1
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 ▇▇▇▇" or "DEM" means Deutsche ▇▇▇▇, 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 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 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 ▇▇▇▇ 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 ▇▇▇▇▇▇▇ ▇▇. 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
▇▇▇▇ (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
▇▇▇▇-▇▇▇▇▇ & 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
▇▇▇▇▇▇▇▇ ▇▇
▇▇ - ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ K
Denmark
Attention: Departementschefen (Permanent Secretary)
facsimile: ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇
and
The Ministry of Finance
Christiansborg Slotsplads 1
DK - 1218 Copenhagen K
Denmark
Attention: Departementschefen (Permanent Secretary)
facsimile: ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇
(b) If to the Company, to:
▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ A/S
▇▇▇▇▇▇▇▇▇ ▇▇
▇▇ - ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ C
Denmark
Attention: Chef Juristen (General Counsel)
facsimile: ▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇
(c) If to Buyer, to:
Ameritech Corporation
Ameritech International
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
facsimile: ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
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 ▇▇▇▇ (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 ▇▇▇▇-▇▇▇▇▇ & 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 ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇-▇▇▇▇▇ & 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), ▇▇▇▇▇▇▇ ▇▇, ▇▇-
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
▇▇▇▇▇▇▇ ▇▇. 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 ▇▇▇▇▇▇▇-▇▇▇▇ ▇▇, ▇▇-
800 Arhus C, or at the Company
office, at ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇-
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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,
▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇-▇▇▇▇ ▇▇▇▇▇
C, or at the Company's office
at ▇▇▇▇▇▇▇▇▇ ▇▇, ▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ 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
▇▇▇ ▇▇ ▇▇ ▇▇ ▇▇. The
reference number for the
Danish Securities Centre must
be stated in connection with
telephone calls.
Tele Danmark A/S
Board of Directors
