PROSPECTUS
Debt
Securities
THE
ROYAL BANK OF SCOTLAND N.V.
fully
and unconditionally guaranteed by
ABN
AMRO Holding N.V.
We, The Royal Bank
of Scotland N.V., may offer from time to time debt securities that are
fully and unconditionally guaranteed by ABN AMRO Holding N.V. This
prospectus describes the general terms of these securities and the general
manner in which we will offer these securities. The specific terms of
any securities we offer will be included in a supplement to this
prospectus. The prospectus supplement will also describe the specific
manner in which we will offer the securities.
The
Securities and Exchange Commission and state securities regulators have not
approved or disapproved these securities, or determined if this prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
The securities will
be our unsecured obligations and will not be savings accounts or deposits of a
bank and are not insured or guaranteed by the Federal Deposit Insurance
Corporation, the Deposit Insurance Fund or any other government
agency.
February
8, 2010
TABLE
OF CONTENTS
Page
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About
This Prospectus
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1
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Where
You Can Find Additional Information
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2
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Cautionary
Statement on Forward-Looking Statements
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3
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Consolidated
Ratios of Earnings to Fixed Charges
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4
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The
Royal Bank of Scotland N.V. and ABN AMRO Holding
N.V.
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5
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Use
of Proceeds
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6
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Description
of Debt Securities
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7
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Forms
of Securities
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17
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The
Depositary
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18
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Plan
of Distribution (Conflicts of Interest)
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20
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Legal
Matters
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23
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Experts
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24
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Benefit
Plan Investor Considerations
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25
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Enforcement
of Civil Liabilities
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26
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i
ABOUT
THIS PROSPECTUS
This prospectus is
part of a Registration Statement that we and ABN AMRO Holding N.V. filed with
the Securities and Exchange Commission, or the SEC, utilizing a “shelf”
registration process. Under this shelf process, we and Holding may, from time to
time, sell the debt securities and related guarantees described in the
prospectus in one or more offerings in U.S. dollars, foreign currencies or
foreign currency units.
This prospectus
provides you with a general description of the debt securities and the related
guarantees. Each time we and Holding sell securities, we will provide a
prospectus supplement that will contain specific information about the terms of
the offering. The prospectus supplement may also add, update or change
information contained in this prospectus. You should read both this prospectus
and any prospectus supplement together with additional information described
under the heading “Where You Can Find Additional Information” beginning on page
2 of this prospectus.
Following the
initial distribution of an offering of securities, certain affiliates of ours
and Holding may offer and sell those securities in the course of their
businesses as broker-dealers. Such affiliates may act as principal or agent in
these transactions. This prospectus and the applicable prospectus
supplement will also be used in connection with those
transactions. Sales in any of those transactions will be made at
varying prices related to prevailing market prices and other circumstances at
the time of sale.
The debt securities
may not be offered or sold anywhere in the world except in compliance with the
requirements of the Dutch Act on Financial Supervision (Wet
op het financieel toezicht) and its subordinate and implementing decrees
and regulations, as amended and restated from time to time.
As
used in this prospectus, the “Bank,” “we,” “us,” and “our” refer to The Royal
Bank of Scotland N.V., “Holding” refers to ABN AMRO Holding N.V, and the “ABN
AMRO Group” refers to Holding and its consolidated subsidiaries.
1
WHERE
YOU CAN FIND ADDITIONAL INFORMATION
Holding is subject
to the informational requirements of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and in accordance therewith, Holding files reports
and other information with the SEC. You may read and copy these
documents at the SEC’s Public Reference Room at 100 F Street, NE, Washington,
D.C. 20549. Copies of this material can also be obtained from the
Public Reference Room of the SEC at 100 F Street, NE, Washington, D.C. 20549 at
prescribed rates. Please call the SEC at 1-800-SEC-0330 for further
information about the Public Reference Room. The SEC also maintains
an Internet website that contains reports and other information regarding
Holding that are filed through the SEC’s Electronic Data Gathering, Analysis and
Retrieval (EDGAR) System. This website can be accessed at www.sec.gov. You can
find information Holding has filed with the SEC by reference to file number
1-14624.
This prospectus is
part of a registration statement we and Holding filed with the
SEC. This prospectus omits some information contained in the
registration statement in accordance with SEC rules and
regulations. You should review the information and exhibits in the
registration statement for further information on us and Holding and the
securities we and Holding are offering. Statements in this prospectus
concerning any document we and Holding filed as an exhibit to the registration
statement or that Holding otherwise filed with the SEC are not intended to be
comprehensive and are qualified by reference to these filings. You
should review the complete document to evaluate these statements.
The SEC allows us
to incorporate by reference much of the information Holding files with it, which
means that we and Holding can disclose important information to you by referring
you to those publicly available documents. The information that we
and Holding incorporate by reference in this prospectus is considered to be part
of this prospectus. Because we and Holding are incorporating by
reference future filings with the SEC, this prospectus is continually updated
and those future filings may modify or supersede some of the information
included or incorporated in this prospectus. This means that you must
look at all of the SEC filings that we and Holding incorporate by reference to
determine if any of the statements in this prospectus or in any document
previously incorporated by reference have been modified or
superseded. This prospectus incorporates by reference the documents
listed below, all subsequent Annual Reports filed on Form 20-F and any future
filings we or Holding make with the SEC (including any Form 6-Ks Holding
subsequently files with the SEC and specifically incorporates by reference into
this prospectus) under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
that are identified in such filing as being specifically incorporated by
reference into the Registration Statement of which this prospectus is a part
until we and Holding complete our offering of the securities to be issued under
the registration statement or, if later, the date on which any of our affiliates
cease offering and selling these securities:
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(a)
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Annual Report
on Form 20-F of ABN AMRO Holding N.V. for the year ended December 31,
2008, filed on March 27, 2009; and
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(b)
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Reports on
Form 6-K of ABN AMRO Holding N.V. dated September 28, 2009 (3 reports),
October 7, 2009, February 4, 2010 and February 8, 2010 (2
reports).
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You may request, at
no cost to you, a copy of these documents (other than exhibits not specifically
incorporated by reference) by writing or telephoning us at:
The Royal Bank of
Scotland N.V.
Investor Relations
Department
Gustav Mahlerlaan
10
P.O. Box
283
1000 EA Amsterdam,
The Netherlands
(31-20)
628-7835
2
CAUTIONARY
STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements
included in this prospectus are forward-looking statements. We and
Holding also may make forward-looking statements in other documents filed with
the SEC that are incorporated by reference into this
prospectus. Forward-looking statements can be identified by the use
of forward-looking terminology such as “expect”, “estimate”, “project”,
“anticipate”, “should”, “intend”, “plan”, “probability”, “risk”, “Value-at-Risk
(“VaR”)”, “target”, “goal”, “objective”, “will”, “endeavour”, “outlook”,
“optimistic”, “prospects” and similar expressions or variations on such
expressions. Forward-looking statements are based on current plans,
estimates and projections, and are subject to inherent risks, uncertainties and
other factors that could cause actual results to differ materially from the
future results expressed or implied by such forward-looking
statements.
In
particular, this prospectus and certain documents incorporated by reference into
this prospectus include forward-looking statements relating, but not limited, to
our and Holding’s potential exposures to various types of market risks, such as
counterparty risk, interest rate risk, foreign exchange rate risk and commodity
and equity price risk. Such statements are subject to risks and uncertainties.
For example, certain of the market risk disclosures are dependent on choices
about key model characteristics and assumptions and are subject to various
limitations. By their nature, certain of the market risk disclosures are only
estimates and, as a result, actual future gains and losses could differ
materially from those that have been estimated.
Some of the risks
inherent in forward-looking statements are identified in “Section 3. Risk and
Capital Management — Risk Factors” in Holding’s annual report on Form 20-F for
the year ended December 31, 2008. Other factors that could cause
actual results to differ materially from those estimated by the forward looking
statements contained in this prospectus and certain documents incorporated by
reference into this prospectus include, but are not limited to:
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the extent
and nature of the financial crisis as it unfolds in Europe, the US and the
other major markets where we and Holding operate including the effect on
Holding’s capital of write downs in respect of credit market
exposures;
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risks related
to Holding’s transition and separation process following its acquisition
by the Consortium;
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general
economic conditions in the Netherlands and in other countries in which we
and Holding have significant business activities or investments, including
the United Kingdom and the United States and including the impact of
recessionary economic conditions on Holding’s revenues, liquidity and
balance sheet;
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the actions
taken by governments and their agencies to support individual banks and
the banking system;
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the monetary
and interest rate policies of the European Central Bank, the Board of
Governors of the Federal Reserve System and other G-7 central
banks;
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inflation or
deflation;
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unanticipated
turbulence in interest rates, foreign currency exchange rates, commodity
prices and equity prices;
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changes in
Dutch and foreign laws, regulations and
taxes;
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changes in
competition and pricing
environments;
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natural and
other disasters;
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the inability
to hedge certain risks
economically;
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the adequacy
of loss reserves;
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3
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technological
changes;
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changes in
consumer spending and saving habits;
and
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our and
Holding’s success in managing the risks involved in the
foregoing.
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Factors that could
also adversely affect our and Holding’s results or the accuracy of
forward-looking statements in this prospectus, and the factors discussed here or
in Section 3 of Holding's annual report on Form 20-F for the year ended December
31, 2008 should not be regarded as a complete set of all potential risks or
uncertainties. We have economic, financial market, credit, legal and other
specialists who monitor economic and market conditions and government policies
and actions. However, because it is difficult to predict with complete accuracy
any changes in economic or market conditions or in governmental policies and
actions, it is hard for us to anticipate the effects that such changes could
have on our and Holding’s financial performance and business
operations.
The forward-looking
statements made in this prospectus speak only as at the date of this prospectus.
We and Holding do not intend to publicly update or revise these forward-looking
statements to reflect events or circumstances after the date of this prospectus,
and we and Holding do not assume any responsibility to do so. You should,
however, take into account any further disclosures of a forward-looking nature
we and Holding made in other documents filed with the SEC that are incorporated
by reference into this prospectus. This discussion is provided as permitted by
the Private Securities Litigation Reform Act of 1995.
CONSOLIDATED
RATIOS OF EARNINGS TO FIXED CHARGES
The following table
sets forth Holding’s consolidated ratios of earnings to fixed charges for the
periods indicated under IFRS as issued by the IASB and adopted by the European
Union.
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Six
months ended June 30,
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Year
ended December 31,
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2009(2)
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2008(2)
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2007
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2006
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2005(3)
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2004(3)
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Excluding
Interest on Deposits(1)
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- | - | 1.07 | 1.33 | 1.78 | 1.76 | ||||||||||||||||||
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Including
Interest on Deposits(1)
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0.30 | 0.05 | 1.03 | 1.15 | 1.25 | 1.22 | ||||||||||||||||||
_____________
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(1)
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Deposits
include bank and total customer accounts. Negative ratios have
been excluded. See the consolidated financial statements
incorporated by reference herein.
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(2)
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The earnings
for the six months ended June 30, 2009 and for the year ended December 31,
2008 were inadequate to cover total fixed charges excluding interest on
deposits and total fixed charges including interest on
deposits. The coverage deficiencies for total fixed charges
excluding interest on deposits for the six months ended June 30, 2009 and
for the year ended December 31, 2008 were €3,491 million and €15,474
million, respectively. The coverage deficiencies for total
fixed charges including interest on deposits for the six months ended June
30, 2009 and for the year ended December 31, 2008 were €3,491 million and
€15,474 million, respectively.
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(3)
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According to
IFRS the income statement figures of 2007 and 2006 have been restated for
the qualifying discontinued operations arising in 2008. The 2005 and 2004
figures have not been restated for discontinued operations arising in 2008
and 2007. As a result the applicable ratios throughout the years are not
comparable.
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4
THE
ROYAL BANK OF SCOTLAND N.V. AND ABN AMRO HOLDING N.V.
The Royal Bank of Scotland N.V. is
the new name of ABN AMRO Bank N.V. As
discussed below, on February 6, 2010, ABN AMRO Bank N.V. changed its name to The
Royal Bank of Scotland N.V.
We
are an international banking group offering a wide range of banking products and
financial services on a global basis. Holding is our parent company,
and its main purpose is to own us and our subsidiaries. Holding owns
100% of our shares. All of the debt securities issued by us hereunder
after the date hereof will be fully and unconditionally guaranteed by
Holding. We and Holding are incorporated under the laws of the
Netherlands as public limited liability companies. We and Holding are
separately governed by our respective Managing Boards and Supervisory Boards and
we are regulated by the Dutch Central Bank. Our and Holding’s
principal executive offices are at Gustav Mahlerlaan 10, 1082 PP Amsterdam, The
Netherlands, and our and Holding’s telephone number is (31-20) 628
9393.
On
October 17, 2007, RFS Holdings B.V., which at the time was owned by a consortium
consisting of The Royal Bank of Scotland Group plc (“RBS”), Fortis N.V., Fortis
SA/NV (“Fortis”) and Banco Santander S.A. (“Santander”), completed the
acquisition of Holding. In December 2008, the State of the
Netherlands (the “Dutch State”) signed an agreement with Fortis pursuant to
which it directly acquired the Fortis shareholding in RFS Holdings
B.V. RFS Holdings B.V., which is now jointly owned by RBS, the State
of the Netherlands (the “Dutch State”) and Santander (the “Consortium Members”),
is in the process of implementing an orderly separation of the business units of
the ABN AMRO Group. Certain other assets will continue to be shared
by the Consortium Members.
On
November 28, 2008, UK Financial Investments Limited (“UKFI”), which is wholly
owned by the UK government, acquired approximately 57.9% of the enlarged issued
ordinary share capital of RBS and £5 billion of RBS preference
shares. On January 19, 2009, RBS announced that it had reached
agreement with the UK Treasury and UKFI to replace the £5 billion of RBS
preference shares with new RBS ordinary shares. Effective April 14,
2009, the £5 billion of RBS preference shares were replaced with new RBS
ordinary shares, resulting in UKFI holding approximately 70.3% of the enlarged
issued ordinary share capital of RBS.
On
November 3, 2009 RBS announced that UKFI agreed to subscribe for additional B
Shares of RBS raising UKFI’s economic interest in RBS to 84.4%, while UKFI’s
ordinary shareholdings of RBS remain at 70.3%. While B Shares are
convertible into ordinary shares, UKFI has maintained
its agreement not to convert its B Shares into ordinary shares to the
extent its holding of ordinary shares would represent 75% or more of RBS's
issued ordinary share capital. Issuance of the additional B Shares
was approved by the European Commission on December 14, 2009 and by the
shareholders of RBS on December 15, 2009.
On
February 6, 2010, in connection with the legal separation of the
businesses that are owned by the Dutch State from the residual RBS business,
ABN
AMRO Bank N.V. changed its name to The Royal Bank of Scotland
N.V.
The
name change is not a change of the legal entity that will issue the Securities
referred to herein, and it does not affect any of the terms of the
Securities. The Securities will continue to be fully and
unconditionally guaranteed by The Royal Bank of Scotland N.V.’s parent company,
ABN AMRO Holding N.V.
From
February 6,
2010 onwards, the name “ABN AMRO Bank N.V.” will be used by a separate legal
entity that will ultimately be owned by the Dutch
State. Neither
the new entity named ABN AMRO Bank N.V. nor the Dutch State, in any way,
guarantees or otherwise supports the obligations under the
Securities.
The
Royal Bank of Scotland N.V. is also an affiliate of The Royal Bank of Scotland
plc and The Royal Bank of Scotland Group plc; however, neither of these entitles
nor the UK government, in any way, guarantees or otherwise supports the
obligations under the Securities.
Similarly, Holding
expects to change its name to “RBS Holding N.V.” in the near
future.
5
USE
OF PROCEEDS
Unless the
applicable prospectus supplement states otherwise, we will use the net proceeds
from the sale of the securities we offer by this prospectus for general
corporate purposes, in connection with hedging our obligations under the
securities or for any other purpose described in the applicable prospectus
supplement. General corporate purposes may include additions to
working capital, investments in or extensions of credit to our subsidiaries and
the repayment of indebtedness. We may temporarily invest the net
proceeds or use them to repay short term debt until they are used for their
stated purpose.
6
DESCRIPTION
OF DEBT SECURITIES
The following
description of debt securities sets forth the material terms and provisions of
the debt securities to which any prospectus supplement may
relate. Our senior debt securities would be issued under a senior
indenture dated September 15, 2006 among us, Wilmington Trust Company, as
trustee, Citibank, N.A., as securities administrator, and Holding, as guarantor,
a copy of which has been filed as an exhibit to the registration statement of
which this prospectus is a part. Any supplemental indentures will be
filed with the SEC on a Form 6-K or by a post-effective amendment to the
registration statement of which this prospectus is a part.
The particular
terms of the debt securities offered by any prospectus supplement, and the
extent to which the general provisions described below may apply to the offered
debt securities, will be described in the applicable prospectus
supplement. The indenture is qualified under the Trust Indenture Act
of 1939, as amended. The terms of the debt securities will include
those stated in the indenture and those made part of the indenture by reference
to the Trust Indenture Act.
Because the
following summaries of the material terms and provisions of the indenture and
the related debt securities are not complete, you should refer to the indenture
and the form of the debt securities for complete information on some of the
terms and provisions of the indenture, including definitions of some of the
terms used below, and the debt securities.
General
The debt securities
will be our direct, unsecured and unsubordinated general obligations and will
have the same rank in liquidation as all of our other unsecured and
unsubordinated debt.
Guarantee
Holding will fully
and unconditionally guarantee payment in full to the holders of our debt
securities. The guarantee is set forth in, and forms part of, the
indenture under which our debt securities will be issued. If, for any
reason, we do not make any required payment in respect of our debt securities
when due, the guarantor will cause the payment to be made to or to the order of
the securities administrator on behalf of the trustee. The guarantee
will be on a senior basis. Holders of our debt securities may sue
Holding to enforce their rights under the guarantee without first suing us or
any other person or entity. Holding may, without the consent of the
holders of the debt securities, assume all of our rights and obligations under
the debt securities and upon such assumption, we will be released from our
liabilities under the indenture and the debt securities.
Payments
We
may issue debt securities from time to time in one or more
series. The provisions of the indenture allow us to “reopen” a
previous issue of a series of debt securities and issue additional debt
securities of that series. The debt securities may be denominated and
payable in U.S. dollars or foreign currencies. We may also issue debt
securities from time to time with the principal amount or interest payable on
any relevant payment date to be determined by reference to one or more currency
exchange rates, interest rates, securities or baskets of securities, commodity
prices or indices or any other financial, economic or other measure or
instrument, including the occurrence or non-occurrence of any event or
circumstance.
Debt securities may
bear interest at a fixed rate, which may be zero, a floating rate, or a rate
which varies during the lifetime of the debt security. Debt
securities bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate may be sold at a discount below
their stated principal amount.
Terms
Specified in the Applicable Prospectus Supplement
The applicable
prospectus supplement will contain, where applicable, the following terms of and
other information relating to any offered debt securities:
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the specific
designation;
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the aggregate
principal amount, purchase price and
denomination;
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the currency
in which the debt securities are denominated and/or in which principal,
premium, if any, and/or interest, if any, is
payable;
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the date of
maturity;
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the interest
rate or rates or the method by which the calculation agent will determine
the interest rate or rates, if any;
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the interest
payment dates, if any;
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the place or
places for payment of the principal of and any premium and/or interest on
the debt securities;
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any
repayment, redemption, prepayment or sinking fund provisions, including
any redemption notice provisions;
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whether we
will issue the debt securities in definitive form and under what terms and
conditions;
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the terms on
which holders of the debt securities may convert or exchange these
securities into or for stock or other securities of an entity unaffiliated
with us, any specific terms relating to the adjustment of the conversion
or exchange feature and the period during which the holders may make the
conversion or exchange;
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information
as to the methods for determining the amount of principal or interest
payable on any date and/or the currencies, interest rates, securities or
baskets of securities, commodities, indices or any other financial,
economic or other measure or instrument, including the occurrence or
non-occurrence of any event or circumstance, to which the amount payable
on that date is linked;
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any agents
for the debt securities, including applicable trustees, securities
administrators, depositaries, authenticating or paying agents, transfer
agents or registrars;
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certain
United States federal income tax consequences and Netherlands income tax
consequences;
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whether
certain payments on the debt securities will be guaranteed under a
financial insurance guaranty policy and the terms of that
guaranty;
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any
applicable selling restrictions;
and
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any other
specific terms of the debt securities, including any modifications to or
additional events of default, covenants or modified or eliminated
acceleration rights, and any terms required by or advisable under
applicable laws or regulations, including laws and regulations relating to
attributes required for the debt securities to be afforded certain capital
treatment for bank regulatory or other
purposes.
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Some of the debt
securities may be issued as original issue discount debt
securities. Original issue discount securities bear no interest or
are issued at a price which represents a discount to their principal
amount. The applicable prospectus supplement will contain information
relating to federal income tax, accounting, and other special considerations
applicable to original issue discount securities.
Registration
and Transfer of Debt Securities
Holders may present
debt securities for exchange, and holders of registered debt securities may
present these securities for transfer, in the manner, at the places and subject
to the restrictions stated in the debt securities and described in the
applicable prospectus supplement. We will provide these services
without charge except for any tax or other governmental charge payable in
connection with these services and subject to any limitations or requirements
provided in the indenture or the applicable supplemental indenture or issuer
order under which that series of debt securities is issued. If any of the
securities are held in global form, the procedures for transfer of interests in
those securities will depend upon the procedures of the depositary for those
global securities. See “Forms of Securities.”
8
Covenant
Restricting Mergers and Other Significant Corporate Actions
The indenture
provides that neither we nor Holding will merge or consolidate with any other
person and will not sell, lease or convey all or substantially all of its assets
to any other person, unless:
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we or
Holding, as applicable, will be the continuing legal entity;
or
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the successor
legal entity or person that acquires all or substantially all of our or
Holding’s assets, as applicable (i) will expressly assume all of our or
Holding’s obligations, as applicable, under the applicable indenture and
the debt securities issued under the indenture, and (ii) will be
incorporated and existing under the laws of the Netherlands, or a member
state of the European Union or the Organization for Economic Co-Operation
and Development, or, provided no adverse U.S. tax consequences to U.S.
holders result therefrom, any other jurisdiction;
and
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immediately
after the merger, consolidation, sale, lease or conveyance, that person or
that successor legal entity will not be in default in the performance of
the applicable covenants and conditions of the
indenture.
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Absence
of Protections Against All Potential Actions of the Bank or Holding
There are no
covenants or other provisions in the indenture that would afford holders of debt
securities additional protection in the event of a recapitalization transaction,
a change of control of us or Holding or a highly leveraged transaction. The
merger covenant described above would only apply if the recapitalization
transaction, change of control or highly leveraged transaction were structured
to include a merger or consolidation of us or Holding or a sale, lease or
conveyance of all or substantially all of our or Holding’s, as the case may be,
assets. However, we may provide specific protections, such as a put
right or increased interest, for particular debt securities, which we would
describe in the applicable prospectus supplement.
Events
of Default
The indenture
provides holders of debt securities with remedies if we or Holding, as the case
may be, fail to perform specific obligations, such as making payments on our
debt securities, or if we or Holding, as the case may be, become
bankrupt. Holders should review these provisions and understand which
of our or Holding’s actions trigger an event of default and which actions do
not. The indenture permits the issuance of debt securities in one or
more series, and, in many cases, whether an event of default has occurred is
determined on a series-by-series basis.
An
event of default is defined under the indenture, with respect to any series of
debt securities issued under the indenture, as any one or more of the following
events, subject to modification in a supplemental indenture, each of which we
refer to in this prospectus as an event of default, having occurred and be
continuing:
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default for
more than 30 days in the payment of interest, premium or principal in
respect of the debt securities of that
series;
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we or
Holding, as the case may be, fail to perform or observe any other
obligations applicable to us or Holding, respectively, under the debt
securities of that series, and such failure has continued for a period of
60 days next following the service on us and Holding of notice requiring
the same to be remedied except that the failure to file with the trustee
certain information required to be filed with the trustee pursuant to the
Trust Indenture Act of 1939, as amended, shall not constitute an event of
default and does not give a right under the indenture to accelerate or
declare any debt security issued under the indenture due and payable.
Although the trustee may bring suit to enforce such filing obligation, the
indenture would not provide for a remedy of acceleration in that
circumstance.
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we or
Holding, as the case may be, are declared bankrupt, or a declaration in
respect of us is made under Chapter X of the Act on the Supervision of the
Credit System (Wet
toezicht kredietwezen 1992) of The
Netherlands;
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an order is
made or an effective resolution is passed for our or Holding’s winding up
or liquidation, as the case may be, unless this is done in compliance with
the “Covenant Restricting Mergers and Other Significant Corporate Actions”
described above; or
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any other
event of default provided in the supplemental indenture or issuer order,
if any, under which that series of debt securities is
issued.
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Acceleration
of Debt Securities Upon an Event of Default
The indenture
provides that, unless otherwise set forth in a supplemental
indenture:
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if an event
of default occurs due to the default in payment of principal of, or any
premium or interest on, any series of debt securities issued under the
indenture, or due to the default in the performance or breach of any other
covenant or warranty of us or Holding, as the case may be, applicable to
that series of debt securities but not applicable to all outstanding debt
securities issued under the indenture, other than a covenant for which the
indenture specifies that violation thereof does not give a right to
accelerate or declare due and payable any debt security issued under the
indenture, occurs and is continuing, either the trustee or the holders of
not less than 25% in aggregate principal amount of the outstanding debt
securities of each affected series issued under the indenture, voting as
one class, by notice in writing to us, may declare the principal of and
accrued interest on the debt securities of such affected series (but not
any other debt securities issued under the indenture) to be due and
payable immediately (provided
that, in the case of original issue discount debt securities, only a
specified portion of the principal amount may be accelerated);
and
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if an event
of default occurs due to specified events of bankruptcy of us or Holding
or due to an order or effective resolution for our or Holding’s
liquidation or winding up, as the case may be, or due to a default in the
performance of any other of the covenants or agreements in the indenture
applicable to all outstanding debt securities issued under the indenture,
other than a covenant or agreement for which the indenture specifies that
violation thereof does not give a right to accelerate or declare due and
payable any debt security issued under the indenture, occurs and is
continuing, either the trustee or the holders of not less than 25% in
aggregate principal amount of all outstanding debt securities issued under
that indenture for which any applicable supplemental indenture does not
prevent acceleration under the relevant circumstances, voting as one
class, by notice in writing to us, may declare the principal of all debt
securities issued under the indenture and interest accrued on those debt
securities to be due and payable immediately (provided
that, in the case of original issue discount debt securities, only a
specified portion of the principal amount may be
accelerated).
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Annulment
of Acceleration and Waiver of Defaults
In
some circumstances, if any and all events of default under the indenture, other
than the non-payment of the principal of the debt securities that has become due
as a result of an acceleration, have been cured, waived or otherwise remedied,
then the holders of a majority in aggregate principal amount of all series of
affected outstanding debt securities issued under the indenture, voting as one
class, may annul past declarations of acceleration or waive past defaults of the
debt securities.
Indemnification
of Trustee for Actions Taken on Your Behalf
The indenture
provides that 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 debt securities issued under the 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. In addition, the indenture contains a provision entitling
the trustee, subject to the duty of the trustee to act with the required
standard of care during a default, to be indemnified to its satisfaction by the
holders of debt securities issued under the indenture before proceeding to
exercise any right or power at the request of holders. Subject to
these provisions and specified other limitations, the holders of a majority in
aggregate principal amount of each series of outstanding debt securities of each
affected series, voting as one class, may 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. The trustee may decline
to act if the direction is contrary to law and in certain circumstances set
forth in the indenture.
10
Limitation
on Actions by You as an Individual Holder
The indenture
provides that no individual holder of debt securities may institute any action
against us or Holding under the indenture, except actions for payment of overdue
principal and interest, unless the following actions have occurred:
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the holder
must have previously given written notice to the trustee of the continuing
default;
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the holders
of not less than 25% in aggregate principal amount of the outstanding debt
securities of each affected series issued under the indenture, treated as
one class, must have:
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requested the
trustee to institute that action,
and
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offered the
trustee reasonable indemnity as it may
require;
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the trustee
must have failed to institute that action within 60 days after receipt of
the request referred to above; and
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the holders
of a majority in principal amount of the outstanding debt securities of
each affected series issued under the indenture, voting as one class, must
not have given directions to the trustee inconsistent with those of the
holders referred to above.
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The indenture
contains a covenant that we will file annually with the trustee a certificate of
no default or a certificate specifying any default that exists.
Discharge,
Defeasance and Covenant Defeasance
We
and Holding each have the ability to eliminate most or all of our obligations on
any series of debt securities prior to maturity if we or Holding, as applicable,
comply with the following provisions:
Discharge
of Indenture. We or Holding may discharge all of our
obligations, other than as to transfer and exchanges, under the indenture after
we have or it has, as applicable:
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paid or
caused to be paid the principal of and interest on all of the outstanding
debt securities issued under the indenture in accordance with their
terms;
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delivered to
the securities administrator for cancellation all of the outstanding debt
securities issued under the indenture;
or
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irrevocably
deposited with the securities administrator cash or, in the case of a
series of debt securities payable only in U.S. dollars, U.S. government
obligations in trust for the benefit of the holders of any series of debt
securities issued under the indenture that have either become due and
payable, or are by their terms due and payable, or are scheduled for
redemption, within one year, in an amount certified to be sufficient to
pay on each date that they become due and payable, the principal of and
interest on, and any mandatory sinking fund payments for, those debt
securities. However, the deposit of cash or U.S. government obligations
for the benefit of holders of a series of debt securities that are due and
payable, or are scheduled for redemption, within one year will discharge
obligations under the applicable indenture relating only to that series of
debt securities.
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Defeasance
of a Series of Securities at Any Time. We or Holding may also
discharge all of our obligations, other than as to transfers and exchanges,
under any series of debt securities at any time, which we refer to as defeasance
in this prospectus. We and Holding may be released with respect to
any outstanding series of debt securities from the obligations imposed by the
covenants described above limiting consolidations, mergers, asset sales and
leases, and elect not to comply with those sections without creating an event of
default. Discharge under those procedures is called covenant
defeasance.
11
Defeasance or
covenant defeasance may be effected only if, among other things:
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we or Holding
irrevocably deposit with the securities administrator cash or, in the case
of debt securities payable only in U.S. dollars, U.S. government
obligations, as trust funds in an amount certified to be sufficient to pay
on each date that they become due and payable, the principal of and
interest on, and any mandatory sinking fund payments for, all outstanding
debt securities of the series being defeased;
and
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we or Holding
deliver to the trustee and the securities administrator an opinion of
counsel to the effect that:
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the holders
of the series of debt securities being defeased will not recognize income,
gain or loss for United States federal income tax purposes as a result of
the defeasance or covenant defeasance;
and
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the
defeasance or covenant defeasance will not otherwise alter those holders’
United States federal income tax treatment of principal and interest
payments on the series of debt securities being defeased; in the case of a
defeasance, this opinion must be based on a ruling of the Internal Revenue
Service or a change in United States federal income tax law occurring
after the date of this prospectus, since that result would not occur under
current tax law.
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Redemptions
and Repurchases of Debt Securities
Optional
Redemption. The prospectus supplement will indicate the terms of our
option to redeem the debt securities, if any. Unless otherwise provided in the
applicable prospectus supplement, we will mail a notice of redemption by
first-class mail, postage prepaid, at least 30 days and not more than 60 days
prior to the date fixed for redemption, or within the redemption notice period
designated in the applicable prospectus supplement, to the depositary, as holder
of the global debt securities. The debt securities will not be subject to any
sinking fund.
Repayment
at Option of Holder. If applicable, the prospectus supplement relating to
a debt security will indicate that the holder has the option to have us repay
that debt security on a date or dates specified prior to its maturity date.
Unless otherwise specified in the applicable prospectus supplement, the
repayment price will be equal to 100% of the principal amount of the debt
security, together with accrued interest to the date of repayment. For debt
securities issued with original issue discount, the prospectus supplement will
specify the amount payable upon repayment.
Unless otherwise
provided in the applicable prospectus supplement, for us to repay a debt
security, the securities administrator must receive the following at least 15
days but not more than 30 days prior to the repayment date:
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the debt
security with the form entitled “Option to Elect Repayment” on the reverse
of the debt security duly completed;
or
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a telegram,
telex, facsimile transmission or a letter from a member of a national
securities exchange, or the Financial Industry Regulatory Authority or a
commercial bank or trust company in the United States setting forth the
name of the holder of the debt security, the principal amount of the debt
security, the principal amount of the debt security to be repaid, the
certificate number or a description of the tenor and terms of the debt
security, a statement that the option to elect repayment is being
exercised and a guarantee that the debt security to be repaid, together
with the duly completed form entitled “Option to Elect Repayment” on the
reverse of the debt security, will be received by the securities
administrator not later than the fifth business day after the date of that
telegram, telex, facsimile transmission or letter. However, the telegram,
telex, facsimile transmission or letter will only be effective if that
debt security and form duly completed are received by the securities
administrator by the fifth business day after the date of that telegram,
telex, facsimile transmission or
letter.
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Exercise of the
repayment option by the holder of a debt security will be irrevocable. Unless
otherwise specified in the applicable prospectus supplement, the holder may
exercise the repayment option for less than the entire principal amount of the
debt security but, in that event, the principal amount of the debt security
remaining outstanding after repayment must be an authorized
denomination.
12
Special
Requirements for Optional Repayment of Global Debt Securities. If a debt
security is represented by a global debt security, the depositary or the
depositary’s nominee will be the holder of the debt security and therefore will
be the only entity that can exercise a right to repayment. In order to ensure
that the depositary’s nominee will timely exercise a right to repayment of a
particular debt security, the beneficial owner of the debt security must
instruct the broker or other direct or indirect participant through which it
holds an interest in the debt security to notify the
depositary of its desire to exercise a right to repayment. Different firms have
different cut-off times for accepting instructions from their customers and,
accordingly, each beneficial owner should consult the broker or other direct or
indirect participant through which it holds an interest in a debt security in
order to ascertain the cut-off time by which an instruction must be given in
order for timely notice to be delivered to the
depositary.
Open
Market Purchases. We may purchase debt securities at any price in the
open market or otherwise. Debt securities so purchased by us may, at our
discretion, be held or resold or surrendered to the securities administrator for
cancellation.
Modification
of the Indenture
Modification
without Consent of Holders. We, Holding, the securities
administrator and the trustee may enter into supplemental indentures without the
consent of the holders of debt securities issued under the indenture
to:
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secure any
debt securities issued under the
indenture;
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evidence the
assumption by a successor corporation of our or Holding’s, as the case may
be, obligations under the indenture and the debt
securities;
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add covenants
for the protection of the holders of debt securities issued under the
indenture;
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cure any
ambiguity or correct or supplement any provision in the indenture that may
be defective or inconsistent with other provisions, or make any other
provisions as we or Holding may deem necessary or desirable, provided
that no such action shall materially and adversely affect the interests of
the holders of debt securities;
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establish the
forms or terms of debt securities of any series to be issued under that
indenture; or
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evidence the
acceptance of appointment by a successor
trustee.
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Modification
with Consent of Holders. We, Holding, the securities
administrator and the trustee, with the consent of the holders of not less than
a majority in aggregate principal amount of each affected series of outstanding
debt securities issued under the indenture, voting as one class, may add any
provisions to, or change in any manner or eliminate any of the provisions of,
the indenture or modify in any manner the rights of the holders of those debt
securities. However, we, Holding, the securities administrator and
the trustee may not make any of the following changes to any outstanding debt
security issued under the indenture without the consent of each holder of debt
securities issued under the indenture that would be affected by the
change:
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extend the
final maturity of the security;
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reduce the
principal amount;
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reduce the
rate or extend the time of payment of
interest;
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reduce any
amount payable on redemption;
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change the
currency in which the principal, including any amount of original issue
discount, premium, or interest on the security is
payable;
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modify or
amend the provisions for conversion of any currency into another
currency;
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reduce the
amount of any original issue discount security payable upon acceleration
or provable in bankruptcy;
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alter the
terms on which holders of the debt securities issued under the indenture
may convert or exchange those debt securities for stock or other
securities or for other property or the cash value of the property, other
than in accordance with the antidilution provisions or other similar
adjustment provisions included in the terms of those debt
securities;
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impair the
right of any holder of debt securities issued under the indenture to
institute suit for the enforcement of any payment on any such debt
security or the guarantee when due;
or
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reduce the
percentage of debt securities issued under the indenture the consent of
whose holders is required for modification of the
indenture.
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Replacement
of Debt Securities
At
the expense of the holder, we will replace any debt securities that become
mutilated, destroyed, lost or stolen or are apparently destroyed, lost or
stolen. The mutilated debt securities must be delivered to the securities
administrator or agent or satisfactory evidence of the destruction, loss or
theft of the debt securities must be delivered to us, Holding, the securities
administrator and the trustee and any agent. At the expense of the holder, an
indemnity that is satisfactory to us and our agents, Holding, the securities
administrator and the trustee and any agent may be required before a replacement
note will be issued.
Notices
Notices to holders
of the securities will be given by mailing such notices to each holder by first
class mail, postage prepaid, or by overnight delivery, courier or facsimile, at
the respective address of each holder as that address appears upon our books.
Notices given to the Depositary, as holder of the registered debt securities,
will be passed on to the beneficial owners of the securities in accordance with
the standard rules and procedures of the Depositary and its direct and indirect
participants.
Tax
Redemption
Unless otherwise
specified in the applicable prospectus supplement, if we are obligated to pay
additional amounts under the indenture as set forth below, we may redeem, in
whole but not in part, any of our debt securities issued under the indenture at
our option at any time prior to maturity, upon the giving of a notice of
redemption as described below, at a redemption price equal to 100% of the
principal amount of those debt securities (or if the debt securities are issued
with original issue discount, a portion of the principal, as specified in the
applicable prospectus supplement) together with accrued interest to the date
fixed for redemption and any additional amounts (as defined below), or at any
redemption price otherwise specified in the applicable prospectus supplement, if
we determine that, as a result of any change in or amendment to the laws
affecting taxation after the date of the relevant prospectus supplement or, if
applicable, pricing supplement relating thereto (or any regulations or rulings
promulgated thereunder) of The Netherlands or of any political subdivision or
taxing authority thereof or therein (or the jurisdiction of residence or
incorporation of any successor corporation), or any change in official position
regarding the application or interpretation of those laws, regulations or
rulings, which change or amendment becomes effective on or after the date of the
applicable prospectus supplement or, if applicable, pricing supplement relating
thereto, we have or will become obligated to pay additional amounts (as defined
below under “— Payment of Additional Amounts”) with respect to any of those debt
securities as described below under “— Payment of Additional
Amounts.” Prior to the giving of any notice of redemption pursuant to
this paragraph, we shall deliver to the trustee and the securities
administrator:
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a certificate
stating that we are entitled to effect the redemption and setting forth a
statement of facts showing that the conditions precedent to our right to
so redeem have occurred; and
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an opinion of
independent counsel reasonably satisfactory to the trustee and the
securities administrator to the effect that we are entitled to effect the
redemption based on the statement of facts set forth in the
certificate.
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Notice of
redemption will be given not less than 30 nor more than 60 days prior to the
date fixed for redemption, which date and the applicable redemption price will
be specified in the notice; provided
that no notice of redemption shall be given earlier than 60 days prior to
the earliest date on which we would be obligated to pay the additional amounts
if a payment in respect of those debt securities were then due. Notice will be
given in accordance with “— Notices” above.
14
Payment
of Additional Amounts
Except to the
extent otherwise specified in the applicable prospectus supplement, we will,
with respect to any of our debt securities and subject to certain exceptions and
limitations set forth below, pay such additional amounts (the “additional
amounts”) to holders of the debt securities as may be necessary in order that
the net payment of the principal of the securities and any other amounts payable
on the debt securities, after 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 the jurisdiction of residence or
incorporation of any successor corporation, or any political subdivision or
taxing authority thereof or therein (a “relevant jurisdiction”), will not be
less than the amount provided for in the debt securities to be then due and
payable. We will not, however, be required to make any payment of additional
amounts for or on account of:
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any such tax,
assessment or other governmental charge that would not have been so
imposed but for (i) the existence of any present or former connection
between such holder (or between a fiduciary, settlor, beneficiary, member
or shareholder, if such holder is an estate, a trust, a partnership or a
corporation) and The Netherlands and its possessions or any other relevant
jurisdiction, including, without limitation, such holder (or such
fiduciary, settlor, beneficiary, member or shareholder) being or having
been a citizen or resident thereof, being or having been engaged in a
trade or business or present therein or having, or having had, a permanent
establishment therein, or (ii) the presentation, where presentation is
required, by the holder of a debt security for payment on a date more than
30 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;
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any capital
gain, estate, inheritance, gift, sales, transfer or personal property tax
or any similar tax, assessment or governmental
charge;
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any tax,
assessment or other governmental charge that is payable otherwise than by
withholding from payments on or in respect of the debt
securities;
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any tax,
assessment or other governmental charge that is imposed on a payment to an
individual and that is required to be made pursuant to European Council
Directive 2003/48/EC or any other directive implementing the conclusions
of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of
savings income, or any law implementing or complying with, or introduced
in order to conform to, such
directives;
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any tax,
assessment or other governmental charge required to be withheld by any
paying agent from any payment of principal or other amounts payable, or
interest on the debt securities, to the extent that such payment can be
made without such withholding by presentation of the debt securities to
any other paying agent;
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any tax,
assessment or other governmental charge that would not have been imposed
but for a holder’s failure to comply with a request addressed to the
holder or, if different, the direct nominee of a beneficiary of the
payment, to comply with certification, information or other reporting
requirements concerning the nationality, residence or identity of the
holder or beneficial owner of securities, if such compliance is required
by statute or by regulation of the relevant jurisdiction, as a
precondition to relief or exemption from such tax, assessment or other
governmental charge; or
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any
combination of the items listed
above;
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nor shall we pay
additional amounts with respect to any payment on the debt securities to a
holder who is a fiduciary, an entity treated as a partnership or any other
person that is not the sole beneficial owner of such debt security to the extent
such payment would be required by the laws of the relevant jurisdiction to be
included in the income, for tax purposes, of a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
who would not have been entitled to the additional amounts had such beneficiary,
settlor, member or beneficial owner been the holder of the debt
securities.
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New
York Law to Govern
The indenture is
and the debt securities will be governed by, and construed in accordance with,
the laws of the State of New York.
Information
Concerning the Trustee
We
and our subsidiaries maintain ordinary banking relationships and custodial
facilities with the trustee under the indenture and affiliates of the
trustee.
16
FORMS
OF SECURITIES
Each debt security
will be represented either by a certificate issued in definitive form to a
particular investor or by one or more global securities representing the entire
issuance of securities. Both certificated securities in definitive
form and global securities may be issued in registered form, where our and
Holding’s obligation runs to the holder of the security named on the face of the
security. Definitive securities name you or your nominee as the owner
of the security and, in order to transfer or exchange these securities or to
receive payments other than interest or other interim payments, you or your
nominee must physically deliver the securities to the trustee, registrar, paying
agent or other agent, as applicable. Global securities name a
depositary or its nominee as the owner of the debt securities represented by
these global securities. The depositary maintains a computerized
system that will reflect each investor’s beneficial ownership of the securities
through an account maintained by the investor with its broker/dealer, bank,
trust company or other representative, as we explain more fully below under
“—Global Securities.”
Our obligations, as
well as the obligations of the trustee under the indenture and the obligations,
if any, of any agents of ours or any agents of the trustee run only to the
persons or entities named as holders of the securities in the security
register. Neither we nor the trustee, other agent of ours or agent of
the trustee have obligations to investors who hold beneficial interest in global
securities, in street name or by any other indirect means.
Upon making a
payment or giving a notice to the holder as required by the terms of that
security, we will have no further responsibility for that payment or notice even
if that holder is required, under agreements with depositary participants or
customers or by law, to pass it along to the indirect owners of beneficial
interests in that security but does not do so. Similarly, if we want
to obtain the approval or consent of the holders of any securities for any
purpose, we would seek the approval only from the holders, and not the indirect
owners, of the relevant securities. Whether and how the holders
contact the indirect owners would be governed by the agreements between such
holders and the indirect owners.
References to “you”
in this prospectus refer to those who invest in the securities being offered by
this prospectus, whether they are the direct holders or only indirect owners of
beneficial interests in those securities.
Registered
Global Securities
We
may issue the registered debt securities in the form of one or more fully
registered global securities that will be deposited with a depositary or its
nominee identified in the applicable prospectus supplement and registered in the
name of that depositary or its nominee. In those cases, one or more
registered global securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal or face amount of
the securities to be represented by registered global
securities. Unless and until it is exchanged in whole for securities
in definitive registered form, a registered global security may not be
transferred except as a whole by and among the depositary for the registered
global security, the nominees of the depositary or any successors of the
depositary or those nominees.
We
anticipate that the provisions described under “The Depositary” below will apply
to all depositary arrangements, unless otherwise described in the prospectus
supplement relating to those securities.
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THE
DEPOSITARY
The Depository
Trust Company, New York, New York will be designated as the depositary for any
registered global security. Each registered global security will be
registered in the name of Cede & Co., the depositary’s nominee.
The depositary is a
limited-purpose trust company organized under the New York Banking Law, a
“banking organization” within the meaning of 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 Securities Exchange Act of
1934, as amended. The depositary holds securities deposited with it
by its direct participants, and it facilitates the settlement of transactions
among its direct participants in those securities through electronic
computerized book-entry changes in participants’ accounts, eliminating the need
for physical movement of securities certificates. The depositary’s
direct participants include both U.S. and non-U.S. securities brokers and
dealers, including the agents, banks, trust companies, clearing corporations and
other organizations, some of whom and/or their representatives own the
depositary. Access to the depositary’s book-entry system is also
available to others, such as both U.S. and non-U.S. brokers and dealers, banks,
trust companies and clearing corporations, such as Euroclear Bank S.A./N.V., as
operator of the Euroclear System and/or Clearstream Banking S.A., that clear
through or maintain a custodial relationship with a participant, either directly
or indirectly. The rules applicable to the depositary and its
participants are on file with the SEC.
Purchases of the
securities under the depositary’s system must be made by or through its direct
participants, which will receive a credit for the securities on the depositary’s
records. The ownership interest of each actual purchaser of each
security (the “beneficial owner”) is in turn to be recorded on the records of
direct and indirect participants. Beneficial owners will not receive
written confirmation from the depositary of their purchase, but beneficial
owners are expected to receive written confirmations providing details of the
transaction, as well as periodic statements of their holdings, from the direct
or indirect participants through which the beneficial owner entered into the
transaction. Transfers of ownership interests in the securities are
to be made by entries on the books of direct and indirect participants acting on
behalf of beneficial owners. Beneficial owners will not receive
certificates representing their ownership interests in securities, except in the
event that use of the book-entry system for the securities is
discontinued.
To
facilitate subsequent transfers, all securities deposited with the depositary
are registered in the name of the depositary’s nominee, Cede & Co, or such
other name as may be requested by the depositary. The deposit of
securities with the depositary and their registration in the name of Cede &
Co. or such other nominee of the depositary do not effect any change in
beneficial ownership. The depositary has no knowledge of the actual
beneficial owners of the securities; the depositary’s records reflect only the
identity of the direct participants to whose accounts the securities are
credited, which may or may not be the beneficial owners. The
participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of
notices and other communications by the depositary to direct participants, by
direct participants to indirect participants, and by direct participants and
indirect participants to beneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Neither the
depositary nor Cede & Co. (nor such other nominee of the depositary) will
consent or vote with respect to the securities unless authorized by a direct
participant in accordance with the depositary’s procedures. Under its
usual procedures, the depositary mails an omnibus proxy to us as soon as
possible after the applicable record date. The omnibus proxy assigns
Cede & Co.’s consenting or voting rights to those direct participants
identified in a listing attached to the omnibus proxy to whose accounts the
securities are credited on the record date.
18
Redemption
proceeds, distributions, and dividend payments on the securities will be made to
Cede & Co or such other nominee as may be requested by the
depositary. The depositary’s practice is to credit direct
participants’ accounts upon the depositary’s receipt of funds and corresponding
detail information from us or any agent of ours, on the date payable in
accordance with their respective holdings shown on the depositary’s
records. Payments by participants to beneficial owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
“street name,” and will be the responsibility of such participant and not of the
depositary or its nominee, the trustee, the securities administrator, any agent
of ours, or us, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payments of redemption proceeds,
distributions, and dividend payments to Cede & Co. or such other nominee as
may be
requested by the depositary is the responsibility of us or of any paying agent
of ours, disbursement of such payments to direct participants will be the
responsibility of the depositary, and disbursement of such payments to the
beneficial owners will be the responsibility of direct and indirect
participants.
The depositary may
discontinue providing its services as depositary with respect to the securities
at any time by giving reasonable notice to us or our agent. Under
such circumstances, in the event that a successor depositary is not obtained by
us within 90 days, security certificates are required to be printed and
delivered. In addition, under the terms of the indenture, we may at
any time and in our sole discretion decide not to have any of the securities
represented by one or more registered global securities. We understand, however,
that, under current industry practices, the depositary would notify its
participants of our request, but will only withdraw beneficial interests from a
global security at the request of each participant. We would issue
definitive certificates in exchange for any such interests
withdrawn. Any securities issued in definitive form in exchange for a
registered global security will be registered in the name or names that the
depositary gives to the relevant trustee, warrant agent, unit agent or other
relevant agent of ours or theirs. It is expected that the
depositary’s instructions will be based upon directions received by the
depositary from participants with respect to ownership of beneficial interests
in the registered global security that had been held by the
depositary.
According to the
depositary, the foregoing information relating to the depositary has been
provided to the financial community for informational purposes only and is not
intended to serve as a representation, warranty or contract modification of any
kind.
The information in
this section concerning the depositary and depositary’s book-entry system has
been obtained from sources we believe to be reliable, but we take no
responsibility for the accuracy thereof. The depositary may change or
discontinue the foregoing procedures at any time.
19
PLAN
OF DISTRIBUTION (CONFLICTS OF INTEREST)
We
and Holding may sell the securities being offered by this prospectus in four
ways: (1) through selling agents, (2) through underwriters, (3) through dealers
and/or (4) directly to purchasers. Any of these selling agents,
underwriters or dealers in the United States or outside the United States may
include affiliates of ours. We and Holding are offering the securities through
RBS Securities Inc. to the extent it is named in the applicable prospectus
supplement.
We
may designate selling agents from time to time to solicit offers to purchase
these securities. We will name any such agent, who may be deemed to
be an underwriter as that term is defined in the Securities Act, and state any
commissions we are to pay to that agent in the applicable prospectus
supplement. That agent will be acting on a reasonable efforts basis
for the period of its appointment or, if indicated in the applicable prospectus
supplement, on a firm commitment basis.
If
we use any underwriters to offer and sell these securities, we and Holding will
enter into an underwriting agreement with those underwriters when we and they
determine the offering price of the securities, and we will include the names of
the underwriters and the terms of the transaction in the applicable prospectus
supplement.
If
we use a dealer to offer and sell these securities, we will sell the securities
to the dealer, as principal, and will name the dealer in the applicable
prospectus supplement. The dealer may then resell the securities to
the public at varying prices to be determined by that dealer at the time of
resale.
Our net proceeds
will be the purchase price in the case of sales to a dealer, the public offering
price less discount in the case of sales to an underwriter or the purchase price
less commission in the case of sales through a selling agent — in each case,
less other expenses attributable to issuance and distribution.
Offers to purchase
securities may be solicited directly by us and the sale of those securities may
be made by us directly to institutional investors or others, who may be deemed
to be underwriters within the meaning of the Securities Act of 1933 with respect
to any resale of those securities. The terms of any sales of this type will be
described in the related prospectus supplement.
One or more firms,
referred to as “remarketing firms,” may also offer or sell the securities, if
the prospectus supplement so indicates, in connection with a remarketing
arrangement upon their purchase. Remarketing firms will act as
principals for their own accounts or as agents for Holding, us or any of our
subsidiaries. These remarketing firms will offer or sell the
securities in accordance with a redemption or repayment pursuant to the terms of
the securities. The prospectus supplement will identify any
remarketing firm and the terms of its agreement, if any, with Holding, us or any
of our subsidiaries and will describe the remarketing firm’s
compensation. Remarketing firms may be deemed to be underwriters in
connection with the securities they remarket.
In order to facilitate the offering
of these securities, the underwriters may engage in transactions that stabilize,
maintain or otherwise affect the price of these securities or any other
securities the prices of which may be used to determine payments on these
securities. Specifically, the underwriters may sell more securities
than they are obligated to purchase in connection with the offering, creating a
short position for their own accounts. A short sale is covered if the
short position is no greater than the number or amount of securities available
for purchase by the underwriters under any over-allotment option. The
underwriters can close out a covered short sale by exercising the over-allotment
option or purchasing these securities in the open market. In
determining the source of securities to close out a covered short sale, the
underwriters will consider, among other things, the open market price of these
securities compared to the price available under the over-allotment
option. The underwriters may also sell these securities or any other
securities in excess of the over-allotment option, creating a naked short
position. The underwriters must close out any naked short position by
purchasing securities in the open market. A naked short position is
more likely to be created if the underwriters are concerned that there may be
downward pressure on the price of these securities in the open market after
pricing that could adversely affect investors who purchase in the
offering. As an additional means of facilitating the offering, the
underwriters may bid for, and purchase, these securities or any other securities
in the open market to stabilize the price of these securities or of any other
securities. Finally, in any offering of the securities through a
syndicate of underwriters, the underwriting syndicate may also reclaim selling
concessions allowed to an underwriter or a dealer for distributing these
securities in the offering, if the syndicate repurchases previously distributed
securities to cover syndicate short positions or to stabilize the price of these
securities. Any of these activities may raise or maintain the market
price of these securities above independent market
levels or prevent or retard a decline in the market price of these
securities. The underwriters are not required to engage in these
activities, and may end any of these activities at any
time.
20
Selling agents,
underwriters, dealers and remarketing firms may be entitled under agreements
with us to indemnification by us against some civil liabilities, including
liabilities under the Securities Act, and may be customers of, engage in
transactions with or perform services for us in the ordinary course of
business.
If
so indicated in the applicable prospectus supplement, we will authorize selling
agents, underwriters or dealers to solicit offers by some purchasers to purchase
debt securities from us at the public offering price stated in the prospectus
supplement under delayed delivery contracts providing for payment and delivery
on a specified date in the future. These contracts will be subject
only to those conditions described in the prospectus supplement, and the
prospectus supplement will state the commission payable for solicitation of
these offers.
RBS Securities Inc.
is an affiliate of ours and Holding. To the extent an initial
offering of the securities will be distributed by an affiliate of ours each such
offering of securities will be conducted in compliance with the requirements of
NASD Rule 2720 of the Financial Industry Regulatory Authority, which is commonly
referred to as FINRA, regarding a FINRA member firm’s distribution of securities
of an affiliate. Following the initial distribution of any of these
securities, affiliates of ours may offer and sell these securities in
the course of their businesses as broker-dealers. Such affiliates may act as
principals or agents in these transactions and may make any sales at varying
prices related to prevailing market prices at the time of sale or
otherwise. Such affiliates may also use this prospectus in connection
with these transactions. None of our affiliates is obligated to make
a market in any of these securities and may discontinue any market-making
activities at any time without notice.
Underwriting
discounts and commissions on securities sold in the initial distribution will
not exceed 8% of the offering proceeds.
Neither RBS
Securities Inc. nor any other affiliated underwriter, selling agent or dealer of
ours utilized in the initial offering of securities will confirm sales to
accounts over which it exercises discretionary authority without the prior
specific written approval of its customer.
Selling
Restrictions
Public
Offering Selling Restriction under the Prospectus Directive
1. In
relation to each Member State of the European Economic Area which has
implemented the Prospectus Directive (each, a “Relevant Member State”), with
effect from and including the date on which the Prospectus Directive is
implemented in that Relevant Member State (the “Relevant Implementation Date”)
we or any selling agent, underwriter or dealer has not made and will not make an
offer of debt securities to the public in that Relevant Member State except that
we or it may, with effect from and including the Relevant Implementation Date,
make an offer of such debt securities to the public in that Relevant Member
State:
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(a)
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if the
applicable prospectus supplement and pricing supplement in relation to the
debt securities specify that an offer of those debt securities may be made
other than pursuant to Article 3(2) of the Prospectus Directive in that
Relevant Member State (a “Non-exempt Offer”), following the date of
publication of a prospectus in relation to such debt securities which has
been approved by the competent authority in that Relevant Member State or,
where appropriate, approved in another Relevant Member State and notified
to the competent authority in that Relevant Member State, provided that
any such prospectus has subsequently been completed by the pricing
supplement contemplating such Non-exempt Offer, in accordance with the
Prospectus Directive, in the period beginning and ending on the dates
specified in such prospectus or final terms, as
applicable;
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(b)
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at any time
to legal entities which are authorized or regulated to operate in the
financial markets or, if not so authorized or regulated, whose corporate
purpose is solely to invest in
securities;
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(c)
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at any time
to any legal entity which has two or more of (1) an average of at least
250 employees during the last financial year; (2) a total balance sheet of
more than €43,000,000 and (3) an annual net turnover of more than
€50,000,000, all as shown in its last annual or consolidated
accounts;
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21
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(d)
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at any time
fewer than 100 natural or legal persons (other than qualified investors as
defined in the Prospectus Directive) subject to obtaining the prior
consent of us and/or the relevant selling agent, underwriter or dealer;
or
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(e)
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at any time
in any other circumstances falling within Article 3(2) of the Prospectus
Directive,
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provided
that no such offer of debt securities referred to in (b) to (e) above shall
require the publication by us of a prospectus pursuant to Article 3 of the
Prospectus Directive.
For the purposes of
this provision, the expression an “offer of debt securities to the public” in
relation to any debt securities in any Relevant Member State means the
communication in any form and by any means of sufficient information on the
terms of the offer and the debt securities to be offered so as to enable an
investor to decide to purchase or subscribe the debt securities, as the same may
be varied in that Member State by any measure implementing the Prospectus
Directive in that Member State and the expression “Prospectus Directive” means
Directive 2003/71/EC and includes any relevant implementing measure in each
Relevant Member State.
2. In
addition and without prejudice to the relevant restrictions set out under 1
above, Zero Coupon Notes (as defined below) in definitive form may only be
transferred and accepted, directly or indirectly, within, from or into The
Netherlands through the mediation of either the Bank or a member firm of
Euronext Amsterdam N.V. in full compliance with the Dutch Savings Certificates
Act (Wet
inzake Spaarbewijzen) of 21 May 1985 (as amended) and its implementing
regulations. No such mediation is required: (a) in respect of the transfer and
acceptance of rights representing an interest in a Zero Coupon Note in global
form or (b) in respect of the initial issue of Zero Coupon Notes in definitive
form to the first holders thereof or (c) in respect of the transfer and
acceptance of Zero Coupon Notes in definitive form between individuals not
acting in the conduct of a business or profession, or (d) in respect of the
transfer and acceptance of such Zero Coupon Notes within, from or into The
Netherlands if all Zero Coupon Notes (either in definitive form or as rights
representing an interest in a Zero Coupon Note in global form) of any particular
Series are issued outside The Netherlands and are not distributed into The
Netherlands in the course of initial distribution or immediately thereafter. As
used herein “Zero Coupon Notes” are debt securities that are in bearer form and
that constitute a claim for a fixed sum against the Bank and on which interest
does not become due during their tenor or on which no interest is due
whatsoever.
22
LEGAL
MATTERS
Davis Polk &
Wardwell LLP will
pass upon the validity of the debt securities and the related guarantees with
respect to United States Federal and New York law. Clifford Chance
LLP will pass upon the validity of the debt securities and the related
guarantees with respect to Dutch law. Each of Davis Polk &
Wardwell LLP and
Clifford Chance LLP has in the past represented Holding and its affiliates,
including us, and continues to represent Holding and its affiliates on a regular
basis and in a variety of matters.
23
EXPERTS
The consolidated
financial statements as of and for the year ended December 31,
2008, and the retrospective adjustments to the 2007 and 2006
financial statements incorporated by reference in this prospectus, and the
effectiveness of Holding’s internal control over financial reporting have been
audited by Deloitte Accountants B.V., an independent registered public
accounting firm, as stated in their reports incorporated in this prospectus by
reference to Holding’s Report on Form 6-K dated September 28, 2009 (which
reports (1) express an unqualified opinion on the 2008 financial statements and
include an explanatory paragraph stating that the consolidated financial
statements for 2007 and 2006 before the effects of the retrospective adjustments
noted therein were audited by other auditors whose report expressed an
unqualified opinion, (2) express an unqualified opinion on the retrospective
adjustments to the 2007 and 2006 financial statements, and (3) express an
unqualified opinion on the effectiveness of internal control over financial
reporting). Such financial statements have been so incorporated in
reliance upon the reports of such firm given upon their authority as experts in
accounting and auditing.
The consolidated
financial statements of Holding as of and for the years ended December 31, 2007
and 2006, incorporated in this prospectus by reference to Holding’s Annual
Report on Form 20-F for the year ended December 31, 2008, as amended by
Holding’s Report on Form 6-K dated September 28, 2009, have been so incorporated
in reliance on the report of Ernst & Young Accountants LLP, independent
registered public accounting firm, as stated in their report incorporated herein
by reference, and have been so incorporated in reliance upon the report of such
firm given on the authority of the firm as experts in accounting and
auditing.
24
BENEFIT
PLAN INVESTOR CONSIDERATIONS
The Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and Section 4975
of the Internal Revenue Code of 1986, (the “Code”), impose certain requirements
on (a) employee benefit plans subject to Title I of ERISA, (b) individual
retirement accounts, Keogh plans or other arrangements subject to Section 4975
of the Code, (c) entities whose underlying assets include “plan assets” by
reason of any such plan’s or arrangement’s investment therein (we refer to the
foregoing collectively as “Plans”) and (d) persons who are fiduciaries with
respect to Plans. In addition, certain governmental, church and
non-U.S. plans (“Non-ERISA Arrangements”) are not subject to Section 406 of
ERISA or Section 4975 of the Code, but may be subject to other laws that are
substantially similar to those provisions (each, a “Similar Law”).
In
addition to ERISA’s general fiduciary standards, Section 406 of ERISA and
Section 4975 of the Code prohibit certain transactions involving the assets of a
Plan and persons who have specified relationships to the Plan, i.e., “parties in
interest” as defined in ERISA or “disqualified persons” as defined in Section
4975 of the Code (we refer to the foregoing collectively as “parties in
interest”) unless exemptive relief is available under an exemption issued by the
U.S. Department of Labor. Parties in interest that engage in a
non-exempt prohibited transaction may be subject to excise taxes and other
penalties and liabilities under ERISA and Section 4975 of the
Code. We, and our current and future affiliates, including RBS
Securities Inc., may be parties in interest with respect to many
Plans. Thus, a Plan fiduciary considering an investment in debt
securities should also consider whether such an investment might constitute or
give rise to a prohibited transaction under ERISA or Section 4975 of the
Code. For example, the debt securities may be deemed to represent a
direct or indirect sale of property, extension of credit or furnishing of
services between us and an investing Plan which would be prohibited if we are a
party in interest with respect to the Plan unless exemptive relief were
available under an applicable exemption.
In
this regard, each prospective purchaser that is, or is acting on behalf of, a
Plan, and proposes to purchase debt securities, should consider the exemptive
relief available under the following prohibited transaction class exemptions, or
PTCEs: (A) the in-house asset manager exemption (PTCE 96-23), (B) the insurance
company general account exemption (PTCE 95-60), (C) the bank collective
investment fund exemption (PTCE 91-38), (D) the insurance company pooled
separate account exemption (PTCE 90-1) and (E) the qualified professional asset
manager exemption (PTCE 84-14). In addition, ERISA Section 408(b)(17)
and Section 4975(d)(20) of the Code provide a limited exemption for the purchase
and sale of debt securities and related lending transactions, provided that
neither the issuer of the debt securities nor any of its affiliates have or
exercise any discretionary authority or control or render any investment advice
with respect to the assets of any Plan involved in the transaction and provided
further that the Plan pays no more than adequate consideration in connection
with the transaction (the so-called “service provider
exemption”). There can be no assurance that any of these statutory or
class exemptions will be available with respect to transactions involving the
debt securities.
Unless the
applicable prospectus supplement explicitly provides otherwise, each purchaser
or holder of a debt security, and each fiduciary who causes any entity to
purchase or hold a debt security, shall be deemed to have represented and
warranted, on each day such purchaser or holder holds such debt securities, that
either (i) it is neither a Plan nor a Non-ERISA Arrangement and it is not
purchasing or holding debt securities on behalf of or with the assets of any
Plan or Non-ERISA arrangement; or (ii) its purchase, holding and subsequent
disposition of such debt securities shall not constitute or result in a
non-exempt prohibited transaction under Section 406 of ERISA, Section 4975 of
the Code or any provision of Similar Law.
Fiduciaries of any
Plans and Non-ERISA Arrangements should consult their own legal counsel before
purchasing the debt securities. We also refer you to the portions of
the offering circular addressing restrictions applicable under ERISA, the Code
and Similar Law.
Each purchaser of a
debt security will have exclusive responsibility for ensuring that its purchase,
holding and subsequent disposition of the debt security does not violate the
fiduciary or prohibited transaction rules of ERISA, the Code or any Similar
Law. Nothing herein shall be construed as a representation that an
investment in the debt securities would meet any or all of the relevant legal
requirements with respect to investments by, or is appropriate for, Plans or
Non-ERISA Arrangements generally or any particular Plan or Non-ERISA
Arrangement.
Please consult the
applicable prospectus supplement for further information with respect to a
particular offering and, in certain cases, further restrictions on the purchase
or transfer of the debt securities.
25
ENFORCEMENT
OF CIVIL LIABILITIES
We
and Holding are organized under the laws of The Netherlands and the members of
our and Holding’s Supervisory Board, with one exception, and our and Holding’s
Managing Board are residents of The Netherlands or other countries outside the
United States. Although we and some of our affiliates have substantial assets in
the United States, substantially all of our and Holding’s assets and the assets
of the members of the respective Supervisory Boards and Managing Boards are
located outside the United States. As a result, it may not be possible for
investors to effect service of process within the United States upon us, Holding
or these persons or to enforce against us, Holding or these persons judgments of
U.S. courts predicated upon the civil liability provisions of U.S. securities
laws. The United States and The Netherlands do not currently have a treaty
providing for reciprocal recognition and enforcement of judgments in civil and
commercial matters. Therefore, a final judgment for the payment of money
rendered by any federal or state court in the United States based on civil
liability, whether or not predicated solely upon U.S. federal securities laws,
would not be enforceable in The Netherlands. However, if the party in whose
favor such judgment is rendered brings a new suit in a competent court in The
Netherlands, that party may submit to a Dutch court the final judgment which has
been rendered in the United States, in which case the Dutch court may give such
effect to this judgment as it deems appropriate. If the Dutch court finds that
the jurisdiction of the federal or state court in the United States has been
based on grounds that are internationally acceptable and that the final judgment
concerned results from proceedings compatible with Dutch concepts of due
process, to the extent that the Dutch court is of the opinion that
reasonableness and fairness so require, the Dutch court would, in principle,
under current practice, recognize the final judgment that has been rendered in
the United States and generally grant the same claim without relitigation on the
merits, unless the consequences of the recognition of such judgment contravene
public policy in The Netherlands or conflicts with an existing Dutch
judgment.
26