SHARE DISPOSITION AND PURCHASE AGREEMENT
Dated as of October 27, 1997
by and among
THE MINISTER OF RESEARCH AND INFORMATION TECHNOLOGY
OF THE KINGDOM OF DENMARK,
TELE DANMARK A/S,
and
AMERITECH CORPORATION
4,500,000 A Shares of TELE DANMARK A/S
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS 2
Section 1.1 Definitions 2
ARTICLE II PURCHASE AND SALE OF SHARES 5
Section 2.1 Purchase and Sale; Purchase Price 5
Section 2.2 Payment of Purchase Price 5
Section 2.3 Danish Share Transfer Duty 6
ARTICLE III CLOSING 6
Section 3.1 Shareholders Notice; Closing Date 6
Section 3.2 Closing 6
Section 3.3 Pledge 7
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLER 8
Section 4.1 Authorisation 8
Section 4.2 No Violation 8
Section 4.3 Approvals, Consents, Etc. 8
Section 4.4 Title to Sale Shares 8
Section 4.5 No Claims, Proceedings, Etc. 8
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY 9
Section 5.1 Corporate Organisation 9
Section 5.2 Authorisation 9
Section 5.3 No Violation 9
Section 5.4 Approvals, Consents, Etc. 9
Section 5.5 Financial Statements 9
Section 5.6 No Undisclosed Liabilities 10
Section 5.7 Reports 10
Section 5.8 No Claims, Proceedings, Etc. 10
Section 5.9 Legal Compliance; Taxes 10
Section 5.10 Material Governmental Permits 10
ARTICLE VI REPRESENTATIONS AND WARRANTEES OF BUYER 11
Section 6.1 Organisation 11
Section 6.2 Authorisation 11
Section 6.3 No Violation 11
Section 6.4 Approval, Consents, Etc. 11
Section 6.5 No Claims, Proceedings, Etc. 11
Section 6.6 Adequate Financing 11
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ARTICLE VII COVENANTS 12
Section 7.1 Covenants of Seller, the Company and Buyer 12
Section 7.2 Buyback Contingencies, Subsequent Offerings 13
Section 7.3 Additional Covenants of the Company and Seller 15
Section 7.4 Additional Covenants of Buyer 16
Section 7.5 Indemnification of Buyer for Certain Matters 18
ARTICLE VIII CONDITIONS TO CLOSING 18
Section 8.1 Conditions to Obligations of Seller and Buyer 18
Section 8.2 Further Conditions to Obligations of Seller 19
Section 8.3 Further Conditions to Obligations of Buyer 19
ARTICLE IX TERMINATION 20
Section 9.1 Right of Termination 20
Section 9.2 Effect of Termination 21
Section 9.3 Expiration of Representations and Covenants 21
ARTICLE X MISCELLANEOUS 22
Section 10.1 Governing Law; No Sovereign Immunity; Dispute
Resolution; Arbitration 22
Section 10.3 Entire Agreement 24
Section 10.4 Assignment 24
Section 10.5 Counterparts 24
Section 10.6 Headings 24
Section 10.7 Separability 24
Section 10.8 No Third Party Rights 25
Section 10.9 Waiver 25
Section 10.10 Amendments: Modifications 25
Section 10.11 No Partnership or Agency 25
Exhibit A Form of Demand Note
Exhibit B Form of Pledge Agreement
Exhibit C Share Buyback: Principal Terms and Conditions
Exhibit D Shareholders Notice
1
SHARE DISPOSITION AND PURCHASE AGREEMENT
THIS AGREEMENT is made on October 27, 1997, by and among:
1. The Minister of Research and Information Technology (the "Seller") acting
on behalf of the Kingdom of Denmark, and whose actions hereunder are fully
authorised by the Government of the Kingdom of Denmark,
and
2. Tele Danmark A/S, a company limited by shares and organised under the laws
of the Kingdom of Denmark ("Tele Danmark" or the "Company"),
and
3. Ameritech Corporation, a corporation organised under the laws of Delaware,
United States of America (the "Buyer").
WITNESSETH:
WHEREAS, Seller beneficially and of record owns all of the currently
outstanding A Shares of Tele Danmark;
WHEREAS, Buyer and the Company have developed cooperative relations in
the course of jointly considering certain international telecommunications
business opportunities;
WHEREAS, Buyer has expressed an interest to the Company and the Kingdom
of Denmark to acquire from the Seller a substantial equity stake in the Company
as a basis for forging a strategic alliance with the Company;
WHEREAS, Buyer has met with representatives of Seller in connection
with the transactions contemplated hereby, has had a series of meetings with
Company management and has developed a joint vision with respect to the future
operations of the Company outlined in public announcements released today;
WHEREAS, Buyer and the Company have entered into a cooperation
agreement dated the date hereof with the view to further developing their
cooperation;
WHEREAS, the board of directors of Buyer has authorised Buyer to enter
into and to perform the terms of this Agreement, the board of directors of the
Company has authorised the Company (including pursuant to article 5(10) of the
Articles) to enter into and to perform the terms of this Agreement and the
Minister is authorised on behalf of the Kingdom of Denmark to enter into and to
perform the terms of this Agreement; and
2
WHEREAS, pursuant to the terms and conditions of this Agreement, Seller
wishes to sell and Buyer wishes to acquire A Shares in the Company.
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section I.1 Definitions. For purposes of this Agreement, capitalized
terms used herein and not otherwise defined shall have the following meanings:
- "Additional Closing" means the completion of the sale of the
Additional Shares in accordance with Section 7.2(d) herein;
- "Additional Closing Date" means the date on which the Additional
Closing takes place as specified in Section 7.2(d) herein;
- "Additional Shares" has the meaning set forth in Section 7.2(a);
- "Additional Share Price" means the aggregate price for Additional
Shares as set forth in Section 7.2(b);
- "Affiliates" includes the Subsidiaries of any Person and its
Subsidiaries, and the corporations or entities of which such Person is a
Subsidiary and the other Subsidiaries of such corporations or entities;
- "A Shares" means the A Shares of the Company, each having nominal
value 100 Danish Kroner and 10 votes or the 10 Shares each having one vote into
which each A Share will convert as of 1 June 1998 as provided in the Company's
Articles;
- "Amended Articles" means the Articles of Association amended
substantially in accordance with the changes set forth in the Shareholders
Notice;
- "Articles" means the Articles of Association in the form adopted at
the Extraordinary General Meeting on March 18, 1994, the Annual General Meeting
on April 7, 1994 and by Board Resolution on August 29, 1995 and March 18, 1997.
- "B-Shares" mean the B Shares of the Company, each having nominal
value 10 Danish Kroner and 1 vote;
- "Business Day" means a day on which banks are open for business in
Copenhagen, Denmark and New York, New York;
- "Closing" means the completion of the sale of the Sale Shares in
accordance with Article III herein;
3
- "Closing Conditions" means the conditions to Closing set forth in
Article VIII herein;
- "Closing Date" means the day on which the Closing takes place, as
determined pursuant to Section 3.1 herein;
- "Closing Letter" means a notice delivered by Buyer or Seller as
defined in Section 3.1 herein;
- "Consolidated Subsidiaries" means those subsidiaries of the Company
whose financial position and results of operations have been fully consolidated
with those of the Company in the Company's audited consolidated financial
statements for 1996;
- "Contingency Date" means the earliest to occur of (i) the 120th day
after the approval at the extraordinary general meeting of the Share Buyback if
no portion of the Share Buyback has been consummated by such date; (ii) the 10th
day after the consummation of the Share Buyback if, after giving effect to the
Share Buyback, Seller owns Additional Shares and (iii) the date of the
extraordinary general meeting held to consider the Share Buyback (or of the
second general meeting if a quorum is not present at the first) if at such
meeting the requisite approval from the Company's shareholders for the Share
Buyback as contemplated in this Agreement is not obtained;
- "Custodian Bank" means an institution ("kontofoerende institut") to
be chosen by the Seller which will be authorised to and responsible for, among
other things, registering the Pledge on the Sale Shares as set forth in Section
3.3;
- "Danish Kroner" or "DKK" means Danish Kroner, the currency of
Denmark;
- "Demand Note" means a non-interest bearing promissory note
substantially in the form of Exhibit A executed by Buyer having the principal
amount set forth in DEM in Section 2.2, payable to Seller in accordance with
Section 3.3;
- "Deutsche Xxxx" or "DEM" means Deutsche Xxxx, the currency of
Germany;
- "Disclosure Letter" means the disclosure letter delivered by the
Company to Buyer and Seller incorporated herein by reference and initialed by
Seller and Buyer.
- "EGM Date" means the date of the general meeting as defined and
called under Section 3.1.
- "Excess Shares" means certain Shares under the circumstances
specified in Section 7.2(a);
- "Financial Statements" means the Company's audited consolidated
financial statements and the parent company financial statements for the Company
for the year ending December 31, 1996 as published in the Company's Annual
Report for 1996 and as audited by Price Waterhouse/Seier-Petersenand Deloitte &
Touche;
4
- "Governmental Entity" means any supranational, national, state,
municipal or local government, any instrumentality, subdivision, court,
administrative agency or commission or other authority thereof, or any
quasi-governmental or private body exercising any regulatory, taxing, importing
or other governmental or quasi-governmental authority, including the European
Commission and Council of Ministers of the European Union;
- "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended;
- "Loss" means any damage, cost, penalty, fine or other loss
(including, but not limited to, reasonable legal fees and other dispute
resolution costs) which is actually incurred;
- "Person" means an individual, a partnership, a corporation, a limited
company, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof,
- "Pledge" means the registered pledge of the Sale Shares as set forth
in Section 3.3.
- "Pledge Agreement" means the agreement substantially in the form
attached as Exhibit B setting forth the terms of the Pledge.
- "Purchase Price" means the purchase price for the Sale Shares, as set
forth in Section 2.1;
- "Public Reports" means the reports and other documents as defined in
Section 5.7;
- "Redemption Date" means the first Business Day after a general
meeting of the Company at which certain actions will be proposed as further
defined in Section 3.3.
- "Sale Shares" means the A Shares and all rights attaching thereto,
including voting and dividend rights, to be sold in accordance with Section 2.1;
- "Sale Notice" means a notice of sale and purchase or of purchase and
sale delivered under Section 7.2.
- "Shares" means the B Shares of the Company, each having nominal value
10 Danish Kroner and 1 vote each together with the A Shares of the Company,
together with all rights (including voting and dividend rights) attaching
thereto and after June 1, 1998, all voting shares of the Company;
- "Share Buyback" means the redemption by the Company (by way of a
capital reduction as set forth in Exhibit C) of A Shares constituting
substantially all of the remaining A Shares owned by Seller following the Share
Sale;
5
- "Shareholders Notice" means a notice to shareholders of a general
meeting on the terms and as defined in Section 8.1(a) herein and substantially
in the form attached as Exhibit D;
- "Shareholders Notice Date" means the date specified in a Closing
Letter for issuance of the Shareholders Notice on the terms and as defined in
Section 3.1;
- "Subsidiary" - means a company, partnership or other Person either
directly or indirectly controlled by another company, partnership or Person;
- "Tax" or "Taxes" - means any Danish income, stamp, customs duties,
withholding, social security, property, sales, value added or other tax,
including any interest, penalty, or addition thereto;
- "Tele Danmark Group" means the Company and its Subsidiaries;
- "VP" means the Danish Securities Centre (Vaerdipapircentralen).
ARTICLE II
PURCHASE AND SALE OF SHARES
Section II.1 Purchase and Sale; Purchase Price. Pursuant to the terms
and subject to the conditions set forth in this Agreement, at the Closing,
Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller,
4,500,000 A Shares (the "Sale Shares"), at a purchase price of four thousand
seven hundred Danish Kroner (DKK 4,700.00) per A Share, and in aggregate
twenty-one billion one hundred and fifty million Danish Kroner (DKK
21,150,000,000.00) (the "Purchase Price"), satisfied by the delivery to the
Seller of the Demand Note in consideration for the Sale Shares.
Section II.2 Payment of Purchase Price. The Purchase Price shall be
paid in full on the Closing Date by Buyer's issuance and delivery of the Demand
Note to Seller and the Demand Note shall be paid in fall on the Redemption Date
by wire transfer of five billion five hundred fifty-five million nine hundred
and ninety-three thousand three hundred and eighty Deutsche Marks (DEM
5,555,993,380.00) in immediately available funds to the bank account(s)
designated by Seller by prior notice to Buyer.
Section II.3 Danish Share Transfer Duty. Seller hereby agrees to pay
Danish share transfer duties owing in connection with any transfers of the Sale
Shares pursuant to this Agreement.
6
ARTICLE III
CLOSING
Section III.1 Shareholders Notice; Closing Date. Seller or Buyer may
provide written notice (the "Closing Letter") to the other and to the Company
following the fulfillment (or waiver by the party for whose benefit the
condition applies) of all of the Closing Conditions set forth in Article VIII
hereof, other than the issuance of the Shareholders Notice contemplated under
Section 8.1. The Closing Letter shall specify that all of the Closing Conditions
set forth in Article VIII hereof, other than the issuance of the Shareholders
Notice contemplated under Section 8.1, have been either satisfied or waived (by
the party for whose benefit the condition applies), and the Closing Letter shall
require the Company to issue the Shareholders Notice on a date (the
"Shareholders Notice Date") not less than 3 nor more than 5 Business Days after
the date of such Closing Letter. The general meeting called in such Shareholders
Notice shall be commenced on the date (the "EGM Date") specified in the Closing
Letter and reflected in the Shareholders Notice. The EGM Date shall be (i) a
date not more than 28 days, but not less than 8 days, after the date on which
the Shareholders Notice is to be issued and (ii) on or after, January 14, 1998.
The acquisition of the Sale Shares pursuant to this Agreement shall be completed
at the offices of Seller, or such other place in Copenhagen as the parties may
agree, on the date (the "Closing Date") that is (i) as few days prior to the EGM
Date as is reasonably practicable but in any event not more than 5 Business Days
prior to the EGM Date and (ii) on or after January 6, 1998.
Section III.2 Closing. At the Closing on the Closing Date, the parties
shall exchange the following documents and take the following actions:
(a) each party shall execute a certificate confirming the
fulfillment (or waiver) of the Closing Conditions running to the benefit of such
party;
(b) Buyer shall then deliver to Seller (i) the Demand Note and
(ii) the executed Pledge Agreement;
(c) upon receipt of the Demand Note, Seller shall cause to be
executed and delivered appropriate share transfers in respect of the Sale Shares
to Buyer, subject to the Pledge set forth in Section 3.3 below and shall pay the
share transfer duty payable by Seller under Section 2.3; and
(d) Buyer and Seller shall cause the Custodian Bank to ensure that
title to the Sale Shares, subject to the Pledge, is registered in the name of
Buyer with the VP and to cause the Company to register title to the Sale Shares
in the name of Buyer in the Company's shareholder register.
Section III.3 Pledge.
(a) Following the Closing, until such time as a duly convened
ordinary or extraordinary general meeting of the Company has either elected or
failed to elect Buyer's 6 nominees for election to the board of directors of the
Company as provided in (b) and (c)
7
of this Section 3.3, the Sale Shares shall be owned by Buyer subject to a duly
executed pledge of the Sale Shares (the "Pledge") registered by the Custodian
Bank in its records as well as with the VP in favor of the Seller to secure
Seller's rights and the performance by Buyer of Buyer's obligations under the
Demand Note. At the first general meeting following the Closing (whether
extraordinary or ordinary and at any adjournment thereof, Buyer shall (A) assure
that the Sale Shares are present for purposes of declaring a quorum at each such
general meeting, (B) exercise its rights as owner of the Sale Shares to nominate
and vote in favor of its nominees being elected as 6 members to the board of
directors (including the chairman and vice-chairman) of the Company, (C) vote in
favor of the Amended Articles and (D) vote the Sale Shares in favor of the Share
Buyback.
(b) In the event that at the first general meeting following the
Closing Buyer's 6 nominees to the board of directors are elected and two of them
are respectively elected the chairman and vice chairman of the board of
directors of the Company (regardless of whether the Amended Articles are
adopted) then on the first Business Day following such general meeting (the
"Redemption Date"): (i) Buyer shall pay and transfer in immediately available
funds the amount due under the Demand Note (the Deutsche Xxxx amount set forth
in Section 2.2) to the account or accounts designated by Seller by prior notice
in writing to Buyer and Seller shall present the Demand Note to Buyer and Buyer
shall accept the Demand Note for cancellation; (ii) Buyer and Seller shall cause
the Custodian Bank to take such action as may be necessary to remove the
registration of the Pledge and otherwise extinguish the Pledge over the Sale
Shares; whereupon the Pledge shall irrevocably terminate and the Demand Note
shall be cancelled, without further action by, and notwithstanding any objection
by, either Buyer or Seller.
(c) In the event that at the first general meeting following the
Closing the shareholders have not elected Buyer's 6 nominees to the board of
directors or two of Buyer's nominees are not elected the chairman and
vice-chairman of the board of directors (regardless of whether the Amended
Articles are adopted) on the Redemption Date: (i) Seller shall deliver the
Demand Note to Buyer and Buyer shall accept the Demand Note; (ii) Buyer and
Seller shall cause the Custodian Bank to take such action as may be necessary to
remove the registration of the Pledge and otherwise extinguish the Pledge over
the Sale Shares, whereupon title to the Sale Shares shall be registered in the
name of Seller free and clear of any lien or pledge and the Pledge shall
irrevocably terminate and the Demand note shall be cancelled, without further
action by, and notwithstanding any objection by, either Buyer or Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
Section IV.1 Authorisation. Seller has full power and authority to
enter into this Agreement (and related agreements) and, subject to the
fulfillment of the Closing Conditions set out in Sections 8.1 and 8.2 herein, to
complete the transactions contemplated hereby.
8
Section IV.2 No Violation. Neither Seller's execution and delivery of
this Agreement (and related agreements) nor, subject to the fulfillment of the
Closing Conditions, timely completion of the transactions contemplated by this
Agreement conflict with (a) any treaty, law or regulation, or any judgment or
court order, by which Seller is bound, (b) any provision of the Articles or (c)
any agreement to which Seller is party, other than in the case of those
conflicts which, in the aggregate, would not materially adversely affect its
ability to complete the transactions contemplated under this Agreement.
Section IV.3 Approvals, Consents, Etc. All approvals and consents of
and filings with Governmental Entities or other third parties which are required
to be obtained or made by Seller in connection with the execution, delivery and
performance by Seller of this Agreement (and related agreements) have been or
will be duly obtained or made, with the exception only of those referred to in
Sections 8.1(b) and 8.1(d) hereof.
Section IV.4 Title to Sale Shares.
(a) Seller has valid and unencumbered title to all of the Sale
Shares and to each of the Additional Shares, if any, to be sold by it pursuant
to this Agreement.
(b) At the Closing, full and valid title to the Sale Shares to be
sold by Seller will be transferred to Buyer credited as fully paid up, and free
and clear of any pledge (other than the Pledge) or other security interest,
lien, or purchase option, right of first refusal or other right of any third
party.
(c) At the Closing, with the exception of the Share Buyback and
the sale of Shares to Buyer contemplated in this Agreement, Seller will not be
committed to sell or otherwise dispose of any Shares or any dividend shares or
other non-capital shares, bonds or other rights convertible into shares, or
warrants, options or other financial instruments entitling the holder to acquire
any Shares of the Company.
Section IV.5 No Claims, Proceedings, Etc. Except for the proceeding
disclosed in Section 7.5, there are no legal actions, proceedings, claims or
arbitrations pending or, to the best of Seller's knowledge, information and
belief after due enquiry, threatened against Seller the adverse determination of
which, in the aggregate, may impair the validity or enforceability of this
Agreement or any of its principal terms or materially adversely affect Seller's
ability to complete the transactions contemplated under this Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule delivered to Buyer and
Seller on the date hereof, the Company represents and warrants to Buyer and
Seller as follows:
Section V.1 Corporate Organisation. The Company is a company limited by
shares duly organised and validly existing under the laws of the Kingdom of
Denmark. As at the date hereof the Company has nominal and fully-paid up share
capital in the amount of DKK 1,310,000,000.
9
Section V.2 Authorisation. The Company has full corporate power and
authority to enter into this Agreement (and related agreements) and to complete
the transactions contemplated to be performed by the Company hereby.
Section V.3 No Violation. Neither the Company's execution and delivery
of this Agreement (and related agreements) nor, subject to the fulfillment of
the Closing Conditions, timely completion of the transactions contemplated
hereby, (a) conflict with any treaty, law or regulation, or any judgment or
court order, by which the Company or any of its Consolidated Subsidiaries (other
than Belgacom SA) are bound or (b) conflict with any provision of the Articles
of the Company or (c) conflict with or cause the termination of or a default
under any agreement to which the Company or any of its Consolidated Subsidiaries
(other than Belgacom SA) are party, other than in the case of those conflicts,
terminations or defaults which, in the aggregate, would not materially adversely
affect the financial condition of the Company and its Consolidated Subsidiaries,
taken as a whole, or its ability to complete the transactions contemplated under
this Agreement (and related agreements).
Section V.4 Approvals, Consents, Etc. All approvals and consents of,
and filings with Governmental Entities or other third parties which are required
to be obtained or made by the Company in connection with the execution, delivery
and performance by the Company of this Agreement (and related agreements) have
been or will be duly obtained or made, with the exception only of those referred
to in Sections 8.1(b) and 8.1(d) hereof.
Section V.5 Financial Statements. The Financial Statements have been
prepared in accordance with the accounting requirements of Danish legislation
and give a true and fair view of the financial assets and liabilities and
financial position of the Company and its Consolidated Subsidiaries as of the
dates shown and the financial results of the Company and its Consolidated
Subsidiaries for the periods shown.
Section V.6 No Undisclosed Liabilities. Neither the Company nor any of
its Consolidated Subsidiaries (other than Belgacom SA) has any liabilities or
obligations (absolute, accrued, contingent or otherwise) of a nature required by
accounting requirements of Danish legislation to be provided for or accrued in a
balance sheet whose purpose is to give a true and fair view of financial
position or disclosed in the notes thereto, that are not accrued or reserved
against, or disclosed in the Financial Statements and Public Reports (as defined
in Section 5.7), other than liabilities or obligations known to the Company
after due enquiry that were incurred in the ordinary course of business after
December 31, 1996 or that, in the aggregate, would not materially adversely
affect the financial condition of the Company and its Consolidated Subsidiaries,
taken as a whole, or its ability to complete the transactions contemplated under
this Agreement (and related agreements).
Section V.7 Reports. The Company has filed all required and material
reports, schedules, forms, statements and other documents required to be filed
by it with the Copenhagen Stock Exchange, the New York Stock Exchange and the
Securities and Exchange Commission of the United States since December 31, 1995
(collectively, including all exhibits and amendments thereto, the "Public
Reports"). Such Public Reports, as of their respective dates (and, if amended or
superseded by a filing prior to the date of this Agreement or the Closing Date,
on the latest filing date), complied or will comply in all material respects
with
10
applicable requirements, including without limitation, applicable disclosure
standards and requirements.
Section V.8 No Claims, Proceedings, Etc. Except for the proceeding
disclosed in Section 7.5, there are no legal actions, proceedings, claims or
arbitrations pending or, to the best of the Company's knowledge, threatened
against the Company or its Consolidated Subsidiaries (other than Belgacom SA)
the adverse determination of which, in the aggregate, may impair the validity or
enforceability of this Agreement (or any related agreements) or any of its (or
their) principal terms or materially adversely affect the Company's ability to
complete the transactions contemplated under this Agreement (or any related
agreements).
Section V.9 Legal Compliance; Taxes. Except for those matters that in
the aggregate, would not materially adversely affect the financial condition of
the Company and its Consolidated Subsidiaries, taken as a whole, the Company and
each of its Consolidated Subsidiaries (other than Belgacom SA) (i) have
conducted their respective businesses in accordance with all applicable laws,
rules and regulations of the Kingdom of Denmark and of all Danish Governmental
Entities having jurisdiction over them and (ii) have withheld and paid all Taxes
(other than Taxes, interest and penalties disputed in good faith) as required by
applicable law or regulation to have been withheld and paid to the Danish
authorities.
Section V.10 Material Governmental Permits. The Company and its Danish
Subsidiaries own, hold or possess, in respect of their respective businesses,
all Danish governmental licenses, franchises, permits, privileges, immunities,
approvals and other Danish authorizations which are necessary to entitle the
Company and its Danish Subsidiaries to own or lease, operate and use its
properties and to carry on and conduct its business in all material respects as
currently conducted (herein collectively called "Material Governmental
Permits"). The Company and its Danish Subsidiaries have fulfilled and performed
in all material respects their obligations under each of such Material
Governmental Permits. As of the date hereof, there is no proceeding pending or,
to the best of the Company's knowledge, threatened to revoke, modify or
otherwise fail to renew any such Material Governmental Permit.
ARTICLE VI
REPRESENTATIONS AND WARRANTEES OF BUYER
Buyer represents and warrants to each of Seller and the Company as
follows:
Section VI.1 Organisation. Buyer is a corporation duly organised and
validly existing under the laws of the State of Delaware, United States.
Section VI.2 Authorisation. Buyer has full corporate power and
authority to enter into this Agreement (and related agreements) and to complete
the transactions contemplated thereby.
Section VI.3 No Violation. The execution and delivery of this Agreement
(and related agreements) by Buyer and, subject to the fulfillment of the Closing
Conditions set out in Sections 8.1 and 8.3 herein, its timely completion of the
transactions contemplated by this Agreement (and related agreements) do not
conflict with (a) any treaty, law or regulation,
11
or any judgment or court order, by which Buyer is bound, (b) any provisions of
the articles of incorporation or bylaws of Buyer or (c) any agreement to which
Buyer is party, other than in the case of those conflicts which, in the
aggregate, would not materially adversely affect the financial condition of
Buyer or its ability to complete the transactions contemplated under this
Agreement (and related agreements).
Section VI.4 Approval, Consents, Etc. All approvals and consents of,
and filings with Governmental Entities or other third parties which are required
to be obtained or made by the Buyer in connection with the execution, delivery
and performance by Buyer of this Agreement (and related agreements) and the
purchase of the Sale Shares have been or will be duly obtained or made, with the
exception only of Sections 8.l(b) hereof.
Section VI.5 No Claims, Proceedings, Etc. There are no legal actions,
proceedings, claims or arbitrations pending or, to the best of Buyer's
knowledge, information and belief after due enquiry, threatened the adverse
determination of which may impair the validity or enforceability of this
Agreement (and related agreements) or any of its principal terms or materially
adversely affect the financial condition of Buyer or its ability to complete the
transactions contemplated under this Agreement (and related agreements).
Section VI.6 Adequate Financing. The necessary funds for paying the
Purchase Price are available, or at the Closing will be available, to Buyer.
ARTICLE VII
COVENANTS
Section VII.1 Covenants of Seller, the Company and Buyer.
(a) Best Reasonable Efforts to Satisfy Conditions. The parties
shall use their best reasonable efforts and fully cooperate to bring about the
fulfillment of the Closing Conditions on the earliest possible date. Among other
matters, the Company agrees to publish the Shareholders Notice on the
Shareholders Notice Date (as contemplated in Section 3.1) and to take such other
actions as may be necessary promptly to convene a shareholders meeting, and if a
quorum is not present at the first general meeting, a second general meeting as
soon as practicable following the Shareholders Notice Date in order to provide
the shareholders of the Company with appropriate information and an opportunity
(i) to vote with respect to the adoption of the Amended Articles and the
election of certain members of the board of directors and (ii) subject to
applicable Danish law including Article 44a of the Companies Act, to vote with
respect to the proposed Share Buyback and the other actions proposed to be taken
by the shareholders of the Company in connection with this Agreement. Seller and
Buyer agree to exercise their rights as shareholders of the Company to cause the
Company to recommend and adopt the Amended Articles and to authorize and execute
the Share Buyback (assuming the events set forth in Section 3.3(b) have been
completed) on the terms contemplated in this Agreement and the exhibits hereto.
Notwith standing the foregoing and unless this Agreement otherwise terminates,
it is further understood and agreed that, in connection with the disposition of
substantially all of its remaining equity in the Company, Seller has determined
that at general meetings following
12
the Closing it may not be appropriate for Seller to approve the selection of
management and accordingly, although Seller's A Shares shall be present and
represented at such general meetings for purposes of establishing a quorum,
Seller will not vote any of its A Shares at such meetings with respect to the
election of nominees to the board of directors of the Company. Until such time
as the Amended Articles are adopted, Buyer agrees to abstain from voting at the
election of two members of the board of directors consistent with the manner in
which Seller presently abstains from voting for such directors as provided for
in Article 17(l) of the Articles.
Seller shall approve the Amended Articles as contemplated in Article 14(3) of
the Articles and further, Seller shall, following Closing and completion under
Section 3.3(b), consent to the further amendment of the Articles by the board of
directors of the Company as provided in Item 2 VIII of the EGM Notice promptly
following written notice from the Company that the transfers contemplated in the
Share Buyback have been completed and the Seller then owns less than 9.5% of the
Shares.
(b) Further Assurances. Each of Seller, the Company and Buyer
shall, at the request of any other party to this Agreement, execute,
acknowledge, deliver and file without further consideration, all further
assignments, conveyances, endorsements, powers of attorney, consents and other
documents and take such other action as may be reasonably requested to complete
the transactions contemplated by this Agreement.
(c) Public Announcements. The parties shall coordinate with each
other the public announcement and presentation to the press of the transactions
contemplated by this Agreement. Pending completion of the Share Buyback, the
parties shall coordinate with each other with respect to public announcements
regarding the Company's business, subject to the fiduciary duties of the board
of directors of the Company. Among other matters, the parties acknowledge and
agree that, in accordance with the legal obligations and duties of each of the
parties, the terms of this Agreement shall be publicly available and may be
disclosed, including to governmental or regulatory authorities.
Section VII.2 Buyback Contingencies, Subsequent Offerings.
(a) Put and Call of Additional Shares. In the event that the
amount due under the Demand Note has been paid to Seller and Seller continues to
own Shares after the Contingency Date occurs, each of Buyer and Seller shall
have rights, exercisable by notice of sale (the "Sale Notice"), to require the
purchase and sale of Seller's A Shares remaining after the sale of the Sale
Shares and the redemption by the Company of Shares, pursuant to whatever portion
of the Share Buyback, if any that occurs (the "Additional Shares') as follows:
(i) Buyer shall have the right, exercisable by delivery of a
Sale Notice to Seller to require the Seller to sell to Buyer, and Buyer
shall purchase from Seller, not less than such number of Additional Shares
owned by Seller that would cause the aggregate of the Sale Shares and the
Additional Shares owned by Buyer to exceed 42.4% of the total voting share
capital of the Company; provided, however, that in the event Buyer's
acquisition of such Additional Shares would cause the aggregate of the Sale
Shares and the Additional Shares owned by Buyer to exceed
13
42.4% of the total voting share capital of the Company (such Shares,
"Excess Shares"), Buyer shall assign the right to purchase such Excess
Shares to any institutional investor or Persons engaged in the
telecommunications industry or related industries, provided further, that
Buyer guarantees the performance of the assignee's obligations to purchase
any Excess Shares under this clause (i);
(ii) Seller shall have the right, exercisable by delivery of
a Sale Notice to Buyer to require Buyer to purchase not less than such
number of Additional Shares owned by Seller that would cause the aggregate
of the Sale Shares and the Additional Shares owned by Buyer to exceed 42.4%
of the total voting share capital of the Company; provided, however, that
upon receipt of a Sale Notice from Seller, Buyer shall be obligated to
purchase only a number of Additional Shares that would cause the aggregate
of the Sale Shares and the Additional Shares owned by Buyer to equal 42.4%
of the total voting share capital of the Company and to use reasonable
efforts to obtain assignee purchasers for any Excess Shares that Buyer
elects not to purchase which efforts shall be deemed to be sufficient so
long as Buyer is acting in good faith. Buyer shall have no duty to
guarantee the purchase obligations of the assignee purchasers under this
clause (ii), and such assignee purchasers may be any institutional investor
or Persons engaged in the telecommunications industry or related industries
who are reasonably acceptable to Seller.
(b) Additional Share Price. If the Share Buyback does not occur,
the purchase price for the Additional Shares shall be the aggregate of the price
per Additional Share determined in accordance with the Share Buyback terms set
forth on Exhibit C. If any portion of the Share Buyback occurs, the purchase
price for the Additional Shares shall be the aggregate of the price per
Additional Share which shall be deemed to equal the average of each day's
trading price ("Alle xxxxxxx xx. 17:00" on the Copenhagen Stock Exchange for B
Shares and adjusted to the A-Share equivalent) weighted by the daily trading
volume as reported on the Copenhagen Stock Exchange for the 15 trading days
preceding the Additional Closing Date. At each Additional Closing (if any), full
and valid title to the Additional Shares to be sold at such Additional Closing
by Seller will be transferred to Buyer and/or the other purchasers permitted
under this Section 7.2 credited as fully paid up, and free and clear of any
pledge, transfer restriction or other security interest, lien, or purchase
option, right of first refusal or other right of any third party. Any share
transfer duties owing in connection with any transfers of Additional Shares
shall be shared and paid on a 50/50 basis by Buyer and Seller.
(c) Sale Notices: Return Notice. Buyer's rights to require a
purchase and sale under clause 7.2(a)(i) shall be exercisable not more than one
time from and after the Contingency Date and shall expire unless exercised by
delivery of a Sale Notice to Seller on or before the 30th day following the
Contingency Date. Seller's rights to require a purchase and sale under clause
7.2(a)(ii) shall be exercisable not more than one time from and after the 31st
day following the Contingency Date and shall expire unless exercised by delivery
of a Sale Notice to Buyer before the 60th day following the Contingency Date. In
the event Buyer intends to assign any or all of its purchase rights and
obligations under Section 7.2(a)(i), Buyer shall provide notice of such assignee
in Buyer's Sale Notice, or within 15 Business Days after Seller's delivery of a
Sale Notice to Buyer. In the event Buyer is not able to obtain assignee
purchasers of Excess Shares under clause 7.2(a)(ii) above, Buyer may
14
notify Seller that such unassigned Shares shall not be purchased by return
notice ("Return Notice") to Seller delivered on or before the 15th day after
receipt of Seller's Sale Notice.
(d) Time and Place of Additional Closing. Unless otherwise agreed,
the closing ("Additional Closing") of the purchase and sale of Additional Shares
shall take place on the 20th Business Day following delivery of the relevant
Sale Notice (the "Additional Closing Date"). The Additional Closing shall take
place on the Additional Closing Date at the offices of the Seller or at such
other time and place in Copenhagen as the parties may agree. The Additional
Share Price shall be paid in full on the Additional Closing Date by wire
transfer in Deutsche Xxxx (at an exchange rate of 3.8067 DKK per DEM) in
immediately available funds to the account or accounts designated by Seller by
prior notice in writing to Buyer and its permitted assignees, as applicable.
(e) Subsequent Offerings. In the event that, notwithstanding the
performance or the expiration of the rights set forth in this Section 7.2 above,
Seller continues to own Shares, then each of Buyer and the Company agree to use
their reasonable efforts, at the request of Seller, to facilitate and to
complete an additional offering (whether to the public or by private sale) of
the remaining Shares owned by Seller, so long as, (A) such offering or sale is
conducted in an orderly manner which is reasonably acceptable to Buyer, and (B)
if such offering or sale is made other than to the public in a registered
offering, the purchaser of such Shares is not a competing telecom operator or
service provider of the Company or of Buyer.
Section VII.3 Additional Covenants of the Company and Seller.
(a) Conduct of Business. From the date of this Agreement to the
earlier of the Closing Date or the date of termination of this Agreement
pursuant to Article IX hereof and except as otherwise contemplated by this
Agreement, the Company will carry on its business, and will cause its
wholly-owned Consolidated Subsidiaries and use its best reasonable efforts to
cause its other Consolidated Subsidiaries to carry on their respective
businesses, in the ordinary course and each of Seller and the Company agrees, to
the extent legally permitted by either Seller or the Company as appropriate,
that the Company will not, and will cause its wholly-owned Consolidated
Subsidiaries and use its best reasonable efforts to cause that its other
Consolidated Subsidiaries will not:
(i) enter, or agree to enter, into any agreement concerning
any investment in another entity, joint venture or alliance, or any
acquisitions, disposals or restructurings (including, but not limited to,
through liquidation, merger or other transfers) or actions outside the
ordinary course of the Company's business (including the incurrence of
indebtedness), in each case, of the kind that would in the Company's past
custom and practice be considered for approval by the Company's board of
directors or management committee;
(ii) recommend or issue or grant, or agree to issue or grant,
any new shares, convertible bonds, options or warrants;
15
(iii) recommend or pay or declare any dividends or
distributions of any sort other than (A) an annual dividend in respect of
the Company's 1997 distributable earnings and in line with market
expectations and (B) the Share Buyback ; or
(iv) recommend an amendment to or amend its Articles other
than in accordance with Exhibit D hereto.
(b) No Solicitation, No Agreement. Prior to receipt of the
Parliamentary authorization described in Section 8.l(d), none of the Company,
Seller or any of their respective Affiliates, representatives, officers,
employees, directors or agents shall, directly or indirectly, solicit, initiate,
encourage or otherwise facilitate any inquiries or the making of any proposal,
or offer with respect to (i) reorganization, liquidation, dissolution or
recapitalization of the Company, (ii) merger or consolidation involving the
Company or its Subsidiaries, (iii) any purchase or sale of any assets or the
shares of the Company or its Subsidiaries (other than the Share Buyback and
other than the sale of assets by the Company or its Subsidiaries in the ordinary
course of business), or (iv) any similar transaction or business combination
involving the Company or its Subsidiaries or the assets of the Company or its
Subsidiaries (each of the foregoing actions described in clauses (i) through
(iv), a "Company Transaction") or otherwise facilitate in any other manner any
effort or attempt by any Person to do or seek to do any of the foregoing. The
Company and Seller agree to notify Buyer as soon as practicable of their receipt
of any proposal, offer, inquiry or contact with respect to a Company
Transaction. Prior to the Closing Date, it is further agreed that none of the
Company or any of its respective Affiliates, representatives, officers,
employees, directors or agents shall, directly or indirectly, enter into any
agreement or accept any offer for any Company Transaction.
In addition to, and supplementing, each of the foregoing obligations, during the
period from and after the date on which the Parliamentary authorization
described in Section 8.1(d) is received and ending on the Closing Date, none of
the Company, Seller or any of their respective Affiliates, representatives,
officers, employees, directors or agents shall, directly or indirectly, solicit,
initiate, encourage or otherwise facilitate or discuss any proposal or offer
regarding a Company Transaction, nor shall they directly or indirectly enter
into any agreement or accept any offer for any Company Transaction.
Section VII.4 Additional Covenants of Buyer.
(a) Certain Minority Offer Obligations. Buyer agrees that for so
long as Section 31 of the Danish Securities Trading Act or a substantially
similar statutory or regulatory measure is in effect but not beyond the third
anniversary of the Closing, Buyer and its Affiliates shall not own or have the
right to vote Shares representing more than fifty percent of the voting share
capital of the Company outstanding from time to time unless, at the time Buyer
and its Affiliates exceed such threshold, Buyer shall make an offer to all
shareholders of the Company to purchase all Shares that remain outstanding at a
price per Share not less than the higher of (i) the pride of DKK 467 per B Share
(or the Share equivalent) or (ii) the price applicable under Section 31 of the
Danish Securities Trading Act and regulations; provided however, that the
foregoing agreement shall not apply in the event that Buyer and its Affiliates
exceed such threshold as a result of their participation (through either cash or
in kind subscription for shares) in an increase of the Company's voting share
16
capital that is authorised and approved by the requisite majority at a duly
constituted general meeting of shareholders in accordance with the Amended
Articles and otherwise in accordance with applicable Danish law.
(b) Certain Transfers of Company Shares. Until the third
anniversary of the Closing, Buyer shall not, without the prior written consent
of Seller, establish or transfer any right to any Shares in favor of or to any
third party other than:
(i) from time to time to an Affiliate of Buyer; provided that
(A) such Affiliate has agreed in a writing delivered to Seller to be bound
by the terms of this Agreement; (B) such Affiliate's obligations under this
Agreement shall be fully and unconditionally guaranteed by Buyer for the
benefit of Seller; and (C) if the transferee ceases to be an Affiliate
prior to the third anniversary of the Closing, Buyer shall promptly
re-acquire the relevant Shares or cause them to be acquired by one or more
Affiliates subject to subparagraphs (A) and (B);
(ii) from time to time to one or more Danish institutional
investors who have a principal place of business in Denmark;
(iii) from time to time to one or more Persons engaged in the
telecommunications industry or related industries who, in the good faith
judgment of a majority in number of the Company's board of directors, would
provide the Company with strategic, financial or technological advantages
beneficial to the Company;
provided that in connection with such transactions, Buyer (together with Buyer's
Affiliates) shall continue to hold a majority of the aggregate of the Sale
Shares and the Additional Shares purchased by Buyer (if any).
(c) Certain Strategic Transactions. Until the fifth anniversary of
the Closing, Seller's prior written consent shall be required in order for
Buyer's nominees on the board of directors of the Company or for Buyer's
representative at general meetings of the Company to recommend, act or vote so
as to cause the Company to take the following strategic decisions:
(i) substantial divestments or disposals of the Company's
core domestic business, which, for purposes of this clause, shall mean
assets and business activities necessary to permit compliance by the
Company with the Act on Universal Service Obligations (Danish Act No. 466
of 12 June 1996, as amended by Act no. 397 of 10 June 1997);
(ii) de-listing the Shares from the Copenhagen Stock Exchange
or the New York Stock Exchange (except as a result of a Permitted Sale (as
defined below) in which the successor's shares are listed on the Copenhagen
Stock Exchange and the New York Stock Exchange); or
(iii) merger or consolidation of the Company into another
Person in which the Company does not survive the merger or the liquidation
of the Company; except in each case for such a transaction occurring which
(A) is done in connection with a reorganization of the Company or its
Subsidiaries after
17
which they will be controlled, directly or indirectly by Buyer or an
Affiliate of Buyer or (B) occurs when Buyer and its Affiliates collectively
cease to own at least 20% of the outstanding voting share capital of the
Company (a transaction covered by (A) or (B), a "Permitted Sale").
Buyer further agrees that Seller's prior written consent shall be required in
order for Buyer's nominees on the board of directors of the Company or for
Buyer's representative at general meetings of the Company to resolve or vote so
as to cause the Company to transfer prior to the tenth anniversary of the
Closing Date the Company's corporate headquarters or corporate registration out
of the Kingdom of Denmark, provided that thereafter Seller's consent to any such
transfer shall be required but shall not be unreasonably withheld.
Section VII.5 Indemnification of Buyer for Certain Matters.
(a) Following the payment of the Demand Note through delivery of
funds and the termination of the Pledge Agreement under Section 3.3(b) , Seller
agrees that it shall indemnify and hold harmless Buyer and its Affiliates (other
than the Company) (i) to the extent of 42.4 per cent of any Loss the Company
suffers or incurs arising under case No. H. 137/91 pending before the Danish
Maritime and Commercial Court of Copenhagen against Kjobenhavns Telefon
Aktieselskab (a predecessor to Tele Danmark) or any other case or proceeding
based on substantially similar facts and circumstances (and in each case only to
the extent the Company does not receive indemnification therefor); and (ii) to
the extent of all of the Loss incurred by Buyer and its Affiliates (other than
the Company) as a result of a breach of any of the representations and
warranties set forth in Sections 4.1, 4.2, 4.3, 4.4 or in Section 5.9(ii).
(b) Nothing herein shall be deemed to relieve any party hereto
from any duty to mitigate any Loss. In case Buyer receives notice of any claim
against Buyer which may be subject to indemnification by Seller in favor of
Buyer, it shall promptly notify Seller; provided however, that the failure to so
notify Seller or a delay in notifying Seller shall not relieve Seller of its
indemnification obligations hereunder except to the extent such failure or delay
actually prejudices Seller's defense of such claim and, if Seller acknowledges
to Buyer in writing that it is obligated to indemnify Buyer with respect thereto
in accordance with the terms and conditions of this Agreement, Seller shall
thereupon have the right to assume the defense against such claim and to contest
it or agree to any settlement or compromise of it; provided, however, that
Seller may not compromise or settle such claim without Buyer's consent (which
shall not be unreasonably withheld) unless (x) there is no finding or admission
of any violation of law by Buyer and no effect on any other claims that may be
made against Buyer and (y) the sole relief provided is monetary damages that are
paid in full by Seller.
ARTICLE VIII
CONDITIONS TO CLOSING
Section VIII.1 Conditions to Obligations of Seller and Buyer. The
obligations of each of Seller and Buyer to complete the sale and purchase of the
Sale Shares and the
18
other transactions contemplated by this Agreement are subject to the
fulfillment, on or before the Closing, of the following conditions:
(a) General Meeting(s). Following receipt of a Closing Letter in
accordance with Section 3.1, the Company shall have taken all such action as may
be necessary, including the publication on the Shareholders Notice Date of a
notice to shareholders (the "Shareholders Notice") to convene an extraordinary
or ordinary general meeting for the purpose of obtaining decisions of the
shareholders of the Company with respect to (i) the adoption of the Amended
Articles and the election of certain members of the board of directors as
contemplated by Section 3.3 and (ii) the authorization and approval of the Share
Buyback.
(b) Competition Clearance. The waiting period (and any extension
thereof) under the HSR Act applicable to the transactions contemplated under the
Agreement shall have been terminated or shall have expired. The Commission of
the European Communities shall have declared the concentration brought about by
this Agreement compatible with the common market and the functioning of the
Agreement on the European Economic Area under Council Regulation (EEC) No
4064/89 of December 21, 1989 "on the control of concentrations between
undertakings" and such declaration shall not be subject to any conditions which
materially prejudice Buyer's rights and obligations under this Agreement.
(c) No Order, Injunction. No order of any court or governmental or
other agency or authority having jurisdiction over any party hereto shall have
been issued and be in effect which prohibits the completion of the transactions
contemplated hereby.
(d) Parliamentary Authorization. The authorization of the
Parliament of the Kingdom of Denmark for the Seller to proceed with the sale of
the Sale Shares and other transactions contemplated herein shall have been
obtained.
Section VIII.2 Further Conditions to Obligations of Seller. The
obligations of Seller to complete the sale of the Sale Shares and the other
transactions contemplated by this Agreement are further subject to the
fulfillment, on or before the Closing, of the following conditions:
(a) Representations and Warranties True. The representations and
warranties set forth in Article VI shall be true and correct in all material
respects as of the date when made and on and as of the Closing Date with the
same force and effect as though such representations and warranties had been
made on and as of the Closing Date, except where such representations and
warranties make specific reference to a date as of which they apply.
(b) Performance. Buyer shall have performed in all material
respects its covenants contained in this Agreement required to be performed on
or prior to the Closing Date.
(c) Closing Documents. As requested by Seller in writing prior to
the date hereof, Seller shall have received from Buyer and its representatives
such documents and
19
instruments in connection with the Closing consistent with the terms and
provisions hereof and Danish customary legal practices in similar transactions.
Section VIII.3 Further Conditions to Obligations of Buyer. The
obligations of Buyer to complete the transactions contemplated by this Agreement
are further subject to the fulfillment, on or before the Closing, of the
following conditions:
(a) Representations and Warranties True. The representations and
warranties set forth in Articles IV and V shall be true and correct in all
material respects as of the date when made and on and as of the Closing Date
with the same force and effect as though such representations and warranties had
been made on and as of the Closing Date, except where such representations and
warranties make specific reference to a date as of which they apply.
(b) Performance. Each of Seller and the Company shall have
performed in all material respects its covenants contained in this Agreement
required to be performed on or prior to the Closing Date.
(c) No Material Adverse Change. Since the date hereof, and except
as known to Buyer or otherwise in the public domain as of the date hereof, there
shall not have occurred any event or events which have resulted, or are
reasonably expected to result, in a material adverse change to the financial
position or results of Danish domestic operations of the Company and its
Consolidated Subsidiaries, taken as a whole. For the avoidance of doubt, the
determination of material adverse change for purposes of determining the
satisfaction of the condition set forth in this paragraph (c) shall not include
(i) the effect on the prospects (other than those which are reasonably expected
to have a material adverse effect on the financial position or results of Danish
domestic operations of the Company as specified in the previous sentence) of the
Company and its Consolidated Subsidiaries, taken as a whole or (ii) the effect
on the Company or the trading value of its Shares of an adverse change in the
financial markets in the Kingdom of Denmark, United States or the international
financial markets, or any outbreak of hostilities or escalation thereof or of
any change or development involving a prospective adverse change in national or
international political, general financial or economic conditions, or of
currency exchange rates or exchange controls or any combination of the foregoing
whether such developments occur in the telecom sector generally or in other
business sectors or political regions generally.
(d) Closing Documents. As requested in writing by Buyer prior to
the date hereof, Buyer shall have received from the Seller, the Company and/or
their respective representatives such documents and instruments in connection
with the Closing consistent with the terms and provisions hereof and Danish
customary legal practices in similar transactions.
20
ARTICLE IX
TERMINATION
Section IX.1 Right of Termination. This Agreement may be terminated and
the transactions contemplated hereby abandoned:
(a) at any time, upon the mutual written consent of Seller and
Buyer;
(b) at any time after 9 months from the date hereof, by Seller or
Buyer upon 30 days prior written notice if, on or before such date the Closing
shall not have occurred; provided that the right to terminate this Agreement
pursuant to this Section 9.1(b) shall not be available to either Seller or Buyer
if all Closing Conditions are fulfilled or waived prior to the expiration of the
30 day notice period set forth in this Section 9.1(b) and shall not be available
to any party whose failure to fulfill any of its obligations under this
Agreement has been the cause of or resulted in the failure of the Closing to
occur on or before such date.
(c) By either Seller or Buyer if any Governmental Entity (i) shall
have issued an order, decree or ruling or taken any other action (which order,
decree, ruling or other action the parties shall have used all reasonable best
efforts to resist, resolve or lift, as applicable) permanently restraining,
enjoining or otherwise prohibiting the sale and purchase of the Sale Shares or
the Share Buyback, and such order, decree, ruling or other action shall have
become final and nonappealable;
(d) By Seller or Buyer upon 5 Business Days prior written notice
to Seller or Buyer if title to the Sale Shares shall have reverted to Seller and
the other actions provided in Section 3.3(c) shall have occurred;
(e) By Seller, upon five Business Days' prior written notice to
Buyer, if Parliamentary authorization for Seller to proceed with the sale of the
Sale Shares and other transactions contemplated herein has not been granted.
Section IX.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 9.1 hereof, all further obligations of Seller, the Company
and Buyer hereunder shall terminate and no damages or other compensation shall
be payable by any party, except that nothing in this Section 9.2 or Section 9.3
shall relieve any party hereto of liability for any breach of this Agreement
that occurred prior to the termination of this Agreement.
Section IX.3 Expiration of Representations and Covenants. None of the
representations and warranties set forth in Articles IV, V, and VI or the
covenants set forth herein, including any rights arising out of any breach of
such representations and warranties shall survive the Closing, except the
representations and warranties, including any rights arising out of any breach
of the representations and warranties set forth in (A) Section 5.9(ii) which
shall survive until the first anniversary of the Closing Date and (B) the
representations and warranties in Sections 4.1, 4.2, 4.3 and 4.4 which shall
survive the Closing without limitation as to time and (C) those covenants
contained herein that by their terms apply or are to be performed in whole or in
part after the Closing. Buyer agrees that
22
its exclusive remedies for breach of the warranties made under Article V (other
than the indemnification available from Seller under Section 7.5 in respect of
clause 5.9(ii)) of this Agreement shall be either (i) delay of the Closing until
such breach can be cured and the warranty made true or (ii) termination of this
Agreement. It is expressly understood and agreed that, except as provided in
Section 7.5, Buyer is not entitled to any adjustment, reduction, set-off,
damages, rescission or the like in connection with the Shares or the Purchase
Price or interest thereon or otherwise in connection with the transactions
contemplated by this Agreement. For the avoidance of doubt and in furtherance of
the foregoing provisions of this Section 9.3, each of the parties hereto hereby
waive any claims against or in respect of any members of the board of directors,
management of the Company and the Company (only in so far as Article V is
concerned) arising out of this Agreement, any related agreements or the
transactions contemplated hereby or thereby other than those arising out of a
claim for fraud or intentional bad faith misconduct.
ARTICLE X
MISCELLANEOUS
Section X.1 Governing Law; No Sovereign Immunity; Dispute Resolution:
Arbitration.
(a) This Agreement shall be governed by, and construed and
interpreted in accordance with, the laws of Denmark. For the benefit of each of
Seller and the Company, the Buyer hereby irrevocably and unconditionally submits
to the exclusive jurisdiction of the courts of Denmark in relation to any
dispute under this Agreement and the Buyer hereby nominates Xxxx-Xxxxx & Trolle,
Copenhagen, Kingdom of Denmark as its agent for service of process in Denmark.
Seller irrevocably agrees that no immunity (whether on the grounds of
sovereignty or otherwise) from any proceedings shall be claimed by or on behalf
of Seller with respect to proceedings arising under this Agreement including,
without limitation the making, enforcement or execution against any property
whatsoever with the exception of real property and buildings and contents
thereof owned by the Ministry of Foreign Affairs and situated outside Denmark
and assets necessary for the proper functioning of the Kingdom as a sovereign
power.
(b) Seller (acting through its Permanent Secretary or other
designee) and Buyer (acting through Buyer's chairman or other designee) shall
endeavor for a period of two months to coordinate, lead and conduct negotiations
to resolve any dispute between Buyer and Seller in a mutually acceptable manner.
During this period, each party shall refrain from instituting any legal
proceedings with respect to the controversy or claim in mediation, except if, in
the opinion of the relevant party, such action is critical to avoid extinction
of a cause of action or right at law or equity (including, without limitation, a
right to injunctive relief or to preserve a right subject to any applicable
statute of limitations) or otherwise to prevent or limit any significant damage
to such party's interests.
(c) If such negotiations should not lead to a mutually acceptable
result for Buyer and Seller by the end of the negotiation period specified in
Section 10.1(b), any dispute between Buyer and Seller in connection with the
interpretation, implementation,
22
performance, validity or termination of this Agreement or any agreement relating
thereto or resulting therefrom, as well as any matter arising out of the same
shall, if requested by either party, be finally and exclusively settled by
arbitration before a panel of three arbitrators. The Seller on the one side and
the Buyer on the other side shall each be entitled to appoint one arbitrator,
and the two arbitrators shall agree on a third arbitrator. The arbitrators
appointed by the parties shall be appointed no later than sixty (60) days after
the arbitration has been requested and the third arbitrator shall be agreed upon
by Buyer and Seller no later than thirty (30) days after the appointment of the
arbitrators appointed by Buyer and Seller. In the event agreement upon a third
arbitrator can not be reached within the foregoing period, the third arbitrator
shall be a member of the Copenhagen bar who shall be appointed by the President
of the Supreme Court of Denmark and who shall be reasonably acceptable to Buyer
and Seller. Unless Buyer and Seller agree otherwise, arbitration shall be held
in Copenhagen. The proceedings shall take place in English and, at the request
of Buyer or Seller, also in Danish. Any award rendered by all or a majority of
the arbitrators shall be final, binding and enforceable on Buyer and Seller. The
award and findings upon which it is based shall be given in writing and shall be
based upon the laws of the Kingdom of Denmark.
Section X.2 Notices. All notices and other communications that are
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if delivered personally or by registered
mail (return receipt requested) or facsimile transmission (confirmed by
registered mail). Notices shall be sent to the appropriate party at the
following addresses or facsimile numbers given below (or such other address or
facsimile number as shall be specified by notice given hereunder):
(a) If to Seller, to:
The Ministry of Research and Information Technology
Xxxxxxxx 00
XX - 0000 Xxxxxxxxxx K
Denmark
Attention: Departementschefen (Permanent Secretary)
facsimile: x00 00 00 00 00
and
The Ministry of Finance
Christiansborg Slotsplads 1
DK - 1218 Copenhagen K
Denmark
Attention: Departementschefen (Permanent Secretary)
facsimile: x00 00 00 00 00
(b) If to the Company, to:
00
Xxxx Xxxxxxx A/S
Xxxxxxxxx 00
XX - 0000 Xxxxxxxxxx C
Denmark
Attention: Chef Juristen (General Counsel)
facsimile: x00 00 00 00 00
(c) If to Buyer, to:
Ameritech Corporation
Ameritech International
000 X. Xxxxxxxx Xxxxxx, Xx 00X
Xxxxxxx, XX 00000
Attention: General Counsel
facsimile: x0 000 000 0000
Section X.3 Entire Agreement. This Agreement, together with its
exhibits and Disclosure Schedule (which constitute an integral part thereof)
embodies and sets forth the entire agreement and understanding of the parties
and supersedes all prior oral or written negotiations, agreements,
representations, understandings or arrangements (if any) between the parties
with respect to the subject matter contained therein. No party hereto shall be
entitled to rely on any document, agreement, understanding or arrangement which
is not expressly set forth in this Agreement or the exhibits hereto. Buyer
hereby acknowledges that it has placed no reliance and will not at any time
hereafter place reliance on any information or representation or warranty
(whether expressed or implied and whether written or oral) relating to Seller,
the Company or the transactions contemplated hereby other than information and
representations and warranties contained in this Agreement and the exhibits
hereto.
Section X.4 Assignment. This Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but except as expressly provided
herein neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any of the parties hereto without the prior
written consent of Buyer and Seller; provided, however, that Seller's consent
shall not be required for Buyer's assignment of its rights (but not its
obligations hereunder) (including, without limitation, the right to purchase
Shares under this Agreement, including the Sale Shares and Additional Shares (if
any)) to a wholly-owned Subsidiary of Buyer. Buyer shall be deemed to guarantee
the obligations of such Subsidiary under this Agreement immediately upon any
such assignment and Buyer shall confirm such guarantee in its notice of
assignment to Seller.
Section X.5 Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same legal document.
24
Section X.6 Headings. The headings of the Articles, Sections and
sub-paragraphs of this Agreement are inserted for convenience only and shall not
constitute a part hereof or affect in any way the meaning or interpretation of
this Agreement.
Section X.7 Separability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be unenforceable or
invalid under applicable law, such provision shall be ineffective only to the
extent of such unenforceability or invalidity, and the remaining provisions of
this Agreement shall continue to be binding and in full force and effect.
Section X.8 No Third Party Rights. Nothing in this Agreement, express
or implied, is intended to confer upon any person, other than the parties hereto
and their respective successors and assigns, any rights or remedies of any
nature whatsoever under or by reason of this Agreement.
Section X.9 Waiver. None of the terms of this Agreement shall be deemed
to have been waived by any party hereto, unless such waiver is in writing and
signed by that party. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other provision of this Agreement or of any further breach of the provision so
waived. No extension of time for the performance of any obligation or act
hereunder shall be deemed to be an extension of time for the performance of any
other obligation or act.
Section X.10 Amendments: Modifications. This Agreement may not be
modified, amended or changed in any respect except in writing duly signed by the
Seller and the Buyer.
Section X.11 No Partnership or Agency. Nothing in this Agreement shall
be deemed to constitute a partnership between the parties or constitute any
party as the agent of any other party for any purpose or entitle any party to
commit or bind any other party in any manner.
25
IN WITNESS WHEREOF, the parties have signed this Agreement in
Copenhagen, on October 27, 1997, in three original copies, each party
acknowledging receipt of one such copy.
MINISTER FOR RESEARCH AND INFORMATION TECHNOLOGY,
ON BEHALF OF THE KINGDOM OF DENMARK
Name:
Title: Minister
TELE DANMARK A/S
By:
Name:
Title: Chairman
By:
Name:
Title: Chief Executive
AMERITECH CORPORATION
By:
Name:
Title: Chairman
26
EXHIBIT A
DEMAND NOTE
The Minister of Research and Information Technology
acting on behalf of the Kingdom of Denmark
[Date]
1. The undersigned, Ameritech Corporation (the "Debtor"), hereby
unconditionally promises to pay, to the order of the Minister of Research
and Information Technology (the "Creditor") acting on behalf of the Kingdom
of Denmark in lawful money of Germany and in immediately available funds
the principal amount of [amount in words] Deutsche Xxxx (DEM 5,555,993,380)
to the Creditor's account No. [to be inserted] in Denmark's Nationalbank on
[EGM Date + 1 Business Day]. This Note is the Note issued under that
certain Share Disposition and Purchase Agreement dated October 27, 1997 by
and among Creditor, Debtor and Tele Danmark A/S (the "Company") (the
"Purchase Agreement").
2. All payments to be made hereunder by the Debtor shall be made without
set-off or counterclaim (other than claims of Debtor arising under Section
3.3(c) of the Purchase Agreement) and in such amounts as may be necessary
in order that every such payment shall not be less than the amounts
otherwise specified to be paid hereunder (it being agreed that such
payments shall not be reduced by any deduction or withholding for or on
account of any present or future taxes, levies, imposts, duties or other
charges of whatever nature imposed by the country of the Debtor or any
political subdivision or taxing authority therein or thereof).
3. No delay on the part of the Creditor in exercising any of its options,
powers, or rights, or partial or single exercise thereof, shall constitute
a waiver thereof The options, powers and rights of the Creditor specified
herein are in addition to those otherwise created under applicable law.
4. Subject to Section 7 below, the payment to be made by the Debtor to the
Creditor pursuant to this Demand Note shall fall due on [EGM Date + 1
Business Day], without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Debtor.
Upon any of the following: (i) the failure of the Debtor to generally pay
its debts as they come due or the admission in writing by the Debtor or any
of its subsidiaries of its inability to pay its debts generally; (ii) the
making by the Debtor or any of its subsidiaries of an assignment for the
benefit of creditors; (iii) the institution of any proceeding by or against
the Debtor or any of its subsidiaries seeking to adjudicate it a bankrupt
or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors; or (iv) the appointment of a receiver, trustee,
custodian or other similar official for the Debtor for any substantial part
of its property, THEN AND IN ANY SUCH
27
EVENT, the Creditor in its discretion may, by written notice to the Debtor,
declare the liability evidenced by this Note to be due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Debtor. Any action taken by the Creditor to
collect the liability evidenced by this Note need not occur in the
Jurisdiction of the Debtor's principal place of business or Jurisdiction of
incorporation.
5. THIS NOTE SHALL BE GOVERNED BY DANISH LAW. The Debtor hereby irrevocably
and unconditionally submits to the exclusive jurisdiction of the courts of
Denmark in relation to any dispute under this Note and the Debtor hereby
nominates Xxxx-Xxxxx & Trolle, Copenhagen, as its agent for service of
process in Denmark. This Demand Note can be used as a basis for immediate
enforcement, cf. Section 478 of the Danish Administration of Justice Act,
for the fulfillment of any obligation hereunder.
6. In the case of non-payment of the liability evidenced by this Note, the
Debtor shall pay all reasonable costs and expenses incurred in connection
with obtaining payment, including all attorneys' fees.
7. Debtor's obligations under this Note are secured by the 4,500,000 A Shares
(the "Sale Shares") of Tele Damnark A/S, the subject of a Share Pledge
Agreement dated the date hereof among Debtor, Creditor and the Company.
Debtor shall have the right to require Creditor to return this Note to
Debtor prior to [EGM Date + 1 Business Day] in the event Debtor's nominees
are not elected to the board of directors of the Company and in exchange
for the transfer by Debtor of the Sale Shares to Creditor as provided in
Section 3.3(c) of the Purchase Agreement. This Note shall not be negotiable
or transferable to any party other than a transfer to Debtor as
contemplated under Section 3.3(c) of the Purchase Agreement.
AMERITECH CORPORATION
Signed at.............. By:
Name:
Title:
Address:
28
EXHIBIT B
Form of Share Pledge Agreement to be executed,
confirmed and delivered at Closing
---------------------------------------------------------------
SHARE PLEDGE AGREEMENT
SHARE PLEDGE AGREEMENT, dated as of [to be inserted], made by Ameritech
Corporation, (together with its successors and assigns, the "Debtor") to the
Minister of Research and Information Technology acting on behalf of the Kingdom
of Denmark (the "Creditor").
WITNESSETH:
WHEREAS, pursuant to the Share Disposition and Purchase Agreement, dated October
27, 1997, among the Creditor, Tele Danmark A/S (the "Company"), and the Debtor
(the "Share Purchase Agreement"), the Creditor has sold to the Debtor
[4,500,000] A- shares in the Company (the "Sale Shares") in exchange for a
Demand Note dated [to be inserted], (the "Demand Note") with a principal amount
of DEM 5,555,993,380.
WHEREAS, the Share Purchase Agreement provides that the Demand Note is to be
secured by a pledge of the Sale Shares in favour of the Creditor;
NOW, THEREFORE, the Debtor hereby agrees with the Creditor as follows:
1. As security for the fulfillment of any obligation which Debtor now has or
may later have toward the Creditor under the Demand Note the Debtor hereby
pledges to the Creditor, 4,500,000, A-shares in the Company (Danish
Securities Code 001022865) (the "Pledged Shares"), in VP securities
account, No. [to be inserted] with [the Custodian Bank] (the "Securities
Account") as well as any amount paid into deposit account No. [to be
inserted] with [the Custodian Bank].
This pledge shall for all purposes be deemed a "handpant" according to
Danish law.
2. The Debtor shall, prior to delivery of the Pledged Shares to the Securities
Account, deliver to the Creditor the attached Confirmation of Pledge, duly
executed by the Custodian Bank, who shall also have registered the Pledge
with the Danish Securities Centre. Upon receipt of confirmation that the
Pledged Shares have been delivered to the Securities Account, the Debtor
shall cause Den Danske Bank Aktiesel- skab as the registrar of the Register
of Shareholders of the Company to ensure that the title to the Pledged
Shares is registered in the name of the Debtor, subject to this pledge, in
said Register of Shareholders.
29
3. The Creditor shall be entitled to demand without any further not redemption
of the pledge, including sale of the pledged assets, if the Demand Note has
been presented to the Debtor and not been paid timely in full as provided
for therein or if the provision of Section 4 (second paragraph) of the
Demand Note becomes applicable.
4. If the [Custodian Bank] receives a statement from Danmarks Nationalbank
that on [EGM + 1 Business Day] on or before 16:00 (Copenhagen time) it had
received [the full amount due under the Demand Note/DEM x], this Share
Pledge Agreement shall expire and the [Custodian Bank] shall without any
further instruction delete the pledge from the accounts encompassed by the
Pledged Shares in its records and those of the Danish Securities Center in
order for the Debtor to enjoy thereafter full and unencumbered title to the
Pledged Shares.
5. If the [Custodian Bank] receives a statement from Danmarks Nationalbank
that on [EGM + 1 Business Day] on or before 16:00 (Copenhagen time) it had
not received [the full amount due under the Demand Note/DEM x] for the
amount of Creditor, the pledge shall be enforced forthwith by the
[Custodian Bank] transferring without any further instruction free of
payment the Pledged Shares to securities and cash accounts with Danmarks
Nationalbank in the name of the Creditor as designated in said statement in
order for the Creditor to enjoy thereafter full and unencumbered title to
the Pledged Shares. Such transfer of title shall be in full satisfaction of
the obligations of the Debtor under the Demand Note. Therefore, the Debtor
expressly acknowledges that the Creditor shall be entitled to receive title
to the Pledged Shares applying the value thereof computed as stated in the
Share Purchase Agreement towards the discharge in full of the obligations
of the Debtor under the Demand Note. Furthermore this shall form an
agreement on alternative realization as provided for in Section 538 (a),
Subsection 1, of the Danish Administration of Justice Act.
6. This pledge shall also encompass proceeds from the pledged assets,
including dividends and any rights to subscribe for new issues or bonus
shares. However, the voting rights attached to the Pledged Shares shall not
be deemed encompassed by this pledge.
7. The discharge of the Debtor shall be conditional upon the Debtor's
repayment to the Creditor, in part or in full, of the debt secured by the
pledge or the assets pledged to the Creditor by the Debtor not subsequently
being invalidated by any administrator of the estate of the Debtor insofar
as such has been appointed.
8. The Debtor is under an obligation immediately to submit to the Creditor any
notice the Debtor may receive in respect of this pledge.
30
9. The Debtor hereby expressly waives any injunctive relief or other remedy
available to it in law for preventing such transfer of shares which, for
the avoidance of doubt, shall include any right of recourse to the
Complaints Board for Central Securities Depositories (Klagenaevnet for
Vaerdipapircentraler) as well as the posting of any bond or other form of
security, irrespective of whether the Debtor has contested, or intends to
contest, the determination by the Creditor that an event of default under
the Demand Note has occurred or not.
10. This Pledge Agreement can be used as a basis for immediate enforcement, cf.
Section 478 of the Danish Administration of Justice Act, for the
fulfillment of any obligation under the Demand Note.
11. The Debtor also confirms having received a copy of this Letter of Pledge
and of the Demand Note.
12. THIS NOTE SHALL BE GOVERNED BY DANISH LAW. The Debtor hereby irrevocably
and unconditionally submits to the exclusive jurisdiction of the courts of
Denmark in relation to any dispute under this Note and the Debtor hereby
xxxx xxxxx Xxxx-Xxxxx & Trolle, Copenhagen Denmark as its agent for service
of process in Denmark.
Unless otherwise defined herein, terms used herein shall have the meaning set
forth in the Share Purchase Agreement on the Demand Note, as applicable.
Name:
Address:
Signature(s):
Signature(s):
Respective Title(s), if any:
31
CONFIRMATION OF PLEDGE
to The Ministry of Research and Information Technology, 43 Bredgade, DK-1260
Copenhagen K.
The undersigned [name and address Custodian Bank appointed by Debtor] hereby
confirms having noted this Share Pledge Agreement with respect to the Securities
Account No. [to be inserted] maintained by the Debtor with us in our records as
well as those of the Danish Securities Center.
We furthermore confirm that we will abide by the instruction set out in the
Pledge Agreement and, specifically, that if we receive a statement from Danmarks
Nationalbank that on the date specified for payment in the Demand Note on or
before 16:00 (Copenhagen time) it had received [the full amount due under the
Demand Note/DEM x], we shall without any further instruction delete the pledge
from the accounts encompassed by the Pledged Shares in its records and those of
the Danish Securities Center.
If, on the other hand, we receive a statement from Danmarks Nationalbank that on
the date specified for payment in the Demand Note on or before 16:00 (Copenhagen
Time) it had not received [the full amount due under the Demand Note/DEM x), we
shall transfer without any farther instructions free of payment the Pledged
Shares to securities and cash accounts with Danmarks Nationalbank in the name of
the Creditor as designated in said statement.
Terms defined in the above-mentioned Share Pledge Agreement, or in documents
incorporated therein by reference, shall have the same meaning when applied in
this confirmation of pledge.
Signed by_________________ Bank
32
Exhibit C
BUYBACK TERMS
The board of directors of the Company will propose a reduction of the Company's
share capital by redemption of 2,277,023 million of the Kingdom's A-shares in
the Company. The consideration for the shares redeemed will be by way of a cash
payment to the Kingdom equating to the number A-shares acquired multiplied by a
price (more than par value) per share equal to the average of each day's trading
price ("Alle handler at 17:00 p.m." for B-shares on the Copenhagen Stock
Exchange), weighted by the daily trading volume as reported on the Copenhagen
Stock Exchange, for the 15 trading days immediately preceding (but not
including) the EGM to approve the buyback multiplied by 10, then deducting 2 per
cent, then deducting a further DKK 30 per share.
The Company agrees, subject to the fiduciary duties of its directors, the Danish
and U.S. Securities Laws, not to make any public announcements during the 15
trading day period immediately preceding the EGM to approve the buyback without
the consent of the Minister of Research and Information Technology, such consent
not to be unreasonably withheld.
The number of A-shares to be redeemed shall in good faith be reduced if the
potential value of the buyback, based on the trading value of the B-shares on
the day before the notice is dispatched, would exceed DKK 10 billion.
The shares that are subject to redemption shall not be entitled to the receipt
of dividends resolved by the subsequent ordinary general meeting. The Kingdom
shall relinquish voting rights with respect to such shares, but shall otherwise
retain all other rights with respect to the shares that are the subject of
redemption until filing of such redemption has been effected, cf. section 46 of
the Danish Companies Act, and payment has taken place.
The Company shall pay any applicable share transfer duty with respect to the
shares that are subject to redemption.
The buyback will not proceed unless the resolutions to amend those articles
restating the Company's share capital and to appoint the six directors proposed
by Ameritech Corporation are passed.
33
[The Danish translation of Exhibit D
Exhibit D has been
intentionally deleted]
NOTICE OF
EXTRAORDINARY GENERAL
MEETING
[ ]
The Board of Directors of Tele
Danmark A/S hereby invites our
shareholders to attend an
extraordinary general meeting,
which will take place in the
offices of Tele Danmark A/S at
[Slet (Arhus), Xxxxxxx 00, XX-
8310 Tranbjerg J], on [ ]
at [ ] with the following
agenda:
1. Election of Chairman.
2. The Board of Directors
proposes that the articles of
association shall be amended
as stated below under I -
VIII, the adoption of each
item being conditional on (i)
the adoption of each of the
other items I-VIII, and (ii)
the election of six directors
proposed by Ameritech
Corporation and two of them
being elected respectively
chairman and vice-chairman as
provided for under item 3.
I. The following shall be
added to section 5 (10):
"Any such consent shall be
conditional upon such
shareholder having expressly
undertaken to the Board of
Directors to abstain from
voting at the election of 2
34
members of the Board of
Directors, as provided for in
Section 17(1)."
II. Section 12(2) shall be
deleted.
III. Section 14(3) shall be
deleted.
IV. Section 17(1) shall be
amended to read as follows:
"The Board of Directors of the
Company shall consist of eight
members. In addition, there
shall be the number of members
who may be elected in
accordance with the rules of
the Danish Companies Act
concerning employee
representation. If any
shareholder with the approval
of the Board of Directors,
pursuant to section 5(10),
owns or controls, as defined
in section 5, more than 7.5
per cent of the nominal share
capital of Tele Danmark A/S
such shareholder shall abstain
from voting at the election of
2 of the members to be elected
by the General Meeting. The
Board of Directors elected by
the General Meeting shall be
elected for a term of one year
so that their office shall
expire at the conclusion of
the Annual General Meeting
held one year after the
election. Retiring members
shall be eligible for re-
election."
V. Section 18(1) shall be
amended to read as follows:
35
The affairs of the Company
shall be managed by the Board
of Directors together with the
Management.
The Board of Directors shall
arrange for an appropriate
organisation of the Company's
activities.
The Management shall be in
charge of the day-today
management of the Company and
shall in this connection
company with the instructions
and orders of the Board of
Directors. All matters of
material importance to the
Company, including
establishment of operating and
capital budgets, dividend
policy, material transactions
regarding the acquisition or
sale of assets, the principles
regarding the acquisition or
sale of assets of the Company
in the ordinary course of
business and the Company's
incurring of debt obligations,
shall be submitted by the
Management to the Board of
Directors for approval."
VI. Section 18(4) shall be
deleted.
VII. Section 23(1) shall be
amended as follows:
"The annual accounts shall be
drawn up in a clear manner and
in accordance with the
legislation in force at any
time concerning the
presentation of accounts by
companies."
VIII. The following shall be
inserted to constitute a new
section 25(2):
"When the shares owned by the
Danish
36
Government amount to 7.5 per
cent of the share capital or
less, and consent thereto has
been given by the Danish
Government the Board of
Directors shall be authorised
to amend the Articles of
Association as follows:
5 (4): In the first line the
words "None other than the
Danish Government" shall be
deleted and be replaced by "No
shareholder".
5 (7): In the first line the
words "other than the Danish
Government" shall be deleted
and to the first sentence
shall be added at the end
"cf., however, subclauses (10)
- (12) of this clause 5"."
3. Election of board members
and chairman and vice-
chairman.
The six board members
appointed by the Kingdom will
tender their resignations, and
six new board members shall be
elected. [These persons have
declared their willingness to
offer themselves for
election*. After this, the
election of the chairman and
then of the vice-chairman
shall take place, X* is a
candidate for the post as
chairman and Y* as vice-
chairman."**
*Name may be provided by
Ameritech Corporation or
Ameritech Corporation may
elect to continue the current
practice of not suggesting a
slate of directors as part of
the proxy material distributed
to shareholders prior to
general meetings of
shareholders.
**The phrases in the bracket
are optional.
37
4. The Board of Directors of
the Company proposes, subject
to the election of six
directors proposed by
Ameritech Corporation and two
of them being elected
respectively chairman and vice-
chairman as referred to under
item 3, a reduction of the
Company's share capital by
redemption of [2,277,023] of
the Kingdom's A-shares in the
Company.
The consideration for the
shares redeemed will be by way
of a cash payment to the
Kingdom redeemed to the
number of A-shares acquired
multiplied by a price (more
than par value) per share
equal to the average of each
day's trading price ("Alle
xxxxxxx xx. 17:00" for B-
shares on the Copenhagen Stock
Exchange), weighted by the
daily trading volume as
reported on the Copenhagen
Stock Exchange, for the 15
trading days immediately
preceding (but not including)
the date of the general
meeting [in case of two
general meetings, the first of
these] multiplied by 10, then
deducting 2 per cent, then
deducting a further DKK 30 per
A-share.
The Kingdom has declared that
it will participate in the
reduction of the share capital
as proposed.
The shares that are subject to
redemption shall not be
entitled to receive dividends
resolved by the subsequent
annual general meeting and,
commencing on the date on
which the reduction of capital
is published in the Danish
Official Gazette as required
by Section 44 of the Danish
Companies Act, the voting
rights on these shares shall
be relinquished by
38
the Kingdom until the
redemption shall have been
effected. The Kingdom shall
retain all other rights with
respect to the shares that
are the subject of redemption
until payment has been made
and filing of such redemption
has been effected, cf.
Section 46 of the Danish
Companies Act.
The Company shall pay any
applicable share transfer duty
with respect to the shares
that are subject to
redemption.
In connection with the
resolution of the general
meeting, [2,277,023] of the
Kingdom's A-shares in the
Company shall be transferred
to a special Danish Securities
Centre account with Den Danske
Bank Aktieselskab, blocked so
that sale of such shares may
only be effected with the
consent of the Company. The
reduction of capital shall be
effected in such a manner that
the amount shall be paid by
the Company via the Danish
Securities Centre when the
three months' notice to
creditors has expired and the
Board of Directors has
ascertained that the reduction
of capital can be lawfully
effected. At the same time,
the A-shares deposited by the
Kingdom in connection with the
reduction of capital shall be
transferred to the Company and
cancelled by Den Danske Bank
Aktie-selskab as issuing agent
for the Company.
At the same time, the Board of
Directors proposes that
section 4(1) and 4(2) of the
Articles of Association shall
be amended after the reduction
of capital has been effected,
cf. section 46 of the Danish
Companies Act, so as to read
as
39
follows as a consequence of
the above:
"4(1)
The nominal and fully paid up
share capital of the Company
is [1,082,297,700] Danish
kroner."
"4(2)
The share capital consists of
A-shares in the amount of
[450,000,000] Danish kroner
and B-shares in the amount of
632,297,700 Danish kroner."
As a consequence it is
furthermore proposed that the
number "7.5 per cent" in
Sections 5(4), 5(7), 5(10),
5(12), 17(1) and 25(2) shall
be deleted and replaced by
"9.5 per cent".
*****
Re items 2 and 4 of the agenda
Resolutions about the
proposals submitted under
item 2 and 4 of the agenda
require in order to be passed
that no less than two thirds
of the vote-carrying share
capital is represented at the
general meeting and
furthermore that the
resolution is passed by not
less than two thirds of the
votes cast as well as of the
vote-carrying share capital
represented at the general
meeting. Where the said vote-
carrying share capital
represented at the general
meeting. Where the said vote-
carrying share amount is not
represented at the general
meeting in question, but the
resolution is otherwise passed
by two thirds off the votes
cast as well as of the vote-
carrying share capital
represented at the general
meeting, the Board of
Directors shall convene a
second extraordinary general
meeting within two weeks at
which meeting the
40
proposal may be adopted by
two thirds of the votes cast
as well as of the
vote-carrying share capital
represented at the
extraordinary general
meeting. Where a second
general meeting is convened
do to lack of a quorum at the
first meeting, proxies will
be considered valid also as
regards the second general
meeting in so far as they
have not been revoked in
writing.
The agenda of the general
meeting containing the
proposals in toto, the most
recent approved annual
accounts and consolidated
annual accounts and
consolidated annual accounts
of the Company with the
auditor's report and
endorsement stating the
resolution of the general
meeting about the net profit
of the accounts presented, the
directors' report on events of
essential significance for the
position of the Company
occurred after the
presentation of the annual
accounts together with a
statement from the company
auditors appointed by the
general meeting about the
directors' report, will be
made available for inspection
by the shareholders at the
head office of the Company,
located at Xxxxxxx-xxxx 00, XX-
800 Arhus C, or at the Company
office, at Xxxxxxxxx 00, XX-
0000 Xxxxxxxxxx K, from
[ ], on weekdays from
9:30 to 16:30 and will at the
same time be sent to all
shareholders registered in the
Company's register of
shareholders who have made a
request to that effect.
Any shareholder is entitled to
attend the general meeting,
provided that the shareholder
has obtained an admission
card. Such admission card may
be obtained
41
against the presentation of
due evidence of authority to
hold shares from [ ] up to an
including [ ] at the Company's
head office, Xxxxxxxxxxx 00,
XX-0000 Xxxxx C, or at the
Company's office at Xxxxxxxxx
00, XX-0000 Xxxxxxxxxx K, from
09:30 to 16:30. Due evidence
of authority to hold shares
shall, insofar as non-
registered shares are
concerned, mean the
presentation of a securities
statement from the Danish
Securities Centre
(Vaerdipapircentralen) or a
depositary bank, not more than
5 days old. Admission cards
may furthermore be obtained
during the said period by
telephone x00 00 00 00 00. The
reference number for the
Danish Securities Centre must
be stated in connection with
telephone calls.
Tele Danmark A/S
Board of Directors
