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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY , 1997
REGISTRATION NO. 333-24201
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BAAN COMPANY N.V.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
THE NETHERLANDS 7372 NOT APPLICABLE
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) NUMBER)
</TABLE>
BAAN COMPANY N.V.
VANENBURGERALLEE 13
3882 RH PUTTEN
THE NETHERLANDS
011-31-341-375555
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
WIM H. HEIJTING
BAAN COMPANY N.V.
C/O BAAN USA, INC.
4600 BOHANNON DRIVE
MENLO PARK, CALIFORNIA 94025
(415) 462-4949
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES OF ALL COMMUNICATIONS SHOULD BE SENT TO:
MARK A. BERTELSEN, ESQ.
HOWARD S. ZEPRUN, ESQ.
WILSON, SONSINI, GOODRICH & ROSATI
650 PAGE MILL ROAD
PALO ALTO, CA 94304-1050
(415) 493-9300
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.
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SUBJECT TO COMPLETION DATED MAY 9, 1997
PROSPECTUS
$113,550,000
BAAN COMPANY N.V.
4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2001
This Prospectus relates to $113,550,000 aggregate principal amount of 4.5%
Convertible Subordinated Notes due 2001 (the "Registrable Notes") of Baan
Company N.V. ("Baan" or the "Company") which were originally sold by the Company
in December 1996 otherwise than in reliance on Regulation S (the "Registrable
Notes") under the Securities Act of 1933, as amended (the "Securities Act"), and
the shares of the Company's common stock, par value NLG .01 per share ("Common
Stock"), issuable upon conversion of the Registrable Notes. The Registrable
Notes registered hereby were issued and sold in December 1996 and January 1997
(the "Original Offering") in transactions exempt from the registration
requirements of the Securities Act, to persons reasonably believed by Deutsche
Morgan Grenfell Inc., as the initial purchaser (the "Initial Purchaser") of the
Registrable Notes, to be "qualified institutional buyers" (as defined by Rule
144A under the Securities Act) or other institutional "accredited investors" (as
defined in Rule 501(a)(1), (2), (3) or (7) under Regulation D of the Securities
Act). An additional $86,450,000 aggregate principal amount of 4.5% Convertible
Subordinated Notes due 2001 (the "Bearer Notes") were issued by the Company in
the Original Offering and sold by the Initial Purchaser in compliance with the
provisions of Regulation S under the Securities Act (the Registrable Notes and
Bearer Notes are collectively referred to as the "Notes"). The Registrable Notes
and the Common Stock issuable upon conversion thereof may be offered and sold
from time to time by the holders named from time to time in one or more
supplements hereto or by their transferees, pledgees, donees or their successors
(collectively, the "Selling Holders") pursuant to this Prospectus. The
Registration Statement of which this Prospectus is a part has been filed with
the Securities and Exchange Commission pursuant to a registration rights
agreement dated as of December 15, 1996 (the "Registration Rights Agreement")
between the Company and the Initial Purchaser, entered into in connection with
the Original Offering.
The Registrable Notes are convertible into shares of Common Stock at any
time prior to the close of business on the maturity date, unless previously
redeemed or repurchased, at a conversion price of $44.00 per share (equivalent
to a conversion rate of 22.73 shares per $1,000 principal amount of Registrable
Notes), subject to adjustment in certain events. On May , 1997, the closing
price of the Common Stock, which is listed on the Nasdaq National Market under
the symbol "BAANF," was $ per share.
Interest on the Registrable Notes is payable on June 15 and December 15 of
each year, commencing on June 15, 1997. Principal and interest payments will be
made without any deduction for withholding taxes of The Netherlands, except to
the extent described under "Description of Notes -- Payment of Additional
Amounts." The Notes are redeemable by the Company in the event of certain
developments involving withholding taxes of The Netherlands. See "Description of
Notes -- Redemption -- Redemption for Taxation Reasons." Otherwise, the Notes
are not redeemable by the Company prior to December 16, 1998. On or after
December 16, 1998 and prior to December 16, 1999, the Notes may be redeemed at
the option of the Company, in whole or, from time to time, in part, at the
then-applicable redemption price plus accrued interest, if the closing price of
the Common Shares shall have exceeded 140% of the conversion price then in
effect for 20 trading days within a period of 30 consecutive trading days ending
within five trading days prior to the notice of redemption. See "Description of
Notes -- Redemption -- Optional Redemption." On or after December 16, 1999, the
Notes will be redeemable at the option of the Company, in whole, or from time to
time, in part, at the redemption prices set forth in this Prospectus, plus
accrued interest. The Registrable Notes are not entitled to any sinking fund.
The Notes will mature on December 15, 2001. The Registrable Notes issued and
sold in the Original Offering in reliance on Rule 144A have been designated for
trading on the PORTAL System of the National Association of Securities Dealers,
Inc. Registrable Notes sold pursuant to the Registration Statement of which this
Prospectus forms a part will not following such sale be eligible for trading on
the PORTAL System. The Bearer Notes and the Company's Common Stock are also
traded on the Amsterdam Stock Exchange.
In the event of a Fundamental Change, subject to certain limitations, each
holder of Notes may require the Company to repurchase its Notes, in whole or in
part, for cash, at a repurchase price equal to the then-applicable redemption
price, subject to adjustment in certain events as described herein, plus accrued
interest. See "Description of Notes -- Repurchase at Option of Holders Upon a
Fundamental Change."
The Notes are unsecured obligations, subordinated in right of payment to all
existing and future Senior Indebtedness (as defined) of the Company and are
effectively subordinated in right of payment to all indebtedness and other
liabilities of the Company's subsidiaries. See "Description of
Notes -- Subordination."
The Registrable Notes and the Common Stock issuable upon conversion of the
Registrable Notes may be sold by the Selling Holders from time to time directly
to purchasers or through agents, underwriters or dealers. See "Selling Holders"
and "Plan of Distribution." If required, the names of any such agents or
underwriters involved in the sale of the Registrable Notes and the Common Stock
issuable upon conversion of the Registrable Notes in respect of which this
Prospectus is being delivered and the applicable agent's commission, dealer's
purchase price or underwriter's discount, if any, will be set forth in an
accompanying supplement to this prospectus (the "Prospectus Supplement").
The Selling Holders will receive all of the net proceeds from the sale of
the Registrable Notes and the Common Stock issuable upon conversion of the
Registrable Notes and will pay all underwriting discounts and selling
commissions, if any, applicable to the sale of the Registrable Notes and the
Common Stock issuable upon conversion of the Registrable Notes. The Company is
responsible for payment of all other expenses incident to the offer and sale of
the Registrable Notes and the Common Stock issuable upon conversion of the
Registrable Notes.
The Selling Holders and any broker-dealers, agents or underwriters which
participate in the distribution of the Registrable Notes and the Common Stock
issuable upon conversion of the Registrable Notes may be deemed to be
"underwriters" within the meaning of the Securities Act, and any commission
received by them and any profit on the resale of the Registrable Notes and
Common Stock issuable upon conversion of the Registrable Notes purchased by them
may be deemed to be underwriting commissions or discounts under the Securities
Act. See "Plan of Distribution" for a description of indemnification
arrangements.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY INVESTORS
IN EVALUATING AN INVESTMENT IN THE SECURITIES OFFERED HEREBY, SEE "RISK FACTORS"
ON PAGE 8.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS MAY , 1997.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
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ENFORCEABILITY OF CIVIL LIABILITIES
The Company is a Netherlands corporation and a substantial portion of the
Company's assets are located outside the United States. In addition, members of
the Management and Supervisory Boards of the Company and certain experts named
herein are residents of countries other than the United States. As a result, it
may not be possible for investors to effect service of process within the United
States upon such persons or to enforce against such persons or the Company
judgments of courts of the United States predicated upon civil liabilities under
the United States federal securities laws. Since there is no treaty between the
United States and The Netherlands providing for the reciprocal recognition and
enforcement of judgments, U.S. judgments are not automatically enforceable in
The Netherlands. However, a final judgment for the payment of money obtained in
a U.S. court and not rendered by default, which is not subject to appeal or any
other means of contestation and is enforceable in the United States, would in
principle be upheld and be regarded by a Netherlands court of competent
jurisdiction as conclusive evidence when asked to render a judgment in
accordance with such final judgment by a U.S. court, without substantive
re-examination or relitigation on the merits of the subject matter thereof,
provided that the competent Netherlands court finds that the jurisdiction of the
U.S. court has been based on grounds which are internationally acceptable, that
such judgment has been rendered in accordance with rules of proper procedure,
that it has not been rendered in proceedings of a penal or revenue nature and
that its content and possible enforcement are not contrary to public policy or
public order of The Netherlands. Notwithstanding the foregoing, there can be no
assurance that United States investors will be able to enforce against the
Company, or members of the Management or Supervisory Boards or certain experts
named herein who are residents of The Netherlands or countries other than the
United States, any judgments in civil and commercial matters, including
judgments under the federal securities laws. In addition, there is doubt as to
whether a Netherlands court would impose civil liability on the Company or on
the members of the Management or Supervisory Boards of the Company and certain
experts named herein in an original action predicated solely upon the federal
securities laws of the United States brought in a court of competent
jurisdiction in The Netherlands against the Company or such members.
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), as applicable to foreign
private issuers, and in accordance therewith files reports and other information
with the Securities and Exchange Commission (the "Commission"). Such reports and
other information can be inspected and copied at the offices of the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
as well as the following regional offices of the Commission: Northwestern
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661;
and 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates. Such
reports, proxy statements and other information concerning the Company may be
inspected at the office of the National Association of Securities Dealers, Inc.,
1735 K Street, N.W., Washington, D.C. 20006. The Commission maintains a World
Wide Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.
The address of the site is http://www.sec.gov. In addition, certain of the
Company's securities are listed on the Nasdaq National Market and the Amsterdam
Stock Exchange, and the aforementioned material may also be inspected at the
offices of such exchanges. At the Amsterdam Stock Exchange, all notices in
respect of the Notes will be published in the Official Price List (De Officiele
Prijs-Courant van de Vereniging voor de Effectenhandel).
The Company has filed with the Commission a registration statement on Form
F-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act") with respect to the offering of the Registrable Notes and the
Common Stock issuable upon conversion thereof made hereby. This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information with respect to the Company and the
Securities, reference is hereby made to the Registration Statement.
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In addition, the most recently filed annual report and audited statutory
annual accounts and a copy of the current Articles of Association of the Company
are available upon request, free of charge, during normal business hours at the
offices of ABN AMRO Bank N.V., Herengracht 595, 1017 CE Amsterdam, The
Netherlands. In addition, other documents mentioned in this Prospectus are
available for inspection at the Company's offices in The Netherlands at
Vanenburgerallee 13, 3882 RH Putten, The Netherlands. The Company is registered
with the Trade Register of the Chamber of Commerce and Industry at Arnhem, The
Netherlands, under number 09048765.
The Company has agreed that if, at any time while the Registrable Notes or
the Common Shares issuable upon conversion of the Notes are "restricted
securities" within the meaning of the Securities Act, the Company is not subject
to the reporting requirements of the Exchange Act, the Company will promptly
furnish or cause to be furnished upon request of a Holder of restricted
securities and to qualified prospective purchasers designated by such Holders,
the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act, to the extent required to permit compliance with Rule 144A in
connection with resales of Notes and such Common Shares.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
1. The Company's Annual Report on Form 20-F for the year ended
December 31, 1996;
2. The Company's Report on Form 6-K dated January 15, 1997
relating to the Company's public announcement of the
Original Offering; and
3. The Company's Report on Form 6-K dated May 1, 1997 relating
to the Company's Annual General Meeting of Shareholders to
be held on May 20, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c) or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Notes shall be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing
such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the request of such person, a copy of any or all
of the foregoing documents incorporated herein by reference, other than exhibits
to such documents (unless such exhibits are specifically incorporated by
reference into such documents). Requests for such documents should be directed
to the Company's headquarters in The Netherlands at Vanenburgerallee 13, 3882 RH
Putten, The Netherlands, Attention: Chief Financial Officer, or to the Company's
headquarters in the United States at 4600 Bohannon Drive, Menlo Park, CA 94025,
U.S.A., Attention: Investor Relations Manager.
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SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements and notes thereto appearing elsewhere in
this Prospectus or incorporated herein by reference.
THE COMPANY
Baan Company N.V. is a leading provider of open systems,
client/server-based enterprise business software used by organizations worldwide
to manage company resources and coordinate enterprise-wide functions such as
sales forecasting, inventory control, procurement, distribution, finance and
project management. The Company's BAAN IV software is designed to allow
businesses of all sizes to adapt quickly to changes in the market, thereby
enabling them to maintain a competitive advantage in the management of their
critical business processes. It is also designed for rapid implementation and
easy adaptation, and reconfiguration in response to changing organizational
needs and technological advances. The Company currently has more than 2,200
customers worldwide, including Asea Brown Boveri Group, The Boeing Company,
Fujitsu-ICL Systems, Inc., George Weston Foods Ltd., Hitachi Ltd., Levi Strauss
Europe, Mercedes Benz US International, Inc., Northern Telecom Limited, Noranda
Aluminum, Inc., Solectron Corporation, Oki Electric Industry Co. Ltd., Philips
Medical Systems Nederland B.V., and Snap-on Incorporated. The Company sells and
supports its products through direct and indirect distribution channels in 59
countries. The Company also has developed relationships with leading global
providers of implementation and customization services, including the systems
consulting groups of major public accounting firms such as KPMG Peat Marwick and
systems integrators such as Cap Gemini Sogeti, IBM Global Services and Origin
International.
THE OFFERING
Securities Offered for
Resale........................ $113,550,000 principal amount of 4.5%
Convertible Subordinated Notes due 2001 (the
"Registrable Notes") (of a total initial
offering of $200,000,000 principal amount of
Notes including Notes sold to non-U.S.
investors under Regulation S).
Interest Payment Dates........ June 15 and December 15, commencing June 15,
1997.
Conversion.................... The Registrable Notes are convertible into
Common Shares at any time prior to the close of
business on the maturity date, unless
previously redeemed or repurchased, at a
conversion price of $44.00 per share
(equivalent to a conversion rate of
approximately 22.73 shares per $1,000 principal
amount of Registrable Notes), subject to
adjustment.
Subordination................. The Registrable Notes are subordinated in right
of payment to all existing and future Senior
Indebtedness (as defined). As of March 31,
1997, the aggregate amount of outstanding
Senior Indebtedness was approximately $46
million (including a notional amount of
approximately $44 million of foreign currency
forward contracts). The Notes are also
structurally subordinated to the liabilities,
including trade payables, of the Company's
subsidiaries, and the Company is a holding
company and conducts substantially all of its
operations through subsidiaries. The Indenture
does not restrict the incurrence of additional
Senior Indebtedness or other indebtedness by
the Company or any of its subsidiaries. Under
Netherlands law, in the event of an insolvency
of the Company, the Notes may be effectively
subordinated to both the Senior Indebtedness
and all other non-secured and unsubordinated
claims against the Company.
Optional Redemption........... Except as described below under "Additional
Amounts and Redemption for Taxation Reasons,"
the Notes are not redeemable by
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the Company prior to December 16, 1998. On or
after December 16, 1998 and prior to December
16, 1999, the Notes may be redeemed at the
option of the Company in whole, or from time to
time, in part, at the then-applicable
redemption price plus accrued interest, if the
closing price of the Common Shares shall have
exceeded 140% of the conversion price then in
effect for 20 trading days within a period of
30 consecutive trading days ending within five
trading days prior to the notice of redemption.
On or after December 16, 1999, the Notes may be
redeemed at the option of the Company in whole,
or from time to time, in part, at any time, at
the redemption prices set forth in this
Prospectus, plus accrued interest.
Additional Amounts and
Redemption for Taxation
Reasons..................... The Company will pay Additional Amounts (as
defined), subject to certain exceptions, in
order that the Holders of Notes or coupons
receive the full amount of the principal,
premium, if any, and interest specified therein
(including any amount payable under a
repurchase of the Notes as described
immediately below under "Repurchase at Option
of Holders Upon a Fundamental Change") without
deduction for or on account of withholding
taxes of The Netherlands. In the event that the
Company must pay such Additional Amounts as a
result of a change in law, the affected Notes
will be redeemable at the option of the
Company, as a whole but not in part, at 100% of
the principal amount thereof, plus any accrued
interest to the redemption date and any
Additional Amounts then payable.
Repurchase at Option of
Holders Upon a Fundamental
Change...................... In the event of a Fundamental Change (as
defined), each Holder of Notes may require the
Company to repurchase its Notes, in whole or in
part, for cash, at a repurchase price equal to
the then applicable redemption price, subject
to adjustment in certain events as described
herein, plus accrued interest.
Use of Proceeds............... The Company will not receive any of the
proceeds from the resale of the Registrable
Notes or the Common Stock issuable upon
conversion thereof by the Selling Holders.
Registration Rights........... Upon any failure by the Company to comply with
certain of its obligations under the
Registration Rights Agreement (as defined),
additional interest will be paid on the Notes
and any Common Stock issued upon conversion
thereof.
Listing; Form and
Denomination.................. The Registrable Notes issued in the Original
Offering in reliance on Rule 144A have been
designated for trading on the PORTAL System.
Registrable Notes sold pursuant to the
Registration Statement of which this Prospectus
is a part will not remain eligible for trading
on the PORTAL System. The Notes are also listed
on the Amsterdam Stock Exchange. Bearer Notes
may be exchanged at the option of the Holder
for Registrable Notes, but Registrable Notes
may not be exchanged for Bearer Notes as a
result of certain securities law and tax
restrictions.
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THE COMPANY
Baan is a leading provider of business management software for an open
systems, client/server computing environment. Companies of all sizes around the
world use Baan's software to control and automate business processes, ranging
from accounting, order management and inventory procurement, to manufacturing
and finished-goods delivery. Baan's software is targeted to companies needing to
respond quickly to today's competitive global marketplace. The Company's
products are targeted at organizations focused on increasing their market
advantage by continually improving business processes. While its products have
the functional depth for many market segments, the Company has optimized its
products, services, and marketing efforts for key players and their entire
supply/demand chain in four industries: automotive; electronics; process; and
project-based industries, including heavy equipment manufacturing, project
services, and aerospace and defense. Baan selected these markets based on three
factors: well defined supply and demand chains; a focus on industry best
practices; and market dynamics that require continuous assessment and
re-assessment of business processes and the underlying information technology
(IT) infrastructure. Baan actively works with industry leaders in each market
sector to help insure that the Company offers a highly competitive product which
closely meets that industry's unique requirements.
The cornerstone of Baan's strategy is to deliver scaleable, flexible
solutions, which can be rapidly implemented and deliver a clear return on
investment. To do this, the Company focuses on intuitive, graphical business
modeling as a starting point for software implementation. As a result, Baan's
software typically can be configured and implemented in as short a time period
as three to twelve months, which the Company believes provides it with a
competitive advantage. In addition, ongoing adjustments can be made to the
system in response to changing market demands and changes in production and
operational processes -- a capability which the Company calls "Dynamic
Enterprise Modeling." According to leading market analysts such as Aberdeen
Group, Advanced Manufacturing Research, Forrester Research, Gartner Group and
Patricia Seybold Group, rapid implementation and capabilities for ongoing system
re-configuration are critical differentiators for Baan's market space.
Baan's software is flexible and can be successfully used in a variety of
business, computing, and manufacturing environments. It offers functionality for
a broad range of manufacturing practices: from make-to-stock to
engineer-to-order manufacturing; single or multi-site environments located in
one or multiple countries; support for an individual assembler or an entire
supply chain; and large or small computing environments running on a broad range
of platforms.
Supported by a decentralized research and development organization, Baan
has adopted a strategy of periodically reinventing its products -- rather than
increasing the complexity of its software by adding layers of code as upgrades
are developed. The Company believes this enables the consistent delivery of
state-of-the-art solutions meeting the requirements of the "extended
enterprise." Baan commenced shipment of its first information systems in The
Netherlands in 1982, and since that time has introduced several new generations
of products. Today, the Company is shipping BAAN IV, consisting of Baan
Applications, Orgware and Baan Tools.
- Baan Applications includes more than 100 integrated software modules for
seven broad areas: manufacturing, constraint planning, distribution and
transportation, finance, service management, project management, and
process manufacturing.
- Orgware is a set of tools, templates, and methodologies for business
modeling and rapid software implementation. Orgware is the linchpin in
Baan's vision for delivering Dynamic Enterprise Modeling, which the
Company believes to be a key competitive differentiator.
- Baan Tools is a fourth generation language (4GL) software development
toolset used by Baan, its implementation providers, and end user
customers to develop and modify Baan Applications.
Over the past several years, the Company has significantly expanded its
sales and service presence in North American, Latin American and certain
European and Far Eastern markets. The Company's net revenues have grown from
$122.9 million in 1994 to $388.0 million in 1996. The Company's overall number
of employees has more than doubled from 943 persons at December 31, 1994 to
2,389 at December 31, 1996.
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The Company manages its business operations through corporate headquarters
in Putten, The Netherlands and Menlo Park, California, as well as through
regional sales and operational offices. Products are sold and supported through
both direct and indirect channels in 59 countries. To augment its own offerings
and infrastructure, the Company has partnered with leading technology and
service providers. This includes implementation and value-added resale partners,
such as Compuware Corporation, Origin International, IBM Global Services, and
KPMG Peat Marwick, and technology partnerships with Digital Equipment
Corporation, IBM, Compaq Computer Corporation, Hewlett-Packard Company, Informix
Software, Inc., Intel Corporation, Microsoft Corporation, and Sun Microsystems,
Inc. In 1996, the Company acquired Berclain Group Inc. (Berclain), a provider of
manufacturing synchronization and scheduling software used to synchronize
manufacturing across the supply chain, and Antalys, Inc. (Antalys) which
provides software that enables a company's sales force to accurately and rapidly
configure and price products and services.
The Company has licensed more than 3,500 system installations to date to
more than 2,200 customers worldwide within its targeted markets. Customers
include Asea Brown Boveri Group, The Boeing Company, British Aerospace Limited,
Fujitsu-ICL Systems, Inc., George Weston Foods Ltd., Hitachi Ltd., Levi Strauss
Europe, Mercedes Benz US International, Inc., Northern Telecom Limited, Noranda
Aluminum, Inc., Solectron Corporation, Oki Electric Industry Co. Ltd., Philips
Medical Systems Nederland B.V., and Snap-on Incorporated.
Baan Company N.V. is a Netherlands holding company with its statutory seat
at Barneveld, The Netherlands, and conducts business through its domestic and
international subsidiaries. The Company's business was founded in 1978 and Baan
Holding B.V., the predecessor of Baan Company N.V., was incorporated in 1983.
References in this Form F-3 to "Baan" or "the Company," unless the context
otherwise requires, relate to Baan Company N.V., its predecessor, Baan Holding
B.V., and its subsidiaries. The Company's headquarters are located at
Vanenburgerallee 13, 3882 RH Putten, The Netherlands, telephone number (31)
341-375555, and at 4600 Bohannon Drive, Menlo Park, California 94025, telephone
number (1) 415-462-4949.
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RISK FACTORS
This Prospectus contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Actual results could differ
materially from those projected in the forward-looking statements as a result of
the risk factors set forth below and elsewhere in this Prospectus. In addition
to the other information contained and incorporated by reference in this
Prospectus, the following factors should be carefully considered in evaluating
the Company and its business before purchasing the Notes offered hereby or the
Common Shares issuable upon conversion thereof:
LIMITED PERIOD OF PROFITABILITY
The Company has experienced substantial revenue growth in recent years, but
its profitability, as a percentage of net revenues, has varied widely on a
quarterly and annual basis. The Company was not profitable in 1993, and was only
slightly profitable in 1994 due largely to recognition of $14.8 million in
software license revenues from one large customer contract. Absent such
contract, the Company would not have been profitable in 1994. Due to the
Company's limited operating history on a significant international scale, the
rate of growth of the Company's business and the variability of operating
results in past periods, there can be no assurance that the Company's revenues
will continue at the current level or will grow, or that the Company will be
able to sustain profitability on a quarterly or annual basis. During 1996, the
Company has experienced increases in accounts receivable as revenues have
increased. Accounts receivable days sales outstanding (the ratio of the
quarter-end accounts receivable balance to quarterly revenues, multiplied by 90)
were 104 and 109 days as of December 31, 1995 and 1996, respectively. These
increases in accounts receivable, together with increased investments by the
Company in infrastructure and expansion of operations, have impacted cash flow
from operations. Although the Company has in recent periods generated cash from
operations, there can be no assurance that cash flow from operations in future
periods will not be further impacted.
VARIABILITY OF QUARTERLY OPERATING RESULTS
The Company's net revenues and operating results can vary, sometimes
substantially, from quarter to quarter. The Company's license revenues have in
recent periods increased as a percentage of total net revenues. License revenues
increased from 49% of total net revenues in 1994 to 52%, 58% and 62% of total
net revenues in 1995, 1996 and the three month period ended March 31, 1997,
respectively. The Company's revenues in general, and in particular its license
revenues, are relatively difficult to forecast due to a number of reasons,
including (i) the relatively long sales cycles for the Company's products, (ii)
the size and timing of individual license transactions, (iii) the timing of the
introduction of new products or product enhancements by the Company or its
competitors, (iv) the potential for delay or deferral of customer
implementations of the Company's software, (v) changes in customer budgets, and
(vi) seasonality of technology purchases and other general economic conditions.
In the last three years, and particularly in its U.S. operations, the Company
has made significant changes in its business focus, including greater emphasis
on sales to larger customers. As a result, the Company has realized an
increasingly high portion of total net revenues from individually large
licenses, which could contribute to greater quarterly variability. While the
Company believes that its allowance for doubtful accounts as of March 31, 1997
remains adequate, a significant portion of the Company's accounts receivable at
such date are derived from sales of large licenses, often to new customers with
which the Company does not have a payment history. Accordingly, there can be no
assurances that the allowance will be adequate to cover any receivables which
are later determined to be uncollectible, particularly if one or more large
receivables becomes uncollectible.
The Company's software products generally are shipped as orders are
received. As a result, license revenues in any quarter are substantially
dependent on orders booked and shipped in that quarter. Because the Company's
operating expenses are based on anticipated revenue levels and because a high
percentage of the Company's expenses are relatively fixed, a delay in the
recognition of revenue from a limited number of license transactions could cause
significant variations in operating results from quarter to quarter and could
result in losses. The Company plans to increase expenditures in order to fund
continued build-up of international operations, greater levels of research and
development, a larger direct sales and marketing staff, development of new
distribution and resale channels, and broader customer support capability,
although annual expendi-
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tures will depend upon ongoing results and evolving business needs. To the
extent such expenses precede or are not subsequently followed by increased
revenues, the Company's operating results would be materially adversely
affected.
The Company believes that fourth quarter revenues have historically been
positively impacted by year-end capital purchases by some large corporate
customers. This seasonality, which the Company believes is common in the
computer software industry, is likely to increase as the Company focuses on
larger corporate accounts, and typically result in first quarter revenues in any
year being lower than revenues in the immediately preceding fourth quarter.
NORTH AMERICAN OPERATIONS
The Company commenced its investment program in North America in 1993 and
has a limited number of operational installations of its products at customer
sites in North America. Accordingly, the Company has only a limited number of
reference customers in North America. Many of these customers continue to
implement the Company's products, and some of these customers are in the early
stage of implementation. If the Company were to experience significant
implementation problems at these or other reference sites in North America (or
elsewhere), it could significantly impact future sales and operating results in
North America (and elsewhere). In addition, in order to support the anticipated
growth of the Company's business in the North American market, the Company
continues to incur significant costs to build corporate infrastructure ahead of
anticipated revenues. This includes developing experienced resources, through
both internal hiring and establishing relationships with third party
implementation providers, that are necessary to support customer installations
of Baan's software and provide other customer services. The number of employees
in North America has grown from 168 at December 31, 1993 to 180 at December 31,
1994, 309 at December 31, 1995, 637 at December 31, 1996 and 699 at March 31,
1997. In addition, the Company's operating expenses (exclusive of general
corporate expenses) in North America have increased from $13.1 million for the
year ended December 31, 1993 to $29.2 million, $44.7 million, $102.7 million and
$34.0 million for the years ended December 31, 1994, 1995, 1996 and for the
three months ended March 31, 1997, respectively. As a result of this expansion,
the Company must continue to implement and improve its operational and financial
control systems and to expand, train and manage its employee base and
relationships with third party implementation providers, in order to provide
high-quality training, product implementation and other customer services. These
factors have placed, and are expected to continue to place, a significant strain
on the Company's management and operations. There can be no assurance that the
Company's North American operations will be successful or that the Company will
be able to manage effectively an increased level of operations in North America.
Any lack of success in North American markets or inability to manage these
activities effectively would have a material adverse effect on the Company's
results of operations.
MANAGEMENT OF GROWTH
The Company's business has grown rapidly in the last five years, with total
net revenues increasing from $46.8 million in 1992 to $388.0 million in 1996 and
$123.9 million in the three months ended March 31, 1997. The growth of the
Company's business and expansion of the Company's customer base has placed a
significant strain on the Company's management and operations. The Company's
recent expansion has resulted in substantial growth in the number of its
employees, the scope of its operating and financial systems and the geographic
area of its operations, resulting in increased responsibility for both existing
and new management personnel. The Company's ability to support the growth of its
business will be substantially dependent upon having in place highly trained
internal and third party resources to conduct pre-sales activity, product
implementation, training and other customer support services. Accordingly, the
Company's future operating results will depend on the ability of its officers
and other key employees to continue to implement and improve its operational,
customer support and financial control systems, to expand, train and manage its
employee base and to work effectively with third party implementation providers.
There can be no assurance that the Company will be able to manage its recent or
any future expansion successfully, and any inability to do so would have a
material adverse effect on the Company's results of operations.
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LEVERAGE AND SUBORDINATION
Upon the issuance of the Notes pursuant to the Original Offering, the
Company incurred an additional $200 million in indebtedness, which resulted in a
significant increase in the Company's ratio of long-term debt to total
capitalization which was 54% at March 31, 1997. As a result of this additional
indebtedness, the Company's principal and interest obligations have increased
substantially. The degree to which the Company is leveraged could materially
adversely affect the Company's ability to obtain additional financing for
working capital, acquisitions or other purposes and could make it more
vulnerable to industry downturns and competitive pressures. The Company's
ability to meet its debt service obligations will be dependent upon the
Company's future performance, which will be subject to financial, business and
other factors affecting the operations of the Company, many of which are beyond
its control.
The Notes are unsecured and subordinated in right of payment in full to all
existing and future Senior Indebtedness of the Company. As a result of such
subordination, in the event of bankruptcy, liquidation or reorganization of the
Company or certain other events, the assets of the Company will be available to
pay obligations on the Notes only after all Senior Indebtedness has been paid in
full, and there may not be sufficient assets remaining to pay amounts due on any
or all of the Notes then outstanding. In addition, the ranking of certain claims
against the Company, including but not limited to claims to be paid out of the
proceeds of assets of the Company located in The Netherlands, will be governed
by the law of The Netherlands. Under Netherlands law, in the event of an
insolvency of the Company, there is a risk that a court of competent
jurisdiction may determine that any payment on the Senior Indebtedness must on a
pari passu basis also be made on all other non-secured and unsubordinated claims
against the Company. In such case, the Notes would be effectively subordinated
in right of payment to both the Senior Indebtedness and all other non-secured
and unsubordinated claims against the Company at the time and the Holders of the
Notes might not receive any payment until both the holders of Senior
Indebtedness and all other unsubordinated creditors had been paid in full. The
Notes are also structurally subordinated to the liabilities, including trade
payables, of the Company's subsidiaries, and the Company is a holding company
and conducts substantially all of its operations through subsidiaries. The
Indenture does not prohibit or limit the incurrence of Senior Indebtedness or
the incurrence of other indebtedness and other liabilities by the Company or its
subsidiaries, and the incurrence of any such additional indebtedness or
liabilities could adversely affect the Company's ability to pay its obligations
on the Notes. As of March 31, 1997, the Company had approximately $46 million of
Senior Indebtedness outstanding (including a notional amount of approximately
$44 million of foreign currency forward contracts). In addition, as of March 31,
1997, subsidiaries of the Company had outstanding an aggregate of approximately
$125 million of indebtedness and other liabilities(excluding intercompany
liabilities and liabilities of a type not required to be reflected as a
liability on the balance sheet of such subsidiaries in accordance with generally
accepted accounting principles). The Company anticipates that from time to time
it will incur additional indebtedness, including Senior Indebtedness, and that
it and its subsidiaries will from time to time incur other additional
indebtedness and liabilities. See "Description of Notes -- Subordination."
COMPETITION
The information management application software market is highly
competitive, is changing rapidly, and is significantly affected by new product
introductions and other market activities of industry participants. The
Company's products are targeted at the emerging market for open systems,
client/server, Enterprise Resource Planning ("ERP") software solutions, and the
Company's current and prospective competitors offer a variety of products and
solutions to address this market. The Company's primary competition comes from a
large number of independent software vendors and other sources including SAP AG
("SAP"), Oracle Corporation ("Oracle"), System Software Associates, Inc. and
Peoplesoft Corporation ("Peoplesoft"). In addition, the Company faces indirect
competition from suppliers of custom-developed business application software
that have focused mainly on proprietary mainframe and minicomputer-based systems
with highly customized software, such as the systems consulting groups of major
accounting firms and systems integrators. The Company also faces indirect
competition from systems developed by the internal MIS departments of large
organizations.
Many of the Company's competitors have longer operating histories,
significantly greater financial, technical, marketing and other resources than
the Company, greater name recognition, and a larger installed
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base of customers. In addition, certain competitors, including SAP, Oracle and
Peoplesoft, have well-established relationships with customers of the Company.
Further, because the Company's products run on relational database management
systems ("RDBMS") and Oracle has the largest market share for RDBMS software,
Oracle may have a competitive advantage in selling its application products to
its RDBMS customer base. The Company may also face market resistance from the
large installed base of legacy systems because of the reluctance of these
customers to commit the time and effort necessary to convert to an open
systems-based client/server software solution. Furthermore, as the client/server
computing market develops, companies with significantly greater resources than
the Company could attempt to increase their presence in this market by acquiring
or forming strategic alliances with competitors of the Company.
The Company relies on a number of systems consulting and systems
integration firms for implementation and other customer support services, as
well as recommendations of its products during the evaluation stage of the
purchase process. Although the Company seeks to maintain close relationships
with these third party implementation providers, many of these third parties
have similar, and often more established, relationships with the Company's
principal competitors. If the Company is unable to develop and retain effective,
long-term relationships with these third parties, it would adversely affect the
Company's competitive position. Further, there can be no assurance that these
third parties, many of which have significantly greater financial, technical and
marketing resources than the Company, will not market software products in
competition with the Company in the future or will not otherwise reduce or
discontinue their relationships with or support of the Company and its products.
The Company believes that its success has been due in part to its focus on
the client/server architecture of its software products. Certain of the
Company's competitors currently offer products using client/server architecture,
and the Company believes that many of its other competitors are actively
developing client/server-based products, including certain large,
well-established software companies that have announced their intent to
introduce client/server ERP products. As a result, competition (including price
competition) is likely to increase substantially, which could result in price
reductions and loss of market share. There can be no assurance that the Company
will be able to compete successfully with existing or new competitors or that
competition will not have a material adverse effect on the Company's business.
RAPID TECHNOLOGICAL CHANGE AND NEW PRODUCTS
The market for the Company's software products is characterized by rapid
technological advances, evolving industry standards in computer hardware and
software technology, changes in customer requirements, and frequent new product
introductions and enhancements. The Company's future success will depend upon
its ability to continue to enhance its current product line and to develop and
introduce new products that keep pace with technological developments, satisfy
increasingly sophisticated customer requirements and achieve market acceptance.
In particular, the Company must continue to anticipate and respond adequately to
advances in RDBMS software and desktop computer operating systems such as
Microsoft Windows and its successors. There can be no assurance that the Company
will be successful in developing and marketing, on a timely and cost-effective
basis, fully functional product enhancements or new products that respond to
technological advances by others, or that its new products will achieve market
acceptance.
Historically, the Company has issued significant new releases of its
software products approximately every two years with interim releases on a more
frequent basis. As a result of the complexities inherent in both the RDBMS and
client/server environments and the broad functionality and performance demanded
by customers for ERP products, major new product enhancements and new products
can require long development and testing periods to achieve market acceptance.
The Company has on occasion experienced delays in the scheduled introduction of
new and enhanced products. In addition, software programs as complex as those
offered by the Company may contain undetected errors or "bugs" when first
introduced or as new versions are released that, despite testing by the Company,
are discovered only after a product has been installed and used by customers.
For example, Version 3.0 contained certain identified software errors which
required correction in Version 3.1. There can be no assurance that the Company's
most recent software release, BAAN IV, or future releases of the Company's
products, will not contain further software errors. Any such errors could impair
the market acceptance of these products and adversely affect operating results.
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Problems encountered by customers installing and implementing new releases or
with the performance of the Company's products could also have a material
adverse effect on the Company's business and operating results. Customers have
only recently commenced implementation of the BAAN IV version of the Company's
software. If the Company were to experience delays in the introduction of new
and enhanced products, or if customers were to experience significant problems
with the implementation and installation of new releases or were to be
dissatisfied with product functionality or performance, it could materially
adversely affect the Company's business and operating results.
INTERNATIONAL OPERATIONS AND CURRENCY FLUCTUATIONS
The Company's products are currently marketed in the United States, The
Netherlands, Germany and 56 other countries as of December 31, 1996. Sales in
the United States, The Netherlands and Germany accounted for 31%, 15% and 12%,
respectively, of the Company's net revenues in the three months ended March 31,
1997. The Company's operations are subject to risks inherent in international
business activities, including, in particular, general economic conditions in
each country, overlap of different tax structures, management of an organization
spread over various countries, unexpected changes in regulatory requirements,
compliance with a variety of foreign laws and regulations, and longer accounts
receivables payment cycles in certain countries. Other risks associated with
international operations include import and export licensing requirements, trade
restrictions and changes in tariff and freight rates.
A significant portion of the Company's business is conducted in currencies
other than the U.S. dollar (the currency in which its financial statements are
stated), primarily the Dutch guilder and the German mark. The Company has
historically recorded a majority of its expenses in guilders, especially
research and development expenses, and a substantial majority of its revenues
has been denominated in guilders, marks and, more recently, U.S. dollars. As a
result, appreciation in the value of the guilder relative to the value of the
U.S. dollar could adversely affect operating results. Foreign currency
transaction gains and losses arising from normal business operations are
credited to or charged against earnings in the period incurred. As a result,
fluctuations in the value of the currencies in which the Company conducts its
business relative to the U.S. dollar have caused and will continue to cause
foreign currency transaction gains and losses. In 1994, the Company incurred
$1.9 million in foreign currency transaction losses. At the end of 1994, the
Company reevaluated its currency management process, and established programs to
reduce its foreign currency exposure. The Company incurred a foreign currency
transaction net losses of $253,000 and $170,000 for the years ended December 31,
1995 and 1996, respectively. Starting in the fourth quarter of 1995, the Company
established controls regarding the use of derivative financial instruments,
which it uses primarily to offset the effects of exchange rate changes on
intracompany cash flow exposures denominated in foreign currencies. These
exposures include firm trade accounts, royalties, service fees and loans. The
Company continues to evaluate its currency management policies. Notwithstanding
the measures the Company has adopted, due to the number of currencies involved,
the constantly changing currency exposures and the substantial volatility of
currency exchange rates, there can be no assurance that the Company will not
experience currency losses in the future, nor can the Company predict the effect
of exchange rate fluctuations upon future operating results.
RELIANCE ON CERTAIN RELATIONSHIPS
The Company relies on a number of consulting and systems integration firms
to enhance its marketing, sales and customer support efforts, particularly with
respect to implementation and support of its products as well as lead generation
and assistance in the sales process. As the Company continues to implement its
strategy of focusing on the licensing of its core software products, the Company
will remain dependent upon third party implementation providers for product
implementation, customization, customer support services and end user training.
Many such firms have similar, and often more established, relationships with the
Company's principal competitors. There can be no assurance that these third
party implementation providers will provide the level and quality of service
required to meet the needs of the Company's customers, that the Company will be
able to maintain an effective, long term relationship with these third parties,
or that these parties will continue to meet the needs of the Company's
customers. If the Company is unable to develop and maintain effective, long-term
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relationships with these third parties, or if these parties fail to meet the
needs of the Company's customers, the Company's business would be adversely
affected. Although the Company has agreements with certain of these providers,
these agreements are generally terminable by the third party providers at any
time and do not impose specific obligations on the part of these third party
providers. Further, there can be no assurance that these third party
implementation providers, many of which have significantly greater financial,
technical, personnel and marketing resources than the Company, will not market
software products in competition with the Company in the future or will not
otherwise reduce or discontinue their relationships with or support of the
Company and its products.
DISCRETIONARY USE OF PROCEEDS OF ORIGINAL OFFERING
The principal purposes of the Original Offering are to increase the
Company's capital base and financial flexibility. The Company expects to use the
net proceeds principally for general corporate purposes, including working
capital, and potentially to acquire complementary businesses, products or
technologies. However, the Company has no current specific plans for use of the
net proceeds of this offering. As a consequence, the Company's management will
have the ability to allocate the net proceeds of the offering at its discretion.
There can be no assurance that the proceeds will be utilized in a manner that
the Noteholders deem optimal or that the proceeds can or will be invested to
yield a significant return. As of March 31, 1997, the Company had approximately
$238.2 million of cash, cash equivalents and investments, substantially all of
which will be invested in short-term, interest bearing, investment grade
obligations for an indefinite period of time.
DEPENDENCE ON KEY PERSONNEL
The Company's success depends to a significant extent upon a limited number
of members of senior management of the Company and other key employees. The
Company does not maintain key man life insurance on any personnel. The loss of
the service of one or more key employees could have a material adverse effect on
the Company. In addition, the Company believes that its future success will also
depend in large part upon its ability to attract and retain highly skilled
technical, management, sales and marketing personnel. Competition for such
personnel in the computer software industry is intense. There can be no
assurance that the Company will be successful in attracting and retaining such
personnel, and the failure to attract and retain such personnel could have a
material adverse effect on the Company's business.
ABILITY TO ENFORCE THE COMPANY'S INTELLECTUAL PROPERTY RIGHTS
The Company relies on a combination of the protections provided under
applicable copyright, trademark and trade secret laws, as well as on
confidentiality procedures and licensing arrangements, to establish and protect
its rights in its software. Despite the Company's efforts, it may be possible
for unauthorized third parties to copy certain portions of the Company's
products or to reverse engineer or obtain and use information that the Company
regards as proprietary. In addition, the laws of certain countries do not
protect the Company's proprietary rights to the same extent as do the laws of
the United States or The Netherlands. Accordingly, there can be no assurance
that the Company will be able to protect its proprietary software against
unauthorized third party copying or use, which could adversely affect the
Company's competitive position.
The Company, from time to time, receives notices from third parties
claiming infringement by the Company's products of third party proprietary
rights. There can be no assurance that legal action claiming patent or other
intellectual property infringement will not be commenced against the Company, or
that the Company would necessarily prevail in such litigation given the complex
technical issues and inherent uncertainties in intellectual property litigation;
and in the event a claim against the Company was successful and the Company
could not obtain a license on acceptable terms or develop or license a
substitute technology, the Company's business and operating results would be
materially adversely affected. The Company expects that software products will
increasingly be subject to such claims as the number of products and competitors
in the Company's industry segment grows and the functionality of products
overlap. Any such claim, with or without merit, could be time-consuming, result
in costly litigation and require the Company to enter into royalty and licensing
agreements. Such royalty or licensing agreements, if required, may not be
available on
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terms acceptable by the Company, or at all. In the event of a successful claim
against the Company and the failure of the Company to develop or license a
substitute technology, the Company's business and operating results would be
materially adversely effected.
LEGAL PROCEEDINGS
The Company is party to legal proceedings from time to time. There is no
such proceeding currently pending which the Company believes is likely to have a
material adverse effect upon the Company's business as a whole. Any litigation,
however, involves potential risk and potentially significant litigation costs,
and therefore there can be no assurances that any litigation which is now
pending or which may arise in the future will not have such a material adverse
effect.
CONTROL BY EXISTING SHAREHOLDERS
Baan Investment B.V. owned approximately 43% of the Company's outstanding
Common Shares, as of March 31, 1997. Jan Baan and J.G. Paul Baan, by virtue of
their positions as managing directors of Baan Investment B.V. and the control
they exercise over the entities that own and control the shares of Baan
Investment B.V., effectively have the power to vote the Common Shares of the
Company owned by Baan Investment B.V. Messrs. Baan and Baan will therefore also
have the effective power to influence significantly the outcome of matters
submitted for shareholder action, including the appointment of members of the
Company's Management and Supervisory Boards and the approval of significant
change in control transactions, and may be deemed to have control over the
management and affairs of the Company. This significant equity interest in the
Company may have the effect of making certain transactions more difficult absent
the support of Jan Baan and J.G. Paul Baan, and may have the effect of delaying
or preventing a change in control of the Company.
POSSIBLE VOLATILITY OF REGISTRABLE NOTES AND SHARE PRICE
The market price of the Company's Common Shares has experienced significant
fluctuations and may continue to fluctuate significantly. The market price of
the Registrable Notes and the Common Shares into which the Registrable Notes are
convertible may be significantly affected by factors such as the announcement of
new products or product enhancements by the Company or its competitors,
technological innovation by the Company or its competitors, quarterly variations
in the Company's results of operations, changes in earnings estimates by market
analysts, and general market conditions or market conditions specific to
particular industries. In particular, the stock prices for many companies in the
technology and emerging growth sector have experienced wide fluctuations which
have often been unrelated to the operating performance of such companies. Such
fluctuations may adversely affect the market price of the Registrable Notes and
the Common Shares.
LIMITATIONS ON REDEMPTION OF NOTES
Upon a Fundamental Change (as defined), each Holder of Notes will have
certain rights, at the Holder's option, to require the Company to redeem all or
a portion of such Holder's Notes. If a Fundamental Change were to occur, there
can be no assurance that the Company would have sufficient funds to pay the
redemption price for all Notes tendered by the Holders thereof. Any future
credit agreements or other agreements relating to other indebtedness (including
other Senior Indebtedness) to which the Company becomes a party may contain
restrictions and provisions which prohibit the Company from purchasing or
redeeming any Notes or provide that a Fundamental Change would constitute an
event of default thereunder. In the event a Fundamental Change occurs at a time
when the Company is prohibited from purchasing or redeeming Notes, the Company
could seek the consent of its lenders to the purchase of Notes or could attempt
to refinance the borrowings that contain such prohibition. If the Company does
not obtain such a consent or repay such borrowings, the Company would remain
prohibited from purchasing or redeeming Notes. In such case, the Company's
failure to redeem tendered Notes may constitute an Event of Default under the
Indenture, which may, in turn, constitute a further default under the Company's
existing bank facilities and may constitute a default under the terms of other
indebtedness that the Company may enter into from time to time. In such
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circumstances, the subordination provisions in the Indenture would likely
restrict payments to the Holders of Notes. See "Description of Registrable
Notes -- Repurchase at Option of Holders upon a Fundamental Change."
ABSENCE OF PUBLIC MARKET FOR THE REGISTRABLE NOTES
The Registrable Notes were issued in the Original Offering to a small
number of institutional buyers. The Notes issued in reliance on 144A have been
designated for trading on the PORTAL System of the National Association of
Securities Dealers, Inc. Registrable Notes sold pursuant to the Registration
Statement of which this Prospectus forms a part will not remain eligible for
trading on the PORTAL System. The Registration Statement of which this
Prospectus forms a part is filed pursuant to the Registration Rights Agreement,
which does not obligate the Company to keep the Registration Statement effective
after the second anniversary of the last date of original issuance of the
Registrable Notes or, if earlier, the date when all the Registrable Notes and
the Common Stock issuable on conversion thereof covered by the Registration
Statement have been sold pursuant to the Registration Statement or may be resold
without registration by persons that are not affiliates of the Company pursuant
to Rule 144(k) under the Securities Act. The Company does not intend to apply
for listing of the Registrable Notes on any U.S. securities exchange or to seek
approval for quotation through any U.S. automated quotation system. The Initial
Purchaser has advised the Company that it intends to make a market in the
Registrable Notes. The Initial Purchaser is not obligated, however, to make a
market in the Registrable Notes and any such market making may be discontinued
at any time in the sole discretion of the Initial Purchaser without notice.
Accordingly, there can be no assurance as to the development or liquidity of any
market for the Registrable Notes.
FOREIGN PERSONAL HOLDING COMPANY TAX RISK
The Company or certain of its subsidiaries may in the future be
characterized as a foreign personal holding company ("FPHC") if: (i) Jan Baan or
J.G. Paul Baan or a member of either of their families were to become a U.S.
resident or citizen, or to marry a U.S. resident or citizen and (ii) more than
60% of the gross income of the Company or a subsidiary were considered foreign
personal holding company income. If such treatment were to occur, U.S.
residents, citizens, corporations and other persons subject to U.S. taxation on
the basis of net income who hold Common Shares would be required to include in
their gross income as a dividend their pro rata portion of any undistributed
income of the Company or a subsidiary so classified as a FPHC, even if no cash
dividend were actually paid. Although neither the Company nor any subsidiary is
currently a FPHC, the Company can give no assurances that changes in ownership
of the shares currently held by Baan Investment B.V., or changes in ownership or
residency of Jan Baan or J.G. Paul Baan or members of either of their families,
will not cause the Company to be treated as a FPHC, nor is the Company
undertaking any obligation to determine or disclose at any time in the future
its status as a FPHC.
ENFORCEABILITY OF UNITED STATES JUDGMENTS AGAINST NETHERLANDS CORPORATIONS,
DIRECTORS AND OFFICERS
Judgments of United States courts, including judgments against the Company,
its directors or its officers predicated on the civil liability provisions of
the federal securities laws of the United States, are not directly enforceable
in The Netherlands. See "Enforceability of Civil Liabilities."
OTHER MATTERS RELATED TO DUTCH COMPANIES
As a Netherlands naamloze vennootschap (N.V.), the Company is subject to
certain requirements not generally applicable to corporations organized in
United States jurisdictions. Among other things, the issuance of shares by the
Company must be submitted for resolution of the general meeting of shareholders,
except to the extent such authority to issue shares has been delegated by the
general meeting of shareholders to another corporate body. The issuance of
shares by the Company is generally subject to shareholder preemptive rights,
except to the extent that such preemptive rights have been excluded or limited
by the general meeting of shareholders (subject to a qualified majority of
two-thirds of the votes if less than 50% of the outstanding share capital is
present or represented) or, in case the authority to issue shares has been
delegated to another corporate body that has also been empowered by the general
meeting of shareholders to exclude or limit such
15
<PAGE> 18
preemptive rights, by such corporate body. In this regard, the general meeting
of shareholders has authorized the Management Board of the Company, upon
approval by the Supervisory Board, to issue any authorized and unissued shares
of the Company at any time up to and including March 31, 2001, and has
authorized the Management Board, upon approval by the Supervisory Board, to
exclude or limit shareholder preemptive rights with respect to any issuance of
such shares up to and including such date. Such authorizations may be renewed by
the general meeting of shareholders from time to time, or by the Company's
Articles of Association pursuant to an amendment to that effect, for up to five
years at a time. This authorization would also permit the issuance of shares in
an acquisition, provided that shareholder approval is required in connection
with a statutory merger (except that, in certain limited circumstances, the
management board of a surviving company may resolve to legally merge the
company). Shareholders do not have preemptive rights with respect to shares
which are issued against payment other than in cash, shares which are issued to
employees of the Company or of a group company or shares which are issued to
someone exercising a previously acquired right to subscribe for shares. In
addition, certain major corporate decisions are subject to prior approval or
advice by the Works Council established at Baan Development B.V. and Baan
Nederland B.V., two Dutch subsidiaries of the Company.
EXCHANGE CONTROLS AND OTHER LIMITATIONS AFFECTING SECURITY HOLDERS
Except as set forth below, there are currently no limitations under the
laws of The Netherlands to the rights of Holders from outside The Netherlands to
hold Notes or to hold or vote Common Shares. Payments of principal and interest
on the Notes will be made in U.S. dollars. Cash distributions, if any, payable
on the Common Shares in Dutch guilders may be officially transferred from The
Netherlands and converted into any other currency without Netherlands legal
restrictions, except that for recording purposes such payments and transactions
must be reported by the Company to The Netherlands Central Bank. Exceptions may
apply to the above under applicable Netherlands sanctions regulations regarding
Iraq and Libya.
LIMITATION OF LIABILITY AND INDEMNIFICATION
The Company has entered into indemnification agreements with its directors
and executive officers, providing for indemnification by the Company against any
liability to which a director or executive officer may be subject for judgments,
settlements, penalties, fines and expenses of defense (including attorneys'
fees, bonds and costs of investigation), arising out of or in any way related to
acts or omissions as a member of the Management or Supervisory Board, or an
executive officer, or in any other capacity in which services are rendered to
the Company or its subsidiaries. The Company believes that the indemnification
agreements will assist the Company in attracting and retaining qualified
individuals to serve as directors and executive officers. The agreements provide
that a director or officer is not entitled to indemnification under such
agreements (i) if indemnification is expressly prohibited under applicable law,
(ii) for certain violations of securities laws or (iii) for certain claims
initiated by the officer or director. Generally, under Netherlands law a
director will not be held personally liable for decisions made with reasonable
business judgment, absent self dealing. In addition, indemnification may not be
available to directors or officers under Netherlands law if any act or omission
by a director or officer would qualify as willful misconduct or gross
negligence. Due to the lack of applicable case law, it is not clear whether
indemnification is available in case of a breach of securities laws of the
United States. See "Enforceability of Civil Liabilities."
16
<PAGE> 19
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
the Company for the periods indicated. The ratio of earnings to fixed charges
represents the number of times that fixed charges were covered by earnings. The
ratio of earnings to fixed charges is computed by dividing (a) earnings before
taxes plus fixed charges by (b) fixed charges. Fixed charges consist of interest
expense and the estimated portion of rental expense deemed by the Company to be
representative of the interest factor of rental payments under operating leases.
<TABLE>
<CAPTION>
THREE MONTHS
FISCAL YEAR ENDED ENDED
DECEMBER 31 ------------
------------------- MARCH 31,
1994 1995 1996 1997
---- ----- ---- ------------
<S> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges............................ 2.6x 10.4x 14.0x 6.1x
</TABLE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Registrable
Notes or the Common Stock issuable upon conversion thereof by the Selling
Holders.
17
<PAGE> 20
DESCRIPTION OF NOTES
The Notes were issued under an indenture dated as of December 15, 1996 (the
"Indenture"), between the Company and Marine Midland Bank, as trustee (the
"Trustee"). A copy of the form of the Indenture and the Registration Rights
Agreement (as defined below) have been filed as exhibits to the Registration
Statement of which this Prospectus forms a part. The following summaries of
certain provisions of the Notes, the Indenture and the Registration Rights
Agreement do not purport to be complete and are subject to, and are qualified in
their entirety by reference to, all of the provisions of the Notes, the
Indenture and the Registration Rights Agreement, including the definitions
therein of certain terms which are not otherwise defined in this Prospectus.
Wherever particular provisions or defined terms of the Indenture (or the form of
Note which is a part thereof) or the Registration Rights Agreement are referred
to, such provisions or defined terms are incorporated herein by reference.
References in this section to the "Company" are solely to Baan Company N.V., a
Netherlands corporation, and not its subsidiaries.
GENERAL
The Notes are unsecured subordinated obligations of the Company, will
mature on December 15, 2001 and be payable at a price of 100% of the principal
amount thereof. The Notes bear interest at 4.5% per annum from December 23,
1996, payable semiannually on June 15 and December 15 of each year, commencing
on June 15, 1997.
The Notes are convertible into Common Shares initially at the conversion
price stated on the cover page hereof, subject to adjustment upon the occurrence
of certain events described under "-- Conversion," at any time prior to the
close of business on the maturity date, unless previously redeemed or
repurchased.
The Notes are redeemable (a) in the event of certain developments involving
withholding taxes of The Netherlands as defined below under
"-- Redemption -- Redemption for Taxation Reasons" at a redemption price of 100%
of the principal amount of the Notes to be redeemed, plus accrued interest to,
but excluding, the Redemption Date (as defined) and (b) at the option of the
Company under the circumstances and at the redemption prices set forth below
under "-- Redemption -- Optional Redemption," plus accrued interest to, but
excluding, the Redemption Date.
CONVERSION
The Holder of any Note will have the right at the Holder's option to
convert any portion of the principal amount of a Note that is an integral
multiple of $1,000 into shares of Common Shares at any time prior to the close
of business on the maturity date, unless previously redeemed or repurchased, at
a conversion price of $44.00 per share (equivalent to a conversion rate of
approximately 22.73 shares per $1,000 principal amount of Notes). The conversion
price is subject to adjustment from time to time as described below. The right
to convert a Note called for redemption or delivered for repurchase will
terminate at the close of business on the Business Day prior to the Redemption
Date or the Repurchase Date (as defined) for such Note, as the case may be.
Under Netherlands law, the issue price of each Common Share issuable upon
conversion will be the Dutch guilder equivalent of the conversion price (or
adjusted conversion price as described below), converted into Dutch guilders at
the rate of exchange of U.S. dollars into Dutch guilders prevailing in The
Netherlands at the time of conversion and such issue price may not be less than
the par value of such Common Share. In the event that at the time of any
conversion the conversion price then in effect and the prevailing exchange rate
would result in an issue price of less than the par value of a Common Share, for
purposes of such conversion, the conversion price will be deemed to be the
conversion price that results in an issue price that is as close as possible to,
but not less than, such par value.
The right of conversion attaching to any Registrable Note may be exercised
by the Holder thereof by delivering the Registrable Note at the Corporate Trust
Office of the Trustee or at the specified office of a Conversion Agent,
accompanied by a duly signed and completed notice of conversion. Beneficial
owners of interests in a registered global Note may exercise their right of
conversion by delivering to DTC the
18
<PAGE> 21
appropriate instruction form for conversion pursuant to DTC's conversion
program. Such notice of conversion can be obtained at the office of any
Conversion Agent. The conversion date will be the date on which the Note and the
duly signed and completed notice of conversion are so delivered. As promptly as
practicable on or after the conversion date, the Company will issue and deliver
to the Trustee a certificate or certificates for the number of full Common
Shares issuable upon conversion, together with payment in lieu of any fraction
of a share in an amount determined as set forth below; such certificate will be
sent by the Trustee to the appropriate Conversion Agent for delivery to the
Holder. Such Common Shares issuable upon conversion of the Notes will be fully
paid and nonassessable. Common Shares issued upon conversion of Notes delivered
for conversion to the Corporate Trust Office of the Trustee will be issued in
registered form. Any Note surrendered for conversion during the period from the
close of business on any Regular Record Date to the opening of business on the
next succeeding Interest Payment Date (except Notes called for redemption on a
Redemption Date or to be repurchased on a Repurchase Date during such period)
must be accompanied by payment of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of Notes being surrendered
for conversion. In the case of any Note which has been converted after any
Regular Record Date, but before the next Interest Payment Date, interest the
Stated Maturity of which is on such Interest Payment Date shall be payable on
such Interest Payment Date notwithstanding such conversion. Such interest shall
be paid to the Holder of such Note on such Regular Record Date. As a result, a
Holder that surrenders Notes for conversion on a date that is not an Interest
Payment Date will not receive any interest for the period from the Interest
Payment Date next preceding the date of conversion to the date of conversion or
for any later period, even if the Notes are surrendered after a notice of
redemption (except for the payment of interest on Notes called for redemption on
a Redemption Date or to be repurchased on a Repurchase Date between a Regular
Record Date and the Interest Payment Date to which it relates). No other payment
or adjustment for interest, or for any dividends in respect of Common Shares,
will be made upon conversion. Holders of Common Stock issued upon conversion
will not be entitled to receive any dividends payable to holders of Common
Shares as of any record time before the close of business on the conversion
date. No fractional shares will be issued upon conversion but, in lieu thereof,
an appropriate amount will be paid in cash by the Company based on the market
price of Common Shares on the day of conversion.
A Holder delivering a Note for conversion will not be required to pay any
taxes or duties in respect of the issue or delivery of Common Shares on
conversion but will be required to pay any tax or duty which may be payable in
respect of any transfer involved in the issue or delivery of the Common Shares
in a name other than that of the Holder of the Note. Certificates representing
Common Shares will not be issued or delivered unless all taxes and duties, if
any, payable by the Holder have been paid.
The initial conversion price of $44.00 per Common Share is subject to
adjustment (under formulae set forth in the Indenture) in certain events,
including: (i) the issuance of Common Shares as a dividend or distribution on
Common Shares of the Company; (ii) certain subdivisions and combinations of the
Common Shares; (iii) the issuance to all holders of Common Shares of certain
rights or warrants to purchase Common Shares (provided that the conversion price
will be readjusted to the extent that such rights or warrants are not exercised
prior to the expiration thereof); (iv) the distribution to all holders of Common
Shares of shares of capital stock of the Company (other than Common Shares) or
evidences of indebtedness of the Company or assets (including securities, but
excluding those rights, warrants, dividends and distributions referred to above
or paid in cash and excluding distributions pursuant to a split-up except as
otherwise provided by the second succeeding paragraph below); (v) distributions
consisting of cash, excluding any semiannual cash dividend on the Common Shares
to the extent that the aggregate cash dividend per Common Share in any
semiannual period does not exceed the greater of (x) the amount per Common Share
of the next preceding semiannual cash dividend on the Common Shares to the
extent that such preceding semiannual dividend did not require an adjustment of
the conversion price pursuant to this clause (v), and (y) 7.5% of the average of
the daily Closing Prices (as defined in the Indenture) of the Common Shares for
the ten consecutive Trading Days (as defined in the Indenture) immediately prior
to the date of declaration of such dividend, and excluding any dividend or
distribution in connection with the liquidation, dissolution or winding up of
the Company; (vi) payment in respect of a tender or exchange offer by the
Company or any subsidiary of the Company for the Common Shares to the extent
that the cash and value of any other consideration included in such payment per
Common Share
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<PAGE> 22
exceeds the Current Market Price (as defined in the Indenture) per Common Share
on the Trading Day next succeeding the last date on which tenders or exchanges
may be made pursuant to such tender or exchange offer; and (vii) payment in
respect of a tender offer or exchange offer by a person other than the Company
or any subsidiary of the Company in which, as of the closing date of the offer,
the Supervisory Board is not recommending rejection of the offer. If an
adjustment is required to be made as set forth in clause (v) above as a result
of a distribution that is a semiannual dividend, such adjustment would be based
upon the amount by which such distribution exceeds the amount of semiannual cash
dividend permitted to be excluded pursuant to such clause (v). If an adjustment
is required to be made as set forth in clause (v) above as a result of a
distribution that is not a semiannual dividend, such adjustment would be based
upon the full amount of the distribution. The adjustment referred to in clause
(vii) above will only be made if the tender offer or exchange offer is for an
amount which increases that person's ownership of Common Shares to more than 25%
of the total Common Shares outstanding and if the cash and value of any other
consideration included in such payment per Common Share, exceeds the Current
Market Price per Common Share on the business day next succeeding the last date
on which tenders or exchanges may be made pursuant to such tender or exchange
offer. The adjustment referred to in clause (vii) above will not be made,
however, if, as of the closing of the offer, the offering documents with respect
to such offer disclose a plan or an intention to cause the Company to engage in
a consolidation or merger of the Company or a sale of all or substantially all
of the Company's assets.
The Company reserves the right to make such reductions in the conversion
price in addition to those required in the foregoing provisions as it considers
to be advisable in order that any event treated for federal income tax purposes
as a dividend of stock or stock rights will not be taxable to the recipients. No
adjustment of the conversion price will be required to be made until the
cumulative adjustments amount to 1.0% or more of the conversion price. No
adjustment of the conversion price will result in zero or in a negative number.
In the event that at the time of any conversion of a Note the conversion price
then in effect and the prevailing exchange rate would result in an effective per
share issue price (expressed in Dutch guilders) of less than the par value of a
Common Share, for purposes of such conversion, the conversion price will be
deemed to be the conversion price that results in an issue price that is as
close as possible to, but not less than, such par value.
In case of any consolidation or merger of the Company with or into another
Person or any merger of another Person into the Company (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of the Common Shares), or in case of any sale or transfer of all or
substantially all of the assets of the Company, or in the case of a split-up of
the Company pursuant to which the assets and liabilities of the Company are
transferred to one or more Persons and the Company ceases to exist, each Note
then outstanding will, without the consent of the Holder of any Note, become
convertible only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale, transfer or split-up by a
holder of the number of Common Shares into which such Note was convertible
immediately prior thereto (assuming such holder of Common Shares failed to
exercise any rights of election and that such Note was then convertible). In the
event of a split-up of the Company pursuant to which all or a portion of the
assets and liabilities of the Company are transferred to one or more Persons and
the Company continues to exist, such split-up shall be treated as a distribution
to all holders of Common Shares to which clause (iv) of the second preceding
paragraph above shall apply.
The Company from time to time may reduce the conversion price by any amount
for any period of at least 20 days, in which case the Company shall give at
least 15 days' notice of such reduction, if the Supervisory Board has made a
determination that such reduction would be in the best interests of the Company,
which determination shall be conclusive.
If at any time the Company makes a distribution of property to its
shareholders which would be taxable to such shareholders as a dividend for
United States federal income tax purposes (e.g., distributions of evidences of
indebtedness or assets of the Company, but generally not stock dividends on
Common Shares or rights to subscribe for Common Shares) and, pursuant to the
anti-dilution provisions of the Indenture, the number of shares into which Notes
are convertible is increased, such increase may be deemed for United States
federal income tax purposes to be the payment of a taxable dividend to Holders
of Notes.
20
<PAGE> 23
SUBORDINATION
The indebtedness evidenced by the Notes is subordinated in right of payment
to the extent provided in the Indenture to the prior payment in full of all
Senior Indebtedness (as defined). Upon any distribution of assets of the Company
upon any dissolution, winding up, liquidation or reorganization (including any
of the foregoing as a result of bankruptcy or moratorium of payment), the
payment of the principal of, or premium, if any, and interest on the Notes is to
be subordinated to the extent provided in the Indenture in right of payment to
the prior payment in full cash of all Senior Indebtedness. In the event of any
acceleration of the Notes because of an Event of Default (as defined in the
Indenture), the holders of any Senior Indebtedness then outstanding would be
entitled to payment in full in cash of all obligations in respect of such Senior
Indebtedness before the Holders of the Notes are entitled to receive any payment
or distribution in respect thereof. The Indenture will require that the Company
promptly notify holders of Senior Indebtedness if payment of the Notes is
accelerated because of an Event of Default.
The Company also may not make any payment upon or in respect of the Notes
if (i) a default in the payment of the principal of, premium, if any, interest,
rent or other obligations in respect of Senior Indebtedness occurs and is
continuing beyond any applicable period of grace or (ii) any other default
occurs and is continuing with respect to Designated Senior Indebtedness (as
defined) that permits holders of the Designated Senior Indebtedness as to which
such default relates to accelerate its maturity and the Trustee receives a
notice of such default (a "Payment Blockage Notice") from the Company or other
person permitted to give such notice under the Indenture. Payments on the Notes
may and shall be resumed (a) in case of a payment default, upon the date on
which such default is cured or waived and (b) in case of a nonpayment default,
the earlier of the date on which such nonpayment default is cured or waived or
179 days after the date on which the applicable Payment Blockage Notice is
received. No new period of payment blockage may be commenced pursuant to a
Payment Blockage Notice unless and until (i) 365 days have elapsed since the
effectiveness of the immediately prior Payment Blockage Notice and (ii) all
scheduled payments of principal, premium, if any, and interest on the Notes that
have come due have been paid in full in cash. No nonpayment default that existed
or was continuing on the date of delivery of any Payment Blockage Notice to the
Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
By reason of the subordination provisions described above, in the event of
the Company's bankruptcy, dissolution or reorganization, holders of Senior
Indebtedness may receive more, ratably, and Holders of the Notes may receive
less, ratably, than the other creditors of the Company. Such subordination will
not prevent the occurrence of any Event of Default under the Indenture. In
addition, the ranking of certain claims against the Company, including but not
limited to claims to be paid out of the proceeds of assets of the Company
located in The Netherlands, will be governed by the law of The Netherlands.
Under Netherlands law, in the event of an insolvency of the Company, there is a
risk that a court of competent jurisdiction may determine that any payment on
the Senior Indebtedness must on a pari passu basis also be made on all other
non-secured and unsubordinated claims against the Company. In such case, the
Notes would be effectively subordinated in right of payment to both the Senior
Indebtedness and all such other non-secured and unsubordinated claims against
the Company at the time and the Holders of the Notes might not receive any
payment until both the holders of Senior Indebtedness and all other
unsubordinated creditors had been paid in full.
The term "Senior Indebtedness" means the principal of, premium, if any,
interest (including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, costs, expenses and other amounts accrued or
due on or in connection with, Indebtedness (as defined) of the Company, whether
outstanding on the date of the Indenture or thereafter created, incurred,
assumed, guaranteed or in effect guaranteed by the Company (including all
deferrals, renewals, extensions or refundings of, or amendments, modifications
or supplements to, the foregoing), unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the assumption or
guarantee thereof expressly provides that such Indebtedness shall not be senior
in right of payment to the Notes or expressly provides that such Indebtedness is
"pari passu" or "junior" to the Notes. Notwithstanding the foregoing, the Senior
Indebtedness shall not include any Indebtedness of the Company to any subsidiary
of the Company, a majority of the voting stock of which is owned, directly or
indirectly, by the Company. The
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<PAGE> 24
term "Indebtedness" means, with respect to any Person (as defined in the
Indenture), and without duplication, (a) all indebtedness, obligations and other
liabilities (contingent or otherwise) of such Person for borrowed money
(including obligations of the Company in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection agreements,
and any loans or advances from banks, whether or not evidenced by notes or
similar instruments) or evidenced by bonds, debentures, notes or similar
instruments (whether or not the recourse of the lender is to the whole of the
assets of such Person or to only a portion thereof)(other than any account
payable or other accrued current liability or obligation incurred in the
ordinary course of business in connection with the obtaining of materials or
services), (b) all reimbursement obligations and other liabilities (contingent
or otherwise) of such Person with respect to letters of credit, bank guarantees
or bankers' acceptances, (c) all obligations and liabilities (contingent or
otherwise) in respect of leases of such Person required, in conformity with
generally accepted accounting principles, to be accounted for as capitalized
lease obligations on the balance sheet of such Person and all obligations and
other liabilities (contingent or otherwise) under any lease or related document
(including a purchase agreement) in connection with the lease of real property
which provides that such Person is contractually obligated to purchase or cause
a third party to purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the landlord and the obligations of
such Person under such lease or related document to purchase or to cause a third
party to purchase such leased property, (d) all obligations of such Person
(contingent or otherwise) with respect to an interest rate or other swap, cap or
collar agreement or other similar instrument or agreement or foreign currency
hedge, exchange, purchase or similar instrument or agreement, (e) all direct or
indirect guaranties or similar agreements by such Person in respect of, and
obligations or liabilities (contingent or otherwise) of such Person to purchase
or otherwise acquire or otherwise assure a creditor against loss in respect of,
indebtedness, obligations or liabilities of another Person of the kind described
in clauses (a) through (d), (f) any indebtedness or other obligations described
in clauses (a) through (d) secured by any mortgage, pledge, lien or other
encumbrance existing on property which is owned or held by such Person,
regardless of whether the indebtedness or other obligation secured thereby shall
have been assumed by such Person and (g) any and all deferrals, renewals,
extensions and refundings of, or amendments, modifications or supplements to,
any indebtedness, obligation or liability of the kind described in clauses (a)
through (f). The term "Designated Senior Indebtedness" means the Company's
obligations under the Credit Agreement (as defined in the Indenture) and any
particular Senior Indebtedness in which the instrument creating or evidencing
the same or the assumption or guarantee thereof (or related agreements or
documents to which the Company is a party) expressly provides that such
Indebtedness shall be "Designated Senior Indebtedness" for purposes of the
Indenture (provided that such instrument, agreement or other document may place
limitations and conditions on the right of such Senior Indebtedness to exercise
the rights of Designated Senior Indebtedness).
The Notes are obligations exclusively of the Company. The Company is a
holding company whose principal assets are its subsidiaries. Since substantially
all of the operations of the Company are conducted through its subsidiaries, the
cash flow and the consequent ability to service debt, including the Notes, of
the Company are partially dependent upon the earnings of its subsidiaries and
the distribution of those earnings, or upon loans or other payments of funds by
those subsidiaries, to the Company. Such subsidiaries are separate and distinct
legal entities and have no obligation, contingent or otherwise, to pay any
amounts due pursuant to the Notes or to make any funds available therefor,
whether by dividends, distributions, loans or other payments. In addition, the
payment of dividends or distributions and the making of loans and advances to
the Company by any such subsidiaries could be subject to statutory or
contractual restrictions, could be contingent upon the earnings of those
subsidiaries and are subject to various business considerations. Any right of
the Company to receive any assets of any of its subsidiaries upon their
liquidation or reorganization (and the consequent right of the Holders of the
Notes to participate in those assets) will be effectively subordinated to the
claims of that subsidiary's creditors (including trade creditors), except to the
extent that the Company is itself recognized as a creditor of such subsidiary,
in which case the claims of the Company would still be subordinate to any
security interest in the assets of such subsidiary and any indebtedness of such
subsidiary senior to that held by the Company.
As of March 31, 1997, the Company had approximately $46 million of
indebtedness outstanding that would have constituted Senior Indebtedness
(including a notional amount of approximately $44 million of
22
<PAGE> 25
foreign currency forward contracts). In addition, as of such date, the Company's
subsidiaries had approximately $125 million of indebtedness and other
liabilities (excluding intercompany liabilities and liabilities of a type not
required to be reflected as a liability on the balance sheet of such
subsidiaries in accordance with generally accepted accounting principles) as to
which the Notes would have been effectively subordinated. The Indenture does not
prohibit or limit the incurrence of Senior Indebtedness or the incurrence of
other indebtedness and other liabilities by the Company or its subsidiaries, and
the incurrence of any such additional indebtedness and other liabilities could
adversely affect the Company's ability to pay its obligations on the Notes. The
Company expects from time to time to incur additional indebtedness, including
Senior Indebtedness, and that it and its subsidiaries will from time to time
incur additional indebtedness and other liabilities. See "Risk
Factors -- Leverage and Subordination."
In the event that, notwithstanding the foregoing, the Trustee or any Holder
of Notes receives any payment or distribution of assets of the Company of any
kind in contravention of any of the subordination provisions of the Indenture,
whether in cash, property or securities, including, without limitation, by way
of set-off or otherwise, in respect of the Notes before all Senior Indebtedness
is paid in full, then such payment or distribution will be held by the recipient
in trust for the benefit of holders of Senior Indebtedness of the Company or
their representative or representatives to the extent necessary to make payment
in full of all Senior Indebtedness of the Company remaining unpaid, after giving
effect to any concurrent payment or distribution, or provision therefor, to or
for the holders of Senior Indebtedness of the Company.
The Company is obligated to pay reasonable compensation to the Trustee and
to indemnify the Trustee against any losses, liabilities or expenses incurred by
it in connection with its duties relating to the Notes. The Trustee's claims for
such payments will be senior to those of Holders of the Notes in respect of all
funds collected or held by the Trustee.
REDEMPTION
OPTIONAL REDEMPTION
The Notes are not entitled to any sinking fund. At any time on or after
December 16, 1998, the Notes will be redeemable at the Company's option on at
least 20 and not more than 60 days' notice as a whole or, from time to time, in
part at the following prices (expressed as percentages of the principal amount),
together with accrued interest to, but excluding, the Redemption Date, except
that prior to December 16, 1999 the Notes will not be redeemable at the option
of the Company unless the closing price of the Common Shares shall have exceeded
140% of the conversion price then in effect for 20 trading days within a period
of 30 consecutive trading days ending within five trading days prior to the
notice of redemption.
If redeemed during the 12-month period beginning December 15:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
------------------------------------------------------------------ ----------
<S> <C>
1998.............................................................. 102.7%
1999.............................................................. 101.8
2000.............................................................. 100.9
</TABLE>
and 100% at December 15, 2001; provided that any semi-annual payment of interest
becoming due on the Redemption Date shall be payable to the Holders of record on
the Regular Record Date of the Notes being redeemed.
If fewer than all the Notes are to be redeemed, the Trustee will select the
Notes to be redeemed by lot. If any Note is to be redeemed in part only, a new
Note or Notes in principal amount equal to the unredeemed principal portion
thereof will be issued. If a portion of a Holder's Notes is selected for partial
redemption and such Holder converts a portion of such Notes, such converted
portion shall be deemed to be taken from the portion selected for redemption.
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<PAGE> 26
REDEMPTION FOR TAXATION REASONS
If, as a result of any change in, or amendment to, the laws or regulations
prevailing in The Netherlands or any political subdivision or taxing authority
thereof or therein, which change or amendment becomes effective on or after
December 12, 1996 or as a result of any application or official interpretation
of such laws or regulations not generally known before that date (a "Tax Law
Change") the Company is or would be required on the next succeeding Interest
Payment Date to pay Additional Amounts (as defined), and such requirement or
obligation cannot be avoided by the Company taking reasonable measures available
to it, the Company may redeem the affected Notes in whole, but not in part, at
any time, on giving not less than 20 days' notice, at a redemption price equal
to 100% of the principal amount thereof plus accrued interest to, but excluding,
the Redemption Date and any Additional Amounts then payable, provided that no
such notice of redemption shall be given earlier than 90 days prior to the
earliest date on which the Company would be obligated to withhold or pay
Additional Amounts were a payment in respect of the Notes then made.
Prior to the publication of any notice of redemption pursuant to this
paragraph, the Company shall deliver to the Trustee (a) a certificate stating
that the Company is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to the right of the
Company so to redeem have occurred and (b) an opinion of counsel selected by the
Company and reasonably acceptable to the Trustee, to the effect that the Company
has or will become obligated to pay such Additional Amounts as a result of a Tax
Law Change. The Company's right to redeem the affected Notes shall continue as
long as the Company is obligated to pay Additional Amounts, notwithstanding that
the Company shall have theretofore made payments of Additional Amounts.
PAYMENT AND CONVERSION
The principal of Registrable Notes will be payable in U.S. dollars, against
surrender thereof at the Corporate Trust Office of the Trustee in The City of
New York, or, subject to any applicable laws and regulations, at the office of
any Paying Agent, by dollar check drawn on, or by transfer to a dollar account
(such transfer to be made only to Holders of an aggregate principal amount of
Registrable Notes in excess of $2,000,000) maintained by the Holder with, a bank
in The City of New York. Payment of any installment of interest on Registrable
Notes will be made to the Person in whose name such Registrable Notes (or any
predecessor Registrable Note) is registered at the close of business on June 1
or December 1 (whether or not a Business Day) immediately preceding the relevant
Interest Payment Date (a "Regular Record Date"). Payments of such interest will
be made by a dollar check drawn on a bank in The City of New York mailed to the
Holder at such Holder's registered address or, upon application by the Holder
thereof to the Trustee not later than the applicable Regular Record Date, by
transfer to a dollar account (such transfer to be made only to Holders of an
aggregate principal amount of Registrable Notes in excess of $2,000,000)
maintained by the Holder with a bank in The City of New York. No transfer to a
dollar account will be made unless the Trustee has received written wire
instructions not less than 15 days prior to the relevant payment date.
Any payment on the Notes due on any day which is not a Business Day need
not be made on such day, but may be made on the next succeeding Business Day
with the same force and effect as if made on such due date, and no interest
shall accrue on such payment for the period from and after such date. "Business
Day," when used with respect to any place of payment, place of conversion or any
other place, as the case may be, means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in such place of
payment, place of conversion or other place, as the case may be, are authorized
or obligated by law or executive order to close; provided, however, that a day
on which banking institutions in New York, New York or Amsterdam, The
Netherlands, are authorized or obligated by law or executive order to close
shall not be a Business Day for certain purposes.
Notes may be surrendered for conversion, subject to any applicable laws and
regulations, at the office of any Conversion Agent outside the United States and
at the Corporate Trust office of the Trustee in the Borough of Manhattan, the
City of New York. Notes surrendered for conversion must be accompanied by
appropriate notices, any unmatured coupons and any payments in respect of
interest or taxes, as applicable, as described above under "-- Conversion."
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<PAGE> 27
The Company has initially appointed as Paying Agents and Conversion Agents,
the Trustee at its Corporate Trust Office and ABN AMRO Bank N.V. in Amsterdam,
The Netherlands. The Company may at any time terminate the appointment of any
Paying Agent or Conversion Agent and appoint additional or other Paying Agents
and Conversion Agents, provided that until the Notes have been delivered to the
Trustee for cancellation, or moneys sufficient to pay the principal of, premium,
if any, and interest on the Notes have been made available for payment and
either paid or returned to the Company as provided in the Indenture, it will
maintain an office or agency in The City of New York, for surrender of Notes for
conversion (but only in the circumstances described in the second sentence of
the immediately preceding paragraph, and not otherwise, with respect to Bearer
Notes), and in a Western European city for payments with respect to the Notes
and for the surrender of Notes for conversion. Notice of any such termination or
appointment and of any change in the office through which any Paying Agent or
Conversion Agent will act will be given in accordance with "-- Notices" below.
All moneys deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of principal of, premium, if any, or
interest on any Notes which remain unclaimed at the end of two years after such
payment has become due and payable will be repaid to the Company, and the Holder
of such Note will thereafter look only to the Company for payment thereof.
PAYMENT OF ADDITIONAL AMOUNTS
The Company will pay to the Holder of any Note or any coupon appertaining
thereto such additional amounts ("Additional Amounts") as may be necessary in
order that every net payment of the principal of, premium, if any, and interest
on such Note, after deduction or withholding for or on account of any present or
future tax, assessment or governmental charge imposed upon or as a result of
such payment by The Netherlands or any political subdivision or taxing authority
thereof or therein, will not be less than the amount provided for in such Note
or in such coupon to be then due and payable; provided however, that the
foregoing obligation to pay Additional Amounts will not apply to:
(a) any tax, assessment or other governmental charge which would not
have been so imposed but for the existence of any present or former
connection between such Holder (or between a fiduciary, settlor,
beneficiary, member, shareholder of or possessor of a power over such
Holder, if such Holder is an estate, a partnership or a corporation) and
The Netherlands or any political subdivision or taxing authority thereof or
therein, including, without limitation, such Holder (or such fiduciary,
settlor, beneficiary, member, shareholder or possessor) being or having
been a citizen, domiciliary or resident of The Netherlands or treated as a
resident thereof, or being or having been engaged in trade or business or
present therein, or having or having had a permanent establishment therein;
(b) any tax, assessment or other governmental charge which would not
have been so imposed but for the presentation by the Holder of such
Registrable Notes for payment on a date more than 15 days after the date on
which such payment became due and payable or the date on which payment
thereof is duly provided for, whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal property
or similar tax, assessment or governmental charge;
(d) in the case of the Registrable Notes, any tax, assessment or other
governmental charge which would not have been imposed but for the failure
of such Holder (or such fiduciary, settlor, beneficiary, member,
shareholder or possessor) of such Registrable Note to comply with a request
by the Company addressed to such Holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) (A) to provide information
concerning the nationality, residence or identity of such Holder (or such
fiduciary, settlor, beneficiary, member, shareholder or possessor) or (B)
to make any declaration or other similar claim or satisfy any information
or reporting requirement, which, in the case of (A) or (B), is required or
imposed by a statute, treaty, regulation or administrative practice of the
taxing jurisdiction as a precondition to exemption from all or part of such
tax, assessment or other governmental charge;
25
<PAGE> 28
(e) any tax, assessment or other governmental charge which is payable
otherwise than by deduction or withholding from payments of principal of,
premium, if any, or interest on such Note;
(f) any tax, assessment or other governmental charge imposed on a
Holder that is a partnership or a fiduciary or other than the sole
beneficial owner of such payment, but only to the extent that any
beneficial owner or member of the partnership or beneficiary or settlor
with respect to the fiduciary would not have been entitled to the payment
of Additional Amounts had the beneficial owner, member, beneficiary or
settlor directly been the Holder of the Note; or
(g) any combination of items (a), (b), (c), (d), (e) and (f).
Notwithstanding the foregoing, the Company shall not be obligated to pay
Additional Amounts in respect of payments becoming due on the Notes more than 15
days after the Redemption Date with respect to any redemption of the Notes
described in the first paragraph under "Redemption -- Redemption for Taxation
Reasons" to the extent that the Company's obligation to pay such Additional
Amounts arises from the Tax Law Change that resulted in such redemption.
REPURCHASE AT OPTION OF HOLDERS UPON A FUNDAMENTAL CHANGE
If a Fundamental Change (as defined) occurs, each Holder of Notes shall
have the right, at the Holder's option, to require the Company to repurchase all
of such Holder's Notes, or any portion of a Note that is $5,000 or an integral
multiple of $1,000 in excess thereof, on the date (the "Repurchase Date") that
is 45 days after the date of the Company Notice (as defined), at a price (the
"Repurchase Price") (expressed as a percentage of the principal amount) equal to
(i) 104.5% if the Repurchase Date is during the 12-month period beginning
December 15, 1996, (ii) 103.6% if the Repurchase Date is during the 12-month
period beginning December 15, 1997 and (iii) thereafter at the redemption price
set forth under "-- Redemption -- Optional Redemption" which would be applicable
to a redemption at the option of the Company on the Repurchase Date; provided
that, if the Applicable Price (as defined) is less than the Reference Market
Price (as defined), the Company shall repurchase such Notes at a price equal to
the foregoing redemption price multiplied by the fraction obtained by dividing
the Applicable Price by the Reference Market Price. In each case, the Company
shall also pay accrued interest on the redeemed Notes to, but excluding, the
Repurchase Date.
Within 30 days after the occurrence of a Fundamental Change, the Company is
obligated to give to all Holders of the Notes notice, as provided in the
Indenture (the "Company Notice"), of the occurrence of such Fundamental Change
and of the repurchase right arising as a result thereof. The Company must also
deliver a copy of the Company Notice to the Trustee. To exercise the repurchase
right, a Holder of Notes must deliver on or before the 30th day after the date
of the Company Notice irrevocable written notice to the Trustee or any Paying
Agent of the Holder's exercise of such right, together with the Notes with
respect to which the right is being exercised. Beneficial owners of an interest
in a registered global Note may exercise the repurchase right by delivering the
appropriate instruction form for repurchases at the election of Holders pursuant
to the DTC book-entry repurchase program.
The term "Fundamental Change" means the occurrence of any transaction or
event in connection with which all or substantially all of the Common Shares
shall be exchanged for, converted into, acquired for or constitute solely the
right to receive, consideration (whether by means of an exchange offer,
liquidation, tender offer, consolidation, merger, split-up, combination,
reclassification, recapitalization or otherwise) which is not all or
substantially all common stock or shares which are (or, upon consummation of or
immediately following such transaction or event, will be) listed on a United
States or Western European securities exchange or approved for quotation on the
Nasdaq National Market or any similar United States or Western European system
of automated dissemination of quotations of securities prices. The term
"Applicable Price" means (i) in the event of a Fundamental Change in which the
holders of Common Shares receive only cash, the amount of cash received by the
holder of one Common Share and (ii) in the event of any other Fundamental
Change, the average of the last reported sale price for the Common Shares during
the ten Trading Days prior to the record date for the determination of the
holders of Common Shares entitled to receive cash, securities, property or other
assets in connection with such Fundamental Change or, if no such record date
exists, the
26
<PAGE> 29
date upon which the holders of the Common Shares shall have the right to receive
such cash, securities, property or other assets in connection with the
Fundamental Change. The term "Reference Market Price" shall initially mean
$22.83 (which is equal to 66 2/3% of the last sale price of the Common Shares
reported on the Nasdaq National Market on December 12, 1996, as reflected on the
cover page of this Offering Memorandum) and in the event of any adjustment to
the conversion price described above pursuant to the provisions of the
Indenture, the Reference Market Price shall also be adjusted so that the ratio
of the Reference Market Price to the conversion price after giving effect to any
such adjustment shall always be the same as the ratio of $22.83 to the
conversion price specified on the cover page of this Prospectus (without regard
to any adjustment thereto).
Rule 13e-4 under the Exchange Act requires the dissemination of certain
information to security holders in the event of an issuer tender offer and may
apply in the event that the repurchase option becomes available to Holders of
the Notes. The Company will comply with this rule to the extent applicable at
that time.
Upon a Fundamental Change (as defined), each Holder of Notes will have
certain rights, at the Holder's option, to require the Company to repurchase all
or a portion of such Holder's Notes. If a Fundamental Change were to occur,
there can be no assurance that the Company would have sufficient funds to pay
the Repurchase Price for all Notes tendered by the Holders thereof. Any future
credit agreements or other agreements relating to other indebtedness (including
other Senior Indebtedness) to which the Company becomes a party may contain
restrictions and provisions which prohibit the Company from purchasing or
redeeming any Notes or provide that a Fundamental Change would constitute an
event of default thereunder. In the event a Fundamental Change occurs at a time
when the Company is prohibited from purchasing or redeeming Notes, the Company
could seek the consent of its lenders to the purchase of Notes or could attempt
to refinance the borrowings that contain such prohibition. If the Company does
not obtain such a consent or repay such borrowings, the Company would remain
prohibited from purchasing or redeeming Notes. In such case, the Company's
failure to repurchase tendered Notes would constitute an Event of Default under
the Indenture, which would, in turn, constitute a further default under the
Company's then existing bank facilities and may constitute a default under the
terms of other indebtedness that the Company may enter into from time to time.
In such circumstances, the subordination provisions in the Indenture would
likely restrict payments to the Holders of Notes.
The Company may, to the extent permitted by applicable law, at any time
purchase Notes in the open market or by tender at any price or by private
agreement. Any Note so purchased by the Company may, to the extent permitted by
applicable law, be re-issued or resold or may, at the Company's option, be
surrendered to the Trustee for cancellation. Any Notes surrendered as aforesaid
and all unmatured coupons attached to them or surrendered with them may not be
re-issued or resold and will be cancelled promptly.
The foregoing provisions would not necessarily afford Holders of the Notes
protection in the event of highly leveraged or other transactions involving the
Company that may adversely affect Holders.
MERGERS AND SALES OF ASSETS BY THE COMPANY
The Company may not consolidate with or merge into any other Person (in a
transaction in which the Company is not the surviving entity) or transfer or
lease its properties and assets substantially as an entirety to any Person
unless the Person formed by such merger or into which the Company is merged or
the Person to which the properties and assets of the Company are so transferred
or leased shall expressly assume the payment of the principal of, premium, if
any, and interest on the Notes and coupons and the performance of the other
covenants of the Company under the Indenture. The Company also may not
consummate a split-up unless, following conclusion of the split-up, there would
be at least one obligor that is fully liable for the payment of the principal
of, premium, if any, and interest on the Notes and coupons and the performance
of the other covenants of the Company under the Indenture.
EVENTS OF DEFAULT
The following will be Events of Default under the Indenture: (a) failure to
pay principal of or premium, if any, on any Note when due; (b) failure to pay
any interest on any Note or coupon when due, continuing for
27
<PAGE> 30
30 days; (c) failure to perform any other covenant of the Company in the
Indenture, continuing for 60 days after written notice as provided in the
Indenture; and (d) certain events of bankruptcy, insolvency or reorganization.
Subject to the provisions of the Indenture relating to the duties of the Trustee
in case an Event of Default shall occur and be continuing, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request or direction of any of the Holders, unless such Holders shall
have offered to the Trustee reasonable indemnity. Subject to such provisions for
the indemnification of the Trustee, the Holders of a majority in aggregate
principal amount of the Outstanding Notes will have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee.
If an Event of Default (other than as specified in clause (d) above) shall
occur and be continuing, either the Trustee or the Holders of at least 25%
principal amount of the Outstanding Notes may accelerate the maturity of all
Notes; provided, however, that after such acceleration, but before a judgment or
decree based on acceleration, the Holders of a majority in aggregate principal
amount of Outstanding Notes may, under certain circumstances, rescind and annul
such acceleration if all Events of Default, other than the non-payment of
accelerated principal, have been cured or waived as provided in the Indenture.
If an Event of Default as specified in clause (d) above occurs and is
continuing, then the principal of, and accrued interest on, all the Notes shall
ipso facto become immediately due and payable without any declaration or other
act on the part of the Holders of the Notes or the Trustee. For information as
to waiver of defaults, see "-- Meetings, Modification and Waiver."
No Holder of any Note will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder, unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default and the Holders of at least 25% in aggregate principal amount of the
Outstanding Notes shall have made written request, and offered reasonable
indemnity, to the Trustee to institute such proceeding as trustee, and the
Trustee shall not have received from the Holders of a majority in aggregate
principal amount of the Outstanding Notes a direction inconsistent with such
request and shall have failed to institute such proceeding within 60 days.
However, such limitations do not apply to a suit instituted by a Holder of a
Note for the enforcement of payment of the principal of, premium, if any, or
interest on such Note on or after the respective due dates expressed in such
Note or of the right to convert such Note in accordance with the Indenture.
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance.
MEETINGS, MODIFICATION AND WAIVER
The Indenture contains provisions for convening meetings of the Holders of
Notes to consider matters affecting their interests.
Modifications and amendments of the Indenture may be made, and certain past
defaults by the Company may be waived, either (i) with the written consent of
the Holders of not less than a majority in aggregate principal amount of the
Notes at the time Outstanding or (ii) by the adoption of a resolution, at a
meeting of Holders of the Notes at which a quorum is present, by the Holders of
at least the lesser of a majority in aggregate principal amount of the Notes at
the time Outstanding and 66 2/3% of the aggregate principal amount of the Notes
represented and entitled to vote at such meeting. However, no such modification
or amendment may, without the consent of the Holder of each Outstanding Note or
coupon affected thereby, (a) change the Stated Maturity of the principal of, or
any installment of interest on, any Note or coupon, (b) reduce the principal
amount of, or the premium, if any, or interest on, any Note or coupon, (c)
reduce the amount payable upon a redemption or mandatory repurchase, (d) modify
the provisions with respect to the repurchase right of the Holders in a manner
adverse to the Holders, (e) change the obligation of the Company to pay
Additional Amounts described above in a manner adverse to the Holders, (f)
change the place or currency of payment of principal of, or premium, if any, or
interest on, any Note or coupon, (g) impair the right to institute suit for the
enforcement of any payment on or with respect to any Note or coupon, (h) modify
the obligation of the Company to maintain an office or agency in The City of New
York and in a Western
28
<PAGE> 31
European city, (i) adversely affect the right to convert Notes, (j) modify the
subordination provisions in a manner adverse to the Holders of the Notes, (k)
reduce the above-stated percentage of Outstanding Notes necessary to modify or
amend the Indenture, (l) reduce the percentage of aggregate principal amount of
Outstanding Notes necessary for waiver of compliance with certain provisions of
the Indenture or for waiver of certain defaults, (m) reduce the percentage in
aggregate principal amount of Outstanding Notes required for the adoption of a
resolution or the quorum required at any meeting of Holders of Notes at which a
resolution is adopted, or (n) modify the obligation of the Company to deliver
information required under Rule 144A to permit resales of Notes and Common
Shares issuable upon conversion thereof in the event the Company ceases to be
subject to certain reporting requirements under the United States securities
laws. The quorum at any meeting called to adopt a resolution will be persons
holding or representing a majority in aggregate principal amount of the Notes at
the time Outstanding and, at any reconvened meeting adjourned for lack of a
quorum, 25% of such aggregate principal amount.
The Holders of a majority in aggregate principal amount of the Outstanding
Notes may waive compliance by the Company with certain restrictive provisions of
the Indenture by written consent. The Holders of a majority in aggregate
principal amount of the Outstanding Notes also may waive any past default under
the Indenture, except a default in the payment of principal, premium, if any, or
interest, by written consent.
REGISTRATION RIGHTS
In connection with the Original Offering, the Company entered into a
Registration Rights Agreement with the Initial Purchaser, pursuant to which the
Company, at the Company's expense for the benefit of the holders of the
Registrable Notes and the Common Shares issuable upon conversion thereof
(together, the "Registrable Securities"), (i) has filed with the Commission this
registration statement (the "Shelf Registration Statement") covering resales of
the Registrable Securities, (ii) will use its reasonable efforts to cause the
Shelf Registration Statement to be declared effective under the Securities Act
within 180 days after the date of original issuance of the Registrable Notes and
(iii) will use its reasonable efforts to keep effective the Shelf Registration
Statement until the second anniversary of the last date of original issuance of
Registrable Notes or such earlier date as all Registrable Securities shall have
been disposed of or on which all Registrable Securities held by persons that are
not affiliates of the Company may be resold without registration pursuant to
Rule 144(k) under the Securities Act (the "Effectiveness Period"). The Company
will be permitted to suspend the use of the prospectus which is part of the
Shelf Registration Statement in connection with the sales of the Registrable
Securities during certain periods of time under certain circumstances relating
to pending corporate developments, public filings with the Commission and other
events. The Company will provide to each holder of Registrable Securities copies
of the prospectus that is a part of the Shelf Registration Statement, notify
each holder when the Shelf Registration Statement has become effective and take
certain other actions as are required to permit public resales of the
Registrable Securities. A holder of Registrable Securities that sells such
Registrable Securities pursuant to the Shelf Registration Statement will be
required to be named as a selling security holder in the related prospectus and
to deliver a prospectus to purchasers, will be subject to certain of the civil
liability provisions under the Securities Act in connection with such sales and
will be bound by the provisions of the Registration Rights Agreement, including
certain indemnification obligations.
If (i) on or prior to 90 days following the date of original issuance of
the Registrable Notes a Shelf Registration Statement has not been filed with the
Commission or (ii) on or prior to the 180th day following the date of original
issuance of the Registrable Notes, such Shelf Registration Statement is not
declared effective (each, a "Registration Default"), additional interest
("Liquidated Damages") will accrue on the Registrable Notes, from and including
the day following such Registration Default until such time as such Shelf
Registration Statement is filed or such Shelf Registration Statement is declared
effective, as the case may be. Liquidated Damages will be paid semi-annually in
arrears, with the first semi-annual payment due on the first Interest Payment
Date following the date on which such Liquidated Damages begin to accrue, and
will accrue at a rate per annum equal to an additional one-quarter of one
percent (0.25%) of the principal amount, to and including the 90th day following
such Registration Default and one-half of one percent (0.50%) thereof from and
after the 91st day following such Registration Default. In the event that during
the
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<PAGE> 32
Effectiveness Period the Shelf Registration Statement ceases to be effective for
more than 90 days or the Company suspends the use of the prospectus which is a
part thereof for more than 90 days, whether or not consecutive, during any
12-month period, then the interest rate borne by Registrable Notes will increase
by an additional one-half of one percent (0.50%) per annum from the 91st day of
the applicable 12-month period such Shelf Registration Statement ceases to be
effective or the Company suspends the use of the prospectus which is a part
thereof, as the case may be, until the earlier of such time as (i) the Shelf
Registration Statement again becomes effective, (ii) the use of the related
prospectus ceases to be suspended or (iii) the Effectiveness Period expires. The
Company has agreed in the Registration Rights Agreement to use its reasonable
efforts to cause such Common Shares issuable upon conversion of the Registrable
Notes to be quoted on the Nasdaq National Market, or, if the Common Shares are
not then quoted on the Nasdaq National Market, to be listed on such exchange or
market in the United States as the Common Shares are then listed, upon
effectiveness of the Shelf Registration Statement.
The summary of certain provisions of the Registration Rights Agreement does
not purport to be complete and is subject to, and qualified in its entirety by
reference to, all the provisions of the Registration Rights Agreement, a copy of
the form of which has been filed as an exhibit to the Registration Statement of
which this Prospectus forms a part.
BOOK-ENTRY; DELIVERY AND FORM; GLOBAL CERTIFICATES
Upon the initial sale of Registrable Notes offered hereby, each Selling
Holder will be required to deliver a notice ("Notice") of such sale to the
Trustee and the Company. The Notice will, among other things, identify the sale
as a transfer pursuant to the Registration Statement of which this Prospectus
forms a part, certify that the prospectus delivery requirements, if any, of the
Securities Act have been satisfied, and certify that the Selling Holder and the
aggregate principal amount of Notes owned by such holder are identified in the
Prospectus in accordance with the applicable rules and regulations under the
Securities Act.
Upon the initial transfer pursuant to the Registration Statement of which
this Prospectus forms a part, the Registrable Notes will be represented by one
or more global notes (the "Global Note") in definitive, fully registered form,
without coupons. Each such Global Note will be deposited upon issuance with, or
on behalf of, Depository Trust Company ("DTC") and registered in the name of DTC
or its nominee (the "Global Note Registered Owner") or will remain in the
custody of the Trustee pursuant to a FAST Balance Certificate Agreement between
DTC and the Trustee. Except as set forth below, the Global Note may be
transferred, whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee.
DTC is a limited purpose trust company organized under the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
was created to hold securities for its participant organizations (collectively,
the "Participants") and to facilitate the clearance and settlement of
transactions in those securities between Participants through electronic
book-entry changes in accounts of its Participants. The Participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations. Access to DTC's systems is also available to
other entities such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly (collectively, the "Indirect Participants"). Persons who are not
Participants may beneficially own securities held by or on behalf of DTC only
through the Participants or the Indirect Participants. The ownership interest
and transfer of ownership interest of each actual purchaser of each security
held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
Pursuant to procedures established by DTC, (i) upon direct deposit of the
Global Note, DTC will credit
the accounts of Participants with portions of the principal amount of the Global
Note and (ii) ownership of such interests in the Global Note will be shown on,
and the transfer of ownership thereof will be effected only through, records
maintained by DTC (with respect to the Participants) or by the Participants and
the Indirect Participants (with respect to other owners of beneficial interest
in the Global Notes). The laws of some states
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<PAGE> 33
require that certain persons take physical delivery in definitive form of
securities that they will own. Consequently, the ability to transfer Registrable
Notes will be limited to that extent.
Except as described below, owners of interests in the Global Note will not
have Registrable Notes registered in their names, will not receive physical
delivery of Registrable Notes in definitive form and will not be considered the
registered owners thereof under the Indenture for any purpose.
None of the Company, the Trustee, nor any agent of the Company or the
Trustee will have any responsibility or liability for (i) any aspect of DTC's
records or any Participant's records relating to or payments made on account of
beneficial ownership interests in the Global Note, or for maintaining,
supervising or reviewing any of DTC's records or any Participants's records
relating to the beneficial ownership interests in the Global Note or (ii) any
other matters relating to the actions and practices of DTC or any of its
Participants.
Payments in respect of the principal of, premium, if any, and interest on
any Registrable Notes registered in the name of the Global Note Registered Owner
or any relevant record will be payable by the Trustee to the Global Note
Registered Owner in its capacity as the registered holder under the Indenture.
Under the terms of the Indenture, the Company and the Trustee will treat the
person in whose name the Registrable Notes, including the Global Note, are
registered as the owners thereof for the purpose of receiving such payments and
for any and all other purposes whatsoever. Consequently, neither the Company,
the Trustee, nor any agent of the Company or the Trustee has nor will have any
responsibility or liability for the payment of such amounts to beneficial owners
of the Registrable Notes or for any other matters relating to actions or
practices of DTC or any of its Participants. The Company understands that DTC's
current practice, upon receipt of any payment in respect to securities such as
the Registrable Notes (including principal and interest), is to credit the
accounts of the relevant Participants with the payment on the payment date, in
amounts proportionate to their respective holdings in principal amount of
beneficial interests in the relevant security as shown on the records of DTC
(unless DTC has reason to believe it will not receive payment on such payment
date). Payments by the Participants and the Indirect Participants to the
beneficial owners of Registrable Notes will be governed by standing instructions
and customary practices and will be the responsibility of Participants or the
Indirect Participant and the beneficial owners, and not the responsibility of
the DTC, the Trustee or the Company. Neither the Company nor the Trustee will be
liable for any delay by DTC or any of its Participants in identifying the
beneficial owners of the Registrable Notes, and the Company and the Trustee may
conclusively rely on and will be protected in relying on instructions from the
Global Note Registered Owner for all purposes.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Note, DTC or such nominee, as the case may be, will be considered the
sole owner of the Registrable Notes represented by such Global Notes for all
purposes under the Indenture and the Registrable Notes. No beneficial owner of
an interest in a Global Note will be able to transfer the interest except in
accordance with DTC's applicable procedures, in addition to those provided for
under the Indenture. Transfer between Participants in DTC will be effected in
the ordinary way in accordance with DTC rules.
The Company expects that DTC will take any action permitted to be taken by
a holder of Registrable Notes (including the presentation of Registrable Notes
for exchange as described below) only at the direction of one or more
Participants to whose account the DTC interests in a Global Note is credited and
only in respect of such portion of the aggregate principal amount of the
Registrable Notes as to which such Participant or Participants has or have given
such direction.
Although the Company expects that DTC will agree to the foregoing
procedures in order to facilitate transfers of interests in a Global Note among
Participants of DTC, it is under no obligation to perform or continue to perform
such procedures may be discontinued at any time. Neither the Company nor the
Trustee will have any responsibility for the performance by DTC or its
Participants or Indirect Participants of their respective obligations under the
rules and procedures governing their operations.
If DTC is at any time unwilling or unable to continue as a depositary for a
Global Note and a successor depositary is not obtained, the Company will issue
definitive certificated Registrable Notes in exchange for a
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Global Note. Such definitive certificated Registrable Notes shall be registered
in names of the owners of the beneficial interests in the Global Note as
provided by the Participants. Upon issuance of Registrable Notes in definitive
certificated form, the Trustee is required to register the Registrable Notes in
the name of, and cause the Registrable Notes to be delivered to, the person or
persons (or the nominee thereof) identified as the beneficial owner as DTC shall
direct.
The information in this section concerning DTC and DTC's book-entry systems
has been obtained from sources that the Company believes to be reliable, but the
Company takes no responsibility for the accuracy thereof.
TITLE
Subject to applicable law, the Company, the Trustee, any Paying Agent and
any Conversion Agent may treat the registered owner (as reflected in the
Security Register) of any Registrable Note as the absolute owner thereof
(whether or not such Registrable Note or coupon shall be overdue) for the
purpose of making payment and for all other purposes.
NOTICES
Notice to Holders of the Notes will be given by publication in Authorized
Newspapers (as set forth in the Indenture). Notices to Holders of Registrable
Notes will also be given by mail to the addresses of such Holders as they appear
in the Security Register. Such notices will be deemed to have been given on the
date of such publication or, if published in such Authorized Newspapers on
different dates, on the date of the first such publication or on the date of
such mailing, as the case may be.
Notice of a redemption of Notes will be given at least once not less than
20 nor more than 60 days prior to the Redemption Date (which notice shall be
published in accordance with the procedures described in the preceding
paragraph, and shall be irrevocable except as otherwise provided in the second
paragraph under "-- Redemption -- Redemption for Taxation Reasons") and will
specify the Redemption Date.
REPLACEMENT OF NOTES AND COUPONS
Registrable Notes that become mutilated, destroyed, stolen or lost will be
replaced by the Company at the expense of the Holder upon delivery to the
Trustee or to a transfer agent outside the United States of the mutilated
Registrable Notes and coupons or evidence of the loss, theft or destruction
thereof satisfactory to the Company and the Trustee. In the case of a lost,
stolen or destroyed Registrable Note or coupon, indemnity satisfactory to the
Trustee and the Company may be required at the expense of the Holder of such
Registrable Note or coupon before a replacement Registrable Note (with the
relevant coupons appertaining thereto, if any) or coupon will be issued.
PAYMENT OF STAMP AND OTHER TAXES
The Company will pay all stamp and other duties, if any, which may be
imposed by the United States or The Netherlands or any political subdivision
thereof or taxing authority thereof or therein with respect to the issuance of
the Notes or the issuance of Common Shares upon any conversion of Notes. Except
as described under "-- Payment of Additional Amounts," the Company will not be
required to make any payment with respect to any other tax, assessment or
governmental charge imposed by any government or any political subdivision
thereof or taxing authority thereof or therein.
GOVERNING LAW
The Indenture, the Notes and the Registration Rights Agreement are governed
by and construed in accordance with the laws of the State of New York, United
States of America (except to the extent that the law of companies of The
Netherlands applies).
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THE TRUSTEE
In case an Event of Default shall occur (and shall not be cured or waived
in a timely manner), the Trustee will be required to use the degree of care of a
prudent person in the conduct of his own affairs in the exercise of its powers.
Subject to such provisions, the Trustee will be under no obligation to exercise
any of its rights or powers under the Indenture at the request of any of the
Holders of Notes, unless they shall have offered to the Trustee reasonable
security or indemnity.
NOTES ISSUED IN RELIANCE UPON REGULATION S
The Bearer Notes issued in the Original Offering in reliance upon
Regulation S are not being registered pursuant to the Registration Statement of
which this Prospectus forms a part. The Bearer Notes issued under the Indenture
are governed by substantially similar terms as the Registrable Notes, except
with respect to certain mechanical provisions relating to form and denomination,
payment and conversion, redemption for taxation reasons and payment of
additional amounts. Bearer Notes may be exchanged at the option of the Holder
for Registrable Notes, but Registrable Notes may not be exchanged at for Bearer
Notes as a result of certain securities law and tax restrictions. For a complete
description of the terms and conditions of the Regulation S Notes, see the
detailed provisions of the Indenture.
SHARE CERTIFICATES AND TRANSFER
The Common Shares are issuable in registered form or bearer form.
Registered Shares may consist of either Common Shares registered with the
Company's transfer agent and registrar in New York, New York ("New York Registry
Shares"), Citibank, N.A. (the "New York Transfer Agent") or Common Shares
registered at the Company's offices in Barneveld, The Netherlands (the
"Barneveld Register"). New York Registry Shares may be evidenced by certificates
printed in the English language and are registered in book-entry form, while
Common Shares registered in the Barneveld Register are registered in book-entry
form. Bearer Shares are represented by certificates printed in the Dutch
language with a dividend sheet attached ("CF-certificates"). CF-certificates
must remain deposited with an authorized custodian and may only be transferred
through the book-entry transfer systems maintained by NECIGEF (Nederlands
Centraal Instituut voor Giraal Effectenverkeer, the Netherlands Central
Institute for Giro Securities), Cedel Bank, S.A. or Euroclear.
The transfer of Registered Shares requires an instrument intended for such
purpose and, except when the Company itself is a party to such legal act, the
written acknowledgement of the transfer by the Company or, in the case of the
New York Registry Shares, the New York Transfer Agent (in the name of the
Company), and submission of the share certificates, if any, to the Company or
(in the name of the Company) to the New York Transfer Agent. The transfer of
Registered Shares requires the permission of the Management Board, unless the
instrument of transfer is in the form supplied by the Company (which the Company
makes available free of charge).
The Common Shares are listed on the Nasdaq National Market and on the
Amsterdam Stock Exchange. Only New York Registry Shares may be traded on the
Nasdaq National Market and only Bearer Shares may be traded on the Amsterdam
Stock Exchange.
Bearer Shares may be converted into Registered Shares at the request of the
holder and vice versa. A holder may convert Bearer Shares to New York Registry
Shares by providing a written request for such exchange and surrendering the
Bearer Shares at the principal office of ABN AMRO Bank N.V., Herengracht 595,
1017 CE Amsterdam, The Netherlands, the Dutch exchange agent (the "CF Agent").
The CF Agent will instruct the New York Transfer Agent to issue New York
Registry Shares and to deliver the corresponding share certificates. Similarly,
a holder may convert New York Registry Shares to Bearer Shares by presenting a
written request for such exchange and surrendering the New York Registry Shares
to the New York Transfer Agent. The New York Transfer Agent will then instruct
the CF Agent in The Netherlands to issue and deliver Bearer Shares for the same
number of shares. Bearer Shares and New York Registry Shares registered with the
New York Transfer Agent and Registrar may upon cancellation also be exchanged
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into Common Shares in registered form registered upon the Barneveld Register and
vice versa. Share certificates for New York Registry Shares may be exchanged at
the office of the New York Transfer Agent for certificates of other authorized
denominations. A fee will be charged to shareholders for the exchange of New
York Registry Shares for Bearer Shares or Common Shares of the Barneveld
Register (and for each other such conversion).
Bearer Shares have been accepted for clearance through Cedel Bank, S.A. and
Euroclear (Common Code 5740223 and ISIN NL0000 336337). The Fonds Code for the
Common Shares on the Amsterdam Stock Exchange is 33633.
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TAXATION
GENERAL
The following is a summary of certain Netherlands and U.S. federal income
tax consequences relating to the purchase, ownership and disposition of the
Notes (including conversion of the Notes into Common Shares) and of the Common
Shares into which the Notes may be converted. It does not address the tax
treatment of certain types of investors (e.g., individual retirement and other
tax deferred accounts, life insurance companies, tax-exempt organizations,
dealers in securities and holders of Notes or the Common Shares as part of a
straddle, hedging or conversion transaction for U.S. federal income tax
purposes) all of whom may be subject to tax rules that differ significantly from
those set forth below. This summary does not address any laws other than the tax
laws of The Netherlands and U.S. federal income tax law as currently in effect (
all of which could change at any time, possibly with retroactive effect) and is
for general information purposes only. It is not intended as tax advice, and it
does not consider any investor's particular circumstances. PROSPECTIVE INVESTORS
SHOULD CONSULT THEIR OWN TAX ADVISERS AS TO THE NETHERLANDS, U.S. AND OTHER TAX
CONSEQUENCES OF AN INVESTMENT IN THE NOTES AND THE COMMON SHARES.
NETHERLANDS TAXATION
NETHERLANDS WITHHOLDING TAX
All payments made by the Company with respect to the Notes, including any
Additional Amounts, will be made free of withholding or deduction, for or on
account of any taxes of whatsoever nature imposed, levied, withheld, or assessed
by The Netherlands or any political subdivision or taxing authority thereof or
therein.
The Company does not expect to pay dividends on the Common Shares in the
foreseeable future. To the extent that dividends are distributed by the Company,
such dividends would be subject under Netherlands tax law to withholding tax at
a rate of 25%. Dividends include dividends in cash or in kind, constructive
dividends and liquidation proceeds in excess of, for Netherlands tax purposes,
recognized paid-in capital. Stock dividends are also subject to withholding tax
unless distributed out of the Company's paid-in share premium as recognized for
Netherlands tax purposes.
A non-resident shareholder can be eligible for a reduction or a refund of
Netherlands dividend withholding tax under a tax convention which is in effect
between the country of residence of the non-resident shareholder and The
Netherlands. The Netherlands has concluded such conventions with, among others,
the United States and all member states of the European Union except Portugal.
Under most of these conventions, Netherlands dividend withholding tax is reduced
to a rate of 15% or less unless the recipient shareholder has a permanent
establishment in The Netherlands to which the Notes or the Common Shares are
attributable.
No withholding tax applies on the sale or disposition of Common Shares to
persons other than the Company and affiliates of the Company.
TAXES ON INCOME AND CAPITAL GAINS
A holder of Notes or of Common Shares will not be subject to any
Netherlands taxes on income or capital gains in respect of any payments under
the Note or dividends on the Common Shares or in respect of any gain realized on
the disposal of the Note (including any gain realized upon conversion of a Note)
or the Common Shares provided that:
(i) such holder is neither resident nor deemed to be resident in The
Netherlands;
(ii) such holder does not have an enterprise or an interest in an
enterprise that is, in whole or in part, carried on through a permanent
establishment or a permanent representative in The Netherlands and to which
enterprise or part of an enterprise, as the case may be, the Notes or the
Common Shares are attributable; and
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(iii) such holder does not have a substantial interest or a deemed
substantial interest in the share capital of the Company or, if such holder
does have such an interest, it forms part of the assets of an enterprise.
As of January 1, 1997, a holder of Notes or Common Shares will generally
not have a substantial interest if he, his spouse, certain other relatives
(including foster children) or certain persons sharing his household, do not
hold, alone or together, whether directly or indirectly, the ownership of, or
certain other rights over, shares representing five per cent or more of the
total issued and outstanding capital (or the issued and outstanding capital of
any class of shares) of the Company. A deemed substantial interest is present if
(part of) a substantial interest has been disposed of, or is deemed to have been
disposed of, on a non-recognition basis.
NET WEALTH TAX
A holder of Notes or of Common Shares will not be subject to Netherlands
net wealth tax in respect of the Notes or the Common Shares provided that such
holder is not an individual or, if he is an individual, the conditions described
in clauses (i) and (ii) of the proviso under "-- Taxes on Income and Capital
Gains" are satisfied.
GIFT, ESTATE OR INHERITANCE TAXES
No gift, estate or inheritance taxes will arise in The Netherlands with
respect to an acquisition of Notes or Common Shares by way of a gift by, or on
the death of, a holder of Notes or Common Shares who is neither resident nor
deemed to be resident in The Netherlands unless (i) such holder at the time of
the gift has or at the time of his death had an enterprise or an interest in an
enterprise that is or was, in whole or in part, carried on through a permanent
establishment or a permanent representative in The Netherlands and to which
enterprise or part of an enterprise, as the case may be, the Notes or the Common
Shares are or were attributable, or (ii) in the case of a gift of Notes or the
Common Shares by an individual who at the date of the gift was neither resident
nor deemed to be resident in The Netherlands, such individual dies within 180
days after the date of the gift while being resident or deemed to be resident in
The Netherlands.
CAPITAL TAX
No Netherlands capital tax will be payable in respect of or in connection
with the execution, delivery and/or enforcement by legal proceedings (including
the enforcement of any foreign judgment in the Courts of The Netherlands) of the
Notes or the performance by the Company of its obligations thereunder.
OTHER TAXES AND DUTIES
No Netherlands registration tax, customs duty, stamp duty or any other
similar documentary tax or duty other than court fees is payable in The
Netherlands by a holder of Notes or Common Shares in respect of or in connection
with the execution and, delivery of the Notes and/or enforcement by legal
proceedings (including the enforcement of any foreign judgment in the Courts of
The Netherlands) of the Notes, or the performance by the Company of its
obligations thereunder, or consummation of the transactions contemplated
thereby.
TURNOVER TAX
No Netherlands turnover tax arises in respect of payments in consideration
of the issue of Notes or of the Common Shares or with respect to payments by the
Company or principal or premium or redemption price or repurchase price of, or
interest on, a Note.
U.S. FEDERAL INCOME TAXATION
For purposes of this summary, a "U.S. Holder" is any holder of the Notes or
of the Common Shares that is (i) a citizen or resident of the United States,
(ii) a corporation, partnership, or other entity created or organized in or
under the laws of the United States (or any State thereof, including the
District of Columbia), or (iii) an estate or trust the income of which is
subject to United States federal income taxation regardless of
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its source. A "Non-U.S. Holder" is any holder of Notes or of the Common Shares
that is not a U.S. Holder. This summary is addressed to original purchasers who
will hold the Notes and the Common Shares as capital assets and whose functional
currency is the U.S. dollar.
TAXATION OF INTEREST
Interest paid on a Note (including Additional Amounts) generally will be
includible in the income of a U.S. Holder in accordance with the U.S. Holder's
regular method of tax accounting. A U.S. Holder will be required to include in
income any amounts paid in respect of withholding taxes (if any) withheld on
payments on the Notes. Similar principles would apply if, due to a change in
applicable law, Netherlands taxes were imposed. Interest on a Note will be
income from sources outside the United States for foreign tax credit limitation
purposes. Under the Code, the limitation on foreign taxes eligible for credit is
calculated separately with respect to specific classes of income. Interest paid
on a Note generally will be either "passive" income or "financial services"
income, depending on the particular U.S. Holder's circumstances. Foreign tax
credits allowable with respect to each class of income cannot exceed the U.S.
federal income tax otherwise payable with respect to such class of income.
Payments of interest on a Note to a Non-U.S. Holder generally will not be
subject to U.S. federal income tax unless such income is effectively connected
with the conduct by such Non-U.S. Holder of a trade or business in the United
States.
CONVERSION OF THE NOTES
In general, no gain or loss will be recognized for U.S. federal income tax
purposes on a conversion of the Notes into Common Shares. Cash paid in lieu of a
fractional share, however, will likely result in taxable gain (or loss), which
will be capital gain (or loss), to the extent that the amount of such cash
exceeds (or is exceeded by) the portion of the adjusted basis of the Note
allocable to such fractional share. The adjusted basis of the Common Shares
received on conversion will equal the adjusted basis of the Note converted,
reduced by the portion of adjusted basis allocated to any fractional share
exchanged for cash. The holding period of an investor in the Common Shares
received on conversion will include the period during which the converted Notes
were held.
TAXATION OF DIVIDENDS
The gross amount (before reduction for withholding taxes) of a distribution
with respect to the Common Shares will be a dividend to a U.S. Holder, taxable
as ordinary income, to the extent of the Company's current or accumulated
earnings and profits (as determined under U.S. federal income tax principles).
Distributions paid by the Company in excess of current or accumulated earnings
and profits will be treated as a tax-free return of capital to the extent of the
U.S. Holder's adjusted tax basis in his or her Common Shares, and thereafter as
gain from the sale or exchange of a capital asset. These dividends are generally
not eligible for the dividends-received deduction otherwise allowed to U.S.
corporate shareholders on dividends from U.S. domestic corporations. The amount
of any distribution paid in guilders will be equal to the U.S. dollar value of
the guilders on the date of receipt, regardless of whether the U.S. Holder
converts the payment into U.S. dollars. Gain or loss, if any, recognized by a
U.S. Holder on the sale or disposition of guilders will be U.S. source ordinary
income or loss. A U.S. Holder may elect annually either to deduct The
Netherlands withholding tax (see "-- Netherlands Taxation") against its income
or take the withholding taxes as a credit against its U.S. tax liability,
subject to U.S. foreign tax credit limitation rules discussed above. Dividend
income will be income from sources outside the United States for foreign tax
credit limitation purposes. Dividend income generally will be either "passive"
income or "financial services" income, depending on the particular U.S. Holder's
circumstances.
Payments of dividends on the Common Shares to a Non-U.S. Holder generally
will not be subject to U.S. federal income tax unless such income is effectively
connected with the conduct by such Non-U.S. Holder of a trade or business in the
United States.
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DISPOSITIONS OF THE NOTES OR COMMON SHARES
A U.S. Holder will recognize gain or loss for U.S. federal income tax
purposes upon the sale or other disposition of the Notes (other than as a result
of conversion into Common Shares, as discussed above) or the Common Shares in an
amount equal to the difference between the amount realized (other than accrued
but unpaid interest which will constitute ordinary income) and the U.S. Holder's
tax basis in the Notes or Common Shares. Such gain or loss will be capital gain
or loss and will be long-term capital gain or loss if the Notes or Common Shares
have been held (or deemed held) for more than one year. Gain generally will be
income from U.S. sources for foreign tax credit limitation purposes. Loss may be
treated as foreign source loss by reference to the source of interest on the
Notes.
Gain realized by a Non-U.S. Holder upon the sale or other disposition of a
Note or of a Common Shares generally will not be subject to U.S. federal income
tax unless (i) the gain is effectively connected with the conduct by such
Non-U.S. Holder of a trade or business in the United States or (ii) the holder
is an individual who was present in the United States for at least 183 days in
the taxable year of such sale, exchange or retirement and certain other
conditions are met.
PASSIVE FOREIGN INVESTMENT COMPANIES
The Company may be classified as a "passive foreign investment company"
("PFIC") for U.S. federal income tax purposes if certain tests are met. The
Company will be a PFIC with respect to a U.S. Holder if for any taxable year in
which the U.S. Holder held the Notes or Common Shares, either (i) 75% or more of
the gross income of the Company for the taxable year is passive income; or (ii)
the average value during the taxable year of its passive assets (i.e., assets
that produce passive income or which are held for the production of passive
income) is at least 50% of the average fair market value of all of the Company's
assets for such year. Passive income generally includes dividends, interest,
royalties, rents (other than rents and royalties derived in the active conduct
of a trade or business and not derived from a related person), annuities, and
gains from assets which would produce such income other than sales of inventory.
For the purpose of the PFIC tests, if a foreign corporation owns directly or
indirectly at least 25% by value of the stock of another corporation, the
foreign corporation is treated as owning its proportionate share of the assets
of the other corporation and as if it had received directly its proportionate
share of the income of such other corporation. The effect of this special
provision with respect to the Company and its direct and indirect ownership of
its subsidiaries is that the Company, for purposes of the income and assets
tests described above, will be treated as owning directly its proportionate
share of the assets of the subsidiaries and of receiving directly its
proportionate share of each of those companies' income, if any, so long as the
Company owns, directly or indirectly, at least 25% by value of the particular
company's stock. Active business income of the Company's subsidiaries will be
treated as active business income of the Company, rather than as passive income.
If the Company were to be classified as a PFIC, a U.S. Holder would be
subject to various adverse U.S. tax consequences. Such adverse consequences
would generally include an interest charge on taxes deemed deferred by them on
receipt of certain "excess" distributions by the Company to the U.S. Holder and
on realization of gain on disposition of the Notes or Common Shares (all of
which distributions and gains would be taxable as ordinary income at the highest
marginal rate). However, the foregoing interest charge could be avoided if a
U.S. Holder were to make a qualified electing fund ("QEF") election and the
Company were to agree to comply with certain reporting requirements. If a QEF
election were made, the U.S. Holder would be currently taxable on the U.S.
Holder's pro rata share of the Company's ordinary earnings and profits and long-
term capital gains for each year (at ordinary income or capital gains rates,
respectively), even if no dividend distributions were received. Based on the
nature of the Company's expected income and assets, management does not expect
that the Company should be classified as a PFIC in the foreseeable future.
FOREIGN PERSONAL HOLDING COMPANIES
The Company or any of its non-U.S. subsidiaries may be classified as a
"foreign personal holding company" ("FPHC") if in any taxable year five or fewer
persons who are U.S. citizens or residents own (directly or constructively
through certain attribution rules) more than 50% of the Company's stock (a "U.S.
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group") and more than 60% of the gross income of the Company or the subsidiary
consists of passive income for purposes of the FPHC rules. Because substantially
all of the Company's income is likely to consist of dividends from subsidiaries,
which generally is passive income for purposes of the FPHC rules, it is likely
to meet the income test. Similarly, if more than 60% of the gross income of a
non-U.S. subsidiary of the Company were to consist of dividends, interest,
royalties (other than active business computer software royalties) or other
types of passive income, the subsidiary would meet the FPHC income test.
If the Company or any of its subsidiaries is or becomes an FPHC, each U.S.
Holder of Common Shares (including a U.S. corporation) who held stock in the
Company in the last day of the taxable year of the Company, or, if earlier, the
last day of its taxable year on which a U.S. group existed with respect to the
Company would be required to include in gross income as a dividend such
shareholder's pro rata portion of the undistributed income of the Company or the
subsidiary, even if no cash dividend were actually paid. In such case, if the
Company were an FPHC, a U.S. Holder would be entitled to increase its tax basis
in the shares of the Company by the amount of a deemed dividend from the
Company. If a subsidiary of the Company were an FPHC, a U.S. Holder in the
Company should be afforded similar relief, although the law is unclear as to the
form of the relief.
If either Jan Baan or J.G. Paul Baan were to become a U.S. citizen or
resident, or marry a U.S. citizen or resident, a U.S. group might then exist
based upon the shares considered owned by him (or such U.S. citizen or resident
spouse). Moreover, if a member of either Jan or J.G. Paul Baan's family were to
own one or more shares in the Company and become a U.S. citizen or resident,
shares owned by such Baan brother could be considered owned by such family
member so as to create a U.S. group. Although the Company believes that at the
present time no U.S. group exists, and that no U.S. group will exist on
completion of the offering, the Company can give no assurances regarding future
ownership of Company Shares by members of the Baan family, or future changes in
citizenship or residence of Baan family members which could result in the
creation of a U.S. group and thus cause the Company to be treated as an FPHC.
Moreover, the Company can give no assurance that it will have timely knowledge
of the formation of a U.S. group. In this regard, the Company does not assume
any obligation to make timely disclosure with respect to such status.
If the Company becomes an FPHC, a U.S. person who acquires shares from a
decedent would be denied the step-up of tax basis of such shares to fair market
value or the decedent's basis.
As noted above, certain U.S. tax consequences depend on the composition of
the income of the Company and its subsidiaries. The tax law is not entirely
clear as to the proper classification of all relevant types of income which the
Company and its subsidiaries may realize. Accordingly, there can be no assurance
that management's expectations described in the preceding section will be
fulfilled.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Payments in respect of Notes or the Common Shares may be subject to
information reporting to the U.S. Internal Revenue Service and to a 31% U.S.
backup withholding tax. Backup withholding will not apply, however, to a holder
who furnishes a correct taxpayer identification number or certificate of foreign
status or who is otherwise exempt from backup withholding. Generally, a U.S.
Holder will provide such certification on Form W-9 (Request for Taxpayer
Identification Number and Certification) and a Non-U.S. Holder will provide such
certification on Form W-8 (Certificate of Foreign Status). The United States
Treasury Department recently proposed regulations that, if finalized, would
change the requirements for establishing an exemption from information reporting
and backup withholdings.
STATE AND LOCAL TAXES
State and local treatment may differ from federal income tax treatment.
Each U.S. Holder should seek tax advice with respect to applicable state and
local taxes.
39
<PAGE> 42
SELLING HOLDERS
The Registrable Notes were originally issued by the Company and sold by
Deutsche Morgan Grenfell Inc. (the "Initial Purchaser") in transactions exempt
from the registration requirements of the Securities Act, to persons reasonably
believed by such Initial Purchaser to be "qualified institutional buyers" (as
defined in Rule 144A under the Securities Act) and to a limited number of
institutional investors that are accredited investors within the meaning of Rule
501(a) of the Securities Act, or outside the United States to non-U.S. persons
in offshore transactions in reliance on Regulation S under the Securities Act.
The Selling Holders may from time to time offer and sell pursuant to this
Prospectus any or all of the Registrable Notes and Common Shares issued upon
conversion of the Notes. The term Selling Holder includes the holders listed in
any Supplement hereto and the beneficial owners of the Registrable Notes and
their transferees, pledgees, donees or other successors. Any such Supplement
will contain certain information with respect to the Selling Holders and the
respective aggregate principal amount of Registrable Notes beneficially owned by
each Selling Holder that may be offered pursuant to this Prospectus. Such
information will be obtained from the Selling Holders and the Trustee.
Except as may be set forth in any Supplement hereto, none of the Selling
Holders has, or within the past three years has had, any position, office or
other material relationship with the Company or its affiliates. Because the
Selling Holders may, pursuant to this Prospectus, offer all or some portion of
the Registrable Notes or the Common Shares issuable upon conversion of the
Notes, no estimate can be given as to the principal amount of the Registrable
Notes or the number of Common Shares issuable upon conversion of the Registrable
Notes that will be held by the Selling Holders upon termination of any such
sales. In addition, the Selling Holders identified above may have sold,
transferred or otherwise disposed of all or a portion of their Registrable
Notes, since the date on which they provided the information regarding their
holdings of Registrable Notes, in transactions exempt from the registration
requirements of the Securities Act.
PLAN OF DISTRIBUTION
The Registrable Notes and Common Stock offered hereby may be sold from time
to time to purchasers directly by the Selling Holders. Alternatively, the
Selling Holders may from time to time offer the Registrable Notes and Common
Stock to or through underwriters, broker/dealers or agents, who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Holders or the purchasers of Registrable Notes and Common Stock
for whom they may act as agents. The Selling Holders and any underwriters,
broker/dealers or agents that participate in the distribution of Registrable
Notes and Common Stock may be deemed to be "underwriters" within the meaning of
the Securities Act and any profit on the sale of Registrable Notes and Common
Stock by them and any discounts, commissions, concessions or other compensation
received by any such underwriter, broker/dealer or agent may be deemed to be
underwriting discounts and commissions under the Securities Act.
The Registrable Notes and Common Stock offered hereby may be sold from time
to time in one or more transactions at fixed prices, at prevailing market prices
at the time of sale, any varying prices determined at the time of sale or at
negotiated prices. The sale of the Registrable Notes and the Common Stock
issuable upon conversion thereof may be effected in transactions (which may
involve crosses or block transactions) (i) on any national or international
securities exchange or quotation service on which the Registrable Notes or the
Common Stock may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such exchanges
or in the over-the-counter market or (iv) through the writing of options. At the
time a particular offering of the Registrable Notes and the Common Stock is
made, a Prospectus Supplement, if required, will be distributed which will set
forth the aggregate amount and type of Registrable Notes and Common Stock being
offered and the terms of the offering, including the name or names of any
underwriters, broker/dealers or agents, any discounts, commissions and other
terms constituting compensation from the Selling Holders and any discounts,
commissions or concessions allowed or reallowed or paid to broker/dealers.
To comply with the securities laws of certain jurisdictions, if applicable,
the Registrable Notes and Common Stock will be offered or sold in such
jurisdictions only through registered or licensed brokers or
40
<PAGE> 43
dealers. In addition, in certain jurisdictions the Registrable Notes and Common
Stock may not be offered or sold unless they have been registered or qualified
for sale in such jurisdictions or any exemption from registration or
qualification is available and is complied with.
The Selling Holders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the Registrable Notes and
Common Stock by the Selling Holders. The foregoing may affect the marketability
of the Registrable Notes and the Common Stock.
Pursuant to the Registration Rights Agreement, all expenses of the
registration of the Registrable Notes and Common Stock will be paid by the
Company, including, without limitation, Commission filing fees and expenses of
compliance with state securities or "blue sky" laws; provided, however, that the
Selling Holders will pay all underwriting discounts and selling commissions, if
any. The Selling Holders will be indemnified by the Company against certain
civil liabilities, including certain liabilities under the Securities Act, or
will be entitled to contribution in connection therewith.
LEGAL MATTERS
The validity of the Notes and the Common Shares issuable on conversion
thereof have been passed upon for the Company by Wilson Sonsini Goodrich &
Rosati, Professional Corporation, Palo Alto, California, solely as to matters of
U.S. law, and by De Brauw Blackstone Westbroek, Amsterdam, The Netherlands,
solely as to matters of Netherlands law.
EXPERTS
The consolidated financial statements of Baan Company N.V. incorporated by
reference in the Company's annual report (Form 20-F) for the year ended December
31, 1996, have been audited by Moret Ernst & Young Accountants, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.
41
<PAGE> 44
- --------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
- --------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Enforceability of Civil Liabilities... 1
Available Information................. 1
Incorporation of Certain Documents
by Reference........................ 3
Summary............................... 4
The Company........................... 6
Risk Factors.......................... 8
Exchange Controls and Other
Limitations Affecting Security
Holders............................. 16
Limitation of Liability and
Indemnification..................... 16
Ratio of Earnings and Fixed Charges... 17
Use of Proceeds....................... 17
Description of Registrable Notes...... 18
Share Certificates and Transfer....... 33
Taxation.............................. 35
Selling Holders....................... 40
Plan of Distribution.................. 40
Legal Matters......................... 41
Independent Auditors.................. 41
</TABLE>
- --------------------------------------------------------
[BAAN LOGO]
U.S. $113,550,000
4.5% CONVERTIBLE SUBORDINATED
NOTES DUE 2001
Prospectus
May , 1997
<PAGE> 45
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF REGISTRATION AND DISTRIBUTION.
The following table sets forth the estimated expenses of the Registrant in
connection with the offering described in this Registration Statement.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............. $ 34,409
Accountants' fees and expenses.................................. 5,000
Legal fees and expenses......................................... 25,000
Printing and engraving expenses................................. 25,000
Trustee's fees and expenses..................................... 10,000
Miscellaneous................................................... 10,591
--------
Total................................................. $110,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has entered into indemnification agreements with its directors
and executive officers, providing for indemnification by the Company against any
liability to which a director or executive officer may be subject for judgments,
settlements, penalties, fines and expenses of defense (including attorneys'
fees, bonds and costs of investigation), arising out of or in any way related to
acts or omissions as a member of the Management or Supervisory Board, or an
executive officer, or in any other capacity in which services are rendered to
the Company or its subsidiaries. The Company believes that the indemnification
agreements will assist the Company in attracting and retaining qualified
individuals to serve as directors and executive officers. The agreements provide
that a director or officer is not entitled to indemnification under such
agreements (i) if indemnification if expressly prohibited under applicable law,
(ii) for certain violations of securities laws or (iii) for certain claims
initiated by the officer or director. Generally, under Netherlands law a
director will not be held personally liable for decisions made with reasonable
business judgment, absent self dealing. In addition, indemnification may not be
available to directors or officers under Netherlands law if any act or omission
by a director or officer would qualify as willful misconduct or gross
negligence. Due to the lack of applicable case law, it is not clear whether
indemnification if available in case of a breach of securities laws of the
United States. See 'Enforceability of Civil Liabilities.'
II-1
<PAGE> 46
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- ------------------------------------------------------------------------------------
<C> <S>
1.1 Purchase Agreement dated December 15, 1996 among the Company and Morgan Grenfell &
Co., Limited, Deutsche Morgan Grenfell Inc., and AMRO Rothschild, and Banque
Indosuez.
4.1 Indenture, dated as of December 15, 1996, between the Company and Marine Midland
Bank, as Trustee, relating to the Notes.
4.2 Form of Notes (included in Exhibit 4.1.)
4.3** Specimen Certificate of Common Stock of Baan Company N.V.
4.4 Articles of Association
4.8 Registration Rights Agreement, dated December 15, 1996 among the Company and Morgan
Grenfell & Co. Limited, Deutsche Morgan Grenfell Inc., ABN AMRO Rothschild, and
Banque Indosuez.
5.1 Opinion of DeBrauw Blackstone Westbroek.
23.1 Consent of Moret Ernst & Young Accountants, independent auditors.
23.2 Consent of Counsel (contained in Exhibit 5.1 hereto).
24.1 Power of Attorney.
25.1 Form T-1 Statement of Eligibility and Qualification of Trustee.
</TABLE>
- ---------------
** Incorporated by reference to the Registration Statement (Registration No.
33-91598) on Form F-1 filed on May 19, 1995.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price, set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.
provided, however, that paragraphs (a) (1) (i) and (a) (1) (ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3,
and the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or
furnished to the Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference into the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
II-2
<PAGE> 47
offered therein, and the offering of such securities at that time shall be
deemed to be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial BONA FIDE offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that such a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in Act and will be
governed by the final adjudication of such issue.
II-3
<PAGE> 48
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF CUPERTINO, STATE OF
CALIFORNIA, ON THE 9TH DAY OF MAY, 1997.
BAAN COMPANY N.V.
By: *
------------------------------------
Jan Baan B.V.
Managing Director, Chairman and
Chief
Executive Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ----------------------------- -------------------
<C> <S> <C>
/s/ JAN BAAN B.V. Managing Director, Chairman May 9, 1997
- ------------------------------------------ and Chief Executive Officer
(Jan Baan B.V.) (Principal Executive Officer)
* Supervisory Director May 9, 1997
- ------------------------------------------
(J.G. Paul Baan)
* Managing Director, President May 9, 1997
- ------------------------------------------ and Chief Operating Officer
(Thomas C. Tinsley)
* Chief Financial Officer May 9, 1997
- ------------------------------------------
(Jan Westerhoud)
* Supervisory Director May 9, 1997
- ------------------------------------------
(William O. Grabe)
* Supervisory Director May 9, 1997
- ------------------------------------------
(David C. Hodgson)
* Supervisory Director May 9, 1997
- ------------------------------------------
(Graham J. Sharman)
* Supervisory Director May 9, 1997
- ------------------------------------------
(J.C. (Hans) Wortmann)
*By: /s/ JAN WESTERHOUD
- ------------------------------------------
Attorney in Fact
</TABLE>
II-4
<PAGE> 49
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Jan Baan, Thomas C. Tinsley, Jan
Westerhoud, and Willem H. Heijting, his true and lawful attorney-in-fact and
agent, with full power of each to act alone, with full powers of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to such certain Registration Statement dated March 31, 1997, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, with full power of each to act alone, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully for all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or his or her substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------- --------------------------------------------- ---------------
<C> <S> <C>
/s/ JAN BAAN Managing Director, Chairman of the Board and March 28, 1997
- ---------------------------------- Chief Executive Officer
Jan Baan (Principal Executive Officer)
/s/ J.G. PAUL BAAN Chairman of the Supervisory Board March 28, 1997
- ----------------------------------
J.G. Paul Baan
/s/ THOMAS C. TINSLEY Managing Director, President and Chief March 28, 1997
- ---------------------------------- Operating Officer
Thomas C. Tinsley
/s/ JAN WESTERHOUD Vice President, Finance March 28, 1997
- ---------------------------------- (Principal Financial and Accounting Officer)
Jan Westerhoud
/s/ WILLIAM O. GRABE Supervisory Director March 28, 1997
- ----------------------------------
William O. Grabe
/s/ DAVID C. HODGSON Supervisory Director March 28, 1997
- ----------------------------------
David C. Hodgson
/s/ GRAHAM J. SHARMAN Supervisory Director March 28, 1997
- ----------------------------------
Graham J. Sharman
/s/ J.C. (HANS) WORTMANN Supervisory Director March 28, 1997
- ----------------------------------
J.C. (Hans) Wortmann
</TABLE>
<PAGE> 50
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- ---------------------------------------------------------------------------
<C> <S> <C>
1.1 Purchase Agreement dated December 15, 1996 among the Company and Morgan
Grenfell & Co., Limited, Deutsche Morgan Grenfell Inc., and AMRO
Rothschild, and Banque Indosuez.
4.1 Indenture, dated as of December 15, 1996, between the Company and Marine
Midland Bank, as Trustee, relating to the Notes.
4.2 Form of Notes (included in Exhibit 4.1.)
4.3** Specimen Certificate of Common Stock of Baan Company N.V.
4.4 Articles of Association
4.8 Registration Rights Agreement, dated December 15, 1996 among the Company
and Morgan Grenfell & Co. Limited, Deutsche Morgan Grenfell Inc., ABN AMRO
Rothschild, and Banque Indosuez.
5.1 Opinion of DeBrauw Blackstone Westbroek.
23.1 Consent of Moret Ernst & Young Accountants, independent auditors.
23.2 Consent of Counsel (contained in Exhibit 5.1 hereto).
24.1 Power of Attorney.
25.1 Form T-1 Statement of Eligibility and Qualification of Trustee.
</TABLE>
- ---------------
** Incorporated by reference to the Registration Statement (Registration No.
33-91598) on Form F-1 filed on May 19, 1995.
<PAGE> 1
EXHIBIT 1.1
BAAN COMPANY N.V.
PURCHASE AGREEMENT
December 12, 1996
Morgan Grenfell & Co. Limited, for Itself and the Other Several
Initial Purchasers Named Below
6-8 Bishopsgate
London EC2N 4DA
England
Dear Sirs:
Baan Company N.V., a corporation incorporated under the law of The
Netherlands with its statutory seat in Barneveld, The Netherlands (the
"Company"), proposes to issue and sell to you (the "Manager") and the other
several purchasers named in Schedule 1 hereto (collectively with the Manager,
the "Initial Purchasers") $175,000,000 principal amount of its 4.5% Convertible
Subordinated Notes due 2001 (the "Firm Offered Securities") to be issued
pursuant to the provisions of an Indenture dated as of December 15, 1996 (the
"Indenture") between the Company and Marine Midland Bank, as Trustee (the
"Trustee").
The Company also proposes to issue and sell and deliver to the Initial
Purchasers not more than an additional $25,000,000 principal amount of its 4.5%
Convertible Subordinated Notes Due 2001 (the "Additional Offered Securities") if
and to the extent that you, as Manager, shall have determined to exercise on
behalf of the Initial Purchasers the right to purchase such 4.5% Convertible
Subordinated Notes due 2001 granted to the Initial Purchasers in Section 3
hereof. The Firm Offered Securities and the Additional Offered Securities are
hereinafter collectively referred to as the "Offered Securities." The Offered
Securities will be convertible into Common Shares, NLG .01 per share, of the
Company (the "Underlying Securities" and, together with the Offered Securities,
the "Securities"). As used herein, the term "Firm Offered Securities,"
"Additional Offered Securities" and "Offered Securities" shall be deemed, unless
the context otherwise requires, to include such Securities in the form of a
temporary global Security representing such Securities issued and sold in
reliance on Regulation S under the Securities Act of 1933, as amended (the
"Securities Act").
The Securities will be offered without being registered under the
Securities Act, in reliance on exemptions therefrom.
In connection with the offer, sale and delivery of the Securities, the
Company has prepared a preliminary private placement memorandum (the
"Preliminary Memorandum") and will prepare
-1-
<PAGE> 2
a final private placement memorandum (the "Final Memorandum" and, with the
Preliminary Memorandum, each a "Memorandum") setting forth or including a
description of the terms of the Securities, the terms of the offering, a
description of the Company and any material developments relating to the Company
occurring after the date of the most recent financial statements included
therein. As used herein, the term "Memorandum" shall include in each case the
documents incorporated by reference therein. The terms "supplement," "amendment"
and "amend" as used herein shall include all documents deemed to be incorporated
by reference in the Preliminary Memorandum or Final Memorandum that are filed
subsequent to the date of such Memorandum with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Exchange Act of 1934,
as amended (the "Exchange Act").
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, you that as of the date hereof:
(a) (i) Each document, if any, filed or to be filed pursuant
to the Exchange Act and incorporated by reference in either Memorandum complied
or will comply when so filed in all material respects with the Exchange Act and
the applicable rules and regulations thereunder and (ii) the Preliminary
Memorandum does not contain and the Final Memorandum, in the form used by the
Initial Purchasers to confirm sales and on the Closing Date, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representations and
warranties set forth in this Section 1(a) do not apply to statements or
omissions in either Memorandum based upon information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through
you expressly for use therein.
(b) The Company has been duly incorporated and is validly
existing as a company limited by shares (naamloze vennootschap) under the laws
of the Netherlands, has the corporate power and authority to own its property
and to conduct its business as described in each Memorandum and is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(c) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business as described in each Memorandum and is
duly qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole. Other than Baan Naderland B.V.,
Baan International B.V., Baan Europe B.V., Baan Development B.V., Baan
Deutschland GmbH and Baan USA, Inc. (each a "Material Subsidiary"),
-2-
<PAGE> 3
no subsidiary of the Company is a "significant subsidiary" as such term is
defined in Regulation S-X under the Securities Act. Each of Baan Naderland B.V.
and Baan Development B.V. does not require any of the proceeds from the sale of
the Offered Securities to operate its business as currently operated and as
proposed to be operated. The Company has no current intent to use the proceeds
from the sale of the Offered Securities for Baan Naderland B.V. or Baan
Development B.V., and will not use such proceeds for such subsidiaries in the
future if approval of any Work's Council is required unless such approval is
obtained.
(d) The Company and its subsidiaries have good and marketable
title to all the properties and assets owned by them or reflected as owned by
them in either Memorandum, which are material to the business of the Company
subject to no lien, mortgage, pledge, charge or encumbrance of any kind except
(i) those, if any, reflected in the Memorandum, or (ii) those which are not
material in amount or do not adversely affect the use made and proposed to be
made of such property by the Company or such subsidiary. The Company and its
subsidiaries hold their leased properties under valid and binding leases, with
such exceptions as are not material in relation to the business of the Company
and its subsidiaries taken as a whole. Except as disclosed in the Memorandum,
the Company and its subsidiaries own or lease all such properties as are
necessary to their combined operations as now conducted, or as proposed to be
conducted, in each case as discussed in or contemplated by either Memorandum.
(e) The authorized capital stock of the Company conforms as to
legal matters in all material respects to the description thereof contained in
the Final Memorandum.
(f) The Common Shares of the Company outstanding immediately
prior to the issuance of the Offered Securities have been duly authorized and
are validly issued, fully paid and nonassessable.
(g) This Agreement has been duly authorized, executed and
delivered by the Company.
(h) The Offered Securities have been duly authorized and, when
executed, authenticated and delivered to and paid for by the Initial Purchasers
in accordance with the terms of this Agreement, will (i) be validly issued,
fully paid and non-assessable and will not be subject to any preemptive or
similar rights, (ii) be valid and binding obligations of the Company enforceable
in accordance with their terms, except as (A) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration, if applicable, and the availability of
equitable remedies may be limited by equitable principles of general
applicability and (iii) be entitled to the benefits of the Indenture pursuant to
which such securities are to be issued.
(i) The Underlying Securities reserved for issuance upon
conversion of the Offered Securities have been duly authorized and reserved in
sufficient numbers for such issue by the Company and, when executed and issued
upon conversion of such Offered Securities in
-3-
<PAGE> 4
accordance with the terms of such Offered Securities, will be validly issued,
fully paid and non-assessable and will not be subject to any preemptive rights
or similar rights.
(j) Each of the Indenture and the Registration Rights
Agreement dated as of December 15, 1996 among the Company and the Initial
Purchasers (the "Registration Rights Agreement") pursuant to which such
securities are to be issued has been duly authorized and, when executed and
delivered by the Company and the other parties thereto, will be a valid and
binding agreement of, the Company, enforceable in accordance with its terms
except (1) as (x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (y) rights
of acceleration, if applicable, and the availability of equitable remedies may
be limited by equitable principles of general applicability and (2) as the
enforceability of indemnification provisions in the Registration Rights
Agreement may be limited by public policy limitations.
(k) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture, the Registration Rights Agreement and the Offered Securities will not
contravene any provision of applicable law or the Articles of Association of the
Company or, except as set forth in each Memorandum, any agreement or other
instrument binding upon the Company or any of its subsidiaries that is material
to the Company and its subsidiaries, taken as a whole, or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or order of,
or qualification with, any governmental body or agency is required for the
performance by the Company of its obligations under this Agreement, the
Indenture or the Offered Securities, except such as may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Securities and except as may be required under federal
securities laws with respect to the Company's obligations under the Registration
Rights Agreement.
(l) Except as expressly identified in the Final Memorandum,
there has not occurred any material adverse change, or any development involving
a prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Preliminary Memorandum.
(m) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is subject
other than proceedings accurately described in all material respects in each
Memorandum and proceedings that would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole, or on the power or ability of
the Company to perform its obligations under this Agreement, the Indenture or
the Offered Securities or to consummate the transactions contemplated by the
Final Memorandum.
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<PAGE> 5
(n) Each of the Company and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, which are necessary to own, lease, license and use
its properties and assets and to conduct its business in the manner described in
the Final Memorandum, except to the extent that the failure to obtain or file
would not have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(o) No default exists in the due performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other instruments
binding on the Company or any of its subsidiaries, except such defaults that
would not have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(p) The Company and each of its material subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (1) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain asset accountability;
(3) access to assets is permitted only in accordance with management's general
or specific authorization; and (4) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.
(q) Moret Ernst & Young Accountants (the "Accountants"), who
have certified certain financial statements of the Company and its subsidiaries,
are independent public accountants within the meaning of the Securities Act; the
consolidated financial statements of the Company and the other financial data of
the Company and its subsidiaries set forth in the Final Memorandum fairly
present in all material respects the financial condition of the entities to
which they relate as of the dates indicated, subject, in the case of any interim
statements, to year-end audit adjustments.
(r) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act, an "Affiliate") of the Company
has directly, or through any agent, (i) sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Offered
Securities in a manner that would require the registration under the Securities
Act of the Offered Securities or (ii) engaged in any form of general
solicitation or general advertising in connection with the offering of the
Offered Securities (as those terms are used in Regulation D under the Securities
Act), or in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act.
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<PAGE> 6
(s) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
(t) It is not necessary in connection with the offer, sale and
delivery of the Offered Securities to the Initial Purchasers in the manner
contemplated by this Agreement to register the Offered Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act of
1939, as amended.
(u) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except, in each case, where
such noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not reasonably be expected to,
singly or in the aggregate, have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(v) The effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries (including,
without limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties) would not, singly or in the aggregate,
have a material adverse effect on the Company and its subsidiaries, taken as a
whole.
(w) Except as disclosed in the Final Memorandum, the Company
and each of its subsidiaries owns or possesses, or can acquire on reasonable
terms, all patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
approvals, governmental authorizations and trade names necessary to the conduct
of the business as now operated by them, except such as are not material to the
business of the Company and its subsidiaries taken as a whole, the expiration of
any trademarks, trade names, patent rights, copyrights, licenses, approvals or
governmental authorizations would not have a material adverse effect on the
condition (financial or otherwise), business or results of operations of the
Company, and the Company has no knowledge of any material infringement by it of
trademarks, trade name rights, patent rights, copyrights, licenses, trade
secrets or similar rights of others and, except as disclosed in the Final
Memorandum, neither the Company nor any of its subsidiaries has received any
notice of infringement of or conflict with asserted rights of others with
respect to any of the foregoing which, singly or in the aggregate, would have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
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<PAGE> 7
(x) None of the Company, its Affiliates or any person acting
on its or their behalf (other than the Initial Purchasers) has engaged in any
directed selling efforts (as that term is defined in Regulation S under the
Securities Act ("Regulation S") with respect to the Offered Securities and the
Company and its Affiliates and any person acting on its or their behalf (other
than the Initial Purchasers) has complied with the offering restrictions
requirement of Regulation S.
(y) The Final Memorandum contains all information specified
in, and meeting the requirements of, Rule 144A(d)(4) under the Securities Act;
and the Offered Securities satisfy the eligibility requirements set forth in
Rule 144A(d)(3) under the Securities Act.
(z) To the extent separately agreed by the parties, each of
the Company's directors and executive officers has entered into a written
agreement with the Company in the form of Exhibit A hereto (each such agreement,
a "Lock-up Agreement"), and executed originals of each Lock-up Agreement have
been delivered to you.
(aa) Except as provided in each Memorandum, and except for
compliance with the provisions of the External Financial Relations Act of 1994
and the Reporting Instructions on Foreign Payments, all dividends and other
distributions declared and payable on the shares of capital stock of the Company
may under the current laws and regulations of The Netherlands be paid in Dutch
Guilders that may be converted into foreign currency and may be freely
transferred out of The Netherlands and all such dividends and other
distributions will not be subject to withholding or other taxes under the laws
and regulations of The Netherlands and are otherwise free and clear of any other
tax, withholding or deduction in The Netherlands and without the necessity of
obtaining any consents, approvals, authorizations, orders, registrations,
clearances and qualifications of or with any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
their properties or any stock exchange authorities in The Netherlands.
(bb) Except for The Netherlands capital tax described in each
Memorandum which will be paid by the Company, no stamp or other issuance or
transfer taxes or duties and no capital gains, income, withholding or other
taxes are payable by or on behalf of the Initial Purchasers to The Netherlands
or any political subdivision or taxing authority thereof or therein in
connection with (A) the sale and delivery by the Company of the Securities to
the Initial Purchasers or (B) the sale and delivery by the Initial Purchasers of
the Securities to purchasers thereof.
(cc) The Company is not a Passive Foreign Investment Company
("PFIC") or Foreign Personal Holding Company ("FPHC") within the meaning of
Section 1296 and 552 of the United States Internal Revenue Code of 1986, as
amended, is not likely to become a PFIC or FPHC, and the Company is not aware of
any contemplated action by any shareholder or shareholders of the Company to
become a PFIC or PFHC.
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<PAGE> 8
(dd) The Company is a resident of the Netherlands for purposes
of Article 4 of the Netherlands-United States Income Tax Treaty.
2. Offering. You have advised the Company that the Initial Purchasers
will make an offering of the Offered Securities purchased by the Initial
Purchasers hereunder on the terms to be set forth in the Final Memorandum, as
soon as practicable after this Agreement is entered into as in your judgment is
advisable.
3. Purchase and Delivery. The Company hereby agrees to sell to the
several Initial Purchasers, and the Initial Purchasers, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agree, severally and not jointly, to purchase from the
Company the respective principal amount of Offered Securities set forth in
Schedule I hereto opposite their names at a purchase price of 97.5% of the
principal amount thereof plus accrued interest, if any, from December 23, 1996
to the date of payment and delivery.
On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, the Company agrees
to sell and deliver to the Initial Purchasers the Additional Offered Securities,
and the Initial Purchasers shall have a one-time right to purchase, severally
and not jointly, up to $25,000,000 Additional Offered Securities at a purchase
price of 97.5% of the principal amount thereof plus accrued interest, if any,
from December 23, 1996 to the date of payment and delivery. Additional Offered
Securities may be purchased as provided in this Section 3 solely for the purpose
of covering over-allotments made in connection with the offering of the Firm
Offered Securities. If any Additional Offered Securities are to be purchased,
each Initial Purchaser agrees, severally and not jointly, to purchase the number
of Additional Offered Securities (subject to such adjustments to eliminate
fractional shares as the Manager shall determine) that bears the same proportion
to the total number of Additional Offered Securities to be purchased as the
number of Firm Offered Securities set forth in Schedule I opposite the name of
such Initial Purchaser bears to the total number of Firm Offered Securities.
The Company agrees that, without your prior written consent,
it will not offer, sell, contract to sell or otherwise dispose of any Common
Shares or preferred shares or any securities convertible into or exercisable or
exchangeable for such Common Shares or preferred shares for a period of 90 days
after the date of this Agreement, other than (i) the Offered Securities to be
sold hereunder, (ii) the Underlying Securities, and (iii) options to purchase
Common Shares, and Common Shares issued by the Company upon the exercise of such
options, granted under the Company's existing stock option such and Common
Shares issued pursuant to employee stock purchase plans.
Payment for the Firm Offered Securities shall be made against
delivery of the Firm Offered Securities at a closing to be held at the office of
Wilson Sonsini Goodrich & Rosati, P.C., 650 Page Mill Road, Palo Alto,
California 94304 at 10:00 A.M., New York City time, on December 23, 1996, or at
such other time on the same or such other date, not later than
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<PAGE> 9
December 23, 1996, as shall be designated in writing by you. The time and date
of such payment are herein referred to as the Closing Date. Payment for the Firm
Offered Securities shall be made in same day funds.
Payment for any Additional Offered Securities shall be made
against delivery of the Additional Offered Securities at a closing to be held at
the office of Wilson Sonsini Goodrich & Rosati, P.C., Palo Alto, California on
such date (which may be the same as the Closing Date but shall in no event be
earlier than the Closing Date nor later than ten business days after the giving
of the notice hereinafter referred to) as shall be designated in a written
notice from the Manager to the Company of its determination, on behalf of the
Initial Purchasers, to purchase a number, specified in said notice, of
Additional Offered Securities, or on such other date, in any event not later
than January 17, 1997 as shall be designated in writing by the Manager. The time
and date of such payment are hereinafter referred to as the Option Closing Date.
Payment for the Additional Offered Securities shall be made in same day funds.
The notice of the determination to exercise the option to purchase Additional
Offered Securities and of the Option Closing Date may be given at any time
within 30 days after the date of this Agreement.
Certificates for the Offered Securities shall be in global
form and registered in such names and in such denominations as you shall request
in writing not less than two full business days prior to the Closing Date or the
Option Closing Date, as the case may be. The certificates evidencing the Offered
Securities shall be delivered to you on the Closing Date or the Option Closing
Date, as the case may be, for the respective accounts of the several Initial
Purchasers, with any transfer taxes payable in connection with the transfer of
the Offered Securities to the Initial Purchasers duly paid, against payment of
the purchase price therefor. If requested by you with respect to the portion of
the Offered Securities sold pursuant to Regulation S, such portion of the
Offered Securities shall be in the form of a temporary global Offered Security
which will be deposited on your behalf with a common depositary selected by you
for the benefit of Morgan Guaranty Trust Company of New York (Brussels office),
as operator of the Euroclear System ("Euroclear"), or Cedel Bank Societe Anonyme
("CEDEL") or both. The Company will deliver the portion of the Offered
Securities represented by one or more definitive global Offered Securities in
book-entry form to your account by causing DTC to credit such Offered Securities
to your account, at DTC, and the portion of the Offered Securities to be
evidenced by the temporary global Offered Security by causing the aggregate
principal amount of such Offered Security to be credited on the records of
Euroclear or CEDEL, as applicable, to your account, unless otherwise directed by
you.
4. Conditions to Closing. The several obligations of the Initial
Purchasers under this Agreement to purchase the Firm Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
Company herein, to the performance and observance by the Company in all material
respects of all covenants and agreements herein contained on its part to be
performed and observed and the following conditions:
(a) Subsequent to the date of this Agreement and prior to the
Closing Date,
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<PAGE> 10
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, of the Company and its
subsidiaries, taken as a whole, from that set forth in the Preliminary
Memorandum that, in your judgment, is material and adverse and that makes it, in
your judgment, impracticable to market the Offered Securities on the terms and
in the manner contemplated in the Final Memorandum.
(b) You shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, to the
effect set forth in clause (a)(i) and (a)(ii) above and to the effect that the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the Company has complied with
all of the agreements and satisfied all of the conditions on its part to be
performed or satisfied on or before the Closing Date.
The officer signing and delivering such certificate
may rely upon the best of his knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date an opinion of
Wilson Sonsini Goodrich & Rosati, P.C., independent United States counsel for
the Company, an opinion of De Brauw Blackstone Westbroek, independent
Netherlands counsel for the Company, an opinion or certificate of Wim H.
Heijting, General Counsel of the Company, and an opinion for each of the
Material Subsidiaries from counsel qualified to give such opinion, each dated
the Closing Date, to the effect set forth in Exhibits B, C, D and E
respectively.
(d) You shall have received on the Closing Date opinions of
Venture Law Group, A Professional Corporation, and Shearman & Sterling, each
United States counsel for the Initial Purchasers, dated the Closing Date, to the
effect set forth in Exhibits F and G, respectively.
(e) You shall have received, on each of the date hereof and
the Closing Date a letter, dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to you, from the Company's
independent public accountants, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in or incorporated by reference into each Memorandum.
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<PAGE> 11
(f) You shall have received representations in writing from
each of Jan Baan and Paul Baan to the effect that he is a citizen of The
Netherlands, that he is not a United States citizen or resident (within the
meaning of Section 7701 of the Internal Revenue Code of 1986, as amended), that
each of Baan Investment B.V., Baan Barneveld Beheer B.V., the Okinomos
Foundation and the related Share Administration Foundation and any other trust
or other entity which beneficially owns shares of capital stock of the Company
on behalf of him and/or members of his family is not formed under the laws of or
domiciled in the United States, and that neither he nor Baan Investment B.V. nor
any such trust has any present intent to become a citizen or resident of or to
become domiciled in the United States.
(g) You shall have received written waivers in form
satisfactory to your counsel of all rights, if any, to have securities
registered as part of the registrations required to be effected by the Company
pursuant to the Registration Rights Agreement
(h) You shall have received on the Closing Date written
confirmation of the admittance to trading of, or of an agreement to the
admittance to trading of, the Offered Securities on the Amsterdam Stock
Exchange, subject only to notice of issuance.
(i) The Registration Rights Agreement and the Indenture shall
have been executed and delivered by all of the parties thereto.
The Initial Purchasers' obligation to purchase
Additional Offered Securities hereunder is subject to the delivery to you on the
Option Closing Date of such documents as you may reasonably request with respect
to the good standing of the Company, the due authorization and issuance of the
Additional Offered Securities and other matters related to the issuance of the
Additional Offered Securities.
5. Covenants of the Company. In further consideration of the agreements
of the Initial Purchasers contained in this Agreement, the Company covenants as
follows:
(a) To furnish to you, without charge, during the period
mentioned in paragraph (c) below, as many copies of the Final Memorandum, any
documents incorporated by reference therein and any supplements and amendments
thereto as you may reasonably request and, in the case of the Final Memorandum,
to furnish copies of the Final Memorandum in New York City, prior to 3:00 p.m.,
on the business day following the date of this Agreement, or at such other time
as the parties shall agree, in such quantities as you reasonably request.
(b) Before amending or supplementing either Memorandum, to
furnish to you a copy of each such proposed amendment or supplement and not to
use any such proposed amendment or supplement to which you reasonably object.
(c) If, during such period after the date hereof and prior to
the date on which all of the Offered Securities shall have been sold by the
Initial Purchasers, any event shall occur or
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<PAGE> 12
condition exist as a result of which it is necessary in your good faith judgment
to amend or supplement the Final Memorandum in order to make the statements
therein, in the light of the circumstances when such Memorandum is delivered to
a purchaser, not misleading, or if, with the opinion of counsel to the Initial
Purchasers it is necessary to amend or supplement such Memorandum to comply with
applicable law, forthwith to prepare and furnish, at its own expense, to the
Initial Purchasers, either amendments or supplements to such Memorandum so that
the statements in such Memorandum as so amended or supplemented will not, in the
light of the circumstances when such Memorandum is delivered to a purchaser, be
misleading or so that such Memorandum, as so amended or supplemented, will
comply with applicable law.
(d) To endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(e) Whether or not any sale of such Offered Securities is
consummated, to pay all expenses incident to the performance of its obligations
under this Agreement, including: (i) the preparation of each Memorandum and all
amendments and supplements thereto, (ii) the preparation, issuance and delivery
of the Securities, (iii) the fees and disbursements of the Company's counsel and
accountants, the Trustee and its counsel and the listing agent, (iv) the
qualification of such Securities under securities or Blue Sky laws in accordance
with the provisions of Section 5(d), including filing fees and the fees and
disbursements of counsel for the Initial Purchasers in connection therewith and
in connection with the preparation of any Blue Sky or legal investment
memoranda, (v) the printing and delivery to the Initial Purchasers in quantities
as herein above stated of copies of the Memorandum and any amendments or
supplements thereto, (vi) any fees charged by rating agencies for the rating of
such Securities, (vii) all document production charges and expenses of counsel
to the Initial Purchasers (but not including their fees for professional
services) in connection with the preparation of this Agreement and the
Indenture, (viii) the fees and expenses, if any, incurred in connection with the
admission of such Securities for trading in any appropriate market system; (ix)
the fees and expenses of Euroclear, CEDEL and any other depositary used in
connection with the Offered Securities and of any transfer or conversion agent
or registrar for the Offered Securities or the Underlying Securities issuable
upon conversion of the Offered Securities; (x) the capital tax, if any, imposed
by The Netherlands upon the issuance and sale of the Securities and all stock
transfer or similar taxes imposed under the laws of The Netherlands or other
jurisdiction on any transfer of the Securities hereunder to the Initial
Purchasers by the Company (including the reimbursement of any Underwriter for
any such tax paid on good faith by such Underwriter after notice to the
Company).
(f) Neither the Company nor any Affiliate will sell, offer for
sale or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the Securities Act) which could be integrated with the sale of
the Offered Securities in a manner which would require the registration under
the Securities Act of such Securities.
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<PAGE> 13
(g) Not to solicit any offer to buy or offer or sell the
Offered Securities by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Securities Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Securities Act.
(h) While any of the Offered Securities remain "restricted
securities" within the meaning of the Securities Act, to make available, upon
request, to any seller of such Offered Securities the information specified in
Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to
Section 13 or 15(d) of the Exchange Act.
(i) To include information substantially in the form set forth
in Exhibit H in each Memorandum.
(j) To use its best efforts to (i) permit the Offered
Securities to be designated PORTAL securities in accordance with the rules and
regulations adopted by the National Association of Securities Dealers, Inc.
relating to trading in the PORTAL Market, (ii) to list for quotation the Offered
Securities on the Amsterdam Stock Exchange, and (iii) to list for quotation the
Underlying Securities on the Amsterdam Stock Exchange and on the NASDAQ National
Market.
(k) None of the Company, its Affiliates or any person acting
on its or their behalf (other than the Initial Purchasers) will engage in any
directed selling efforts (as that term is defined in Regulation S) with respect
to the Offered Securities, and the Company and its Affiliates and each person
acting on its or their behalf (other than the Initial Purchasers) will comply
with the offering restrictions of Regulation S.
6. Offering of Securities; Restrictions on Transfer.
(a) Each Initial Purchaser, severally and not jointly,
represents and warrants that it is a qualified institutional buyer as defined in
Rule 144A under the Securities Act (a "QIB"). Each Initial Purchaser, severally
and not jointly, agrees with the Company that (a) it will not solicit offers
for, or offer to sell, such Offered Securities by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act and (b) it will solicit offers
for such Offered Securities only from, and will offer such Offered Securities
only to, persons that it reasonably believes to be (A) in the case of offers
inside the United States, QIBs and (B) in the case of offers outside the United
States, persons other than U.S. persons ("foreign purchasers," which term shall
include dealers or other professional fiduciaries in the United States acting on
a discretionary basis for foreign beneficial owners (other than an estate or
trust)) that, in each case, in purchasing such Offered Securities are deemed to
have represented and agreed as provided in Exhibit F. In addition,(a) each of
Morgan Grenfell & Co. Limited, ABN AMRO Bank N.V. and Banque Indo Suez agrees
that it will solicit offers for the Offered Securities only outside the United
States to persons other than U.S. persons, and
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<PAGE> 14
(b)Deutsche Morgan Grenfell Inc. will solicit offers of securities only inside
the United States. To the extent necessary to comply with the terms of this
Agreement, (A) Deutsche Morgan Grenfell Inc. agrees to act as selling agent for
the other Initial Purchasers with respect to offers and sales of Offered
Securities in the United States pursuant to this Agreement, and (B) Morgan
Grenfell & Co. Limited agrees to act as selling agent for Deutsche Morgan
Grenfell Inc. with respect to offers and sales of Offered Securities outside of
the United States to persons other than U.S. persons pursuant to this Agreement.
(b) Each Initial Purchaser, severally and jointly, represents,
warrants, and agrees with respect to offers and sales outside the United States
that:
(i) it understands that no action has been or will be
taken in any jurisdiction by such Initial Purchaser that would permit a public
offering of the Offered Securities, or possession or distribution of either
Memorandum or any other offering or publicity material relating to the Offered
Securities, in any country or jurisdiction where action for that purpose is
required;
(ii) such Initial Purchaser will comply with all
applicable laws and regulations in each jurisdiction in which it acquires,
offers, sells or delivers Offered Securities or has in its possession or
distributes either Memorandum or any such other material, in all cases at its
own expense;
(iii) the Offered Securities have not been and will
not be registered under the Securities Act and may not be offered or sold within
the United States or to, or for the account or benefit of, U.S. persons except
in accordance with Regulation S under the Securities Act or pursuant to another
exemption from the registration requirements of the Securities Act;
(iv) such Initial Purchaser has offered the Offered
Securities and will offer and sell the Offered Securities (A) as part of their
distribution at any time and (B) otherwise until 40 days after the later of the
commencement of the Offering and the latest original issue date of the Offered
Securities (the "Restricted Period"), only in accordance with Rule 903 of
Regulation S. Accordingly, neither such Initial Purchaser, its Affiliates nor
any persons acting on its or their behalf have engaged or will engage in any
directed selling efforts (within the meaning of Regulation S) with respect to
the Offered Securities, and such Initial Purchaser, its Affiliates and any such
persons have complied and will comply with the offering restrictions requirement
of Regulation S;
(v) such Initial Purchaser has (1) not offered or
sold or invited any person to offer to purchase and, prior to the expiry of the
period six months from the date the Offered Securities are purchased by the
Initial Purchaser will not offer or sell any Offered Securities or Common Shares
issuable upon conversion thereof or invite any person to purchase any such
Offered Securities or Common Shares in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as
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<PAGE> 15
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995 ("Regulations"); (2) complied and will comply with
all applicable provisions of the Financial Services Act 1986 and the Regulations
with respect to anything done by it in relation to the Offered Securities or
Common Shares issuable upon conversion thereof, to a person who is of a kind
described in Article 11(3) of the Financial Services Act of 1986 (Investment
Advertisements) (Exemptions ) Order 1996 of Great Britain or is a person to whom
such document may otherwise lawfully be issued or passed on;
(vi) such Initial Purchaser understands that the
Offered Securities have not been and will not be registered under the Securities
and Exchange Law of Japan, and represents that it has not offered or sold, and
agrees that it will not offer or sell, any Offered Securities, directly or
indirectly in Japan or to or from any resident of Japan except (i) pursuant to
an exemption from the registration requirements of the Securities and Exchange
Law of Japan and (ii) in compliance with any other applicable requirements of
Japanese law; and
(vii) such Initial Purchaser agrees that, at or prior
to confirmation of sales of the Offered Securities, it will have sent to each
distributor, dealer or person receiving a selling concession, fee or other
remuneration that purchases Offered Securities from it during the restricted
period a confirmation or notice to substantially the following effect:
The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered
and sold within the United States or to, or for the account or benefit
of, U.S. persons (a) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of the
offering and the latest original issue date of the Notes, except in
either case in accordance with Regulation S (or Rule 144A if available)
under the Securities Act. Terms used above have the meaning given to
them by Regulation S.
Terms used in Sections 6(a) and (b) have the meanings given to them by
Regulation S.
(c) In addition,
(A) except to the extent permitted under U.S. Treas.
Reg. Section 1.163-5(c)(2)(i)(D) (the "D Rules"), (i) each Initial Purchaser
agrees that it has not offered or sold, and during the Restricted Period will
not offer or sell, Offered Securities in bearer form to a person who is within
the United States or its possessions or to a U.S. person, and (ii) it has not
delivered and will not deliver within the United States or its possessions
definitive Offered Securities in bearer form that are sold during the Restricted
Period;
(B) each Initial Purchaser represents and agrees that
it has, and throughout the Restricted Period will have, in effect procedures
reasonably designed to ensure that its employees or agents who are directly
engaged in selling Offered Securities in bearer form
-15-
<PAGE> 16
are aware that such Offered Securities may not be offered or sold during the
restricted period to a person who is within the United States or its possessions
or to a United States person, except as permitted by the D Rules;
(C) each Initial Purchaser represents that it is
acquiring the Offered Securities in bearer form for purposes of resale in
connection with their original issuance and if it retains Offered Securities in
bearer form for its own account, it will only do so in accordance with the
requirements of U.S. Treas. Reg. Section 1.163-5(c)(2)(i)(D)(6); and
(D) with respect to each affiliate that acquires from
such Initial Purchaser Offered Securities in bearer form for the purpose of
offering or selling such Offered Securities during the restricted period, either
(i) repeats and confirms the representations and agreements contained in clauses
(A), (B) and (C) on its behalf or (ii) agrees that it will obtain from such
affiliate for the Company's benefit the representations and agreements contained
in clauses (A), (B) and (C).
Terms used in this Section 6(c) have the meanings given to them by the United
States Internal Revenue Code and regulations thereunder, including the D Rules.
7. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, and each person, if any, who
controls such Initial Purchaser within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, or is under common control
with, or is controlled by, such Initial Purchaser, from and against any and all
losses, claims, damages and liabilities (including, without limitation, any
legal or other expenses reasonably incurred by any Initial Purchaser or any such
controlling of affiliated person in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in either Memorandum (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to any Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through you expressly for use therein.
(b) Each Initial Purchaser, severally and not jointly, agrees
to indemnify and hold harmless the Company, its directors, its officers and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to such Initial Purchaser, but only
with reference to information relating to such Initial Purchaser furnished to
the Company in writing by such Initial Purchaser through you expressly for use
in either Memorandum or any amendments or supplements thereto.
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<PAGE> 17
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph (a) or (b) above, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all such indemnified parties and that all
such fees and expenses shall be reimbursed as they are incurred. Such firm shall
be designated in writing by Morgan Grenfell & Co. Limited in the case of parties
indemnified pursuant to paragraph (a) above and by the Company in the case of
parties indemnified pursuant to paragraph (b) above. The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Initial Purchasers on
the other hand from the offering of such Offered Securities or (ii) if the
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<PAGE> 18
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and the Initial Purchasers on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Initial
Purchasers the other hand in connection with the offering of such Offered
Securities shall be deemed to be in the same respective proportions as the net
proceeds from the offering of such Offered Securities (before deducting
expenses) received by the Company and the total discounts and commissions
received by the Initial Purchasers in respect thereof, in each case as set forth
in the Final Memorandum, bear to the aggregate offering price of such Offered
Securities. The relative fault of the Company on the one hand and of the Initial
Purchasers on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Initial Purchasers' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amount of Offered Securities they have purchased hereunder,
and not joint.
(e) The Company and the Initial Purchasers agree that it would
not be just or equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in paragraph (d) above shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, no Initial Purchaser shall be required to
contribute any amount in excess of the amount by which the total price at which
the Offered Securities resold by it in the initial placement of such Offered
Securities were offered to investors exceeds the amount of any damages that such
Initial Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The indemnity and contribution
provisions contained in this Section 7 and the representations and warranties of
the Company contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Initial Purchasers or any person
controlling any Initial Purchaser or by or on behalf of the Company, its
officers or directors or any person controlling the Company and (iii) acceptance
of and payment for any of the Offered Securities. The remedies provided for in
this Section 7 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in equity.
-18-
<PAGE> 19
8. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date or the Option Closing Date, as the
case may be, (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, any of the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers, Inc.,
the Amsterdam Stock Exchange, the Chicago Board of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York or the Netherlands shall have been declared by either
Federal, New York State or Netherlands authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in financial
markets or any calamity or crisis that, in your judgment, is material and
adverse and (b) in the case of any of the events specified in clauses (a)(i)
through (iv), such event singly or together with any other such event makes it,
in your judgment, impracticable to market the Offered Securities on the terms
and in the manner contemplated in the Final Memorandum.
9. Jurisdiction. Each of the parties hereto irrevocably (i) agrees that
any legal suit, action or proceeding against the Company brought by any Initial
Purchaser or by any person who controls any Initial Purchaser arising out of or
based upon this Agreement or the transactions contemplated hereby may be
instituted in any New York court, (ii) waives, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such proceeding and (iii) submits to the exclusive
jurisdiction of such courts in any such suit, action or proceeding. The Company
irrevocably waives any immunity to jurisdiction to which it may otherwise be
entitled or become entitled (including sovereign immunity, immunity to
prejudgment attachment, post-judgment attachment and execution) in any legal
suit, action or proceeding against it by any Initial Purchaser arising out of or
based on this Agreement or the transactions contemplated hereby which is
instituted in any New York court or in any competent court in The Netherlands.
The Company has appointed CT Corporation System, 1633 Broadway, New York, New
York 10019, as its authorized agent (the "Authorized Agent") upon whom process
may be served in any such action by any Initial Purchaser arising out of or
based on this Agreement or the transactions contemplated hereby which may be
instituted in any New York court by any Initial Purchaser or by any person who
controls, any Initial Purchaser expressly consents to the jurisdiction of any
such court in respect of any such action, and waives any other requirements of
or objections to personal jurisdiction with respect thereto. Such appointment
shall be irrevocable. The Company represents and warrants that the Authorized
Agent has agreed to act as such agent for service of process and agrees to take
any and all action, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment in full force
and effect as aforesaid. Service of process upon the Authorized Agent and
written notice of such service to the Company shall be deemed, in every respect,
effective service of process upon the Company as the case may be.
10. Currency. In respect of any judgment or order given or made for any
amount due hereunder that is expressed and paid in a currency (the "judgment
currency") other than United
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<PAGE> 20
States dollars, the Company will indemnify against any loss incurred by any
Initial Purchaser as a result of any variation as between (i) the rate of
exchange at which the United States dollar amount is converted into the judgment
currency for the purpose of such judgment or order and (ii) the rate of exchange
at which any Initial Purchaser is able to purchase United States dollars with
the amount of the judgment currency actually received by any Initial Purchaser
or the Company. The foregoing indemnity shall constitute a separate and
independent obligation of the Company and shall continue in full force and
effect notwithstanding any such judgment or order as aforesaid. The term "rate
of exchange" shall include any premiums and costs of exchange payable in
connection with the purchase of or conversion into United States dollars.
11. Miscellaneous. If, on the Closing Date, or the Option Closing Date,
as the case may be, any one or more of the Initial Purchasers shall fail or
refuse to purchase Offered Securities that it or they have agreed to purchase
hereunder on such date, and the aggregate principal amount of Offered Securities
which such defaulting Initial Purchaser or Initial Purchasers agreed but failed
or refused to purchase is not more than one-tenth of the aggregate principal
amount of Offered Securities to be purchased on such date, the other Initial
Purchasers shall be obligated severally in the proportions that the principal
amount of Firm Offered Securities set forth opposite their respective names in
Schedule I bears to the aggregate principal amount of Firm Offered Securities
set forth opposite the names of all such non-defaulting Initial Purchasers, or
in such other proportions as you may specify, to purchase the Offered Securities
which such defaulting Initial Purchaser or Initial Purchasers agreed but failed
or refused to purchase on such date; provided that in no event shall the
principal amount of Offered Securities that any Initial Purchaser has agreed to
purchase pursuant to Section 3 be increased pursuant to this Section 11 by an
amount in excess of one-ninth of such principal amount of Offered Securities
without the written consent of such Initial Purchaser. If, on the Closing Date
or the Option Closing Date, as the case may be, any Initial Purchaser or Initial
Purchasers shall fail or refuse to purchase Offered Securities which it or they
have agreed to purchase hereunder on such date and the aggregate principal
amount of Offered Securities with respect to which such default occurs is more
than one-tenth of the aggregate principal amount of Offered Securities to be
purchased on such date and arrangements satisfactory to you and the Company for
the purchase of such Offered Securities are not made within 36 hours after such
default, this Agreement shall terminate without liability on the part of any
non-defaulting Initial Purchaser or of the Company. In any such case either you
or the Company shall have the right to postpone the Closing Date, or the Option
Closing Date, as the case may be, but in no event for longer than seven days, in
order that the required changes if any, in the Final Memorandum or in any other
documents or arrangements may be effected. Any action taken under this paragraph
shall not relieve any defaulting Initial Purchaser from liability in respect of
any default of such Initial Purchaser under this Agreement. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.
If this Agreement shall be terminated by the Initial
Purchasers, or any of them, because of any failure or refusal on the part of the
Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to
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<PAGE> 21
perform its obligations under this Agreement, the Company will reimburse the
Initial Purchasers or such Initial Purchasers as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Initial Purchaser in connection with this Agreement or the offering
contemplated hereunder.
This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
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<PAGE> 22
Please confirm your agreement to the foregoing by signing in
the space provided below for that purpose and returning to us a copy hereof,
whereupon this Agreement shall constitute a binding agreement between us.
Very truly yours,
BAAN COMPANY N.V.
By: /s/ W. H. Hegting
-----------------------------
Name: W. H. Hegting
-----------------------------
Title: Secretary to the
Board and General Counsel
-----------------------------
Agreed, December 12, 1996
MORGAN GRENFELL & CO. LIMITED
Acting severally on behalf of itself
and the several Initial Purchasers named herein.
By: MORGAN GRENFELL & CO. LIMITED
By: /s/ A. David Miller, Jr.
-----------------------------------
Name: A. David Miller, Jr.
-----------------------------------
Title: Attorney-in-Fact
-----------------------------------
<PAGE> 23
SCHEDULE 1
<TABLE>
<CAPTION>
Principal Amount of Firm
Initial Purchaser Offered Securities to Be Purchased
----------------- ----------------------------------
<S> <C>
Deutsche Morgan Grenfell Inc. $100,000,000
Morgan Grenfell & Co. Limited 65,000,000
ABN AMRO Rothschild 5,000,000
Banque Indo Suez 5,000,000
Total ------------
$175,000,000
============
</TABLE>
<PAGE> 24
EXHIBIT A
FORM OF LOCK-UP AGREEMENT
______________, 1996
Morgan Grenfell & Co. Limited.
31 West 52nd Street
New York, New York 10019-6160
Ladies and Gentlemen:
Baan Company N.V. (the "Company") proposes to issue and sell (the
"Offering") up to $200,000,000 aggregate principal amount of the Company's ____%
Convertible Subordinated Notes due 2001 (the "Securities"), convertible into
Common Shares of the Company.
In connection with the Offering, the Company will enter into a purchase
agreement with Morgan Grenfell & Co. Limited (the "Purchaser"). The form, terms
and conditions of this agreement, including the amount of Securities to be sold
in the Offering, the amount of Securities to be purchased by the Purchaser and
the Purchaser's purchase price and the initial offering price, are to be
determined by the Company and the Purchaser at a later date, and references
herein to the "Purchase Agreement" mean such document in the form in which it
will be executed and delivered by the parties thereto. Capitalized terms, unless
otherwise defined herein, shall have the meanings assigned thereto in the
Purchase Agreement.
The undersigned, to facilitate the marketing of the Securities and in
consideration of the Company and the Purchasers entering into the Purchase
Agreement, hereby irrevocably confirms and agrees for the benefit of the Company
and the Purchasers as follows:
During the period beginning on and including the date hereof and
continuing to and including the 90th day after the date of the definitive
offering circular relating to the Offering, the undersigned will not, without
the prior written consent of the Purchaser, directly or indirectly, offer, sell,
contract to sell, or otherwise dispose of any Common Shares of the Company, any
securities which are substantially similar to the Securities or the Common
Shares of the Company and any securities convertible into or exchangeable for or
which represent the right to receive Common Shares or substantially similar
securities, which Stock and other securities are, on the date hereof, or become,
at any time hereafter, registered in the name of, or beneficially owned or
<PAGE> 25
controlled by, the undersigned, except that the restrictions contained in this
letter shall not apply to _________ Common Shares owned by the undersigned.
Very truly yours,
Signature
Print Name
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<PAGE> 26
EXHIBIT B
OPINION OF WILSON SONSINI GOODRICH & ROSATI, P.C.
The opinion of Wilson Sonsini Goodrich & Rosati, P.C., United States
counsel for the Company, to be delivered pursuant to Section 4(c) of the
Purchase Agreement shall be to the effect that:
1. The Purchase Agreement has been executed and delivered by the
Company.
2. The Indenture has been executed and delivered by the Company and is a
valid and binding agreement of the Company enforceable against the Company in
accordance with its terms (assuming due execution and delivery by the Trustee).
3. The Offered Securities, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by you in
accordance with the terms of the Purchase Agreement, will be valid and binding
obligations of the Company and will be entitled to the benefits of the
Indenture.
4. The Registration Rights Agreement has been executed and delivered by
the Company and is a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms (assuming due execution and
delivery by the Initial Purchasers).
5. The execution and delivery by the Company of, and the performance by
the Company of its obligations under, this Agreement, the Indenture and the
Offered Securities and the Registration Rights Agreement will not contravene any
provision of applicable U.S. federal or state law of the Company or, to the
knowledge of such counsel and except as set forth in each Memorandum, any
Reviewed Agreement binding upon the Company or any of its Subsidiaries, or any
judgment, order or decree of any U.S. federal or state governmental body, agency
or court having jurisdiction over the Company or any of its properties or any of
its Subsidiaries or any of their property, and no consent, approval,
authorization or order of or qualification with any U.S. federal or state
governmental body or agency is required for the performance by the Company of
its obligations under this Agreement, the Indenture and the Offered Securities
except such as are specified and have been obtained and such as may be required
by the securities or Blue Sky laws of the various states in connection with the
purchase and distribution of the Offered Securities by you.
6. Such counsel does not know of any legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or to which
any of the properties of the Company or any of its subsidiaries is subject other
than proceedings fairly summarized in all material respects in each Memorandum
and, to such counsel's knowledge, proceedings that would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole, or on
<PAGE> 27
the power or ability of the Company to perform its obligations under this
Agreement, the Indenture or the Offered Securities.
7. The statements in the Final Memorandum under the captions
"Description of Notes," "Share Certificates and Transfer," "Plan of
Distribution" and "Notice to Investors", insofar as such statements constitute a
summary of the legal matters, documents or proceedings referred to therein,
fairly summarize in all material respects the matters referred to therein.
8. The statements in the Final Memorandum under the caption "Taxation,"
insofar as such statements constitute a summary of the United States tax laws
referred to therein, are accurate and fairly summarize in all material respects
the United States tax laws referred to therein.
9. Each document incorporated by reference in the Final Memorandum
(except for financial statements and schedules and other statistical and
financial data included therein as to which such counsel need not express any
opinion), complied as to form when filed with the Commission in all material
respects with the Exchange Act and the rules and regulations of the Commission
thereunder.
10. Based upon the representations, warranties and agreements of the
Company in Sections 1(o), 1(u), 1(v), 1(w), 5(f), 5(g), 5(h) and 5(k) of the
Purchase Agreement and of the Initial Purchasers (as defined in the Final
Memorandum) in Section 6 of the Purchase Agreement and on the representations
and agreements contained in the Final Memorandum, and assuming compliance
therewith, it is not necessary in connection with the offer, sale and delivery
of the Offered Securities to the Initial Purchasers under the Purchase Agreement
or in connection with the initial resale of such Offered Securities by the
Initial Purchasers in accordance with Section 6 of the Purchase Agreement to
register the Offered Securities or the Shares (other than as required by the
Registration Rights Agreement) under the Securities Act of 1933 or to qualify
the Indenture under the Trust Indenture Act of 1939, it being understood that no
opinion is expressed as to any subsequent resale of any Offered Security or
Share.
11. Assuming the validity of such action under the laws of The
Netherlands, under the laws of the State of New York relating to personal
jurisdiction, in any action arising out of or relating to the Purchase Agreement
or the transactions contemplated hereby, the Company has, pursuant to Section 9
of the Purchase Agreement, validly and irrevocably submitted to the personal
jurisdiction of any state or federal court located in the Borough of Manhattan,
The City of New York, New York (each a "New York Court"), has validly and
irrevocably waived any objection to the venue of a proceeding in any such court,
and validly and irrevocably appointed the Authorized Agent (as defined therein)
as its authorized agent for the purpose described in Section 9 thereof; and
service of process effected on such agent in the manner set forth in Section 9
thereof will be effective to confer valid personal jurisdiction over the Company
in any
-2-
<PAGE> 28
action arising out of or relating to the Purchase Agreement or the transactions
contemplated thereby.
In addition, such counsel shall state that nothing has come to
the attention of such counsel which causes such counsel to believe that (except
for financial statements and schedules and other financial data included therein
as to which such counsel need not express any belief) the Final Memorandum when
issued contained, or as of the date such opinion is delivered contains, any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. With respect to this
paragraph, counsel may state their opinion and belief are based upon their
participation in the preparation of the Final Memorandum (and any amendments or
supplements thereto) and the documents incorporated therein by reference and
review and discussion of the contents thereof, including incorporated documents,
but are without independent check or verification except as specified.
Such counsel's opinions shall relate to California, New York
and United States federal law.
-3-
<PAGE> 29
EXHIBIT C
OPINION OF DE BRAUW BLACKSTONE WESTBROEK
The opinion of De Brauw Blackstone Westbroek, Netherlands counsel for the
Company, to be delivered pursuant to Section 4(c) of the Purchase Agreement
shall be to the effect that:
1. The Company has been duly incorporated and is validly existing as a
company limited by shares (naamloze vennootschap) in good standing under the
laws of the Netherlands, has the corporate power and authority to own its
property and to conduct its business as described in the Final Memorandum
(references herein to the Final Memorandum being taken to mean the same, as
amended or supplemented), and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries taken as a whole.
2. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
3. The Indenture has been duly authorized, executed and delivered by
the Company and is a valid and binding agreement of the Company enforceable
against the Company in accordance with its terms (assuming due execution and
delivery by the Trustee).
4. The Registration Rights Agreement has been duly authorized, executed
and delivered by the Company and is a valid and binding agreement of the Company
(assuming due execution and delivery by the Initial Purchasers) enforceable
against the Company in accordance with its terms.
5. The Offered Securities have been duly authorized by all necessary
corporate action on the part of the Company and when duly executed and
authenticated in accordance with the terms of the Indenture and delivered to and
paid for by you in accordance with the terms of the Purchase Agreement, will be
valid and binding obligations of the Company enforceable against the Company in
accordance with their terms and will be entitled to the benefits of the
Indenture.
6. The Common Shares initially issuable on conversion of the Offered
Securities have been duly authorized and reserved for issuance upon such
conversion and, when issued upon conversion in accordance with the terms of the
Indenture, will have been validly issued, fully paid and non-assessable, and
there are no preemptive or, to such counsel's knowledge, other rights to
subscribe for or purchase any of the Common Shares issuable upon
<PAGE> 30
conversion of the Offered Securities pursuant to the Company's Articles of
Association or, to the knowledge of such counsel, any Reviewed Agreement*
binding on the Company.
7. The execution and delivery by the Company of, and the performance by the
Company of its obligations under, this Agreement, the Indenture and the Offered
Securities and the Registration Rights Agreement will not contravene any
provision of applicable Netherlands law or the Articles of Association of the
Company or, to the knowledge of such counsel and except as set forth in each
Memorandum, any Reviewed Agreement binding upon the Company or any of its
Subsidiaries, or any judgment, order or decree of any Netherlands governmental
body, the Amsterdam Stock Exchange or agency or court having jurisdiction over
the Company or any of its properties or any of its Subsidiaries or any of their
property, and no consent, approval, authorization or order of or qualification
with any Netherlands governmental body or agency is required for the performance
by the Company of its obligations under this Agreement, the Indenture and the
Offered Securities except such as are specified and have been obtained.
8. Such counsel does not know of any legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or to which
any of the properties of the Company or any of its subsidiaries is subject other
than proceedings fairly summarized in all material respects in each Memorandum
and, to such counsel's knowledge, proceedings that would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole, or on the
power or ability of the Company to perform its obligations under this Agreement,
the Indenture or the Offered Securities.
9. The statements in the Final Memorandum under the captions
"Enforceability of Civil Liabilities," "Exchange Controls and Other Limitations
Affecting Security Holders," "Description of Notes," "Share Certificates and
Transfer," "Description of Share Capital," "Plan of Distribution" and "Notice to
Investors", insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, fairly summarize in
all material respects the matters referred to therein.
10. The statements in the Final Memorandum under the caption "Taxation"
insofar as such statements constitute a summary of the Netherlands tax laws
referred to therein, are accurate and fairly summarize in all material respects
the Netherlands tax laws referred to therein.
11. The Company's agreement to the choice of law provisions set forth in
Section 9 of the Purchase Agreement, Section ___ of the Indenture and Section
___ of the
- --------
* * Defined as any agreement which would be required to be filed as an Exhibit
to a Registration Statement on Form F-1 of the Company.
-2-
<PAGE> 31
Registration Rights Agreement will be recognized by the courts of The
Netherlands; the Company can sue and be sued in its own name under the laws of
The Netherlands; the irrevocable submission of the Company to the exclusive
jurisdiction of a New York Court, the waiver by the company of any objection to
the venue of a proceeding of a New York Court and the agreement of the Company
that the Purchase Agreement, the Indenture and the Registration Rights Agreement
shall be governed by and construed in accordance with the laws of the State of
New York are legal, valid and binding; service of process effected in the manner
set forth in Section 9 of the Purchase Agreement will be effective, insofar as
the law of The Netherlands is concerned, to confer valid personal jurisdiction
over the Company; and judgment obtained in a New York Court arising out of or in
relation to the obligations of the Company under the Purchase Agreement, the
Indenture or the Registration Rights Agreement would be enforceable against the
Company in the courts of The Netherlands.
12. The Company is not entitled to any immunity on the basis of sovereignty
or otherwise in respect of its obligations under this Agreement and could not
successfully interpose any such immunity as a defense to any suit or action
brought or maintained in respect of its obligations under the Purchase
Agreement, the Indenture or the Registration Rights Agreement; and the waiver by
the Company of immunity to jurisdiction (including the waiver of sovereign
immunity to which the Company may become entitled subsequent to the date of the
Purchase Agreement) and immunity to pre-judgment attachment, post-judgment
attachment and execution in any suit, action or proceeding against it arising
out of or based on the Purchase Agreement is a valid and binding obligation of
the Company under Netherlands law.
13. All dividends and other distributions declared and payable on the
shares of capital stock of the Company may under the current laws and
regulations of The Netherlands be paid in Dutch Guilders that may be converted
into foreign currency that may be freely transferred out of The Netherlands,
under the laws and regulations of The Netherlands and are otherwise free and
clear of any other tax, withholding or deduction in The Netherlands and without
the necessity of obtaining any Governmental Authorization in The Netherlands.
14. No stamp or other issuance or transfer taxes or duties and no capital
gains, income, withholding or other taxes are payable by or on behalf of the
Initial Purchasers to The Netherlands or to any political subdivision or taxing
authority thereof or therein in connection with (A) the sale and delivery by the
Company of the Securities to the Initial Purchasers or (B) the sale and delivery
outside The Netherlands by the Initial Purchasers of the Securities to
purchasers thereof.
Such counsel's opinions shall relate to Netherlands law.
-3-
<PAGE> 32
EXHIBIT D
OPINION OR CERTIFICATE OF GENERAL COUNSEL OF THE COMPANY
Wim H Heijting, the General Counsel of the Company, shall state that
(I) nothing has come to his attention which causes him to believe that (except
for financial statements and schedules and other financial data included therein
as to which such counsel need not express any belief) the Final Memorandum when
issued contained, or as of the date such opinion is delivered contains, any
untrue statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. With respect to this
paragraph, he may state his opinion and belief is based upon his participation
in the preparation of the Final Memorandum (and any amendments or supplements
thereto) and the documents incorporated therein by reference and review and
discussion of the contents thereof, including incorporated documents, but is
without independent check or verification except as specified; and
(II) he does not know of any legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is subject other than
proceedings fairly summarized in all material respects in each Memorandum and,
to his knowledge, proceedings that would not have a material adverse effect on
the Company and its subsidiaries, taken as a whole, or on the power or ability
of the Company to perform its obligations under this Agreement, the Indenture or
the Offered Securities.
<PAGE> 33
EXHIBIT E
MATERIAL SUBSIDIARY OPINIONS
The opinion of qualified counsel to be delivered pursuant to Section 4(c)
of the Purchase Agreement shall be to the effect that each Material Subsidiary
of the Company has been duly incorporated, is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation, has
the corporate power and authority to own its property and to conduct its
business as described in the Final Memorandum, and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries taken as a whole.
-2-
<PAGE> 34
EXHIBIT F
OPINION OF VENTURE LAW GROUP
The opinion of Venture Law Group, A Professional Corporation, to be
delivered pursuant to Section 4(d) of the Purchase Agreement shall be to the
effect that:
1. The Indenture is a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms (assuming due
execution and delivery by the Company and the Trustee).
2. The Offered Securities, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by you in
accordance with the terms of the Purchase Agreement, will be valid and binding
obligations of the Company and will be entitled to the benefits of the
Indenture.
3. The Registration Rights Agreement is a valid and binding agreement of
the Company enforceable against the Company in accordance with its terms
(assuming due execution and delivery by the Company and the Initial Purchasers).
4. Based upon the representations, warranties and agreements of the Company
in sections 1(o), 1(u), 1(v), 5(f), 5(g), 5(h) and 5(k) of the Purchase
Agreement and of the Initial Purchasers (as defined in the Final Memorandum) in
Section 6 of the Purchase Agreement and on the representations and agreements
contained in the section "Transfer Restrictions" of the Final Memorandum, it is
not necessary in connection with the offer, sale and delivery of the Offered
Securities to the Initial Purchasers under the Purchase Agreement or in
connection with the initial resale of such Offered Securities by the Initial
Purchasers in accordance with Section 6 of the Purchase Agreement to register
the Offered Securities or the Shares under the Securities Act of 1933 or to
qualify the Indenture under the Trust Indenture Act of 1939, it being understood
that no opinion is expressed as to any subsequent resale of any Offered Security
or Share.
5. The statements in the Final Memorandum under the captions "Description
of Notes," "Plan of Distribution," and "Notice to Investors," insofar as such
statements constitute a summary of the legal matters, documents or proceedings
referred to therein, fairly summarize in all material respects the matters
referred to therein.
6. The statements in the Final Memorandum under the caption "Taxation"
insofar as such statements constitute a summary of the United States federal tax
laws referred to therein, are accurate and fairly summarize in all material
respects the United States federal tax laws referred to therein.
<PAGE> 35
In addition, such counsel shall state that nothing has come to the attention of
such counsel which causes such counsel to believe that (except for financial
statements and schedules and other financial data included therein as to which
such counsel need not express any belief) the Final Memorandum when issued
contained, or as of the date such opinion is delivered contains, any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. With respect to this
paragraph, counsel may state their opinion and belief are based upon their
participation in the preparation of the Final Memorandum (and any amendments or
supplements thereto) and the documents incorporated therein by reference and
review and discussion of the contents thereof, including incorporated documents,
but are without independent check or verification except as specified.
Such counsel's opinions shall relate to New York, California and
United States federal law. The opinions with respect to New York law may be
given in reliance on the opinion of Shearman & Sterling.
-2-
<PAGE> 36
EXHIBIT G
OPINION OF SHEARMAN & STERLING
The opinion of Shearman & Sterling, United States counsel for the
Initial Purchasers, to be delivered pursuant to Section 4(d) of the Purchase
Agreement shall be to the effect that:
1. The Indenture is a valid and binding agreement of the Company
enforceable against the Company in accordance with its terms (assuming due
execution and delivery by the Company and the Trustee).
2. The Offered Securities, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by
you in accordance with the terms of the Purchase Agreement, will be valid and
binding obligations of the Company and will be entitled to the benefits of the
Indenture.
3. The Registration Rights Agreement is a valid and binding agreement
of the Company enforceable against the Company in accordance with its terms
(assuming due execution and delivery by the Company and the Initial Purchasers).
4. The statements in the Final Memorandum under the caption
"Description of Notes" insofar as such statements constitute a summary of the
legal matters, documents or proceedings referred to therein, fairly summarize in
all material respects the matters referred to therein.
5. Assuming the validity of such action under the laws of The
Netherlands, under the laws of the State of New York relating to personal
jurisdiction, in any action arising out of or relating to the Purchase Agreement
or the transactions contemplated hereby, the Company has, pursuant to Section 9
of the Purchase Agreement, validly and irrevocably submitted to the personal
jurisdiction of any state or federal court located in the Borough of Manhattan,
The City of New York, New York (each a "New York Court"), has validly and
irrevocably waived any objection to the venue of a proceeding in any such court,
and validly and irrevocably appointed the Authorized Agent (as defined therein)
as its authorized agent for the purpose described in Section 9 thereof; and
service of process effected on such agent in the manner set forth in Section 9
thereof will be effective to confer valid personal jurisdiction over the Company
in any action arising out of or relating to the Purchase Agreement or the
transactions contemplated thereby.
6. Based upon the representations, warranties and agreements of the
Company in sections 1(o), 1(u), 1(v), 5(f), 5(g), 5(h) and 5(k) of the Purchase
Agreement and of the Initial Purchasers (as defined in the Final Memorandum) in
Section 6 of the Purchase Agreement and on the representations and agreements
contained in the section "Transfer Restrictions" of the Final Memorandum, it is
not necessary in connection with the offer, sale and delivery of the Offered
<PAGE> 37
Securities to the Initial Purchasers under the Purchase Agreement or in
connection with the initial resale of such Offered Securities by the Initial
Purchasers in accordance with Section 6 of the Purchase Agreement to register
the Offered Securities or the Shares under the Securities Act of 1933 or to
qualify the Indenture under the Trust Indenture Act of 1939, it being understood
that no opinion is expressed as to any subsequent resale of any Offered Security
or Share.
Such counsel's opinions shall relate to New York and United States
federal law
-2-
<PAGE> 38
EXHIBIT H
Each Memorandum shall contain language to the following effect:
"Each purchaser of Notes offered otherwise than in reliance on Regulation
S under the Securities Act (the "Restricted Notes") will be deemed to have
represented and agreed as follows (terms used in this paragraph that are defined
in Rule 144A or Regulation S under the Securities Act are used herein as defined
therein):
(1) The purchaser is a qualified institutional buyer (a "QIB"), is
aware that the sale of the Notes to it is being made in reliance on Rule 144A
and is acquiring such Notes for its own account or for the account of a QIB, as
the case may be.
(2) The purchaser understands that the Restricted Notes are being
offered only in a transaction not involving any public offering in the Untied
States within the meaning of the Securities Act, that such Notes and the Common
Shares issuable upon conversion thereof have not been registered under the
Securities Act and that (A) it may not resell, pledge or otherwise transfer any
such Notes or Common Shares except (i) to a person who the seller reasonably
believes is a QIB in a transaction meeting the requirements of Rule 144A, (ii)
in an offshore transaction complying with Rule 903 or Rule 904 of Regulation S,
(iii) to an institution that is an accredited investor within the meaning of
Rule 501 (a) under the Securities Act in a transaction exempt from the
registration requirements thereof, (iv) pursuant to the exemption from
registration under the Securities Act provided by Rule 144 thereunder (if
available), or (v) pursuant to an effective registration statement under the
Securities Act, and in each of cases (i) through (iv) in accordance with any
applicable securities laws of the States and other jurisdictions of the United
States, and (B) the purchaser will, and each subsequent holder of such Notes or
holder of such Common Shares is required to, notify any purchaser of such Notes
or Common Shares from it of the resale restrictions referred to in (A) above.
(3) The purchaser understands that the Restricted Notes will bear
legends to the following effect unless the Company determines otherwise in
compliance with applicable law:
THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THIS NOTE AND ANY COMMON SHARES ISSUABLE
UPON ITS CONVERSION MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THIS NOTE MAY
ONLY BE SOLD IN ACCORDANCE WITH THE INDENTURE, COPIES OF WHICH ARE AVAILABLE FOR
INSPECTION AT THE CORPORATE TRUST OFFICE OF THE TRUSTEE. EACH PURCHASER OF THIS
NOTE IS HEREBY NOTIFIED THAT THE
-3-
<PAGE> 39
SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144a THEREUNDER.
THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF BAAN COMPANY N.V.
(THE "COMPANY") THAT (A) THIS NOTE AND ANY COMMON SHARES ISSUABLE UPON ITS
CONVERSION MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE TRANSACTION COMPLYING WITH THE
PROVISIONS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT,
(III) TO AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR WITHIN THE MEANING OF
RULE 501 (a) UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE
REGISTRATION REQUIREMENTS THEREOF, (IV) PURSUANT TO THE EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, AND IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF THE STATES AND OTHER JURISDICTIONS OF THE UNITED
STATES, AND THAT (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER OF THIS NOTE OR
ANY COMMON SHARES ISSUABLE UPON ITS CONVERSION IS REQUIRED TO, NOTIFY ANY
PURCHASER OF THIS NOTE OR SUCH COMMON SHARES ISSUABLE UPON ITS CONVERSION FROM
IT OF THE RESALE RESTRICTIONS REFERRED TO IN CLAUSE (A) ABOVE.
-4-
<PAGE> 40
THIS NOTE, ANY COMMON SHARES ISSUABLE UPON ITS CONVERSION AND ANY
RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY
THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF THIS NOTE
AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR
THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER
OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS NOTE AND ANY SUCH SHARES
SHALL BE DEEMED BY THE ACCEPTANCE OF THIS NOTE AND ANY SUCH SHARES TO HAVE
AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.
Common Shares issuable upon conversion of Restricted Notes prior to the
third anniversary of the date of original issuance of the Restricted Notes (or
such shorter period of time as shall be set by the Company to reflect any
changes in applicable laws and regulations relating to the resale or transfer of
restricted securities generally) will bear comparable legends.
A Restricted Note may be exchanged for a Note not bearing the legends
set forth in (3) above upon certification by the transferor in the form set
forth in the Indenture that the transfer of such Restricted Note has been made
in accordance with Rule 904 under the Securities Act. The Company understands
that under current market practices settlement of the transfer of any such Note
may be effected through the facilities of The Depository Trust Company, but that
prior to the 40th day after the later of the commencement of the Offering and
the last original issue date of the Notes, any such transfer may only occur
through the facilities of Euroclear and/or CEDEL.
NO REPRESENTATION CAN BE MADE AS TO AVAILABILITY OF THE EXEMPTION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT FOR THE RESALE OF THE RESTRICTED
NOTES OR ANY COMMON SHARES ISSUABLE UPON CONVERSION THEREOF."
Each Memorandum shall also contain language to the following effect:
"Each person receiving this Offering Memorandum acknowledges that such
person (i) has been afforded an opportunity to request from the Company and to
review, and has received, all additional information considered by it to be
necessary to verify the accuracy of, or to supplement, the information herein,
(ii) it has not relied on the Initial Purchasers or any person affiliated with
the Initial Purchasers in connection with its investigation of the accuracy of
such information or its investment decision and (iii) no person has been
authorized to give any information or to make any representation concerning the
Company or the Securities or the Underlying Securities offered hereby other than
as contained herein and information given by duly authorized officers and
employees of the Company in connection with investors' examination of the
Company and the terms of the offering, and, if given or made, such other
information or representations should not be relied upon as having been
authorized by the Company or the Initial Purchasers."
<PAGE> 41
Each Memorandum shall also contain language to the following effect:
"Each purchaser of Notes offered hereby in reliance on Regulation S
will be deemed to have represented and agreed that such purchaser understands
that the Notes (and the Common Shares issuable upon conversion thereof) have not
been registered under the Securities Act and may not be offered, sold or
delivered in the United States or to, or for the account of, any U.S. Person,
unless the Notes (and such Common Shares) are registered under the Securities
Act or an exemption from the registration requirements thereof is available and
the Notes will bear a legend to this effect, unless the Company determines
otherwise in compliance with applicable laws (terms used above that are defined
in Regulation S are used above as therein defined)."
<PAGE> 1
EXHIBIT 4.1
-----------------------------------------------------------------------
BAAN COMPANY N.V.
ISSUER
TO
MARINE MIDLAND BANK
TRUSTEE
----------------
INDENTURE
DATED AS OF DECEMBER 15, 1996
----------------
U.S.$200,000,000
4.5% CONVERTIBLE SUBORDINATED NOTES
DUE 2001
-----------------------------------------------------------------------
<PAGE> 2
.........................................
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
----------- -------
<S> <C>
Section 310(a)(1) ......................................................... 6.8
(a)(2) ......................................................... 6.8
(a)(3) ......................................................... Not Applicable
(a)(4) ......................................................... Not Applicable
(b) ......................................................... 6.13
6.9
Section 311(a) ......................................................... 6.14
(b) ......................................................... 6.14
Section 312(a) ......................................................... 15.1
15.2(a)
(b) ......................................................... 15.2(b)
(c) ......................................................... 15.2(c)
Section 313(a) ......................................................... 15.3(a)
(a)(4) ......................................................... 1.1
10.9
(b) ......................................................... 15.3(a)
(c) ......................................................... 15.3(a)
(d) ......................................................... 15.3(b)
Section 314(a) ......................................................... 15.4
(b) ......................................................... Not Applicable
(c)(1) ......................................................... 1.2
(c)(2) ......................................................... 1.2
(c)(3) ......................................................... Not Applicable
(d) ......................................................... Not Applicable
(e) ......................................................... 1.2
Section 315(a) ......................................................... 6.1
(b) ......................................................... 6.2
(c) ......................................................... 6.1
(d) ......................................................... 6.1
(e) ......................................................... 5.14
Section 316(a) ......................................................... 1.1
(a)(1)(A) ......................................................... 5.2
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
5.12
(a)(1)(B) ......................................................... 5.13
(a)(2) ......................................................... Not Applicable
(b) ......................................................... 5.8
(c) ......................................................... 1.4(g)
Section 317(a)(1) ......................................................... 5.3
(a)(2) ......................................................... 5.4
(b) ......................................................... 10.3
Section 318(a) ......................................................... 1.13
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
ii
<PAGE> 4
TABLE OF CONTENTS
-----------
<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS OF THE COMPANY...........................................................1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.1. Definitions.............................................. 1
Act .....................................................................2
Additional Amounts.......................................................2
Affiliate................................................................2
Agent Member.............................................................2
Applicable Price.........................................................2
Authenticating Agent.....................................................2
Authorized Newspaper.....................................................2
Bearer Security..........................................................3
Board Resolution.........................................................3
Business Day.............................................................3
CEDEL ................................................................3
Closing Price............................................................3
Code ................................................................3
Commission...............................................................3
Common Depositary........................................................3
Common Shares............................................................3
Company ................................................................4
Company Notice...........................................................4
Company Request..........................................................4
Company Order............................................................4
Constituent Person.......................................................4
Conversion Agent.........................................................4
Conversion Price.........................................................4
Corporate Trust Office...................................................4
corporation..............................................................4
coupon ................................................................4
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
i
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C>
Credit Agreement........................................................4
Defaulted Interest......................................................4
Definitive Security.....................................................5
Depositary..............................................................5
Designated Senior Indebtedness..........................................5
Dollar ...............................................................5
U.S.$ ...............................................................5
DTC ...............................................................5
EUROCLEAR...............................................................5
Event of Default........................................................5
Exchange Act............................................................5
Exchange Date...........................................................5
Expiration Time.........................................................5
Fundamental Change......................................................5
Global Registered Security..............................................6
Global Security.........................................................6
Holder ...............................................................6
Indebtedness............................................................6
Indenture...............................................................7
Initial Regulation S Securities.........................................7
Initial Purchasers......................................................7
Interest Payment Date...................................................7
Liquidated Damages......................................................7
Maturity ...............................................................7
Non-electing Share......................................................7
Officers' Certificate...................................................7
Opinion of Counsel......................................................7
Outstanding.............................................................7
Paying Agent............................................................8
Payment Blockage Notice.................................................8
Person ...............................................................8
Place of Conversion.....................................................8
Place of Payment........................................................9
Predecessor Security....................................................9
Purchase Agreement......................................................9
Purchased Shares........................................................9
Record Date.............................................................9
Redemption Date.........................................................9
Redemption Price........................................................9
Reference Market Price..................................................9
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
ii
<PAGE> 6
<TABLE>
<CAPTION>
Page
----
<S> <C>
Registered Security......................................................9
Registration Rights Agreement............................................9
Regular Record Date......................................................9
Regulation S.............................................................9
Regulation S Certificate.................................................9
Regulation S Global Security............................................10
Regulation S Restricted Period..........................................10
Regulation S Securities.................................................10
Representative..........................................................10
Repurchase Date.........................................................10
Repurchase Price........................................................10
Responsible Officer.....................................................10
Restricted Global Registered Security...................................10
Restricted Securities...................................................10
Restricted Securities Legend............................................10
Rule 144A...............................................................11
Rule 144A Information...................................................11
Rule 144A Securities....................................................11
Securities..............................................................11
Securities Act..........................................................11
Securities Act Legend...................................................11
Security Register" and "Security Registrar..............................11
Senior Indebtedness.....................................................11
Shelf Registration Statement............................................11
Special Record Date.....................................................11
Stated Maturity.........................................................11
Subsidiary..............................................................12
Successor Security......................................................12
Supervisory Board.......................................................12
Surrender Certificate...................................................12
Tax Affected Security...................................................12
Tax Law Change..........................................................12
Temporary Global Bearer Security........................................12
Trading Day.............................................................12
Transfer Agent..........................................................12
Trust Indenture Act.....................................................12
Trustee ...............................................................13
United States...........................................................13
United States person....................................................13
Unrestricted Securities Certificate.....................................13
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a
part of the Indenture.
iii
<PAGE> 7
<TABLE>
<CAPTION>
Page
----
<S> <C>
Western Europe.................................................................................13
Section 1.2. Compliance Certificates and Opinions............................................13
Section 1.3. Form of Documents Delivered to the Trustee......................................14
Section 1.4. Acts of Holders of Securities...................................................14
Section 1.5. Notices, Etc., to Trustee and Company...........................................17
Section 1.6. Notice to Holders of Securities; Waiver.........................................17
Section 1.7. Effect of Headings and Table of Contents........................................19
Section 1.8. Successors and Assigns..........................................................19
Section 1.9. Separability Clause.............................................................19
Section 1.10. Benefits of Indenture...........................................................19
Section 1.11. Governing Law...................................................................19
Section 1.12. Legal Holidays..................................................................19
Section 1.13. Conflict with Trust Indenture Act...............................................20
Section 1.14. Jurisdiction....................................................................20
ARTICLE TWO
SECURITY FORMS
Section 2.1. Forms Generally.................................................................21
Section 2.2. Forms of Securities.............................................................22
Section 2.3. Form of Coupon..................................................................58
Section 2.4. Form of Certificate of Authentication...........................................59
Section 2.5. Form of Conversion Notice.......................................................60
ARTICLE THREE
THE SECURITIES
Section 3.1. Title and Terms.................................................................61
Section 3.2. Denominations...................................................................62
Section 3.3. Execution, Authentication, Delivery and Dating..................................63
Section 3.4. Temporary Global Bearer Security; Global Securities; Non-
Global Registered Securities....................................................63
Section 3.5. Registration, Registration of Transfer and Exchange;
Restrictions on Transfer........................................................68
Section 3.6. Mutilated, Destroyed, Lost or Stolen Securities and Coupons.....................75
Section 3.7. Payment of Interest; Interest Rights Preserved..................................76
Section 3.8. Persons Deemed Owners...........................................................78
Section 3.9. Cancellation....................................................................79
Section 3.10. Computation of Interest.........................................................79
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Section 3.11. Form of Certification...........................................................79
Section 3.12. CUSIP and ISIN Numbers..........................................................80
Section 3.13. Notification of Withholding.....................................................81
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.1. Satisfaction and Discharge of Indenture.........................................81
Section 4.2. Application of Trust Money......................................................82
ARTICLE FIVE
REMEDIES
Section 5.1. Events of Default...............................................................83
Section 5.2. Acceleration of Maturity; Rescission and Annulment..............................84
Section 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee. .......................................................................85
Section 5.4. Trustee May File Proofs of Claim................................................86
Section 5.5. Trustee May Enforce Claims Without Possession of Securities
or Coupons......................................................................87
Section 5.6. Application of Money Collected..................................................87
Section 5.7. Limitation on Suits.............................................................87
Section 5.8. Unconditional Right of Holders to Receive Principal, Premium
and Interest and to Convert.....................................................88
Section 5.9. Restoration of Rights and Remedies..............................................88
Section 5.10. Rights and Remedies Cumulative..................................................89
Section 5.11. Delay or Omission Not Waiver....................................................89
Section 5.12. Control by Holders of Securities................................................89
Section 5.13. Waiver of Past Defaults.........................................................90
Section 5.14. Undertaking for Costs...........................................................90
Section 5.15. Waiver of Stay or Extension Laws................................................90
ARTICLE SIX
THE TRUSTEE
Section 6.1. Certain Duties and Responsibilities.............................................91
Section 6.2. Notice of Defaults..............................................................92
Section 6.3. Certain Rights of Trustee.......................................................92
Section 6.4. Not Responsible for Recitals or Issuance of Securities..........................93
Section 6.5. May Hold Securities, Act as Trustee Under Other Indentures......................94
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Section 6.6. Money Held in Trust.............................................................94
Section 6.7. Compensation and Reimbursement..................................................94
Section 6.8. Corporate Trustee Required; Eligibility.........................................95
Section 6.9. Resignation and Removal; Appointment of Successor...............................95
Section 6.10. Acceptance of Appointment by Successor..........................................97
Section 6.11. Merger, Conversion, Consolidation or Succession to Business.....................97
Section 6.12. Authenticating Agents...........................................................97
Section 6.13. Disqualification; Conflicting Interests.........................................99
Section 6.14. Preferential Collection of Claims Against Company...............................99
ARTICLE SEVEN
CONSOLIDATION, MERGER, SPLIT-UP, TRANSFER OR LEASE
Section 7.1. Company May Consolidate, Merge, Etc., Only on Certain Terms ....................99
Section 7.2. Successor Substituted..........................................................100
Section 7.3. Company May Split-Up Only on Certain Terms.....................................100
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
Section 8.1. Supplemental Indentures Without Consent of Holders of
Securities or Coupons........................................................101
Section 8.2. Supplemental Indentures with Consent of Holders of Securities .................102
Section 8.3. Execution of Supplemental Indentures...........................................103
Section 8.4. Effect of Supplemental Indentures..............................................104
Section 8.5. Reference in Securities to Supplemental Indentures.............................104
Section 8.6. Notice of Supplemental Indentures..............................................104
ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
Section 9.1. Purposes for Which Meetings May Be Called......................................104
Section 9.2. Call, Notice and Place of Meetings.............................................104
Section 9.3. Persons Entitled to Vote at Meetings...........................................105
Section 9.4. Quorum; Action.................................................................105
Section 9.5. Determination of Voting Rights; Conduct and Adjournment of
Meetings.....................................................................106
Section 9.6. Counting Votes and Recording Action of Meetings................................107
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ARTICLE TEN
COVENANTS
Section 10.1. Payment of Principal, Premium and Interest.....................................107
Section 10.2. Maintenance of Offices or Agencies.............................................108
Section 10.3. Money for Security Payments To Be Held in Trust................................109
Section 10.4. Additional Amounts ............................................................110
Section 10.5. Existence......................................................................111
Section 10.6. Registration and Listing.......................................................111
Section 10.7. Statement by Officers as to Default............................................111
Section 10.8. Delivery of Certain Information................................................112
Section 10.9. Resale of Certain Securities; Reporting Issuer.................................113
Section 10.10. Compliance with Listing Requirements of Amsterdam Stock Exchange...............113
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 11.1. Right of Redemption............................................................113
Section 11.2. Applicability of Article.......................................................113
Section 11.3. Election to Redeem; Notice to Trustee..........................................114
Section 11.4. Selection by Trustee of Securities to Be Redeemed..............................114
Section 11.5. Notice of Redemption...........................................................115
Section 11.6. Deposit of Redemption Price....................................................116
Section 11.7. Securities Payable on Redemption Date..........................................116
Section 11.8. Registered Securities Redeemed in Part.........................................117
Section 11.9. Conversion Arrangement on Call for Redemption..................................117
ARTICLE TWELVE
CONVERSION OF SECURITIES
Section 12.1. Conversion Privilege and Conversion Price......................................118
Section 12.2. Exercise of Conversion Privilege...............................................119
Section 12.3. Fractions of Shares............................................................121
Section 12.4. Adjustment of Conversion Price.................................................122
Section 12.5. Notice of Adjustments of Conversion Price......................................129
Section 12.6. Notice of Certain Corporate Action.............................................130
Section 12.7. Company to Reserve Common Shares...............................................131
Section 12.8. Taxes on Conversions...........................................................131
Section 12.9. Covenant as to Common Shares...................................................132
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Section 12.10. Cancellation of Converted Securities...........................................132
Section 12.11. Provision in Case of Consolidation, Merger, Split-up or Sale of Assets.........132
Section 12.12. Responsibility of Trustee for Conversion Provisions............................133
ARTICLE THIRTEEN
SUBORDINATION
Section 13.1. Agreement of Subordination.....................................................134
Section 13.2. Payments to Noteholders........................................................134
Section 13.3. Subrogation of Securities......................................................137
Section 13.4. Authorization to Effect Subordination..........................................138
Section 13.5. Notice to Trustee..............................................................139
Section 13.6. Trustee's Relation to Senior Indebtedness......................................140
Section 13.7. No Impairment of Subordination.................................................140
Section 13.8. Certain Conversions Deemed Payment.............................................140
Section 13.9. Article Applicable to Paying Agents............................................141
ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF
THE HOLDER UPON A FUNDAMENTAL CHANGE
Section 14.1. Right to Require Repurchase....................................................141
Section 14.2. Notices; Method of Exercising Repurchase Right, Etc............................142
Section 14.3. Merger, Consolidation, etc.....................................................144
ARTICLE FIFTEEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 15.1. Company to Furnish Trustee Names and Addresses of Holders. ....................145
Section 15.2. Preservation of Information....................................................146
Section 15.3. Reports by Trustee.............................................................146
Section 15.4. Reports by Company.............................................................146
ARTICLE SIXTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 16.1. Indenture and Securities Solely Corporate Obligations..........................147
ANNEX A..............................................................................A-1
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ANNEX B..............................................................................B-1
ANNEX C .............................................................................C-1
ANNEX D..............................................................................D-1
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INDENTURE, dated as of December 15, 1996, between Baan Company N.V., a
corporation duly organized and existing under the laws of The Netherlands,
having its statutory seat in Barneveld, The Netherlands and principal office at
Zonneoordlaan 17, 6710 BG Ede, The Netherlands (herein called the "Company"),
and Marine Midland Bank, a New York banking corporation and trust company, as
Trustee hereunder (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 4.5%
Convertible Subordinated Notes due 2001 (herein called the "Securities") and the
coupons, if any, thereto appertaining, of substantially the tenor and amount
hereinafter set forth, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.
All things necessary to make the Securities and the coupons, if any,
thereto appertaining, when the Securities are executed by the Company and
authenticated and delivered hereunder, the valid obligations of the Company, and
to make this Indenture a valid agreement of the Company, in accordance with
their and its terms, have been done. Further, all things necessary to duly
authorize the issuance of the Common Shares of the Company issuable upon the
conversion of the Securities have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities and the
coupons, if any, thereto appertaining, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
<PAGE> 14
(2) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States, and, except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally
accepted at the date of such computation; and
(3) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder of a Security, has the
meaning specified in Section 1.4.
"Additional Amounts" has the meaning specified in Section 2.2.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control", when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Price" means (i) in the event of a Fundamental Change in
which the holders of the Company's Common Shares receive only cash, the amount
of cash received by the holder of one Common Share and (ii) in the event of any
other Fundamental Change, the arithmetic average of the Closing Price for the
Company's Common Shares during the ten Trading Days prior to the record date for
the determination of the holders of Common Shares entitled to receive cash,
securities, property or other assets in connection with such Fundamental Change,
or, if there is no such record date, the date upon which the holders of the
Common Shares shall have the right to receive such cash, securities, property or
other assets in connection with the Fundamental Change.
"Authenticating Agent" means any Person authorized pursuant to Section
6.12 to act on behalf of the Trustee to authenticate Securities.
"Authorized Newspaper" means a newspaper, in an official language of
the country of publication or in the English language, customarily published on
each Monday, Tuesday, Wednesday, Thursday and Friday, whether or not published
on Saturdays, Sundays or holidays, and of general circulation in the place in
connection with which the term is used or in the financial community of such
place. Where successive publications are required to be made in an Authorized
Newspaper, the successive publications may be made in the same or in different
newspapers in the same city meeting the foregoing requirements and in each case
on any Monday, Tuesday, Wednesday, Thursday and
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Friday. For purposes of publication in Amsterdam, The Netherlands, the term
shall mean the Official Price List of The Amsterdam Stock Exchange and a
newspaper meeting the requirements set forth in this definition.
"Bearer Security" means any Security issued in substantially the form
set forth in Section 2.2(a).
"Board" means either the Management Board or Supervisory Board of the
Company empowered to act with respect to the Indenture under the laws of
companies of The Netherlands.
"Board Resolution" means a resolution duly adopted by the Board, a copy
of which, certified by the chairman or secretary of the meeting to have been
duly adopted by the Board and to be in full force and effect on the date of such
certification, shall have been delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment, Place
of Conversion or any other place, as the case may be, means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in such Place of Payment, Place of Conversion or other place, as
the case may be, are authorized or obligated by law or executive order to close;
provided, however, that a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close shall not be
a Business Day for purposes of Section 13.5; provided, further, that a day on
which banking institutions in New York, New York or Amsterdam, The Netherlands
are authorized or obligated by law or executive order to close shall not be a
Business Day for purposes of Sections 10.1, 10.3 or 11.6.
"CEDEL" has the meaning specified in Section 3.4.
"Closing Price" has the meaning specified in Section 12.4(8)(a).
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Depositary" has the meaning specified in Section 3.4.
"Common Shares" includes any stock or shares of any class of the
Company which has no preference in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution or winding up
of the Company and which is not subject to redemption by the Company. However,
subject to the provisions of Section 12.11, shares issuable on conversion of
Securities shall include only shares of the class designated as Common Shares of
the Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or
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reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; provided, however, that if at any time there shall be more than
one such resulting class, the shares of each such class then so issuable shall
be substantially in the proportion which the total number of shares of such
class resulting from all such reclassifications bears to the total number of
shares of all such classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Notice" has the meaning specified in Section 14.2.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by a member of the Management Board with the
title Chief Executive Officer, a member of the Management Board with the title
President or any two other members of the Management Board, acting jointly, and
delivered to the Trustee.
"Constituent Person" has the meaning specified in Section 12.11.
"Conversion Agent" means any Person authorized by the Company to
convert Securities in accordance with Article Twelve. The Company has initially
appointed the Trustee as its Conversion Agent in the Borough of Manhattan, The
City of New York, New York and ABN AMRO Bank N.V., Herengracht 595, 1017 CE
Amsterdam, The Netherlands, as its Conversion Agent in The Netherlands.
"Conversion Price" has the meaning specified in Section 12.1.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered (which at the date of this Indenture is located at 140 Broadway,
12th Floor, New York, NY 10005).
"corporation" means a corporation, company, including, without
limitation, a limited liability company, association, joint-stock company or
business trust.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Credit Agreement" means the Company's credit agreement in effect as of
the date of this Indenture, as amended, amended and restated, supplemented or
otherwise modified from time to time.
"Defaulted Interest" has the meaning specified in Section 3.7.
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"Definitive Security" means any Security that is a Bearer Security
(other than the Temporary Global Bearer Security) or a Registered Security
(other than a Global Registered Security).
"Depositary" means, with respect to any Securities issued in whole or
in part in the form of one or more Global Registered Securities, the clearing
agency that is registered under the Exchange Act and designated to act as
Depositary for such Securities, as contemplated by Section 3.4(B), or any
successor clearing agency registered under the Exchange Act as contemplated by
Section 3.4(B).
"Designated Senior Indebtedness" means any of the Company's obligations
under the Credit Agreement and any particular Senior Indebtedness in which the
instrument creating or evidencing the same or the assumption or guarantee
thereof (or related agreements or documents to which the Company is a party)
expressly provides that such Senior Indebtedness shall be "Designated Senior
Indebtedness" for purposes of the Indenture (provided that such instrument,
agreement or other document may place limitations and conditions on the right of
such Senior Indebtedness to exercise the rights of Designated Senior
Indebtedness).
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such
coin or currency of the United States as at the time shall be legal tender for
the payment of public and private debts.
"DTC" means The Depository Trust Company, a New York corporation.
"EUROCLEAR" has the meaning specified in Section 3.4.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended from time to time.
"Exchange Date" means the date and day on which the Regulation S
Restricted Period expires.
"Expiration Time" has the meaning specified in Section 12.4(6).
"Fundamental Change" means the occurrence of any transaction or event
in connection with which all or substantially all the Common Shares shall be
exchanged for, converted into, acquired for or constitute solely the right to
receive consideration (whether by means of an exchange offer, liquidation,
tender offer, consolidation, merger, split-up, combination, reclassification,
recapitalization or otherwise) which is not all or substantially all common
stock or shares which are (or, upon consummation of or immediately following
such transaction or event, will be) listed on a United States or Western
European national securities exchange or approved for quotation in the Nasdaq
National Market or any similar United States or Western Europe system of
automated dissemination of quotations of securities prices.
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"Global Registered Security" means any Registered Security issued in
the form set forth in Section 2.2(b) and registered in the Security Register in
the name of a Depositary or a nominee thereof.
"Global Security" means any Security that is a Temporary Global Bearer
Security or a Global Registered Security.
"Holder", when used with respect to any Registered Security, means the
Person in whose name the Security is registered in the Security Register, when
used with respect to any Bearer Security or Temporary Global Bearer Security,
means the bearer thereof and, when used with respect to any coupon, means the
bearer thereof.
"Indebtedness" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of the
Company in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof) (other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services), (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances, (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such
Person and all obligations and other liabilities (contingent or otherwise) under
any lease or related document (including a purchase agreement) in connection
with the lease of real property which provides that such Person is contractually
obligated to purchase or cause a third party to purchase the leased property and
thereby guarantee a minimum residual value of the leased property to the
landlord and the obligations of such Person under such lease or related document
to purchase or to cause a third party to purchase such leased property, (d) all
obligations of such Person (contingent or otherwise) with respect to an interest
rate or other swap, cap or collar agreement or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument or
agreement, (e) all direct or indirect guaranties or similar agreements by such
Person in respect of, and obligations or liabilities (contingent or otherwise)
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (d), (f) any indebtedness or
other obligations described in clauses (a) through (d) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).
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"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Regulation S Securities" means the Securities sold by the
Initial Purchasers in the initial offering contemplated by the Purchase
Agreement in reliance on Regulation S and shall include (i) Securities initially
evidenced by the Temporary Global Bearer Security and (ii) Securities initially
evidenced by interest in a Restricted Global Registered Security and thereafter
exchanged in the initial resale thereof by the Initial Purchasers for interests
in the Regulation S Global Security.
"Initial Purchasers" means Deutsche Morgan Grenfell Inc., Morgan
Grenfell & Co. Limited, ABN AMRO Rothschild and Banque Indosuez.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Liquidated Damages" has the meaning specified in the Registration
Rights Agreement.
"Management Board" means either the management board of the Company or
any committee of the management board empowered to act for it with respect to
the Indenture.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set forth in
Article Fourteen or otherwise.
"Non-electing Share" has the meaning specified in Section 12.11.
"Officers' Certificate" means a certificate signed by a member of the
Management Board with the title Chief Executive Officer, a member of the
Management Board with the title President or any two other members of the
Management Board, acting jointly, of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of independent counsel of
recognized standing who may be counsel for the Company and who shall be
reasonably acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
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(ii) Securities for the payment or redemption of which money
in the necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities and any coupons
thereto appertaining, provided that if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee has
been made;
(iii) Securities which have been paid pursuant to Section 3.6
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company; and
(iv) Securities converted into Common Shares pursuant to
Article Twelve;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a meeting of Holders
of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such determination as to the presence of a quorum or upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Securities which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company and, except
as otherwise specifically set forth herein, such term shall include the Company
if it shall act as its own Paying Agent. The Company has initially appointed the
Trustee as its Paying Agent in the Borough of Manhattan, The City of New York,
New York and ABN AMRO Bank N.V., Herengracht 595, 1017 CE Amsterdam, The
Netherlands, as its Paying Agent in Amsterdam, The Netherlands.
"Payment Blockage Notice" has the meaning specified in Section 13.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, estate, unincorporated organization or government or any agency or
political subdivision thereof.
"Place of Conversion" has the meaning specified in Section 3.1.
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"Place of Payment" has the meaning specified in Section 3.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Purchase Agreement" means the Purchase Agreement, dated December 12,
1996, between the Company and the Initial Purchasers, as such agreement may be
amended from time to time.
"Purchased Shares" has the meaning specified in Section 12.4(6).
"Record Date" means any Regular Record Date or Special Record Date.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Reference Market Price" means $22.83 and in the event of any
adjustment to the Conversion Price pursuant to Section 12.4, the Reference
Market Price shall also be adjusted so that the ratio of the Reference Market
Price to the Conversion Price after giving effect to any such adjustment shall
always be the same as the ratio of $22.83 to the initial Conversion Price
specified in Section 12.1 (without regard to any adjustment thereto).
"Registered Security" means any Security (including any Global
Registered Security) issued in substantially the form set forth in Section
2.2(b) and registered in the Security Register.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of December 15, 1996, between the Company and the Initial
Purchasers, as such agreement may be amended from time to time.
"Regular Record Date" for interest payable in respect of any Registered
Security on any Interest Payment Date means the June 1 or December 1 (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Regulation S Certificate" means a certificate substantially in the
form set forth in Annex A to this Indenture.
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"Regulation S Global Security" has the meaning specified in Section
2.1.
"Regulation S Restricted Period" means the period of 40 consecutive
days beginning on and including the later of (i) the day on which Securities are
first offered to persons other than distributors (as defined in Regulation S) in
reliance on Regulation S and (ii) the last original issuance date of the
Securities.
"Regulation S Securities" means (i) all Bearer Securities, including
the Temporary Global Bearer Security, (ii) the Regulation S Global Security and
(iii) any Registered Security (other than the Regulation S Global Security)
issued in exchange for an interest in the Regulation S Global Security or any
Restricted Security and which is not a Restricted Security.
"Representative" means the (a) indenture trustee or other trustee,
agent or representative for any Senior Indebtedness or (b) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"Repurchase Date" has the meaning specified in Section 14.1.
"Repurchase Price" has the meaning specified in Section 14.1.
"Responsible Officer", when used with respect to the Trustee, means any
officer within the Corporate Trust Office of the Trustee including without
limitation any vice president, assistant vice president, assistant treasurer,
assistant secretary, corporate trust officer, assistant corporate trust officer
or other employee of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge and familiarity with the particular
subject.
"Restricted Global Registered Security" has the meaning specified in
Section 2.1.
"Restricted Securities" means all Securities required pursuant to
Section 3.5(c) to bear any Restricted Securities Legend. Such term includes the
Restricted Global Registered Security.
"Restricted Securities Certificate" means a certificate substantially
in the form set forth in Annex B to this Indenture.
"Restricted Securities Legend" means, collectively, the legends
substantially in the forms of the legends required in the form of Security set
forth in Section 2.2(b) to be placed upon each Restricted Security.
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<PAGE> 23
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A Information" has the meaning specified in Section 10.8.
"Rule 144A Securities" means the Securities purchased by the Initial
Purchasers from the Company pursuant to the Purchase Agreement and resold by the
Initial Purchasers, other than the Regulation D Securities and the Initial
Regulation S Securities.
"Securities" has the meaning ascribed to it in the first paragraph
under the caption "Recitals of the Company".
"Securities Act" means the United States Securities Act of 1933, as
amended from time to time.
"Securities Act Legend" means a Restricted Securities Legend.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
"Senior Indebtedness" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in such proceeding) and rent payable on or in
connection with, and all fees, costs, expenses and other amounts accrued or due
on or in connection with, Indebtedness of the Company, whether outstanding on
the date of this Indenture or thereafter created, incurred, assumed, guaranteed
or in effect guaranteed by the Company (including all deferrals, renewals,
extensions or refundings of, or amendments, modifications or supplements to, the
foregoing), unless in the case of any particular Indebtedness the instrument
creating or evidencing the same or the assumption or guarantee thereof expressly
provides that such Indebtedness shall not be senior in right of payment to the
Securities or expressly provides that such Indebtedness is "pari passu" or
"junior" to the Securities. Notwithstanding the foregoing, the Senior
Indebtedness shall not include any Indebtedness of the Company to any Subsidiary
of the Company.
"Shelf Registration Statement" has the meaning specified in the
Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Company pursuant to Section 3.7.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security or a
coupon representing such installment of interest as the fixed date on which the
principal of such Security or such installment of interest is due and payable.
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<PAGE> 24
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock or
other similar interests in the corporation which ordinarily has or have voting
power for the election of directors, or persons performing similar functions,
whether at all times or only so long as no senior class of stock or other
interests has or have such voting power by reason of any contingency.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Supervisory Board" means either the supervisory board of the Company
or any committee of the supervisory board empowered to act for it with respect
to this Indenture.
"Surrender Certificate" means a certificate substantially in the form
set forth in Annex D to this Indenture.
"Tax Affected Security" means any Security that, if as a result of any
Tax Law Change, the Company has or will become obligated to pay Additional
Amounts in respect of such Security.
"Tax Law Change" means any change in, or amendment to, the laws or
regulations prevailing in The Netherlands or any political subdivision or taxing
authority thereof or therein, which change or amendment becomes effective on or
after December 12, 1996 or as a result of any application or official
interpretation of such laws or regulations not generally known before that date.
"Temporary Global Bearer Security" means any Security issued in
substantially the form set forth in Section 2.2(c).
"Trading Day" has the meaning specified in Section 12.4(8)(e).
"Transfer Agent" has the meaning specified in Section 2.2(a). The
Company has initially appointed the Trustee as its Transfer Agent in the Borough
of Manhattan, The City of New York, New York and ABN AMRO Bank N.V. as its
Transfer Agent in Amsterdam, The Netherlands.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
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"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction (its "possessions" including Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands).
"United States person" has the meaning specified in Section 2.2(c).
"Unrestricted Securities Certificate" means a certificate substantially
in the form set forth in Annex C to this Indenture.
"Western Europe" means Austria, Belgium, Denmark, Finland, France,
Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal,
Spain, Sweden, Switzerland and the United Kingdom.
Section 1.2. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee or the
Paying Agent in Amsterdam, The Netherlands to take any action under any
provision of this Indenture, the Company shall furnish to the Trustee or the
Paying Agent in Amsterdam, The Netherlands, as the case may be, an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided for in Section 10.7) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
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<PAGE> 26
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 1.3. Form of Documents Delivered to the Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders of Securities.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders of Securities may be embodied in and evidenced by (1) one or
more instruments of substantially similar tenor signed by such Holders in person
or by an agent or proxy duly appointed in writing by such Holders or (2) the
record of Holders of Securities voting in favor thereof, either in person or by
proxies duly appointed in writing, at any meeting of Holders of Securities duly
called and held in accordance with the provisions of Article Nine. Such action
shall become effective when such instrument or instruments or record is
delivered to the Trustee and, where it is hereby expressly required, to the
Company. The Trustee shall promptly deliver to the Company copies of all such
instruments and records delivered to the Trustee. Such instrument or instruments
and record (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders of Securities signing such
instrument or instruments and so voting at such meeting. Proof of execution of
any such instrument or of a writing appointing any such agent or proxy, or of
the holding by any Person of a
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<PAGE> 27
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 6.1) conclusive in favor of the Trustee and the Company if made in the
manner provided in this Section . The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section 9.6.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) The principal amount and serial number of any Bearer Security held
by any Person, and the date of his holding the same, may be proved by the
production of such Bearer Security or by a certificate executed by any trust
company, bank, broker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee or the Paying Agent in Amsterdam, The
Netherlands to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the Bearer
Security therein described; or such facts may be proved by the certificate or
affidavit of the Person holding such Bearer Security, if such certificate or
affidavit is deemed by the Trustee or the Paying Agent in Amsterdam, The
Netherlands to be satisfactory. The Trustee, the Paying Agent in Amsterdam, The
Netherlands and the Company may assume that any Bearer Security continues to be
held by such Person until (1) another certificate or affidavit bearing a later
date issued in respect of such Bearer Security is produced, or (2) such Bearer
Security is produced to the Trustee or the Paying Agent in Amsterdam, The
Netherlands by some other Person, or (3) such Bearer Security is surrendered in
exchange for a Registered Security, or (4) such Bearer Security is no longer
Outstanding.
(d) The principal amount and serial number of any Registered Security
held by any Person, and the date of his holding the same, shall be proved by the
Security Register.
(e) The principal amount and serial numbers of Bearer Securities held
by the Person so executing such instrument or writing and the date of holding
the same may also be proved in any other manner which the Paying Agent in
Amsterdam, The Netherlands deems sufficient; and the Paying Agent in Amsterdam,
The Netherlands may in any instance require further proof with respect to any of
the matters referred to in this Section 1.4.
(f) The fact and date of execution of any such instrument or writing
and the authority of the Person executing the same may also be proved in any
other manner which the Trustee or the Paying Agent in Amsterdam, The Netherlands
deems sufficient; and the Trustee or the Paying Agent in Amsterdam, The
Netherlands may in any instance require further proof with respect to any of the
matters referred to in this Section 1.4.
(g) The Company may set any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver
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<PAGE> 28
or other action, or to vote on any action, authorized or permitted by this
Indenture to be given or taken by Holders. Promptly and in any case not later
than ten days after setting a record date, the Company shall notify the Trustee,
the Paying Agent in Amsterdam, The Netherlands and the Holders of such record
date. If not set by the Company prior to the first solicitation of a Holder made
by any Person in respect of any such action, or, in the case of any such vote,
prior to such vote, the record date for any such action or vote shall be the
30th day (or, if later, the date of the most recent list of Holders required to
be provided pursuant to Section 15.1) prior to such first solicitation or vote,
as the case may be. With regard to any record date, the Holders on such date (or
their duly appointed agents or proxies), and only such Persons, shall be
entitled to give or take, or vote on, the relevant action, whether or not such
Holders remain Holders after such record date. Notwithstanding the foregoing,
the Company shall not set a record date for, and the provisions of this
paragraph shall not apply with respect to, any notice, declaration or direction
referred to in the next paragraph.
Upon receipt by the Trustee from any Holder of (i) any notice of
default or breach referred to in Section 5.1(3), if such default or breach has
occurred and is continuing and the Trustee shall not have given such a notice to
the Company, (ii) any declaration of acceleration referred to in Section 5.2, if
an Event of Default has occurred and is continuing and the Trustee shall not
have given such a declaration to the Company, or (iii) any direction referred to
in Section 5.12, if the Trustee shall not have taken the action specified in
such direction, then a record date shall automatically and without any action by
the Company or the Trustee be set for determining the Holders entitled to join
in such notice, declaration or direction, which record date shall be the close
of business on the tenth day (or, if such day is not a Business Day, the first
Business Day thereafter) following the day on which the Trustee receives such
notice, declaration or direction. Promptly after such receipt by the Trustee,
and as soon as practicable thereafter, the Trustee shall notify the Company and
the Holders of any such record date so fixed. The Holders on such record date or
their duly appointed agents or proxies), and only such Persons, shall be
entitled to join in such notice, declaration or direction, whether or not such
Holders remain Holders after such record date; provided that, unless such
notice, declaration or direction shall have become effective by virtue of
Holders of the requisite principal amount of Securities on such record date (or
their duly appointed agents or proxies) having joined therein on or prior to the
90th day after such record date, such notice, declaration or direction shall
automatically and without any action by any Person be canceled and of no further
effect. Nothing in this paragraph shall be construed to prevent a Holder (or a
duly appointed agent or proxy thereof) from giving, before or after the
expiration of such 90-day period, a notice, declaration or direction contrary to
or different from, or, after the expiration of such period, identical to, the
notice, declaration or direction to which such record date relates, in which
event a new record date in respect thereof shall be set pursuant to this
paragraph. In addition, nothing in this paragraph shall be construed to render
ineffective any notice, declaration or direction of the type referred to in this
paragraph given at any time to the Trustee and the Company by Holders (or their
duly appointed agents or proxies) of the requisite principal amount of
Securities on the date such notice, declaration or direction is so given.
(h) Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and any coupon
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<PAGE> 29
appertaining thereto and the Holder of every Security or coupon issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security or coupon.
(i) The provisions of this Section 1.4 are subject to the provisions of
Section 9.5.
Section 1.5. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
election, waiver or Act of Holders of Securities or other document provided or
permitted by this Indenture to be made upon, given or furnished to, or filed
with,
(1) the Trustee or the Paying Agent in Amsterdam, The
Netherlands by any Holder of Securities or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee and received at its Corporate
Trust Office, Attention: Corporate Trust Services - Baan, or to or with
the Paying Agent in Amsterdam, The Netherlands and received at
Herengracht 595, 1017 CE Amsterdam, The Netherlands, Attention: Baan,
or
(2) the Company by the Trustee or by any Holder of Securities
shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing, mailed, first-class postage
prepaid, or telecopied and confirmed by mail, first-class postage
prepaid, or delivered by hand or overnight courier, addressed to the
Company at Zonneoordlaan 17, 6710 BG Ede, The Netherlands, facsimile
no.: 011-31-342-428200, Attention: General Counsel, or at any other
address previously furnished in writing to the Trustee by the Company.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that any published notice may be in an official
language of the country of publication.
Section 1.6. Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event,
(1) such notice shall be sufficiently given to Holders of
Bearer Securities or any Temporary Global Bearer Security if published
in an Authorized Newspaper in the City of Amsterdam, The Netherlands,
or, if not practicable in Amsterdam, The Netherlands, elsewhere in any
country in Western Europe, on a Business Day at least twice, the first
such
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<PAGE> 30
publication to be not earlier than the earliest date and the second
such publication to be not later than the latest date herein prescribed
for the giving of such notice; and
(2) such notice shall be sufficiently given to Holders of
Registered Securities if in writing and mailed, first-class postage
prepaid, to each Holder of a Registered Security affected by such
event, at the address of such Holder as it appears in the Security
Register, not earlier than the earliest date and not later than the
latest date prescribed for the giving of such notice.
Neither the failure to give notice by publication to Holders of Bearer
Securities or any Temporary Global Bearer Security as provided above, nor any
defect in any notice so published, shall affect the sufficiency of any notice
mailed to Holders of Registered Securities as provided above. In case by reason
of the suspension of publication of any Authorized Newspaper or Authorized
Newspapers or by reason of any other cause it shall be impracticable to publish
any notice as provided above, then such notification as shall be given with the
approval of the Trustee, which approval shall not be unreasonably withheld,
shall constitute sufficient notice to such Holders for every purpose hereunder.
In any case where notice to Holders of Registered Securities is given
by mail, neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder of a Registered Security shall affect the
sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice by publication to Holders of Bearer
Securities or any Temporary Global Bearer Security given as provided above. In
case by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice by mail, then such
notification to Holders of Registered Securities as shall be made with the
approval of the Trustee, which approval shall not be unreasonably withheld,
shall constitute a sufficient notification to such Holders for every purpose
hereunder.
In the case of paragraph (1) of this section, such notice shall be
deemed to have been given on the date of such publication or, if published in
Authorized Newspapers on different dates, on the date of the first such
publication.
In the case of paragraph (2) of this section, such notice shall be
deemed to have been given when such notice is mailed.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
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<PAGE> 31
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
Section 1.9. Separability Clause.
In case any provision in this Indenture or the Securities or coupons
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 1.10. Benefits of Indenture.
Except as provided in the next sentence, nothing in this Indenture or
in the Securities or coupons, express or implied, shall give to any Person,
other than the parties hereto and their successors and assigns hereunder and the
Holders of Securities and coupons, any benefit or legal or equitable right,
remedy or claim under this Indenture. The provisions of Article Thirteen are
intended to be for the benefit of, and shall be enforceable directly by, the
holders of Senior Indebtedness.
Section 1.11. Governing Law.
THIS INDENTURE AND THE SECURITIES AND COUPONS SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED
STATES OF AMERICA, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 1.12. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity of any Security or coupon or the last day on
which a Holder of a Security has a right to con vert his Security shall not be a
Business Day at a Place of Payment or Place of Conversion, as the case may be,
then (notwithstanding any other provision of this Indenture or of the Securities
or coupons) payment of interest or principal and premium, if any, or delivery
for conversion of such
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<PAGE> 32
Security need not be made at such Place of Payment or Place of Conversion, as
the case may be, on or by such day, but may be made on or by the next succeeding
Business Day at such Place of Payment or Place of Conversion, as the case may
be, with the same force and effect as if made on the Interest Payment Date,
Redemption Date or Repurchase Date, or at the Stated Maturity or by such last
day for conversion; provided, however, that in the case that payment is made on
such succeeding Business Day, no interest shall accrue on the amount so payable
for the period from and after such Interest Payment Date, Redemption Date,
Repurchase Date, Stated Maturity or last day for conversion, as the case may be.
Section 1.13. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under the Trust Indenture Act to be
a part of and govern this Indenture, the latter provision shall control. If any
provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be. Until such time as this Indenture shall be qualified under the Trust
Indenture Act, this Indenture, the Company and the Trustee shall be deemed for
all purposes hereof to be subject to and governed by the Trust Indenture Act to
the same extent as would be the case if this Indenture were so qualified on the
date hereof.
Section 1.14. Jurisdiction.
Each of the Company, the Trustee and the Holders irrevocably (i) agrees
that any legal suit, action or proceeding against the Company brought by the
Trustee or any Holder or by any person who controls the Trustee or any Holder
arising out of or based upon this Indenture or the transactions contemplated
hereby may be instituted in any New York court, (ii) waives, to the fullest
extent it may effectively do so, any objection which it may now or hereafter
have to the laying of venue of any such proceeding and (iii) submits to the
exclusive jurisdiction of such courts in any such suit, action or proceeding.
The Company irrevocably waives any immunity to jurisdiction to which it may
otherwise be entitled or become entitled (including sovereign immunity, immunity
to pre-judgment attachment, post-judgment attachment and execution) in any legal
suit, action or proceeding against it by the Trustee or any Holder arising out
of or based on this Indenture or the transactions contemplated hereby which is
instituted in any New York court or in any competent court in The Netherlands.
The Company has appointed CT Corporation System, 1633 Broadway, New York, New
York 10019, as its authorized agent (the "Authorized Agent") upon whom process
may be served in any such action by the Trustee or any Holder arising out of or
based on this Indenture or the transactions contemplated hereby which may be
instituted in any New York court by the Trustee or any Holder or by any person
who controls the Trustee or any Holder, expressly consents to the jurisdiction
of any such court in respect of any such action, and waives any other
requirements of or objections to personal jurisdiction with respect thereto.
Such appointment shall be irrevocable. The Company represents and warrants that
the Authorized Agent has agreed to act as such agent for service of process and
agrees to take any and all action, including the filing of any and all documents
and
20
<PAGE> 33
instruments, that may be necessary to continue such appointment in full force
and effect as aforesaid. Service of process upon the Authorized Agent and
written notice of such service to the Company shall be deemed, in every respect,
effective service of process upon the Company as the case may be.
ARTICLE TWO
SECURITY FORMS
Section 2.1. Forms Generally.
The Securities and the coupons shall be in substantially the forms set
forth in this Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange, the law of The Netherlands, the Code,
and the treasury regulations under the Code, or as may, consistently herewith,
be determined by the officers executing such Securities and coupons, as
evidenced by their execution thereof.
The Trustee's certificates of authentication shall be in substantially
the form set forth in Section 2.4.
Conversion notices shall be in substantially the form set forth in
Section 2.5.
The Temporary Global Bearer Security and the Registered Securities may
be printed, lithographed, typewritten, mimeographed or otherwise produced, as
determined by the officers of the Company executing such Security, as evidenced
by their execution thereof. The format and spacing of the text of a Definitive
Security may be varied to facilitate such production.
The Bearer Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner permitted by the rules of any
securities exchange on which the Securities may be listed, all as determined by
the officers executing such Securities and coupons, as evidenced by their
execution thereof.
Upon their original issuance, Rule 144A Securities shall be issued in
the form of a Global Registered Security registered in the name of DTC, as
Depositary, or its nominee and deposited with the Trustee, as custodian for DTC,
for credit by DTC to the respective accounts of beneficial owners of the
Securities represented thereby (or such other accounts as they may direct). Such
Global Registered Security, together with its Successor Securities which are
Global Registered Securities other than the Regulation S Global Security, are
collectively herein called the "Restricted Global Registered Security".
21
<PAGE> 34
Upon their original issuance, Initial Regulation S Securities (other
than the Initial Regulation S Securities described in clause (ii) of the
definition thereof) shall be issued in the form of the Temporary Global Bearer
Security as set forth in Section 2.2(c).
After their original issuance, as provided in and subject to the terms
and conditions of Sections 3.4 and 3.5, Securities may be exchanged for
interests in a Global Registered Security registered in the name of DTC, as
Depositary, or its nominee and deposited with the Trustee, as custodian for DTC,
for credit by DTC to the respective accounts of beneficial owners of the
Securities represented thereby (or such other accounts as they may direct),
provided that upon such deposit all such Securities shall be credited to or
through accounts maintained at DTC by or on behalf of EUROCLEAR or CEDEL. Such
Global Securities, together with its Successor Securities which are Global
Securities other than the Restricted Global Registered Security, are
collectively herein called the "Regulation S Global Security".
22
<PAGE> 35
Section 2.2. Forms of Securities.
(a) Form of Bearer Security
[FORM OF FACE]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN Sections 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.
BAAN COMPANY N.V.
4.5% CONVERTIBLE SUBORDINATED NOTE
DUE 2001
No. __________________ U.S. $__________
ISIN No. ______________
BAAN COMPANY N.V., a corporation duly organized and existing under the
laws of The Netherlands with its statutory seat in Barneveld, The Netherlands
(herein called the "Company", which term includes any successor Person under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to bearer upon presentation and surrender of this Security the
principal sum of ________ United States Dollars (U.S.$_____) on December 15,
2001 and to pay interest thereon, from December 23, 1996, or from the most
recent Interest Payment Date (as defined below) to which interest has been paid
or duly provided for, semi-annually in arrears on June 15 and December 15 in
each year (each, an "Interest Payment Date"), commencing June 15, 1997, at the
rate of 4 1/2% per annum (together with any Additional Amounts (as defined
below) that the Company may be required to pay), until the principal hereof is
due, and at the rate of 4 1/2% per annum on any overdue principal and premium,
if any, and, to the extent permitted by law, on any overdue interest. Such
payments shall be made, subject to any laws or regulations applicable thereto
and to the right of the Company (limited as provided in the Indenture) to
terminate the appointment of any such Paying Agent, at the option of the Holder
at the office of ABN AMRO Bank N.V., Herengracht 595, 1017 CE Amsterdam, The
Netherlands, or at such other offices or agencies outside the United States (as
defined below) as the Company may designate, at the option of the Holder by
United States Dollar check drawn on a bank in the Borough of Manhattan, The City
of New York or by transfer of United States Dollars to a United States Dollar
account maintained by the payee with a bank located outside the United States
(such a transfer to be made only to a Holder of an aggregate principal amount of
Securities in excess of U.S. $2,000,000 and only if such Holder shall have
furnished wire instructions in writing to the Paying Agent in Amsterdam, The
Netherlands by no later than 15 days prior to the relevant payment date).
Interest on this Security due on or before Maturity shall be payable only upon
presentation and surrender at such an office or agency of the interest coupons
hereto attached as they severally mature. No payment of principal of, premium,
if any, or
23
<PAGE> 36
interest on, including Additional Amounts with respect to, this Security shall
be made at the Corporate Trust Office of the Trustee under the Indenture
referred to on the reverse hereof or at any other office or agency of the
Company in the United States or by check mailed to any address in the United
States or by transfer to an account maintained with a bank located in the United
States; provided, however, that payment of principal of, premium, if any, or
interest on this Security and payment of any such Additional Amounts may be made
at the office of the Paying Agent in the Borough of Manhattan, The City of New
York, if (but only if) payment of the full amount of such principal, premium, if
any, interest, or Additional Amounts, as the case may be, at all offices outside
the United States maintained for such purpose by the Company in accordance with
the Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions on the full payment or receipt of such amounts in United
States Dollars, as determined by the Company.
The Company will pay to the Holder of this Security or any coupon
appertaining hereto such additional amounts ("Additional Amounts") as may be
necessary in order that every net payment of the principal of, premium, if any,
and interest on this Security (including payment on redemption or repurchase),
after deduction or withholding for or on account of any present or future tax,
assessment or governmental charge imposed upon or as a result of such payment by
The Netherlands or any political subdivision or taxing authority thereof or
therein, will not be less than the amount provided for in this Security or in
such coupon to be then due and payable; provided, however, that the Company
shall not be obligated to pay any Additional Amounts in respect of payments
becoming due on the Securities more than 15 days after the Redemption Date with
respect to any redemption of the Tax Affected Securities pursuant to the third
paragraph of the reverse of this Security to the extent that the Company's
obligation to pay such Additional Amounts arises from the Tax Law Change that
resulted in such redemption; and provided further, that the foregoing obligation
to pay Additional Amounts will not apply to:
(a) any tax, assessment or other governmental charge which
would not have been so imposed but for the existence of any present or
former connection between such Holder (or between a fiduciary, settlor,
beneficiary, member, shareholder of or possessor of a power over such
Holder, if such Holder is an estate, a trust, a partnership or a
corporation) and The Netherlands or any political subdivision or taxing
authority thereof or therein, including, without limitation, such
Holder (or such fiduciary, settlor, beneficiary, member, shareholder or
possessor) being or having been a citizen, domiciliary or resident of
The Netherlands or treated as a resident thereof, or being or having
been engaged in trade or business or present therein, or having or
having had a permanent establishment therein;
(b) any tax, assessment or other governmental charge which
would not have been so imposed but for the presentation by the Holder
of this Security or any coupon appertaining hereto for payment on a
date more than 15 days after the date on which such payment became due
and payable or the date on which payment thereof is duly provided for,
whichever occurs later;
24
<PAGE> 37
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or governmental charge;
(d) in the case of Securities other than Bearer Securities,
any tax, assessment or other governmental charge which would not have
been imposed but for the failure of such Holder (or such fiduciary,
settlor, beneficiary, member, shareholder or possessor) of such
Security to comply with a request by the Company addressed to such
Holder (or such fiduciary, settlor, beneficiary, member, shareholder or
possessor) (A) to provide information concerning the nationality,
residence or identity of such Holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) or (B) to make any
declaration or other similar claim or satisfy any information or
reporting requirement, which, in the case of (A) or (B), is required or
imposed by a statute, treaty, regulation or administrative practice of
the taxing jurisdiction as a precondition to exemption from all or part
of such tax, assessment or other governmental charge;
(e) any tax, assessment or other governmental charge which is
payable otherwise than by deduction or withholding from payments of
principal of, premium, if any, or interest on such Security;
(f) any tax, assessment or other governmental charge imposed
on a Holder that is a partnership or a fiduciary or other than the sole
beneficial owner of such payment, but only to the extent that any
beneficial owner or member of the partnership or beneficiary or settlor
with respect to the fiduciary would not have been entitled to the
payment of Additional Amounts had the beneficial owner, member,
beneficiary or settlor directly been the Holder of this Security or
coupon, if any; or
(g) any combination of items (a), (b), (c), (d), (e) and (f).
For purposes of this Security, the term "United States" shall include,
when used in the geographical sense, only the States and the District of
Columbia. For all other purposes, the term "United States" shall include its
"possessions" including Puerto Rico, the U.S. Virgin Islands, Guam, American
Somoa, Wake Island and Northern Mariana Islands.
Except as specifically provided herein and in the Indenture, the
Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein. Whenever in this
Security there is a reference, in any context, to the payment of the principal
of, premium, if any, or interest on, or in respect of, any Security or any
coupon appertaining thereto, such mention shall be deemed to include mention of
the payment of Additional Amounts payable as described in the first preceding
paragraph, respectively, to the extent that, in such context, Additional Amounts
are, were or would be payable in respect of this Security or any coupon
appertaining thereto, pursuant to such paragraph, and express mention of the
payment of such Additional Amounts in any provisions of this
25
<PAGE> 38
Security shall not be construed as excluding Additional Amounts in those
provisions of this Security where such express mention is not made.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. Capitalized terms used
herein, including on the reverse hereof, and not defined herein or on the
reverse hereof shall have the respective meanings given to such terms in the
Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof or its Authenticating Agent by the
manual signature of one of its authorized signatories, neither this Security,
nor any coupon appertaining hereto, shall be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
26
<PAGE> 39
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed and coupons bearing the facsimile signature of its member of the
Management Board with the title Chief Executive Officer or its member of the
Management Board with the title President be annexed hereto.
Dated as of
BAAN COMPANY N.V.
By:
------------------------------
Name:
Title:
Attest:
- ------------------------
Name:
Title:
27
<PAGE> 40
[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities of the
Company designated as its "4.5% Convertible Subordinated Notes due 2001" (herein
called the "Securities"), limited in aggregate principal amount to
U.S.$200,000,000, issued and to be issued under an Indenture, dated as of
December 15, 1996 (herein called the "Indenture"), between the Company and
Marine Midland Bank, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Indebtedness and the Holders of
the Securities and any coupons appertaining thereto and of the terms upon which
the Securities are, and are to be, authenticated and delivered. The Securities
are issuable as Bearer Securities, with interest coupons attached, in
denominations of U.S.$5,000, U.S.$10,000 or U.S.$100,000, and as Registered
Securities, without coupons, in the denomination of U.S.$1,000 and integral
multiples of U.S.$1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Bearer Securities are
exchangeable for a like aggregate principal amount of Registered Securities of
any authorized denominations as requested by the Holder surrendering the same
upon surrender of the Bearer Security or Bearer Securities to be exchanged, with
all unmatured coupons and all matured coupons in default thereto appertaining,
except as provided below, (a) at the Corporate Trust Office of the Trustee or at
such other office or agency of the Company as may be designated by it for such
purpose in The City of New York or (b) subject to any laws or regulations
applicable thereto and to the right of the Company to terminate the appointment
of any Transfer Agent (as defined below), the office of ABN AMRO Bank N.V.,
Herengracht 595, 1017 CE Amsterdam, The Netherlands, or at such other offices or
agencies outside the United States as the Company may designate (each a
"Transfer Agent"); provided, however, that such surrender may be made at the
Corporate Trust Office of the Trustee in the Borough of Manhattan, The City of
New York, if (but only if) such surrender at all offices outside the United
States maintained for such purpose by the Company in accordance with the
Indenture is illegal or effectively precluded by exchange controls or other
similar restrictions. Bearer Securities surrendered in exchange for Registered
Securities between a Record Date and the relevant Interest Payment Date or date
for payment of Defaulted Interest will not be required to be surrendered with
the coupon relating to such Interest Payment Date or date for payment of
Defaulted Interest. Bearer Securities may not be issued in exchange for
Registered Securities.
No sinking fund is provided for the Securities. The Securities will not
be redeemable at the option of the Company prior to December 16, 1998. At any
time on or after December 16, 1998 and prior to maturity the Securities are
subject to redemption at the option of the Company at any time, in whole or in
part, upon not less than 20 nor more than 60 days' notice to the Holders prior
to the Redemption Date, at the following Redemption Prices (expressed as
percentages of the principal amount), except that prior to December 16, 1999 the
Securities will not be redeemable at the option of the Company unless the
Closing Price of the Common Shares shall have exceeded the product of the
Conversion Price then in effect times 140% (rounded to the nearest cent) for 20
Trading Days within a period of 30 consecutive Trading Days ending within five
Trading Days prior to the notice of redemption:
28
<PAGE> 41
<TABLE>
<CAPTION>
Redemption
Year Price
------ ----------
<S> <C>
1998 102.7%
1999 101.8
2000 100.9
</TABLE>
and thereafter at a Redemption Price equal to 100% of the principal amount,
together, in each case, with accrued interest to the Redemption Date, and
certain Securities that are Tax Affected Securities are also redeemable in whole
but not in part, under the circumstances described in the next paragraph at a
Redemption Price equal to 100% of the principal amount thereof plus interest
accrued to the Redemption Date; provided, however, that interest installments on
Bearer Securities whose Stated Maturity is on or prior to such Redemption Date
will be payable only upon presentation and surrender of coupons for such
interest (at an office or agency outside the United States except as herein
provided otherwise).
If as a result of a Tax Law Change, the Company is or would become
obligated to pay to the Holder of any Security or coupon Additional Amounts, as
described in the second paragraph of the face of this Security, and such
obligation cannot be avoided by the Company taking reasonable measures available
to it, then the Company may, at its option, redeem the Tax Affected Securities
in whole, but not in part, at any time, or giving not less than 20 days' notice
to the Holders prior to, but excluding, the Redemption Date at a Redemption
Price equal to 100% of the principal amount plus interest accrued to the
Redemption Date and any Additional Amounts then payable; provided, that no such
notice of redemption shall be given earlier than 90 days prior to the earliest
date on which the Company would be obligated to pay any such Additional Amounts
were a payment in respect of the Tax Affected Securities then made. Prior to the
publication of any notice of redemption pursuant to this paragraph, the Company
shall deliver to the Trustee (a) an Officers' Certificate stating that the
Company is entitled to effect such redemption and setting forth a statement of
facts showing that the conditions precedent to the right of the Company so to
redeem have occurred and (b) an Opinion of Counsel to the effect that the
Company has or will become obligated to pay such Additional Amounts as a result
of such Tax Law Change. The Company's right to redeem the Tax Affected
Securities shall continue as long as the Company is obligated to pay such
Additional Amounts, notwithstanding that the Company shall have made payments of
Additional Amounts specified in such second paragraph.
In the event of a redemption of less than all of the Securities, the
Company will not be required (a) to register the transfer or exchange of
Registered Securities or to exchange Bearer Securities for Registered Securities
for a period of 15 days immediately preceding the date notice is given
identifying the serial numbers of the Securities called for such redemption, (b)
to register the transfer or exchange of any Registered Security, or portion
thereof, called for redemption, or (c) to exchange any Bearer Security called
for redemption; provided, however, that a Bearer Security called for redemption
may be exchanged for a Registered Security which is simultaneously surrendered
to the Security Registrar
29
<PAGE> 42
or Transfer Agent making such exchange with written instructions for conversion
consistent with the provisions described in Sections 2.5 and 12.2 of the
Indenture.
Notice of redemption will be given by publication in Authorized
Newspapers in the City of Amsterdam, The Netherlands, or, if not practicable in
Amsterdam, The Netherlands, elsewhere in a Western European city. Notice to the
Holders will be given at least twice not less than 20 nor more than 60 days
prior to the Redemption Date as provided in the Indenture.
In any case where the due date for the payment of the principal of, or
premium, if any, or interest, including Additional Amounts, on, any Security or
the last day on which a Holder of a Security has a right to convert his Security
shall be, at any Place of Payment or Place of Conversion, as the case may be, a
day on which banking institutions at such Place of Payment or Place of
Conversion are authorized or obligated by law or executive order to close, then
payment of principal, premium, if any, or interest, including Additional
Amounts, or delivery for conversion of such Security need not be made on or by
such date at such place but may be made on or by the next succeeding day at such
place which is not a day on which banking institutions are authorized or
obligated by law or executive order to close, with the same force and effect as
if made on the date for such payment or the date fixed for redemption or
repurchase, or by such last day for conversion, and no interest shall accrue on
the amount so payable for the period after such date.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time on or after
March 23, 1997 and on or before the close of business on December 15, 2001, or
in case this Security is called for redemption or the Holder hereof has
exercised his right to require the Company to repurchase this Security, then in
respect of this Security until and including, but (unless the Company defaults
in making the payment due upon redemption or repurchase, as the case may be) not
after, the close of business on the Business Day prior to the Redemption Date or
the Repurchase Date, as the case may be, to convert this Security into fully
paid and nonassessable Common Shares of the Company at an initial Conversion
Price of U.S. $44 for each Common Share (or at the current adjusted Conversion
Price if an adjustment has been made as provided in the Indenture) by surrender
of this Security, together with all coupons appertaining hereto that mature
after the date of conversion, and also the conversion notice hereon, duly
executed, to the Company, subject to any laws or regulations applicable thereto
and subject to the right of the Company to terminate the appointment of any
Conversion Agent (as defined below), at the office of ABN AMRO Bank N.V.,
Herengracht 595, 1017 CE Amsterdam, The Netherlands, or at such other offices or
agencies outside the United States as the Company may designate (each a
"Conversion Agent"). Subject to the aforesaid requirement to surrender coupons
and except as provided in the Indenture, no cash payment or adjustment is to be
made on conversion, if the date of conversion is not an Interest Payment Date,
for interest accrued hereon from the Interest Payment Date next preceding the
date of conversion, or for dividends on the Common Shares issued on conversion
hereof. The Company shall thereafter deliver to the Holder the fixed number of
Common Shares (together with any cash adjustment, as provided in the Indenture)
into which this Security is convertible and such delivery will be deemed to
satisfy the Company's obligation to pay the principal amount of this Security.
No fractions of shares or scrip representing fractions of shares will be issued
on conversion, but instead
30
<PAGE> 43
of any fractional interest (calculated to the nearest 1/100th of a share) the
Company shall pay a cash adjustment as provided in the Indenture. The Conversion
Price is subject to adjustment as provided in the Indenture. In addition, the
Indenture provides that in case of certain consolidations or mergers to which
the Company is a party (other than a consolidation or merger which does not
result in any reclassification, conversion, exchange or cancellation of the
Common Shares) or the transfer of all or substantially all of the property and
assets of the Company, or in the case of a split-up of the Company pursuant to
which the assets and liabilities of the Company are transferred to one or more
Persons and the Company ceases to exist, the Indenture shall be amended, without
the consent of any Holders of Securities, so that this Security, if then
Outstanding, will be convertible thereafter, during the period this Security
shall be convertible as specified above, only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
transfer or split-up by a holder of the number of Common Shares of the Company
into which this Security could have been converted immediately prior to such
consolidation, merger, transfer or split-up (assuming such holder of Common
Shares is not a Constituent Person, failed to exercise any rights of election
and received per share the kind and amount received per share by a plurality of
Non-electing Shares and further assuming, if such consolidation, merger,
transfer or split-up occurs prior to the later of March 23, 1997 and the receipt
of Securities in definitive form (in the case of Securities initially
represented by a Temporary Global Bearer Security), that the Security was
convertible at the time of such occurrence at the Conversion Price specified
above as adjusted from the issue date of such Security to such time as provided
in the Indenture). In the event of a split-up of the Company pursuant to which
all or a portion of the assets and liabilities of the Company are transferred to
one or more Persons and the Company continues to exist and remains fully liable
for the Indenture Obligations, such split-up shall be treated as a distribution
to all holders of the Common Shares which will be subject to the provisions of
Section 12.4(4) of the Indenture. No adjustment in the Conversion Price will be
made until such adjustment would require an increase or decrease of at least one
percent of such price, provided that any adjustment that would otherwise be made
will be carried forward and taken into account in the computation of any
subsequent adjustment; and further provided in the event that at the time of any
conversion the Conversion Price then in effect and the prevailing exchange rate
would result in an issue price of less than the par value of a Common Share, for
purposes of such conversions, the Conversion Price will be deemed to be the
Conversion Price that results in an issue price that is as close as possible to,
but not less than, such par value.
Subject to certain limitations in the Indenture, at any time when the
Company is not subject to Section 13 or 15(d) of the United States Securities
Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted
Security or the holder of Common Shares issued upon conversion thereof, the
Company will promptly furnish or cause to be furnished Rule 144A Information (as
defined below) to such Holder of Restricted Securities or such holder of Common
Shares issued upon conversion of Restricted Securities, or to a prospective
purchaser of any such security designated by any such Holder or holder, as the
case may be, to the extent required to permit compliance by any such Holder or
holder with Rule 144A under the United States Securities Act of 1933, as amended
(the "Securities Act"), in connection with the resale of any such security.
"Rule 144A Information" shall be such information as is specified pursuant to
Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).
31
<PAGE> 44
If a Fundamental Change (as defined in the Indenture) occurs at any
time prior to December 15, 2001, each Holder shall have the right, at his or her
option, to require the Company to repurchase the Securities on the 45th day
after notice thereof. Such payment shall be made at the Repurchase Prices
(expressed as percentages of the principal amount) in the event of a Fundamental
Change occurring during the 12-month period beginning December 15:
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1996 104.5%
1997 103.6
1998 102.7
1999 101.8
2000 100.9
</TABLE>
and 100% at December 15, 2001; provided in each case that if the Applicable
Price (as defined in the Indenture) is less than the Reference Market Price (as
defined in the Indenture), the Company shall repurchase such Securities at a
price equal to the foregoing Repurchase Price multiplied by the fraction
obtained by dividing the Applicable Price by the Reference Market Price. In each
case, the Company shall also pay accrued interest, if any, on such Securities
to, but excluding the Repurchase Date; provided, however, that the Repurchase
Price in respect of any Bearer Security will be payable only upon presentation
and surrender of such Bearer Security at an office or agency outside the United
States, except in the limited circumstances described in the last sentence of
the first paragraph of the face hereof; provided further that if such Repurchase
Date is June 15 or December 15, then the interest payable on such date shall be
paid to the Holder of record of the Securities on the Regular Record Date.
Whenever in this Security there is a reference, in any context, to the principal
of any Security as of any time, such reference shall be deemed to include
reference to the Repurchase Price payable in respect of such Security to the
extent that such Repurchase Price is, was or would be so payable at such time,
and express mention of the Repurchase Price in any provision of this Security
shall not be construed as excluding the Repurchase Price in those provisions of
this Security when such express mention is not made.
The indebtedness evidenced by this Security and any coupons
appertaining hereto is, to the extent and in the manner provided in the
Indenture, subordinate and subject in right of payment to the prior payment in
full of all Senior Indebtedness of the Company, and this Security is issued
subject to such provisions of the Indenture with respect thereto. Each Holder of
this Security or any coupon appertaining to this Security, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and (c) appoints the
Trustee his attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of
all the Securities, together with accrued interest to the date of declaration,
may be declared due and payable in the manner and with the effect provided in
the Indenture. Upon payment (i) of the amount of principal so declared due
32
<PAGE> 45
and payable, together with accrued interest to the date of declaration, and (ii)
of interest on any overdue principal and overdue interest, to the extent
permitted by law, all of the Company's obligations in respect of the payment of
the principal of and interest on the Securities shall terminate.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities and coupons under the
Indenture at any time by the Company and the Trustee with either (a) the written
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding, or (b) by the adoption of a resolution, at a
meeting of Holders of the Outstanding Securities at which a quorum is present,
by the lesser of (a) the Holders of a majority in aggregate principal amount of
the Securities at the time Outstanding and (b) the Holders of 66-2/3% in
aggregate principal amount of the Outstanding Securities represented and
entitled to vote at such meeting. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities and coupons, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and any coupon appertaining hereto and of any Security issued in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security or such other Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security or any coupon appertaining hereto shall not have the
right to institute any proceeding with respect to the Indenture or for the
appointment of a receiver or trustee or for any other remedy thereunder, unless
such Holder shall have previously given the Trustee written notice of a
continuing Event of Default, the Holders of not less than 25% in aggregate
principal amount of the Outstanding Securities shall have made written request
to the Trustee to institute proceedings in respect of such Event of Default as
Trustee and offered the Trustee reasonable indemnity and the Trustee shall not
have received from the Holders of a majority in aggregate principal amount of
the Securities Outstanding a direction inconsistent with such request, and shall
have failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Security or any coupon appertaining hereto
for the enforcement of any payment of principal hereof, premium, if any, or
interest hereon (including any Additional Amounts) on or after the respective
due dates expressed herein or for the enforcement of the right to convert this
Security as provided in the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on (including Additional Amounts, as described herein) this Security at
the times, places and rate, and in the coin or currency, herein prescribed or to
convert this Security as provided in the Indenture.
33
<PAGE> 46
Subject to applicable law, title to this Security and the coupons
appertaining hereto shall pass by delivery. Subject to applicable law, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
bearer of this Security and any coupon appertaining thereto as the owner thereof
for all purposes, whether or not this Security or such coupon be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
No recourse for the payment of the principal (and premium, if any) or
interest on this Security and no recourse under or upon any obligation, covenant
or agreement of the Company in the Indenture or any indenture supplemental
thereto or in any Security, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, agent, officer or director or subsidiary, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of consideration for the issue hereof, expressly waived and released.
THE INDENTURE, THE SECURITIES AND ANY COUPONS APPERTAINING THERETO
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, UNITED STATES OF AMERICA, WITHOUT REGARD TO THE PRINCIPLES OF
CONFLICTS OF LAWS.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
34
<PAGE> 47
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 14.1 of the Indenture, the undersigned hereby
elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Company to pay bearer an amount
in cash or, at the Company's election, Common Shares valued as set forth in the
Indenture, equal to 100% of the principal amount hereof, plus interest accrued
to the Repurchase Date, as provided in the Indenture.
Dated:_______________________ _______________________
Signature
35
<PAGE> 48
(b) Form of Registered Security
[FORM OF FACE]
[THE FOLLOWING LEGEND (THE "RULE 144A LEGEND") SHALL APPEAR ON THE
FACE OF EACH RESTRICTED SECURITY OTHER THAN ANY RESTRICTED GLOBAL
REGISTERED SECURITY:
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND ANY COMMON SHARES
ISSUABLE UPON ITS CONVERSION MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. THIS
SECURITY MAY ONLY BE SOLD IN ACCORDANCE WITH THE INDENTURE, COPIES OF WHICH ARE
AVAILABLE FOR INSPECTION AT THE CORPORATE TRUST OFFICE OF THE TRUSTEE. EACH
PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF Section 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF BAAN COMPANY N.V.
(THE "COMPANY") THAT (A) THIS SECURITY AND ANY COMMON SHARES ISSUABLE UPON ITS
CONVERSION MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE TRANSACTION COMPLYING WITH THE
PROVISIONS OF RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT, (III) TO
AN INSTITUTION THAT IS AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE
501(A) UNDER THE SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION
REQUIREMENTS THEREOF, (IV) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (V) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN EACH OF
CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE
STATES AND OTHER JURISDICTIONS OF THE UNITED STATES, AND THAT (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER OF THIS SECURITY OR ANY COMMON SHARES ISSUABLE
UPON ITS CONVERSION IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY OR
SUCH COMMON SHARES ISSUABLE UPON ITS CONVERSION FROM IT OF THE RESALE
RESTRICTIONS REFERRED TO IN (A) ABOVE.
36
<PAGE> 49
THIS SECURITY, ANY COMMON SHARES ISSUABLE UPON ITS CONVERSION AND ANY
RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY
THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF THIS
SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE
RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS
SECURITY AND ANY SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY
AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED
GLOBAL REGISTERED SECURITY:
THE SECURITIES EVIDENCED BY THIS GLOBAL REGISTERED SECURITY (OR ITS
PREDECESSOR) WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND SUCH SECURITIES AND ANY COMMON SHARES ISSUABLE UPON THEIR CONVERSION
MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. SUCH SECURITIES MAY ONLY BE
SOLD IN ACCORDANCE WITH THE INDENTURE, COPIES OF WHICH ARE AVAILABLE FOR
INSPECTION AT THE CORPORATE TRUST OFFICE OF THE TRUSTEE. EACH PURCHASER OF ANY
BENEFICIAL INTEREST IN THE SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF SUCH
BENEFICIAL INTEREST IN THE SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF Section 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
EACH BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES EVIDENCED
BY THIS GLOBAL REGISTERED SECURITY (INCLUDING ANY PARTICIPANT IN THE DEPOSITARY
HOLDING THE GLOBAL REGISTERED SECURITY THAT IS SHOWN AS HOLDING SUCH AN INTEREST
ON THE RECORDS OF SUCH DEPOSITARY AND EACH BENEFICIAL OWNER THAT HOLDS THROUGH
ANY SUCH PARTICIPANT) AGREES FOR THE BENEFIT OF BAAN COMPANY N.V. (THE
"COMPANY") THAT (A) ANY BENEFICIAL INTEREST IN THE SECURITIES AND ANY COMMON
SHARES ISSUABLE UPON THEIR CONVERSION MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN AN OFFSHORE
TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 903 OR 904 OF REGULATION S
UNDER THE SECURITIES ACT, (III) TO AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" WITHIN THE MEANING OF RULE 501(A) UNDER THE
37
<PAGE> 50
SECURITIES ACT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
THEREOF, (IV) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (V) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN EACH OF CASES
(I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE STATES
AND OTHER JURISDICTIONS OF THE UNITED STATES, AND THAT (B) THE BENEFICIAL OWNER
WILL, AND EACH SUBSEQUENT BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE
SECURITIES EVIDENCED BY THIS GLOBAL REGISTERED SECURITY OR ANY COMMON SHARES
ISSUABLE UPON CONVERSION THEREOF IS REQUIRED TO, NOTIFY ANY PURCHASER OF ANY
BENEFICIAL INTEREST IN THE SECURITIES OR SUCH COMMON SHARES ISSUABLE UPON ITS
CONVERSION FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THIS SECURITY, ANY COMMON SHARES ISSUABLE UPON ITS CONVERSION AND ANY
RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY
THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER TRANSFERS OF THIS
SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE
RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER AND BENEFICIAL
OWNERS OF AN INTEREST IN ANY OF THE SECURITIES EVIDENCED BY THIS GLOBAL SECURITY
AND ANY SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY AND THE
BENEFICIAL INTERESTS THEREIN AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH
AMENDMENT OR SUPPLEMENT.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL REGISTERED
SECURITY:
THIS SECURITY IS A GLOBAL REGISTERED SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY,
THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL
PURPOSES.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL REGISTERED
SECURITY FOR WHICH THE DEPOSITORY TRUST COMPANY IS TO BE THE DEPOSITARY:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK
38
<PAGE> 51
CORPORATION ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR REGISTERED
SECURITIES IN DEFINITIVE REGISTERED FORM IN THE LIMITED CIRCUMSTANCES REFERRED
TO IN THE INDENTURE, THIS GLOBAL REGISTERED SECURITY MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY
OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE
OF SUCH SUCCESSOR DEPOSITARY.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH REGULATION S GLOBAL
SECURITY:
THIS SECURITY IS A REGULATION S GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE REFERRED TO HEREINAFTER. EXCEPT IN THE CIRCUMSTANCES DESCRIBED IN
Sections 3.4 AND 3.5(B) OF THE INDENTURE, NO TRANSFER OR EXCHANGE OF AN INTEREST
IN THIS REGULATION S GLOBAL SECURITY MAY BE MADE FOR A REGISTERED SECURITY OR AN
INTEREST IN THE RESTRICTED GLOBAL SECURITY DURING THE REGULATION S RESTRICTED
PERIOD.]
39
<PAGE> 52
BAAN COMPANY N.V.
4.5% CONVERTIBLE SUBORDINATED NOTE
DUE 2001
No. _____________ U.S.$_____
[IF RESTRICTED GLOBAL REGISTERED SECURITY - CUSIP NO. 056072 AA9]
[IF ANY REGULATION S SECURITY (OTHER THAN BEARER SECURITIES) - CUSIP NO.
N08044 AA2]
[IF REGULATION S GLOBAL SECURITY - ISIN NO. USN08044AA23]
BAAN COMPANY N.V., a corporation duly organized and existing under the
laws of The Netherlands with its statutory seat in Barneveld, The Netherlands
(herein called the "Company", which term includes any successor Person under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to _______________, or registered assigns, the principal sum of
_____________ United States Dollars (U.S.$_____) [(which amount may from time to
time be increased or decreased to such other principal amounts (which, taken
together with the principal amounts of all other Outstanding Securities, shall
not exceed $200,000,000 in the aggregate at any time) by adjustments made on the
records of the Trustee, as custodian of the Depositary, in accordance with the
rules and procedures of the Depositary)]1 on December 15, 2001 and to pay
interest thereon, from December 23, 1996, or from the most recent Interest
Payment Date (as defined below) to which interest has been paid or duly provided
for, semi-annually in arrears on June 15 and December 15 in each year (each, an
"Interest Payment Date"), commencing June 15, 1997, at the rate of 4 1/2% per
annum (together with any Additional Amounts and Liquidated Damages that the
Company may be required to pay), until the principal hereof is due, and at the
rate of 4 1/2% per annum on any overdue principal and premium, if any, and, to
the extent permitted by law, on any overdue interest. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the June 1 or December
1 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Except as otherwise provided in the Indenture, any such
interest not so punctually paid or duly provided for ("Defaulted Interest") will
forthwith cease to be payable to the Holder on such Regular Record Date and may
either be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Company, notice whereof shall be given to Holders of Registered Securities not
less than 10 days prior to such Special Record Date, or be paid at any time in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture. Payments
of principal shall be made upon the surrender of this Security, at the option of
the Holder, at the Corporate Trust Office of the Trustee, or at such other
office or agency of the Company as may be designated by it for such purpose in
the
- --------
1 This language shall appear on each Global Registered Security.
40
<PAGE> 53
Borough of Manhattan, The City of New York, in such coin or currency of the
United States of America as at the time of payment shall be legal tender for the
payment of public and private debts, or at such other offices or agencies as the
Company may designate, by United States Dollar check drawn on, or transfer to a
United States Dollar account (such a transfer to be made only to a Holder of an
aggregate principal amount of Registered Securities in excess of U.S.
$2,000,000, and only if such Holder shall have furnished wire instructions in
writing to the Trustee no later than 15 days prior to the relevant payment date)
maintained by the payee with a bank in the Borough of Manhattan, The City of New
York. Payment of interest on this Security may be made by United States Dollar
check drawn on a bank in the Borough of Manhattan, The City of New York mailed
to the address of the Person entitled thereto as such address shall appear in
the Security Register, or, upon written application by the Holder to the
Security Registrar setting forth wire instructions not later than the relevant
Record Date, by transfer to a United States Dollar account (such a transfer to
be made only to a Holder of an aggregate principal amount of Registered
Securities in excess of U.S.$2,000,000 and only if such Holder shall have
furnished wire instructions in writing to the Trustee no later than 15 days
prior to the relevant payment date) maintained by the payee with a bank in the
Borough of Manhattan, The City of New York.
The Company will pay to the Holder of this Security such additional
amounts ("Additional Amounts") as may be necessary in order that every net
payment of the principal of, premium, if any, and interest on this Security
(including payment on redemption or repurchase), after deduction or withholding
for or on account of any present or future tax, assessment or governmental
charge imposed upon or as a result of such payment by The Netherlands or any
political subdivision or taxing authority thereof or therein, will not be less
than the amount provided for in this Security to be then due and payable;
provided, however, that the Company shall not be obligated to pay any Additional
Amounts in respect of payments becoming due on the Securities more than 15 days
after the Redemption Date with respect to any redemption of the Tax Affected
Securities pursuant to the third paragraph of the reverse of this Security to
the extent that the Company's obligation to pay such Additional Amounts arises
from the Tax Law Change that resulted in such redemption; and provided, further,
that the foregoing obligation to pay Additional Amounts will not apply to:
(a) any tax, assessment or other governmental charge which
would not have been so imposed but for the existence of any present or
former connection between such Holder (or between a fiduciary, settlor,
beneficiary, member, shareholder of or possessor of a power over such
Holder, if such Holder is an estate, a trust, a partnership or a
corporation) and The Netherlands or any political subdivision or taxing
authority thereof or therein, including, without limitation, such
Holder (or such fiduciary, settlor, beneficiary, member, shareholder or
possessor) being or having been a citizen, domiciliary or resident of
The Netherlands or treated as a resident thereof, or being or having
been engaged in trade or business or present therein, or having or
having had a permanent establishment therein;
(b) any tax, assessment or other governmental charge which
would not have been so imposed but for the presentation by the Holder
of this Security for payment on a date more
41
<PAGE> 54
than 15 days after the date on which such payment became due and
payable or the date on which payment thereof is duly provided for,
whichever occurs later;
(c) any estate, inheritance, gift, sales, transfer, personal
property or similar tax, assessment or governmental charge;
(d) in the case of Securities other than Bearer Securities,
any tax, assessment or other governmental charge which would not have
been imposed but for the failure of such Holder (or such fiduciary,
settlor, beneficiary, member, shareholder or possessor) of such
Security to comply with a request by the Company addressed to such
Holder (or such fiduciary, settlor, beneficiary, member, shareholder or
possessor) (A) to provide information concerning the nationality,
residence or identity of such Holder (or such fiduciary, settlor,
beneficiary, member, shareholder or possessor) or (B) to make any
declaration or other similar claim or satisfy any information or
reporting requirement, which, in the case of (A) or (B), is required or
imposed by a statute, treaty, regulation or administrative practice of
the taxing jurisdiction as a precondition to exemption from all or part
of such tax, assessment or other governmental charge;
(e) any tax, assessment or other governmental charge which is
payable otherwise than by deduction or withholding from payments of
principal of, premium, if any, or interest on such Security:
(f) any tax, assessment or other governmental charge imposed
on a Holder that is a partnership or a fiduciary or other than the sole
beneficial owner of such payment, but only to the extent that any
beneficial owner or member of the partnership or beneficiary or settlor
with respect to the fiduciary would not have been entitled to the
payment of Additional Amounts had the beneficial owner, member,
beneficiary or settlor directly been the Holder of this Security; or
(g) any combination of items (a), (b), (c), (d), (e), and (f).
Except as specifically provided herein and in the Indenture, the
Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein. Whenever in this
Security there is a reference, in any context, to the payment of the principal
of, premium, if any, or interest on, or in respect of, any Security such mention
shall be deemed to include mention of the payment of Additional Amounts payable
as described in the second preceding paragraph to the extent that, in such
context, Additional Amounts are, were or would be payable in respect of such
Security and express mention of the payment of Additional Amounts (if
applicable) in any provisions of this Security shall not be construed as
excluding Additional Amounts in those provisions of this Security where such
express mention is not made.
42
<PAGE> 55
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place. Capitalized terms used
herein, including on the reverse hereof, and not defined herein or on the
reverse hereof shall have the respective meanings given to such terms in the
Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof or an Authenticating Agent by the
manual signature of one of their respective authorized signatories, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed.
Dated:
BAAN COMPANY N.V.
By:
----------------------------------
Name:
Title:
Attest:
- ---------------------------------
Name:
Title:
43
<PAGE> 56
[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities of the
Company designated as its "4.5% Convertible Subordinated Notes due 2001" (herein
called the "Securities"), limited in aggregate principal amount to
U.S.$200,000,000, issued and to be issued under an Indenture, dated as of
December 15, 1996 (herein called the "Indenture"), between the Company and
Marine Midland Bank, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Indebtedness and the Holders of
the Securities and any coupons appertaining thereto and of the terms upon which
the Securities are, and are to be, authenticated and delivered. The Securities
are issuable as Bearer Securities, with interest coupons attached, in
denominations of U.S.$5,000, U.S.$10,000 or U.S.$100,000, and as Registered
Securities, without coupons, in the denomination of U.S.$1,000 and integral
multiples of U.S.$1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Registered Securities are
exchangeable for a like aggregate principal amount of Registered Securities of
any authorized denominations as requested by the Holder surrendering the same
upon surrender of the Registered Security or Registered Securities to be
exchanged, at the Corporate Trust Office of the Trustee or at such other office
or agency of the Company as may be designated by it for such purpose in the
Borough of Manhattan, The City of New York or at such other offices or agencies
as the Company may designate (each a "Transfer Agent"). The Transfer Agent will
then forward such surrendered Registered Securities (together with any payment
surrendered therewith) to the Trustee who in turn will issue the new Registered
Securities. Bearer Securities may not be issued in exchange for Registered
Securities.
No sinking fund is provided for the Securities. The Securities will not
be redeemable at the option of the Company prior to December 16, 1996. At any
time on or after December 16, 1998 and prior to maturity, the Securities are
subject to redemption at the option of the Company at any time, in whole or in
part, upon not less than 20 nor more than 60 days' notice to the Holders prior
to the Redemption Date, at the following Redemption Prices (expressed as
percentages of the principal amount), except that prior to December 16, 1999 the
Securities will not be redeemable at the option of the Company unless the
Closing Price of the Common Shares shall have exceeded the product of the
Conversion Price then in effect times 140% (rounded to the nearest cent) for 20
Trading Days within a period of 30 consecutive Trading Days ending within five
Trading Days prior to the notice of redemption:
<TABLE>
<CAPTION>
Redemption
Year Price
------ ------------
<S> <C>
1998 102.7%
1999 101.8
2000 100.9
</TABLE>
44
<PAGE> 57
and thereafter at a Redemption Price equal to 100% of the principal amount,
together, in each case, with accrued interest to the Redemption Date, and
Securities that are Tax Affected Securities are also redeemable, in whole but
not in part, under the circumstances described in the next succeeding paragraph,
at a Redemption Price equal to 100% of the principal amount thereof plus
interest accrued to the Redemption Date; provided, however, that interest
installments on Registered Securities whose Stated Maturity is on or prior to
such Redemption Date will be payable to the Holders of such Securities, or one
or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.
If as a result of a Tax Law Change, the Company is or would become
obligated to pay to the Holder of any Security or coupon Additional Amounts, as
described in the second paragraph of the face of this Security, and such
obligation cannot be avoided by the Company taking reasonable measures available
to it, then the Company may, at its option, redeem the Tax Affected Securities
in whole, but not in part, at any time, on giving not less than 20 days' notice
to the Holders prior to the Redemption Date, at a Redemption Price equal to 100%
of the principal amount plus interest accrued to, but excluding, the Redemption
Date, and any Additional Amounts then payable; provided, that no such notice of
redemption shall be given earlier than 90 days prior to the earliest date on
which the Company would be obligated to pay any such Additional Amounts were a
payment in respect of the Tax Affected Securities then made. Prior to the
publication of any notice of redemption pursuant to this paragraph, the Company
shall deliver to the Trustee (a) an Officers' Certificate stating that the
Company is entitled to effect such redemption and setting forth a statement of
facts showing that the conditions precedent to the right of the Company so to
redeem have occurred and (b) an Opinion of Counsel to the effect that the
Company has or will become obligated to pay such Additional Amounts as a result
of such Tax Law Change. The Company's right to redeem the Tax Affected
Securities shall continue as long as the Company is obligated to pay such
Additional Amounts, notwithstanding that the Company shall have made payments of
Additional Amounts specified in such second paragraph.
In the event of a redemption of less than all of the Securities, the
Company will not be required (a) to register the transfer or exchange of
Registered Securities or to exchange Bearer Securities for Registered Securities
for a period of 15 days immediately preceding the date notice is given
identifying the serial numbers of the Securities called for such redemption, (b)
to register the transfer or exchange of any Registered Security, or portion
thereof, called for redemption, or (c) to exchange any Bearer Security called
for redemption; provided, however, that a Bearer Security called for redemption
may be exchanged for a Registered Security which is simultaneously surrendered
to the Registrar or Transfer Agent making such exchange with written
instructions for conversion consistent with the provisions described in Sections
2.5 and 12.2 of the Indenture.
Notice of redemption will be given by publication in Authorized
Newspapers in the City of Amsterdam, The Netherlands, or, if not practicable in
Amsterdam, The Netherlands, elsewhere in any country in Western Europe, and by
mail to Holders of Registered Securities. Notice to the Holders will be given at
least twice not less than 20 nor more than 60 days prior to the Redemption Date
as provided in the Indenture.
45
<PAGE> 58
In any case where the due date for the payment of the principal of,
premium, if any, or interest, including Additional Amounts and Liquidated
Damages, on, any Security or the last day on which a Holder of a Security has a
right to convert his Security shall be, at any Place of Payment or Place of
Conversion, as the case may be, a day on which banking institutions at such
Place of Payment or Place of Conversion are authorized or obligated by law or
executive order to close, then payment of principal, premium, if any, or
interest, including Additional Amounts and Liquidated Damages, or delivery for
conversion of such Security need not be made on or by such date at such place
but may be made on or by the next succeeding day at such place which is not a
day on which banking institutions are authorized or obligated by law or
executive order to close, with the same force and effect as if made on the date
for such payment or the date fixed for redemption or repurchase, or by such last
day for conversion, and no interest shall accrue on the amount so payable for
the period after such date.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time on or after
March 23, 1997, and on or before the close of business on December 15, 2001, or
in case this Security or a portion hereof is called for redemption or the Holder
hereof has exercised his right to require the Company to repurchase this
Security or such portion hereof, then in respect of this Security until and
including, but (unless the Company defaults in making the payment due upon
redemption or repurchase, as the case may be) not after, the close of business
on the Business Day prior to the Redemption Date or the Repurchase Date, as the
case may be, to convert this Security (or any portion of the principal amount
hereof that is an integral multiple of U.S.$1,000, provided that the unconverted
portion of such principal amount is U.S.$1,000 or any integral multiple of
U.S.$1,000 in excess thereof) into fully paid and nonassessable Common Shares of
the Company at an initial Conversion Price of U.S.$44.00 for each Common Share
(or at the current adjusted Conversion Price if an adjustment has been made as
provided in the Indenture) by surrender of this Security, duly endorsed or
assigned to the Company or in blank and, in case such surrender shall be made
during the period from the close of business of any Regular Record Date next
preceding any Interest Payment Date to the opening of business on such Interest
Payment Date ("Interest Period") (except Securities called for redemption on a
Redemption Date or to be repurchased on a Repurchase Date during, in each case,
such Interest Period), also accompanied by payment in New York Clearing House or
other funds acceptable to the Company of an amount equal to the interest payable
on such Interest Payment Date on the principal amount of this Security then
being converted (or, if this Security was issued in exchange for a Bearer
Security after the close of business on such Regular Record Date, by surrender
of one or more coupons relating to such Interest Payment Date or by both payment
in such funds and surrender of such coupon or coupons, in either case, in an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of this Security then being converted; provided that coupons
may be so surrendered only at an office or agency outside the United States
designated pursuant to the Indenture), and also the conversion notice hereon
duly executed, to the Company at the Corporate Trust Office of the Trustee, or
at such other office or agency of the Company, subject to any laws or
regulations applicable thereto and subject to the right of the Company to
terminate the appointment of any Conversion Agent (as defined below) as may be
designated by it for such purpose in the Borough of Manhattan, The City of New
York, or at such other offices or agencies as the Company may designate (each a
"Conversion Agent"), provided further, that if this
46
<PAGE> 59
Security or portion hereof has been called for redemption on a Redemption Date
or is repurchasable on a Repurchase Date occurring, in either case, during the
period from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business on such succeeding Interest
Payment Date and is surrendered for conversion during such period, then the
Holder of this Security who converts this Security or a portion hereof during
such period will be entitled to receive the interest accruing hereon from the
Interest Payment Date next preceding the date of such conversion to such
succeeding Interest Payment Date and shall not be required to pay such interest
upon surrender of this Security for conversion. Subject to the aforesaid
requirement for payment and, in the case of a conversion after the Regular
Record Date next preceding any Interest Payment Date and on or before such
Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
installment of interest, no cash payment or adjustment is to be made on
conversion, if the date of conversion is not an Interest Payment Date, for
interest accrued hereon from the Interest Payment Date next preceding the date
of conversion, or for dividends on the Common Shares issued on conversion
hereof. The Company shall thereafter deliver to the Holder the fixed number of
Common Shares (together with any cash adjustment, as provided in the Indenture)
into which this Security is convertible and such delivery will be deemed to
satisfy the Company's obligation to pay the principal amount of this Security.
No fractions of shares or scrip representing fractions of shares will be issued
on conversion, but instead of any fractional interest (calculated to the nearest
1/100th of a share) the Company shall pay a cash adjustment as provided in the
Indenture. The Conversion Price is subject to adjustment as provided in the
Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party (other than a
consolidation or merger which does not result in any reclassification,
conversion, exchange or cancellation of the Common Shares) or the transfer of
all or substantially all of the property and assets of the Company, or in the
case of a split-up of the Company pursuant to which the assets and liabilities
of the Company are transferred to one or more Persons and the Company ceases to
exist, the Indenture shall be amended, without the consent of any Holders of
Securities, so that this Security, if then Outstanding, will be convertible
thereafter, during the period this Security shall be convertible as specified
above, only into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, transfer or split-up by a holder of
the number of Common Shares of the Company into which this Security could have
been converted immediately prior to such consolidation, merger, transfer or
split-up (assuming such holder of Common Shares is not a Constituent Person,
failed to exercise any rights of election and received per share the kind and
amount received per share by a plurality of Non-electing Shares and further
assuming, if such consolidation, merger, transfer or split-up occurs prior to
the later of March 23, 1997 and the receipt of Securities in definitive form (in
the case of Securities initially represented by a Temporary Global Bearer
Security), that the Security was convertible at the time of such occurrence at
the Conversion Price specified above as adjusted from the issue date of such
Security to such time as provided in the Indenture). In the event of a split-up
of the Company pursuant to which all or a portion of the assets and liabilities
of the Company are transferred to one or more Persons and the Company continues
to exist and remains fully liable for the Indenture Obligations, such split-up
shall be treated as a distribution to all holders of Common Shares which will be
subject to the adjustment provisions of Section 12.4(4) of the Indenture. No
adjustment in the Conversion Price will be made until such adjustment would
require an increase or decrease of at least one percent of such price, provided
that
47
<PAGE> 60
any adjustment that would otherwise be made will be carried forward and taken
into account in the computation of any subsequent adjustment; and further
provided in the event that at the time of any conversion the Conversion Price
then in effect and the prevailing exchange rate would result in an issue price
of less than the par value of a Common Share, for purposes of such conversions,
the Conversion Price will be deemed to be the Conversion Price that results in
an issue price that is as close as possible to, but not less than, such par
value.
Subject to certain limitations in the Indenture, at any time when the
Company is not subject to Section 13 or 15(d) of the United States Securities
Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted
Security or the holder of Common Shares issued upon conversion thereof, the
Company will promptly furnish or cause to be furnished Rule 144A Information (as
defined below) to such Holder of Restricted Securities or such holder of Common
Shares issued upon conversion of Restricted Securities, or to a prospective
purchaser of any such security designated by any such Holder or holder, as the
case may be, to the extent required to permit compliance by such Holder or
holder with Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"), in connection with the resale of any such security. "Rule
144A Information" shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto).
[The following shall appear in each Restricted Security and every
Successor Security with respect thereto issued prior to the next Interest
Payment Date:
The Holder of this Security and the Common Shares of the Company
issuable upon conversion thereof is entitled to the benefits of a Registration
Rights Agreement (subject to the provisions thereof), dated as of December 15,
1996, between the Company and the Initial Purchasers.]
If a Fundamental Change (as defined in the Indenture) occurs at any
time prior to December 15, 2001, each Holder shall have the right, at his or her
option, to require the Company to repurchase the Securities on the 45th day
after notice thereof. Such payment shall be made at the Repurchase Prices
(expressed as percentages of the principal amount) in the event of a Fundamental
Change occurring during the 12-month period beginning (December 15):
<TABLE>
<CAPTION>
Year Percentage
---- ----------
<S> <C>
1996 104.5%
1997 103.6
1998 102.7
1999 101.8
2000 100.9
</TABLE>
and 100% at December 15, 2001; provided in each case that if the Applicable
Price (as defined in the Indenture) is less than the Reference Market Price (as
defined in the Indenture), the Company shall repurchase such Securities at a
price equal to the foregoing Repurchase Price multiplied by the fraction
48
<PAGE> 61
obtained by dividing the Applicable Price by the Reference Market Price. In each
case, the Company shall also pay accrued interest, if any, on such Securities
to, but excluding the Repurchase Date; provided that if such Repurchase Date is
June 15 or December 15, then the interest payable on such date shall be paid to
the Holder of record of the Securities on the Regular Record Date. Whenever in
this Security there is a reference, in any context, to the principal of any
Security as of any time, such reference shall be deemed to include reference to
the Repurchase Price payable in respect of such Security to the extent that such
Repurchase Price is, was or would be so payable at such time, and express
mention of the Repurchase Price in any provision of this Security shall not be
construed as excluding the Repurchase Price in those provisions of this Security
when such express mention is not made.
[The following paragraph shall appear in each Registered Security that
is not a Global Registered Security:
In the event of redemption, repurchase or conversion of this Security
in part only, a new Registered Security or Securities for the unredeemed,
unrepurchased or unconverted portion hereof will be issued in the name of the
Holder hereof.]
[The following paragraph shall appear in each Global Registered
Security:
In the event of a deposit or withdrawal of an interest in this
Security, including an exchange, transfer, redemption, repurchase or conversion
of this Security in part only, the Trustee, as custodian of the Depositary,
shall make an adjustment on its records to reflect such deposit or withdrawal in
accordance with the rules and procedures of the Depositary.]
The indebtedness evidenced by this Security is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
and this Security is issued subject to such provisions of the Indenture with
respect thereto. Each Holder of this Security, by accepting the same, (a) agrees
to and shall be bound by such provisions, (b) authorizes and directs the Trustee
on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination so provided and (c) appoints the Trustee his
attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of
all the Securities, together with accrued interest to the date of declaration,
may be declared due and payable in the manner and with the effect provided in
the Indenture. Upon payment (i) of the amount of principal so declared due and
payable, together with accrued interest to the date of declaration, and (ii) of
interest on any overdue principal and overdue interest, to the extent permitted
by law, all of the Company's obligations in respect of the payment of the
principal of and interest on the Securities shall terminate.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities and coupons under the
Indenture at any time by the Company and the Trustee with either
49
<PAGE> 62
(a) the written consent of the Holders of a majority in aggregate principal
amount of the Securities at the time Outstanding, or (b) by the adoption of a
resolution, at a meeting of Holders of the Outstanding Securities at which a
quorum is present, by the lesser of (a) the Holders of a majority in aggregate
principal amount of the Securities at the time Outstanding and (b) the Holders
of 66-2/3% in aggregate principal amount of the Outstanding Securities
represented and entitled to vote at such meeting. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities and coupons, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security or such other Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, the Holders of not
less than 25% in aggregate principal amount of the Outstanding Securities shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default as Trustee and offered the Trustee reasonable indemnity
and the Trustee shall not have received from the Holders of a majority in
aggregate principal amount of the Securities Outstanding a direction
inconsistent with such request, and shall have failed to institute any such
proceeding, for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to any suit instituted by the Holder of
this Security for the enforcement of any payment of principal hereof, premium,
if any, or interest hereon (including any Additional Amounts and Liquidated
Damages) on or after the respective due dates expressed herein or for the
enforcement of the right to convert this Security as provided in the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on (including Additional Amounts and Liquidated Damages, as described
herein) this Security at the times, places and rate, and in the coin or
currency, herein prescribed or to convert this Security as provided in the
Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of Registered Securities is registrable on the Security
Register upon surrender of a Registered Security for registration of transfer
(a) at the Corporate Trust Office of the Trustee or at such other office or
agency of the Company as may be designated by it for such purpose in the Borough
of Manhattan, The City of New York, or (b) subject to any laws or regulations
applicable thereto and to the right of the Company to terminate the appointment
of any Transfer Agent, at the offices of the Transfer Agents described herein or
at such other offices or agencies as the Company may designate, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by, the Holder thereof or
his attorney duly authorized in writing, and
50
<PAGE> 63
thereupon one or more new Registered Securities, of authorized denominations and
for the same aggregate principal amount, will be issued to the designated
transferee or transferees by the Registrar. No service charge shall be made for
any such registration of transfer or exchange, but the Company may require
payment of a sum sufficient to recover any tax or other governmental charge
payable in connection therewith.
No recourse for the payment of the principal (and premium, if any) or
interest on this Security and no recourse under or upon any obligation, covenant
or agreement of the Company in the Indenture or any indenture supplemental
thereto or in any Security, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, agent, officer or director or subsidiary, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of consideration for the issue hereof, expressly waived and released.
Prior to due presentation of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered, as
the owner thereof for all purposes, whether or not such Security be overdue, and
neither the Company, the Trustee nor any such agent shall be affected by notice
to the contrary.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
51
<PAGE> 64
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 14.1 of the Indenture, the undersigned hereby
elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or the Company to pay it
or __________________ an amount in cash or, at the Company's election, Common
Shares valued as set forth in the Indenture, equal to 100% of the principal
amount to be repurchased (as set forth below), plus interest accrued to the
Repurchase Date, as provided in the Indenture.
Dated:
-------------------------- -----------------------------
Signature
--------------------------
Signature Guaranteed
Principal amount to be repurchased:
--------------------------------
Remaining principal amount following such repurchase:
-------------
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
52
<PAGE> 65
(c) Form of Temporary Global Bearer Security
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN Sections 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.
THE SECURITIES EVIDENCED BY THIS TEMPORARY GLOBAL BEARER SECURITY (OR ITS
PREDECESSOR) WERE ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT
PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE
THE MEANINGS GIVEN THEM IN REGULATION S UNDER THE SECURITIES ACT.
BAAN COMPANY N.V.
4.5% CONVERTIBLE SUBORDINATED NOTES
DUE 2001
TEMPORARY GLOBAL BEARER SECURITY
ISIN NO. XS0072136202
BAAN COMPANY N.V., a corporation duly organized and existing under the
laws of The Netherlands with its statutory seat in Barneveld, The Netherlands,
(herein called the "Company", which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to bearer upon presentation and surrender of this Temporary Global Bearer
Security the principal sum of _____________ United States Dollars
(U.S.$__________) on December 15, 2001, and to pay interest thereon, from
December 23, 1996, or from the most recent Interest Payment Date (as defined
below) to which interest has been paid or duly provided for, semi-annually in
arrears on June 15 and December 15 in each year (each an "Interest Payment
Date"), commencing June 15, 1997, at the rate of 4 1/2% per annum (together with
any Additional Amounts that the Company may be required to pay), until the
principal hereof is due, and at the rate of 4 1/2% per annum on any overdue
principal and, to the extent permitted by law, on any overdue interest;
provided, however, that interest on this Temporary Global Bearer Security shall
be payable only after the issuance of the Definitive Securities in bearer form
for which this Temporary Global Bearer Security is exchangeable and, in the case
of Definitive Securities in bearer form, only upon presentation and
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<PAGE> 66
surrender (at an office or agency outside the United States, except as otherwise
provided in the Indenture) of the interest coupons thereto attached as they
severally mature.
This Temporary Global Bearer Security is one of a duly authorized issue
of Securities of the Company designated as specified in the title hereof, issued
and to be issued under the Indenture, dated as of December 15, 1996 (herein
called the "Indenture"), between the Company and Marine Midland Bank, as
Trustee. This Temporary Global Bearer Security is a temporary security and is
exchangeable in whole or from time to time in part without charge upon request
of the holder hereof for Definitive Securities in bearer form, only in
denominations of U.S.$5,000, U.S.$10,000 or U.S.$100,000, with interest coupons
attached, (a) not earlier than 40 days after the later of the commencement of
the offering of the Securities and the last original issuance of the Securities
and (b) as promptly as practicable following presentation of certification, in
one of the forms set forth in the Indenture for such purpose, that the
beneficial owner or owners of this Temporary Global Bearer Security (or, if such
exchange is only for a part of this Temporary Global Bearer Security, of such
part) are not United States persons (as defined below), are persons described in
Section 1.163-5(c)(2)(i)(D)(6) of the United States Treasury Regulations or are
financial institutions that are holding such Security for resale during the
restricted period (as defined in Section 1.163-5(c)(2)(i)(D)(7) of the United
States Treasury Regulations) and that have not acquired such Securities for
purposes of resale directly or indirectly to a United States person or within
the United States (as defined below). Definitive Securities in bearer form to be
delivered in exchange for any part of this Temporary Global Bearer Security
shall be delivered only outside the United States. Upon any exchange of a part
of this Temporary Global Bearer Security for Definitive Securities, the portion
of the principal amount hereof so exchanged shall be endorsed by the Paying
Agent in Amsterdam, The Netherlands or its agent on the Schedule hereto, and the
principal amount hereof shall be reduced for all purposes by the amount so
exchanged.
Until exchanged in full for Definitive Securities, this Temporary
Global Bearer Security shall in all respects be entitled to the same benefits
under, and subject to the same terms and conditions of, the Indenture as Bearer
Securities authenticated and delivered thereunder, except that neither the
Holder hereof nor the beneficial owners of this Temporary Global Bearer Security
shall be entitled to receive payment of interest or other payments hereon or to
convert this Temporary Global Bearer Security into Common Shares of the Company
or any other security, cash or other property.
THE INDENTURE AND THIS TEMPORARY GLOBAL BEARER SECURITY SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
UNITED STATES OF AMERICA, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
"United States person" is a Person that is, for United States
federal income tax purposes, (a) a citizen or resident of the United States, (b)
a corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof or (c) an estate
or trust the income of which is subject to United States federal income taxation
regardless of the source. Solely for purposes of the foregoing definition of
"United States person," the term "United States" means the United States of
America (including the States and the District of Columbia). For all other
purposes, the term "United States" shall include its "possessions" including
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<PAGE> 67
Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the
Northern Mariana Islands.
All terms used in this Temporary Global Bearer Security which are
defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee or an Authenticating Agent by the manual signature of one of their
respective authorized signatories, this Temporary Global Bearer Security shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
55
<PAGE> 68
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed.
Dated:
BAAN COMPANY N.V.
By:
--------------------------
Name:
Title:
Attest:
- ---------------------------------
Name:
Title:
56
<PAGE> 69
SCHEDULE OF EXCHANGES
<TABLE>
<CAPTION>
Principal Amount Remaining Principal Notation Made on Behalf of
Date Exchanged for Amount Following Paying Agent
Made Bearer Securities Such Exchange in Amsterdam, The Netherlands
------ ------------------ ------------------ ------------------------
<S> <C> <C> <C>
------ ------------------ ------------------ ------------------------
------ ------------------ ------------------ ------------------------
------ ------------------ ------------------ ------------------------
------ ------------------ ------------------ ------------------------
------ ------------------ ------------------ ------------------------
------ ------------------ ------------------ ------------------------
------ ------------------ ------------------ ------------------------
------ ------------------ ------------------ ------------------------
</TABLE>
57
<PAGE> 70
Section 2.3. Form of Coupon.
[FORM OF FACE]
ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE LIMITATIONS
PROVIDED IN Sections 165(J) AND 1287(A) OF THE INTERNAL REVENUE CODE.
NO.- ________________
ISIN NO. ____________
BAAN COMPANY N.V.
U.S.$ _______
DUE ________ __, ____
4.5% CONVERTIBLE SUBORDINATED NOTE
DUE 2001
Unless the Security to which this coupon appertains shall have been
redeemed, repurchased or converted prior to the date set forth hereon, Baan
Company N.V. with its statutory seat in Barneveld, The Netherlands, (the
"Company") shall, subject to and in accordance with the terms and conditions of
such Security and the Indenture referred to therein, pay to the bearer on the
date set forth hereon, upon surrender hereof, the amount shown hereon (together
with any Additional Amounts payable in respect thereof which the Company may be
required to pay according to the terms of said Security) at the paying agencies
set out on the reverse hereof or at such other places outside the United States
of America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction as the Company may
determine from time to time.
58
<PAGE> 71
[REVERSE OF COUPON]
TRANSFER, PAYING AND CONVERSION AGENT
ABN AMRO Bank N.A.
Herengracht 595
1017 CE Amsterdam
The Netherlands,
Section 2.4. Form of Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: _______________*
MARINE MIDLAND BANK,
as Trustee
[By Authenticating Agent,
as Authenticating Agent]**
By:___________________________
Authorized Signatory
* For Registered Securities only.
**For the Temporary Global Bearer Security and Bearer Securities in definitive
form.
59
<PAGE> 72
Section 2.5. Form of Conversion Notice.
CONVERSION NOTICE
(a) For Bearer Securities:
The undersigned Holder of this Bearer Security hereby irrevocably
exercises the option to convert this Bearer Security into Common Shares in
bearer form in accordance with the terms of the Indenture referred to in this
Bearer Security and directs that such shares be in bearer form, together with a
check in payment for any fractional share.
Dated:
----------------------- -------------------------
Signature
(b) For Registered Securities:
The undersigned Holder of this Security hereby irrevocably exercises
the option to convert this Security, or any portion of the principal amount
hereof (which is an integral multiple of U.S.$1,000, provided that the
unconverted portion of such principal amount is U.S.$1,000 or any integral
multiple of U.S.$1,000 in excess thereof) below designated, into Common Shares
in accordance with the terms of the Indenture referred to in this Security, and
directs that such shares, together with a check in payment for any fractional
share and any Securities representing any unconverted principal amount hereof,
be delivered to and be registered in the name of the undersigned unless a
different name has been indicated below. If Common Shares or Securities are to
be registered in the name of a Person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto. Any amount
required to be paid by the undersigned on account of interest accompanies this
Security.
Dated:
----------------------- -------------------------
Signature
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<TABLE>
<S> <C>
If shares or Registered Securities are to be If only a portion of the Securities is to be
registered in the name of a Person other converted, please indicate:
than the Holder, please print such
Person's name and address:
1. Principal amount to be converted:
U.S.$___________
- -------------------------
Name 2. Principal amount and
denomination of Registered
Securities representing uncon-
verted principal amount to be
_________________________ issued:
Address
Amount: U.S.$________
_________________________ Denominations:
Social Security or other Taxpayer U.S.$______
Identification Number, if any (any
integral multiple of
U.S.$1,000, provided that
the unconverted portion
of such principal amount
is U.S.$1,000 or any
integral multiple of
U.S.$1,000 in excess
thereof)
____________________ [Signature Guaranteed]
</TABLE>
ARTICLE THREE
THE SECURITIES
Section 3.1. Title and Terms.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to U.S.$200,000,000, except for
Securities authenticated and delivered in exchange for, or in lieu of, other
Securities pursuant to Section 3.4, 3.5, 3.6, 8.5, 11.8, 12.2 or 14.2(f).
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<PAGE> 74
The Securities shall be known and designated as the "4.5% Convertible
Subordinated Notes due 2001" of the Company. Their Stated Maturity shall be
December 15, 2001 and they shall bear interest on their principal amount from
December 23, 1996, payable semi-annually in arrears on June 15 and December 15
in each year, commencing June 15, 1997, at the rate of 4 1/2% per annum
(together with any Additional Amounts and Liquidated Damages the Company may be
required to pay) until the principal thereof is due, and at the rate of 4 1/2%
per annum on any overdue principal and, to the extent permitted by law, on any
overdue interest; provided, however, that payments shall only be made on
Business Days as provided in Section 1.12.
The Restricted Securities are entitled to the benefits of registration
rights as provided by the Registration Rights Agreement.
The principal of, premium, if any, and interest on the Securities shall
be payable as provided in the forms of Securities and coupon set forth in
Sections 2.2 and 2.3 and the Repurchase Price, whether payable in cash or in
Common Shares, shall be payable at such places as are identified in the Company
Notice given pursuant to Section 14.2 (any city in which any Paying Agent is
located being herein called a "Place of Payment").
The Securities shall be redeemable at the option of the Company, in
whole or in part, and at the Company's option or otherwise in the event of
certain developments, including developments with respect to changes in U.S.
withholding taxes or certification requirements, as provided in Article Eleven
and in the forms of Securities set forth in Section 2.2.
The Securities shall be convertible as provided in Article Twelve (any
city in which any Conversion Agent is located being herein called a "Place of
Conversion").
The Securities shall be subordinated in right of payment to Senior
Indebtedness of the Company as provided in Article Thirteen.
The Securities shall be subject to repurchase by the Company at the
option of the Holders as provided in Article Fourteen.
Section 3.2. Denominations.
The Definitive Securities shall be issuable (i) in bearer form, with
interest coupons attached, only in denominations of U.S.$5,000, U.S.$10,000 or
U.S.$100,000 and (ii) as Registered Securities, without coupons, in
denominations of U.S.$1,000 and integral multiples of U.S.$1,000 in excess
thereof.
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<PAGE> 75
Section 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by a member
of the Management Board with the title Chief Executive Officer or a member of
the Management Board with the title President. Any such signature may be manual
or facsimile.
Securities bearing the manual or facsimile signature of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee or to its order for authentication (or to the Paying Agent in
Amsterdam, The Netherlands, or to its order, in the case of Bearer Securities or
the Temporary Global Bearer Security), together with a Company Order for the
authentication and delivery of such Securities, and the Trustee or an
Authenticating Agent in accordance with such Company Order shall authenticate
and make available for delivery such Securities as in this Indenture provided
and not otherwise. In connection with any Company Order for authentication, an
Officers' Certificate and Opinion of Counsel pursuant to Section 1.2 shall not
be required.
Each Bearer Security and the Temporary Global Bearer Security shall be
dated as of December 23, 1996. Each Registered Security shall be dated the date
of its authentication.
No Security (or coupon attached thereto) shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless
there appears on such Security a certificate of authentication substantially in
the form provided for herein executed by the Trustee or an Authenticating Agent
by manual signature of an authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Except as permitted by
Section 3.4 or 3.6, neither the Trustee nor an Authenticating Agent shall
authenticate and make available for delivery any Bearer Security unless all
coupons appurtenant thereto for interest then matured have been detached and
canceled.
Section 3.4. Temporary Global Bearer Security; Global Securities; Non-Global
Registered Securities.
(A) Temporary Global Security
The Initial Regulation S Securities (other than the Initial
Regulation S Securities described in clause (ii) of the definition thereof)
shall be issued initially in the form of one Temporary Global Bearer Security,
which Temporary Global Bearer Security shall be deposited on behalf of the
subscribers for the Securities represented thereby with Midland Bank plc, as
common depositary (the
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<PAGE> 76
"Common Depositary"), for credit to their respective accounts (or to such other
accounts as they may direct) at MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
BRUSSELS OFFICE, as operator of the EUROCLEAR SYSTEM ("EUROCLEAR"), or CEDEL
BANK, SOCIETE ANONYME ("CEDEL").
On or before the Exchange Date, the Company shall deliver to the Paying
Agent in Amsterdam, The Netherlands at its office located at Herengracht 595,
1017 CE Amsterdam, The Netherlands, or its designated agent, Bearer Securities
executed by the Company. On or after the Exchange Date, the Temporary Global
Bearer Security shall be surrendered by the Common Depositary to the Trustee or
its agent, as the Company's agent for such purpose, to be exchanged, in whole or
from time to time in part, for Bearer Securities without charge to Holders, and
the Trustee or the Paying Agent in Amsterdam, The Netherlands or other Paying
Agent outside the United States shall authenticate and deliver (at an office or
agency outside the United States), in exchange for the Temporary Global Bearer
Security or the portions thereof to be exchanged, an equal aggregate principal
amount of Bearer Securities, as shall be specified by the beneficial owners
thereof; provided, however, that upon such presentation by the Common
Depositary, the Temporary Global Bearer Security shall be accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by EUROCLEAR
as to the portion of the Temporary Global Bearer Security held for its account
then to be exchanged and a certificate dated the Exchange Date or a subsequent
date and signed by CEDEL as to the portion of the Temporary Global Bearer
Security held for its account then to be exchanged, each to the effect
hereinafter provided. The Company hereby appoints the principal office of the
Paying Agent in Amsterdam, The Netherlands or its designated agent, as its agent
outside the United States where Bearer Securities may be delivered in exchange
for the Temporary Global Bearer Security or portions thereof. Each beneficial
owner of any portion of the Temporary Global Bearer Security shall be entitled
to take delivery of Bearer Securities only at such office. Notwithstanding any
other provision hereof or of the Securities, no Security initially represented
by the Temporary Global Bearer Security will be mailed to or otherwise delivered
in connection with its original issuance to any location within the United
States. The Trustee agrees that it will cause the Paying Agent in Amsterdam, The
Netherlands to retain each certificate provided by EUROCLEAR or CEDEL for a
period of four calendar years following the year in which the certificate is
received and not to destroy or otherwise dispose of any such certificate without
first offering to deliver it to the Company.
Each certificate to be provided by EUROCLEAR and CEDEL shall be
substantially to the following effect or with such changes therein as shall be
approved by the Company and Morgan Grenfell & Co. Limited and be satisfactory to
the Trustee:
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<PAGE> 77
"CERTIFICATE
BAAN COMPANY N.V.
4.5% CONVERTIBLE SUBORDINATED NOTES
DUE 2001
This is to certify that, based on certificates we have received from
our member organizations substantially in the form set out in Section 3.11 of
the Indenture relating to the above-captioned Securities, as of the date hereof,
U.S.$_____________ principal amount of the above-captioned Securities of Baan
Company N.V. (i) is owned by persons that are not United States persons (as
defined below), (ii) is owned by United States persons that are (a) foreign
branches of United States financial institutions (as defined in United States
Treasury Regulations Section 1.165-12(c)(1)(v) ("financial institutions"))
purchasing for their own account or for resale or (b) United States persons who
acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such financial institutions on
the date hereof (and in the case of either clause (a) or (b), each financial
institution has agreed for the benefit of Baan Company N.V. to comply with the
requirements of Section 165(j)(3)(A), (B) or (C) of the United States Internal
Revenue Code of 1986, as amended, and the regulations thereunder) or (iii) is
owned by financial institutions for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)). Financial institutions described in clause (iii) of the
preceding sentence (whether or not also described in clause (i) or (ii)) have
certified that they have not acquired the Securities for purposes of resale
directly or indirectly to United States persons or to persons within the United
States or its possessions.
As used in this Certificate, "United States person" is a person that
is, for United States federal income tax purposes, (a) a citizen or resident of
the United States, (b) a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof, or (c) an estate or trust the income of which is subject to United
States Federal income taxation regardless of the source; "United States" means
the United States of America (including the States and the District of
Columbia); and its "possessions" include Puerto Rico, U.S. Virgin Islands, Guam,
American Samoa, Wake Island and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange any portion of the Temporary Global Bearer Security excepted in such
certificates and (ii) as of the date hereof, we have not received any
notification from any of our member organizations to the effect that the
statements made by such member organizations with respect to any portion of the
part submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof.
We understand that this certificate is required in connection with
certain tax laws of the United States. In connection therewith, if
administrative or legal proceedings are commenced or threatened in connection
with which this certificate is or would be relevant, we irrevocably authorize
you to produce this certificate to any interested party in such proceedings. We
agree to retain each
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<PAGE> 78
statement provided by a member organization for a period of four calendar years
following the year in which the statement is received.
Dated: ________, 19__*
*To be dated no
earlier than the
Exchange Date.
[MORGAN GUARANTY TRUST COMPANY OF NEW
YORK, BRUSSELS OFFICE, AS OPERATOR OF THE
EUROCLEAR CLEARANCE SYSTEM]
[CEDEL BANK, SOCIETE ANONYME]
By __________________________"
Each certificate received by EUROCLEAR and CEDEL from Persons appearing
in their records as Persons entitled to a portion of the Temporary Global Bearer
Security shall be substantially to the effect set forth in Section 3.11.
Upon any such exchange of a portion of the Temporary Global Bearer
Security for Bearer Securities, the Temporary Global Bearer Security shall be
endorsed to reflect the reduction of the principal amount evidenced thereby.
Until so exchanged in full, the Temporary Global Bearer Security shall in all
respects be entitled to the same benefits under, and subject to the same terms
and conditions of, this Indenture as Bearer Securities authenticated and
delivered hereunder, except that none of EUROCLEAR, CEDEL or the beneficial
owners of the Temporary Global Bearer Security shall be entitled to receive
payment of interest or other payments thereon or to convert the Temporary Global
Bearer Security, or any portion thereof, into Common Shares of the Company or
any other security, cash or other property.
Bearer Securities shall be exchangeable for Registered Securities as
provided in Section 3.5. Bearer Securities will not be issued in exchange for
any Registered Securities.
(B) Global Registered Securities
(a) Each Global Registered Security authenticated under this
Indenture shall be registered in the name of the Depositary designated by the
Company for such Global Registered Security or a nominee thereof and delivered
to such Depositary or a nominee thereof or custodian therefor, and each such
Global Registered Security shall constitute a single Security for all purposes
of this Indenture.
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<PAGE> 79
(b) Notwithstanding any other provision in this Indenture, no
Global Registered Security may be exchanged in whole or in part for Registered
Securities registered, and no transfer of a Global Registered Security in whole
or in part may be registered, in the name of any Person other than the
Depositary for such Global Registered Security or a nominee thereof unless (i)
such Depositary (A) has notified the Company that it is unwilling or unable to
continue as Depositary for such Global Registered Security or (B) has ceased to
be a clearing agency registered as such under the Exchange Act or announces an
intention permanently to cease business or does in fact do so, (ii) there shall
have occurred and be continuing an Event of Default with respect to such Global
Registered Security, or (iii) pursuant to the following sentence. After the
expiration of the Regulation S Restricted Period (but not earlier, unless any of
the events specified in clauses (i) or (ii) of this paragraph shall have then
occurred), all or any portion of a Regulation S Security may be exchanged for a
Registered Security that has a like aggregate principal amount and is not a
Global Registered Security, upon timely request made by the Depositary or its
authorized representative to the Trustee.
(c) If any Global Registered Security is to be exchanged for
other Registered Securities or canceled in whole, it shall be surrendered by or
on behalf of the Depositary or its nominee to the Trustee, as Security
Registrar, for exchange or cancellation as provided in this Article Three. If
any Global Registered Security is to be exchanged for other Registered
Securities or canceled in part, or if another Security is to be exchanged in
whole or in part for a beneficial interest in any Global Registered Security, in
each case, as provided in Section 3.5, then either (i) such Global Registered
Security shall be so surrendered for exchange or cancellation as provided in
this Article Three or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
canceled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Trustee, as Security
Registrar, whereupon the Trustee, in accordance with the rules and procedures of
the Depositary, shall instruct the Depositary or its authorized representative
to make a corresponding adjustment to its records. Upon any such surrender or
adjustment of a Global Registered Security, the Trustee shall, subject to
Section 3.5 and as otherwise provided in this Article Three, authenticate and
deliver any Registered Security (or any portion thereof) to or upon the order
of, and registered in such names as may be directed by, the Depositary or its
authorized representative. Upon the request of the Trustee in connection with
the occurrence of any of the events specified in the preceding paragraph, the
Company shall promptly make available to the Trustee a reasonable supply of
Registered Securities that are not in the form of Global Registered Securities.
The Trustee shall be entitled to rely upon any order, direction or request of
the Depositary or its authorized representative which is given or made pursuant
to this Article Three if such order, direction or request is given or made in
accordance with the procedures of the Depositary.
(d) Every Registered Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of a Global
Registered Security or any portion thereof, whether pursuant to this Article
Three or otherwise, shall be authenticated and delivered in the form of, and
shall be, a Global Registered Security, unless such Security is registered in
the name of a
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<PAGE> 80
Person other than the Depositary for such Global Registered Security or a
nominee thereof, in which case such Registered Security shall be authenticated
and delivered in definitive, fully registered form, without interest coupons.
(e) The Depositary or its nominee, as registered owner of a
Global Registered Security, shall be the Holder of such Global Registered
Security for all purposes under the Indenture and the Registered Securities, and
owners of beneficial interests in a Global Registered Security shall hold such
interests pursuant to the procedures of the Depositary. Accordingly, any such
owner's beneficial interest in a Global Registered Security will be shown only
on, and the transfer of such interest shall be effected only through, records
maintained by the Depositary or its nominee or its Agent Members and such owners
of beneficial interests in a Global Registered Security will not be considered
the owners or holders thereof.
(C) Non-Global Registered Securities
Pending the preparation of definitive Registered Securities,
the Company may execute, and upon Company Order the Trustee shall authenticate
and make available for delivery, temporary Registered Securities which are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Registered
Securities in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as the officers
executing such Registered Securities may determine, as evidenced by their
execution of such Registered Securities.
If temporary Registered Securities are issued, the Company
will cause definitive Registered Securities to be prepared without unreasonable
delay. After the preparation of definitive Registered Securities, the temporary
Registered Securities shall be exchangeable for definitive Registered Securities
upon surrender of the temporary Registered Securities at any office or agency of
the Company designated pursuant to Section 10.2, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Registered
Securities the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Registered Securities of authorized denominations. Until so exchanged
the temporary Registered Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Registered Securities.
Section 3.5. Registration, Registration of Transfer and Exchange; Restrictions
on Transfer.
(a) The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 10.2 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Registered Securities and of transfers of Registered
Securities. The
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<PAGE> 81
Trustee is hereby appointed "Security Registrar" for the purpose of registering
Registered Securities and transfers and exchanges of Registered Securities as
herein provided.
Upon surrender for registration of transfer of any Registered Security
at an office or agency of the Company designated pursuant to Section 10.2 for
such purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Registered Securities of any authorized denominations and of a like
aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.
At the option of the Holder, and subject to the other provisions of
this Section 3.5, Registered Securities may be exchanged for other Registered
Securities of any authorized denomination and of a like aggregate principal
amount, upon surrender of the Registered Securities to be exchanged at any such
office or agency. Whenever any Registered Securities are so surrendered for
exchange, and subject to the other provisions of this Section 3.5, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive. Every Registered
Security presented or surrendered for registration of transfer or for exchange
shall (if so required by the Company or the Security Registrar) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
Bearer Securities may not be issued in exchange for Registered
Securities.
At the option of the Holder, upon written request, Bearer Securities
may be exchanged at any time after the Exchange Date for Registered Securities
of any authorized denomination and of a like aggregate principal amount, upon
surrender of the Bearer Securities to be exchanged at any office or agency
outside the United States designated pursuant to Section 10.2, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, such exchange may be
effected if such Bearer Security is accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons or the surrender of such missing coupon or coupons may be waived by the
Company, the Trustee, and the Paying Agent in Amsterdam, The Netherlands, if
there is furnished to them such security or indemnity as they may require to
save each of them and any Paying Agent harmless. If thereafter the Holder of
such Bearer Security shall surrender to any Paying Agent outside the United
States any such missing coupon in respect of which such a payment shall have
been made, such Holder shall be entitled to receive the amount of such payment;
provided, however, that, except as otherwise provided in the form of Bearer
Security set forth in Section 2.2(a), interest represented by coupons shall be
payable only upon presentation and surrender of such coupons at an office or
agency of the Company outside the United States. Notwithstanding the foregoing,
in case a Bearer Security is surrendered in exchange for a Registered Security
at an office or agency of the Company outside the United States designated
pursuant to Section 10.2 after the close of business at such office or agency on
(i) any Regular Record Date and before the opening of business at such office or
agency on the next succeeding Interest Payment Date, or (ii) any Special Record
Date and before the opening of business
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at such office or agency on the related date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
Interest Payment Date or proposed date of payment, as the case may be, and
interest or Defaulted Interest, as the case may be, will not be payable on such
Interest Payment Date or such related date for payment of Defaulted Interest, as
the case may be, in respect of the Registered Security issued in exchange for
such Bearer Security, but will be payable only to the Holder of such coupon when
due in accordance with the provisions of this Indenture.
Whenever any Bearer Securities are so surrendered for exchange, subject
to the other provisions of this Section 3.5, the Company shall execute, and the
Trustee shall authenticate and deliver, the Registered Securities which the
Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and, subject to the other provisions of this Section 3.5, entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
Except as provided in Section 3.6, no service charge shall be made for
any registration of transfer or exchange of Securities, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section 3.4, 8.5, 11.8,
12.2 or 14.2(f) (other than, in the case of Registered Securities, where the
Common Shares are to be issued or delivered in a name other than that of the
Holder of the Registered Security) not involving any transfer and other than any
stamp and other duties, if any, which may be imposed in connection with any such
transfer or exchange by the United States or The Netherlands or any political
subdivision thereof or therein, which shall be paid by the Company.
In the event of a redemption of the Securities in part, neither the
Company nor the Security Registrar will be required (a) to register the transfer
of or exchange of Registered Securities or to exchange Bearer Securities for
Registered Securities for a period of 15 days immediately preceding the date
notice is given identifying the serial numbers of the Securities called for such
redemption, (b) to register the transfer of or exchange any Registered Security,
or portion thereof, called for redemption, or (c) to exchange any Bearer
Security called for redemption; provided, however, that a Bearer Security called
for redemption may be exchanged for a Registered Security which is
simultaneously surrendered to the Registrar or Transfer Agent making such
exchange with written instructions for conversion consistent with the provisions
described in Sections 2.5 and 12.2.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Indenture or the Securities, transfers and exchanges of
Securities and beneficial interests in a Global Registered Security of the kinds
specified in this Section 3.5(b) shall be made only in accordance with this
Section 3.5(b).
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(i) Restricted Global Registered Security to
Regulation S Global Security. If the owner of a beneficial interest in
the Restricted Global Registered Security wishes at any time to
transfer such interest to a Person who wishes to acquire the same in
the form of a beneficial interest in the Regulation S Global Security,
such transfer may be effected only in accordance with the provisions of
this Clause (b) (i) and Clause (b) (vii) below and subject to the
procedures of the Depositary. Upon receipt by the Trustee, as Security
Registrar, of (A) an order given by the Depositary or its authorized
representative directing that a beneficial interest in the Regulation S
Global Security in a specified principal amount be credited to a
specified Agent Member's account and that a beneficial interest in the
Restricted Global Registered Security in an equal principal amount be
debited from another specified Agent Member's account and (B) unless
the interest acquired is an interest in an Initial Regulation S
Security acquired by a purchase thereof from an Initial Purchaser in
the initial resale thereof by such Initial Purchaser in reliance on
Regulation S as contemplated by the Purchase Agreement, a Regulation S
Certificate, duly executed by the owner of such beneficial interest in
the Restricted Global Registered Security or his attorney duly
authorized in writing, then the Trustee, as Security Registrar but
subject to Clause (b) (vii) below, shall reduce the principal amount of
the Restricted Global Registered Security and increase the principal
amount of the Regulation S Global Security by such specified principal
amount as provided in Section 3.4 (B) (c).
(ii) Regulation S Global Security to Restricted
Global Registered Security. If the owner of a beneficial interest in
the Regulation S Global Security wishes at any time to transfer such
interest to a Person who wishes to acquire the same in the form of a
beneficial interest in the Restricted Global Registered Security, such
transfer may be effected only in accordance with this Clause (b) (ii)
and subject to the procedures of the Depositary. Upon receipt by the
Trustee, as Security Registrar, of (A) an order given by the Depositary
or its authorized representative directing that a beneficial interest
in the Restricted Global Registered Security in a specified principal
amount be credited to a specified Agent Member's account and that a
beneficial interest in the Regulation S Global Security in an equal
principal amount be debited from another specified Agent Member's
account and (B) if such transfer is to occur during the Regulation S
Restricted Period, a Restricted Securities Certificate, duly executed
by the owner of such beneficial interest in the Regulation S Global
Security or his attorney duly authorized in writing, then the Trustee,
as Security Registrar, shall reduce the principal amount of the
Regulation S Global Security and increase the principal amount of the
Restricted Global Registered Security by such specified principal
amount as provided in Section 3.4 (B) (c).
(iii) Restricted Non-Global Security to Restricted
Global Registered Security or Regulation S Global Security. If the
Holder of a Restricted Security (other than a Global Registered
Security) wishes at any time to transfer all or any portion of such
Restricted Security to a Person who wishes to take delivery thereof in
the form of a beneficial interest in the Restricted Global Registered
Security or the Regulation S Global Security, such transfer may be
effected only in accordance with the provisions of this Clause (b)
(iii) and
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Clause (b) (vii) below and subject to the procedures of the Depositary.
Upon receipt by the Trustee, as Security Registrar, of (A) such
Restricted Security as provided in Section 3.5 (a) and instructions
satisfactory to the Trustee directing that a beneficial interest in the
Restricted Global Registered Security or Regulation S Global Security
in a specified principal amount not greater than the principal amount
of such Security be credited to a specified Agent Member's account and
(B) a Restricted Securities Certificate, if the specified account is to
be credited with a beneficial interest in the Restricted Global
Registered Security, or a Regulation S Certificate, if the specified
account is to be credited with a beneficial interest in the Regulation
S Global Security, in either case duly executed by such Holder or his
attorney duly authorized in writing, then the Trustee, as Security
Registrar but subject to Clause (b) (vii) below, shall cancel such
Restricted Security (and issue a new Restricted Security in respect of
any untransferred portion thereof) as provided in Section 3.5(a) and
increase the principal amount of the Restricted Global Registered
Security or the Regulation S Global Security, as the case may be, by
the specified principal amount as provided in Section 3.4 (B) (c).
(iv) Regulation S Non-Global Security to Restricted
Global Registered Security or Regulation S Global Security. If the
Holder of a Regulation S Security (other than a Global Registered
Security) wishes at any time to transfer all or any portion of such
Regulation S Security to a Person who wishes to acquire the same in the
form of a beneficial interest in the Restricted Global Registered
Security or the Regulation S Global Security, such transfer may be
effected only in accordance with this Clause (b) (iv) and Clause (b)
(vii) below and subject to the procedures of the Depositary. Upon
receipt by the Trustee, as Security Registrar, of (A) such Regulation S
Security as provided in Section 3.5(a) and instructions satisfactory to
the Trustee directing that a beneficial interest in the Restricted
Global Registered Security or Regulation S Global Security in a
specified principal amount not greater than the principal amount of
such Security be credited to a specified Agent Member's account and (B)
if the transfer is to occur during the Regulation S Restricted Period
and the specified account is to be credited with a beneficial interest
in the Restricted Global Registered Security, a Restricted Securities
Certificate satisfactory to the Trustee and duly executed by such
Holder or his attorney duly authorized in writing, then the Trustee, as
Security Registrar but subject to Clause (b) (vii) below, shall cancel
such Regulation S Security (and issue a new Regulation S Security in
respect of any untransferred portion thereof) as provided in Section
3.5(a) and increase the principal amount of the Restricted Global
Registered Security or the Regulation S Global Security, as the case
may be, by the specified principal amount as provided in Section 3.4
(B) (c).
(v) Non-Global Registered Security to Non-Global
Registered Security. A Registered Security that is not a Global
Registered Security may be transferred, in whole or in part, to a
Person who takes delivery in the form of another Security that is not a
Global Registered Security as provided in Section 3.5(a), provided
that, if the security to be transferred in whole or in part is a (y)
Regulation S Security and the transfer is to occur during the
Regulation S Restricted Period, then the Trustee shall have received a
Restricted
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Securities Certificate, satisfactory to the Trustee and duly executed
by the transferor Holder or his attorney duly authorized in writing, in
which case the transferee Holder shall take delivery in the form of a
Restricted Security, or (z) Restricted Security, then the Trustee shall
have received a Regulation S Certificate, satisfactory to the Trustee
and duly executed by the transferor Holder or his attorney duly
authorized in writing, in which case the transferee Holder shall take
delivery in the form of a Regulation S Security (subject in every case
to Section 3.5(c)).
(vi) Exchanges between Global Registered Security and
Non-Global Security. A beneficial interest in a Global Registered
Security may be exchanged for a Security that is not a Global
Registered Security as provided in Section 3.4, provided that, if such
interest is a beneficial interest in the Restricted Global Registered
Security, or if such interest is a beneficial interest in the
Regulation S Global Security and such exchange is to occur during the
Regulation S Restricted Period, then such interest shall be exchanged
for a Restricted Security (subject in each case to Section 3.5 (c)). A
Security that is not a Global Registered Security may be exchanged for
a beneficial interest in a Global Registered Security only if (A) such
exchange occurs in connection with a transfer effected in accordance
with Clause (b) (iii) or (iv) above or (B) such Security is a
Regulation S Security and such exchange occurs after the Regulation S
Restricted Period.
(vii) Regulation S Global Security to be held through
EUROCLEAR or CEDEL during Regulation S Restricted Period. The Company
shall use its best efforts to cause the Depositary to ensure that,
until the expiration of the Regulation S Restricted Period, beneficial
interests in the Regulation S Global Security may be held only in or
through accounts maintained at the Depositary by EUROCLEAR or CEDEL (or
by Agent Members acting for the account thereof), and no person shall
be entitled to effect any transfer or exchange that would result in any
such interest being held otherwise than in or through such an account;
provided that this Clause (b) (vii) shall not prohibit any transfer or
exchange of such an interest in accordance with Clause (b) (ii) or (vi)
above.
(viii) Exchange of Temporary Global Bearer Security
for Bearer Securities. Exchanges of interests in the Temporary Global
Bearer Security for Bearer Securities shall be accomplished in
accordance with the procedures set forth in Section 3.4 (A).
(ix) Exchange of Bearer Securities for Registered
Securities. After the expiration of the Regulation S Restricted Period
(but not earlier), Bearer Securities may be exchanged for any form of
Registered Securities. Under no circumstances will any Registered
Securities be exchangeable for Bearer Securities.
(c) Securities Act Legends. Rule 144A Securities and their
respective Successor Securities shall bear the applicable Restricted Securities
Legend, subject to the following:
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(i) Subject to the following clauses of this Section
3.5(c), a Security (including a Bearer Security) or any portion thereof
which is exchanged, upon transfer or otherwise, for a Global Registered
Security or any portion thereof shall bear the Securities Act Legend
borne by such Global Registered Security while represented thereby.
(ii) Subject to the following clauses of this Section
3.5(c), a new Registered Security which is not a Global Registered
Security and is issued in exchange for another Registered Security
(including a Global Registered Security) or any portion thereof, upon
transfer or otherwise, shall bear the Securities Act Legend borne by
such other Security, provided that, if such new Security is required
pursuant to Section 3.5(b) (v) or (vi) to be issued in the form of a
Restricted Security, it shall bear a Restricted Securities Legend;
provided, further, that a new Registered Security which is not a Global
Registered Security and which is issued in exchange for a Bearer
Security or any portion thereof shall bear the applicable Restricted
Securities Legend, if such new Registered Security is a Restricted
Security.
(iii) Any Securities which are sold or otherwise
disposed of pursuant to an effective registration statement under the
Securities Act (including the Shelf Registration Statement), together
with their Successor Securities shall not bear a Securities Act Legend;
the Company shall inform the Trustee in writing of the effective date
of any such registration statement registering the Securities under the
Securities Act and shall notify the Trustee at any time when
prospectuses may not be delivered with respect to Securities to be sold
pursuant to such registration statement. The Trustee shall not be
liable for any action taken or omitted to be taken by it in good faith
in accordance with the aforementioned registration statement.
(iv) At any time after the Securities may be freely
transferred without registration under the Securities act or without
being subject to transfer restrictions pursuant to the Securities act,
a new Registered Security which does not bear a Securities Act Legend
may be issued in exchange for or in lieu of a Security (other than a
Global Registered Security) or any portion thereof which bears such a
legend if the Trustee has received an Unrestricted Securities
Certificate, duly executed by the Holder of such legended Security or
his attorney duly authorized in writing, and after such date and
receipt of such certificate, the Trustee shall authenticate and deliver
such a new Security in exchange for or in lieu of such other Security
as provided in this Article Three.
(v) A new Security which does not bear a Securities
Act Legend may be issued in exchange for or in lieu of a Security
(other than a Global Registered Security) or any portion thereof which
bears such a legend if, in the Company's judgment, placing such a
legend upon such new Security is not necessary to ensure compliance
with the registration requirements of the Securities Act, and the
Trustee, at the direction of the Company, shall authenticate and
deliver such a new Security as provided in this Article Three.
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(vi) Notwithstanding the foregoing provisions of this
Section 3.5(c), a Successor Security of a Security that does not bear a
particular form of Securities Act Legend shall not bear such form of
legend unless the Company has reasonable cause to believe that such
Successor Security is a "restricted security" within the meaning of
Rule 144, in which case the Trustee, at the direction of the Company,
shall authenticate and deliver a new Security bearing a Restricted
Securities Legend in exchange for such Successor Security as provided
in this Article Three.
(d) Neither the Trustee, the Paying Agent in Amsterdam, The
Netherlands nor any of their agents shall (1) have any duty to monitor
compliance with or with respect to any federal or state or other securities or
tax laws or (2) have any duty to obtain documentation on any transfers or
exchanges other than as specifically required hereunder.
Section 3.6. Mutilated, Destroyed, Lost or Stolen Securities and Coupons.
If any mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee or to a Transfer Agent outside
the United States, the Company shall execute, the Trustee or an Authenticating
Agent shall authenticate and the Trustee or Transfer Agent shall deliver in
exchange therefor a new Security of like tenor and principal amount and bearing
a number not contemporaneously outstanding, with coupons corresponding to the
coupons, if any, appertaining to the surrendered Security; provided, however,
that any Bearer Security or any coupon shall be delivered only outside the
United States, and provided, further, that all Bearer Securities shall be
delivered and received in person.
If there be delivered to the Company and either to the Trustee or to a
Transfer Agent outside the United States:
(1) evidence to their satisfaction of the destruction, loss or
theft of any Security or coupon, and
(2) such security or indemnity as may be satisfactory to the
Company and the Trustee and such Transfer Agent to save each of them
and any agent of either of them harmless,
then, in the absence of actual notice to the Company, the Trustee or the
Transfer Agent that such Security or coupon has been acquired by a bona fide
purchaser, the Company shall execute, the Trustee or an Authenticating Agent
shall authenticate and the Trustee or Transfer Agent shall deliver, in lieu of
any such destroyed, lost or stolen Security or in exchange for the Security to
which such coupon appertains (together with all appurtenant coupons not
destroyed, lost or stolen), a new Security of like tenor and principal amount
and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to such destroyed, lost or
stolen Security or appertaining to the Security to which such destroyed, lost or
stolen coupon appertains;
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provided, however, that any Bearer Security or any coupon shall be delivered
only outside the United States; and provided, further, that all Bearer
Securities shall be delivered and received in person.
In case any such mutilated, destroyed, lost or stolen Security or
coupon has become or is about to become due and payable, the Company in its
discretion, but subject to any conversion rights, may, instead of issuing a new
Security, pay such Security or coupon, upon satisfaction of the conditions set
forth in the preceding paragraph; provided, however, that, except as otherwise
provided in the form of Securities set forth in Section 2.2(a), the principal of
and interest on Bearer Securities shall be payable only at an office or agency
outside the United States and, in the case of interest, only upon presentation
and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section 3.6, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto (other than any
stamp and other duties, if any, which may be imposed in connection therewith by
the United States or The Netherlands or any political subdivision thereof or
therein, which shall be paid by the Company) and any other expenses (including
the fees and expenses of the Trustee, the Paying Agent in Amsterdam, The
Netherlands and the Transfer Agent) connected therewith.
Every new Security with its coupons, if any, issued pursuant to this
Section 3.6 in lieu of any mutilated, destroyed, lost or stolen Security or in
exchange for a Security to which a mutilated, destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual obligation of
the Company, whether or not the mutilated, destroyed, lost or stolen Security
and its coupons, if any, or the mutilated, destroyed, lost or stolen coupon
shall be at any time enforceable by anyone, and such new Security and coupons,
if any, shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities and coupons duly issued
hereunder.
The provisions of this Section 3.6 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies of any Holder with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities or
coupons.
Section 3.7. Payment of Interest; Interest Rights Preserved.
Interest on any Registered Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest. In case a Bearer Security is surrendered in exchange for a Registered
Security at an office or agency of the Company designated pursuant to Section
10.2 for the purpose after the close of business (at such office or agency) on
any Regular Record Date and before the opening of business (at such office or
agency) on the next succeeding Interest Payment Date, such Bearer Security shall
be surrendered without the coupon relating to such Interest Payment Date and
interest will not be
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payable on such Interest Payment Date in respect of the Registered Security
issued in exchange for such Bearer Security, but will be payable only to the
Holder of such coupon when due.
Interest on the Temporary Global Bearer Security shall be payable only
after the issuance of the Bearer Securities for which it is exchangeable as
provided in the form of Temporary Global Bearer Security set forth in Section
2.2(c).
Any interest on any Registered Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Registered Security, the date of the
proposed payment and the Special Record Date, and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this Clause provided. Thereupon, the
Trustee shall fix the Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder of Registered Securities at such Holder's
address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having
been so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Registered Securities (or their respective Predecessor
Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
Clause (2). In case a Bearer Security is surrendered in exchange for a
Registered Security at an office or agency of the Company designated
pursuant to Section 10.2 for such purpose after the close of business
(at such office or agency) on any Special Record Date and before the
opening of business (at such office or agency) on the related proposed
date for payment of Defaulted Interest, such Bearer Security shall be
surrendered outside the United States without the coupon relating to
such proposed date of payment and Defaulted Interest will not be
payable on such proposed date of payment in respect of the Registered
Security issued in
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exchange for such Bearer Security, but will be payable only to the
Holder of such coupon upon surrender thereof at an office or agency
outside the United States designated pursuant to Section 10.2 hereof.
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon
such notice as may be required by such exchange, if, after notice given
by the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section , each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
In the case of any Registered Security which is converted after any
Regular Record Date and on or prior to the next succeeding Interest Payment Date
(other than any Registered Security whose Maturity is prior to such Interest
Payment Date), interest whose Stated Maturity is on such Interest Payment Date
shall be payable on such Interest Payment Date notwithstanding such conversion,
and such interest (whether or not punctually paid or duly provided for) shall be
paid to the Person in whose name such Registered Security (or one or more
Predecessor Securities) is registered at the close of business on such Regular
Record Date. Except as otherwise expressly provided in the immediately preceding
sentence, in the case of any Security which is converted, interest whose Stated
Maturity is after the date of conversion of such Security shall not be payable.
Section 3.8. Persons Deemed Owners.
Subject to applicable law, title to any Bearer Security or coupon shall
pass by delivery. Subject to applicable law, the Company, the Trustee, the
Paying Agent in Amsterdam, The Netherlands and any other agent of the Company or
the Trustee may treat the bearer of any Bearer Security or the Temporary Global
Bearer Security and the bearer of any coupon as the absolute owner of such
Security or coupon, as the case may be, for the purpose of receiving payment
thereof or on account thereof and for all other purposes whatsoever, whether or
not such Security or coupon be overdue, and neither the Company, the Trustee,
the Paying Agent in Amsterdam, The Netherlands nor any other agent of the
Company or the Trustee shall be affected by notice to the contrary. Prior to due
presentment of a Registered Security for registration of transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in
whose name such Registered Security is registered as the owner of such
Registered Security for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 3.7) interest on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
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Section 3.9. Cancellation.
All Securities and coupons surrendered for payment, redemption,
repurchase, registration of transfer or exchange or conversion shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee.
All Bearer Securities and coupons so surrendered shall be immediately canceled
by such Person upon receipt prior to being forwarded to the Trustee. All
Registered Securities so delivered to the Trustee shall be canceled promptly by
the Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities canceled as provided in this Section 3.9. The Trustee shall
destroy all canceled Securities and coupons in accordance with applicable law
and its customary practices in effect from time to time.
Section 3.10. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
Section 3.11. Form of Certification.
Whenever any provision of this Indenture or the form of Temporary
Global Bearer Security contemplates that certification be given by a beneficial
owner of a portion of the Temporary Global Bearer Security, such certification
shall be provided substantially in the form of the following certificate, with
only such changes as shall be approved by the Company and Morgan Grenfell & Co.
Limited:
"CERTIFICATE
BAAN COMPANY N.V.
4.5% CONVERTIBLE SUBORDINATED NOTES
DUE 2001
This is to certify that as of the date hereof and except as provided in
the fourth paragraph hereof, the above-captioned Securities held by you for our
account (i) are owned by a person that is not a United States person (as defined
below), (ii) are owned by a United States person that is (A) a foreign branch of
a United States financial institution (as defined in United States Treasury
Regulations Section 1.165-12(c)(1)(v) (a "financial institution")) purchasing
for its own account or for resale or (B) a United States person who acquired the
Securities through a foreign branch of a United States financial institution and
who holds the Securities through such financial institution on the date hereof
(and in the case of either clause (A) or (B), the financial institution hereby
agrees for the benefit of Baan Company N.V. to comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the United States Internal Revenue Code of
1986, as amended, and the regulations thereunder)
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or (iii) are owned by a financial institution for purposes of resale during the
restricted period (as defined in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(7)). In addition, if we are a financial institution
described in clause (iii) of the preceding sentence (whether or not also
described in clause (i) or (ii)) we certify that we have not acquired the
Securities for purposes of resale directly or indirectly to a United States
person or to a person within the United States or its possessions.
As used in this certificate, "United States person" is a Person that
is, for United States federal income tax purposes, (a) a citizen or resident of
the United States, (b) a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof or (c) an estate or trust the income of which is subject to United
States Federal income taxation regardless of the source; "United States" means
the United States of America (including the States and the District of
Columbia); and its "possessions" includes Puerto Rico, the U.S. Virgin Islands,
Guam, American Samoa, Wake Island and the Northern Mariana Islands.
We undertake to advise you by telecopy, on or before the date on which
you intend to submit your certification relating to the above-captioned
Securities then appearing in your books as being held for our account, if the
above statement as to beneficial ownership is not correct on such date as to all
such Securities.
This certificate excepts and does not relate to U.S.$________ principal
amount of the above-captioned Securities appearing on your books as being held
for our account as to which we are not yet able to certify and as to which we
understand that exchange and delivery of definitive Securities cannot be made
until we are able so to certify.
We understand that this certificate is required in connection with
certain tax regulations in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy hereof to any interested party in such proceedings.
Dated: ___________________, 19__* [Name of Account Holder]
*To be dated on or after
the 15th day before the
Exchange Date.
------------------------
(Authorized Signatory)
Name:
Title:"
Section 3.12. CUSIP and ISIN Numbers.
The Company in issuing Registered Securities may use "CUSIP" numbers
(if then generally in use) in addition to serial numbers, and in issuing Bearer
Securities may use "ISIN" numbers (if then
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generally in use); if so, the Trustee shall use such "CUSIP" and "ISIN" numbers
in addition to serial numbers in notices of redemption and repurchase as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such CUSIP and ISIN numbers
either as printed on the Securities or as contained in any notice of a
redemption or repurchase and that reliance may be placed only on the serial or
other identification numbers printed on the Securities, and any such redemption
or repurchase shall not be affected by any defect in or omission of such CUSIP
or ISIN numbers.
Section 3.13. Notification of Withholding.
The Company shall notify the Trustee in writing of the necessity, if
any, to withhold any amounts from payments to Holders (and the amount of any
such withholding) arising from the delivery by a Holder of any certificate
pursuant to Section 2.5 or 3.11.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of conversion, or registration of transfer or
exchange, or replacement of Securities herein expressly provided for and any
right to receive Additional Amounts and Liquidated Damages as provided in the
forms of Securities set forth in Section 2.2 and the Company's obligations to
the Trustee pursuant to Section 6.7), and the Trustee, at the expense of the
Company, shall execute proper instruments in form and substance satisfactory to
the Trustee acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered and all coupons appertaining thereto (other than (i)
Securities and coupons which have been destroyed, lost or
stolen and which have been replaced or paid as provided in
Section 3.6, (ii) coupons appertaining to Securities called
for redemption or repurchased and maturing after the relevant
Redemption Date or Repurchase Date, as the case may be, whose
surrender has been waived as provided in Section 11.7 or 14.2
and (iii) Securities and coupons for whose payment money has
theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 10.3) have
been delivered to the Trustee for cancellation; or
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(B) all such Securities and all coupons appertaining
thereto not theretofore delivered to the Trustee or the Paying
Agent in Amsterdam, The Netherlands or its agent for
cancellation (other than Securities or coupons referred to in
clauses (i) through (iii) of clause (1)(A) above)
(i) have become due and payable, or
(ii) will have become due and payable at
their Stated Maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of clause (i), (ii) or (iii)
above, has deposited or caused to be deposited with the
Trustee as trust funds (immediately available to the Holders
in the case of clause (i)) in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on
such Securities and coupons not theretofore delivered to the
Trustee for cancellation, for principal, premium, if any, and
interest (including any applicable Additional Amounts and
Liquidated Damages) to the date of such deposit (in the case
of Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Company to any Authenticating Agent under Section 6.12, the obligation of
the Company to pay Additional Amounts and, if money shall have been deposited
with the Trustee pursuant to clause (1)(B) of this Section 4.1, the obligations
of the Trustee under Section 4.2 and the last paragraph of Section 10.3 shall
survive. Funds held in trust pursuant to this Section are not subject to the
provisions of Article Thirteen.
Section 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, the
coupons and this Indenture, to the payment, either directly or through
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any Paying Agent (including the Company acting as its own Paying Agent), to the
Persons entitled thereto, of the principal, premium, if any, and interest for
whose payment such money has been deposited with the Trustee.
All moneys deposited with the Trustee pursuant to Section 4.1 (and held
by it or any Paying Agent) for the payment of Securities subsequently converted
shall be returned to the Company upon Company Request.
ARTICLE FIVE
REMEDIES
Section 5.1. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Thirteen or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of the principal of or premium, if
any, on any Security at its Maturity, whether or not such payment is
prohibited by the subordination provisions of Article 13; or
(2) default in the payment of any interest (including any
Additional Amounts or Liquidated Damages, if any) upon any Security
when it becomes due and payable, and continuance of such default for a
period of 30 days, whether or not such payment is prohibited by the
subordination provisions of Article 13; or
(3) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in the performance or breach of which is
specifically dealt with elsewhere in this Section ), and continuance of
such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities a written
notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(4) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable bankruptcy,
moratorium of payments, insolvency, reorganization or other similar law
or (B) a decree or order adjudging the Company a bankrupt or insolvent,
or approving as properly
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filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company under any applicable
Federal or State law, or appointing a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any
such decree or order unstayed and in effect for a period of 60
consecutive days; or
(5) the commencement by the Company of a voluntary case or
proceeding under any applicable bankruptcy, moratorium of payments
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent or to be granted
moratorium of payment, or the consent by it to the entry of a decree or
order for relief in respect of the Company in an involuntary case or
proceeding under any applicable bankruptcy, moratorium of payment,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy, moratorium payment or insolvency proceedings against
it, or the filing by it of a petition or answer or consent seeking
reorganization or similar relief under any applicable law, or the
consent by it to the filing of such petition or to the appointment of
or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company in furtherance of any
such action.
Section 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.1(4) or (5)) occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities may declare the principal of all the Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such principal
and all accrued interest thereon shall become immediately due and payable. If an
Event of Default specified in Section 5.1(4) or (5) occurs, the principal of,
and accrued interest on, all the Securities shall ipso facto become immediately
due and payable without any declaration or other Act of the Holders or any act
on the part of the Trustee.
At any time after such declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article Five provided, the Holders of a
majority in aggregate principal amount of the Outstanding Securities, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if
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(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including any Additional
Amounts and Liquidated Damages) on all Securities,
(B) the principal of and premium, if any, on any
Securities which have become due otherwise than by such
declaration of acceleration and any interest thereon at the
rate borne by the Securities,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at a rate of 4 1/2% per
annum, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel; and
(2) all Events of Default, other than the nonpayment of the
principal of, and any interest on, Securities which have become due
solely by such declaration of acceleration, have been cured or waived
as provided in Section 5.13.
No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.
Section 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest (including
any Additional Amounts and Liquidated Damages) on any Security when it
becomes due and payable and such default continues for a period of 30
days, or
(2) default is made in the payment of the principal of or
premium, if any, on any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities and any coupons appertaining thereto, the whole
amount then due and payable on such Securities and coupons for principal and
interest (including any Additional Amounts and Liquidated Damages) and interest
on any overdue principal and premium, if any, and on any overdue interest
(including any Additional Amounts and Liquidated Damages), to the extent
permitted by law, at a rate of 4 1/2% per annum, and in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
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If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities and coupons by such appropriate judicial proceedings as
the Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
Section 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, moratorium of payments, reorganization, arrangement, adjustment,
composition or other judicial proceeding relative to the Company or any other
obligor upon the Securities or coupons or the property of the Company or of such
other obligor or the creditors of either, the Trustee (irrespective of whether
the principal of, and any interest on, the Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal or interest) shall be entitled and empowered, by intervention
in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount of
principal, premium, if any, and interest owing and unpaid in respect of
the Securities and take such other actions, including participating as
a member, voting or otherwise, of any official committee of creditors
appointed in such matter, and to file such other papers or documents,
in each of the foregoing cases, as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders of Securities and
coupons allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property
payable or deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities and coupons to make such payments to the Trustee and,
in the event that the Trustee shall consent to the making of such payments
directly to the Holders of Securities and coupons, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel and any other amounts due the
Trustee under Section 6.7.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the coupons or the rights of any Holder thereof or
to authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding; provided, however, that the Trustee
may, on behalf of such Holders, vote for the election of a trustee in bankruptcy
or similar official.
Section 5.5. Trustee May Enforce Claims Without Possession of Securities or
Coupons.
All rights of action and claims under this Indenture or the Securities
or coupons may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or coupons or the production thereof in any proceeding
relating thereto, and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the Holders of the Securities and coupons in respect
of which judgment has been recovered.
Section 5.6. Application of Money Collected.
Subject to Article Thirteen, any money collected by the Trustee
pursuant to this Article Five shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal, premium, if any, or interest, upon presentation
of the Securities or coupons, or both, as the case may be, and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.7;
SECOND: To the payment of the amounts then due and unpaid for
principal, premium, if any, or interest on the Securities and coupons
in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on such Securities and coupons
for principal, premium, if any, and interest, respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
Section 5.7. Limitation on Suits.
No Holder of any Security or coupon shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless:
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(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities shall have made written request to
the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
Section 5.8. Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert.
Notwithstanding any other provision in this Indenture, the Holder of
any Security or coupon shall have the right, which is absolute and
unconditional, to receive payment of the principal of, premium, if any, and
(subject to Section 3.7) interest on such Security or payment of such coupon on
the respective Stated Maturities expressed in such Security or coupon (or, in
the case of redemption or repurchase, on the Redemption Date or Repurchase Date,
as the case may be), and to convert such Security in accordance with Article
Twelve, and to institute suit for the enforcement of any such payment and right
to convert, and such rights shall not be impaired without the consent of such
Holder.
Section 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security or coupon has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the
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Holders of Securities and coupons shall be restored severally and respectively
to their former positions hereunder and thereafter all rights and remedies of
the Trustee and such Holders shall continue as though no such proceeding had
been instituted.
Section 5.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities or coupons in the last
paragraph of Section 3.6, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders of Securities or coupons is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security or
coupon to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or any acquiescence therein. Every right and remedy given by this
Article Five or by law to the Trustee or to the Holders of Securities or coupons
may be exercised from time to time, and as often as may be deemed expedient, by
the Trustee or (subject to the limitations contained in this Indenture) by the
Holders of Securities or coupons, as the case may be.
Section 5.12. Control by Holders of Securities.
Subject to Section 6.3(5), the Holders of a majority in aggregate
principal amount of the Outstanding Securities shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee,
provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
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Section 5.13. Waiver of Past Defaults.
The Holders, either (a) through the written consent of not less than a
majority in aggregate principal amount of the Outstanding Securities, or (b) by
the adoption of a resolution, at a meeting of Holders of the Outstanding
Securities at which a quorum is present, by the Holders of the lessor of (x) not
less than a majority in aggregate principal amount of Outstanding Securities and
(y) at least 66-2/3% in aggregate principal amount of the Outstanding Securities
represented at such meeting, may on behalf of the Holders of all the Securities
and coupons waive any past default hereunder and its consequences, except a
default (1) in the payment of the principal of, premium, if any, or interest on
any Security, or (2) in respect of a covenant or provision hereof which under
Article Eight cannot be modified or amended without the consent of the Holder of
each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security or
coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.14 shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in aggregate
principal amount of the Outstanding Securities, or to any suit instituted by any
Holder of any Security or coupon for the enforcement of the payment of the
principal of, premium, if any, or interest on any Security or the payment of any
coupon on or after the respective Stated Maturity or Maturities expressed in
such Security or coupon (or, in the case of redemption or repurchase, on or
after the Redemption Date or Repurchase Date, as the case may be) or for the
enforcement of the right to convert any Security in accordance with Article
Twelve.
Section 5.15. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not
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hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
Section 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of this
Indenture, but not to verify the contents thereof.
(b) In case an Event of Default has occurred and is continuing of which
a Responsible Officer of the Trustee has actual knowledge, the Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use
the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the
effect of paragraph (a) of this Section ;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in aggregate principal amount of
the Outstanding Securities or such lesser percentage as
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provided in this Indenture relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 6.2. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder as to
which the Trustee has received written notice, the Trustee shall give to all
Holders of Securities, in the manner provided in Section 1.6, notice of such
default, unless such default shall have been cured or waived; provided, however,
that, except in the case of a default in the payment of the principal of,
premium, if any, or interest on any Security or coupon, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors or Responsible
Officers of the Trustee in good faith determine that the withholding of such
notice is in the interest of the Holders; and provided, further, that in the
case of any default of the character specified in Section 5.1(3), no such notice
to Holders of Securities shall be given until at least 30 days after the
occurrence thereof. For the purpose of this Section, the term "default" means
any event which is, or after notice or lapse of time or both would become, an
Event of Default.
Section 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
other certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, coupon,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed or presented by the proper
party or parties;
(2) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board shall be sufficiently evidenced by a
Board Resolution;
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(3) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(4) the Trustee may consult with counsel of its selection and
the advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(5) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders of Securities or coupons pursuant to
this Indenture, unless such Holders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction;
(6) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, coupon, other evidence of
indebtedness or other paper or document, but the Trustee may make such
further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or
attorney;
(7) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(8) the permissive right of the Trustee to take or refrain
from taking any actions enumerated in this Indenture shall not be
construed as a duty and the Trustee shall not be answerable in such
actions other than for its own negligence or willful misconduct; and
(9) the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by the Indenture.
Section 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) and in the coupons shall be taken as
the statements of the Company, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the
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validity or sufficiency of this Indenture, of the Securities or coupons, or of
the Common Shares issuable upon the conversion of the Securities. The Trustee
shall not be accountable for the use or application by the Company of Securities
or the proceeds thereof.
Section 6.5. May Hold Securities, Act as Trustee Under Other Indentures.
The Trustee, any Authenticating Agent, any Paying Agent, any Conversion
Agent or any other agent of the Company or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities and coupons and
may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Authenticating Agent, Paying Agent, Conversion Agent or such
other agent.
The Trustee may become and act as trustee under other indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding in the same manner as if it were not
Trustee hereunder.
Section 6.6. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
Section 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation
as the Company and the Trustee shall from time to time agree in writing
for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee (and its directors, officers,
employees and agents) for, and to hold it harmless against, any loss,
liability or expense incurred
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without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of this trust,
including the costs, expenses and reasonable attorneys' fees of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 5.1(4) or Section 5.1(5), the expenses
(including the reasonable charges of its counsel) and the compensation for the
services are intended to constitute expenses of the administration under any
applicable Federal or state bankruptcy, insolvency or other similar law.
Any Paying Agent or Authenticating Agent appointed hereunder shall be
entitled to the benefits of Section 6.7(3) as if the indemnity set forth
therefor were specifically afforded to such Paying Agent or Authenticating
Agent.
The provisions of this Section shall survive the termination of this
Indenture or the earlier resignation or removal of the Trustee, any Paying Agent
or any Authenticating Agent, as the case may be.
Section 6.8. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such, having a
combined capital and surplus of at least U.S.$50,000,000, subject to supervision
or examination by federal or state authority, in good standing and having an
established place of business in the Borough of Manhattan, The City of New York.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article and a successor shall be appointed pursuant to Section 6.9.
Section 6.9. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.10.
(b) The Trustee may resign at any time by giving written notice thereof
to the Company. If the instrument of acceptance by a successor Trustee required
by Section 6.10 shall not have been
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delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in aggregate principal amount of the Outstanding Securities, delivered
to the Trustee and the Company. If the instrument of acceptance by a successor
Trustee required by Section 6.10 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of removal, the removed Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(d) If at any time:
(1) the Trustee shall cease to be eligible under Section 6.8
and shall fail to resign after written request therefor by the Company
or by any Holder of a Security who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder of a Security who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee and
shall comply with the applicable requirements of this Section and Section 6.10.
If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities delivered to the Company and the retiring Trustee, the successor
Trustee so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 6.10, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders of Securities and accepted appointment in the manner required by this
Section and Section 6.10, any Holder of a Security who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders of
Securities in the manner provided in Section 1.6. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
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Section 6.10. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be eligible under this Article.
Section 6.11. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 6.12. Authenticating Agents.
The Common Depositary may authenticate the Temporary Global Bearer
Security, and the Paying Agent in Amsterdam, The Netherlands may authenticate
Bearer Securities, in each case, as the Trustee's Authenticating Agent. The
Trustee may, with the written consent of the Company, appoint an additional
Authenticating Agent or Agents acceptable to the Company with respect to the
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities issued upon exchange or substitution pursuant to this
Indenture.
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Securities authenticated by an Authenticating Agent shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder, and every reference in
this Indenture to the authentication and delivery of Securities by the Trustee
or the Trustee's certificate of authentication shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be subject to acceptance
by the Company and shall at all times be a corporation organized and doing
business under the laws of the United States of America, any State thereof, the
District of Columbia, England and Wales or The Netherlands authorized under such
laws to act as Authenticating Agent and subject to supervision or examination by
government or other fiscal authority. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section
6.12, such Authenticating Agent shall resign immediately in the manner and with
the effect specified in this Section 6.12.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 6.12, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.12, the Trustee may appoint a successor
Authenticating Agent which shall be subject to acceptance by the Company. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.12.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 6.12.
If an Authenticating Agent is appointed with respect to the Securities
pursuant to this Section 6.12, the Securities may have endorsed thereon, in
addition to or in lieu of the Trustee's certification of authentication, an
alternative certificate of authentication in the following form:
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This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: MARINE MIDLAND BANK,
as Trustee
By [Authenticating Agent],
as Authenticating Agent
By
--------------------------------
Authorized Signatory
Section 6.13. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
Section 6.14. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE SEVEN
CONSOLIDATION, MERGER, SPLIT-UP, TRANSFER OR LEASE
Section 7.1. Company May Consolidate, Merge, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
(in a transaction in which the Company is not the surviving entity) or transfer
or lease all its properties and assets substantially as an entirety to any
Person, unless:
(1) in case the Company shall consolidate with or merge into
another Person (in a transaction in which the Company is not the
surviving entity) or transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by transfer, or which leases the properties and assets of the
Company substantially as an entirety shall be a corporation, limited
liability company, partnership or trust, shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
the due and punctual
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payment of the principal of, premium, if any, and interest (including
Additional Amounts, if any, payable pursuant to Section 10.4 and
Liquidated Damages, if any) on all of the Securities and coupons, as
applicable, and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed and
shall have provided for conversion rights in accordance with Article
Twelve; and
(2) the Company has delivered in a transfer in which the
Company is not the surviving entity to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such
supplemental indenture comply with Sections 7.1 and 7.2 of this
Article and that all conditions precedent herein provided for relating
to such transaction have been complied with, together with any
documents required under Section 8.3.
Section 7.2. Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any transfer or lease of all the properties and assets
of the Company substantially as an entity in accordance with Section 7.1, the
successor Person formed by such consolidation or into which the Company is
merged or to which such transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture, the Securities and the coupons, if any.
Section 7.3. Company May Split-Up Only on Certain Terms.
The Company may not consummate a split-up unless, following the
conclusion of such split-up, there would be at least one Person that is fully
liable (by operation of law or pursuant to a supplemental indenture) for the due
and punctual payment of the principal of, premium, if any, and interest
(including Additional Amounts, if any, payable pursuant to Section 10.4 and
Liquidated Damages, if any) on all of the Securities and coupons, as applicable,
and the performance or observance of the covenants set forth in this Indenture
on the part of the Company to be performed or observed and shall have provided
for conversion rights in accordance with Article Twelve, if applicable (the
"Indenture Obligations"). In the event of a split-up in which upon consummation
thereof the Company ceases to exist or otherwise ceases to be fully liable for
the Indenture Obligations as a consequence of such split-up, one of the Persons
party to such split-up, which Person shall be a corporation, limited liability
company, partnership or trust, shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, the Indenture
Obligations, and the Company will deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such split-up and, if a
supplemental indenture is required in connection with such split-up,
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such supplemental indenture complies with this Section 7.3 and that all
conditions precedent herein provided for in relation to such transaction have
been complied with, together with any documents required under Section 8.3. The
Person that assumes the Indenture Obligations in accordance with the preceding
sentence may exercise every right and power of the Company under this Indenture
with the same effect as if such Person had been named as the Company herein.
Notwithstanding any provision of this Section 7.3 to the contrary, the Trustee
and Holders are entitled to all rights and remedies provided to them under
Netherlands law.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
Section 8.1. Supplemental Indentures Without Consent of Holders of Securities
or Coupons.
Without the consent of any Holders of Securities or coupons, the
Company, when authorized by a Board Resolution, and the Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto for
any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants and
obligations of the Company herein and in the Securities and coupons as
permitted by this Indenture; or
(2) to add to the covenants of the Company for the benefit of
the Holders of Securities or coupons, or to surrender any right or
power herein conferred upon the Company; or
(3) to secure the Securities; or
(4) to permit Registered Securities to be exchanged for Bearer
Securities or to remove or relax the restrictions on payment of
principal, premium, if any, or interest in respect of Bearer Securities
in the United States, in each case to the extent then permitted under
the Code and applicable regulations of the United States Treasury
Department; provided, however, that no adverse consequences would
result to any Holder; or
(5) to make provision with respect to the conversion rights of
Holders of Securities pursuant to Section 12.11 or the repurchase
rights of Holders of Securities pursuant to Section 14.3; or
(6) to comply with the requirements of the Trust Indenture Act
or the rules and regulations of the Commission thereunder in order to
effect or maintain the qualification of
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this Indenture under the Trust Indenture Act, as contemplated by this
Indenture or otherwise; or
(7) to comply with the requirements of the Amsterdam Stock
Exchange or the law of companies of The Netherlands; provided that any
such action pursuant to this clause (7) shall not adversely affect the
interests of Holders of Securities or coupons in any material respect;
or
(8) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein or which is otherwise defective, or to make any other provisions
with respect to matters or questions arising under this Indenture as
the Company and the Trustee may deem necessary or desirable, provided,
such action pursuant to this clause (8) shall not adversely affect the
interests of the Holders of Securities or coupons in any material
respect.
Upon Company Request, accompanied by a Board Resolution authorizing the
execution of any such supplemental indenture, and subject to and upon receipt by
the Trustee of the documents described in Section 8.3 hereof, the Trustee shall
join with the Company in the execution of any supplemental indenture authorized
or permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations which may be therein contained.
Section 8.2. Supplemental Indentures with Consent of Holders of Securities.
With either (a) the written consent of the Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities, by the Act
of said Holders delivered to the Company and the Trustee, or (b) by the adoption
of a resolution, at a meeting of Holders of the Outstanding Securities at which
a quorum is present, by the Holders of the lesser of (x) not less than a
majority in aggregate principal amount of the Outstanding Securities and (y)
66-2/3% in aggregate principal amount of the Outstanding Securities represented
at such meeting, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of modifying in any manner the rights of
the Holders of Securities or coupons under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent or affirmative
vote of the Holder of each Outstanding Security or coupon affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security or coupon appertaining
thereto, or reduce the principal amount or the rate of interest payable
thereon or any premium payable upon redemption or mandatory repurchase
thereof, or change the obligation of the Company to pay Additional
Amounts pursuant to Section 10.4 in a manner adverse to the Holders, or
change the Place of Payment or coin or currency in which any Security
or the interest or any premium thereon or any other amount
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in respect thereof is payable, or impair the right to institute suit
for the enforcement of any payment in respect of any Security or coupon
on or after the Stated Maturity thereof (or, in the case of redemption
or any repurchase, on or after the Redemption Date or Repurchase Date,
as the case may be) or, except as permitted by Section 12.11, adversely
affect the right to convert any Security as provided in Article Twelve,
or modify the provisions of this Indenture with respect to the
subordination of the Securities in a manner adverse to the Holders of
Securities or coupons, or
(2) reduce the requirements of Section 9.4 for quorum or
voting, or reduce the percentage in aggregate principal amount of the
Outstanding Securities the consent of whose Holders is required for any
such supplemental indenture or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture
or certain defaults hereunder and their consequences) provided for in
this Indenture, or
(3) modify the obligation of the Company to maintain an office
or agency in the Borough of Manhattan, The City of New York, and in a
city in a Western European country pursuant to Section 10.2, or
(4) modify any of the provisions of this Section or Section
5.13, except to increase any percentage contained herein or therein or
to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each
Outstanding Security affected thereby; or
(5) modify the provisions of Article Fourteen in a manner
adverse to the Holders; or
(6) modify any of the provisions of Section 10.8 or 10.9.
It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Section 8.3. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture, and that such supplemental
indenture has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
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Section 8.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
and of any coupons appertaining thereto shall be bound thereby.
Section 8.5. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Company and the
Trustee, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
Section 8.6. Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 8.2, the Company
shall give notice to all Holders of Securities of such fact, setting forth in
general terms the substance of such supplemental indenture, in the manner
provided in Section 1.6. Any failure of the Company to give such notice, or any
defect therein, shall not in any way impair or affect the validity of any such
supplemental indenture.
ARTICLE NINE
MEETINGS OF HOLDERS OF SECURITIES
Section 9.1. Purposes for Which Meetings May Be Called.
A meeting of Holders of Securities may be called at any time and from
time to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities.
Section 9.2. Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of Securities
for any purpose specified in Section 9.1, to be held at such time and at such
place in the Borough of Manhattan, The
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City of New York, or in the City of Amsterdam, The Netherlands, as the Trustee
shall determine. Notice of every meeting of Holders of Securities, setting forth
the time and the place of such meeting and in general terms the action proposed
to be taken at such meeting, shall be given, in the manner provided in Section
1.6, not less than 21 nor more than 180 days prior to the date fixed for the
meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or
the Holders of at least 25% in aggregate principal amount of the Outstanding
Securities shall have requested the Trustee to call a meeting of the Holders of
Securities for any purpose specified in Section 9.1, by written request setting
forth in reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have made the first publication of the notice of such
meeting within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the Company or
the Holders of Securities in the amount specified, as the case may be, may
determine the time and the place in the Borough of Manhattan, The City of New
York, or in the City of Amsterdam, The Netherlands, for such meeting and may
call such meeting for such purposes by giving notice thereof as provided in
paragraph (a) of this Section .
Section 9.3. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Securities, a
Person shall be (a) a Holder of one or more Outstanding Securities, or (b) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities by such Holder or Holders. The only Persons
who shall be entitled to be present or to speak at any meeting of Holders shall
be the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 9.4. Quorum; Action.
The Persons entitled to vote a majority in aggregate principal amount
of the Outstanding Securities shall constitute a quorum. In the absence of a
quorum within 30 minutes of the time appointed for any such meeting, the meeting
shall, if convened at the request of Holders of Securities, be dissolved. In any
other case, the meeting may be adjourned for a period of not less than 10 days
as determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at any such adjourned meeting, such
adjourned meeting may be further adjourned for a period not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting (subject to repeated applications of this sentence). Notice of
the reconvening of any adjourned meeting shall be given as provided in Section
9.2(a), except that such notice need be given only once not less than five days
prior to the date on which the meeting is scheduled to be reconvened. Notice of
the reconvening of an adjourned meeting shall state expressly the percentage of
the principal amount of the Outstanding Securities which shall constitute a
quorum.
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Subject to the foregoing, at the reconvening of any meeting adjourned
for a lack of a quorum, the Persons entitled to vote 25% in aggregate principal
amount of the Outstanding Securities at the time shall constitute a quorum for
the taking of any action set forth in the notice of the original meeting.
At a meeting or an adjourned meeting duly reconvened and at which a
quorum is present as aforesaid, any resolution and all matters (except as
limited by the proviso to Section 8.2) shall be effectively passed and decided
if passed or decided by the lesser of (i) not less than a majority in aggregate
principal amount of the Outstanding Securities and (ii) Persons entitled to vote
not less than 66-2/3% in aggregate principal amount of Outstanding Securities
represented and entitled to vote at such meeting.
Any resolution passed or decisions taken at any meeting of Holders of
Securities duly held in accordance with this Section shall be binding on all the
Holders of Securities and coupons, whether or not present or represented at the
meeting. The Trustee shall, in the name and at the expense of the Company,
notify all the Holders of Securities of any such resolutions or decisions
pursuant to Section 1.6.
Section 9.5. Determination of Voting Rights; Conduct and Adjournment of
Meetings.
(a) Notwithstanding any other provisions of this Indenture, the Trustee
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities in regard to proof of the holding of Securities and of the
appointment of proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate. Except as otherwise permitted or
required by any such regulations, the holding of Securities shall be proved in
the manner specified in Section 1.4 and the appointment of any proxy shall be
proved in the manner specified in Section 1.4 or by having the signature of the
Person executing the proxy witnessed or certified by any officer authorized by
Section 1.4(c) to certify to the holding of Bearer Securities.
(b) The Trustee shall, by an instrument in writing, appoint a temporary
chairman (which may be the Trustee) of the meeting, unless the meeting shall
have been called by the Company or by Holders of Securities as provided in
Section 9.2(b), in which case the Company or the Holders of Securities calling
the meeting, as the case may be, shall in like manner appoint a temporary
chairman. A permanent chairman and a permanent secretary of the meeting shall be
elected by vote of the Persons entitled to vote a majority in aggregate
principal amount of the Outstanding Securities represented at the meeting.
(c) At any meeting, each Holder of a Security or proxy shall be
entitled to one vote for each U.S.$1,000 principal amount of Securities held or
represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Security challenged as not Outstanding
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and ruled by the chairman of the meeting to be not Outstanding. The chairman of
the meeting shall have no right to vote, except as a Holder of a Security or
proxy.
(d) Any meeting of Holders of Securities duly called pursuant to
Section 9.2 at which a quorum is present may be adjourned from time to time by
Persons entitled to vote a majority in aggregate principal amount of the
Outstanding Securities represented at the meeting, and the meeting may be held
as so adjourned without further notice.
Section 9.6. Counting Votes and Recording Action of Meetings.
The vote upon any resolution submitted to any meeting of Holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities or of their representatives by proxy and
the principal amounts at Stated Maturity and serial numbers of the Outstanding
Securities held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record, at least in duplicate, of the proceedings
of each meeting of Holders of Securities shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more Persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was given as provided in
Section 9.2 and, if applicable, Section 9.4. Each copy shall be signed and
verified by the affidavits of the permanent chairman and secretary of the
meeting and one such copy shall be delivered to the Company and another to the
Trustee to be preserved by the Trustee, the latter to have attached thereto the
ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
ARTICLE TEN
COVENANTS
Section 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually pay
the principal of and premium, if any, and interest (including Additional
Amounts, if any, or Liquidated Damages, if any) on the Securities in accordance
with the terms of the Securities, the coupons appertaining thereto and this
Indenture. The interest due on the Bearer Securities on or before Maturity,
other than Additional Amounts payable as provided in Section 10.4 in respect of
principal of such a Security, shall be payable only upon presentation and
surrender of the several coupons for such interest installments as are evidenced
thereby as they severally mature. The Company will deposit or cause to be
deposited with the Trustee, one Business Day prior to the Stated Maturity of any
Bearer Security or one
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Business Day prior to the due date for any installment of interest thereon and
by noon Eastern Standard Time on the Stated Maturity of any Registered Security
or on the due date for any installment of interest thereon, all payments so due,
which payments shall be in immediately available funds on the date of such
Stated Maturity or due date, as the case may be.
Section 10.2. Maintenance of Offices or Agencies.
The Company hereby appoints (a) the Corporate Trust Office of the
Trustee as its agent in the Borough of Manhattan, The City of New York, where
Registered Securities may be presented or surrendered for payment, where Bearer
Securities and coupons may be presented or surrendered for payment in the
circumstances described below (and not otherwise), where Registered Securities
may be surrendered for registration of transfer or exchange, where Registered
Securities may be surrendered for conversion, where Bearer Securities may be
surrendered for conversion in the circumstances described below (and not
otherwise) and where notices and demands to or upon the Company in respect of
the Securities and coupons and this Indenture may be served, and (b) (i) the
office of ABN AMRO Bank N.V., Herengracht 595, 1017 CE Amsterdam, The
Netherlands, as its agents outside of the United States where, subject to any
applicable laws or regulations, Bearer Securities and coupons may be presented
and surrendered for payment, where, subject to any applicable laws and
regulations, Registered Securities may be surrendered for payment, where
Registered Securities may be surrendered for registration of transfer or
exchange, where Bearer Securities may be presented for exchange, where
Securities may be surrendered for conversion, and where the written statements
to be delivered by Holders of Registered Securities as contemplated by the third
paragraph on the reverse of the form of Registered Security may be delivered.
Payment of principal of, premium, if any, or interest on Bearer Securities,
including any Additional Amounts and Bearer Additional Amounts payable on Bearer
Securities pursuant to Section 10.4, may be made at the Corporate Trust Office
of the Trustee in the Borough of Manhattan, The City of New York, if (but only
if) payment of the full amount of such principal and interest, and Additional
Amounts at all offices outside the United States maintained for such purpose by
the Company in accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions on the full payment
or receipt of such amounts in United States Dollars, as determined by the
Company.
The Company may at any time and from time to time vary or terminate the
appointment of any such agent or appoint any additional agents for any or all of
such purposes; provided, however, that until all of the Securities have been
delivered to the Trustee for cancellation, or moneys sufficient to pay the
principal of, premium, if any, and interest on the Securities have been made
available for payment and either paid or returned to the Company pursuant to the
provisions of Section 10.3, the Company will maintain (1) in the Borough of
Manhattan, The City of New York, an office or agency where Registered Securities
may be presented or surrendered for payment and conversion, where Bearer
Securities and coupons may be presented or surrendered for payment and
conversion in the circumstances described in the last sentence of the first
paragraph of this Section (and not otherwise), where Registered Securities may
be surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities and coupons and this
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Indenture may be served, and (2) subject to any laws or regulations applicable
thereto, in any city in a Western European country, an office or agency where
Securities and coupons may be presented and surrendered for payment, where
Securities may be presented for registration of transfer or exchange or
conversion, and where the written statements to be delivered by Holders of
Registered Securities as contemplated by the third paragraph on the reverse of
the form of Registered Security may be delivered. The Company will give prompt
written notice to the Trustee, and notice to the Holders in accordance with
Section 1.6, of the appointment or termination of any such agents and of the
location and any change in the location of any such office or agency.
If at any time the Company shall fail to maintain any such required
office or agency, or shall fail to furnish the Trustee with the address thereof,
presentations and surrenders may be made and notices and demands may be served
on the Corporate Trust Office of the Trustee, except that Bearer Securities and
coupons may be presented and surrendered for payment and conversion to the
Paying Agent in Amsterdam, The Netherlands at its office in the City of
Amsterdam, The Netherlands or other Paying Agent or Conversion Agent outside the
United States, and the Company hereby appoints the Paying Agent in Amsterdam,
The Netherlands as its agent to receive such respective presentations,
surrenders, notices and demands.
Section 10.3. Money for Security Payments To Be Held in Trust.
If the Company shall act as its own Paying Agent, it will, on or before
each due date of the principal of, premium, if any, or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, premium, if any, or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and the Company will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, one
Business Day prior to each due date of the principal of, premium, if any, or
interest on any Securities, deposit with the Trustee a sum sufficient to pay the
principal, premium, if any, or interest so becoming due, such sum to be held for
the benefit of the Persons entitled to such principal, premium, if any, or
interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of any failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section , that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on Securities for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
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(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security or any coupon
appertaining thereto shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in an Authorized
Newspaper in each Place of Payment, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
Section 10.4. Additional Amounts
The Company will pay to the Holder of any Security or any coupon
appertaining thereto Additional Amounts as provided in the form of Bearer
Security and Registered Security, in each case set forth in Section 2.2.
Whenever in this Indenture there is mentioned, in any context, the payment of
the principal of, premium, if any, or interest on, or in respect of, any
Security or any coupon, such mention shall be deemed to include mention of the
payment of Additional Amounts provided for in this Section to the extent that,
in such context, Additional Amounts are, were or would be payable in respect
thereof pursuant to the provisions of this Section and express mention of the
payment of Additional Amounts (if applicable) in any provisions hereof shall not
be construed as excluding Additional Amounts in those provisions hereof where
such express mention is not made.
At least 10 days prior to June 15, 1997, or an earlier Redemption Date
or Repurchase Date (and at least 10 days prior to each date of payment of
principal, premium, if any, or interest after June 15, 1997, or such earlier
Redemption Date or Repurchase Date, if there has been any change
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with respect to the matters set forth in the below-mentioned Officers'
Certificate), the Company will furnish the Trustee and the Company's Paying
Agents in Amsterdam, The Netherlands and in the Borough of Manhattan, The City
of New York, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agents whether such payment of principal
of, premium, if any, or interest on the Securities shall be made to Holders of
Securities or coupons who are not United States persons without withholding for
or on account of any tax, assessment or other governmental charge described in
the second paragraph of the face of the forms of Definitive Securities set forth
in Section 2.2. If any such withholding shall be required, then such Officers'
Certificate shall specify by country the amount, if any, required to be withheld
on such payments to such Holders of Securities or coupons and the Company will
pay to the Trustee or the Paying Agent in Amsterdam, The Netherlands the
Additional Amounts required by this Section to be paid in the event of any such
withholding. The Company covenants to indemnify the Trustee and any Paying Agent
for, and to hold them harmless against, any loss, liability or expense arising
out of or in connection with actions taken or omitted by any of them in reliance
on any Officers' Certificate furnished pursuant to this Section , except to the
extent such loss, liability or expense is attributable to the Trustee's
negligence or bad faith.
Section 10.5. Existence.
Subject to Article Seven, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence.
Section 10.6. Registration and Listing.
Within a reasonable time after the issuance of the Temporary Global
Bearer Security, the Company (i) will effect all registrations with, and obtain
all approvals by, all governmental authorities that may be necessary under any
United States Federal or State law (including the Securities Act, the Exchange
Act and state securities and Blue Sky laws) before the Common Shares issuable
upon conversion of Securities may be lawfully issued and delivered, and
thereafter publicly traded (if permissible under the Securities Act), and
qualified or listed as contemplated by clause (ii); and (ii) will cause the
Common Shares required to be issued and delivered upon conversion of Securities,
prior to such issuance or delivery, to be quoted on the Nasdaq National Market
or, if the Common Shares is not then quoted on the Nasdaq National Market, cause
to be listed the Common Shares on each national securities exchange on which
outstanding Common Shares is listed or quoted at the time of such delivery.
Section 10.7. Statement by Officers as to Default.
The Company shall deliver to the Trustee within 120 days after the end
of each fiscal year of the Company an Officers' Certificate stating that in the
course of performance by the signers of their
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duties as such officers of the Company they would normally obtain knowledge of
whether any default exists in the performance and observance of any of the
terms, provisions and conditions of this Indenture and whether the Company has
kept, observed, performed and fulfilled its obligations under this Indenture.
Such Certificate shall further state, as to each such officer signing such
Certificate, to the best of the knowledge of such officer, as of the date of
such Officers' Certificate, (a) whether any such default exists, (b) whether the
Company during the preceding fiscal year kept, observed, performed and fulfilled
each and every covenant and obligation of the Company under this Indenture and
(c) whether there was any default in the performance and observance of any of
the terms, provisions or conditions of this Indenture during such preceding
fiscal year. If the officers signing the Certificate know of such a default,
whether then existing or occurring during such preceding fiscal year, the
Officers' Certificate shall describe such default and its status with
particularity. The Company shall also promptly notify the Trustee if the
Company's fiscal year is changed so that the end thereof is on any date other
than the then current fiscal year end date.
The Company will deliver to the Trustee, forthwith upon becoming aware
of any default in the performance or observance of any covenant, agreement or
condition contained in this Indenture, or any Event of Default, an Officers'
Certificate specifying with particularity such default or Event of Default and
further stating what action the Company has taken, is taking or proposes to take
with respect thereto.
Any notice required to be given under this Section 10.7 shall be
delivered to the Trustee at its Corporate Trust Office.
Section 10.8. Delivery of Certain Information.
At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, upon the request of a Holder of a Restricted Security or the
holder of Common Shares issued upon conversion thereof, the Company will
promptly furnish or cause to be furnished Rule 144A Information (as defined
below) to such Holder of Restricted Securities or such holder of Common Shares
issued upon conversion of Restricted Securities, or to a prospective purchaser
of any such security designated by any such Holder or holder, as the case may
be, to the extent required to permit compliance by such Holder or holder with
Rule 144A under the Securities Act (or any successor provision thereto) in
connection with the resale of any such security; provided, however, that the
Company shall not be required to furnish such information in connection with any
request made on or after the date which is three years from the later of (i) the
date such a security (or any such predecessor security) was last acquired from
the Company or (ii) the date such a security (or any such predecessor security)
was last acquired from an "affiliate" of the Company within the meaning of Rule
144 under the Securities Act (or any successor provision thereto). "Rule 144A
Information" shall be such information as is specified pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto).
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Section 10.9. Resale of Certain Securities; Reporting Issuer.
During the period beginning on December 23, 1996 and ending on the date
that is three years from such date, the Company will not, and will use its
reasonable efforts not to permit any of its "affiliates" (as defined under Rule
144 under the Securities Act or any successor provision thereto) to, resell (x)
any Securities which constitute "restricted securities" under Rule 144 or (y)
any securities into which the Securities have been converted under this
Indenture which constitute "restricted securities" under Rule 144, that in
either case have been reacquired by any of them. The Trustee shall have no
responsibility in respect of the Company's performance of its agreement in the
preceding sentence. The Company will continue to be a "reporting issuer" for
purposes of Rule 903 under the Securities Act until the full principal amount of
the Temporary Global Bearer Security has been exchanged for Bearer Securities in
accordance with this Indenture.
Section 10.10. Compliance with Listing Requirements of Amsterdam Stock Exchange.
So long as the Securities are listed on the Amsterdam Stock Exchange,
the Company will comply with the provisions set forth in Article 2.1.20,
Sections a-g of Schedule B of the Rules and Regulations ("Fondsenreglement") of
the Amsterdam Stock Exchange Association ("Vereniging voor de Effectenhandel")
or any amended form of the said provisions as in force as of the date of
original issuance of the Securities.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
Section 11.1. Right of Redemption.
The Securities may be redeemed in accordance with the provisions of the
forms of Securities set forth in Section 2.2.
Section 11.2. Applicability of Article.
Redemption of Securities at the election of the Company or otherwise,
as permitted or required by any provision of the Securities or this Indenture,
shall be made in accordance with such provision and this Article Eleven.
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Section 11.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company
of any of the Securities, the Company shall, at least 60 days (or 75 days in the
case of a redemption pursuant to the fourth paragraph of the reverse of the form
of Bearer Security set forth in Section 2.2(a)) prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee in writing of such Redemption Date. If the
Securities are to be redeemed pursuant to an election of the Company which is
subject to a condition specified in the forms of Securities set forth in Section
2.2, the Company shall furnish the Trustee with an Officers' Certificate stating
that the Company is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to the right of the
Company so to redeem have occurred.
Section 11.4. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed (other than pursuant
to the third or fourth paragraph on the reverse of the form of Bearer Security
in Section 2.2(a) or the third paragraph on the reverse of the form of
Registered Security in Section 2.2(b)), the particular Securities to be redeemed
shall be selected by the Trustee within two Business Days after it receives the
notice described in 11.3, from the Outstanding Securities not previously called
for redemption, individually by lot in the case of Bearer Securities, and by
such method as the Trustee may deem substantially equivalent thereto in the case
of Registered Securities and under circumstances intended not to discriminate
between Registered and Bearer Securities to be redeemed pursuant to the terms
thereof and hereof in the selection of Securities (or portion thereof) selected
for redemption. Partial redemption must be in an amount not less than
U.S.$1,000,000 principal amount of Securities.
If any Registered Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed may be
treated by the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the securities selected for redemption and, in the case
of any Registered Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
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Section 11.5. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
1.6 to the Holders of Securities to be redeemed not less than 20 nor more than
60 days prior to the Redemption Date, and such notice shall be irrevocable.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Securities are to be
redeemed, the aggregate principal amount of Securities to be redeemed
and the aggregate principal amount of Securities which will be
outstanding after such partial redemption,
(4) that on the Redemption Date the Redemption Price, and
accrued interest, if any, will become due and payable upon each such
Security to be redeemed, and that interest thereon shall cease to
accrue on and after said date,
(5) the Conversion Price, the date on which the right to
convert the Securities to be redeemed will terminate and the places
where such Securities, together with all unmatured coupons and any
matured coupons in default appertaining thereto, may be surrendered for
conversion,
(6) the place or places where such Securities, together with
all coupons appertaining thereto, if any, maturing after the Redemption
Date, are to be surrendered for payment of the Redemption Price and
accrued interest, if any, and
(7) in the case of a notice of redemption pursuant to the
third paragraph on the reverse of the form of Registered Security, a
form of written certification of each beneficial owner of a Registered
Security as to such beneficial owner's entitlement to Additional
Amounts.
In case of a partial redemption, the first notice given shall specify
the last date on which exchanges or transfers of Securities may be made pursuant
to Section 3.5 and shall specify the serial number and ISIN number (if any) of
the Bearer Securities (either individually or in group, from one number to
another, or by last digit or digits) called for redemption and in the case of
Registered Securities the serial and CUSIP numbers (if any) and the portions
thereof called for redemption, and the second notice shall specify the serial
number and ISIN number (if any) of the Bearer Securities (either individually or
in group, from one number to another, or by last digit or digits) called for
redemption and, in the case of Registered Securities, the serial and CUSIP
numbers (if any) and the portions thereof called for redemption.
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Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name of and at the expense of the Company. Notice of
redemption of Securities to be redeemed at the election of the Company received
by the Trustee shall be given by the Trustee to each Paying Agent in the name of
and at the expense of the Company.
Section 11.6. Deposit of Redemption Price.
Not less than one Business Day prior to any Redemption Date of the
Bearer Securities and by noon Eastern Standard Time on any Redemption Date of
the Registered Securities, the Company shall deposit with the Trustee or with
the Paying Agent in Amsterdam, The Netherlands so directed by the Trustee (or,
if the Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.3) an amount of money (which shall be in immediately
available funds on such Redemption Date) sufficient to pay the Redemption Price
of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date
other than any Securities called for redemption on that date which have been
converted prior to the date of such deposit.
If any Security called for redemption is converted, any money deposited
with the Trustee or with a Paying Agent or so segregated and held in trust for
the redemption of such Security shall (subject to any right of the Holder of
such Security, if a Registered Security, or any Predecessor Security to receive
interest as provided in the last paragraph of Section 3.7) be paid to the
Company on Company Request as soon as administratively practicable after the
Trustee receives such Company Request or, if then held by the Company, shall be
discharged from such trust.
Section 11.7. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price, including accrued
interest) such Securities shall cease to bear interest and the coupons for such
interest appertaining to Bearer Securities shall, except to the extent provided
below, be void. Upon surrender of any Security for redemption in accordance with
said notice, together with all coupons, if any, appertaining thereto maturing
after the Redemption Date, such Security shall be paid by the Company at the
Redemption Price together with accrued and unpaid interest to the Redemption
Date; provided, however, that installments of interest on Bearer Securities
whose Stated Maturity is on or prior to the Redemption Date shall be payable
only upon presentation and surrender of coupons for such interest (at an office
or agency outside the United States, except as otherwise provided in the form of
Bearer Security set forth in Section 2.2(a)); and provided, further, that
installments of interest on Registered Securities whose Stated Maturity is on or
prior to the Redemption Date shall be
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payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Record Date according to their
terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal amount of, premium, if any, and,
to the extent permitted by applicable law, accrued interest on such Security
shall, until paid, bear interest from the Redemption Date at a rate of 4 1/2%
per annum and such Security shall remain convertible into Common Shares until
the principal of such Security (or portion thereof, as the case may be) shall
have been paid or duly provided for.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons or the surrender of such missing
coupons or coupon may be waived by the Company and the Trustee or the Paying
Agent in Amsterdam, The Netherlands or its agent, if there be furnished to them
such security or indemnity as they may require to save each of them and any
Paying Agent harmless. If thereafter the Holder of such Security shall surrender
to any Paying Agent any such missing coupon in respect of which a deduction
shall have been made from the Redemption Price, such Holder shall be entitled to
receive the amount so deducted (without interest thereon); provided, however,
that interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside of the United
States (except as otherwise provided in the form of Bearer Security set forth in
Section 2.2(a)).
Section 11.8. Registered Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 10.2 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Registered Security without service charge, a new Registered Security or
Securities, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Registered Security so surrendered.
Section 11.9. Conversion Arrangement on Call for Redemption.
In connection with any redemption of Securities, the Company may
arrange for the purchase and conversion of any Securities by an agreement with
one or more investment bankers or other purchasers (the "Purchasers") to
purchase such securities by paying to the Trustee in trust for the Holders, on
or before the Redemption Date, an amount not less than the applicable Redemption
Price, together with interest accrued to the Redemption Date, of such
Securities. Notwithstanding anything to the contrary contained in this Article
Eleven, the obligation of the Company to pay the Redemption
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Price, together with interest accrued to the Redemption Date, shall be deemed to
be satisfied and discharged to the extent such amount is so paid by such
Purchasers. If such an agreement is entered into (a copy of which shall be filed
with the Trustee prior to the close of business on the Business Day immediately
prior to the Redemption Date), any Securities called for redemption that are not
duly surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, and consistent with
any agreement or agreements with such Purchasers, to be acquired by such
Purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article Twelve) surrendered by such Purchasers for conversion, all
as of immediately prior to the close of business on the Redemption Date (and the
right to convert any such Securities shall be extended though such time),
subject to payment of the above amount as aforesaid. At the direction of the
Company, the Trustee shall hold and dispose of any such amount paid to it to the
Holders in the same manner as it would monies deposited with it by the Company
for the redemption of Securities. Without the Trustee's prior written consent,
no arrangement between the Company and such Purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such purchasers, including the costs and
expenses, including reasonable legal fees, incurred by the Trustee in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE TWELVE
CONVERSION OF SECURITIES
Section 12.1. Conversion Privilege and Conversion Price.
Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Security other than the Temporary Global
Bearer Security may be converted into fully paid and nonassessable shares
(calculated as to each conversion to the nearest 1/100th of a share) of Common
Shares of the Company at the Conversion Price, determined as hereinafter
provided, in effect at the time of conversion. Such conversion right shall
commence on March 23, 1997 and expire at the close of business on December 15,
2001 subject, in the case of the conversion of any Global Registered Security,
to any applicable book-entry procedures of the Depositary therefor and the
following sentence. In case a Security or portion thereof is called for
redemption or is delivered for repurchase, such conversion right in respect of
the Security or portion so called shall expire at the close of business on the
Business Day prior to the Redemption Date or the Repurchase Date (as defined in
Article Fourteen), as the case may be, unless the Company defaults in making the
payment due upon redemption or repurchase, as the case may be.
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The price at which Common Shares shall be delivered upon conversion
(herein called the "Conversion Price") shall be initially U.S.$44.00 per Common
Share. The Conversion Price shall be adjusted in certain instances as provided
in this Article Twelve.
The issue price of each Common Share issuable upon conversion will be
The Netherlands guilders equivalent of the Conversion Price converted into
Netherlands Guilders at the rate of exchange of U.S. Dollars into Netherlands
Guilders prevailing in The Netherlands at the time of conversion and such issue
price may not be less than the par value of such Common Share, as determined by
the Company and notified to the Trustee and Conversion Agents in writing. In the
event that at the time of any conversion the Conversion Price then in effect and
the prevailing exchange rate would result in an issue price of less than the par
value of a Common Share, for purposes of such conversions, the Conversion Price
will be deemed to be the Conversion Price that results in an issue price that is
as close as possible to, but not less than, the par value of a Common Share.
Section 12.2. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank (in the case of any Registered Security), at
any office or agency of the Company maintained for that purpose pursuant to
Section 10.2, accompanied by a duly signed conversion notice substantially in
the form set forth in Section 2.5, stating that the Holder elects to convert
such Security or, if less than the entire principal amount thereof is to be
converted (in the case of any Registered Security), the portion thereof to be
converted. Each Bearer Security surrendered for conversion must be surrendered
together with all coupons appertaining thereto that mature after the date of
conversion and may only be converted at the office of any Conversion Agent
outside the United States. Each Bearer Security surrendered for conversion will
be converted into Common Shares in bearer form. Each Registered Security
surrendered for conversion will be converted into Common Shares in registered
form. If any Bearer Security surrendered for conversion shall not be accompanied
by all such appurtenant coupons, the surrender of any or all of such missing
coupons may be waived by the Company and the Trustee, if there be furnished to
them such security or indemnity as they may require to save each of them and any
Paying Agent harmless. Matured coupons not in default (including coupons
maturing on the date of conversion) will be payable against surrender thereof,
and matured coupons previously surrendered and in default will continue to be
payable, notwithstanding the exercise of the right of conversion by the Holder
of the Security to which the coupon appertains, but coupons maturing after the
date of conversion will not be paid. Each Registered Security surrendered for
conversion (in whole or in part) during the period from the close of business on
any Regular Record Date to the opening of business on the next succeeding
Interest Payment Date (except Notes called for redemption on a Redemption Date
or to be repurchased on a Repurchase Date during, in each case, such period)
shall be accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of such Registered Security (or
part thereof, as the case may be) being
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surrendered for conversion (or, if such Registered Security was issued in
exchange for a Bearer Security after the close of business on such Regular
Record Date, by surrender of one or more coupons relating to such Interest
Payment Date or by both payment in such funds and surrender of such coupon or
coupons, in either case in an amount equal to the interest payable on such
Interest Payment Date on the principal amount of such Registered Security (or
portion thereof) then being converted). The interest so payable on such Interest
Payment Date with respect to any Registered Security (or portion thereof, if
applicable) which has been called for redemption on a Redemption Date, or is
repurchasable on a Repurchase Date, occurring, in either case, during the period
from the close of business on any Record Date next preceding any Interest
Payment Date to the opening of business on such Interest Payment Date, which
Security (or portion thereof, if applicable) is surrendered for conversion
during such period, shall be paid to the Holder of such Security being converted
in an amount equal to the interest that would have been payable on such Security
if such Security had been converted as of the close of business on such Interest
Payment Date. The interest so payable on such Interest Payment Date in respect
of any Registered Security (or portion thereof, as the case may be) which has
not been called for redemption on a Redemption Date, or is not eligible for
repurchase on a Repurchase Date, occurring, in either case, during the period
from the close of business on any Record Date next preceding any Interest
Payment Date, which Registered Security (or portion thereof, as the case may be)
is surrendered for conversion during such period, shall be paid to the Holder of
such Security as of such Regular Record Date. Interest payable in respect of any
Registered Security surrendered for conversion on or after an Interest Payment
Date shall be paid to the Holder of such Security as of the next preceding
Regular Record Date, notwithstanding the exercise of the right of conversion.
Except as provided in this paragraph and subject to the last paragraph of
Section 3.7, no cash payment or adjustment shall be made upon any conversion on
account of, if the date of conversion is not an Interest Payment Date, any
interest accrued from the Interest Payment Date next preceding the conversion
date, in respect of any Security (or part thereof, as the case may be)
surrendered for conversion, or on account of any dividends on the Common Shares
issued upon conversion. The Company's delivery to the Holder of the number of
Common Shares (and cash in lieu of fractions thereof, as provided in this
Indenture) into which a Security is convertible will be deemed to satisfy the
Company's obligation to pay the principal amount of the Security.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion,
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Shares issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Shares at such
time. As promptly as practicable on or after the conversion date, the Company
shall issue and deliver to the Trustee, for delivery to the Holder, a
certificate or certificates for the number of full Common Shares issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 12.3.
All Common Shares delivered upon such conversion of Restricted
Securities shall bear restrictive legends substantially in the form of the
legends required to be set forth on the Restricted
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Securities pursuant to Section 3.5(c) and shall be subject to the restrictions
on transfer provided in such legends. Neither the Trustee nor any agent
maintained for the purpose of such conversion shall have any responsibility for
the inclusion or content of any such restrictive legends on such Common Shares;
provided, however, that the Trustee or Conversion Agent shall have provided, to
the Company or to the Transfer Agent for such Common Shares, prior to or
concurrently with a request to the Company to deliver such Common Shares,
written notice that the Securities delivered for conversion are Restricted
Securities.
In the case of any Registered Security which is converted in part only,
upon such conversion the Company shall execute and the Trustee shall
authenticate and deliver to the Holder thereof, at the expense of the Company, a
new Registered Security or Securities of authorized denominations in an
aggregate principal amount equal to the unconverted portion of the principal
amount of such Security. A Registered Security may be converted in part, but
only if the principal amount of such Security to be converted is any integral
multiple of U.S.$1,000 and the principal amount of such security to remain
Outstanding after such conversion is equal to U.S.$1,000 or any integral
multiple of $1,000 in excess thereof.
If Common Shares to be issued upon conversion of a Restricted Security
(other than a Restricted Global Registered Security), or Registered Securities
to be issued upon conversion of a Restricted Security (other than a Restricted
Global Registered Security) in part only, are to be registered in a name other
than that of the beneficial owner of such Restricted Security, then such Holder
must deliver to the Conversion Agent a Surrender Certificate, dated the date of
surrender of such Restricted Security and signed by such beneficial owner, as to
compliance with the restrictions on transfer applicable to such Restricted
Security. Neither the Trustee nor any Conversion Agent, Registrar or Transfer
Agent shall be required to register in a name other than that of the beneficial
owner, Common Shares or Registered Securities issued upon conversion of any such
Restricted Security not so accompanied by a properly completed Surrender
Certificate.
Section 12.3. Fractions of Shares.
No fractional Common Shares shall be issued upon conversion of any
Securities. If more than one Security shall be surrendered for conversion at one
time by the same Holder, the number of full shares which shall be issuable upon
conversion thereof shall be computed on the basis of the aggregate principal
amount of the Securities (or specified portions thereof) so surrendered. Instead
of any fractional Common Share which would otherwise be issuable upon conversion
of any Securities (or specified portions thereof), the Company shall calculate
and pay a cash adjustment in respect of such fraction (calculated to the nearest
1/100th of a share) in an amount equal to the same fraction of the Current
Market Price per Common Share (calculated in accordance with Section 12.4(8)
below) at the close of business on the day of conversion. Such cash payments
shall, in the case of a conversion of Bearer Securities, be made to an address
outside of the United States as requested in writing by such Holder.
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Section 12.4. Adjustment of Conversion Price.
The Conversion Price shall be subject to adjustments by the Company
from time to time as follows:
(1) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Shares in Common Shares,
the Conversion Price in effect at the opening of business on the date following
the date fixed for the determination of shareholders entitled to receive such
dividend or other distribution shall be reduced by multiplying such Conversion
Price by a fraction of which the numerator shall be the number of Common Shares
outstanding at the close of business on the date fixed for such determination
and the denominator shall be the sum of such number of shares and the total
number of shares constituting such dividend or other distribution, such
reduction to become effective immediately after the opening of business on the
day following the date fixed for such determination. If any dividend or
distribution of the type described in this Section 12.4(1) is declared but not
so paid or made, the Conversion Price shall again be adjusted to the Conversion
Price which would then be in effect if such dividend or distribution had not
been declared.
(2) In case the Company shall issue rights or warrants to all holders
of its outstanding Common Shares entitling them (for a period expiring within 45
days after the date fixed for determination of shareholders entitled to receive
such rights or warrants) to subscribe for or purchase Common Shares at a price
per share less than the Current Market Price (as defined below) on the date
fixed for determination of shareholders entitled to receive such rights or
warrants, the Conversion Price shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the date fixed for determination of shareholders entitled to receive
such rights or warrants by a fraction of which the numerator shall be the number
of Common Shares outstanding at the close of business on the date fixed for
determination of shareholders entitled to receive such rights and warrants plus
the number of shares which the aggregate offering price of the total number of
shares so offered would purchase at such Current Market Price, and of which the
denominator shall be the number of Common Shares outstanding on the date fixed
for determination of shareholders entitled to receive such rights and warrants
plus the total number of additional Common Shares offered for subscription or
purchase. Such adjustment shall be successively made whenever any such rights
and warrants are issued, and shall become effective immediately after the
opening of business on the day following the date fixed for determination of
shareholders entitled to receive such rights or warrants. To the extent that
Common Shares are not delivered after the expiration of such rights or warrants,
the Conversion Price shall be readjusted to the Conversion Price which would
then be in effect had the adjustments made upon the issuance of such rights or
warrants been made on the basis of delivery of only the number of Common Shares
actually delivered. In the event that such rights or warrants are not so issued,
the Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such date fixed for the determination of shareholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
Common Shares at less than such Current Market Price, and in determining the
aggregate offering price of such Common Shares,
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there shall be taken into account any consideration received by the Company for
such rights or warrants, the value of such consideration, if other than cash, to
be determined by the Board.
(3) In case outstanding Common Shares shall be subdivided into a
greater number of Common Shares, the Conversion Price in effect at the opening
of business on the day following the day upon which such subdivision becomes
effective shall be proportionately reduced, and conversely, in case outstanding
Common Shares shall be combined into a smaller number of Common Shares, the
Conversion Price in effect at the opening of business on the day following the
day upon which such combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Shares of any class of capital stock of the Company
(other than any dividends or distributions to which Section 12.4(1) applies) or
evidences of its indebtedness or assets (including securities, but excluding any
rights or warrants referred to in Section 12.4(2), and excluding any dividend or
distribution (x) paid exclusively in cash or (y) referred to in Section 12.4(1)
or (z) distributions pursuant to a split-up except as provided by the last
paragraph in Section 12.11 (any of the foregoing hereinafter in this Section
12.4(4) called the "Distribution Securities")), then, in each such case (unless
the Company elects to reserve such Distribution Securities for distribution to
the Holders upon the conversion of the Securities so that any such Holder
converting Securities will receive upon such conversion, in addition to the
Common Shares to which such Holder is entitled, the amount and kind of such
Securities which such Holder would have received if such Holder had converted
its Securities into Common Shares immediately prior to the Distribution Record
Date (as defined in Section 12.4(8) for such distribution of the Distribution
Securities)), the Conversion Price shall be reduced so that the same shall be
equal to the price determined by multiplying the Conversion Price in effect on
the Distribution Record Date with respect to such distribution by a fraction of
which the numerator shall be the Current Market Price per Common Share on such
Distribution Record Date less the fair market value (as determined by the Board
whose determination shall be conclusive, and described in a resolution of the
Board) on the Distribution Record Date of the portion of the Distribution
Securities so distributed applicable to one Common Share and the denominator
shall be the Current Market Price per Common Share, such reduction to become
effective immediately prior to the opening of business on the day following such
Distribution Record Date; provided, however, that in the event the then fair
market value (as so determined) of the portion of the Distribution Securities so
distributed applicable to one Common Share is equal to or greater than the
Current Market Price of the Common Shares on the Distribution Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion the amount of
Distribution Securities such holder would have received had such holder
converted each Security on the Distribution Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared. If the Board determines the
fair market value of any distribution for purposes of this Section 12.4(4) by
reference to the actual or when issued trading market for any securities, it
must in doing so consider
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the prices in such market over the same period used in computing the Current
Market Price of the Common Shares.
Rights or warrants distributed by the Company to all holders of Common
Shares entitling the holders thereof to subscribe for or purchase shares of the
Company's capital shares (either initially or under certain circumstances),
which rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such Common Shares;
(ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Shares, shall be deemed not to have been distributed for
purposes of this Section 12.4 (and no adjustment to the Conversion Price under
this Section 12.4 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 12.4(4). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 12.4 was made, (1) in the case of any such
rights or warrants which shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Price shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Shares with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Shares as
of the date of such redemption or repurchase, and (2) in the case of such rights
or warrants which shall have expired or been terminated without exercise by any
holders thereof, the Conversion Price shall be readjusted as if such rights and
warrants had not been issued.
For purposes of this Section 12.4(4) and Sections 12.4(1) and (2), any
dividend or distribution to which this Section 12.4(4) is applicable that also
includes Common Shares, or rights or warrants to subscribe for or purchase
Common Shares (or both), shall be deemed instead to be (1) a dividend or
distribution of the evidences of indebtedness, assets or shares of capital
shares other than such Common Shares or rights or warrants (and any Conversion
Price reduction required by this Section 12.4(4) with respect to such dividend
or distribution shall then be made) immediately followed by (2) a dividend or
distribution of such Common Shares or such rights or warrants (and any further
Conversion Price reduction required by Sections 12.4(1) and (2) with respect to
such dividend or distribution shall then be made), except (A) the Distribution
Record Date of such dividend or distribution shall be substituted as "the date
fixed for the determination of shareholders entitled to receive such dividend or
other distribution" and "the date fixed for such determination" within the
meaning of Sections 12.4(1) and (2) and (B) any Common Shares included in such
dividend or
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distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 12.4(1).
(5) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Shares cash (excluding (x) any semiannual cash
dividend on the Common Shares to the extent the aggregate cash dividend per
Common Share in any semiannual period does not exceed the greater of (A) the
amount per Common Share of the next preceding semiannual cash dividend on the
Common Shares to the extent that such preceding semiannual dividend did not
require any adjustment of the Conversion Price pursuant to this Section 12.4(5)
(as adjusted to reflect subdivisions or combinations of the Common Shares), and
(B) 7.5% of the arithmetic average of the Closing Prices (determined as set
forth in Section 12.4(8)) during the ten Trading Days immediately prior to the
date of declaration of such dividend, and (y) any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary), then, in such case, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close of
business on such Distribution Record Date by a fraction of which the numerator
shall be the Current Market Price of the Common Shares on the Distribution
Record Date less the amount of cash so distributed (and not excluded as provided
above) applicable to one Common Share and the denominator shall be such Current
Market Price of the Common Shares, such reduction to be effective immediately
prior to the opening of business on the day following the Distribution Record
Date; provided, however, that in the event the portion of the cash so
distributed applicable to one Common Share is equal to or greater than the
Current Market Price of the Common Shares on the Distribution Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder shall have the right to receive upon conversion the amount of cash such
Holder would have received had such Holder converted each Security on the
Distribution Record Date. In the event that such dividend or distribution is not
so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or distribution
had not been declared. If any adjustment is required to be made as set forth in
this Section 12.4(5) as a result of a distribution that is a semiannual
dividend, such adjustment shall be based upon the amount by which such
distribution exceeds the amount of the semiannual cash dividend permitted to be
excluded pursuant hereto. If an adjustment is required to be made as set forth
in this Section 12.4(5) above as a result of a distribution that is not a
semiannual dividend, such adjustment shall be based upon the full amount of the
distribution.
(6) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Shares shall
expire and such tender or exchange offer (as amended upon the expiration
thereof) shall require the payment to shareholders of consideration per Common
Share having a fair market value (as determined by the Board, whose
determination shall be conclusive and described in a resolution of the Board)
that as of the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended) that
exceeds the Current Market Price of the Common Shares on the Trading Day next
succeeding the Expiration Time, the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the Expiration
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Time by a fraction of which the numerator shall be the number of Common Shares
outstanding (including any tendered or exchanged shares) on the Expiration Time
multiplied by the Current Market Price of the Common Shares on the Trading Day
next succeeding the Expiration Time and the denominator shall be the sum of (x)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased Shares")
and (y) the product of the number of Common Shares outstanding (less any
Purchased Shares) on the Expiration Time and the Current Market Price of the
Common Shares on the Trading Day next succeeding the Expiration Time, such
reduction to become effective immediately prior to the opening of business on
the day following the Expiration Time. In the event that the Company is
obligated to purchase shares pursuant to any such tender or exchange offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender or exchange offer had not been made.
(7) In case of a tender or exchange offer made by a Person other than
the Company or any Subsidiary for an amount which increases the offeror's
ownership of Common Shares to more than 25% of the Common Shares outstanding and
shall involve the payment by such Person of consideration per Common Share
having a fair market value (as determined by the Board, whose determination
shall be conclusive, and described in a resolution of the Board) at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as it shall have been amended) that exceeds the
Current Market Price of the Common Shares on the Trading Day next succeeding the
Expiration Time, and in which, as of the Expiration Time the Board is not
recommending rejection of the offer, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the Expiration Time by a fraction of which
the numerator shall be the number of Common Shares outstanding (including any
tendered or exchanged shares) on the Expiration Time multiplied by the Current
Market Price of the Common Shares on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
shareholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of Common Shares outstanding (less any Purchased Shares)
on the Expiration Time and the Current Market Price of the Common Shares on the
Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time. In the event that such person is obligated to purchase shares
pursuant to any such tender or exchange offer, but such person is permanently
prevented by applicable law from effecting any such purchases or all such
purchases are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such tender or exchange offer
had not been made. Notwithstanding the foregoing, the adjustment described in
this Section 12.4(7) shall not be made
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if, as of the Expiration Time, the offering documents with respect to such offer
disclose a plan or intention to cause the Company to engage in any transaction
described in Sections 7.1 or 7.2
(8) For purposes of this Section 12.4, the following terms shall have
the meaning indicated:
(a) "Closing Price" with respect to any securities on any day
shall mean the closing sale price regular way on such day or, in case
no such sale takes place on such day, the average of the reported
closing bid and asked prices, regular way, in each case on the New York
Stock Exchange, or, if such security is not listed or admitted to
trading on such Exchange, on the principal security exchange or
quotation system in the United States on which such security is quoted
or listed or admitted to trading, or, if not quoted or listed or
admitted to trading on any securities exchange or quotation system in
the United States, on the Amsterdam Stock Exchange, or if not listed on
the Amsterdam Stock Exchange, the average of the closing bid and asked
prices of such security on the over-the-counter market on the day in
question as reported by the Nasdaq National Market or a similar
generally accepted reporting service, or if not so available, in such
manner as furnished by any New York Stock Exchange member firm selected
from time to time by the Board for that purpose, or a price determined
in good faith by the Board or, to the extent permitted by applicable
law, a duly authorized committee thereof, whose determination shall be
conclusive.
(b) "Current Market Price" shall mean the average of the daily
Closing Prices per Common Share for the ten consecutive Trading Days
immediately prior to the date in question; provided, however, that (1)
if the "ex" date (as hereinafter defined) for any event (other than the
issuance or distribution or Fundamental Change requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 12.4(1), (2), (3), (4), (5), (6) or (7) occurs
during such ten consecutive Trading Days, the Closing Price for each
Trading Day prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the same fraction by
which the Conversion Price is so required to be adjusted as a result of
such other event, (2) if the "ex" date for any event (other than the
issuance, distribution or Fundamental Change requiring such
computation) that requires an adjustment to the Conversion Price
pursuant to Section 12.4(1), (2), (3), (4), (5), (6) or (7) occurs on
or after the "ex" date for the issuance or distribution requiring such
computation and prior to the day in question, the Closing Price for
each Trading Day on and after the "ex" date for such other event shall
be adjusted by multiplying such Closing Price by the reciprocal of the
fraction by which the Conversion Price is so required to be adjusted as
a result of such other event, and (3) if the "ex" date for the
issuance, distribution or Fundamental Change requiring such computation
is prior to the day in question, after taking into account any
adjustment required pursuant to clause (1) or (2) of this proviso, the
Closing Price for each Trading Day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the fair market
value (as determined by the Board in a manner consistent with any
determination of such value for purposes of Section 12.4(4), (6) or (7)
whose determination shall be conclusive and described in a resolution
of the Board) of the evidences of indebtedness,
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shares of capital stock or assets being distributed applicable to one
Common Share as of the close of business on the day before such "ex"
date. For purposes of any computation under Section 12.4(6) or (7), the
Current Market Price of the Common Shares on any date shall be deemed
to be the average of the daily Closing Prices per Common Share for such
day and the next two succeeding Trading Days; provided, however, that
if the "ex" date for any event (other than the tender or exchange offer
requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 12.4(1), (2), (3), (4), (5), (6)
or (7) occurs on or after the Expiration Time for the tender or
exchange offer requiring such computation and prior to the day in
question, the Closing Price for each Trading Day on and after the "ex"
date for such other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the Conversion Price
is so required to be adjusted as a result of such other event. For
purposes of this paragraph, the term "ex" date, (1) when used with
respect to any issuance or distribution, means the first date on which
the Common Shares trades regular way on the relevant exchange or in the
relevant market from which the Closing Price was obtained without the
right to receive such issuance or distribution, (2) when used with
respect to any subdivision or combination of Common Shares, means the
first date on which the Common Shares trades regular way on such
exchange or in such market after the time at which such subdivision or
combination becomes effective, and (3) when used with respect to any
tender or exchange offer means the first date on which the Common
Shares trades regular way on such exchange or in such market after the
Expiration Time of such offer.
(c) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's length transaction.
(d) "Distribution Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which the
holders of Common Shares have the right to receive any cash, securities
or other property or in which the Common Shares (or other applicable
security) is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of
shareholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board or by statute,
contract or otherwise).
(e) "Trading Day" shall mean (x) if the applicable security is
listed or admitted for trading on the New York Stock Exchange or
another national security exchange, a day on which the New York Stock
Exchange or another national security exchange is open for business or
(y) if the applicable security is quoted on the Nasdaq National Market,
a day on which trades may be made on thereon or (z) if the applicable
security is not so listed, admitted for trading or quoted, any day
other than a Saturday or Sunday or a day on which banking institutions
in the State of New York are authorized or obligated by law or
executive order to close.
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(9) No adjustment in the Conversion Price shall be required unless such
adjustment (plus any adjustments not previously made by reason of this paragraph
(9)) would require an increase or decrease of at least one percent in such
price; provided, however, that any adjustments which by reason of this paragraph
(9) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this Article shall be made
to the nearest cent or to the nearest one-hundredth of a share, as the case may
be.
(10) The Company may make such reductions in the Conversion Price, for
the remaining term of the Securities or any shorter term, in addition to those
required by paragraphs (1), (2), (3), (4), (5), (6) or (7) of this Section 12.4,
as it considers to be advisable in order to avoid or diminish any income tax to
any holders of Common Shares or rights to purchase Common Shares resulting from
any dividend or distribution on Common Shares (or rights to acquire such shares)
or from any event treated as such for income tax purposes, resulting from any
dividend or distribution of shares or issuance of rights or warrants to purchase
or subscribe for shares or from any event treated as such for income tax
purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during the
period and the Board shall have made a determination that such reduction would
be in the best interests of the Company, which determination shall be
conclusive. Whenever the Conversion Price is reduced pursuant to the preceding
sentence, the Company shall give notice of the reduction to the Holders of
Securities in the manner provided in Section 1.6 at least fifteen (15) days
prior to the date the reduced Conversion Price takes effect, and such notice
shall state the reduced Conversion Price and the period during which it will be
in effect.
(11) No adjustment of the Conversion Price will result in zero or a
negative number. In the event that at the time of any conversion the Conversion
Price then in effect and the exchange rate of U.S. Dollars into Netherlands
Guilders prevailing in The Netherlands at the time of conversion would result in
an issue price of less than the par value of a Common Share, for purposes of
such conversions, the Conversion Price will be deemed to be the Conversion Price
that results in an issue price that is as close as possible to, but not less
than, such par value.
Section 12.5. Notice of Adjustments of Conversion Price.
Whenever the Conversion Price is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Price in
accordance with Section 12.4 and shall prepare a certificate signed by
the Treasurer, Chief Financial Officer or Vice President of Finance of
the Company setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based, and
such certificate shall promptly be filed with the Trustee and with each
Conversion Agent; and
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(2) a notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price shall promptly
be prepared and as soon as practicable thereafter, such notice shall be
provided by the Company to all Holders in accordance with Section 1.6.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at its office during normal business
hours.
Section 12.6. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other
distribution) on all or substantially all of its Common Shares payable
(i) otherwise than exclusively in cash or (ii) exclusively in cash in
an amount that would require any adjustment pursuant to Section 12.4;
or
(b) the Company shall authorize the granting to the holders of
its Common Shares of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other
rights that would require any adjustment pursuant to Section 12.4; or
(c) of any reclassification of the Common Shares of the
Company (other than a subdivision or combination of its outstanding
Common Shares), or of any consolidation or merger to which the Company
is a party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company; or
(e) the Company or any Subsidiary shall commence a tender
offer for all or a portion of the Company's outstanding Common Shares
(or shall amend any such tender offer); or
(f) of the split-up of the Company;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 10.2, and shall
cause to be provided to all Holders in accordance with Section 1.6, at least 20
days (or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record, expiration or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, rights,
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options or warrants, or, if a record is not to be taken, the date as of which
the holders of Common Shares of record to be entitled to such dividend,
distribution, rights, options or warrants are to be determined, (y) the date on
which the right to make tenders under such tender offer expires or (z) the date
on which such reclassification, consolidation, merger, split-up, share exchange,
transfer, sale, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Shares
of record shall be entitled to exchange their Common Shares for securities, cash
or other property deliverable upon such reclassification, consolidation, merger,
split-up, share exchange, conveyance, transfer, sale, lease, dissolution,
liquidation or winding up. If at the time the Trustee shall not be the
Conversion Agent, a copy of such notice and any notice referred to in the
following paragraph shall also forthwith be filed by the Company with the
Trustee.
The preceding paragraph to the contrary notwithstanding, the Company
shall cause to be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 10.2, and shall cause to be
provided to all Holders in accordance with Section 1.6, notice of (i) any tender
offer by the Company or any Subsidiary for all or any portion of the Common
Shares at or about the time that such notice of tender offer is provided to the
public generally or (ii) any split-up of the Company at or about the time notice
is given in a Netherlands newspaper of the fact that a proposal to split-up has
been filed with the trade register of The Netherlands (such notice to be sent to
all Holders within five days after receipt of such notice by the Trustee or
Conversion Agent from the Company).
[Section 12.7. Company to Reserve Common Shares.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Shares, for the
purpose of effecting the conversion of Securities, the full number of Common
Shares then issuable upon the conversion of all Outstanding Securities.]
Section 12.8. Taxes on Conversions.
The Company will pay any and all taxes and duties that may be payable
in respect of the issue or delivery of Common Shares on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax or
duty which may be payable in respect of any transfer involved in the issue and
delivery of Common Shares in a name other than that of the Holder of the
Security or Securities to be converted, and no such issue or delivery shall be
made unless and until the Person requesting such issue has paid to the Company
the amount of any such tax or duty, or has established to the satisfaction of
the Company that such tax or duty has been paid.
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Section 12.9. Covenant as to Common Shares.
The Company agrees that all Common Shares which may be delivered upon
conversion of Securities, upon such delivery, will have been duly authorized and
validly issued and will be fully paid and nonassessable and, except as provided
in Section 12.8, the Company will pay all taxes, liens and charges with respect
to the issue thereof.
Section 12.10. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee or the Paying Agent in Amsterdam, The Netherlands or its agent to be
canceled by or at the direction of the Trustee, which shall dispose of the same
as provided in Section 3.9.
Section 12.11. Provision in Case of Consolidation, Merger, Split-up or Sale of
Assets.
In case of any consolidation of the Company with, or merger of the
Company into, any other Person, or any merger of another Person into the Company
(other than a merger which does not result in any reclassification, conversion,
exchange or cancellation of outstanding Common Shares of the Company) or any
sale or transfer of all or substantially all of the assets of the Company or a
split-up of the Company pursuant to which the assets and liabilities of the
Company are transferred to one or more Persons and the Company ceases to exist
or otherwise ceases to remain fully liable for the Indenture Obligations, the
Person formed by such consolidation or resulting from such merger or which
acquires such assets, or in the case of such split-up, at least one of the
Persons which acquires assets or liabilities of the Company pursuant to such
split-up (which shall include at least one Person which, following the
conclusion of such split-up, would be fully liable on all of the Securities and
under the Indenture as required by Section 7.3), as the case may be, shall
execute and deliver to the Trustee a supplemental indenture providing that the
Holder of each Security then Outstanding shall have the right thereafter, during
the period such Security shall be convertible as specified in Section 12.1, to
convert such Security only into the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, split-up, sale or
transfer by a holder of the number of Common Shares of the Company into which
such Security might have been converted immediately prior to such consolidation,
merger, split-up, sale or transfer, assuming such holder of Common Shares of the
Company (i) is not a Person with which the Company consolidated or into which
the Company merged or which merged into the Company or to which such sale or
transfer was made or which is not a Person that has acquired assets or
liabilities pursuant to such split-up of the Company, as the case may be (a
"Constituent Person"), or an Affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such consolidation, merger
or split-up, sale or transfer (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
split-up, sale or transfer is not the same for each Common Share of the Company
held immediately prior to such consolidation, merger, split-up, sale or transfer
by others than a Constituent
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Person or an Affiliate thereof and in respect of which such rights of election
shall not have been exercised ("Non-electing Share"), then for the purpose of
this Section 12.11 the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, split-up, sale or transfer by the
holders of each Non-electing Share shall be deemed to be the kind and amount so
receivable per share by a plurality of the Non-electing Shares), and further
assuming, if such consolidation, merger, split-up, transfer or sale occurs prior
to the later of March 23, 1997 and the receipt of Securities in definitive form
by the Holder (in the case of Securities initially represented by a Temporary
Global Bearer Security), that the Security was convertible at the time of such
occurrence at the Conversion Price specified in Section 12.1 as adjusted from
the issue date of such Security to such time as provided in this Article Twelve.
Such supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article. The above provisions of this Section 12.11 shall similarly apply to
successive consolidations, mergers, split-ups, sales or transfers. Notice of the
execution of such a supplemental indenture shall be given by the Company to the
Holder of each Security as provided in Section 1.6 promptly upon such execution.
Neither the Trustee, any Paying Agent nor any Conversion Agent shall be
under any responsibility to determine the correctness of any provisions
contained in any such supplemental indenture relating either to the kind or
amount of shares of stock or other securities or property or cash receivable by
Holders of Securities upon the conversion of their Securities after any such
consolidation, merger, split-up, conveyance, transfer, sale or lease or to any
such adjustment, but may accept as conclusive evidence of the correctness of any
such provisions, and shall be protected in relying upon, an Opinion of Counsel
with respect thereto, which the Company shall cause to be furnished to the
Trustee upon request.
In the event of a split-up of the Company pursuant to which all or a
portion of the assets and liabilities of the Company are transferred to one or
more Persons and the Company continues to exist and remains fully liable for the
Indenture Obligations, such split-up shall be treated as a distribution to all
holders of Common Shares which will be subject to the provisions of Section
12.4(4) of this Indenture.
Section 12.12. Responsibility of Trustee for Conversion Provisions.
The Trustee, subject to the provisions of Section 6.1, and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Conversion Price, or with respect to the nature or extent
of any such adjustment when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same, or whether a supplemental indenture need be entered into. Neither the
Trustee, subject to the provisions of Section 6.1, nor any Conversion Agent
shall be accountable with respect to the validity or value (or the kind or
amount) of any Common Shares, or of any other securities or property or cash,
which may
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at any time be issued or delivered upon the conversion of any Security; and it
or they do not make any representation with respect thereto. Neither the
Trustee, subject to the provisions of Section 6.1, nor any Conversion Agent
shall be responsible for any failure of the Company to make or calculate any
cash payment or to issue, transfer or deliver any Common Shares or share
certificates or other securities or property or cash upon the surrender of any
Security for the purpose of conversion; and the Trustee, subject to the
provisions of Section 6.1, and any Conversion Agent shall not be responsible for
any failure of the Company to comply with any of the covenants of the Company
contained in this Article.
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
Section 13.1. Agreement of Subordination.
The Company covenants and agrees, and each Holder of Securities issued
hereunder and any coupons appertaining thereto by his acceptance thereof
likewise covenants and agrees, that all Securities and any coupons appertaining
thereto shall be issued subject to the provisions of this Article Thirteen; and
each Person holding any Security or any coupon, whether upon original issue or
upon transfer, assignment or exchange thereof, accepts and agrees to be bound by
such provisions.
The payment of the principal of, premium, if any, and interest on all
Securities and any coupons appertaining thereto (including, but not limited to,
the Redemption Price with respect to the Securities called for redemption in
accordance with Article Eleven, or the Repurchase Price with respect to
Securities submitted for repurchase in accordance with Article Fourteen, as the
case may be, as provided in this Indenture and Additional Amounts, if any, and
Liquidated Damages, if any) issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and subject in right of payment to
the prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article Thirteen shall prevent the occurrence of
any default or Event of Default hereunder.
Section 13.2. Payments to Noteholders.
No payment shall be made with respect to the principal of, or premium,
if any, or interest on the Securities or coupons appertaining thereto
(including, but not limited to, the Redemption Price with respect to the
Securities to be called for redemption in accordance with Article Eleven or the
Repurchase Price with respect to Securities submitted for repurchase in
accordance with Article Fourteen, as the case may be, as provided in this
Indenture and Additional Amounts, if any,
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and Liquidated Damages, if any), except payments and distributions made by the
Trustee as permitted by the first or second paragraph of Section 13.5, if:
(i) a default in the payment of principal,
premium, interest, rent or other obligations due on any Senior Indebtedness
occurs and is continuing (or, in the case of Senior Indebtedness for which there
is a period of grace, in the event of such a default that continues beyond the
period of grace, if any, specified in the instrument or lease evidencing such
Senior Indebtedness), unless and until such default shall have been cured or
waived or shall have ceased to exist; or
(ii) a default, other than a payment
default, on Designated Senior Indebtedness occurs and is continuing that then
permits holders of such Designated Senior Indebtedness to accelerate its
maturity and the Trustee receives a notice of the default (a "Payment Blockage
Notice") from a Representative of Designated Senior Indebtedness or the Company.
If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until (A) at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice, and (B) all scheduled payments of principal, premium, if any,
and interest on the Securities that have come due have been paid in full in
cash. No nonpayment default that existed or was continuing on the date of
delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the
basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Securities upon the earlier of:
(1) the date upon which the default is cured or waived or ceases to
exist, or
(2) in the case of a default referred to in clause (ii) above, 179 days
pass after notice is received if the maturity of such Designated Senior
Indebtedness has not been accelerated,
unless this Article Thirteen otherwise prohibits the payment or distribution at
the time of such payment or distribution.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, moratorium of
payments, insolvency, receivership or other proceedings, all amounts due or to
become due upon all Senior Indebtedness shall first be paid in full in cash or
other payment satisfactory to the holders of such Senior Indebtedness, or
payment thereof in accordance with its terms provided for in cash or other
payment satisfactory to the holders of such Senior Indebtedness before any
payment is made on account of the principal of, premium, if any, or interest on
the Securities or any coupons appertaining thereto (except payments made
pursuant to Article Four from monies deposited with
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the Trustee pursuant thereto prior to commencement of proceedings for such
dissolution, winding-up, liquidation or reorganization); and upon any such
dissolution or winding-up or liquidation or reorganization of the Company or
bankruptcy, insolvency, receivership or other proceeding, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders or the Trustee
would be entitled, except for the provision of this Article Thirteen, shall
(except as aforesaid) be paid by the Company or by any receiver, trustee in
bankruptcy, moratorium of payments, liquidating trustee, agent or other Person
making such payment or distribution, or by the Holders or by the Trustee under
this Indenture if received by them or it, directly to the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, or as otherwise required by law or a
court order) or their Representative or Representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness in full, in cash
or other payment satisfactory to the holders of such Senior Indebtedness, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness, before any payment or distribution is made to the Holders
or to the Trustee.
For purposes of this Article Thirteen, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article Thirteen with
respect to the Securities to the payment of all Senior Indebtedness which may at
the time be outstanding; provided that (i) the Senior Indebtedness is assumed by
the new corporation, if any, resulting from any reorganization or readjustment,
and (ii) the rights of the holders of Senior Indebtedness (other than leases
which are not assumed by the Company or the new corporation, as the case may be)
are not, without the consent of such holders, altered by such reorganization or
readjustment. The merger of the Company into another corporation, the split-up
of the Company pursuant to which the Company ceases to exist or ceases to be the
obligor of all the Indenture Obligations or the liquidation or dissolution of
the Company following the conveyance or transfer of its property as an entirety,
or substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Seven shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 13.2
if such other corporation shall, as a part of such merger, split-up, conveyance
or transfer, comply with the conditions stated in Article Seven.
In the event of the acceleration of the Securities because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
Holder of Securities or coupon appertaining thereto in respect of the principal
of, premium, if any, or interest on the Securities or coupon appertaining
thereto (including, but not limited to, the Redemption Price with respect to the
Securities called for redemption in accordance with Article Eleven or the
Repurchase Price with respect to Securities submitted for repurchase in
accordance with Article Fourteen, as the case may be, as provided in this
Indenture and Additional Amounts, if any, and Liquidated Damages, if any),
except payments and distributions made by the Trustee as permitted by the first
or second paragraph of Section 13.5, until all Senior Indebtedness has been paid
in full in cash or other payment satisfactory
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to the holders of Senior Indebtedness or such acceleration is rescinded in
accordance with the terms of this Indenture. If payment of the Securities is
accelerated because of an Event of Default, the Company shall promptly notify
holders of Senior Indebtedness of the acceleration.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Securities before all Senior Indebtedness is paid
in full in cash or other payment satisfactory to the holders of such Senior
Indebtedness, or provision is made for such payment thereof in accordance with
its terms in cash or other payment satisfactory to the holders of such Senior
Indebtedness, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness or their Representative or Representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Company, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in cash or other payment satisfactory to the holders of
such Senior Indebtedness, after giving effect to any concurrent payment or
distribution, or provision therefor, to or for the holders of such Senior
Indebtedness.
Nothing in this Article Thirteen shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 6.7. This Section 13.2 shall be
subject to the further provisions of Section 13.5.
Section 13.3. Subrogation of Securities.
Subject to the payment in full of all Senior Indebtedness, the Holders
of the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article Thirteen (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to other
indebtedness of the Company to substantially the same extent as the Securities
are subordinated and is entitled to like rights of subrogation) to the rights of
the holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Indebtedness
until the principal, premium, if any, and interest on the Securities shall be
paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article Thirteen, and no payment over
pursuant to the provisions of this Article Thirteen, to or for the benefit of
the holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment by
the Company to or on account of the Senior Indebtedness; and no payments or
distributions of cash, property or securities to or for the benefit of the
Holders of the Securities or coupons appertaining thereto pursuant to the
subrogation provisions of this Article Thirteen, which would otherwise have
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been paid to the holders of Senior Indebtedness shall be deemed to be a payment
by the Company to or for the account of the Securities. It is understood that
the provisions of this Article Thirteen are and are intended solely for the
purposes of defining the relative rights of the Holders of the Securities, on
the one hand, and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article Thirteen or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of (and
premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Thirteen
of the holders of Senior Indebtedness in respect of cash, property or securities
of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article Thirteen, the Trustee, subject to the provisions of Section 6.1,
and the Holders of the Securities shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article
Thirteen.
Section 13.4. Authorization to Effect Subordination.
Each Holder of a Security by the Holder's acceptance thereof authorizes
and directs the Trustee on the Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article Thirteen and appoints the Trustee to act as the Holder's
attorney-in-fact for any and all such purposes. If the Trustee does not file a
proper proof of claim or proof of debt in the form required in any proceeding
referred to in Section 5.3 hereof at least 30 days before the expiration of the
time to file such claim, the holders of any Senior Indebtedness or their
Representatives are hereby authorized to file an appropriate claim for and on
behalf of the Holders of the Securities.
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Section 13.5. Notice to Trustee.
The Company shall give prompt written notice in the form of an
Officers' Certificate to a Responsible Officer of the Trustee and to any Paying
Agent of any fact known to the Company which would prohibit the making of any
payment of monies to or by the Trustee or any Paying Agent in respect of the
Securities or any coupons appertaining thereto pursuant to the provisions of
this Article Thirteen. Notwithstanding the provisions of this Article Thirteen
or any other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of any
payment of monies to or by the Trustee in respect of the Securities or any
coupons appertaining thereto pursuant to the provisions of this Article
Thirteen, unless and until a Responsible Officer of the Trustee shall have
received written notice thereof at the Corporate Trust Office from the Company
(in the form of an Officers' Certificate) or a Representative or a holder or
holders of Senior Indebtedness or from any trustee thereof; and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 6.1, shall be entitled in all respects to assume that no such facts
exist; provided that if on a date not fewer than two Business Days prior to the
date upon which by the terms hereof any such monies may become payable for any
purpose (including, without limitation, the payment of the principal of, or
premium, if any, or interest on any Security) the Trustee shall not have
received, with respect to such monies, the notice provided for in this Section
13.5, then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such monies and to apply
the same to the purpose for which they were received, and shall not be affected
by any notice to the contrary which may be received by it on or after such prior
date.
Notwithstanding anything in this Article Thirteen to the contrary,
nothing shall prevent any payment by the Trustee to the Holders of monies
deposited with it pursuant to Section 4.1, and any such payment shall not be
subject to the provisions of Section 13.1 or 13.2.
The Trustee, subject to the provisions of Section 6.1, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such notice has been given
by a Representative or a holder of Senior Indebtedness or a trustee on behalf of
any such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article Thirteen, the Trustee may request such person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such person, the extent to which such person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such person under this Article Thirteen, and if such
evidence is not furnished the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.
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Section 13.6. Trustee's Relation to Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article Thirteen in respect of any Senior Indebtedness
at any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Thirteen, and no implied covenants
or obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 6.1, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to Holders of Securities or
any coupons appertaining thereto, the Company or any other person money or
assets to which any holder of Senior Indebtedness shall be entitled by virtue of
this Article Thirteen or otherwise.
Section 13.7. No Impairment of Subordination.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
otherwise be charged with.
Section 13.8. Certain Conversions Deemed Payment.
For the purposes of this Article Thirteen only, (1) the issuance and
delivery of junior securities upon conversion of Securities in accordance with
Article Twelve shall not be deemed to constitute a payment or distribution on
account of the principal of (or premium, if any) or interest on Securities or on
account of the purchase or other acquisition of Securities, and (2) the payment,
issuance or delivery of cash (except in satisfaction of fractional shares
pursuant to Section 12.2), property or securities (other than junior securities)
upon conversion of a Security shall be deemed to constitute payment on account
of the principal of such Security. For the purposes of this Section 13.8, the
term "junior securities" means (a) shares of any stock of any class of the
Company, or (b) securities of the Company which are subordinated in right of
payment to all Senior Indebtedness which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Securities are so subordinated as provided in this
Article. Nothing contained in this Article Thirteen or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Indebtedness and the
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<PAGE> 153
Holders, the right, which is absolute and unconditional, of the Holder of any
Security to convert such Security in accordance with Article Twelve.
Section 13.9. Article Applicable to Paying Agents.
If at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article shall (unless the context otherwise requires) be construed
as extending to and including such Paying Agent within its meaning as fully for
all intents and purposes as if such paying agent were named in this Article in
addition to or in place of the Trustee; provided, however, that the first
paragraph of Section 13.5 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.
Section 13.10. Senior Indebtedness Entitled to Rely.
The holders of Senior Indebtedness (including, without limitation,
Designated Senior Indebtedness) shall have the right to rely upon this Article
Thirteen, and no amendment or modification of the provisions contained herein
shall diminish the rights of such holders unless such holders shall have agreed
in writing thereto.
ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A FUNDAMENTAL CHANGE
Section 14.1. Right to Require Repurchase.
In the event that a Fundamental Change (as hereinafter defined) shall
occur, then each Holder shall have the right, at the Holder's option, to require
the Company to repurchase, and upon the exercise of such right the Company shall
repurchase, all of such Holder's Securities, or any portion of the principal
amount thereof that is equal to U.S.$1,000 or any integral multiple of
U.S.$1,000 in excess thereof (provided that no single Bearer Security may be
repurchased in part, and no single Registered Security may be repurchased in
part unless the portion of the principal amount of such Registered Security to
be Outstanding after such repurchase is equal to U.S.$5,000 or integral
multiples of U.S.$1,000 in excess thereof), on the date (the "Repurchase Date")
that is 45 days after the date of the Company Notice (as defined in Section
14.2) at the following prices (expressed as percentages of the principal amount)
(the "Repurchase Price") in the event of a Fundamental Change occurring during
the 12-month period beginning December 15 (plus interest accrued to, but
excluding, the Repurchase Date):
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<PAGE> 154
<TABLE>
<CAPTION>
Year Percentage Year Percentage
- ---- ---------- ---- ----------
<S> <C> <C> <C>
1996 . . . . . . . . . . . . . . .104.5% 1999 . . . . . . . . . . . . . . .101.8%
1997 . . . . . . . . . . . . . . .103.6 2000 . . . . . . . . . . . . . . .100.9
1998 . . . . . . . . . . . . . . .102.7
</TABLE>
and 100% at December 15, 2001; provided that if the Applicable Price with
respect to the Fundamental Change is less than the Reference Market Price, the
Company shall repurchase such Notes at a price equal to the foregoing Repurchase
Price multiplied by the fraction obtained by dividing the Applicable Price by
the Reference Market Price; provided, further, that installments of interest on
Bearer Securities whose Stated Maturity is on or prior to the Repurchase Date
shall be payable only upon presentation and surrender of coupons for such
interest (at an office or agency outside the United States, except as otherwise
provided in the form of Bearer Security set forth in Section 2.2(a)); and
provided, further, that installments of interest on Registered Securities whose
Stated Maturity is on or prior to the Repurchase Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such on the relevant Record Date according to their terms and the provisions of
Section 3.7. Such right to require the repurchase of the Securities shall not
continue after a discharge of the Company from its obligations with respect to
the Securities in accordance with Article Four, unless a Fundamental Change
shall have occurred prior to such discharge. Whenever in this Indenture
(including Sections 2.2, 3.1, 5.1(2) and 5.8) there is a reference, in any
context, to the principal of any Security as of any time, such reference shall
be deemed to include reference to the Repurchase Price payable in respect of
such Security to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Indenture shall not be construed as excluding the Repurchase
Price in those provisions of this Indenture when such express mention is not
made.
Section 14.2. Notices; Method of Exercising Repurchase Right, Etc.
(a) Unless the Company shall have theretofore called for redemption all
of the Outstanding Securities, on or before the 30th day after the occurrence of
a Fundamental Change, the Company or, at the request and expense of the Company,
the Trustee, shall give to all Holders of Securities, in the manner provided in
Section 1.6, notice (the "Company Notice") of the occurrence of the Fundamental
Change and of the repurchase right set forth herein arising as a result thereof.
The Company shall also deliver a copy of such notice of a repurchase right to
the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price,
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<PAGE> 155
(4) a description of the procedure which a Holder must follow
to exercise a repurchase right, and the place or places where such
Securities, together with all coupons appertaining thereto, if any,
maturing after the Repurchase Date, are to be surrendered for payment
of the Repurchase Price and accrued interest, if any,
(5) that on the Repurchase Date the Repurchase Price, and
accrued interest, if any, will become due and payable upon each such
Security designated by the Holder to be repurchased, and that interest
thereon shall cease to accrue on and after said date, and
(6) the Conversion Price then in effect, the date on which the
right to convert the principal amount of the Securities to be
repurchased will terminate and the place or places where such
Securities, together with all unmatured coupons and any matured coupons
in default appertaining thereto, may be surrendered for conversion.
No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this Article
are inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall deliver to the
Trustee or any Paying Agent on or before the 30th day after the date of the
Company Notice (i) written notice of the Holder's exercise of such right, which
notice shall set forth the name of the Holder, the principal amount of the
Securities to be repurchased (and, if any Registered Security is to repurchased
in part, the serial number thereof, the portion of the principal amount thereof
to be repurchased and the name of the Person in which the portion thereof to
remain Outstanding after such repurchase is to be registered) and a statement
that an election to exercise the repurchase right is being made thereby, and
(ii) the Securities with respect to which the repurchase right is being
exercised, together with all coupons, if any, appertaining thereto maturing
after the Repurchase Date; provided, however, that Bearer Securities shall be
delivered only to an office of a Paying Agent located outside the United States
except in the limited circumstances described in Section 10.2. Such written
notice shall be irrevocable, except that the right of the Holder to convert the
Securities with respect to which the repurchase right is being exercised shall
continue until the close of business on the Business Day prior to the Repurchase
Date.
(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
or the Paying Agent in Amsterdam, The Netherlands the Repurchase Price in cash,
as provided above, for payment to the Holder on the Repurchase Date together
with accrued and unpaid interest to the Repurchase Date payable with respect to
the Securities as to which their purchase right has been exercised; provided,
however, that installments of interest that mature on or prior to the Repurchase
Date shall be payable in cash, in the case of Registered Securities, to the
Holders of such Securities, or one or more Predecessor
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<PAGE> 156
Securities, registered as such at the close of business on the relevant Regular
Record Date and, in the case of Bearer Securities, to the holder of the coupon
with respect thereto, in each case according to the terms and provisions of
Article Three; and provided, further, that Bearer Securities and coupons shall
be so payable only at an office or agency outside the United States (except as
otherwise provided in the form of Bearer Security set forth in Section 2.2(a)).
(d) If any Bearer Security surrendered for repurchase shall not be
accompanied by all appurtenant coupons maturing after the Repurchase Date, such
Security may be paid after deducting from the Repurchase Price an amount equal
to the face amount of all such missing coupons or the surrender of such missing
coupons or coupon may be waived by the Company and the Trustee, if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to any Paying Agent any such missing coupon in respect
of which a deduction shall have been made from the Repurchase Price, if any,
such Holder shall be entitled to receive the amount so deducted without interest
thereon; provided, however, that interest represented by coupons shall be
payable only upon presentation and surrender of those coupons at an office or
agency located outside of the United States (except as otherwise provided in the
form of Bearer Security set forth in Section 2.2(a)).
(e) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such
Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the rate of 4 1/2% per annum, and each Security shall remain convertible into
Common Shares until the principal of such Security (or portion thereof, as the
case may be) shall have been paid or duly provided for.
(f) Any Registered Security which is to be repurchased only in part
shall be surrendered to the Trustee (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and make available for delivery to the Holder of
such Registered Security without service charge, a new Registered Security or
Registered Securities, containing identical terms and conditions, each in an
authorized denomination in aggregate principal amount equal to and in exchange
for the unrepurchased portion of the principal of the Registered Security so
surrendered.
(g) All securities delivered for repurchase shall be delivered to the
Trustee, the Paying Agent or any other agents (as shall be set forth in the
Company Notice) to be canceled by or at the direction of the Trustee, which
shall dispose of the same as provided in Section 3.9.
Section 14.3. Merger, Consolidation, etc.
In the case of any merger, consolidation, split-up, sale or transfer of
all or substantially all of the assets of the Company to which Section 12.11
applies, in which the Common Shares of the
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<PAGE> 157
Company is changed or exchanged as a result into the right to receive shares of
stock and other securities or property or assets (including cash) which includes
Common Shares of the Company or common stock of another Person that are, or upon
issuance will be, traded on a United States national securities exchange or
approved for trading on an established automated over-the-counter trading market
in the United States and such shares constitute at the time such change or
exchange becomes effective in excess of 50% of the aggregate fair market value
of such shares of stock and other securities, property and assets (including
cash) (as determined by the Company, which determination shall be conclusive and
binding), then the Person resulting from such merger or consolidation or
split-up or which acquires the properties or assets (including cash) of the
Company, as the case may be, shall execute and deliver to the Trustee a
supplemental indenture (which shall comply with the Trust Indenture Act as in
force at the date of execution of such supplemental indenture) modifying the
provisions of this Indenture relating to the right of Holders to cause the
Company to repurchase the Securities following a Fundamental Change, including
without limitation the applicable provisions of this Article Fourteen and the
definitions of the Common Shares and Fundamental Change, as appropriate, and
such other related definitions set forth herein as determined in good faith by
the Company (which determination shall be conclusive and binding), to make such
provisions apply in the event of a subsequent Fundamental Change to the common
stock and the issuer thereof if different from the Company and Common Shares of
the Company (in lieu of the Company and the Common Shares of the Company).
ARTICLE FIFTEEN
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 15.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after the Regular
Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of Registered
Securities as of such Regular Record Date, and
(b) at such other times as the Trustee may reasonably request
in writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished;
provided, however, that no such list need be furnished so long as the Trustee is
acting as Security Registrar.
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<PAGE> 158
Section 15.2. Preservation of Information.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 15.1, if any, and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it pursuant to Section
15.1 upon receipt of a new list so furnished.
(b) After this Indenture has been qualified under the Trust Indenture
Act, the rights of Holders to communicate with other Holders with respect to
their rights under this Indenture or under the Securities, and the corresponding
rights and duties of the Trustee, shall be as provided by the Trust Indenture
Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
Section 15.3. Reports by Trustee.
(a) After this Indenture has been qualified under the Trust Indenture
Act, the Trustee shall transmit to Holders such reports concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
(b) After this Indenture has been qualified under the Trust Indenture
Act, a copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which the
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when the Securities are listed on any stock exchange.
Section 15.4. Reports by Company.
After this Indenture has been qualified under the Trust Indenture Act,
the Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 shall be filed with
the Trustee within 15 days after the same is so required to be filed with the
Commission.
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<PAGE> 159
ARTICLE SIXTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 16.1. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or
interest on any Security and no recourse under or upon any obligation, covenant
or agreement of the Company in this Indenture or in any supplemental indenture
or in any Security, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, employee, agent,
officer, or director or subsidiary, as such, past, present or future, of the
Company or of any successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that all such liability is hereby
waived and released as a condition of, and as a consideration for, the execution
of this Indenture and the issue of the Securities.
---------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<PAGE> 160
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and, where applicable, their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
BAAN COMPANY N.V.
By /s/ Jan Baan
-------------------------------
Jan Baan, on behalf of Jan Baan B.V.,
Managing Director with the title of
Chief Executive Officer
Attest:
[ILLEGIBLE]
- ---------------------------------
Name:
Title: Secretary to the Board and
General Counsel
MARINE MIDLAND BANK,
Trustee
By /s/ EILEEN M. HUGHES
----------------------------------
Name: Eileen M. Hughes
Title: Assistant Vice President
Attest:
/s/ TERESA SANTOS
- ---------------------------------
Name: Teresa Santos
Title: Asst. Corporate Trust Officer
<PAGE> 161
ANNEX A -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to Section 3.5(b)(i), (iii) and (v)
of the Indenture)
Marine Midland Bank,
as Trustee
140 Broadway, 12th Floor
New York, New York 10005
Re: 4.5% Convertible Subordinated Notes due 2001 of Baan Company
N.V. (the "Securities")
Reference is made to the Indenture, dated as of December 15, 1996 (the
"Indenture"), from Baan Company N.V. (the "Company") to Marine Midland Bank, as
Trustee. Terms used herein and defined in the Indenture or in Regulation S or
Rule 144 under U.S. Securities Act of 1933 (the "Securities Act") are used
herein as so defined.
This certificate relates to U.S. $ principal amount of Securities,
which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
CERTIFICATE No(s).
The person in whose name this certificate is executed below (the "Undersigned')
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Registered Security,
they are held through the Depositary or an Agent Member in the name of the
Undersigned, as or on behalf of the Owner. If the Specified Securities are not
represented by a Global Registered Security, they are registered in the name of
the Undersigned, as or on behalf of the Owner.
A-1
<PAGE> 162
The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a Regulation S
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
904 or Rule 144 under the Securities Act and with all applicable securities laws
of the states of the United States and other jurisdictions. Accordingly, the
Owner hereby further certifies as follows:
(1) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities,
an affiliate of the Company or any such distributor or a
person acting on behalf of any of the foregoing;
(B) the offer of the Specified Securities was not
made to a person in the United States;
(C) either;
(i) at the time the buy order was
originated, the Transferee was outside the United
States or the Owner and any person acting on its
behalf reasonably believed that the Transferee was
outside the United States, or
(ii) the transaction is being executed in,
on or through the facilities of the Eurobond market,
as regulated by the Association of International Bond
Dealers, or another designated offshore securities
market and neither the Owner nor any person acting on
its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the
United States by or on behalf of the Owner or any affiliate
thereof;
(E) if the Owner is a dealer in securities or has
received a selling concession, fee or other remuneration in
respect of the Specified Securities, and the transfer is to
occur during the Regulation S Restricted Period, then the
requirements of Rule 904(c)(1) have been satisfied; and
(F) the transaction is not part of a plan or scheme
to evade the registration requirements of the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period
of at least two years (computed in accordance with paragraph
(d) of Rule 144) has elapsed since the date
A-2
<PAGE> 163
the Specified Securities were acquired from the Company or
from an affiliate (as such term is defined in Rule 144) of the
Company, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and
notice requirements of paragraphs (e), (f) and (h) of Rule
144; or
(B) the transfer is occurring after a period of at
least three years has elapsed since the date Specified
Securities were acquired from the Company or from an affiliate
(as such term is defined in Rule 144) of the Company,
whichever is later, and the Owner is not, and during the
preceding three months has not been, an affiliate of the
Company.
A-3
<PAGE> 164
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated: (Print the name of the
Undersigned, as such term is
defined in the second paragraph
of this certificate.)
By:
Name:
Title:
(If the Undersigned is a
corporation, partnership or
fiduciary, the title of the
person signing on behalf of the
Undersigned must be stated.)
A-4
<PAGE> 1
EXHIBIT 4.4
The undersigned:
Martin van Olffen, "notaris" (civil law notary), practicing in Amsterdam, the
Netherlands, hereby declares, that to the best of his knowledge
(i) the articles of association of the limited liability company:
Baan Company N.V.
having its corporate seat in Barneveld, the Netherlands,
correspond with the document in the Dutch language which is attached
to this certificate;
(ii) the document in the English language attached hereto is an accurate,
unofficial translation of such articles of association; and
(iii) the articles of association were last amended by deed, executed before
Martin van Olffen, notaris, practicing in Amsterdam, on the 29th day
of May, 1996, for which amendment the required ministerial
declaration of non-objection was granted on the 29th day of May, 1996,
number N.V. 256.619.
Signed in Amsterdam on the 20th day of December, 1996.
-1-
<PAGE> 2
06-06-96*
70095906.bbe/dt
TRANSLATION OF THE ARTICLES
OF ASSOCIATION OF BAAN COMPANY N.V.
WITH CORPORATE SEAT IN BARNEVELD, THE NETHERLANDS
AS PER MAY 29, 1996
NAME AND REGISTERED OFFICE
Article 1.
The name of the company shall be:
Baan Company N.V.
and its registered office shall be at Barneveld.
OBJECTS
Article 2.
The objects of the company are:
a. the financing of -, the participating in -, the administration of -,
the managing of - and the cooperation or merger with other companies
and/or enterprises, irrespective of object or legal form;
b. the developing and managing of software, the granting of licenses, the
purchasing and selling of software, as well as the purchasing and
selling of computer systems;
c. the acquisition, alienation, letting and hiring, managing and
operating of - and the trade in registered property and movable
properties;
d. the investment of capital in securities, registered property, debt
claims and other capital values;
e. the rendering of advisory services with regard to management as well
as the giving of commercial advice and the acting as an intermediary
at the realization of (trade) transactions;
f. the carrying out of all that is connected with the aforementioned in
the broadest sense.
-2-
<PAGE> 3
DURATION
Article 3.
The company shall continue to exist for an indefinite period of time.
CAPITAL AND SHARES
Article 4.
1. The authorized capital of the company amounts to three million five
hundred thousand guilders (NLG 3,500,000.--) divided into three
hundred-and-fifty million (350,000,000) shares of one cent (NLG 0.01)
nominal each.
2. The shares shall be registered shares or bearer shares, such at the
option of the holder. The shares shall be in bearer form, unless the
shareholder, explicitly or implicitly, expresses the desire that he
wants a share in registered form.
3. Share certificates for bearer shares shall be available as a body
construction with a simplified dividend sheet (CF certificates); such
share certificates shall be referred to in these articles of
association as share certificates Model A. The dividend sheet of a
share certificate Model A shall only be issued by the company to a
custodian to be designated by the shareholder. Such a designated
custodian must have been admitted as such by the management board and
he must have pledged himself towards the company (a) not to hand over
the dividend sheets, except to other custodians admitted by the
management board or to the company, (b) to have the custody of the
dividend sheets administered by an institution commissioned to do so
by the management board.
4. Share certificates Model A shall be available for one share and
furthermore for such a higher amount of shares as shall be determined
by the management board.
5. Registered shares shall be available:
- in the form of an entry in the register of shareholders without
the issuance of a share certificate; such shares shall be referred
to in these articles of association as shares Model I;
-3-
<PAGE> 4
- and -in so far as the management board so stipulates- in the form
of an entry in the register of shareholders, with the issuance of
a share certificate, which share certificate shall consist of a
body without a dividend sheet; such shares and share certificates
shall in these articles of association be referred to as shares
and share certificates Model II.
6. The management board may determine that the entry of shares shall be
possible for one or more shares at the same time, the amounts of
shares to be determined by the management board.
7. Share certificates Model II shall be available for such amounts of
shares as shall be determined by the management board.
8. All share certificates shall be signed by or on behalf of one member
of the management board; the signing may be effected by means of a
facsimile signature. Moreover, the share certificates Model II
shall, and the other share certificates may, be co-signed by one or
more persons to be designated thereto by the management board.
9. All share certificates shall bear numbers and/or letters in the manner
to be determined by the management board.
10. Subject to approval by the supervisory board, the management board may
resolve that for transactions at foreign exchanges share certificates
shall be issued that shall meet the requirements of the foreign
exchange (exchanges) involved and that they shall not be provided with
any dividend sheet.
11. In these articles of association a 'share certificate' shall also be
understood to mean a certificate for more than one share.
-4-
<PAGE> 5
LOSS/DAMAGE OF SHARE CERTIFICATES
Article 5.
1. At a request in writing by the person entitled to share certificates,
new certificates or duplicates bearing the same particulars may be
issued for share certificates or parts thereof which have been lost or
damaged, if the applicant furnishes proper proof of his right and -in
case of loss- of the loss to the satisfaction of the management board,
and furthermore on such conditions as the management board shall deem
necessary.
2. With respect to the issue of new or duplicate certificates for bearer
share certificates in the cases that qualify for issuance according to
the management board, the condition may be stipulated that the
particulars of the lost certificates shall be announced three times,
each time with an interval of at least one month, in at least three
newspapers to be selected by the management board, stating the request
made and only then the new or duplicate certificates may be issued not
until six months after the last announcement, provided that the
original documents shall not have been shown to the management board
before that time.
3. The issuance of the new or duplicate certificates shall render the
original documents void.
4. The issuance of new or duplicate certificates for registered share
certificates may, in the cases that qualify for issuance according to
the management board, be announced in newspapers to be selected by the
management board.
SHARE REGISTER
Article 6.
1. Subject to the provisions laid down in the law, a register of the
registered shares shall be kept by or on behalf of the company; the
register shall be kept up to date regularly and it may, entirely or
partly, consist of more than one copy, and may be kept at various
places, all this at the management board's discretion. At least one
copy of the register of shares shall be kept at the office of the
company.
2. In the register the name and address of every shareholder shall be
entered, stating the date of acquisition by the shareholder, the
amount of shares held by him, the date of the
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acknowledgment of the transfer by the company or the service upon the
company and the amount paid on each share, and all other information
that must be entered by virtue of the law, as well as such further
information as the management board, whether or not at the request of
a shareholder, deems desirable.
3. The management board shall determine the form and contents of the
share register with due observance of the provisions laid down in the
first two paragraphs of this article. The management board can
resolve that the register may differ as to the form and contents,
depending on the type of shares, whether it be Model I or Model II.
4. At his request a shareholder shall obtain a statement of what is
entered in the register with regard to shares registered in his name,
free of charge, which statement may be signed by one of the special
attorneys, to be designated thereto by the management board.
5. The provisions laid down in the preceding paragraphs shall apply
mutatis mutandis with respect to beneficiaries of a usufruct or
pledgees of one or more registered shares, provided that at the same
time the other information required by virtue of the law shall also be
included in the register.
Article 7.
1. The holder of a share certificate Model A may, after submitting his
share certificate to the company, obtain at his request and at his
option without prejudice to what is laid down in article 4-: - either
an entry in the share register for one or more shares Model I for an
equal nominal amount; - or one or more share certificates Model II for
an equal nominal amount.
2. The holder of an entry in the share register for one or more shares
Model I may obtain at his request and at his option -without prejudice
to what is laid down in article 4-:
- either one or more share certificates Model II for an equal nominal
amount;
- or one or more share certificates Model A for an equal nominal
amount.
3. The holder of a share certificate Model II that has been registered in
his name may obtain, after submitting his share certificate to the
company, at his request and at his option -without prejudice to what
is laid down in article 4-:
- either an entry in the share register for one or more shares Model
I for an equal nominal amount;
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- or one or more share certificates Model A for an equal nominal
amount.
4. The holder of one or more bearer or registered share certificates may
obtain, after submitting these share certificates to the company, at
his request and at his option, one or more bearer or registered share
certificates of the same model and for an equal nominal amount, each
for such an amount of shares as he shall request, however, without
prejudice to what is laid down in article 4, paragraphs 4 and 7.
5. The management board may require that a request, as meant in this
article, shall be filed on a form to be provided by the company free
of charge, and signed by the applicant.
ISSUANCE OF SHARES/ BODY AUTHORIZED TO ISSUE SHARES
CONDITIONS OF ISSUANCE/ RIGHTS OF PRE-EMPTION
Article 8.
1. The issuance of shares shall be effected pursuant to a resolution of
the general meeting, unless the general meeting has appointed an other
corporate body thereto. (In these articles of association the general
meeting is understood to mean: the body that consists of shareholders
and other persons with voting rights.) A resolution of the general
meeting to issue shares or to appoint an other body authorized to
issue shares may only be passed on the proposal of the management
board, which has been approved by the supervisory board. If another
corporate body has been appointed, the resolution to issue shares
shall be subject to approval by the supervisory board. If the general
meeting resolves to appoint an other corporate body as the body
authorized to issue shares that have not yet been issued, it shall
also determine the amount of shares that may be issued. The
appointment may be effected each time for a period not exceeding five
(5) years. Each period may be extended by not more than five years.
The appointment may not be revoked, unless provisions stating the
contrary have been made in the resolution to appoint a body authorized
to issue shares. If the general meeting has appointed an other
corporate body as the body authorized to issue shares that have not
yet been issued, it shall not be authorized itself to pass such a
resolution during the period of said appointment.
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2. A resolution for the issuance of shares shall state the price and
further conditions of issuance.
3. On the issuance of shares each shareholder shall have a right of
pre-emption in proportion to the aggregate amount of his shares, with
due observance of the relevant limitations set by law.
4. Shareholders shall have a similar right of pre-emption if rights to
subscribe to shares are granted.
5. The right of pre-emption may be limited or excluded by the general
meeting, upon proposal by the management board, which proposal has
been approved by the supervisory board. If the general meeting has
used the authority to appoint an other corporate body authorized to
resolve to issue shares that have not yet been issued, as meant in
paragraph 1 of this article, that body shall exclusively be authorized
to resolve to limit or to exclude the right of pre-emption. If less
than one half of the issued capital is represented at the meeting, a
majority of at least two thirds of the votes cast shall be required
for a resolution of the general meeting to restrict or exclude such a
pre-emption right or to designate another corporate body authorized to
limit or to exclude the right of pre-emption. The provisions of the
third and sixth sentence of the first paragraph of this article shall,
to the extent possible, apply mutatis mutandis.
If the authority to issue shares of the aforementioned other corporate
body appointed by the general meeting shall end, the authority to
limit or to exclude shall end as well.
6. This article shall apply mutatis mutandis to the grant of rights to
subscribe for shares, but shall not apply to the issuance of shares
to a person who exercises a previously acquired right to subscribe
for shares.
PAYMENT FOR SHARES
Article 9.
1. The full nominal amount of each share must be paid on issue, as well
as the balance of these amounts, if a share is subscribed at a higher
amount.
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2. Payment for a share must be made in cash in so far as no other form of
contribution has been agreed on. Payment in foreign currency may be
made only after approval by the company. If shares are paid for in
foreign currency, the obligation to pay shall be met to the extent of
the sum for which the payment can freely be converted into Dutch
currency. The rate of exchange on the day of payment shall be
decisive or, after application of what is laid down in the next
sentence, on the day meant in that sentence. The company may demand
payment at the rate of exchange on a fixed day within two months
before the last day on which payment must be made, provided that the
shares or the depositary receipts thereof shall immediately be listed
upon issue on the price list of an exchange outside The Netherlands.
OWN SHARES
Article 10.
1. On the issue of shares the company shall not be entitled to subscribe
to its own shares.
2. The company shall be entitled to acquire its own fully paid up shares
or depositary receipts therefor, provided either no valuable
consideration is given or provided that:
a. the distributable part of the shareholders' equity (the
distributable part of the shareholders' equity in these articles
of association is understood to mean: the part of the
shareholders' equity that exceeds the paid in and called up part
of the capital augmented by the reserves that must be maintained
by virtue of the law) is at least equal to the acquisition price;
and
b. the nominal amount of the shares in its capital or the depositary
receipts therefor to be acquired by the company itself, held by
the company or pledged for the benefit of the company, or which
are held by a subsidiary, does not exceed one tenth of the issued
share capital.
3. For the purposes of paragraph 2 under a., the amount of the
shareholders' equity according to the last adopted balance sheet shall
be determined less the acquisition price of shares in the capital of
the company and distributions to others from profit or reserves
becoming due by the company and its subsidiaries after the balance
sheet date. If more than six months of a financial year have elapsed
in which the annual accounts (in these articles of
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association the annual accounts are understood to mean: the balance
sheet and the profit and loss account and the notes on the accounts)
have not been adopted, any acquisition in conformity with paragraph 2
shall not be permitted.
4. An acquisition for valuable consideration shall be permitted only if
the general meeting has authorized the management board in this
respect and the general meeting may determine that such acquisition
shall be subject to approval by the supervisory board. Such
authorization shall be valid for a period of time not exceeding
eighteen months. The general meeting must stipulate in the
authorization the number of shares or depositary receipts therefor may
be acquired, the manner in which they may be acquired, and the limits
within which the price must be set. However, no authorization shall
be required in so far as the company acquires shares in its own
capital for the purpose of transferring the same to employees of the
company or of a group company under a scheme applicable to such
employees. Such shares must be officially listed on an exchange.
5. An acquisition of registered shares in contravention with paragraphs 2
- 4 shall be null and void. Bearer shares and depositary receipts for
shares acquired by the company in contravention of paragraphs 2 - 4
shall be transferred to the joint members of the management board on
the date of the acquisition.
6. The company may not exercise the voting rights in the general meeting
in respect of shares in its own capital held by the company or in
respect of which the company has a usufruct or a pledge.
Nevertheless, the beneficiaries of a usufruct or pledgees in respect
of shares held by the company itself shall be entitled to exercise the
voting rights in respect of such shares if either the usufruct or the
pledge had been created before the share was owned by the company. No
voting rights may be exercised in respect of shares of which the
depositary receipts are held by the company. The provisions of this
paragraph shall apply mutatis mutandis to shares or depositary
receipts therefor held by subsidiaries of the company or in respect of
which the subsidiaries of the company hold a usufruct or a pledge.
7. a. The company may not grant loans, provide collateral, guarantee the
price, otherwise guarantee or otherwise bind itself jointly or
severally with or for third parties, for the
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purpose of the subscription or acquisition by third parties of shares
in its own capital or of depositary receipts issued therefore. This
prohibition shall also extent to its subsidiaries.
b. This prohibition shall not apply if shares or depositary receipts
are acquired by and for the account of employees of the company or
of a group company.
8. In establishing whether the shareholders vote or whether a certain
part of the capital is present or represented, the shares in respect
of which no votes may be cast by virtue of the law shall be left out
of consideration.
9. The company may take its own shares or depositary receipts therefor in
pledge only if:
a. the aggregate nominal value of the shares and depositary receipts
therefor to be pledged and already held or held in pledge does not
exceed one tenth of the issued capital; and
b. the general meeting has approved the pledge agreement.
TRANSFER OF SHARES
Article 11.
1. Unless the law provides otherwise and without prejudice to what is
laid down in the following paragraphs of this article, the transfer
of a registered share shall require an instrument intended thereto
and, except in the case that the company itself is a party to said
legal act, an acknowledgment in writing of the transfer by the
company; the service upon the company of such instrument of transfer
or of a copy or extract thereof signed as a true copy by the notary or
the transferor shall be considered to have the same effect as an
acknowledgment.
2. Without prejudice to what is laid down in paragraph 3 of this article,
the transfer of a registered share may only be effected with the
approval of the management board.
To the approval of the management board such conditions may be
attached as the management board deems desirable or necessary. The
applicant may always demand that approval be granted under the
condition that the transfer shall be to a person to be designated by
the management board.
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The approval shall be deemed to have been granted if the management
board has not decided on the request within six weeks after the
request for approval has been made.
3. The approval of the management board shall not be required:
a. in the event that a share Model I is transferred, if an instrument
of transfer on a form to be supplied by the company, free of
charge, signed by both parties, has been submitted to the company;
b. in the event that for the share to be transferred a share
certificate Model II has been issued, if the share certificate is
submitted to the company, provided that the instrument of transfer
as mentioned under a., printed on the back of the share
certificate has been filled in completely and signed by or on
behalf of the transferor or if a separate instrument in the same
form is submitted together with the share certificate.
4. If a transfer of a share Model II has taken place by the servicing of
an instrument of transfer upon the company, the company shall either
make a note of the transfer on the share certificate or cancel the
share certificate and issue to the transferee one or more share
certificates registered in his name up to an equal nominal amount,
such at the discretion of the management board.
5. Acknowledgment in writing of the transfer of a share Model II by the
company shall take place either by a note on the share certificate,
evidencing the acknowledgment or by the issuance to the transferee of
one or more share certificates registered in his name up to an equal
nominal amount, such at the discretion of the management board.
6. The provisions of the preceding paragraphs of this article shall apply
mutatis mutandis with respect to the allotment of registered shares
at the partitioning of any form of joint property, the transfer of a
registered share as a result of execution and the creation of limited
rights on a registered share.
7. The filing of requests and the submission of documents as meant in the
articles 4 to 7 inclusive and article 10 must be effected at a place
to be determined by the management board. Different places can be
designated for the different models of shares and share certificates.
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8. The company is authorized to charge amounts, at no more than cost, to
be determined by the management board, to those persons at whose
request services shall be carried out on the basis of the articles 4
to 7 inclusive, on the understanding that a number of shares Model A
to be determined by the management board with the approval of the
shareholder may be comprised in one certificate, at the request of the
shareholder free of charge, which again can be split, free of charge,
into singular certificates or in certificates representing an other
number of shares Model A at the request of the shareholder, to be
determined by the management board with the approval of the
shareholder, together up to an equal nominal amount.
USUFRUCT/PLEDGING
Article 12.
1. The shareholder shall have the right to vote in respect of the shares
in which a usufruct has been created. However, the beneficiary of a
usufruct shall be entitled to vote, if it was so provided for at the
creation of the usufruct. The shareholder who does not have the right
to vote and the beneficiary of a usufruct who has the right to vote
shall have the rights which the law attributes to holders of
depositary receipts issued with the company's cooperation. The rights
referred to in the preceding sentence shall not accrue to the
beneficiary of the usufruct who does not have the right to vote.
2. The shareholder shall have the right to vote in respect of the shares
which are pledged. However, the voting rights shall accrue to the
pledgee, if it was so provided for at the creation of the pledge.
The shareholder who does not have the right to vote and the pledgee
who has the right to vote shall have the rights which the law
attributes to holders of depositary receipts issued with the company's
cooperation. The rights referred to in the preceding sentence shall
not accrue to the pledgee who does not have the right to vote.
3. The shareholder shall have the rights accruing from the share relating
to the acquisition of shares, it being understood that he shall have
to compensate the beneficiary of the usufruct
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for the value of these rights in so far as the latter is entitled
thereto by virtue of his usufruct.
CAPITAL REDUCTION
Article 13.
1. The general meeting may, but only on the proposal of the management
board, and after said proposal has been approved by the supervisory
board, resolve to reduce the issued share capital by a cancellation of
shares or by a reduction of the nominal amount of the shares by means
of an amendment of the articles of association. The shares referred
to in such resolution must be designated therein and such provisions
for the implementation of the resolution must be made therein.
2. A resolution to cancel shares may only relate to shares held by the
company itself or of which the company owns the depositary receipts.
3. For a resolution to reduce capital a majority of at least two thirds
of the votes cast shall be required, if less than half of the issued
share capital is represented at the meeting.
MANAGEMENT
Article 14.
The management of the company is constituted by a management board,
consisting of one or more members.
APPOINTMENT/REMUNERATION
Article 15.
1. The members of the management board shall be appointed by the general
meeting for a limited or unlimited period of time.
2. The supervisory board shall determine the remuneration and further
conditions of employment for every member of the management board and
the general meeting may grant managing directors the titles of "Chief
Executive Officer", President and such other titles as it may deem
appropriate.
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SUSPENSION AND DISMISSAL
Article 16.
1. Each member of the management board may at any time be suspended or
dismissed by the general meeting.
2. Each member of the management board may at any time be suspended by
the supervisory board. Such suspension may be discontinued by the
general meeting at any time.
3. Any suspension may be extended one or more times, but may not last
longer than three months in the aggregate. If, at the end of that
period, no decision has been taken on the termination of the
suspension or dismissal, the suspension lapses.
DUTIES OF THE MANAGEMENT BOARD/DECISION-
MAKING/ALLOCATION OF DUTIES
Article 17.
1. Subject to the restrictions imposed by these articles of association,
the management board shall be entrusted with the management of the
company.
2. The management board may lay down rules regarding its own
decision-making process. The regulations shall be subject to the
approval of the supervisory board.
3. At the allocation of duties the management board may determine which
duties in particular each member of the management will be charged
with. The allocation of duties shall be subject to the approval of
the supervisory board.
REPRESENTATION
Article 18.
1. The management board shall be authorized to represent the company.
The power to represent the company is also vested in the Chief
Executive Officer, the President, and in any two members of the
management board acting jointly.
2. The management board may appoint officers of the company with full or
limited power of attorney to represent the company. Each of those
officers shall be authorized to represent the company with due
observance of any restrictions imposed on him.
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3. If a member of the management board, acting in his personal capacity,
enters into an agreement with the company, or if he, acting in his
personal capacity, conducts any litigation against the company, the
company may be represented in that matter either by one of the other
members of the management board with due observance of the provisions
of paragraph 1 or by a member of the supervisory board designated by
the supervisory board, unless the general meeting designates a person
for that purpose or unless the law provides otherwise for such
designation. Such person may also be the member of the management
board with whom the conflict of interest exists. If a member of the
management board has a conflict of interest with the company other
than as referred to in the first sentence of this paragraph, he shall
as each of the other member of the management board have power to
represent the company with due observance of the provisions of
paragraph 1.
4. The management board has authority to perform legal acts:
a. relating to the subscription for shares whereby special
obligations are imposed upon the company;
b. concerning the acquisition of share on a basis other than that on
which a participation in the company is offered to the public;
c. purporting to confer an advantage on an incorporator of the
company or on a third party involved with the incorporation;
d. relating to a non-cash contribution, without prior approval of the
general meeting of shareholders.
APPROVAL OF MANAGEMENT RESOLUTIONS
Article 19.
1. The management board shall act on the instructions of the supervisory
board concerning the general policy of the company on financial,
social and economic matters.
2. The supervisory board is entitled to require such resolutions of the
management board to be subject to its approval as it shall decide.
Such resolutions shall be clearly specified and notified to the
management board in writing. If a resolution of the management board
has
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been subjected to the approval of the supervisory board, a certificate
to that effect signed by the chairman of the supervisory board, shall
constitute evidence of such resolution vis-a-vis third parties.
3. All resolutions of the management board must be approved by an
absolute majority of the votes cast.
4. The management board may also pass resolutions without recourse to a
meeting, provided the text of the proposed resolution has been sent to
all members of the management board and they have all agreed in
writing, including by telegraph, telex or telefax, upon this way of
passing resolutions. The management board shall add the record of
such a resolution to the received answers attached.
ABSENCE OR PREVENTION
Article 20.
If a member of the management board is absent or prevented from
performing his duties, the remaining members or the remaining member of the
management board shall be temporarily entrusted with the entire management of
the company. If all members of the management board or the sole member of the
management board are/is absent or are/is prevented from performing their/his
duties, the management of the company shall be temporarily entrusted to the
supervisory board which shall then be authorized to entrust the management to
one or more person(s), whether or not from among its members.
SUPERVISORY BOARD
Article 21.
The company shall have a supervisory board, consisting of one or more
natural persons.
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APPOINTMENT
Article 22.
1. The members of the supervisory board shall be appointed by the
general meeting for a period of time not exceeding three (3)
years.
2. No person who has reached the age of seventy-two (72) may be
appointed as a member of the supervisory board.
3. When the appointment of a member of the supervisory board is
proposed, the candidate's age and profession shall be stated as
well as the number of shares held by him in the company and the
offices he holds or has held in so far as they are of importance
in connection with the performance of the duties of a member of
the supervisory board. Furthermore, it shall be stated which
companies he is already associated with as a member of a
supervisory board; if they include companies belonging to one and
the same group, an indication of the group shall suffice. The
proposal for the appointment shall be substantiated.
SUSPENSION AND DISMISSAL/RETIREMENT
Article 23.
1. Each member of the supervisory board may be suspended and
dismissed by the general meeting at any time.
2. Each member of the supervisory board shall retire no later than
on the day on which the annual meeting is held in the financial
year in which he reaches the age of seventy-two (72).
3. The members of the supervisory board shall retire by rotation in
accordance with a scheme to be drawn up by the supervisory board.
Each member thus retiring may be re-appointed as long as he has
not reached the age limit.
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REMUNERATION
Article 24.
The general meeting, on the proposal of the supervisory board, shall
determine the remuneration for each member of the supervisory board.
DUTIES AND POWERS
Article 25.
1. It shall be the duty of the supervisory board to supervise the
management of the management board and the general course of
affairs in the company and in the enterprise connected with it.
It shall assist the management board with advice. In performing
their duties the members of the supervisory board shall act in
accordance with the interests of the company and of the enterprise
connected with it.
2. The management board shall supply the members of the supervisory
board in due time with the information required for the
performance of the duties of the supervisory board.
3. The supervisory board shall have access to the buildings and the
premises of the company and shall be authorized to inspect the
books and records of the company. The supervisory board may
designate one or more persons from among its members or an expert
to exercise these powers. The members of the supervisory board
may also in other instances be assisted by experts.
4. The members of the management board shall be invited to attend
the meetings of the supervisory board.
5. All resolutions of the supervisory board shall be passed by an
absolute majority of the votes cast.
FINANCIAL YEAR/DRAWING UP THE ANNUAL ACCOUNTS
Article 26.
1. The financial year of the company shall be the calendar year.
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2. Annually, not later than five months after the end of the
financial year, the management board shall draw up the annual
accounts, unless by reason of special circumstances this term has
been extended by the general meeting.
3. Within the period referred to in paragraph 2, the annual accounts
shall be deposited for inspection by the shareholders at the
office of the company. Within this period of time the management
board shall also submit the annual report. The statement of the
accountant as mentioned in article 27 and the additional
information required by virtue of the law shall be added to the
annual Accounts.
4. The annual accounts shall be signed by the members of the
management board and the supervisory board; if the signature of
one or more of the members is lacking, this shall be stated and
reasons given.
ACCOUNTANT
Article 27.
1. The company shall give instructions for the audit of the annual
accounts to an accountant (in these articles of association an
accountant is understood to mean: a chartered accountant or
another accountant as meant in article 2:393 of the Civil Code,
or an organization in which such accountants associate).
2. Such instructions shall be given by the general meeting. If the
latter fails to do so, the supervisory board or, in the absence of
the members of the supervisory board or in the event the
supervisory board fails to do so, the management board shall be
authorized to do so. The appointment of an accountant shall not
be limited to any limited list of candidates; the instructions may
at all times be withdrawn by the general meeting and by the
person who gave the instructions; furthermore, instructions given
by the management board may be withdrawn by the supervisory board.
3. The accountant shall report on his audit to the supervisory board
and the management board.
4. The accountant shall present the results of his audit in a
statement as to whether the annual accounts give a true and fair
view.
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ADOPTION
Article 28.
1. The company shall ensure that the annual accounts, the annual
report and the information to be added by virtue of the law are
held at its office as from the day on which the annual meeting is
convened. Shareholders, and beneficiaries of a usufruct or a
pledge in shares who have the right to vote, may inspect the
documents at that place and obtain a copy thereof, free of charge.
2. The general meeting shall adopt the annual accounts. The annual
accounts cannot be adopted in the event that the general meeting
has been unable to inspect the auditor's report referred to in
article 27, paragraph 4, unless a legal ground is given in the
information required to be added by virtue of the law for the
lack of the auditor's report referred to in article 27, paragraph
4.
3. Unconditional adoption of the annual accounts by the general
meeting shall serve to discharge the management board in respect
of their management and the supervisory board in respect of their
supervision in so far as such management is apparent from the
annual accounts.
PUBLICATION
Article 29.
1. The company is obliged to publish the annual accounts within eight
days following the adoption thereof. The publication shall be
made by depositing a complete copy in the Dutch language or, if
such copy had not been prepared, a copy in the French, German or
English language, at the office of the commercial register in the
district in which the company has its official seat according to
these articles of association. The date of the adoption must be
annotated on the copy.
2. If the annual accounts have not been adopted within seven months
of the termination of the financial year in accordance with the
legal requirements, then the management board shall, without
further delay, publish the prepared annual accounts in the manner
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prescribed in paragraph 1; it shall be noted on the annual
accounts that they have not yet been adopted.
3. In the event that the general meeting has extended the period for
the preparation of the annual accounts in accordance with article
26 paragraph 2, then the preceding paragraph shall apply as from
two months after the termination of the thus extended period.
4. A copy of the annual report produced in the same language or in
Dutch shall, together with the additional information required by
virtue of the law, be published at the same time and in the same
manner as the annual accounts. In so far as the law permits, the
foregoing shall not apply if the documents are held at the office
of the company for inspection by any person and if upon request
full or partial copies thereof are supplied at a price not
exceeding the cost; the company shall file a notice of this fact
for registration in the commercial register.
5. The publication shall be effected with due observance of the
applicable legal exemptions.
PROFIT/DIVIDEND
Article 30.
1. The profits, as appearing from the annual accounts as adopted,
after retention of such an amount as the management board, after
approval by the supervisory board, shall determine, shall be at
the disposal of the general meeting, with due observance of the
provisions of this article 30.
2. Dividends may be paid only up to an amount which does not exceed
the amount of the distributable part of the shareholders' equity.
3. Dividends may only be paid after adoption of the annual accounts
from which it appears that payment of dividends is permissible.
4. In anticipation of final dividends, the management board may
resolve to pay an interim dividend, provided the requirement of
paragraph 2 has been complied with, as
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evidenced by interim accounts drawn up in accordance with the
provisions of the law. Such a resolution shall be subject to the
approval of the supervisory board.
5. Upon proposal of the management board, which proposal has been
approved by the supervisory board, the general meeting may,
subject to due observance of the provision of paragraph 2, resolve
to make distributions to the charge of any reserve which need not
be maintained by virtue of the law, and/or to make distributions
not in cash but in shares in the company.
DATE ON WHICH DISTRIBUTIONS BECOME PAYABLE
Article 31.
1. Distributions pursuant to article 30, hereinafter to be referred
to as "distributions" (or in the singular "distribution") shall
become payable from a date to be determined by the management
board. The date on which a distribution shall first become
payable in respect of shares for which bearer certificates are in
circulation or in respect of shares Model I can be a different one
than the date in respect of shares for which share certificates
Model II are in circulation.
2. Distributions shall be made payable at a place or places to be
determined by the management board, including at least one
location in The Netherlands.
3. In respect of distributions in cash on the shares, the management
board may determine the method of payment, as well as the currency
in which said distributions shall be made payable.
4. Distributions in cash which shall be made payable in a currency
other than in Dutch currency, shall be converted at the rate of
exchange as quoted by the Bank of the Netherlands on a day to be
determined and announced by the management board.
This day may not be determined any earlier than the day prior to
the day on which the decision to make distributions was made and
not later than the day that, in accordance with paragraph 5 of
this article, has been determined for the shares concerned. If
and in so far as the company, on the first day on which the
distribution has been made payable, shall not be able to make
payments at the designated location outside The
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Netherlands or in the foreign currency concerned as a result of
government measures or other exceptional circumstances beyond its
control, the management board shall have such authority that they
may designate one or more locations in The Netherlands where the
distributions shall be payable, whether or not in Dutch currency.
5. The person in whose name the share is registered shall be entitled
to distributions in respect of registered shares or, in case of
limited rights and rights of holders of depositary receipts, the
person whose right shall prove to be well-founded, on a date to be
determined by the management board for the purpose of each
distribution for the various share models.
6. In order to be able to exercise the right of this distribution,
the person entitled to a distribution in respect of a share for
which a share certificate Model A is in circulation must have the
dividend sheet of said share held in the safe-keeping of a
custodian as meant in article 4, paragraph 3 at the moment to be
determined by the management board.
7. In respect of distributions concerning shares for which share
certificates Model A are in circulation, the company shall be
discharged vis-a-vis the persons entitled to distributions by
making the distributions payable in accordance with the
instructions to be given by the institution meant in article 4,
paragraph 3.
8. Notices with regard to distributions and with regard to dates and
locations as meant in the preceding paragraphs of this article
shall be published in The Netherlands at least in one nationwide
published daily newspaper and abroad in at least one daily
newspaper in each of those countries where the shares have been
admitted for official listing at the company's request and further
in such manner as the management board deems desirable.
9. Claims for payment of distributions in cash shall lapse in so far
as these distributions have not been collected within five years
and one day after the day they have become payable.
10. In case of a distribution in shares in the company on the basis of
article 30, paragraph 5, the shares which have not been claimed
within, a period to be determined by the
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management board shall be sold for the account of the persons
entitled to them. After such sale the persons who have not
claimed their shares shall only have the right to the net
proceeds in cash of such sale. This right shall lapse after five
years and one day, counting from the day after the date on which
the shares could be claimed.
11. In case of a distribution in shares in the company on the basis of
article 30, paragraph 5, in respect of registered shares, these
shares shall be entered in the register of shares. To holders of
shares Model II a share certificate Model II shall be issued to a
nominal amount equal to the amount of the entry.
12. The management board may resolve not to apply the provision laid
down in paragraph 6, for what the management board considers to be
legitimate reasons and under such conditions as it deems
necessary.
13. The provisions laid down in paragraph 5 to 7 inclusive and
paragraph 11 shall apply mutatis mutandis in so far as it concerns
distributions that are not made pursuant to article 30.
GENERAL MEETING OF SHAREHOLDERS
ANNUAL MEETING
Article 32.
1. Annually, not later than six months after the end of the
financial year of the company , the annual meeting shall be held.
(In these articles of association the annual meeting is understood
to mean the general meeting of shareholders intended to discuss
and adopt the annual accounts, whereas in these articles of
association the general meeting of shareholders is understood to
mean: the meeting of shareholders and other persons who are
entitled to attend meetings.)
2. The agenda for that meeting shall state inter alia the following
points for discussion:
a. the annual report;
b. adoption of the annual accounts;
c. appropriation of profits;
d. filling of any vacancies;
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e. other proposals put forward by the management board or the
supervisory board.
OTHER MEETINGS
Article 33.
1. Other general meetings of shareholders shall he held as often as
the management board deems such necessary.
2. Upon their request, one or more holders of shares representing in
the aggregate at least one tenth of the issued capital may be
authorized by the president judge of the court to convene a
general meeting.
3. When this article applies, holders of shares shall have equal
rights as holders of depositary receipts which have been issued in
cooperation with the company.
CONVOCATION/AGENDA/NOTIFICATION
Article 34.
1. General meetings of shareholders shall be convened by means of an
advertisement-which shall at least be published in a nationwide
published daily newspaper in The Netherlands and abroad at least
in one daily newspaper in each of those countries where the shares
have been admitted for official listing at the company's request.
Further, the holders of registered shares shall be convened to the
meeting by letter.
2. The convocation shall be effected by the management board or by
those who are authorized to do so by virtue of the law.
Article 35.
1. The convocation as meant in the preceding article shall take place
no later than the fifteenth day prior to the day of the meeting.
2. The agenda shall include such items as, without prejudice to the
other provisions of these articles of association, the management
board, or the supervisory board have included therein. No
resolution can be validly passed at the meeting with regard to
items that have not been included in the agenda.
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3. The convocation shall either specify the items to be discussed or
state that the shareholders, the beneficiaries of a usufruct and
pledgees with voting rights may acquaint themselves with such
items at the company's office and may obtain a copy of the list of
items to be discussed, without prejudice to the provisions of the
law with regard to capital reduction and the amendment of the
articles of association.
PROXIES
Article 36.
Shareholders and other persons entitled to be present at meetings may
be represented by a proxy-in-fact. The written proxy shall have to be
deposited no later than the moment and at the location indicated for share
certificates in accordance with article 40.
PLACE OF THE MEETINGS
Article 37.
The general meetings of shareholders shall be held in Ede, Barneveld,
Amsterdam, Schiphol-Airport (municipality of Haarlemmermeer), Rotterdam or The
Hague.
CHAIRMANSHIP
Article 38.
1. The general meetings of shareholders shall be presided over by the
chairman of the supervisory board or, in his absence, by the
deputy chairman of the supervisory board, in the event that the
latter is absent also, the members of the supervisory board
shall elect a chairman from among their midst. The members of the
supervisory board may designate another person to act as
chairman of a general meeting of shareholders.
2. If no chairman has been appointed in accordance with paragraph 1,
the meeting itself shall designate a chairman.
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<PAGE> 28
MINUTES
Article 39.
1. Minutes shall be kept of the proceedings of every general meeting
of shareholders by a secretary to be designated by the chairman.
The minutes shall be adopted by the chairman and the secretary and
shall be signed by them as proof thereof.
2. The supervisory board, the chairman or the person who has convened
the meeting may determine that notarial minutes shall be drawn up
of the proceedings of the meeting. The notarial minutes shall be
co-signed by the chairman.
MEETING RIGHTS/ADMITTANCE
Article 40.
1. Each shareholder entitled to vote and each beneficiary of a
usufruct and each pledgee to whom the voting right has been
granted, shall be authorized to attend the general meeting of
shareholders, to address the meeting and to exercise the voting
right.
2. In order to be able to exercise the rights mentioned in the first
paragraph of this article, the holders of shares for which a
share certificate Model A has been issued must deposit their
share certificates prior to the meeting at the office of the
company, or at one of the banks or other institutions, among which
at least a custodian as meant in article 4, paragraph 3- which
shall also be designated in the convocation. Furthermore the
convocation shall state the day on which such deposit shall have
to be effected at the latest. The deposit shall be made in return
for a ticket for admission for the meeting.
3. In order to exercise the rights mentioned in the first paragraph
of this article the holders of registered shares must notify the
company in writing of their intention to do so, no later than on
the day and furthermore at the place stated in the convocation
and also, in so far as it concerns shares Model II, stating the
number of the share certificates/numbers of the share
certificates. They may only exercise said rights at the meeting
for shares which are registered in their name both on the day
mentioned above and on the day of the meeting.
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<PAGE> 29
4. The company shall send a ticket for admission to the meeting to
the holders of registered shares who have notified the company of
their intention to attend the meeting in accordance with the
provisions laid down in the preceding paragraph.
5. The provisions laid down in the preceding paragraph shall apply
mutatis mutandis to beneficiaries of a usufruct and pledgees who
have been granted voting rights.
6. If the voting right in respect of a share has been granted to the
beneficiary of a usufruct or to the pledgee instead of to the
shareholder, the shareholder shall be entitled to attend the
general meeting of shareholders and to address the meeting.
7. Each share confers the right to cast one vote.
8. Each person entitled to vote or his attorney must sign the
attendance list.
9. The right to take part in the meeting according to the paragraphs
1 and 6 may be exercised by an attorney-in-fact. The written
power of attorney shall have to be deposited no later than the
moment and on the location for share certificates indicated in
accordance with this article 40.
10. The general meeting shall decide on the admittance of persons
other than those mentioned above in this article.
VOTES
Article 41.
1. In so far as the law does not require a qualified majority, all
resolutions shall be passed by an absolute majority of all the
votes cast (the "Absolute Majority").
2. If in an election of persons an Absolute Majority is not obtained,
a second free vote shall be taken. If again an Absolute Majority
is not obtained, further votes shall be taken until either one
person obtains the Absolute Majority or the election is between
two persons who received an equal number of votes. In the event
of further votes (not including the second free vote), the vote
shall concern the persons who participated in the preceding vote,
with the exception of the person who received the smallest number
of votes in that preceding vote. If in that preceding vote more
than one person received the smallest number of votes, lots shall
be drawn to decide which of them can no longer
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<PAGE> 30
participate in the following vote. If in the vote between the two
the, votes are equal, lots shall be drawn to decide which of them
shall be chosen.
3. If a vote other than for the election of persons results in a tie,
the proposal shall be rejected.
4. Votes shall be by voice. However, the chairman is entitled to
decide that votes be cast by ballot. If it concerns an election
of persons, a person present at the meeting and entitled to vote
can also demand a vote by ballot. Voting by ballot shall take
place by means of folded, unsigned ballot papers.
5. Blank votes and void votes shall be deemed not to have been cast.
6. Voting by acclamation shall be possible if none of the persons
present and entitled to vote objects thereto.
7. The decision as expressed by the chairman at the meeting with
regard to the result of a vote shall be final and conclusive. The
same shall apply to the contents of an adopted resolution in so
far as it concerns a vote on a proposal not laid down in writing.
If, however, the correctness of that decision is challenged
immediately after its pronouncement, a new vote shall be taken
when either the majority of the persons present and entitled to
vote, or, if the original voting was not taken by a roll call or
in writing, any person present and entitled to vote so desires.
The original vote shall have no legal consequences as the original
voting shall be cancelled by this new voting.
AMENDMENT OF THE ARTICLES OF
ASSOCIATION AND DISSOLUTION
Article 42.
1. When a proposal to amend the articles of association or to
dissolve the company is made to the general meeting, this must be
stated in the convocation to the general meeting of
shareholders and, in so far as it concerns an amendment of the
articles of association, at the same time a copy of the
proposal in which the proposed amendment has been phrased verbatim
must be deposited at the office of the company for inspection by
the shareholders until the end of that meeting. Shareholders may
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<PAGE> 31
obtain a copy of the aforementioned proposal. Shareholders
include beneficiaries of a usufruct and pledgees to whom the
voting right has been granted.
2. A resolution to amend the articles of association or to dissolve
the company may only be passed on the proposal of the management
board, which proposal has been approved by the supervisory board.
LIQUIDATION
Article 43.
1. In the event of dissolution of the company by virtue of a
resolution of the general meeting, the members of the management
board shall be charged with the liquidation of the business of the
company, and the supervisory board with the supervision thereof.
2. During liquidation, the provisions of the articles of association
shall remain in force to the extent possible.
3. The balance of the liquidation, remaining after payment of
creditors, shall be distributed equally and proportionally among
the shareholders.
4. The liquidation shall take place in accordance with the provisions
of section 1 of Book 2 of the Civil Code.
CONSIGNMENT FUND
Article 44.
The amounts due to shareholders or creditors, which have not been
claimed within six months of the moment that the last distribution has been
made payable, shall be deposited in the consignment fund.
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<PAGE> 1
EXHIBIT 4.8
BAAN COMPANY N.V.
4.5% CONVERTIBLE SUBORDINATED NOTES DUE 2001
REGISTRATION RIGHTS AGREEMENT
Dated as of
December 15, 1996
Morgan Grenfell & Co. Limited
Deutsche Morgan Grenfell Inc.
ABN AMRO Rothschild
Banque Indosuez
c/o Morgan Grenfell & Co. Ltd.
6-8 Bishopsgate
London EC2N 4DA
United Kingdom
Ladies and Gentlemen:
Baan Company N.V., a Netherlands corporation (the "Company"), proposes
to issue and sell to Morgan Grenfell & Co. Limited, Deutsche Morgan Grenfell
Inc., ABN AMRO Rothschild and Banque Indosuez (the "Initial Purchasers") upon
the terms set forth in a purchase agreement dated December 12, 1996 (the
"Purchase Agreement") between the Initial Purchasers and the Company, its 4.5%
Convertible Subordinated Notes due 200 1. As an inducement to the Initial
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Initial Purchasers thereunder, the Company
agrees with the Initial Purchasers, (i) for the benefit of the Initial
Purchasers and (ii) for the benefit of the Holders (as defined below) from time
to time of the Registrable Securities (as defined below), including the Initial
Purchasers, as follows:
1. DEFINITIONS. Capitalized terms used herein without definition shall
have their respective meanings set forth in or pursuant to the Purchase
Agreement or the Offering Memorandum, dated December 12, 1996, in respect of the
Securities. As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Affiliate" of any specified Person means any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified Person. For purposes of
<PAGE> 2
this definition, control of a Person means the power. direct or indirect, to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Agreement" shall mean this Registration Rights Agreement as the same
may be amended, supplemented or modified from time to time in accordance with
the terms hereof
"Commission" means the United States Securities and Exchange
Commission.
"Common Shares" means the Common Shares, nominal value of NLG 0.01, of
the Company and any other shares of common shares as may constitute "Common
Shares" for purposes of the Indenture.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning set forth in Section 2(b)
hereof.
"Electing Holder" shall mean, with respect to any Shelf Registration
Statement, a Holder electing to sell Registrable Securities thereunder.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Holder" shall mean any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).
"Indenture" shall mean the Indenture, dated as of December 15, 1996,
between the Company and the Trustee thereunder, pursuant to which the Securities
are being issued, as amended, modified or supplemented from time to time in
accordance with the terms thereof.
"Issue Date" means December 23, 1996.
"Liquidated Damages" has the meaning set forth in Section 2(c).
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, as set forth in Section 6 hereof.
"NLG" shall mean Dutch guilders.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed
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<PAGE> 3
as part of an effective registration statement in reliance upon Rule 430A under
the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities.
"Registration Default" has the meaning set forth in Section 2(c)
hereof.
"Restricted Securities" shall mean all Securities required pursuant to
Section 3.5(c) of the Indenture to bear any Restricted Securities Legend (as
defined in the Indenture).
"Registrable Security" shall mean any Restricted Security and any share
of Common Shares issuable upon conversion thereof except any such Restricted
Security or share of Common Shares which (i) has been effectively registered
under the Securities Act and sold in a manner contemplated by the Registration
Statement, (ii) has been transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto), or is transferable pursuant
to paragraph (k) of such Rule 144 (or any successor provision thereto), (iii)
has been resold in compliance with Regulation S under the Securities Act (or any
successor thereto) and does not constitute the unsold allotment of a distributor
within the meaning of Regulation S under the Securities Act, or (iv) has
otherwise been transferred and a new Security or share of Common Shares not
subject to transfer restrictions under the Securities Act has been delivered by
or on behalf of the Company in accordance with Section 3.5(b) of the Indenture.
"Rule 144" shall mean Rule 144 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
successor rule or regulation.
"Rule 144A" shall mean Rule 144A promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
successor rule or regulation.
"Rule 415" shall mean Rule 415 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
successor rule or regulation.
"Rule 430A" shall mean Rule 430A promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
successor rule or regulation.
"Securities" shall mean the $175,000,000 aggregate principal amount of
4.5% Convertible Subordinated Notes due 2001 of the Company being issued
pursuant to the Indenture (together with up to $25,000,000 aggregate principal
amount of such convertible subordinated notes if, and to the extent, the Initial
Purchasers' over-allotment option is exercised).
"Securities Act" means the United States Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Shelf Registration" means a registration effected pursuant to Section
2 hereof.
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<PAGE> 4
"Shelf Registration Statement" means a shelf registration statement of
the Company pursuant to the provisions of Section 2 hereof filed with the
Commission which covers some or all of the Registrable Securities, as
applicable, on an appropriate form under Rule 415 under the Securities Act, or
any similar rule that may be adopted by the Commission, amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Special Counsel" means any special counsel to the Holders, determined
as provided in Section 4 hereof.
"Trust Indenture Act" has the meaning set forth in Section 1.1 of the
Indenture.
"Trustee" the Trustee under the Indenture.
"underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
2. SHELF REGISTRATION.
(a) The Company shall, within 90 calendar days following the
Issue Date of the Securities, file with the Commission a Shelf Registration
Statement relating to the offer and sale of the Registrable Securities by the
Holders from time to time in accordance with the methods of distribution elected
by such Holders and set forth in such Shelf Registration Statement and,
thereafter, shall use its reasonable efforts to cause such Shelf Registration
Statement to be declared effective under the Securities Act within 180 calendar
days after the Issue Date; provided, however, that no Holder shall be entitled
to have the Registrable Securities held by it covered by such Shelf Registration
unless such Holder is in compliance with Section 3(m) hereof
(b) The Company shall use its reasonable efforts:
(i) To keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a period of
three years from the later of a) the Issue Date or b) the last
date of original issuance of the Securities or such shorter
period that will terminate upon the earliest of the following:
(A) when all the Securities covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration
Statement, (B) when all shares of Common Shares issued upon
conversion of any such Securities that had not been sold
pursuant to the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement and (C) when
there shall cease to be outstanding Registrable Securities (in
any such case, such period being called the "Effectiveness
Period"); and
(ii) After the effectiveness of the Shelf
Registration Statement, promptly upon the request of any
Holder, to take any action reasonably necessary to register
the
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<PAGE> 5
sale of any Registrable Securities of such- Holder and to
identify such Holder as a selling securityholder.
The Company shall be deemed not to have used its reasonable efforts to keep the
Shelf Registration Statement effective during the requisite period if the
Company voluntarily takes any action that would result in Holders of Registrable
Securities covered thereby not being able to offer and sell any such Registrable
Securities during that period, unless (i) such action is required by applicable
law, (ii) the continued effectiveness of the Shelf Registration Statement would
require the Company to disclose a material financing, acquisition or other
corporate transaction, and the Management Board shall have determined in good
faith that such disclosure is not in the best interests of the Company and the
holders of its outstanding Common Shares, or (iii) the Management Board shall
have determined in good faith that there is a valid business purpose or reason
for such suspension, and (x), in the case of clause (i) above, the Company
thereafter promptly complies with the requirements of paragraph 3(i) below and
(y) in the case of clauses (ii) and (iii) above, the Company complies with its
obligations, if any, to pay Liquidated Damages.
(c) (1) If (i) on or prior to 90 days following the Issue Date
a Shelf Registration Statement has not been filed with the Commission or (ii) on
or prior to the 180th day following the Issue Date, such Shelf Registration
Statement is not declared effective (each, a "Registration Default"), additional
interest ("Liquidated Damages") will accrue on the Restricted Securities from
and including the date following such Registration Default until such time as
such Shelf Registration Statement is filed or such Shelf Registration Statement
is declared effective, as the case may be. Liquidated Damages will be paid
semi-annually in arrears, with the first semi-annual payment due on the first
Interest Payment Date under the Indenture following the date on such Liquidated
Damages begin to accrue, and will accrue at a rate per annum equal to an
additional one-quarter of one percent (0.25%) of the principal amount, to and
including the 90th day following such Registration Default and one-half of one
percent (0.50%) thereof from and after the 91 st day following such Registration
Default. In the event that Shelf Registration Statement ceases to be effective
for more than 90 days or the Company suspends the use of the prospectus which is
a part thereof for more than 90 days, whether or not consecutive, during any
12-month period, then the interest rate borne by Restricted Securities will
increase by an additional one-half of one percent (0.50%) per annum from the 91
st day of the applicable 12-month period such Shelf Registration Statement
ceases to be effective or the Company suspends the use of the prospectus which
is a part thereof, as the case may be, until the earlier of such time as (i) the
Shelf Registration Statement again becomes effective, (ii) the use of the
related prospectus ceases to be suspended or (iii) the Effectiveness Period
expires. Following the cure of all Registration Defaults relating to any
Restricted Securities, the accrual of Liquidated Damages with respect to such
Restricted Securities will cease (without in any way limiting the effect of any
subsequent Registration Default). In no event shall the Company be required to
pay Liquidated Damages in excess of the applicable maximum amount of one-half of
one percent (0.50%) set forth above, regardless of whether one or multiple
Registration Defaults exist.
(2) Liquidated Damages on the Restricted Securities
shall be paid by the Company to the holders of record of such Restricted
Securities on each Interest Payment Date (as
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<PAGE> 6
defined in the Indenture) in the same manner as for interest on such Restricted
Securities as provided in the form of Securities set forth in Section 2.2 of the
Indenture.
(3) All of the Company's obligations set forth in
this Section 2(c) which are unsatisfied to any extent with respect to any
Restricted Security at the time such security ceases to be a Restricted Security
shall survive until such time as all such obligations with respect to such
security have been satisfied in full (notwithstanding the earlier termination of
this Agreement).
(4) Any payments due and payable pursuant to this
Section 2(c) shall be subordinated to Senior Indebtedness (as defined in the
Indenture) to the extent and in the manner set forth in the Indenture.
(5) The rights of the recordholders of Restricted
Securities to Liquidated Damages as set forth in this Section 2(c) is not
intended to be exclusive of any other right or remedy, and shall be in addition
to every other right and remedy given hereunder or under the Indenture or now or
hereafter existing at law or in equity or otherwise.
3. REGISTRATION PROCEDURES. In connection with any Shelf Registration
Statement, the following provisions shall apply:
(a) The Company shall furnish to the Special Counsel and
Holders (if requested), prior to the filing thereof with the
Commission, a copy of any Shelf Registration Statement, and each
amendment thereof and each amendment or supplement, if any, to the
Prospectus included therein and shall use its reasonable efforts to
reflect in each such document, when so filed with the Commission, such
comments as the Special Counsel and Holders reasonably may propose.
(b) The Company shall take such action as may be necessary so
that (1) any Shelf Registration Statement and any amendment thereto and
any Prospectus forming part thereof and any amendment or supplement
thereto (and each report or other document incorporated therein by
reference in each case) complies in all material respects with the
Securities Act and the Exchange Act, (ii) any Shelf Registration
Statement and any amendment thereto does not, when it becomes
effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading and (iii) any Prospectus
forming part of any Shelf Registration Statement, and any amendment or
supplement to such Prospectus, does not include an untrue statement of
a material fact or omit to state a material fact necessary in order to
make the statements, in the light of the circumstances under which they
were made, not misleading.
(c) (1) The Company shall advise the Initial Purchasers and,
in the case of clause (i), the Holders and, if requested by the Initial
Purchasers or any such Holder, confirm such advice in writing:
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<PAGE> 7
(i) when a Shelf Registration Statement and any
amendment thereto has been filed with the Commission and when
the Shelf Registration Statement or any post effective
amendment thereto has become effective; and
(ii) of any request by the Commission for amendments
or supplements to the Shelf Registration Statement or the
Prospectus included therein or for additional information.
(2) The Company shall advise the Electing Holders and, if
requested by any such Electing Holder, confirm such advice in writing
of:
(i) the issuance by the Commission of any stop order
suspending effectiveness of the Shelf Registration Statement
or the initiation of any proceedings for that purpose;
(ii) the receipt by the Company of any notification
with respect to the suspension of the qualification of the
securities included therein for sale in any jurisdiction or
the initiation of any proceeding for such purpose; and
(iii) the happening of any event that requires the
making of any changes in the Shelf Registration Statement or
the Prospectus so that, as of such date, the Shelf
Registration Statement and the Prospectus do not contain an
untrue statement of a material fact and do not omit to state a
material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not
misleading (which advice shall be accompanied by an
instruction to suspend the use of the Prospectus until the
requisite changes have been made).
(d) The Company shall use its reasonable efforts to prevent
the issuance, and if issued to obtain the withdrawal, of any order
suspending the effectiveness of any Shelf Registration Statement at the
earliest possible time.
(e) The Company shall furnish to the Special Counsel and each
Electing Holder (if requested) with respect to a Shelf Registration
Statement, without charge, at least one copy of such Shelf Registration
Statement and any post-effective amendment thereto, including financial
statements and schedules, and, if the Electing Holder so requests in
writing, all reports, other documents and exhibits (including those
incorporated by reference).
(f) The Company shall, during the Effectiveness Period,
deliver to each Electing Holder with respect to a Shelf Registration
Statement, without charge, as many copies of the Prospectus (including
each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Electing
Holder may reasonably request, and the Company consents (except during
the continuance of any event described in Section 3(c)(2)(iii)) to the
use of the Prospectus or any amendment or supplement thereto by
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<PAGE> 8
each of the Electing Holders in connection with the offering and sale
of the Registrable Securities covered by the Prospectus or any
amendment or supplement thereto during the Effectiveness Period.
(g) Prior to any offering of Registrable Securities pursuant
to any Shelf Registration Statement, the Company shall register or
qualify or cooperate with the Special Counsel and Electing Holders in
connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or blue sky laws of
such jurisdictions as any such Electing Holders reasonably request in
writing and do any and all other acts or things necessary or advisable
to enable the offer and sale in such jurisdictions of the Registrable
Securities covered by such Shelf Registration Statement; provided,
however, that in no event shall the Company be obligated to (i) qualify
as a foreign corporation or as a dealer in securities in any where it
would not otherwise be required to so qualify but for this Section
3(g), (ii) file any general consent to service of process in any where
it is not as of the date hereof then so subject or (iii) subject itself
to taxation in any jurisdiction if it is not so subject.
(h) Unless any Registrable Securities shall be in book-entry
only form, the Company shall cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to any Shelf
Registration Statement free of any restrictive legends and in such
permitted denominations and registered in such names as Electing
Holders may request in connection with the sale of Registrable
Securities pursuant to such Shelf Registration Statement.
(i) Upon the occurrence of any event contemplated by paragraph
3(c)(2)(iii) above, the Company shall promptly prepare a post-effective
amendment to any Shelf Registration Statement or an amendment or
supplement to the related Prospectus or FILE any other required
document so that, as thereafter delivered to purchasers of the
Registrable Securities included therein, the Prospectus will not
include an untrue statement of a material 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. If the
Company notifies the Electing Holders of the occurrence of any event
contemplated by paragraph 3(c)(2)(iii) above, the Electing Holders
shall suspend the use of the Prospectus until the requisite changes to
the Prospectus have been made.
(j) Not later than the effective date of any Shelf
Registration Statement hereunder, the Company shall provide a CUSIP
number for the Securities registered under such Shelf Registration
Statement.
(k) The Company shall use its reasonable efforts to comply
with all applicable rules and regulations of the Commission and shall
make generally available to their securityholders or otherwise provide
in accordance with Section 11(a) of the Securities Act as soon as
practicable after the effective date of the applicable Shelf
Registration Statement an earnings statement satisfying the provisions
of Section 11(a) of the Securities Act.
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<PAGE> 9
(1) The Company shall cause the Indenture and the Securities
to be qualified under the Trust Indenture Act in a timely manner, and
in connection with such qualification, the Company shall cooperate with
the Trustee under the Indenture and the Holders (as defined in the
Indenture) to effect such changes to the Indenture as may be required
for such Indenture to be so qualified in accordance with the terms of
the Trust Indenture Act; and the Company shall execute and use all
reasonable efforts to cause the Trustee to execute, all documents that
may be required to effect such changes and all other forms and
documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner.
(m) The Company may require each Electing Holder with respect
to a Shelf Registration Statement to furnish to the Company such
information regarding the Electing Holder and the distribution of
Registrable Securities held by such Electing Holder as may be required
by applicable law or regulation for inclusion in such Shelf
Registration Statement (including, without limitation, the information
required by Item 507 of Regulation S-K of the Securities Act), and the
Company may exclude from such registration the Registrable Securities
of any Electing Holder that fails to furnish such information within a
reasonable time after receiving such request.
(n) The Company shall enter into such customary agreements
(including underwriting agreements in customary form) to take all other
appropriate actions in order to expedite or facilitate the registration
or the disposition of the Registrable Securities, and in connection
therewith, if an underwriting agreement is entered into pursuant to an
underwritten offering in accordance with the provisions of Section 6,
cause the same to contain indemnification provisions and procedures
substantially identical to those set forth in Section 5 (or such other
provisions and procedures acceptable to the Managing Underwriters, if
any) with respect to all parties to be indemnified pursuant to Section
5.
(o) The Company shall make reasonably available for inspection
by one representative of the Electing Holders designated in writing by
the Holders of a majority of the Registrable Securities to be
registered thereunder, any underwriter participating in any disposition
pursuant to such Shelf Registration Statement, and any attorney,
accountant or other agent retained by such representative or any such
underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries;
(p) The Company shall cause the Company's officers, directors
and employees to make reasonably available for inspection all relevant
information reasonably requested by such representative or any such
underwriter, attorney, accountant or agent in connection with any such
Shelf Registration Statement, in each case, as is customary for similar
due diligence examinations; provided, however, that any information
that is designated in writing by the Company, in good faith, as
confidential at the time of delivery of such information shall be kept
confidential by such representative, any Holders or any such
underwriter, attorney, accountant or agent, unless such disclosure is
made in connection with a court proceeding or
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<PAGE> 10
required by law, or such information becomes available to the public
generally or through a third party without an accompanying obligation
of confidentiality;
(q) The Company will use its reasonable efforts to cause the
Common Shares issuable upon conversion of the Securities to be admitted
for quotation on the Nasdaq National Market or other stock exchange or
trading system on which the Common Shares primarily trades on or prior
to the effective date of any Shelf Registration Statement hereunder.
(r) In the event that any broker-dealer registered under the
Exchange Act shall underwrite any Registrable Securities or participate
as a member of an underwriting syndicate or selling group or "assist in
the distribution" (within the meaning of the Rules of Fair Practice and
the By-Laws of the National Association of Securities Dealers, Inc.
("NASD")) thereof, whether as a Holder of such Registrable Securities
or as an underwriter, a placement or sales agent or a broker or dealer
IN respect thereof, or otherwise, assist such broker-dealer in
complying with the requirements of such Rules and By-Laws, including,
without limitation, by (A) such Rules or By-Laws, including Schedule E
thereto, shall so require, engaging a "qualified independent
underwriter" (as defined in Schedule E) to participate in the
preparation of the Shelf Registration Statement relating to such
Registrable Securities and to exercise usual standards of due diligence
in respect thereto, (B) indemnifying any such qualified independent
underwriter to the extent of the indemnification of underwriters
provided in Section 5 hereof and (C) providing such information to
such broker-dealer as may be required in order for such broker-dealer
to comply with the requirements of the Rules of Fair Practice of the
NASD.
(s) The Company shall use its reasonable efforts to take all
other steps necessary to effect the registration, offering and sale of
the Registrable Securities covered by the Shelf Registration Statement
contemplated hereby.
(t) Notwithstanding any provision of this Section 3 to the
contrary, the Company shall not be required to amend or supplement the
Shelf Registration Statement pursuant to the requirements of Sections
3(b), 3(c), 3(i) or 3(s) hereof if (i) such amendment or supplement
would require the Company to disclose a material financing, acquisition
or corporate transaction and the Management Board shall have determined
that such disclosure is not in the best interests of the Company and
the holders of its outstanding Common Shares or (ii) the Management
Board shall have determined in good faith that there is a valid
business purpose or reason for suspending the use of the Prospectus
included in such Shelf Registration Statement in accordance with
Section 3(i) hereof instead of making such amendment or supplement,
provided that in each such case the Company complies with its
obligations, if any, to pay Liquidated Damages.
4. REGISTRATION EXPENSES. Except as otherwise provided in Section 6,
the Company shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2 and 3 hereof and shall bear or
reimburse the Electing Holders for the reasonable fees and
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<PAGE> 11
disbursements of a Special Counsel designated by the Company. For purposed of
this Agreement, the Company initially appoints Shearman & Sterling as Special
Counsel- provided that the Holders of a majority of the Registrable Securities
covered by the Shelf Registration Statement have the right pursuant to this
Agreement to substitute another firm of counsel as Special Counsel under this
Agreement.
5. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with any Shelf
Registration Statement, the Company shall indemnify and hold harmless each
Electing Holder, each underwriter who participates in an offering of Registrable
Securities, each person, if any, who controls any of such parties within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
and each of their respective directors, officers, employees. trustees and
agents, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, including any amounts paid in settlement of any
investigation, litigation, proceeding or claim, joint or several. as
incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Shelf Registration
Statement (or any amendment thereto) covering Registrable Securities,
including all documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided. that the Company shall not be liable under
this clause (i) for any settlement of any action effected without its
written consent, which consent shall not be unreasonably withheld-, and
(ii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by the
Electing Holders, such Electing Holder or any underwriter (except to
the extent otherwise expressly provided in Section 5(c) hereof)),
reasonably incurred in investigating, preparing or defending against
any litigation, or any investigation or proceeding by any court or
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) of this Section 5(a);
provided that this indemnity shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Electing Holder or any
underwriter in writing expressly for use in the Shelf Registration Statement (or
any amendment thereto) or any Prospectus (or any amendment or supplement
thereto). Any amounts advanced by the Company to an indemnified party pursuant
to this Section 5 as a result of such losses shall be returned to the Company if
it shall be finally determined by such a court in a judgment not subject to
appeal or final review that such indemnified party was not entitled to
indemnification by the Company.
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<PAGE> 12
(b) Each Electing Holder shall agree, severally and not jointly, to
indemnify and hold harmless the Company, each underwriter who participates in an
offering of Registrable Securities and the other Electing Holders and each of
their respective directors, officers (including each officer of the Company who
signed the Shelf Registration Statement), employees, trustees and agents and
each Person, if any, who controls the Company, any underwriter or any other
Electing Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all loss, liability,
claim, damage and expense whatsoever described in the indemnity contained in
Section 5(a)(i) and (ii) hereof, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Shelf Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Electing Holder expressly
for use in the Shelf Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto); provided, however, that, no
such Electing Holder shall be liable for any claims hereunder in excess of the
amount of net proceeds received by such Electing Holder from the sale of
Registrable Securities pursuant to the Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers served on such
indemnified party, but failure to so notify an indemnifying party shall not
relieve it of any liability which it may have to the indemnified party otherwise
than on account of this indemnity agreement. An indemnifying party may
participate at its own expense in the defense of any such action. If an
indemnifying party so elects within a reasonable time after receipt of such
notice, such indemnifying party, jointly with any other indemnifying party, may
assume the defense of such action with counsel chosen by it and approved by the
indemnified party or parties defendant in such action, provided that if any such
indemnified party reasonably determines that there may be legal defenses
available to such indemnified party which are different from or in addition to
those available to such indemnifying party or that representation of such
indemnifying party and any indemnified party by the same counsel would present a
conflict of interest, then such indemnifying party or parties shall not be
entitled to assume such defense. If an indemnifying party is not entitled to
assume the defense of such action as a result of the proviso to the preceding
sentence, counsel for such indemnifying party shall be entitled to conduct the
defense of such indemnifying party and counsel for each indemnified party or
parties shall be entitled to conduct the defense of such indemnified party or
parties. If an indemnifying party assumes the defense of an action in accordance
with and as permitted by the provisions of this paragraph, such indemnifying
party shall not be liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection with such action. In no
event shall the indemnifying party or parties be liable for the fees and
expenses of more than one counsel (in addition to any local counsel) separate
from its own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity provision agreement provided for in this
Section 5 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, and the Electing
Holders shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of
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<PAGE> 13
the nature contemplated by said indemnity agreement incurred by the Company and
the Electing Holders, as incurred; provided that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person that was not guilty of such
fraudulent misrepresentation. As between the Company, on the one hand, and the
Electing Holders, on the other hand, such parties shall contribute to such
aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion as shall be
appropriate to reflect the relative fault of the Company, on the one hand, and
the Electing Holders, on the other hand, with respect to the statements or
omissions which resulted in such loss, liability, claim, damage or expense, or
action in respect thereof, as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Electing Holders, on the other hand, shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company, on the one hand, or by or on behalf of the
Electing Holders, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Initial Purchasers agree, and the
Electing Holders shall agree, that it would not be just and equitable if
contribution pursuant to this Section 5 were to be determined by pro rata
allocation or by any other method of allocation that does not take into account
the relevant equitable considerations. For purposes of this Section 5(d), each
director, officer, employee, trustee, agent and Person, if any, who controls a
Holder within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act shall have the same rights to contribution as such Holder, and
each director, officer, employee, trustee and agent of the Company, and each
Person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Company. No party shall be liable for contribution with
respect to any action, suit, proceeding or claim settled without its written
consent.
(e) The Company may require, as a condition to including any
Registrable Securities in any Registration Statement filed and to entering into
any underwriting agreement with respect thereto, that the Company shall have
received an undertaking reasonably satisfactory to it from the holder of such
Registrable Securities and from each underwriter named in any such underwriting
agreement, severally and not jointly, to comply with the provisions of
paragraphs (a) through (d) of this Section 5.
6. UNDERWRITTEN OFFERING. The Electing Holders who desire to do so may
sell Registrable Securities in an underwritten offering. In any such
underwritten offering, the investment banker or bankers and manager or managers
that will administer the offering will be selected by, and the underwriting
arrangements with respect thereto will be approved by the Holders of a majority
of the Registrable Securities to be included in such offering- provided,
however, that (i) such investment bankers and managers and underwriting
arrangements must be reasonably satisfactory to the Company and (ii) the Company
shall not be obligated to arrange for more than one underwritten offering during
the Effectiveness Period. No Holder may participate in any underwritten offering
contemplated hereby unless such Holder (a) agrees to sell such Holder's
Registrable Securities in accordance with any approved underwriting
arrangements, (b) completes and executes all reasonable questionnaires, powers
of attorney, indemnities, underwriting agreements, lock-up letters and other
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<PAGE> 14
documents required under the terms of such approved underwriting arrangements
and (c) at least 20% of the outstanding Registrable Securities are included in
such underwritten offering. The Holders participating in any underwritten
offering shall be responsible for any expenses customarily borne by selling
securityholders, including underwriting discounts and commissions and fees and
expenses of counsel to the selling securityholders and shall reimburse the
Company for the fees and disbursements of their counsel, their independent
public accountants and any printing expenses incurred in connection with such
underwritten offerings. Notwithstanding the foregoing or the provisions of
Section 6(a) hereof, upon receipt of a request from the Managing Underwriter or
a representative of Holders of a majority of the Registrable Securities
outstanding to prepare and file an amendment or supplement to the Shelf
Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Company in good faith has a valid business reason for
such delay.
The Company shall in connection with an underwritten offering in
accordance with the provisions of this Section:
(a) The Company shall, if requested, promptly include or
incorporate IN a Prospectus supplement or post-effective amendment to a
Shelf Registration Statement, such information as the Managing
Underwriters administering an underwritten offering of Registrable
Securities registered thereunder reasonably request to be included
therein and to which the Company does not reasonably object and shall
make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after they are notified
of the matters to be included or incorporated in such Prospectus
supplement or posteffective amendment;
(b) make such representations and warranties to the Electing
Holders and the underwriters in form, substance and scope as are
customarily made by the Company to under-writers in primary
underwritten offerings and covering matters, including, but not limited
to, those set forth in the Purchase Agreement;
(c) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the Managing Underwriters)
addressed to each Electing Holder and the underwriters covering such
matters as are customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such Electing Holders and underwriters (it being agreed
that the matters to be covered by such opinion or written statement by
such counsel delivered in connection with such opinions shall include
in customary form, without limitation, as of the date of the opinion
and as of the effective date of the Shelf Registration Statement or
most recent post-effective amendment thereto, as the case may be, the
absence from such Shelf Registration Statement and the prospectus
included therein, as then amended or supplemented, including the
documents incorporated by reference therein, of an untrue statement of
a material fact or the omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading);
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<PAGE> 15
(d) obtain "cold comfort" letters and updates thereof from the
independent public accountants of the Company (and, if necessary, any
other independent public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in
the Shelf Registration Statement), addressed to each Electing Holder
and the underwriters IN customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection with
primary underwritten offerings; and
(e) deliver such documents and certificates as may be
reasonably requested by any such Electing Holders and the Managing
Underwriters, including those to evidence compliance with Section 3(i)
and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company.
7. MISCELLANEOUS.
(a) Other Registration Rights. The Company may grant
registration rights that would permit any Person that is a third party the right
to piggyback on any Shelf Registration Statement, provided that if the Managing
Underwriter, if any, of such offering delivers an opinion to the Electing
Holders that the total amount of securities which they and the holders of such
piggyback rights intend to include in any Shelf Registration Statement is so
large as to materially adversely affect the success of such offering (including
the price at which such securities can be sold), then only the amount, the
number or kind of securities to be offered for the account of holders of such
piggyback rights will be reduced to the extent necessary to reduce the total
amount of securities to be included in such offering to the amount, number or
kind recommended by the Managing Underwriter prior to any reduction in the
amount of Registrable Securities to be included.
(b) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of Morgan Grenfell & Co.
Limited.
(c) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail, telex, telecopier, or air courier guaranteeing overnight delivery:
(1) if to a Holder, at the most current address given
by such Holder to the Company in accordance with the
provisions of this Section 7(c);
(2) if to the Initial Purchasers, initially at the
address set forth in the Purchase Agreement;
(3) if to the Company, initially at its address set
forth in the Purchase Agreement; and
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<PAGE> 16
(4) if to the Special Counsel, the address given by
such Special Counsel to the Company in accordance with the pro
visions of this Section 7(c).
All such notices and communications shall be deemed to have been duly given when
received.
The Initial Purchasers or the Company by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
and the Holders, including, without the need for an express assignment or any
consent by the Company thereto, subsequent Holders of Registrable Securities.
The Company hereby agrees to extend the benefits of this Agreement to any Holder
of Registrable Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(e) Counterparts. This agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof
(g) Governing Law. This agreement shall be governed by and
construed in accordance with the laws of the State of New York, United States of
America, without giving effect to any provisions relating to conflicts of laws.
(h) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be IN any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
(i) Jurisdiction. Each of the parties hereto irrevocably (i)
agrees that any legal suit, action or proceeding against the Company brought by
any Initial Purchaser or by any person who controls any Initial Purchaser
arising out of or based upon this Agreement or the transactions contemplated
hereby may be instituted in any New York court, (ii) waives, to the fullest
extent it may effectively do so, any objection which it may now or hereafter
have to the laying of venue of any such proceeding and (iii) submits to the
exclusive jurisdiction of such courts in any such suit, action or proceeding.
The Company irrevocably waives any immunity to to which ti may otherwise be
entitled or become entitled (including sovereign immunity, immunity to
pre-judgment attachment, post-judgment attachment and execution) in any legal
suit, action or proceeding against it by any Initial Purchaser arising out of or
based on this Agreement or the transactions contemplated hereby which is
instituted in any New York court or in any competent court in The Netherlands.
The
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<PAGE> 17
Company has appointed CT Corporation System, 1633 Broadway, New York, New York
10019, as its authorized agent (the "Authorized Agent") upon whom process may be
served in any such action by any Initial Purchaser arising out of or based on
this Agreement or the transactions contemplated hereby which maybe instituted in
any New York court by any Initial Purchaser or by any person who controls, any
Initial Purchaser expressly consents to the Jurisdiction of any such court in
respect of any such action, and waives any other requirements of or objections
to personal jurisdiction with respect thereto. Such appointment shall be
irrevocable. The Company represent and warrants that the Authorized Agent has
agreed to act as such agent for service of process and agrees to take any and
all action, including the filing of any and all documents and instruments, that
may be necessary to continue such appointment in full force and effect as
aforesaid. Service of process upon the Authorized Agent and written notice of
such service to the Company shall be deemed, in every respect, effective service
of process upon the Company as the case may be.
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<PAGE> 18
Please confirm that the foregoing correctly sets forth the agreement between the
Company and you.
Very truly yours,
BAAN COMPANY N.V.
By: /s/ Jan Baan
------------------------------------
Jan Baan, on behalf of Jan Baan,
B.V., Managing Director with the
title of Chief Executive Officer
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
MORGAN GRENFELL & CO. LIMITED
Acting severally on behalf of itself
and the several Initial Purchasers named herein.
By: MORGAN GRENFELL & CO. LIMITED
By: /s/ James F. Miller
------------------------------
Name: James F. Miller
-----------------------
Title: Managing Director
-----------------------
<PAGE> 1
EXHIBIT 5.1
DE BRAUW BLACKSTONE WESTBROEK
advocaten & notarissen
in samenwerking met
DE BANDT, VAN HECKE & LAGAE
Postbus 75084
1070 AP Amsterdam
Tripoli 300
Burgerweeshuispad 301
Telefoon 020 5771771
Telefax 020 5771775
To: Baan Company N.V.
Baron van Nagellstraat 89
3371 LK Barneveld
The Netherlands
Amsterdam, May 9, 1997
Ref. : 276/20078749/opn2.512
Ladies and Gentlemen,
BAAN COMPANY N.V.
Issue of USD 200,000,000 4 1/2 per cent.
Convertible Subordinated Notes due 2001
I have acted as legal counsel in respect of certain matters of the law of the
Netherlands to Baan Company N.V., a company incorporated under the law of the
Netherlands with its corporate seat in Barneveld, the Netherlands, (the
"Company") in connection with the issue (the "Issue") by the Company of USD
200,000,000 aggregate principal amount of 4 1/2 per cent. subordinated notes
due 2001 (the "Notes"), convertible into common shares, with a nominal value of
NLG 0.01 each, in the capital of the Company ("Shares").
In connection herewith I have examined the following documents:
(a) a photocopy of a copy of the deed of incorporation of the Company, as
filed with the trade register of the Chamber of Commerce and Industry of
Centraal Gelderland, the Netherlands, (the "Trade Register") and the
text of the articles of association of the
<PAGE> 2
Company as most recently amended according to the Extract (as defined
below) by deed of amendment executed on May 29, 1996 (the "Articles of
Association");
(b) an extract (the "Extract"), dated April 25, 1997, from the Trade
Register with information regarding the Company, confirmed to me to be
unchanged in all respects material for rendering this opinion by
telephone by the Trade Register on the date hereof;
(c) an extract, dated April 25, 1997, from the Trade Register with
information regarding Jan Baan B.V., a company incorporated under the
law of the Netherlands with corporate seat in Terschuur, the
Netherlands, confirmed to me to be unchanged in all respects material
for rendering this opinion by telephone by the Trade Register on the
date hereof;
(d) a telecopy of the minutes of the general meeting of shareholders of the
Company, held on April 11, 1996;
(e) a telecopy of the resolutions of the board of managing directors
("directie") of the Company, dated December 12, 1996 in connection with
the Issue;
(f) a telecopy of the resolutions adopted by the board of supervisory
directors ("raad van commissarissen") of the Company, dated December 12,
1996 in connection with the Issue;
(g) a telecopy of a memorandum, dated December 19, 1996, to Mr. P. Versloot
in his capacity as chairman of the works council of Baan Nederland B.V.,
signed for confirmation by Mr. Versloot in such capacity;
(h) a telecopy of a memorandum, dated December 19, 1996,
<PAGE> 3
to Mr. C. Van Dijk in his capacity as chairman of the works council of
Baan Development B.V., signed for confirmation by Mr. Van Dijk in such
capacity;
(i) a telecopy of an executed copy of a purchase agreement, dated December
12, 1996, between the Issuer and the Initial Purchasers mentioned
therein (the "Purchase Agreement");
(j) a telecopy of an executed copy of an indenture, date as of December 15,
1996, between the Issuer and Marine Midland Bank as Trustee (the
"Indenture");
(k) a telecopy of a draft, dated May 6, 1997, of an amendment No. 1 to a
registration statement on Form F-3, relating to the Notes (the
"Registration Statement").
My examination referred to above has been limited to the face of the documents.
The Purchase Agreement and the Indenture are hereinafter collectively referred
to as the "Agreements".
For the purpose of rendering this opinion I have assumed that:
(i) the Registration Statement has been or will have been executed and filed
substantially in the form of the draft referred to in (k);
(ii) the signatures on original documents are the genuine signatures of the
persons purported to have executed the same and the conformity of
photo-, tele- and other copies to originals;
(iii) the resolutions referred to in (d), (e) and (f) above are not contrary
to standards of reasonableness and fairness ("redelijkheid en
billijkheid") to be observed by a legal entity and those persons who
are, pursuant to the law or the articles of association of such legal
entity, involved in its organisation;
<PAGE> 4
(iv) the Agreements constitute the valid, binding and enforceable obligations
of all the parties thereto (including the Company) under all applicable
law (including to the extent applicable, the law of The Netherlands);
(v) the Notes have been duly authorised, accepted and paid for in accordance
with the Agreements by all the initial holders thereof;
(vi) each conversion of Notes into Shares will take place in accordance with
the Agreements and in accordance with any applicable law other than the
law of the Netherlands;
(vii) each conversion of Notes into Shares will be possible under the articles
of association of the Issuer in force at the time of such conversion,
and that at each such time the authorised share capital
("maatschappelijk kapitaal") and the issued share capital ("geplaatst
kapitaal") of the Issuer will be such that the relevant Shares can be
validly issued.
I have not investigated the law of any jurisdiction other than the Netherlands
as it stands and has been interpreted in published case law of the courts in
the Netherlands as at the date of this opinion and I do not express an opinion
on the law of any jurisdiction other than the Netherlands.
Terms and expressions of law and of legal concepts as used in this opinion have
the meaning in this opinion attributed to them under the law of the Netherlands
and this opinion should be read and understood accordingly.
Based upon the foregoing (including the assumptions set out above), and subject
to any facts, circumstances, documents or
<PAGE> 5
events not disclosed to me in the course of my examination referred to above, I
am, at the date hereof, of the following opinion:
1. The Notes have been duly authorized and validly issued in accordance
with the law of the Netherlands and the provisions of the Articles of
Association applicable thereto.
2. The Shares issuable upon conversion of Notes have been duly authorized
and, upon such conversion, will be validly issued in accordance with the
law of the Netherlands and the Articles of Association and will be fully
paid and non-assessable.
This opinion is addressed to you and is for the sole benefit of yourselves and
may not be relied upon by any person other than yourselves and your legal
advisers. This opinion may not without my prior written consent be transmitted
to or filed with any person, firm, company or institution.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to De Brauw Blackstone Westbroek in
the prospectus included in the Registration Statement under the heading "Legal
Matters". In giving such consent, I do not thereby admit that I am in the
category of persons whose consent is required under Section 7 of the United
States Securities Act of 1933, as amended.
Very truly yours,
/s/ Francine M. Schlingmann
Francine M. Schlingmann
<PAGE> 1
Exhibit 23.1
CONSENT OF MORET ERNST & YOUNG ACCOUNTANTS, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendement No. 1 to the Registration Statement (Form F-3) and related Prospectus
of Baan Company N.V. for the registration of 4.5% Convertible Subordinated Notes
due 2001 and shares of common stock issuable on conversion thereof and to the
incorporation by reference therein of our report dated January 24, 1997, with
respect to the consolidated financial statements of Baan Company N.V. included
in its Annual Report (Form 20-F) for the year ended December 31, 1996, filed
with the Securities and Exchange Commission.
/s/ Moret Ernst & Young
MORET ERNST & YOUNG ACCOUNTANTS
Utrecht, The Netherlands
May 8, 1997
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Jan Baan, Thomas C. Tinsley, Jan
Westerhoud, and Willem H. Heijting, his true and lawful attorney-in-fact and
agent, with full power of each to act alone, with full powers of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to such certain Registration Statement dated March 31, 1997, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, with full power of each to act alone, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully for all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or his or her substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------- --------------------------------------------- ---------------
<C> <S> <C>
/s/ JAN BAAN Managing Director, Chairman of the Board and March 28, 1997
- ---------------------------------- Chief Executive Officer
Jan Baan (Principal Executive Officer)
/s/ J.G. PAUL BAAN Chairman of the Supervisory Board March 28, 1997
- ----------------------------------
J.G. Paul Baan
/s/ THOMAS C. TINSLEY Managing Director, President and Chief March 28, 1997
- ---------------------------------- Operating Officer
Thomas C. Tinsley
/s/ JAN WESTERHOUD Vice President, Finance March 28, 1997
- ---------------------------------- (Principal Financial and Accounting Officer)
Jan Westerhoud
/s/ WILLIAM O. GRABE Supervisory Director March 28, 1997
- ----------------------------------
William O. Grabe
/s/ DAVID C. HODGSON Supervisory Director March 28, 1997
- ----------------------------------
David C. Hodgson
/s/ GRAHAM J. SHARMAN Supervisory Director March 28, 1997
- ----------------------------------
Graham J. Sharman
/s/ J.C. (HANS) WORTMANN Supervisory Director March 28, 1997
- ----------------------------------
J.C. (Hans) Wortmann
</TABLE>
<PAGE> 1
EXHIBIT 25.1
Conformed Copy
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST
INDENTURE ACT OF 1939 OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
------------------
MARINE MIDLAND BANK
(Exact name of trustee as specified in its charter)
New York 16-1057879
(Jurisdiction of incorporation (I.R.S. Employer
or organization if not a U.S. Identification No.)
national bank)
140 Broadway, New York, N.Y. 10005-1180
(212) 658-1000 (Zip Code)
(Address of principal executive offices)
Warren L. Tischler
Senior Vice President
Marine Midland Bank
140 Broadway
New York, New York 10005-1180
Tel: (212) 658-6560
(Name, address and telephone number of agent for service)
BAAN COMPANY N.V.
(Exact name of obligor as specified in its charter)
The Netherlands Not Applicable
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Post Office Box 250
6710 BG Ede The Netherlands
011-31-318-696666 (Zip Code)
(Address of principal executive offices)
4.5% Convertible Subordinated Notes due 2001
(Title of Indenture Securities)
<PAGE> 2
General
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory
authority to which it is subject.
State of New York Banking Department.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe
each such affiliation.
None
<PAGE> 3
Item 16. List of Exhibits.
Exhibit
T1A(i)*-Copy of the Organization Certificate of Marine Midland Bank.
T1A(ii)*-Certificate of the State of New York Banking Department dated December
31, 1993 as to the authority
of Marine Midland Bank to commence business.
T1A(iii)-Not applicable.
T1A(iv)*-Copy of the existing By-Laws of Marine Midland Bank as adopted on
January 20, 1994.
T1A(v)-Not applicable.
T1A(vi)*-Consent of Marine Midland Bank required by Section 321(b) of the Trust
Indenture Act of 1939.
T1A(vii)-Copy of the latest report of condition of the trustee (December 31,
1996), published pursuant to law
or the requirement of its supervisory or examining authority.
T1A(viii)-Not applicable.
T1A(ix)-Not applicable.
*Exhibits previously filed with the Securities and Exchange Commission with
Registration No. 33-53693 and
incorporated herein by reference thereto.
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Marine Midland Bank, a banking corporation and trust company
organized under the laws of the State of New York, has duly caused
this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of New York
and State of New York on the 11th day of April, 1997.
MARINE MIDLAND BANK
By:/s/Frank J, Godino
--------------------------------
Frank J. Godino
Assistant Vice President
<PAGE> 5
EXHIBIT T1A (VII)
Board of Governors of the
Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance
Corporation
OMB Number: 3064-0052
Office of the Comptroller
of the Currency
OMB Number: 1557-0081
<TABLE>
<S> <C>
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Expires March 31, 1999
- ----------------------------------------------------------------------------------------------------------------------------
This financial information has not been reviewed, or confirmed [1]
for accuracy or relevance, by the Federal Reserve System. Please refer to page i,
Table of Contents, for
the required disclosure
of estimated burden.
- ----------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR
A BANK WITH DOMESTIC AND FOREIGN OFFICES--FFIEC 031
(950630)
REPORT AT THE CLOSE OF BUSINESS DECEMBER 31, 1996 (RCRI9999)
This report is required by law; 12 U.S.C. Section 324 (State This report form is to be filed by banks with branches
member banks); 12 U.S.C. Section 1817 (State nonmember and consolidated subsidiaries in U.S. territories and
banks); and 12 U.S.C. Section 161 (National banks). possessions, Edge or Agreement subsidiaries,
foreign branches, consolidated foreign subsidiaries,
or International Banking Facilities.
- ----------------------------------------------------------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be signed by The Reports of Condition and Income are to be prepared in
an authorized officer and the Report of Condition must be accordance with Federal regulatory authority instructions.
attested to by not less than two directors (trustees) for NOTE: These instructions may in some cases differ from
State nonmember banks and three directors for State member generally accepted accounting principles.
and National Banks.
I, Gerald A. Ronning, Executive VP & Controller We, the undersigned directors (trustees), attest to the
-------------------------------------------- correctness of this Report of Condition (including the
Name and Title of Officer Authorized to Sign Report supporting schedules) and declare that it has been examined by
us and to the best of our knowledge and belief has been
of the named bank do hereby declare that these Reports of prepared in conformance with the instructions issued by the
Condition and Income (including the supporting schedules) appropriate Federal regulatory authority and is true and
have been prepared in conformance with the instructions correct.
issued by the appropriate Federal regulatory authority and
are true to the best of my knowledge and believe.
/s/ Bernard J. Kennedy
-------------------------------------
Director (Trustee)
/s/ Gerald A. Ronning /s/ Northrup R. Knox
- ---------------------------------- -------------------------------------
Signature of Officer Authorized to Sign Report Director (Trustee)
1/27/97 /s/ Henry J. Nowak
- ---------------------------------- -------------------------------------
Date of Signature Director (Trustee)
- ----------------------------------------------------------------------------------------------------------------------------
FOR BANKS SUBMITTING HARD COPY REPORT FORMS:
STATE MEMBER BANK: Return the original and one copy to the NATIONAL BANKS: Return the original only in the special return
appropriate Federal Reserve District Bank. address envelope provided. If express mail is used in lieu of
the special return address envelope, return the original only
STATE NONMEMBER BANKS: Return the original only in the to the FDIC, c/o Quality Data Systems, 2127 Espey Court, Suite
special return address envelope provided. If express mail is 204, Crofton, MD 21114.
used in lieu of the special return address envelope, return
the original only to the FDIC, c/o Quality Data Systems, 2127
Espey Court, Suite 204, Crofton, MD 21114.
- ----------------------------------------------------------------------------------------------------------------------------
FDIC Certificate Number 0 0 5 8 9
(RCRI 9030)
</TABLE>
<PAGE> 6
NOTICE
This form is intended to assist institutions with state publication
requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for
your state publication requirements.
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
Marine Midland Bank of Buffalo City
Name of Bank
in the state of New York, at the close of business
December 31, 1996
ASSETS
Thousands
of dollars
Cash and balances due from depository
institutions:
<TABLE>
<S> <C>
Noninterest-bearing balances
currency and coin.................................... $ 967,072
Interest-bearing balances ........................... 1,867,936
Held-to-maturity securities.......................... 0
Available-for-sale securities........................ 2,841,138
Federal Funds sold and securities purchased
under agreements to resell in domestic
offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds sold................................... 1,606,822
Securities purchased under
agreements to resell................................. 235,041
Loans and lease financing receivables:
Loans and leases net of unearned
income............................... 14,555,533
LESS: Allowance for loan and lease
losses............................... 415,451
LESS: Allocated transfer risk reserve 0
Loans and lease, net of unearned
income, allowance, and reserve....................... 14,140,082
Trading assets....................................... 891,546
Premises and fixed assets (including
capitalized leases).................................. 189,690
Other real estate owned................................. 1,144
Investments in unconsolidated
subsidiaries and associated companies................... 0
Customers' liability to this bank on
acceptances outstanding................................. 17,549
Intangible assets....................................... 187,259
Other assets............................................ 399,875
Total assets............................................ 23,345,154
</TABLE>
<PAGE> 7
LIABILITIES
<TABLE>
<S> <C>
Deposits:
In domestic offices.................................. 15,864,140
Noninterest-bearing................................. 4,242,927
Interest-bearing.................................... 11,621,213
In foreign offices, Edge, and Agreement
subsidiaries, and IBFs.................................. 3,036,069
Noninterest-bearing.................................. 0
Interest-bearing..................................... 3,036,069
Federal funds purchased and securities sold
under agreements to repurchase in domestic
offices of the bank and its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds purchased.............................. 1,225,738
Securities sold under agreements to
repurchase........................................... 58,491
Demand notes issued to the U.S. Treasury 181,786
Trading Liabilities...................................... 234,555
Other borrowed money:
With original maturity of one year
or less.............................................. 26,912
With original maturity of more than
one year............................................. 0
Mortgage indebtedness and obligations
under capitalized leases................................ 33,120
Bank's liability on acceptances
executed and outstanding................................ 17,549
Subordinated notes and debentures....................... 397,522
Other liabilities....................................... 386,942
Total liabilities....................................... 21,462,824
Limited-life preferred stock and
related surplus......................................... 0
EQUITY CAPITAL
Perpetual preferred stock and related
surplus................................................. 0
Common Stock............................................ 185,000
Surplus................................................. 1,633,431
Undivided profits and capital reserves.................. 54,753
Net unrealized holding gains (losses)
on available-for-sale securities........................ 9,146
Cumulative foreign currency translation
adjustments............................................. 0
Total equity capital.................................... 1,882,330
Total liabilities, limited-life
preferred stock, and equity capital..................... 23,345,154
</TABLE>
