EXHIBIT F
TERMINATION AND STANDSTILL AGREEMENT
TERMINATION AND STANDSTILL AGREEMENT, dated as of May 29, 2000
(this "Agreement"), by and between Baan Company N.V., a corporation
organized under the laws of the Netherlands (together with its successors,
"Baan") and Fletcher International Limited, a company organized under the
laws of the Cayman Islands (together with its successors, "Fletcher").
W H E R E A S
- - - - - - -
Baan and Fletcher entered into a Share Rights Agreement, dated as
of December 31, 1998 and amended that Share Rights Agreement as of November
24, 1999 (as so amended, the "Share Rights Agreement").
Baan has announced publicly that it is exploring its strategic
alternatives, which may include a sale of Baan.
Baan and Fletcher wish to suspend the exercise of Fletcher Rights
and Baan Rights under the Share Rights Agreement while Baan explores its
strategic options.
Baan and Fletcher wish to terminate the Share Rights Agreement,
together with all rights and duties thereunder, if certain conditions set
forth herein are satisfied.
NOW THEREFORE, in consideration of the mutual promises hereunder
and for other good and lawful consideration, the sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. Certain definitions. As used herein, the following terms shall
have the following respective meanings, and all capitalized terms used
herein which are not otherwise defined shall have the meaning assigned
thereto in the Share Rights Agreement:
"Affiliate" means, with respect to a person or entity, a person
or entity that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with that person or
entity. "Control" means, for purposes of this definition, the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a person or entity, whether through the
ownership of voting securities, by contract or otherwise.
"Boards" means the Supervisory Board and Management Board of
Baan.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Transaction" means any transaction or series of transactions in
which (i) a party or group acting in concert, other than Fletcher or any of
its Affiliates, purchases or otherwise acquires more than 50% of the then
outstanding Common Shares, or (ii) all or substantially all of the assets
of Baan are sold, leased or otherwise transferred to one or more parties
other than Fletcher or any of its Affiliates or (iii) Baan is merged with
and/or into another entity in which the shareholders of Baan as of the date
hereof do not hold more than 50% of the voting power of the resulting
entity.
2. Representations and warranties.
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2.1 Fletcher represents and warrants that, as of the date
hereof, under the Share Rights Agreement, (i) Fletcher holds $16,623,392.48
of Additional Investor Rights (the "Outstanding Rights") (which represent
Baan Rights for which a Rights Closing occurred under Section 1.d of the
Share Rights Agreement and for which no Additional Investment Notice for
exercises into Common Shares has been delivered) and $175.0 million of
Fletcher Rights; (ii) Baan holds $40.0 million of Baan Rights which, unless
exercised prior to June 30, 2000, will become Fletcher Rights in accordance
with the terms of the Share Rights Agreement; (iii) other than as set forth
in clauses (i) and (ii) of this sentence, neither Fletcher nor any of its
Affiliates has any right or option to acquire (1) Common Shares or (2) any
security exercisable for, or convertible into Common Shares and (iv)
neither the Share Rights Agreement nor any of the rights or interests
thereunder have been assigned to any party aside from the lien (the "Lehman
Lien") granted to Lehman Brothers Finance S.A. ("Lehman") pursuant to the
Collateral Assignment Agreement dated as of December 3, 1999 between
Fletcher and Lehman.
2.2 Fletcher represents and warrants that, as of the date
hereof, Fletcher and its Affiliates beneficially own (for purposes of Rule
13d-3 under the Exchange Act), in the aggregate, 8,121,236 Common Shares
(the "Fletcher Shares"). The Fletcher Shares are owned free and clear of
any security interest, pledge, claim, lien, encumbrance or adverse interest
of any nature (collectively "Liens") aside from the Lehman Lien. Upon any
transfer of the Fletcher Shares contemplated by Section 4.1 hereof, the
transferee will receive good and valid title to the Fletcher Shares, free
and clear of any Liens. Fletcher and its Affiliates have full legal power,
authority and right to vote (and to grant any consents for) all Fletcher
Shares without the consent or approval of, or any other action on the part
of, any other person or entity. Prior to the Expiration Date (as defined in
Section 3.1 hereof), Fletcher shall not commit any act that could restrict
or otherwise affect such legal power, authority and right to vote the
Fletcher Shares.
2.3 Each of Baan and Fletcher represents to each other that
(i) it has full legal power, authority and right to execute and deliver,
and to perform the obligations under, this Agreement; (ii) this Agreement
has been duly authorized, executed and delivered by such party and
constitutes a valid and binding agreement of such party enforceable against
such party in accordance with its terms, subject to (x) bankruptcy,
insolvency, moratorium and other similar laws now or hereinafter in effect
relating to or affecting creditors' rights generally and (y) general
principles of equity (regardless of whether considered in a proceeding at
law or in equity).
3. Covenants.
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3.1 From the date hereof until the earlier of (i) December
31, 2000 or (ii) the date that Baan publicly announces it is no longer
pursuing strategic alternatives involving a sale or other disposition of
Baan and no other person shall have publicly announced that a proposed
Transaction is pending (such earlier date, the "Expiration Date"), Fletcher
shall not, and shall cause its Affiliates not to:
(a) Exercise any Fletcher Rights (including, without
limitation, any Fletcher Rights exercisable under Section 1.e of the Share
Rights Agreement) or give any Fletcher Notices;
(b) Exercise any Additional Investor Rights or give any
Additional Investment Notices;
(c) Exercise any of its rights or give any notices
under the Share Rights Agreement (including, without limitation, Section
3.B.c, 6 or 7 of the Share Rights Agreement);
(d) Other than in respect of the issuance to Fletcher
of the Fletcher Shares as described in Section 3.6 hereof, require Baan to
comply with any representation, warranty or covenant of the Share Rights
Agreement or assert the existence of a breach on the part of Baan of any
representation, warranty or covenant under the Share Rights Agreement;
(e) Otherwise acquire any additional Common Shares
under the Share Rights Agreement or otherwise;
(f) Purchase or sell, directly or indirectly, any
security issued by Baan except as provided in this Agreement; provided that
Fletcher and its Affiliates may engage in one or more Hedging Transactions
so long as neither Fletcher, any of Fletcher's Affiliates nor any
counterparty to such Hedging Transaction is obligated directly or
indirectly, to purchase, sell or deliver any security issued by Baan under
such Hedging Transaction to any person or entity. "Hedging Transaction"
includes any transaction, stock appreciation or depreciation right, swap,
collar, floor, cap, hedging arrangement or other contract or arrangement
whose value is determined in whole or in part by reference to the value of
any security issued by Baan;
(g) Directly or indirectly negotiate or engage in
discussions with, or facilitate, encourage or solicit any party to enter
into or commence any Transaction without the prior written consent of Baan;
or
(h) Assign or otherwise transfer (or agree to assign or
otherwise transfer) the Share Rights Agreement (or any right or interest
thereunder) or directly or indirectly negotiate or engage in discussions
with any party to do any of the foregoing without the prior written consent
of Baan.
3.2 From the date hereof until the Expiration Date, except
as permitted under Section 4.1, (i) other than the Lehman Lien, Fletcher
shall not, and shall cause its Affiliates not to, directly or indirectly
sell, assign, tender, pledge, encumber, mortgage, hypothecate, transfer,
make any distributions of, or otherwise dispose of (collectively,
"Transfer") or enter into any agreement or series of agreements to Transfer
any Fletcher Shares and (ii) Fletcher shall not, and shall cause its
Affiliates not to, enter into any hedging or other transaction that is
designed to or reasonably expected to lead to or result in a Transfer of
the Fletcher Shares, even if such Fletcher Shares would be disposed of by
someone other than Fletcher or one of its Affiliates, which transactions
would include, without limitation, any short sale (whether or not against
the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Fletcher Shares or
with respect to any other security issued by Baan. This Section 3.2 shall
not apply to a Transfer if such Transfer is in accordance with the terms of
a Transaction that has been recommended by the Boards.
3.3 From the date hereof until the Expiration Date, to the
extent Fletcher or any of its Affiliates beneficially owns any Fletcher
Shares, Fletcher shall, and shall cause its Affiliates and the holder of
record of any Fletcher Shares on any applicable record date to, from time
to time, at any meeting (whether annual or special and whether or not an
adjourned or postponed meeting) of stockholders of Baan, however called, or
in connection with any written consent of the holders of Common Shares, (a)
if a meeting is held, appear at such meeting or otherwise cause the
Fletcher Shares to be counted as present thereat for purposes of
establishing a quorum, and (b) vote or consent (or cause to be voted or
consented), in person or by proxy, all Fletcher Shares that are
beneficially owned or held of record by Fletcher or any of its Affiliates
or as to which Fletcher or any of its Affiliates has, directly or
indirectly, the right to vote or direct the voting, in favor of the
approval and adoption of any matter (including, without limitation, the
consummation of any Transaction and the approval and adoption of any
agreements or transactions related thereto) approved or recommended by the
Boards and any action required in furtherance thereof (and against any
matter not approved or recommended by the Boards).
3.4 From the date hereof until the Expiration Date, Baan
shall not:
(a) Exercise any Baan Rights;
(b) Exercise any of its rights or give any notices
under the Share Rights Agreement;
(c) Other than in respect of the issuance to Fletcher
of the Fletcher Shares as described in Section 3.6 hereof, require Fletcher
to comply with any representation warranty or covenant of the Share Rights
Agreement or assert the existence of a breach on the part of Fletcher of
any representation, warranty or covenant under the Share Rights Agreement
other than under Sections 8 and 8.A of the Share Rights Agreement.
3.5 Fletcher shall use reasonable commercial efforts to
release the Fletcher Shares from the Lehman Lien as soon as is practicable
(but in no event later than the third business day after the date of this
Agreement).
3.6 On or prior to May 30, 2000, in accordance with the
terms of the Share Rights Agreement, Baan shall have issued 8,121,233
Common Shares to Fletcher upon exercise of Additional Investor Rights by
Fletcher on May 24, 2000.
4. Share Purchase.
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4.1 If Baan enters into, agrees to, or publicly announces
any Transaction in which the total consideration to be received per share
is greater than U.S.$2.00 (or if such consideration is in Euros, the Dollar
Equivalent of the per share Euro price determined as of the close of
business on the business day immediately preceding the earlier of the date
such Transaction is entered into, agreed or announced publicly) payable
solely in cash, on or prior to May 31, 2000 and the Boards have approved or
recommended such Transaction (a "Recommended Transaction"), Baan (or its
assignee under Section 4.3, which may be one or more of the other parties
to a Transaction agreement) shall purchase from Fletcher and its
Affiliates, and Fletcher and its Affiliates shall sell to Baan (or its
assignee under Section 4.3, which may be one or more of the other parties
to a Transaction agreement), the Fletcher Shares owned by them on the date
hereof at the same price per Common Share as that payable in such
Recommended Transaction. The closing of any purchase under this Section 4.1
shall occur at 11:00 am on the later of (x) May 31, 2000 or (y) the date
the Lehman Lien is extinguished, at the offices of Paul, Weiss, Rifkind,
Wharton & Garrison, 1285 Avenue of the Americas, New York, New York or at
such other time and place as the parties may agree. At such closing,
Fletcher shall, and shall cause its Affiliates to, deliver to Baan (or its
assignee under Section 4.3, which may be one or more of the other parties
to a Transaction agreement) the Fletcher Shares being purchased under this
Section 4.1, duly endorsed for transfer and accompanied by all requisite
transfer taxes, if any, and such Shares shall be free and clear of any
Liens. Payment for the Fletcher Shares shall be made on the closing date in
cash by wire-transfer of immediately-available funds in U.S. dollars to a
bank account designated to Baan by Fletcher in writing (or if no such
account is designated, by delivery of a bank check to Fletcher), against
delivery of the Fletcher Shares. If the purchase price for the Recommended
Transaction is in Euros, then the purchase price per Fletcher Share under
this Section 4.1 shall be the Dollar Equivalent of the Euro price per share
determined as of the close of business on the business day immediately
preceding the closing of any purchase under this Section 4.1.
4.2 At the closing of a purchase under Section 4.1 hereof,
the following actions shall be performed:
(a) For registered Common Shares ("aandelen op naam")
being purchased, Fletcher and the purchaser shall execute a deed of
transfer of those Common Shares, and Baan shall acknowledge the transfer of
those Common Shares; and
(b) For Common Shares in bearer form
("toonderaandelen") being purchased, Fletcher and the purchaser shall
instruct its bank(s) to transfer those Common Shares to the account
designated by the purchaser in writing to Fletcher.
(c) The parties to the transaction shall execute such
additional documents as are otherwise necessary or appropriate.
4.3 Baan shall have the right to assign its rights and
delegate its obligations under this Section 4 to an acquiror in a
Recommended Transaction (or an Affiliate thereof) without the consent of
Fletcher; provided, that any acquiror to which such rights are assigned
shall expressly assume in writing the obligations under this Agreement. No
assignment by Baan shall relieve it of any of its obligations under this
Section 4 if such assignee shall fail to perform such obligations.
4.4 For purposes of this Section 4:
(a) "Dollar Equivalent" means, at any time, as to any
amount denominated in Euros, the equivalent amount in U.S. dollars at such
time on the basis of the Spot Rate for the purchase of U.S. dollars with
such Euros; and
(b) "Spot Rate" means with respect to any applicable
currency, at any date of determination thereof, the spot rate of exchange
for such date in London that appears on the display page applicable to such
currency on the Telerate System Incorporated Service (or such other page as
may replace such page on such service for the purpose of displaying the
spot rate of exchange in London); provided, however, that if there shall at
any time no longer exist such a page or a relevant spot rate is not shown
on such service, the spot rate of exchange shall be determined by reference
to another similar rate publishing service mutually agreeable to the
parties.
5. Termination of the Share Rights Agreement upon completion of
the Transaction. If a Transaction is completed or consummated on or prior
to the Expiration Date:
5.1 Baan (or, at Baan's option, an acquiror in the
Transaction or Affiliate thereof) shall, on the date the Transaction is
completed, pay to Fletcher the sum of (i) U.S.$10,000,000, plus (ii)
U.S.$16,623,392.48 plus (iii) interest on U.S.$16,623,392.48 calculated
from (and including) the date hereof until (but not including) the date of
payment and based on an annual interest rate equal to 8.5%, in cash by wire
transfer of immediately-available funds to a bank account designated to
Baan by Fletcher in writing (or if no such account is designated, by
delivery of a bank check to Fletcher); and
5.2 Effective as of the date the payment under Section 5.1
hereof is made:
(a) The Share Rights Agreement shall be terminated;
(b) The Share Rights Agreement and all Rights granted
thereunder shall be null and void and of no further force or effect, and
neither Baan nor Fletcher shall have any further rights, obligations or
liabilities whatsoever under the Share Rights Agreement; and
(c) Baan shall release and discharge Fletcher, and
Fletcher shall release and discharge Baan, fully and finally from all
actions, causes of action, claims, damages, expenses, losses, liabilities
or obligations, at law or in equity, known or unknown, choate or inchoate
for any breach or alleged breach of the Share Rights Agreement.
6. Miscellaneous.
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6.1 THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN THAT STATE. EACH PARTY TO
THIS AGREEMENT HEREBY IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE SHARES OR ANY
AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES OF AMERICA FOR
THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY SUBMITS TO THE
PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES THEREOF AND
EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT SUCH COURTS
ARE AN INCONVENIENT FORUM. EACH PARTY HEREBY IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT,
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS SET FORTH IN THE SHARE
RIGHTS AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH
MAILING.
6.2 The parties to this Agreement shall take all actions
reasonably necessary to cause the transactions contemplated by this
Agreement to be completed in accordance with the terms of this Agreement.
6.3 This Agreement constitutes the entire agreement of the
parties to it and supersedes all prior agreements and understandings, both
written and oral, with respect to its subject matter.
6.4 Except as provided in Section 4.3 hereof, this Agreement
may not be assigned by either party in whole or in part to any party that
is not an Affiliate of the assigning party except with the prior written
consent of the other party. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective legal successors and permitted assigns.
6.5 It is agreed and understood that monetary damages would
not adequately compensate an injured party for the breach of the terms and
provisions of this Agreement, that this Agreement shall be specifically
enforceable, and that any breach or threatened breach of this Agreement
shall be the proper subject of a temporary or permanent injunction or
restraining order. Further, each party hereto waives any claim or defense
that there is an adequate remedy at law for such breach or threatened
breach.
6.6 If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded
from this Agreement, and the balance of the Agreement shall be interpreted
as if such provision were so excluded and shall be enforceable in
accordance with its terms.
6.7 No provision of this Agreement may be amended or
modified except by written instrument executed by the parties hereto. No
provision of this Agreement may be waived except by the party to entitled
to performance thereof. The parties acknowledge that Baan will agree with
any party who is assigned Baan's rights under Section 4 that this Agreement
cannot be modified or amended or any of Baan's rights hereunder waived or
released, without the consent of such party.
6.8 Except as provided for herein, this Agreement shall not
be deemed to confer any additional rights to Fletcher or Baan under the
Share Rights Agreement.
6.9 If, after the date hereof, Fletcher or any of its
Affiliates acquires or becomes the beneficial owner of any additional
Common Shares (any such shares are called "Additional Shares"), including,
without limitation, upon exercise of any option, warrant or right to
acquire shares of Common Shares or through any stock dividend or stock
split, the provisions of this Agreement applicable to the Fletcher Shares
(other than Section 4 hereof) shall be applicable to such Additional Shares
as if such Additional Shares had been Fletcher Shares as of the date
hereof. The provisions of the immediately preceding sentence shall be
effective with respect to Additional Shares without action by any person or
entity immediately upon the acquisition by Fletcher or any of its
Affiliates of beneficial ownership of such Additional Shares.
6.10 Notwithstanding any other provision, representation or
agreement contained herein, Baan (i) acknowledges that Fletcher currently
has short or hedging positions for a number of Common Shares (or any
equivalent thereof that is traded in the United States) not in excess of
that number of Common Shares it beneficially owns as represented in Section
2.2 hereof; and (ii) agrees that Fletcher may acquire additional Common
Shares (or any equivalent thereof that is traded in the United States)
sufficient to close out such current short or hedging positions without
such Common Shares (or any equivalent thereof that is traded in the United
States) becoming subject to the restrictions and agreements contained
herein. Fletcher agrees that it will not close out such short or hedging
positions in a manner that is intended to change or influence the control
of Baan.
6.11 This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be the same instrument.
<PAGE>
IN WITNESS WHEREOF the parties hereto have duly executed and
delivered this Agreement as of the date first written above.
BAAN COMPANY N.V.
By: /s/ Pierre J. Everaert
---------------------------------
Name: Pierre J. Everaert
Title: Interim CEO
FLETCHER INTERNATIONAL LIMITED
By: its duly authorized investment advisor,
Fletcher Asset Management, Inc.
By: /s/ Kell B. Benson
---------------------------------
Name: Kell B. Benson
Title: Vice-Chairman
Fletcher Asset Management, Inc.
