Exhibit(5)
[LETTERHEAD OF INTERNATIONAL BUSINESS MACHINES CORPORATION]
January 13, 1999
Ladies & Gentlemen:
As Vice President and Assistant General Counsel of International
Business Machines Corporation (the "Company") and an attorney duly admitted to
practice in the State of New York, I am giving this opinion in connection with
the proposed issuance and sale from time to time pursuant to Rule 415 under the
Securities Act of 1993 (the "Securities Act") of up to $5,115,000,000 of senior
or subordinated debt securities of the Company, to be issued under an Indenture
dated as of October 1, 1993, as supplemented by the First Supplemental Indenture
thereto dated as of December 15, 1995 (the "Senior Indenture"), between the
Company and The Chase Manhattan Bank (the "Senior Trustee") or an Indenture (the
"Subordinated Indenture") to be entered into between the Company and a Trustee
(the "Subordinated Trustee"), preferred stock (the "Preferred Stock") of the
Company, depositary shares (the "Depositary Shares") of the Company representing
a fractional interest in a share of Preferred Stock, capital stock (the "Capital
Stock") of the Company and/or warrants to purchase Debt Securities, Preferred
Stock or Capital Stock (the "Warrants") of the Company (the Debt Securities,
Preferred Stock, Depositary Shares, Capital Stock and Warrants are collectively
referred to herein as the "Securities").
I, together with competent members of my legal staff acting under my
direct supervision and control, have examined the Certificate of Incorporation
of the Company, as amended; the By-laws of the Company, the Senior Indenture;
and the forms of Subordinated Indenture and Deposit Agreement (the "Deposit
Agreement") filed as Exhibits to the Registration Statement. In addition, I am
familiar with the proceedings by which such instruments and the transactions
contemplated thereby were authorized by the Company.
Based upon and subject to the foregoing and assuming that (i) the
Registration Statement and any amendments thereto (including post-effective
amendments) will have become effective and comply with all applicable laws; (ii)
the Registration Statement will be effective and will comply with all applicable
laws at the time the Securities are offered or issued as contemplated by the
Registration Statement; (iii) a Prospectus Supplement, Pricing Supplement or
term sheet will have been prepared and file with the Securities and Exchange
Commission describing the Securities offered thereby and will comply with all
applicable laws; (iv) all Securities will be issued and sold in compliance with
applicable federal and state securities laws and in the manner
stated in the Registration Statement and the appropriate Prospectus Supplement;
(v) a definitive purchase, underwriting or similar agreement with respect to any
Securities offered or issued will have been duly authorized and validly executed
and delivered by the Company and the other parties thereto; and (vi) any
Securities issuable upon conversion, exchange or exercise of any Security being
offered or issued will be duly authorized, created and, if appropriate, reserved
for issuance upon such conversion, exchange or exercise, I am of the opinion
that:
(1) the Company has been duly incorporated and is a validly existing
corporation under the laws of the State of New York.
(2) with respect to Debt Securities to be issued under either the
Senior Indenture or Subordinated Indenture, when (A) the Senior Trustee or
Subordinated Trustee, as applicable, is qualified to act as Senior Trustee or
Subordinated Trustee, as applicable, under the Senior Indenture or Subordinated
Indenture, as applicable, (B) the Senior Trustee or Subordinated Trustee, as
applicable, has duly executed and delivered the Subordinated Indenture or Senior
Indenture, as applicable, (C) the Senior Indenture or Subordinated Indenture, as
applicable, has been duly authorized and validly executed and delivered by the
Company to the Senior Trustee or Subordinated Trustee, as applicable, (D) the
Senior Indenture or Subordinated Indenture, as applicable, has been duly
qualified under the Trust Indenture Act of 1939, as amended, (E) the Board of
Directors of the Company or a duly constituted and acting committee thereof
(such Board of Directors or committee being hereinafter referred to as the
"Board") ha taken all necessary corporate action to approve the issuance and
terms of such Debt Securities, the terms of the offering thereof and related
matters, and (F) such Debt Securities have been duly executed, authenticated,
issued and delivered in accordance with the provisions of the Senior Indenture
or Subordinated Indenture, as applicable, and the applicable definitive
purchase, underwriting or similar agreement approved by the Board upon payment
of the consideration therefor provided for therein, such Deb Securities will be
validly issued and will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms (subject to
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws in effect and subject to general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law);
(3) with respect to shares of Preferred Stock, when both (A) the Board
has taken all necessary corporate action to approve the issuance and terms of
the shares of Preferred Stock, the terms of the offering thereof, and related
matters, including the adoption of a Certificate of Amendment relating to such
Preferred Stock (a "Certificate") and the filing of the Certificate with the
Secretary of State of the State of New York, and (B) certificates representing
the shares of Preferred Stock have bee duly executed, countersigned, registered
and delivered either (i) in accordance with the applicable definitive purchase,
underwriting or similar agreement approved by the Board upon payment of the
consideration therefor (not less than the par value of the Preferred Stock)
provided for therein or (ii) upon conversion or exercise of such Security or the
instrument governing such Security providing for such conversion or exercise as
approved by the Board, for the consideration approved by the Board (not less
than the par value of the Preferred Stock), then the shares of Preferred Stock
will be validly issued, fully paid and nonassessable;
(4) with respect to Depositary Shares, when (A) the Board has taken all
necessary corporate action to approve the issuance and terms of the Depositary
Shares, the terms of the offering thereof, and related matters, including the
adoption of a Certificate relating to the Preferred Stock underlying such
Depositary Shares and the filing of the Certificate with the Secretary of State
of the State of New York, (B) the Deposit Agreement or Agreements relating to
the Depositary Shares and the related Depositary Receipts have been duly
authorized and validly executed and delivered by the Company and the Depositary
appointed by the Company, (C) the shares of Preferred Stock underlying such
Depositary Shares have been deposited with a bank or trust company (which meets
the requirements for the Depositary set forth in the Registration Statement)
under the applicable Deposit Agreement, and (D) the Depositary Receipts
representing the Depositary Shares have been duly executed, countersigned,
registered and delivered in accordance with the appropriate Deposit Agreement
and the applicable definitive purchase, underwriting or similar agreement
approved by the Board upon payment of the consideration therefor provided for
therein, the Depositary Shares will be validly issued;
(5) with respect to shares of Capital Stock, when both (A) the Board
has taken all necessary corporate action to approve the issuance of and the
terms of the offering of the shares of Capital Stock and related matters and (B)
certificates representing the shares of Capital Stock have been duly executed,
countersigned, registered and delivered either (i) in accordance with the
applicable definitive purchase, underwriting or similar agreement approved by
the Board upon payment of the consideration therefor (not less than the par
value of the Capital Stock) provided for therein or (ii) upon conversion or
exercise of any other Security, in accordance with the terms of such Security or
the instrument governing such Security providing for such conversion or exercise
as approved by the Board, for the consideration approved by the Board (not less
than the par value of the Capital Stock), then the shares of Capital Stock will
be validly issued, fully paid and nonassessable; and
(6) with respect to the Warrants, when (A) the Board has taken all
necessary corporate action to approve the creation of and the issuance and terms
of the Warrants, the terms of the offering thereof, and related matters, (B) the
Warrant Agreement or Agreements relating to the Warrants have been duly
authorized and validly executed and delivered by the Company and the Warrant
Agent appointed by the Company, and (C) the Warrants or certificates
representing the Warrants have been duly executed, countersigned, registered and
delivered in accordance with the appropriate Warrant Agreement or Agreements and
the applicable definitive purchase, underwriting or similar agreement approved
by the Board upon payment of the consideration therefor provided for therein,
the Warrants will be validly issued.
I understand that I may be referred to, as counsel who has passed upon
the validity of the Debt Securities or the issuance of the Preferred Stock,
Depositary Shares, Capital Stock or Warrants on behalf of the Company, in a
supplement to the Prospectus forming a part of the Registration Statement on
Form S-3 relating to the Securities filed with the Securities and Exchange
Commission pursuant to the Securities Act, and I hereby consent to such use of
my name in said Registration Statement and to the use of this opinion for filing
with said Registration Statement as Exhibit (5) thereto.
Very truly yours,
/s/ David S. Hershberg
David S. Hershberg