PARENT GUARANTEE AGREEMENT
This PARENT
GUARANTEE AGREEMENT (this “ Agreement ”),
dated as of May 25, 2007, is entered into between International
Business Machines Corporation, a New York corporation, (“
Guarantor ”) and [SELLER] (“ Seller
”) and contains a guarantee made by Guarantor in favor of
Seller.
W I T N E S S E T H:
WHEREAS , Guarantor
is the issuer of shares of common stock, par value $0.20 per share
(Ticker: IBM) (“ Shares ”);
WHEREAS , IBM
International Group B.V. (“ Company ”) and
Seller have entered into a Cover Letter for Accelerated Share
Repurchase dated as of May 25, 2007, including a Schedule of
Standard Terms and Conditions attached thereto, (together, the
“ Accelerated Share Repurchase Agreement ”),
pursuant to which, Company and Seller may enter into a transaction
to purchase and sell Shares upon the terms and subject to the
conditions set forth therein (the “ Transaction
”);
WHEREAS , it is a
condition precedent to the effectiveness of the Transaction that
Guarantor shall have executed and delivered this Agreement to
Seller;
NOW, THEREFORE , in
consideration of the premises and to induce Seller to enter into
the Accelerated Share Repurchase Agreement, Guarantor hereby agrees
with Seller, for the benefit of Seller, as follows:
ARTICLE
1
DEFINED TERMS
Section 1.01
. Definitions. (a) Unless otherwise defined
herein, terms defined in the Accelerated Share Repurchase Agreement
are used herein as therein defined.
(b)
The following terms have the following meanings:
“
Accelerated Share Repurchase Agreement ”: has the
meaning set forth in the introductory paragraph hereof.
“
Agreement ”: has the meaning set forth in the
introductory paragraph hereof.
“
Company ”: has the meaning set forth in the
introductory paragraph hereof.
“
Exchange Act ”: has the meaning set forth in Section
3.01.
“
Guarantor ”: has the meaning set forth in the
introductory paragraph hereof.
“
Seller ”: has the meaning set forth in the
introductory paragraph hereof.
“
Shares ”: has the meaning set forth in the
introductory paragraph hereof.
“
Transaction ”: has the meaning set forth in the
introductory paragraph hereof.
ARTICLE
2
GUARANTEE
Section 2.01
. Guarantee. Guarantor hereby unconditionally
and irrevocably guarantees to Seller, for the benefit of Seller,
the prompt and complete payment and performance when due of the
obligations of Company under the Accelerated Share Repurchase
Agreement (including, without limitation, any obligation Company
may have under the Settlement provisions of the Accelerated Share
Repurchase Agreement), as may be further modified, amended or
supplemented from time to time (collectively, the “
Obligations ”). Any amounts or deliveries that
would be owed or become due by Company to Seller under the
Accelerated Share Repurchase Agreement but are unenforceable
or not allowable against Company because Company is the subject of
a bankruptcy, liquidation, reorganization or similar case or
proceeding, shall nonetheless be deemed owed or due for the
purposes of this Article. Seller shall not be obligated to
file any claim relating to the Obligations in the event Company
becomes subject to a bankruptcy, liquidation, reorganization or
similar case or proceeding, and the failure by Seller to so file
shall not affect Guarantor’s obligations
hereunder.
(a)
This Article is a guarantee of payment and performance when due and
not of collection. Guarantor agrees that Seller may resort to
Guarantor for payment or performance of any of the Obligations,
whether or not Seller shall have proceeded or attempted to proceed
against Company or any other entity principally or secondarily
obligated with respect to the Obligations.
(b)
Guarantor’s obligations under this Article shall continue to
be effective or be reinstated, as the case may be, if at any time
any payment or performance of any of the Obligations is rescinded
or must otherwise be returned by Seller upon or as a result of the
insolvency, bankruptcy, liquidation or reorganization of Company or
otherwise, all as though such payment or performance had not been
made.
Section 2.02
. Guarantee Absolute and Unconditional.
Guarantor guarantees that the Obligations will be performed
strictly in accordance with the
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provisions of this
Agreement and the Accelerated Share Repurchase Agreement,
regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such provisions or the
rights of Seller with respect thereto. The liability of
Guarantor under this Article shall be irrevocable, absolute and
unconditional irrespective of, and Guarantor hereby irrevocably
waives, any defenses it may now or hereafter have (including any
defense based on the failure to provide notice to or obtain the
consent of Guarantor) in any way relating to, any or all of the
following:
(a)
lack of validity or enforceability of this Agreement or the
Accelerated Share Repurchase Agreement;
(b)
the entry into additional transactions, any indulgence, concession,
waiver or consent given to Company, or any other changes in the
amount of, time, manner or place of payment of, or in any other
term of any or all of the Obligations;
(c)
any change, restructuring or termination in or of the structure or
existence of Company; or
(d)
any other circumstance (including, without limitation, any statute
of limitations) that might otherwise constitute a defense available
to, or a discharge of, Guarantor or Company.
Section 2.03
. Waiver and Acknowledgements. (a) Guarantor
hereby waives promptness, diligence, demand for performance, notice
of acceptance, presentment, protest, non-performance, default,
acceleration, early termination, protest or dishonor, any other
notice with respect to any of the Obligations and this Article, and
any requirement that Seller exhaust any right or take any action
against Guarantor or any other entity.
(b)
Guarantor
hereby waives any right to revoke this guarantee, and acknowledges
that its obligations under this Article is continuing in nature and
applies to all Obligations, whether existing now or in the
future.
(c)
Guarantor hereby waives (i) any defense arising by reason of any
claim or defense based upon an election of remedies by Seller that
in any manner impairs, reduces, releases or otherwise adversely
affects Guarantor’s subrogation, reimbursement, exoneration,
contribution or indemnification rights or other rights to proceed
against Company, any other guarantor or any other entity, and (ii)
any defense based on any right of set-off or counterclaim against
or in respect of Guarantor’s obligations under this
Article.
Section 2.04
. Subrogation. Guarantor will not exercise any
rights that it may now have or hereafter acquire against Company or
any other guarantor that arise from the existence, payment,
performance or enforcement of Guarantor’s obligations under
this Article, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or
indemnification and any
3
right to participate in
any claim or remedy of Seller against Company or any other
guarantor, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, including, without
limitation, the right to take or receive from Company or any other
guarantor, directly or indirectly, in cash or other property, by
set-off or in any other manner, payment on account of such claim,
remedy or right, unless and until all of the Obligations shall have
been finally and irrevocably satisfied in full. If any amount
shall be paid to Guarantor in violation of the preceding sentence
at any time prior to the final and irrevocable payment or
performance in full of all of the Obligations, such amount shall be
held in trust for the benefit of Seller and shall forthwith be paid
to Seller to be (at the election of Seller) credited and applied to
the Obligations, whether matured or unmatured, in accordance with
the terms of this Agreement and the Accelerated Share Repurchase
Agreement.
ARTICLE
3
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF GUARANTOR
Section 3.01
. Representations, Warranties and Agreements of
Guarantor.
(a)
Guarantor represents and warrants to Seller that it is duly
organized and validly existing under the laws of the jurisdiction
of its organization or incorporation and, if relevant under such
law, in good standing.
(b)
Guarantor represents and warrants to Seller that (i) it has all
corporate power and authority to enter into this Agreement and (ii)
this Agreement has been duly authorized and validly executed and
delivered by Guarantor and constitutes a valid and legally binding
obligation of Guarantor, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws
affecting creditors’ rights generally and to general
equitable principles.
(c)
Guarantor represents and warrants to Seller that the execution and
delivery by Guarantor of, and the compliance by the Guarantor with
all of the provisions of, this Agreement and the consummation of
the Transaction will not (i) conflict with or result in a breach of
any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or any other
agreement or instrument to which Guarantor or any of its
subsidiaries is a party or by which Guarantor or any of its
subsidiaries is bound or to which any of the property or assets of
Guarantor or any of its subsidiaries is subject, and which
conflict, breach or default has a material adverse effect on the
Guarantor and its subsidiaries taken as a whole or (ii) result in
any violation of the provisions of the Certificate of Incorporation
or By-laws or other constitutive documents of Guarantor or any
statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over Guarantor or
any of its subsidiaries or any of their respective
properties.
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(d)
Guarantor represents and warrants to Seller that, except as
contemplated by clause (e) below, no consent, approval,
authorization, order, registration, qualification or filing of or
with any court or governmental agency or body having jurisdiction
over Guarantor or any of its subsidiaries or any of their
respective properties is required for the execution and delivery by
Guarantor of, and the performance by Guarantor of all its
obligations under this Agreement or the consummation by
Guarantor of the transaction contemplated hereby.
(e)
Guarantor represents and warrants to Seller that Guarantor has made
as of June 1, 2007, and agrees that it shall use its best efforts
during the Averaging Period and the Valuation Period (if any) to
make, all filings, if any, required to be made by it with the
Securities and Exchange Commission, any securities exchange or any
other regulatory body with respect to the existence and terms of
the Transaction.
(f)
Guarantor represents and warrants to Seller as of the date hereof
and agrees that as of the date, if any, that Company delivers a
Company Election Notice to Seller choosing Share Settlement,
neither Guarantor nor any of its officers and directors is, or will
be, as the case may be, aware of any material nonpublic information
regarding Guarantor or the Shares.
(g)
Guarantor represents and warrants to Seller as of June 1, 2007 and
agrees that as of the date, if any, that Company delivers a Company
Election Notice to Seller choosing Share Settlement, all reports
and other documents filed by Guarantor with the Securities and
Exchange Commission pursuant to the Exchange Act when considered as
a whole (with the more recent such reports and documents deemed to
amend inconsistent statements contained in any earlier such reports
and documents), do not, or will not, as the case may be, contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading.
(h) &nbs
