrower’s benefit under this Agreement or under any other
agreement between Borrower and Bank; 
 (c)    demand that Borrower (i) deposit cash with Bank in an amount equal
to at least (A) one hundred five percent (105.0%) of the Dollar Equivalent of the aggregate face amount of all Letters of Credit denominated in Dollars remaining undrawn, and (B) one hundred ten percent (110.0%) of the Dollar Equivalent of
the aggregate face amount of all Letters of Credit denominated in a Foreign Currency remaining undrawn (plus, in each case, all interest, fees, and costs due or to become due in connection therewith (as estimated by Bank in its good

  
 17 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 
faith business judgment)), to secure all of the Obligations relating to such Letters of Credit, as collateral security for the repayment of any future drawings under such Letters of Credit, and
Borrower shall forthwith deposit and pay such amounts, and (ii) pay in advance all letter of credit fees scheduled to be paid or payable over the remaining term of any Letters of Credit; 

(d)    terminate any FX Contracts; 

(e)    verify the amount of, demand payment of and performance under, and collect any Accounts and General Intangibles,
settle or adjust disputes and claims directly with Account Debtors for amounts on terms and in any order that Bank considers advisable, and notify any Person owing Borrower money of Bank’s security interest in such funds. Borrower shall collect
all payments in trust for Bank and, if requested by Bank, immediately deliver the payments to Bank in the form received from the Account Debtor, with proper endorsements for deposit; 

(f)    make any payments and do any acts it considers necessary or reasonable to protect the Collateral and/or its
security interest in the Collateral. Borrower shall assemble the Collateral if Bank requests and make it available as Bank designates. Bank may enter premises where the Collateral is located, take and maintain possession of any part of the
Collateral, and pay, purchase, contest, or compromise any Lien which appears to be prior or superior to its security interest and pay all expenses incurred. Borrower grants Bank a license to enter and occupy any of its premises, without charge, to
exercise any of Bank’s rights or remedies; 
 (g)    apply to the Obligations any (i) balances and deposits of
Borrower it holds, or (ii) amount held by Bank owing to or for the credit or the account of Borrower; 

(h)    ship, reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise for sale, and sell the
Collateral. Bank is hereby granted a non-exclusive, royalty-free license or other right to use, without charge, Borrower’s labels, Patents, Copyrights, mask works, rights of use of any name, trade
secrets, trade names, Trademarks, and advertising matter, or any similar property as it pertains to the Collateral, in completing production of, advertising for sale, and selling any Collateral and, in connection with Bank’s exercise of its
rights under this Section 9.1, Borrower’s rights under all licenses and all franchise agreements inure to Bank’s benefit; 

(i)    place a “hold” on any account maintained with Bank and/or deliver a notice of exclusive control, any
entitlement order, or other directions or instructions pursuant to any Control Agreement or similar agreements providing control of any Collateral; 

(j)    demand and receive possession of Borrower’s Books; and 

(k)    exercise all rights and remedies available to Bank under the Loan Documents or at law or equity, including all
remedies provided under the Code (including disposal of the Collateral pursuant to the terms thereof). 

9.2    Power of Attorney. Borrower hereby irrevocably appoints Bank as its lawful attorney-in-fact, exercisable following the occurrence of an Event of Default, to: (a) endorse Borrower’s name on any checks, payment instruments, or other forms of
payment or security; (b) sign Borrower’s name on any invoice or bill of lading for any Account or drafts against Account Debtors; (c) demand, collect, sue, and give releases to any Account Debtor for monies due, settle and adjust
disputes and claims about the Accounts directly with Account Debtors, and compromise, prosecute, or defend any action, claim, case, or proceeding about any Collateral (including filing a claim or voting a claim in any bankruptcy case in Bank’s
or Borrower’s name, as Bank chooses); (d) make, settle, and adjust all claims under Borrower’s insurance policies; (e) pay, contest or settle any Lien, charge, encumbrance, security interest, or other claim in or to the
Collateral, or any judgment based thereon, or otherwise take any action to terminate or discharge the same; and (f) transfer the Collateral into the name of Bank or a third party as the Code permits. Borrower hereby appoints Bank as its lawful attorney-in-fact to sign Borrower’s name on any documents necessary to perfect or continue the perfection of Bank’s security interest in the Collateral regardless of
whether an Event of Default has occurred until all Obligations (other than inchoate indemnity obligations and other obligations which by their terms survive the termination of this Agreement) have been satisfied in full and the Loan Documents have
been terminated. Bank’s foregoing appointment as Borrower’s attorney in fact, and all of Bank’s rights and powers, coupled with an 

  
 18 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 
interest, are irrevocable until all Obligations (other than inchoate indemnity obligations and other obligations which by their terms survive the termination of this Agreement) have been fully
repaid and performed and the Loan Documents have been terminated. 
 9.3    Protective Payments. If
Borrower fails to obtain the insurance called for by Section 6.7 or fails to pay any premium thereon or fails to pay any other amount which Borrower is obligated to pay under this Agreement or any other Loan Document or which may be required to
preserve the Collateral, Bank may obtain such insurance or make such payment, and all amounts so paid by Bank are Bank Expenses and immediately due and payable, bearing interest at the then highest rate applicable to the Obligations, and secured by
the Collateral. Bank will make reasonable efforts to provide Borrower with notice of Bank obtaining such insurance at the time it is obtained or within a reasonable time thereafter. No payments by Bank are deemed an agreement to make similar
payments in the future or Bank’s waiver of any Event of Default. 
 9.4    Application of Payments and
Proceeds. If an Event of Default has occurred and is continuing (or at any time on the terms set forth in Section 6.3(c), regardless of whether an Event of Default exists), Bank shall have the right to apply in any order any funds in its
possession, whether from Borrower account balances, payments, proceeds realized as the result of any collection of Accounts or other disposition of the Collateral, or otherwise, to the Obligations. Bank shall pay any surplus to Borrower by credit to
the Designated Deposit Account or to other Persons legally entitled thereto; Borrower shall remain liable to Bank for any deficiency. If Bank, directly or indirectly, enters into a deferred payment or other credit transaction with any purchaser at
any sale of Collateral, Bank shall have the option, exercisable at any time, of either reducing the Obligations by the principal amount of the purchase price or deferring the reduction of the Obligations until the actual receipt by Bank of cash
therefor. 
 9.5    Bank’s Liability for Collateral. So long as Bank complies with reasonable banking
practices regarding the safekeeping of the Collateral in the possession or under the control of Bank, Bank shall not be liable or responsible for: (a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral;
(c) any diminution in the value of the Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or other Person. Borrower bears all risk of loss, damage or destruction of the Collateral. 

9.6    No Waiver; Remedies Cumulative. Bank’s failure, at any time or times, to require strict
performance by Borrower of any provision of this Agreement or any other Loan Document shall not waive, affect, or diminish any right of Bank thereafter to demand strict performance and compliance herewith or therewith. No waiver hereunder shall be
effective unless signed by the party granting the waiver and then is only effective for the specific instance and purpose for which it is given. Bank’s rights and remedies under this Agreement and the other Loan Documents are cumulative. Bank
has all rights and remedies provided under the Code, by law, or in equity. Bank’s exercise of one right or remedy is not an election and shall not preclude Bank from exercising any other remedy under this Agreement or other remedy available at
law or in equity, and Bank’s waiver of any Event of Default is not a continuing waiver. Bank’s delay in exercising any remedy is not a waiver, election, or acquiescence. 

9.7    Demand Waiver. Borrower waives demand, notice of default or dishonor, notice of payment and
nonpayment, notice of any default, nonpayment at maturity, release, compromise, settlement, extension, or renewal of accounts, documents, instruments, chattel paper, and guarantees held by Bank on which Borrower is liable. 

10    NOTICES 

All notices, consents, requests, approvals, demands, or other communication by any party to this Agreement or any other Loan Document must be
in writing and shall be deemed to have been validly served, given, or delivered: (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the U.S. mail, first class, registered or certified mail return receipt
requested, with proper postage prepaid; (b) upon transmission, when sent by electronic mail or facsimile transmission; (c) one (1) Business Day after deposit with a reputable overnight courier with all charges prepaid; or
(d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address, facsimile number, or email address indicated below. Bank or Borrower may change its mailing or electronic
mail address or facsimile number by giving the other party written notice thereof in accordance with the terms of this Section 10. 

  
 19 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

					
	If to Borrower:	 	Keryx Biopharmaceuticals, Inc.
		 	One Marina Park Drive, 12th Floor
		 	Boston, Massachusetts, 02210
		 	Attn:	 	Mr. Scott Holmes, CFO
		 	Email:	 	scott.holmes@keryx.com
		 	Website URL:    http://keryx.com
		
	with a copy to:	 	Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
		 	One Financial Center
		 	Boston, Massachusetts 02111
		 	Attn:	 	Meryl J. Epstein, Esquire
		 	Fax:	 	(617) 348-1635
		 	Email:	 	MJEpstein@mintz.com
		
	If to Bank:	 	Silicon Valley Bank
		 	275 Grove Street
		 	Suite 2-200
		 	Newton, MA 02466
		 	Attn:	 	Mr. Clark Hayes
		 	Fax:	 	(617) 969-5962
		 	Email:	 	chayes@svb.com
		
	with a copy to:	 	Riemer & Braunstein LLP
		 	Three Center Plaza
		 	Boston, Massachusetts 02108
		 	Attn:	 	David A. Ephraim, Esquire
		 	Fax:	 	(617) 880-3456
		 	Email:	 	DEphraim@riemerlaw.com

 11    CHOICE OF LAW, VENUE, JURY TRIAL WAIVER 

Except as otherwise expressly provided in any of the Loan Documents, Massachusetts law governs the Loan Documents without regard to principles
of conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of the State and Federal courts in Boston, Massachusetts; provided, however, that nothing in this Agreement shall be deemed to operate to preclude Bank from bringing
suit or taking other legal action in any other jurisdiction to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Bank. Borrower expressly submits and consents in advance to
such jurisdiction in any action or suit commenced in any such court, and Borrower hereby waives any objection that it may have based upon lack of personal jurisdiction, improper venue, or forum non conveniens and hereby consents to the granting of
such legal or equitable relief as is deemed appropriate by such court. Borrower hereby waives personal service of the summons, complaints, and other process issued in such action or suit and agrees that service of such summons, complaints, and other
process may be made by registered or certified mail addressed to Borrower at the address set forth in, or subsequently provided by Borrower in accordance with, Section 10 of this Agreement and that service so made shall be deemed completed upon
the earlier to occur of Borrower’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid. 

TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS AGREEMENT. EACH
PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL. 
 This Section 11 shall survive the termination of this Agreement. 

  
 20 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 12    GENERAL PROVISIONS 

12.1    Termination Prior to Maturity Date; Survival. All covenants, representations and warranties made in
this Agreement shall continue in full force until this Agreement has terminated pursuant to its terms and all Obligations have been satisfied (other than inchoate indemnity obligations and other obligations which by their terms survive the
termination of this Agreement). So long as Borrower has satisfied the Obligations (other than inchoate indemnity obligations, and any other obligations which, by their terms, are to survive the termination of this Agreement, and any Obligations
under Bank Services Agreements that are cash collateralized in accordance with Section 4.1 of this Agreement), this Agreement may be terminated prior to the Revolving Line Maturity Date by Borrower, effective three (3) Business Days after
written notice of termination is given to Bank. Those obligations that are expressly specified in this Agreement as surviving this Agreement’s termination shall continue to survive notwithstanding this Agreement’s termination. 

12.2    Successors and Assigns. This Agreement binds and is for the benefit of the successors and permitted
assigns of each party. Borrower may not assign this Agreement or any rights or obligations under it without Bank’s prior written consent (which may be granted or withheld in Bank’s discretion). Bank has the right, without the consent of or
notice to Borrower, to sell, transfer, assign, negotiate, or grant participation in all or any part of, or any interest in, Bank’s obligations, rights, and benefits under this Agreement and the other Loan Documents. 

12.3    Indemnification. Borrower agrees to indemnify, defend and hold Bank and its directors, officers,
employees, agents, attorneys, or any other Person affiliated with or representing Bank (each, an “Indemnified Person”) harmless against: (i) all obligations, demands, claims, and liabilities (collectively,
“Claims”) claimed or asserted by any other party in connection with the transactions contemplated by the Loan Documents; and (ii) all losses or expenses (including Bank Expenses) in any way suffered, incurred, or paid by such
Indemnified Person as a result of, following from, consequential to, or arising from transactions between Bank and Borrower (including reasonable attorneys’ fees and expenses), except for Claims and/or losses directly caused by such Indemnified
Person’s gross negligence or willful misconduct. This Section 12.3 shall survive until all statutes of limitation with respect to the Claims, losses, and expenses for which indemnity is given shall have run. 

12.4    Time of Essence. Time is of the essence for the performance of all Obligations in this Agreement.

 12.5    Severability of Provisions. Each provision of this Agreement is severable from every other
provision in determining the enforceability of any provision. 
 12.6    Correction of Loan Documents.
Bank may correct patent errors and fill in any blanks in the Loan Documents consistent with the agreement of the parties. 

12.7    Amendments in Writing; Waiver; Integration. No purported amendment or modification of any Loan
Document, or waiver, discharge or termination of any obligation under any Loan Document, shall be enforceable or admissible unless, and only to the extent, expressly set forth in a writing signed by the party against which enforcement or admission
is sought. Without limiting the generality of the foregoing, no oral promise or statement, nor any action, inaction, delay, failure to require performance or course of conduct shall operate as, or evidence, an amendment, supplement or waiver or have
any other effect on any Loan Document. Any waiver granted shall be limited to the specific circumstance expressly described in it, and shall not apply to any subsequent or other circumstance, whether similar or dissimilar, or give rise to, or
evidence, any obligation or commitment to grant any further waiver. The Loan Documents represent the entire agreement about this subject matter and supersede prior negotiations or agreements. All prior agreements, understandings, representations,
warranties, and negotiations between the parties about the subject matter of the Loan Documents merge into the Loan Documents. 

12.8    Counterparts. This Agreement may be executed in any number of counterparts and by different parties
on separate counterparts, each of which, when executed and delivered, is an original, and all taken together, constitute one Agreement. 

12.9    Confidentiality. In handling any confidential information, Bank shall exercise the same degree of
care that it exercises for its own proprietary information, but disclosure of information may be made: (a) to Bank’s 

  
 21 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 
Subsidiaries or Affiliates (such Subsidiaries and Affiliates, together with Bank, collectively, “Bank Entities”); (b) to prospective transferees or purchasers of any
interest in the Credit Extensions (provided, however, Bank shall use its best efforts to obtain any prospective transferee’s or purchaser’s agreement to the terms of this provision); (c) as required by law, regulation, subpoena, or
other order; (d) to Bank’s regulators or as otherwise required in connection with Bank’s examination or audit; (e) as Bank considers appropriate in exercising remedies under the Loan Documents; and (f) to third-party service
providers of Bank so long as such service providers have executed a confidentiality agreement with Bank with terms no less restrictive than those contained herein. Confidential information does not include information that is either: (i) in the
public domain or in Bank’s possession when disclosed to Bank, or becomes part of the public domain (other than as a result of its disclosure by Bank in violation of this Agreement) after disclosure to Bank; or (ii) disclosed to Bank by a
third party, if Bank does not know that the third party is prohibited from disclosing the information. 
 Bank Entities may use anonymous
forms of confidential information for aggregate datasets, for analyses or reporting, and for any other uses not expressly prohibited in writing by Borrower. The provisions of the immediately preceding sentence shall survive the termination of this
Agreement. 
 12.10    Electronic Execution of Documents. The words “execution,”
“signed,” “signature” and words of like import in any Loan Document shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity and
enforceability as a manually executed signature or the use of a paper-based recordkeeping systems, as the case may be, to the extent and as provided for in any applicable law, including, without limitation, any state law based on the Uniform
Electronic Transactions Act. 
 12.11    Right of Setoff.    Borrower hereby grants to
Bank a Lien and a right of setoff as security for all Obligations to Bank, whether now existing or hereafter arising upon and against all deposits, credits, collateral and property, now or hereafter in the possession, custody, safekeeping or control
of Bank or any entity under the control of Bank (including a subsidiary of Bank) or in transit to any of them. At any time after the occurrence and during the continuance of an Event of Default, without demand or notice, Bank may setoff the same or
any part thereof and apply the same to any liability or Obligation of Borrower even though unmatured and regardless of the adequacy of any other collateral securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR
REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED. 

12.12    Captions. The headings used in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement. 
 12.13    Construction of Agreement. The parties mutually acknowledge
that they and their attorneys have participated in the preparation and negotiation of this Agreement. In cases of uncertainty this Agreement shall be construed without regard to which of the parties caused the uncertainty to exist. 

12.14    Relationship. The relationship of the parties to this Agreement is determined solely by the
provisions of this Agreement. The parties do not intend to create any agency, partnership, joint venture, trust, fiduciary or other relationship with duties or incidents different from those of parties to an
arm’s-length contract. 
 12.15    Third Parties. Nothing in
this Agreement, whether express or implied, is intended to: (a) confer any benefits, rights or remedies under or by reason of this Agreement on any persons other than the express parties to it and their respective permitted successors and
assigns; (b) relieve or discharge the obligation or liability of any person not an express party to this Agreement; or (c) give any person not an express party to this Agreement any right of subrogation or action against any party to this
Agreement. 
 13    DEFINITIONS 

13.1    Definitions. As used in the Loan Documents, the word “shall” is mandatory, the word
“may” is permissive, the word “or” is not exclusive, the words “includes” and “including” are not limiting, the singular includes the plural, and numbers denoting amounts that are set off in brackets are
negative. As used in this Agreement, the following capitalized terms have the following meanings: 

  
 22 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 “Account” is, as to any Person, any “account” of such Person as
“account” is defined in the Code with such additions to such term as may hereafter be made, and includes, without limitation, all accounts receivable and other sums owing to such Person. 

“Account Debtor” is any “account debtor” as defined in the Code with such additions to such term as may
hereafter be made. 
 “Additional Commitment Fee” is defined in Section 2.5(b) hereof. 

“Administrator” is an individual that is named: 

(a)    as an “Administrator” in the “SVB Online Services” form completed by Borrower
with the authority to determine who will be authorized to use SVB Online Services (as defined in Bank’s Online Banking Agreement as in effect from time to time) on behalf of Borrower; and 

(b)    as an Authorized Signer of Borrower in an approval by the Board. 

“Advance” or “Advances” means a revolving credit loan (or revolving credit loans) under the Revolving Line.

 “Affiliate” is, with respect to any Person, each other Person that owns or controls directly or indirectly the Person,
any Person that controls or is controlled by or is under common control with the Person, and each of that Person’s senior executive officers, directors, partners and, for any Person that is a limited liability company, that Person’s
managers and members. For purposes of the definition of Eligible Accounts, Affiliate shall include a Specified Affiliate. 

“Agreement” is defined in the preamble hereof. 

“Anniversary Fee” is defined in Section 2.5(b). 

“Authorized Signer” is any individual listed in Borrower’s Borrowing Resolution who is authorized to execute the Loan
Documents, including making (and executing if applicable) any Credit Extension request, on behalf of Borrower. 
 “Availability
Amount” is (a) prior to the completion of the Initial NOLV and the Initial Audit, (i) the lesser of (A) Twenty Million Dollars ($20,000,000.00) or (B) the amount available under the Borrowing Base minus (ii) the
outstanding principal balance of any Advances, and (b) after the completion of the Initial NOLV and the Initial Audit, (i) the lesser of (A) the Revolving Line or (B) the amount available under the Borrowing Base minus
(ii) the outstanding principal balance of any Advances. 
 “Bank” is defined in the preamble hereof. 

“Bank Entities” is defined in Section 12.9. 

“Bank Expenses” are all reasonable and documented audit fees and expenses, and out-of-pocket costs, and expenses (including reasonable and documented attorneys’ fees and expenses) for preparing, amending, negotiating, administering, defending and enforcing the Loan Documents
(including, without limitation, those incurred in connection with appeals or Insolvency Proceedings) or otherwise incurred with respect to Borrower or any Guarantor. 

“Bank Services” are any products, credit services, and/or financial accommodations previously, now, or hereafter provided to
Borrower or any of its Subsidiaries by Bank or any Bank Affiliate, including, without limitation, any letters of credit, cash management services (including, without limitation, merchant services, direct deposit of

  
 23 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 
payroll, business credit cards, and check cashing services), interest rate swap arrangements, and foreign exchange services as any such products or services may be identified in Bank’s
various agreements related thereto (each, a “Bank Services Agreement”). 
 “Bank Services Agreement” is
defined in the definition of Bank Services. 
 “Board” is Borrower’s board of directors. 

“Borrower” is defined in the preamble hereof. 

“Borrower’s Books” are all Borrower’s books and records including ledgers, federal and state tax returns, records
regarding Borrower’s assets or liabilities, the Collateral, business operations or financial condition, and all computer programs or storage or any equipment containing such information. 

“Borrowing Base” is (a) eighty five percent (85%) of Eligible Accounts plus (b) the least of (i) Ten Million
Dollars ($10,000,000.00), (ii) fifty percent (50%) of the value of Borrower’s Eligible Inventory (valued at the lower of cost or wholesale fair market value), (iii) NOLV, or (iv) fifty percent (50.0%) of all amounts included in
the Borrowing Base, as determined by Bank from Borrower’s most recent Borrowing Base Report (and as may subsequently be updated by Bank based upon information received by Bank including, without limitation, Accounts that are paid and/or billed
following the date of the Borrowing Base Report); provided, however, (i) for the purposes of calculating the Borrowing Base, at no time shall the amount under section (b) above be greater than the amount under section
(a) above, and (ii) Bank has the right to decrease the foregoing percentages and/or amount in its good faith business judgment to mitigate the impact of events, conditions, contingencies, or risks which could reasonably be expected to
adversely affect the Collateral or its value. 
 “Borrowing Base Report” is that certain report of the value of certain
Collateral in the form specified by Bank to Borrower from time to time. 
 “Borrowing Resolutions” are, with respect to any
Person, those resolutions adopted by such Person’s board of directors (and, if required under the terms of such Person’s Operating Documents, stockholders) and delivered by such Person to Bank approving the Loan Documents to which such
Person is a party and the transactions contemplated thereby, together with a certificate executed by its secretary on behalf of such Person certifying (a) such Person has the authority to execute, deliver, and perform its obligations under each
of the Loan Documents to which it is a party, (b) that set forth as a part of or attached as an exhibit to such certificate is a true, correct, and complete copy of the resolutions then in full force and effect authorizing and ratifying the
execution, delivery, and performance by such Person of the Loan Documents to which it is a party, (c) the name(s) of the Person(s) authorized to execute the Loan Documents, including making (and executing if applicable) any Credit Extension
request, on behalf of such Person, together with a sample of the true signature(s) of such Person(s), and (d) that Bank may conclusively rely on such certificate unless and until such Person shall have delivered to Bank a further certificate
canceling or amending such prior certificate. 
 “Business Day” is any day that is not a Saturday, Sunday or a day on which
Bank is closed. 
 “Cash Collateral Account” is defined in Section 6.3(c). 

“Cash Equivalents” means (a) marketable direct obligations issued or unconditionally guaranteed by the United States or
any agency or any State thereof having maturities of not more than one (1) year from the date of acquisition; (b) commercial paper maturing no more than one (1) year after its creation and having the highest rating from either
Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc.; (c) Bank’s certificates of deposit issued maturing no more than one (1) year after issue; and (d) money market funds at least ninety-five percent
(95%) of the assets of which constitute Cash Equivalents of the kinds described in clauses (a) through (c) of this definition. 

“Change in Control” means (a) at any time, any “person” or “group” (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act), shall become, or obtain rights (whether by means of warrants, options or otherwise) to become, the “beneficial owner” (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act), 

  
 24 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 
directly or indirectly, of forty nine percent (49%) or more of the ordinary voting power for the election of directors of Borrower (determined on a fully diluted basis) other than by the sale of
Borrower’s equity securities in a public offering or to venture capital or private equity investors so long as Borrower identifies to Bank the venture capital or private equity investors at least seven (7) Business Days prior to the
closing of the transaction and provides to Bank a description of the material terms of the transaction; (b) during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent
governing body of Borrower cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body
was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body; or (c) at any
time, Borrower shall cease to own and control, of record and beneficially, directly or indirectly, one hundred percent (100.0%) of each class of outstanding capital stock of each Subsidiary of Borrower free and clear of all Liens (except Liens
created by this Agreement and Permitted Liens). 
 “Claims” is defined in Section 12.3. 

“Code” is the Uniform Commercial Code, as the same may, from time to time, be enacted and in effect in the Commonwealth of
Massachusetts; provided, that, to the extent that the Code is used to define any term herein or in any Loan Document and such term is defined differently in different Articles or Divisions of the Code, the definition of such term contained in
Article or Division 9 shall govern; provided further, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, or priority of, or remedies with respect to, Bank’s Lien on any Collateral is
governed by the Uniform Commercial Code in effect in a jurisdiction other than the Commonwealth of Massachusetts, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for
purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies and for purposes of definitions relating to such provisions. 

“Collateral” is any and all properties, rights and assets of Borrower described on Exhibit A. 

“Collateral Account” is any Deposit Account, Securities Account, or Commodity Account. 

“Commodity Account” is any “commodity account” as defined in the Code with such additions to such term as may
hereafter be made. 
 “Compliance Certificate” is that certain certificate in the form attached hereto as Exhibit B. 

“Consent Event” means Bank provides its written approval in its sole discretion to the merger of Borrower and Alpha
Therapeutics Merger Sub, Inc. 
 “Contingent Obligation” is, for any Person, any direct or indirect liability, contingent
or not, of that Person for (a) any indebtedness, lease, dividend, letter of credit or other obligation of another such as an obligation, in each case, directly or indirectly guaranteed, endorsed, co made, discounted or sold with recourse by
that Person, or for which that Person is directly or indirectly liable; (b) any obligations for undrawn letters of credit for the account of that Person; and (c) all obligations from any interest rate, currency or commodity swap agreement,
interest rate cap or collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; but “Contingent Obligation” does not include
endorsements in the ordinary course of business. The amount of a Contingent Obligation is the stated or determined amount of the primary obligation for which the Contingent Obligation is made or, if not determinable, the maximum reasonably
anticipated liability for it determined by the Person in good faith; but the amount may not exceed the maximum of the obligations under any guarantee or other support arrangement. 

“Control Agreement” is any control agreement entered into among the depository institution at which Borrower maintains a
Deposit Account or the securities intermediary or commodity intermediary at which Borrower maintains a Securities Account or a Commodity Account, Borrower, and Bank pursuant to which Bank obtains control (within the meaning of the Code) over such
Deposit Account, Securities Account, or Commodity Account. 

  
 25 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 “Copyrights” are any and all copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative work thereof, whether published or unpublished and whether or not the same also constitutes a trade secret. 

“Credit Extension” is any Advance, any Overadvance, or any other extension of credit by Bank for Borrower’s benefit.

 “Currency” is coined money and such other banknotes or other paper money as are authorized by law and circulate as a
medium of exchange. 
 “Current Liabilities” are, determined on a consolidated basis with respect to Borrower and its
Subsidiaries, the aggregate amount of all obligations and liabilities of Borrower and its Subsidiaries to Bank, including without duplication, the aggregate amount of Borrower’s and its Subsidiaries’ obligations to Bank under any business
credit cards with Bank and all amounts owed under any Bank Services Agreement. 
 “Default Rate” is defined in
Section 2.4(b). 
 “Deferred Revenue” is all amounts received or invoiced in advance of performance under contracts
and not yet recognized as revenue. 
 “Deposit Account” is any “deposit account” as defined in the Code
with such additions to such term as may hereafter be made. 
 “Designated Deposit Account” is the account number ending 803
maintained by Borrower with Bank (provided, however, if no such account number is included, then the Designated Deposit Account shall be any deposit account of Borrower maintained with Bank as chosen by Bank). 

“Dollars,” “dollars” or use of the sign “$” means only lawful money of the United States and not
any other currency, regardless of whether that currency uses the “$” sign to denote its currency or may be readily converted into lawful money of the United States. 

“Dollar Equivalent” is, at any time, (a) with respect to any amount denominated in Dollars, such amount, and
(b) with respect to any amount denominated in a Foreign Currency, the equivalent amount therefor in Dollars as determined by Bank at such time on the basis of the then-prevailing rate of exchange in San Francisco, California, for sales of the
Foreign Currency for transfer to the country issuing such Foreign Currency. 
 “Effective Date” is defined in the preamble
hereof. 
 “Eligible Accounts” means Accounts owing to Borrower which arise in the ordinary course of Borrower’s
business that meet all Borrower’s representations and warranties in Section 5.3, that have been, at the option of Bank, confirmed in accordance with Section 6.3(f) of this Agreement, and are due and owing from Account Debtors deemed
creditworthy by Bank in its good faith business judgment. Bank reserves the right upon prior written notice to Borrower at any time after the Effective Date to adjust any of the criteria set forth below and to establish new criteria in its good
faith business judgment. Unless Bank otherwise agrees in writing, Eligible Accounts shall not include: 

(a)    Accounts (i) for which the Account Debtor is Borrower’s Affiliate, officer, employee, investor, or agent,
or (ii) that are intercompany Accounts; 
 (b)    Accounts that the Account Debtor has not paid within ninety
(90) days of invoice date regardless of invoice payment period terms; 
 (c)    Accounts with credit balances over
ninety (90) days from invoice date; 

  
 26 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 (d)    Accounts owing from an Account Debtor if fifty percent (50%) or more
of the Accounts owing from such Account Debtor have not been paid within ninety (90) days of invoice date; 

(e)    Accounts owing from an Account Debtor (i) which does not have its principal place of business in the United
States or (ii) whose billing address (as set forth in the applicable invoice for such Account) is not in the United States, unless in the case of both (i) and (ii) such Accounts are otherwise approved by Bank in writing on a case by case
basis in its sole discretion; 
 (f)    Accounts billed from and/or payable to Borrower outside of the United States
(sometimes called foreign invoiced accounts); 
 (g)    Accounts in which Bank does not have a first priority, perfected
security interest under all applicable laws; 
 (h)    Accounts billed and/or payable in a Currency other than Dollars;

 (i)    Accounts owing from an Account Debtor to the extent that Borrower is indebted or obligated in any manner to
the Account Debtor (as creditor, lessor, supplier or otherwise - sometimes called “contra” accounts, accounts payable, customer deposits or credit accounts); 

(j)    Accounts with or in respect of accruals for marketing allowances, incentive rebates, price protection, cooperative
advertising and other similar marketing credits, unless otherwise approved by Bank in writing; 
 (k)    Accounts owing
from an Account Debtor which is a United States government entity or any department, agency, or instrumentality thereof unless Borrower has assigned its payment rights to Bank and the assignment has been acknowledged under the Federal Assignment of
Claims Act of 1940, as amended; 
 (l)    Accounts with customer deposits and/or with respect to which Borrower has
received an upfront payment, to the extent of such customer deposit and/or upfront payment; 
 (m)    Accounts for
demonstration or promotional equipment, or in which goods are consigned, or sold on a “sale guaranteed”, “sale or return”, “sale on approval”, or other terms if Account Debtor’s payment may be conditional; 

(n)    Accounts owing from an Account Debtor where goods or services have not yet been rendered to the Account Debtor
(sometimes called memo billings or pre-billings); 
 (o)    Accounts subject to
contractual arrangements between Borrower and an Account Debtor where payments shall be scheduled or due according to completion or fulfillment requirements (sometimes called contracts accounts receivable, progress billings, milestone billings, or
fulfillment contracts); 
 (p)    Accounts owing from an Account Debtor the amount of which may be subject to
withholding based on the Account Debtor’s satisfaction of Borrower’s complete performance (but only to the extent of the amount withheld; sometimes called retainage billings); 

(q)    Accounts subject to trust provisions, subrogation rights of a bonding company, or a statutory trust; 

(r)    Accounts owing from an Account Debtor that has been invoiced for goods that have not been shipped to the Account
Debtor unless Bank, Borrower, and the Account Debtor have entered into an agreement acceptable to Bank wherein the Account Debtor acknowledges that (i) it has title to and has ownership of the goods wherever located, (ii) a bona fide sale
of the goods has occurred, and (iii) it owes payment for such goods in accordance with invoices from Borrower (sometimes called “bill and hold” accounts); 

(s)    Accounts for which the Account Debtor has not been invoiced; 

  
 27 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 (t)    Accounts that represent
non-trade receivables or that are derived by means other than in the ordinary course of Borrower’s business; 

(u)    Accounts for which Borrower has permitted Account Debtor’s payment to extend beyond ninety (90) days
(including Accounts with a due date that is more than ninety (90) days from invoice date); 
 (v)    Accounts
arising from chargebacks, debit memos or other payment deductions taken by an Account Debtor; 
 (w)    Accounts arising
from product returns and/or exchanges (sometimes called “warranty” or “RMA” accounts); 

(x)    Accounts in which the Account Debtor disputes liability or makes any claim (but only up to the disputed or claimed
amount), or if the Account Debtor is subject to an Insolvency Proceeding (whether voluntary or involuntary), or becomes insolvent, or goes out of business; 

(y)    Accounts owing from an Account Debtor with respect to which Borrower has received Deferred Revenue (but only to the
extent of such Deferred Revenue); 
 (z)    Accounts owing from an Account Debtor, whose total obligations to Borrower
exceed thirty-five percent (35.0%) of all Accounts, for the amounts that exceed that percentage, unless Bank approves in writing; and 

(aa)    Accounts for which Bank in its good faith business judgment determines collection to be doubtful, including,
without limitation, accounts represented by “refreshed” or “recycled” invoices. 
 “Eligible Inventory”
means Inventory that meets all of Borrower’s representations and warranties in Section 5.3 and is otherwise acceptable to Bank in its good faith business judgment. 

“Equipment” is all “equipment” as defined in the Code with such additions to such term as may hereafter be
made, and includes without limitation all machinery, fixtures, goods, vehicles (including motor vehicles and trailers), and any interest in any of the foregoing. 

“ERISA” is the Employee Retirement Income Security Act of 1974, and its regulations. 

“Event of Default” is defined in Section 8. 

“Exchange Act” is the Securities Exchange Act of 1934, as amended. 

“Foreign Currency” means lawful money of a country other than the United States. 

“Funding Date” is any date on which a Credit Extension is made to or for the account of Borrower which shall be a Business
Day. 
 “GAAP” is generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other Person as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the date of determination. 
 “General
Intangibles” is all “general intangibles” as defined in the Code in effect on the date hereof with such additions to such term as may hereafter be made, and includes without limitation, all Intellectual Property, claims, income
and other tax refunds, security and other deposits, payment intangibles, contract rights, options to purchase or sell real or personal property, rights in all litigation presently or hereafter pending (whether in contract, tort or otherwise),
insurance policies (including without limitation key man, property damage, and business interruption insurance), payments of insurance and rights to payment of any kind. 

  
 28 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 “Governmental Approval” is any consent, authorization, approval, order, license,
franchise, permit, certificate, accreditation, registration, filing or notice, of, issued by, from or to, or other act by or in respect of, any Governmental Authority. 

“Governmental Authority” is any nation or government, any state or other political subdivision thereof, any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative functions of or pertaining to government, any securities exchange and any
self-regulatory organization. 
 “Guarantor” is any Person providing a Guaranty in favor of Bank. 

“Guaranty” is any guarantee of all or any part of the Obligations, as the same may from time to time be amended, restated,
modified or otherwise supplemented. 
 “Indebtedness” is (a) indebtedness for borrowed money or the deferred price of
property or services, such as reimbursement and other obligations for surety bonds and letters of credit, (b) obligations evidenced by notes, bonds, debentures or similar instruments, (c) capital lease obligations within the meaning of
GAAP as in effect on the Effective Date, and (d) Contingent Obligations. 
 “Indemnified Person” is defined in
Section 12.3. 
 “Initial Audit” is Bank’s inspection of Borrower’s Accounts, the Collateral, and
Borrower’s Books, with results satisfactory to Bank in its sole and absolute discretion. 
 “Initial NOLV” is the
completion of the first NOLV, with results satisfactory to Bank in its sole and absolute discretion. 
 “Insolvency
Proceeding” is any proceeding by or against any Person under the United States Bankruptcy Code, or any other bankruptcy or insolvency law, including assignments for the benefit of creditors, compositions, extensions generally with its
creditors, or proceedings seeking reorganization, arrangement, or other relief. 
 “Intellectual Property” means, with
respect to any Person, all of such Person’s right, title, and interest in and to the following: 
 (a)    its
Copyrights, Trademarks and Patents; 
 (b)    any and all trade secrets and trade secret rights, including, without
limitation, any rights to unpatented inventions, know-how and operating manuals; 

(c)    any and all source code; 

(d)    any and all design rights which may be available to such Person; 

(e)    any and all claims for damages by way of past, present and future infringement of any of the foregoing, with the
right, but not the obligation, to sue for and collect such damages for said use or infringement of the Intellectual Property rights identified above; and 

(f)    all amendments, renewals and extensions of any of the Copyrights, Trademarks or Patents. 

“Inventory” is all “inventory” as defined in the Code in effect on the date hereof with such additions to
such term as may hereafter be made, and includes without limitation all merchandise, raw materials, parts, supplies, packing and shipping materials, work in process and finished products, including without limitation such inventory as is temporarily
out of Borrower’s custody or possession or in transit and including any returned goods and any documents of title representing any of the above. 

  
 29 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 “Investment” is any beneficial ownership interest in any Person (including
stock, partnership interest or other securities), and any loan, advance or capital contribution to any Person. 
 “Key
Person” is each of Borrower’s (a) Chief Executive Officer and (b) Chief Financial Officer. 
 “Letter of
Credit” is a standby or commercial letter of credit issued by Bank upon request of Borrower based upon an application, guarantee, indemnity, or similar agreement. 

“Lien” is a claim, mortgage, deed of trust, levy, charge, pledge, security interest or other encumbrance of any kind, whether
voluntarily incurred or arising by operation of law or otherwise against any property. 
 “Liquidity” is, at any time, the
sum of (a) the aggregate amount of unrestricted and unencumbered cash and Cash Equivalents held at such time by Borrower and its Subsidiaries in Deposit Accounts or Securities Accounts maintained with Bank or its Affiliates, plus (b) the
net billed accounts receivable determined in accordance with GAAP. 
 “Liquidity Ratio” is the ratio of Liquidity to
Current Liabilities. 
 “Loan Documents” are, collectively, this Agreement and any schedules, exhibits, certificates,
notices, and any other documents related to this Agreement, any Bank Services Agreement, any subordination agreement, any note, or notes or guaranties executed by Borrower or any Guarantor, and any other present or future agreement by Borrower
and/or any Guarantor with or for the benefit of Bank, all as amended, restated, or otherwise modified. 
 “Material Adverse
Change” is (a) a material impairment in the perfection or priority of Bank’s Lien in the Collateral or in the value of such Collateral; (b) a material adverse change in the business, operations, or condition (financial or
otherwise) of Borrower; or (c) a material impairment of the prospect of repayment of any portion of the Obligations. 

“NOLV” means the net orderly liquidation value of Borrower’s Eligible Inventory, as may be determined from time to time,
by an appraiser or consultant selected by Bank in its sole discretion. 
 “Obligations” are Borrower’s obligations to
pay when due any debts, principal, interest, fees, Bank Expenses, the Additional Commitment Fee, the Termination Fee, the Anniversary Fee, the Unused Revolving Line Facility Fee, and other amounts Borrower owes Bank now or later, whether under this
Agreement, the other Loan Documents, or otherwise, including, without limitation, all obligations relating to Bank Services and interest accruing after Insolvency Proceedings begin and debts, liabilities, or obligations of Borrower assigned to Bank,
and to perform Borrower’s duties under the Loan Documents. 
 “Operating Documents” are, for any Person, such
Person’s formation documents, as certified by the Secretary of State (or equivalent agency) of such Person’s jurisdiction of organization on a date that is no earlier than thirty (30) days prior to the Effective Date, and, (a) if
such Person is a corporation, its bylaws in current form, (b) if such Person is a limited liability company, its limited liability company agreement (or similar agreement), and (c) if such Person is a partnership, its partnership agreement
(or similar agreement), each of the foregoing with all current amendments or modifications thereto. 
 “Overadvance” is
defined in Section 2.3. 
 “Patents” means all patents, patent applications and like protections including without
limitation improvements, divisions, continuations, renewals, reissues, extensions and continuations-in-part of the same. 

“Payment Date” is the last calendar day of each month. 

  
 30 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 “Perfection Certificate” is defined in Section 5.1. 

“Permitted Convertible Debt” is defined in subsection (d) of the definition of “Permitted Indebtedness”. 

“Permitted Convertible Debt Default” is defined in subsection (d) of the definition of “Permitted
Indebtedness”. 
 “Permitted Indebtedness” is: 

(a)    Borrower’s Indebtedness to Bank under this Agreement and the other Loan Documents; 

(b)    Indebtedness existing on the Effective Date which is shown on the Perfection Certificate; 

(c)    Subordinated Debt; 

(d)    unsecured Indebtedness which by its terms is convertible into equity securities of Borrower (the “Permitted
Convertible Debt”) provided that (i) the aggregate principal amount of the Permitted Convertible Debt shall not exceed One Hundred Eighty Million Dollars ($180,000,000.00) at any time outstanding (ii) no scheduled principal
payments may be made with respect to the Permitted Convertible Debt, and (iii) if a default or an event of default (however defined) occurs under the Permitted Convertible Debt (a “Permitted Convertible Debt Default”), all
outstanding liabilities and obligations of Borrower to Bank shall immediately be repaid in full; 
 (e)    Indebtedness
secured by Liens permitted under clauses (a) and (c) of the definition of “Permitted Liens” hereunder; 

(f)    unsecured Indebtedness to trade creditors incurred in the ordinary course of business; 

(g)    Indebtedness incurred as a result of endorsing negotiable instruments received in the ordinary course of
Borrower’s business; 
 (h)    Indebtedness in respect of netting services, overdraft protections and otherwise in
connection with deposit accounts; 
 (i)    other unsecured Indebtedness not otherwise permitted hereunder not to exceed
Fifty Thousand Dollars ($50,000); and 
 (j)    extensions, refinancings, modifications, amendments and restatements of
any items of Permitted Indebtedness (a) through (i) above, provided that the principal amount thereof is not increased or the terms thereof are not modified to impose more burdensome terms upon Borrower or its Subsidiary, as the case may be.

 “Permitted Investments” are: 

(a)    Investments (including, without limitation, Subsidiaries) existing on the Effective Date which are shown on the
Perfection Certificate; and 
 (b)    (i) Investments consisting of Cash Equivalents, and (ii) any Investments
permitted by Borrower’s investment policy, as amended from time to time, provided that such investment policy (and any such amendment thereto) has been approved in writing by Bank; 

(c)    Investments consisting of the endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of Borrower; 
 (d)    Investments consisting of deposit accounts in which Bank has
a first priority perfected security interest to the extent required under this Agreement; 
 (e)    Investments in
connection with Transfers permitted by Section 7.1; 

  
 31 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 (f)    Investments consisting of (i) travel advances and employee
relocation loans and other employee loans and advances in the ordinary course of business, and (ii) loans to employees, officers or directors relating to the purchase of equity securities of Borrower or its Subsidiaries pursuant to employee
stock purchase plans or agreements approved by the Board; 
 (g)    Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of customers or suppliers and in settlement of delinquent obligations of, and other disputes with, customers or suppliers arising in the ordinary course of business; 

(h)    Investments consisting of notes receivable of, or prepaid royalties and other credit extensions, to customers and
suppliers who are not Affiliates, in the ordinary course of business; 
 (i)    joint ventures or strategic alliances in
the ordinary course of Borrower’s business consisting of the non-exclusive licensing of technology, the development of technology or the providing of technical support, provided that any cash Investments
by Borrower in another Person do not exceed Two Hundred Thousand Dollars ($200,000) in the aggregate in any fiscal year; 

(j)    Investments by Borrower or Subsidiaries that are domestic secured Guarantors in Borrower or Subsidiaries that are
or become domestic secured Guarantors; and 
 (k)    other Investments not otherwise permitted hereunder not to exceed
Fifty Thousand Dollars ($50,000.00) in the aggregate in any calendar year. 
 “Permitted Liens” are: 

(a)    Liens existing on the Effective Date which are shown on the Perfection Certificate or arising under this Agreement
or the other Loan Documents; 
 (b)    Liens for taxes, fees, assessments or other government charges or levies, either
(i) not due and payable or (ii) being contested in good faith and for which Borrower maintains adequate reserves on Borrower’s Books, provided that no notice of any such Lien has been filed or recorded under the Internal Revenue Code
of 1986, as amended, and the Treasury Regulations adopted thereunder; 
 (c)    purchase money Liens (i) on
Equipment acquired or held by Borrower incurred for financing the acquisition of the Equipment securing no more than Two Hundred Thousand Dollars ($200,000) in the aggregate amount outstanding, or (ii) existing on Equipment when acquired, if
the Lien is confined to the property and improvements and the proceeds of the Equipment; 
 (d)    Liens incurred in the
extension, renewal or refinancing of the Indebtedness secured by Liens described in (a) through (c), but any extension, renewal or replacement Lien must be limited to the property encumbered by the existing Lien and the principal amount of the
indebtedness may not increase; 
 (e)    Liens of carriers, warehousemen, suppliers, or other Persons that are
possessory in nature arising in the ordinary course of business so long as such Liens attach only to Inventory and related property, securing liabilities in the aggregate amount not to exceed Fifty Thousand Dollars ($50,000) and which are not
delinquent or remain payable without penalty or which are being contested in good faith and by appropriate proceedings which proceedings have the effect of preventing the forfeiture or sale of the property subject thereto; 

(f)    Liens to secure payment of workers’ compensation, employment insurance,
old-age pensions, social security and other like obligations incurred in the ordinary course of business (other than Liens imposed by ERISA); 

(g)    leases or subleases of real property granted in the ordinary course of Borrower’s business (or, if referring
to another Person, in the ordinary course of such Person’s business), and leases, subleases, non-exclusive licenses or sublicenses of personal property (other than Intellectual Property) granted in the
ordinary course of Borrower’s business (or, if referring to another Person, in the ordinary course of such Person’s business); 

  
 32 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 (h)    non-exclusive licenses of
Intellectual Property granted to third parties in the ordinary course of business, and licenses of Intellectual Property that could not result in a legal transfer of title of the licensed property that may be exclusive in respects other than
territory and that may be exclusive as to territory only as to discreet geographical areas outside of the United States; 

(i)    Liens arising from attachments or judgments, orders, or decrees in circumstances not constituting an Event of
Default under Section 8.4 (attachment) or 8.7 (judgment); 
 (j)    Liens in favor of other financial institutions
arising in connection with Borrower’s deposit and/or securities accounts held at such institutions, provided that (i) Bank has a first priority perfected security interest in the amounts held in such deposit and/or securities accounts
(except for accounts with respect to which Bank has agreed to not require a Control Agreement in its sole and absolute discretion) and (ii) such accounts are permitted to be maintained pursuant to Section 6.8 of this Agreement; and 

(k)    easements, zoning restrictions,
rights-of-way, minor defects or irregularities in title and similar encumbrances on real property imposed by law or arising in the ordinary course of business which
(i) do not secure obligations for the payment of money, (ii) are not material in amount and (iii) do not materially detract from or impair the value of the affected property or interfere materially with the ordinary conduct of
business of Borrower. 
 “Person” is any individual, sole proprietorship, partnership, limited liability company, joint
venture, company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, firm, joint stock company, estate, entity or government agency. 

“Prime Rate” is the rate of interest per annum from time to time published in the money rates section of The Wall Street
Journal or any successor publication thereto as the “prime rate” then in effect; provided that, in the event such rate of interest is less than zero, such rate shall be deemed to be zero for purposes of this Agreement; and provided further
that if such rate of interest, as set forth from time to time in the money rates section of The Wall Street Journal, becomes unavailable for any reason as determined by Bank, the “Prime Rate” shall mean the rate of interest per annum
announced by Bank as its prime rate in effect at its principal office in the State of California (such Bank announced Prime Rate not being intended to be the lowest rate of interest charged by Bank in connection with extensions of credit to
debtors); provided that, in the event such rate of interest is less than zero, such rate shall be deemed to be zero for purposes of this Agreement. 

“Registered Organization” is any “registered organization” as defined in the Code with such additions to such term
as may hereafter be made. 
 “Requirement of Law” is as to any Person, the organizational or governing documents of such
Person, and any law (statutory or common), 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 to which such Person
or any of its property is subject. 
 “Reserves” means, as of any date of determination, such amounts as Bank may from time
to time establish and revise in its good faith business judgment, reducing the amount of Advances and other financial accommodations which would otherwise be available to Borrower (a) to reflect events, conditions, contingencies or risks which,
as determined by Bank in its good faith business judgment, do or may adversely affect (i) the Collateral or any other property which is security for the Obligations or its value (including without limitation any increase in delinquencies of
Accounts), (ii) the assets, business or prospects of Borrower or any Guarantor, or (iii) the security interests and other rights of Bank in the Collateral (including the enforceability, perfection and priority thereof); or (b) to reflect
Bank’s reasonable belief that any collateral report or financial information furnished by or on behalf of Borrower or any Guarantor to Bank is or may have been incomplete, inaccurate or misleading in any material respect; or (c) in respect
of any state of facts which Bank determines constitutes an Event of Default or may, with notice or passage of time or both, constitute an Event of Default. 

  
 33 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 “Responsible Officer” is any of the Chief Executive Officer, President, Chief
Financial Officer and Controller of Borrower. 
 “Restricted License” is any material license or other agreement with
respect to which Borrower is the licensee (a) that prohibits or otherwise restricts Borrower from granting a security interest in Borrower’s interest in such license or agreement or any other property, or (b) for which a default under
or termination of could interfere with Bank’s right to sell any Collateral. 
 “Revolving Line” is an aggregate
principal amount equal to Forty Million Dollars ($40,000,000.00). 
 “Revolving Line Maturity Date” is the date that is the
earlier of (i) two (2) years after the Effective Date, and (ii) ninety (90) days prior to the maturity of any portion of the Permitted Convertible Debt. 

“SEC” shall mean the Securities and Exchange Commission, any successor thereto, and any analogous Governmental Authority.

 “Securities Account” is any “securities account” as defined in the Code with such additions to such
term as may hereafter be made. 
 “Specified Affiliate” is any Person (a) more than ten percent (10.0%) of whose
aggregate issued and outstanding equity or ownership securities or interests, voting, non-voting or both, are owned or held directly or indirectly, beneficially or of record, by Borrower, and/or (b) whose
equity or ownership securities or interests representing more than ten percent (10.0%) of such Person’s total outstanding combined voting power are owned or held directly or indirectly, beneficially or of record, by Borrower. 

“Subordinated Debt” is indebtedness incurred by Borrower subordinated to all of Borrower’s now or hereafter indebtedness
to Bank (pursuant to a subordination, intercreditor, or other similar agreement in form and substance satisfactory to Bank entered into between Bank and the other creditor), on terms acceptable to Bank. 

“Subsidiary” is, as to any Person, a corporation, partnership, limited liability company 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 such Person. Unless the context otherwise requires,
each reference to a Subsidiary herein shall be a reference to a Subsidiary of Borrower. 
 “Termination Fee” is defined in
Section 2.5(c). 
 “Trademarks” means any trademark and servicemark rights, whether registered or not, applications to
register and registrations of the same and like protections, and the entire goodwill of the business of Borrower connected with and symbolized by such trademarks. 

“Transfer” is defined in Section 7.1. 

“Transition Period” is the period of time commencing on the Effective Date, and continuing through the earlier to occur of
(i) sixty (60) days after the Effective Date or (ii) an Event of Default. 
 “Unused Revolving Line Facility Fee”
is defined in Section 2.5(d). 
 [Signature page follows.] 

  
 34 

CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY
WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as a
sealed instrument under the laws of the Commonwealth of Massachusetts as of the Effective Date. 
  

			
	BORROWER:
	
	KERYX BIOPHARMACEUTICALS, INC.

 
			
		
	By	 	/s/ Scott A. Holmes

 
			
		
	Name:	 	Scott A. Holmes

 
			
		
	Title:	 	Chief Financial Officer

 
			
	
	BANK:
	
	SILICON VALLEY BANK

 
			
		
	By	 	/s/ Lauren Cole

 
			
		
	Name:	 	Lauren Cole

 
			
		
	Title:	 	Vice President

 CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF
THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED. 
  

 EXHIBIT A - COLLATERAL DESCRIPTION 

The Collateral consists of all of Borrower’s right, title and interest in and to the following personal property: 

All goods, Accounts (including health-care receivables), Equipment, Inventory, contract rights or rights to payment of money, leases, license
agreements, franchise agreements, General Intangibles (except as provided below), commercial tort claims, documents, instruments (including any promissory notes), chattel paper (whether tangible or electronic), cash, deposit accounts, certificates
of deposit, fixtures, letters of credit rights (whether or not the letter of credit is evidenced by a writing), securities, and all other investment property, supporting obligations, and financial assets, whether now owned or hereafter acquired,
wherever located; and 
 all Borrower’s Books relating to the foregoing, and any and all claims, rights and interests in any of the
above and all substitutions for, additions, attachments, accessories, accessions and improvements to and replacements, products, proceeds and insurance proceeds of any or all of the foregoing. 

Notwithstanding the foregoing, the Collateral does not include (a) rights held under a license that are not assignable by their terms
without the consent of the licensor thereof (but only to the extent such restriction on assignment is enforceable under applicable law); (b) any interest of Borrower as a lessee under an Equipment lease if Borrower is prohibited by the terms of such
lease from granting a security interest in such lease or under which such an assignment or Lien would cause a default to occur under such lease; provided, however, that upon termination of such prohibition, such interest shall immediately become
Collateral without any action by Borrower or Bank; or (c) any Intellectual Property; provided, however, the Collateral shall include all Accounts and all proceeds of Intellectual Property. If a judicial authority (including a U.S.
Bankruptcy Court) would hold that a security interest in the underlying Intellectual Property is necessary to have a security interest in such Accounts and such property that are proceeds of Intellectual Property, then the Collateral shall
automatically, and effective as of the Effective Date, include the Intellectual Property to the extent necessary to permit perfection of Bank’s security interest in such Accounts and such other property of Borrower that are proceeds of the
Intellectual Property. 
 Pursuant to the terms of a certain negative pledge arrangement with Bank, Borrower has agreed not to encumber any
of its Intellectual Property without Bank’s prior written consent. 
 CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH
“[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 

 EXHIBIT B 

COMPLIANCE CERTIFICATE 
  

									
	TO:	  	SILICON VALLEY BANK	  		  	Date:	 	 
	FROM:	  	Keryx Biopharmaceuticals, Inc.	  		  		 	

 The undersigned authorized officer of Keryx Biopharmaceuticals, Inc. (“Borrower”) certifies
that under the terms and conditions of the Loan and Security Agreement between Borrower and Bank (the “Agreement”), (1) Borrower is in complete compliance for the period ending _______________ with all required covenants except as
noted below, (2) there are no Events of Default, (3) all representations and warranties in the Agreement are true and correct in all material respects on this date except as noted below; provided, however, that such
materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof; and provided, further that those representations and warranties expressly
referring to a specific date shall be true, accurate and complete in all material respects as of such date, (4) Borrower, and each of its Subsidiaries, has timely filed all required tax returns and reports, and Borrower has timely paid all
foreign, federal, state and local taxes, assessments, deposits and contributions owed by Borrower except as otherwise permitted pursuant to the terms of Section 5.9 of the Agreement, and (5) no Liens have been levied or claims made against
Borrower or any of its Subsidiaries, if any, relating to unpaid employee payroll or benefits of which Borrower has not previously provided written notification to Bank. Attached are the required documents supporting the certification. The
undersigned certifies that these are prepared in accordance with GAAP consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The undersigned acknowledges that no borrowings may be requested at
any time or date of determination that Borrower is not in compliance with any of the terms of the Agreement, and that compliance is determined not just at the date this certificate is delivered. Capitalized terms used but not otherwise defined
herein shall have the meanings given them in the Agreement. 
 Please indicate compliance status by circling Yes/No under “Complies” column.

  

					
	 Reporting
Covenants
	  	 Required
	  	 Complies

			
	Borrowing Base Reports	  	With each Advance request (when there are no Advances outstanding) and monthly within 15 days of month end during months in which any Advances are outstanding	  	Yes    No
			
	A/R & A/P Agings/A/R reconciliation & ledger/ Inventory Report	  	Monthly within 30 days of month end during months in which any Advances are outstanding	  	Yes    No
			
	Compliance Certificate	  	Quarterly within 45 days (within 90 days for last quarter of fiscal year)	  	
			
	Board approved projections	  	FYE as soon as available but within 30 days of Board approval, and as amended/updated	  	Yes    No
			
	SEC Filings	  	Within 5 days of filing	  	Yes    No

 The following Intellectual Property was registered after the Effective Date (if no registrations, state “None”) 

 
  
  

							
	 Financial
Covenant
	  	 Required
	  	 Actual
	  	 Complies

				
	Maintain as indicated:	  		  		  	
				
	Liquidity Ratio: Monthly	  	1.50:1.0	  	________	  	Yes    No
				
	Minimum Revenue: Monthly for the prior three (3) month period	  	As set forth in Section 6.9(b)	  	$________	  	Yes    No

 CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS
EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

  

 The following financial covenant analyses and information set forth in Schedule 1 attached hereto
are true and accurate as of the date of this Certificate. 
 The following are the exceptions with respect to the certification above: (If
no exceptions exist, state “No exceptions to note.”) 
  
  

 
  

 

			
	KERYX BIOPHARMACEUTICALS, INC.

			
		
	By:	 	 

			
	Name:	 	 

			
	Title:	 	 

 

			
	 BANK USE ONLY

			
		
	Received by:	 	 
	 	 	AUTHORIZED SIGNER

			
		
	Date:	 	 

			
		
	Verified:	 	 
	 	 	AUTHORIZED SIGNER

			
		
	Date:	 	 

			
		
	 Compliance Status:
	 	        Yes    No

 
 

  
 CERTAIN CONFIDENTIAL PORTIONS OF THIS
EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT
PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 
  

 Schedule 1 to Compliance Certificate 

Financial Covenants of Borrower 

In the event of a conflict between this Schedule and the Agreement, the terms of the Agreement shall govern. 

Dated:    ____________________ 
  

	I.	Liquidity Ratio (Section 6.9(a)) 

  

	Required:	1.50:1.0 

  

	Actual:	____:1.0 

  

							
	         A.
	    	Aggregate amount of unrestricted and unencumbered cash held at such time by Borrower and its Subsidiaries in Deposit Accounts or Securities Accounts maintained with Bank or its Affiliates	    	$	 	
                 

				
	         B.
	    	Net billed accounts receivable determined in accordance with GAAP	    	$	 	
                 

				
	         C.
	    	Liquidity (line A plus line B)	    	$	 	
                 

				
	         D.
	    	Current Liabilities	    	$	 	
                 

 Is the ratio of line C to line D equal to or greater than 1.5:1.0? 

 

									
	
                 
	 	No, not in compliance	  		  	
                 
	 	Yes, in compliance

  

	II.	Minimum Revenue (Section 6.9(b)) 

 A.    Required: Achieve minimum revenue
determined in accordance with GAAP, and measured on a trailing three month period and tested as of the last day of each month set forth in the chart below, as determined by Bank, of not less than the following amounts: 

 

					
	 Three (3) Month Period Ended
	  	Minimum
Revenue	 
	 June 30, 2018
	  	$	[***]	 
	 July 31, 2018
	  	$	[***]	 
	 August 31, 2018
	  	$	[***]	 
	 September 30, 2018
	  	$	[***]	 
	 October 31, 2018
	  	$	[***]	 
	 November 30, 2018
	  	$	[***]	 
	 December 31, 2018
	  	$	[***]	 
	 January 31, 2019
	  	$	[***]	 

 CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND
REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2
PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. 
  

					
	 February 28, 2019
	  	$	[***]	 
	 March 31, 2019
	  	$	[***]	 
	 April 30, 2019
	  	$	[***]	 
	 May 31, 2019
	  	$	[***]	 
	 June 30, 2019
	  	$	[***]	 
	 July 31, 2019
	  	$	[***]	 
	 August 31, 2019
	  	$	[***]	 
	 September 30, 2019
	  	$	[***]	 
	 October 31, 2019
	  	$	[***]	 
	 November 30, 2019
	  	$	[***]	 
	 December 31, 2019
	  	$	[***]	 
	 January 31, 2020
	  	$	[***]	 
	 February 29, 2020
	  	$	[***]	 

 With respect to each period ending after February 29, 2020, the levels of minimum revenue shall be
mutually agreed upon between Borrower and Bank based upon Borrower’s Board-approved operating plan and financial projections acceptable to Bank. Borrower’s failure to either (1) agree in writing (which agreement shall be set forth in
a written amendment to this Agreement) on or before February 29, 2020, to any such covenant levels proposed by Bank with respect to the calendar year ending December 31, 2020, or (2) notwithstanding Section 6.2(f) of this
Agreement, deliver to Bank, on or before the earlier to occur of (i) February 15, 2020 or (ii) approval by the Board, Borrower’s budgets, sales projections, operating plans and other financial information of Borrower that Bank
deems relevant, including, without limitation, Borrower’s Board-approved operating budgets, projections and plans, with respect to the calendar year ending December 31, 2020, shall result in an immediate Event of Default for which there
shall be no grace or cure period. 
  

							
	B.	 	Actual:	  	$______	  	

 Is line B equal to or greater than line A? 
  

									
	
                 
	 	No, not in compliance	  		  	
                 
	 	Yes, in compliance

 CERTAIN CONFIDENTIAL PORTIONS OF THIS EXHIBIT WHERE OMITTED AND REPLACED WITH “[***]”. A COMPLETE VERSION OF THIS
EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECRETARY OF THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO AN APPLICATION REQUESTING CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 PROMULGATED UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00285-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00285-of-00352.parquet"}]]