EXECUTION COPY Exhibit 10.4
Dated 27 September 2002
TELIA AB (PUBL)
and
THE REPUBLIC OF FINLAND
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of 27 September 2002,
BETWEEN:
(1) TELIA AB (PUBL), a corporation organized under the laws of the Kingdom
of Sweden ("TELIA"); and
(2) THE REPUBLIC OF FINLAND ("ROF" or the "SHAREHOLDER").
Preamble
(A) Telia and Sonera Corporation, a company limited by shares and
incorporated in the Republic of Finland ("SONERA"), have entered into a
Combination Agreement, dated 26 March 2002 (the "COMBINATION
AGREEMENT") to merge through the Exchange Offer and, if necessary,
through a mandatory redemption offer and compulsory acquisition
proceedings in accordance with the Finnish Securities Market Act of
1989, as amended, and the Finnish Companies Act of 1978, as amended,
respectively, all of the issued and outstanding shares of Sonera,
without nominal value (the "SONERA SHARES"), and ADSs of Sonera, each
representing one Sonera Share (each, a "SONERA ADS"), and certain other
securities of Sonera, as described in more detail in the Combination
Agreement;
(B) Telia and RoF wish to agree upon certain rights and obligations of RoF
and Telia respectively in connection with the potential future
disposition of Telia Equity Securities by RoF;
(C) Telia and the Kingdom of Sweden ("KOS") have entered into a similar
registration rights agreement dated as of the date hereof in connection
with the potential future disposition of Telia Equity Securities by
KoS; and
(D) Capitalized terms used in this Agreement and not elsewhere defined
shall have the respective meanings set forth in Annex A hereto;
NOW THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements herein contained, and
intending to be legally bound hereby, the parties agree as follows:
1 REGISTRATION RIGHTS
1.1 DEMAND REGISTRATION OF REGISTRABLE SECURITIES
1.1.1 Following the Closing Date, upon written notice by RoF
requesting that Telia effect or cause to be effected the
registration under the Securities Act of some or all of the
Registrable Securities held by RoF, which notice shall specify
the intended method or methods of disposition of such
Registrable Securities (which method or methods shall not
include offerings on a continuous or delayed basis pursuant to
Rule 415 under the Securities Act or any similar or successor
provision thereto), Telia will use its reasonable best efforts
to effect or cause to be effected the registration under the
Securities Act of such Registrable Securities for disposition
in accordance with the intended method or methods of
disposition stated in such registration request, provided
that:
(i) Telia shall not be required to effect a registration
under this Section 1.1.1, prior to the 180th calendar
day after the Closing Date;
(ii) If RoF previously has disposed of Registrable
Securities pursuant to a registration under this
Section 1.1.1, Telia shall not be required to effect
a registration under this Section 1.1.1 until a
period of at least 180 calendar days shall have
elapsed from the effective date of the most recent
-1-
preceding registration pursuant to this Section
1.1.1. For the avoidance of doubt, this restriction
does not apply with respect to registrations pursuant
to Section 1.2;
(iii) If, upon receipt of a registration request pursuant
to this Section 1.1.1, Telia is advised by a
recognized independent investment banking firm
selected by Telia and agreed to by RoF, such
agreement not to be unreasonably withheld, that, in
such firm's opinion, a registration at that time and
on the terms requested of any of the Registrable
Securities proposed to be offered would be likely to
have a material adverse affect on a public offering
by Telia of Telia Shares (other than in connection
with employee benefit and similar plans) (a "TELIA
COMPANY OFFERING") that had been specifically
approved by the Board of Directors of Telia prior to
the date of the written registration request under
this Section 1.1.1 (provided that Telia complies with
Section 1.2 hereof with respect to such Telia Company
Offering), Telia shall not be required to effect a
registration pursuant to this Section 1.1.1 until the
earliest of (i) the later of (a) 180 calendar days
after the completion of such Telia Company Offering
or (b) the termination of any "lock-up" period
required by the underwriters, if any, to be
applicable to RoF in connection with such Telia
Company Offering, (ii) five Business Days after
abandonment of such Telia Company Offering, (iii) 90
calendar days after the completion of such Telia
Company Offering if, in connection with a Telia
Company Offering, RoF has made a registration request
pursuant to Section 1.2 and the number of Registrable
Securities is "cut-back" pursuant to this Agreement
by more than 10% and (iv) 240 calendar days after the
date of the written registration request under this
Section 1.1.1;
(iv) If, while a registration request is pending under
this Section 1.1.1, Telia determines in good faith
that (i) the filing of a registration statement would
require the disclosure of material, non-public
information regarding Telia and (ii) public
disclosure of such material information would be
likely to have a significant adverse impact on Telia,
then, on written notice signed by the Chairman of the
Board of Directors or the Chief Executive Officer of
Telia given to RoF setting forth details regarding
the basis for such determination, Telia shall not be
required to file or effect a registration pursuant to
this Section 1.1.1 until the earlier of (a) the date
that is 10 calendar days after such material
information is disclosed to the public or ceases to
be material to Telia, and (b) 90 calendar days after
Telia provides such written notice of such
determination to RoF; and
(v) Telia shall not be required to register any
Registrable Securities under this Section 1.1.1
unless the aggregate number of Registrable Securities
proposed to be registered by RoF shall represent at
least 2.5% of outstanding Telia Shares.
1.1.2 If a registration request pursuant to Section 1.1.1 involves
an underwritten offering, RoF shall have the right to select
the investment banking firm that will act as managing
underwriter for the offering; provided, however, that such
investment banking firm shall be approved by Telia (such
approval not to be unreasonably withheld or delayed).
-2-
1.1.3 Telia may register Telia Shares or Telia ADSs for sale for its
own account or the account of another person in a registration
of Registrable Securities under Section 1.1.1, provided that,
except as otherwise required under the terms of currently
outstanding registration rights agreements of Telia, Telia
shall not have the right to register any such securities to
the extent that RoF is advised in writing (with a copy to
Telia) by the managing underwriter for the offering of such
Registrable Securities that, in such managing underwriter's
opinion, registration of such other securities would
reasonably be expected to adversely affect the offering and
sale of such Registrable Securities. Notwithstanding the
foregoing and subject to Section 1.2.2 hereof, if Telia or
another person or entity has requested to have its Telia
Shares or Telia ADSs registered in the same offering as a
registration of Registrable Securities under Section 1.1.1,
the Registrable Securities shall have priority.
1.1.4 RoF shall have the right to one registration pursuant to this
Section 1.1 in any six-month period up to a maximum of two
registrations. If after Telia has exercised its right to delay
a registration pursuant to Section 1.1.1(iii) or (iv), RoF
withdraws its request for such registration, or if such
registration is otherwise not completed, whether as a result
of adverse market conditions or for any other reason, such
registration or attempted registration shall not be counted as
a registration under this Section 1.1.
1.2 "PIGGYBACK" REGISTRATION OF REGISTRABLE SECURITIES
If at any time after the date hereof Telia proposes to register for
public sale under the Securities Act (other than a registration on Form
F-4 or S-8 or any successor or similar forms thereto), whether proposed
to be offered for sale by Telia or any other person, including, without
limitation, pursuant to the exercise by any other person or entity of
any registration rights, any Telia Equity Securities on a form and in a
manner which would permit registration of Registrable Securities for
sale to the public under the Securities Act, Telia will give prompt
written notice to RoF of its intention to do so, describing such
securities, and specifying the form and manner and the other relevant
facts involved in such registration (including, without limitation, (i)
whether or not such registration will be in connection with an
underwritten offering of Telia Equity Securities and, if so, the
identity of the managing underwriter and whether such offering will be
pursuant to a "best efforts" or "firm commitment" underwriting and (ii)
if practicable, an estimate of the anticipated price range at which
such securities are reasonably expected to be sold to the public). Upon
the written request of RoF, to be delivered to Telia by RoF within 20
Business Days after the receipt of any such notice by RoF, which
request shall specify the maximum number of Registrable Securities
intended to be disposed of by RoF, Telia will use its reasonable best
efforts to effect or cause to be effected, in connection with the
registration of the Telia Equity Securities, the registration under the
Securities Act of all Registrable Securities which Telia has been
requested to register or cause to be registered by RoF, to the extent
required to permit the disposition of Registrable Securities so to be
registered; provided that:
1.2.1 if Telia proposes to effect a primary registration pursuant to
a Telia Company Offering and Telia shall have been advised in
writing by a recognized independent investment banking firm
selected by Telia and agreed by RoF, such agreement not to be
unreasonably withheld, that, in such firm's opinion, the
number of Telia Equity Securities proposed to be included in a
registration under this Section 1.2 is greater than the number
of Telia Equity Securities which can be offered without
adversely affecting the offering, Telia shall be required to
include in the registration
-3-
only that number of Telia Equity Securities that the
independent investment banking firm believes should be
included therein without adversely affecting the offering, and
Telia Equity Securities shall be excluded from the
registration in the following order: (i) first, Telia Equity
Securities requested to be registered by any person other than
KoS or RoF (but not including Telia Equity Securities to be
registered by Telia for sale in a Telia Company Offering),
(ii) second Telia Equity Securities requested to be included
in such registration by KoS and RoF (such exclusion to be pro
rata, based upon the number of Telia Equity Securities
requested to be included in such registration by each of KoS
and RoF, respectively) and (iii) Telia Equity Securities to be
registered by Telia for sale in a Telia Company Offering;
1.2.2 if Telia proposes to effect a secondary registration on behalf
of a person or entity other than RoF, and Telia shall have
been advised in writing by a recognized independent investment
banking firm selected by Telia and agreed by RoF, such
agreement not to be unreasonably withheld, that, in such
firm's opinion, the number of Telia Equity Securities proposed
to be included in a registration under this Section 1.2 is
greater than the number of Telia Equity Securities which can
be offered without adversely affecting the offering, Telia
shall be required to include in the registration only that
number of Telia Equity Securities that the independent
investment banking firm believes should be included therein
without adversely affecting the offering, and Telia Equity
Securities shall be excluded from the registration in the
following order: (i) first, Telia Equity Securities requested
to be registered by any person other than the person or entity
on whose behalf the secondary registration is initially being
made, Telia, KoS or RoF (to the extent KoS and/or RoF is not
the entity on whose behalf the secondary registration is
initially being made), (ii) second, Telia Equity Securities
requested to be included in such registration by KoS and RoF
(to the extent KoS and/or RoF is not the entity on whose
behalf the secondary registration is initially being made),
such exclusion to be pro rata, based upon the number of Telia
Equity Securities requested to be included in such
registration by each of KoS and RoF, respectively, (iii) Telia
Equity Securities requested to be registered by Telia and (iv)
the Telia Equity Securities of the person or entity on whose
behalf the secondary registration is initially being made;
1.2.3 Telia may, in its sole discretion, delay any offering of Telia
Equity Securities for which registration of Registrable
Securities also is effected under this Section 1.2 by giving
written notice of the delay to RoF; provided, however, that if
(i) the registration statement with respect to the offering is
not yet effective and the delay extends for more than 30
calendar days from the date of the written notice of delay
under this Section 1.2 or (ii) the registration statement with
respect to the offering has been declared effective by the SEC
and the closing of the offering is delayed for more than 24
hours, RoF may withdraw its Registrable Securities from the
offering, without penalty, and thereupon Telia shall be
relieved of its obligation to register such Registrable
Securities, without prejudice, however to the rights of RoF to
include Registrable Securities in any future registrations
pursuant to this Section 1.2;
1.2.4 Telia shall not be required to register any Registrable
Securities under this Section 1.2 unless the aggregate number
of Registrable Securities proposed to be registered by RoF
represents at least 2.5% of outstanding Telia Shares; and
-4-
1.2.5 Telia shall have the right to select the managing underwriter
for any underwritten offering effected pursuant to this
Section 1.2.
No registration of Registrable Securities effected under this Section
1.2 shall relieve Telia of its obligation to effect a registration of
Registrable Securities pursuant to Section 1.1.
1.3 RULE 144 INFORMATION
With a view to making available the benefits of certain rules and
regulations of the SEC which may at any time permit the sale of the
Registrable Securities to the public without registration, at all
times, Telia agrees to use its reasonable best efforts to:
1.3.1 make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act,
to the extent required from time to time to enable RoF and its
successors and assigns to sell Registrable Securities without
registration under the Securities Act pursuant to Rule 144
under the Securities Act or any similar rule or regulation
hereafter adopted by the SEC;
1.3.2 file with and furnish to the SEC in a timely manner all
reports and other documents required of Telia under the
Securities Act and the Exchange Act; and
1.3.3 promptly furnish to RoF upon request a written statement by
Telia as to its compliance with the reporting requirements of
such Rule 144 and of the Securities Act and the Exchange Act,
a copy of the most recent annual or quarterly report of Telia
and such other reports and documents so filed by Telia as RoF
may reasonably request in availing itself of any rule or
regulation of the SEC and applicable state securities laws
("BLUE SKY LAWS") allowing RoF to sell any Registrable
Securities without registration.
1.4 ADDITIONAL RIGHTS
If Telia at any time grants to any other shareholder any rights to
request Telia to effect the registration under the Securities Act of
any Telia Equity Securities on terms that in the opinion of RoF are
more favourable to such shareholder than the terms set forth in this
Agreement, the terms of this Agreement shall be deemed amended or
supplemented to the extent necessary to provide RoF such more
favourable rights and benefits.
2 REGISTRATION PROCEDURES
2.1 REGISTRATION PROCEDURES
If and whenever Telia is required to use its reasonable best efforts to
effect or cause to be effected the registration under the Securities
Act of any Registrable Securities, as provided in this Agreement, Telia
will use its reasonable best efforts to as expeditiously as is
practicable:
2.1.1 prepare and promptly (in any event within 60 calendar days
upon written notice by RoF) file or cause to be filed with the
SEC a registration statement or statements under the
Securities Act on the appropriate form or forms with respect
to such securities to be offered and use its reasonable best
efforts to cause such registration statement or statements to
become and remain effective until the earlier of (i) such time
as all such securities have been disposed of in accordance
with the intended methods of disposition by RoF set forth in
such registration statement or statements and (ii) 270
calendar days after the effective date of such registration
statement or statements;
-5-
2.1.2 prepare and file or cause to be filed with the SEC such
amendments (including post-effective amendments) and
supplements to such registration statement or statements and
the prospectus used in connection therewith as may be
necessary to keep such registration statement or statements
effective and to comply with the provisions of the Securities
Act, the Exchange Act and Blue Sky Laws with respect to the
disposition of such securities until the earlier of (i) such
time as all such securities have been disposed of in
accordance with the intended methods of disposition by RoF set
forth in such registration statement or statements and (ii)
270 calendar days after the effective date of such
registration statement or statements;
2.1.3 furnish to RoF copies of any such registration statement or
statements, any prospectus included therein (including any
preliminary prospectus or summary prospectus) and any
amendment or supplement thereto (including all documents
incorporated by reference therein prior to the effectiveness
of such registration statement or statements and all
exhibits), which documents (other than documents incorporated
by reference) will be subject to the prior review of RoF for a
period of at least three Business Days or such shorter period
as RoF may agree, and (i) with respect to a registration under
Section 1.1 of this Agreement, Telia shall not file or cause
to be filed with the SEC any such registration statement or
statements, prospectus, amendment or supplement to which RoF,
shall reasonably object within three Business Days of receipt
thereof and (ii) with respect to a registration under Section
1.2 hereof, prior to filing or causing to be filed with the
SEC any such registration statement or statements, prospectus,
amendment or supplement, Telia will consider the reasonable
objections of RoF which are conveyed to it and consult with
RoF and its advisors to resolve the objections;
2.1.4 furnish to RoF and to any underwriter of such securities, such
number of conformed copies of such registration statement or
statements and of each such amendment and supplement thereto
(in each case including all exhibits), such number of copies
of the prospectus included in such registration statement or
statements (including each preliminary prospectus and any
summary prospectus) in conformity with the requirements of the
Securities Act, such documents incorporated by reference in
such registration statement or statements or prospectus and
such other documents as RoF or such underwriter may reasonably
request in order to facilitate the public sale or other
disposition of such securities;
2.1.5 register or qualify all the securities covered by such
registration statement or statements under such other
securities laws or Blue Sky Laws of such jurisdictions as RoF
or any underwriter of such securities shall reasonably request
and do any and all other acts and things which may be
reasonably necessary or advisable to enable RoF or any
underwriter to consummate the disposition in such
jurisdictions of the securities covered by such registration
statement or statements; provided that Telia shall not for any
such purpose be required to qualify generally to do business
as a foreign corporation in any jurisdiction where but for the
requirements of this Section 2.1.5, it would not be obligated
to be so qualified, or to subject itself to any taxation in
any such jurisdiction, or to subject itself to or consent to
general or unlimited service of process in any jurisdiction
where it is not then so subject;
2.1.6 comply with all applicable rules and regulations of the SEC
and make generally available to its securityholders, in each
case as soon as practicable, an earnings
-6-
statement of Telia which will satisfy the provisions of
Section 11(a) of the Securities Act;
2.1.7 if requested by the underwriters for any underwritten offering
of Registrable Securities pursuant to Section 1.1 of this
Agreement, Telia will enter into an underwriting agreement
with such underwriters for such offering, such agreement to
contain such representations, warranties, covenants and
indemnities by Telia and such other terms and provisions as
are customarily contained in underwriting agreements with
respect to secondary distributions, including without
limitation such underwriters' form of indemnities and
contribution and the provision of an opinion of counsel and,
if applicable, a "cold comfort" letter;
2.1.8 list such securities on each securities exchange or quote such
securities on each quotation system as RoF or the underwriters
of the offering may reasonably designate;
2.1.9 cooperate with RoF and each underwriter or agent participating
in the disposition of such securities and their respective
counsel in connection with any filings required to be made
with the National Association of Securities Dealers, Inc.
("NASD");
2.1.10 (i) immediately notify RoF at any time when a prospectus
relating to a registration pursuant to Sections 1.1 or 1.2 of
this Agreement is required to be delivered under the
Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement
or statements, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances then
existing, not misleading and (ii) at the request of RoF,
prepare and furnish to RoF or the managing underwriter a
reasonable number of copies of a supplement to, or an
amendment of, such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities,
such prospectus shall not include an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances then existing, not misleading. RoF
agrees not to sell any Registrable Securities registered under
Sections 1.1 or 1.2 hereof if RoF has been notified of the
happening of an event under clause (i) of this Section 2.1.10
until RoF or the managing underwriter has received such copies
of the supplement or amendment as aforesaid and is further
notified by Telia that the prospectus included in the
registration statement, as then in effect, no longer includes
an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances
then existing, not misleading;
2.1.11 (i) furnish to RoF, addressed to RoF, an opinion of counsel
for Telia, such counsel to be approved by RoF and such
approval not to be unreasonably withheld or delayed, dated the
date of the closing of the sale of the securities under the
underwriting agreement, covering substantially the same
matters with respect to such registration statement (and the
prospectus included therein) as are customarily covered in
opinions of Telia's counsel delivered to underwriters in
underwritten public offerings of securities and, in the case
of a registration pursuant to Section 1.1, such other matters
as RoF may reasonably request, and (ii) if permitted by
applicable accounting standards, use its best efforts to
furnish to RoF, addressed to RoF, a "cold comfort" letter
signed by the independent public
-7-
accountants who have certified Telia's financial statements
included in or incorporated by reference into such
registration statement, covering substantially the same
matters with respect to such registration statement (and the
prospectus included therein), and with respect to events
subsequent to the date of such financial statements, as are
customarily covered in accountants' letters delivered to
underwriters in underwritten public offerings of securities
and, in the case of a registration pursuant to Section 1.1,
such other matters as RoF may reasonably request;
2.1.12 execute and deliver all instruments and documents and take
such other actions and obtain all such other certificates and
opinions as is customary in an underwritten offering;
2.1.13 in connection with the preparation and filing of each
registration statement registering Registrable Securities
under the Securities Act, make available for inspection by
RoF, by any underwriter participating in any disposition to be
effected pursuant to such registration statement or
statements, by any depositary with respect to Registrable
Securities covered by such registration statement or
statements and by any attorney, accountant, auditor or other
agent retained by RoF or any such underwriter or depositary,
all pertinent financial and other records, pertinent
corporation documents and properties of Telia, and cause
Telia's officers, directors and employees to supply all
information reasonably requested by RoF or any such
underwriter, attorney, accountant, auditor or agent in
connection with such registration statement or statements and
such opportunities to discuss the business of Telia with its
officers and the independent public accountants who have
certified its financial statements and perform such other
diligence as shall be necessary, to conduct a reasonable
investigation within the meaning of the Securities Act
subject, in each case, to such customary confidentiality
undertakings as Telia shall reasonably request.
2.1.14 notify RoF as soon as practicable and confirm the notice in
writing (i) when a registration statement or statements
pertaining to the Registrable Securities becomes effective,
(ii) when the filing of a post-effective amendment to such
registration statement or statement or supplement to or
amendment of the related prospectus is required, when the same
is filed, and in the case of a post-effective amendment, when
the same becomes effective, (iii) of the receipt of any
comments from the SEC, (iv) of any request by the SEC to amend
the registration statement or statements or amend or
supplement the related prospectus or for additional
information, (v) of the entry of any stop order suspending the
effectiveness of such registration statement or of the
initiation of any proceedings for that purpose and (vi) of the
suspension of the qualification of any Registrable Securities
for offering or sale in any jurisdiction or of the initiation
of any proceedings for that purpose;
2.1.15 prevent the issuance of any stop order suspending the
effectiveness of the registration statement or statements or
of any order preventing or suspending the use of any
preliminary prospectus and, if any such order is issued, to
obtain the withdrawal of any such order at the earliest
possible moment;
2.1.16 provide and cause to be maintained a transfer agent and
registrar for all Registrable Securities registered pursuant
to a registration statement or statements pertaining to such
securities and a CUSIP number for all such securities, in each
case from and after a date not later than the effective date
of such registration
-8-
statement or statements, and to instruct such transfer agent
(i) to release any stop transfer orders with respect to the
Registrable Securities being sold and (ii) to furnish
certificates without restrictive transfer legends representing
ownership of the Registrable Securities being sold, in such
denominations requested by RoF or the lead underwriter;
2.1.17 if requested by the managing underwriter or agent or RoF,
promptly incorporate and, in the case of ADSs, promptly cause
to be incorporated in a prospectus supplement or
post-effective amendment such information as the managing
underwriter or agent or RoF reasonably requests to be included
therein, including, without limitation, with respect to the
number of Registrable Securities being sold by RoF to such
underwriter or agent, the purchase price being paid therefore
by such underwriter or agent and with respect to any other
terms of the underwritten offering of the Registrable
Securities to be sold in such offering; and make and, in the
case of ADSs, cause to be made all required filings of such
prospectus supplement or post-effective amendment as soon as
practicable after being notified of the matters incorporated
in such prospectus supplement or post-effective amendment;
2.1.18 cooperate with RoF and the managing underwriter or agent or
depositary, if any, to facilitate the timely preparation and
delivery of certificates, if applicable, representing the
securities to be sold under the registration statement or
statements, and enable such securities to be in such
denominations and registered in such names as the managing
underwriter or agent, if any, or RoF may request;
2.1.19 make its directors, officers and employees available to
participate in such marketing tours, meetings and other
customary selling efforts, at such locations, as RoF or the
managing underwriter may reasonably request; and
2.1.20 enter into such agreements and take such other actions with
the same diligence as it would devote to a primary offering as
RoF or the managing underwriter reasonably requires in order
to expedite or facilitate the disposition of such Registrable
Securities.
2.2 LOCK-UP
2.2.1 If a registration pursuant hereto involves an underwritten
offering, Telia agrees, if and to the extent reasonably
requested by the managing underwriter of such offering, (i)
not to effect any public sale or distribution of any of its
Telia Equity Securities (or a transaction that would have a
similar economic effect as such a sale or distribution of
Telia Equity Securities such as a swap or other hedging
transaction whether settled in cash or securities) during a
period of up to 90 calendar days after the effective date of
such registration (except for securities sold in such
underwritten offering or except in connection with a stock
option plan, purchase plan, savings or similar plan, the
exercise of then outstanding options, warrants and other
convertible securities or an acquisition, merger, exchange
offer or other similar acquisition or business combination
transaction) without the consent of such managing underwriter
and (ii) to use its reasonable best efforts to cause its
officers and directors and each holder of at least 5% of Telia
Shares to agree not to effect any sale or distribution (other
than a private sale to a transferee who or which agrees to the
same restrictions to which the transferor is subject) of any
Telia Equity Securities owned or controlled by any of them or
their respective family members (or a transaction that would
have a similar economic effect as such
-9-
a sale or distribution of Telia Equity Securities such as a
swap or other hedging transaction whether settled in cash or
securities) during a period of up to 90 calendar days after
the effective date of the registration statement (except as
part of and pursuant to such underwritten offering) without
the consent of such managing underwriter; provided that no
person shall be subject to the foregoing more than once in any
twelve (12) month period.
2.2.2 If a registration pursuant hereto involves an underwritten
offering, which includes Registrable Securities, RoF will
agree, if and to the extent reasonably requested by the
managing underwriter in such offering, not to effect any
public sale or distribution, including any sale pursuant to
Rule 144 under the Securities Act (but excluding those
securities sold in such underwritten offering) (or a
transaction that would have a similar economic effect as such
a sale or distribution of Telia Equity Securities such as a
swap or other hedging transaction whether settled in cash or
securities), of any Telia Equity Securities owned by RoF,
without the consent of such managing underwriter, such consent
not to be unreasonably withheld or delayed, during a period
commencing on the effective date of such registration and
ending a number of calendar days thereafter not exceeding 90
days as such managing underwriter shall reasonably determine
is required to effect a successful offering; provided that
such agreement is on terms which are at least as favourable to
RoF, in form and substance, as those provided in other
"lock-up" agreements of other stockholders of Telia who
execute such agreements in connection with such offering;
provided, further, that RoF shall not be subject to the
foregoing more than once in any twelve (12) month period.
2.3 REGISTRATION EXPENSES
2.3.1 If and to the extent required by RoF, Telia will pay all
reasonable Registration Expenses in connection with any
registration of Registrable Securities pursuant to Sections
1.1 and 1.2 of this Agreement, provided, however, Telia will
not be required to pay (i) any underwriting discounts or
selling commissions attributable to Registrable Securities in
connection with any such registrations or (ii) the fees of
RoF's professional advisers in connection with such
registrations; provided, however, that in the event that any
professional advisers selected by RoF are also acting as
professional advisers to Telia in connection with a Telia
Company Offering, Telia will pay the fees of such professional
advisers in connection with such Telia Company Offering.
2.3.2 As used in this Agreement, "REGISTRATION EXPENSES" shall
include all expenses incident to the performance of or
compliance by Telia with the registration requirements set
forth in this Agreement, including, without limitation, the
following:
(i) the fees, disbursements and expenses of Telia's
counsel, including those of any local counsel
retained by or on behalf of Telia in any
jurisdiction, accountants, independent experts
retained by or on behalf of Telia and transfer agents
in connection with the registration of securities to
be disposed of under the Securities Act, including
the expenses of any special audits and/or "cold
comfort" letters required by or incident to such
performance and compliance;
(ii) any fees and disbursements of underwriters
customarily paid by the issuers or sellers of
securities;
-10-
(iii) all expenses in connection with the preparation,
printing and filing of the registration statement or
statements, any preliminary prospectus or final
prospectus, any other offering document and
amendments and supplements thereto, including all
filing fees (i.e., SEC and stock exchange or NASD
registration and filing fees, the fees and expenses
of any "qualified independent underwriter", as such
term is defined in Schedule E to the by-laws of the
NASD, and of its counsel), and the mailing and
delivering of copies thereof;
(iv) all fees and expenses incurred in connection with the
creation of ADSs, including the reasonable fees and
disbursements of the depositary for such ADSs that
Telia, and not the depositary, is required to pay;
(v) the cost of printing or producing any agreement(s)
among underwriters, underwriting agreement(s) and
blue sky or legal investment memoranda, any selling
agreements and any other documents in connection with
the offering, sale or delivery of the securities to
be disposed of;
(vi) the cost of printing or producing and the issuance
and delivery of certificates for the securities;
(vii) all expenses in connection with the qualification of
the securities for offering and sale under
international and Blue Sky Laws, including the fees
and disbursements of counsel for the underwriters in
connection with such qualification and in connection
with any blue sky and legal investment surveys; and
(viii) all fees and expenses incurred in connection with the
listing or quotation of the securities on stock
exchanges or quotation systems.
2.4 INDEMNIFICATION
2.4.1 Telia agrees in connection with any registration of
Registrable Securities to indemnify and reimburse, to the
extent permitted by law, RoF and any person or entity who has
lawfully acted on behalf of RoF against all losses, claims,
damages, liabilities and expenses (including reasonable legal
expenses and any reasonable expenses incurred in investigating
any claims) caused by any untrue or alleged untrue statement
of a material fact contained in the registration statement or
statements pertaining to the Registrable Securities or any
amendment or supplement thereto or any omission or alleged
omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading or any
preliminary prospectus or prospectus (including any amendment
or supplement thereto), as of its date, containing any untrue
statement of material fact or omitting to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading, except insofar as the same are caused by, or
contained in, any information furnished in writing to Telia by
RoF stating that it is to be used in the preparation thereof
or by RoF's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements
thereto after Telia has furnished to RoF a sufficient number
of copies of the same. In connection with an underwritten
offering, Telia shall, upon request, agree in writing to
indemnify such underwriters, their officers and directors and
each person or entity that controls
-11-
such underwriters (within the meaning of the Securities Act)
to substantially the same extent as provided above with
respect to the indemnification of RoF.
2.4.2 In connection with the registration of the Registrable
Securities, Telia may request that RoF indemnify and
reimburse, to the extent permitted by law, Telia and any
person or entity who has lawfully acted on behalf of Telia
against all losses, claims, damages, liabilities and expenses
(including reasonable legal expenses and any reasonable
expenses incurred in investigating any claims) caused by any
information furnished in writing (such writing to specifically
state that the information contained therein may be used in
the preparation of the registration statement pertaining to
the Registrable Securities) by RoF to Telia which contained
any untrue or alleged untrue statement of material fact
contained in the registration statement pertaining to the
Registrable Securities, prospectus or preliminary prospectus
or any amendment or supplement thereto or any omission or
alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not
misleading; provided that in no event shall the liability of
RoF for indemnities exceed -------- the net amount of proceeds
received by RoF from the sale of its Registrable Securities
pursuant to such Registration Statement.
2.5 CONTRIBUTION
2.5.1 If the indemnification provided for in Section 2.4 from the
indemnifying party is unavailable to the indemnified party
hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and
indemnified party or parties in connection with the actions
which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party
and indemnified party or parties shall be determined by
reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of
a material fact or omission or alleged omission to state a
material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified party or
parties, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such
action. The amount paid or payable by a party under this
Section 2.5 as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably
incurred by such party in connection with any investigation or
proceeding.
2.5.2 The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 2.5 were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in Section 2.5.1. No person guilty
of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation.
3 TERM
This Agreement shall terminate at the earliest of:
(i) the day RoF ceases to hold at least five percent of the outstanding
Telia Shares; or
-12-
(ii) at the request of RoF.
4 MISCELLANEOUS
4.1 ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES
This Agreement and the other agreements contemplated hereby and
instruments delivered pursuant hereto and thereto constitute the entire
agreement, and supersede all other prior agreements and understandings,
both written and oral, among the parties with respect to the subject
matter hereof and thereof and, except as otherwise expressly provided
herein including, without limitation, in Section 4.6 hereof, is not
intended to and shall not confer upon any person other than the parties
hereto any rights or remedies hereunder.
4.2 REGULATORY COOPERATION
4.2.1 The parties shall cooperate with each other to ensure that all
information necessary or desirable for the making of (or
responding to any requests for further information consequent
upon) any notifications or filings made in connection with
this Agreement, the transactions contemplated hereunder or any
on-going regulatory filings or other obligations in connection
with the operations of Telia or any of its subsidiaries, is
supplied to the party responsible for such notifications and
filings.
4.2.2 Telia may require RoF to furnish to it such information
regarding RoF and the distribution of Registrable Securities
that Telia may from time to time reasonably request in writing
and as shall be required by law or by the SEC, a national
securities exchange or the NASD in connection with a
registration pursuant to this Agreement.
4.3 NOTICES
Any notice, request, instruction or other document to be given
hereunder by either party to another party shall be in writing and
shall be deemed given when delivered personally, upon receipt of a
transmission confirmation (with a confirming copy sent by overnight
courier) if sent by facsimile or like transmission, and on the next
business day when sent by overnight courier, to the party at the
following addresses (or such other addresses for a party as shall be
specified by like notice):
4.3.1 IF TO TELIA:
Telia AB
Address: Xxxxxxxxxxxxx 00
Xxxxxx 000 00
Xxxxxx
Fax: x00 0 00 00 00
Attention: Jan-Henrik Ahrnell, General Counsel
4.3.2 IF TO ROF:
Ministry of Transport and Communications
-13-
Address: Xxxxxxxxxxxxxx 00, 00000 Xxxxxxxx
Fax: x000-0-000-0000
Attention: Samuli Haapasalo, Director
4.4 GOVERNING LAW; ARBITRATION
4.4.1 This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of New York
applicable to contracts made and to be performed therein,
without regard to the principles of conflicts of laws thereof.
4.4.2 Any dispute, controversy or claim concerning the validity,
scope, meaning, construction, application or effect of this
Agreement or the breach, termination or invalidity thereof
shall be finally settled by arbitration in Stockholm in
accordance with the rules of the Arbitration Institute of the
Stockholm Chamber of Commerce. Telia and RoF shall each
appoint one arbitrator and the two arbitrators shall appoint a
third arbitrator who shall be the chairman. The arbitration
proceedings shall be conducted in the English language.
4.5 SEVERABILITY
Any provision of this Agreement which is invalid or unenforceable in
any jurisdiction shall, as to that jurisdiction, be ineffective to the
extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement
in any other jurisdiction. Upon such determination that any term or
other provision is invalid or unenforceable, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible to the fullest
extent permitted by applicable law in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent
possible.
4.6 SUCCESSORS; ASSIGNS; TRANSFEREES
This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns and,
with respect to RoF, any affiliate (within the meanings of Rule 405
under the Securities Act) to which RoF has transferred any legal or
beneficial interest, in whole or in part, in Registrable Securities,
provided such entity continues to be an affiliate of RoF at the time it
seeks to exercise its rights pursuant to this Agreement.
4.7 AMENDMENTS; WAIVERS
This Agreement may not be amended, modified or supplemented and no
waivers of or consents to departures from the provisions hereof may be
given unless consented to in writing by the parties.
4.8 COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one
and the same Agreement.
4.9 EFFECTIVE DATE
This Agreement shall be effective on the first business day following
the date on which Telia Equity Securities are issued to RoF in exchange
for Sonera Shares pursuant to the
-14-
Combination Agreement and, if such date of issue shall not have
occurred by January 1, 2003, this Agreement shall terminate.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
as of the date first written above.
TELIA AB
By: /s/ Xxxxxx Xxxx
Name: Xxxxxx Xxxx
Title: President and Chief Executive Officer
By: /s/ Jan Henrik Ahrnell
Name: Jan Henrik Ahrnell
Title: Vice President and General Counsel
THE KINGDOM OF SWEDEN
By: /s/ Kimmo Sasi
Name: Kimmo Sasi
Title: Minister of Transport and Communications
By: /s/ Samuli Haaposalo
Name: Samuli Haaposalo
Title: Director General
-15-
ANNEX A
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
(i) "ADSS" means American Depositary Shares.
(ii) "BENEFICIAL OWNERSHIP" has the same meaning as in Rule 13d-3
promulgated under the Exchange Act.
(iii) "BUSINESS DAY" means any day other than a Saturday, Sunday or a day on
which the SEC is not open to receive filings.
(iv) "CLOSING DATE" means the day of the consummation of the Exchange Offer.
(v) "EXCHANGE ACT" means the U.S. Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
(vi) "EXCHANGE OFFER" means Telia's exchange offer to acquire all the Sonera
Shares, Sonera ADSs and certain other securities of Sonera, on the
terms and subject to the conditions included in the Combination
Agreement.
(vii) "PERSON" shall mean an individual, corporation, unincorporated
association, partnership, a 13D Group, trust, joint stock company,
joint venture, business trust or unincorporated organization, limited
liability company, any governmental entity or any other entity of
whatever nature.
(viii) "REGISTER", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement
or similar document in compliance with the Securities Act and the
declaration or ordering of effectiveness of such registration statement
or document.
(ix) "REGISTRABLE SECURITIES" shall mean (i) any Telia Equity Security held
by RoF, (ii) any Telia Shares issued as (or issuable upon the
conversion or exercise of any warrant, right, option or other
convertible security which is issued as) a dividend or other
distribution with respect to, or in exchange for, or in replacement of,
such Telia Equity Security and (iii) any Telia Shares issued by way of
a stock split of the Telia Equity Security referred to in clauses (i)
or (ii) above. For purposes of this Agreement, any Registrable
Securities shall cease to be Registrable Securities when (i) a
registration statement covering such Registrable Securities has been
declared effective and such Registrable Securities have been disposed
of pursuant to such effective registration statement, (ii) such
Registrable Securities shall have been distributed pursuant to Rule 144
of the Securities Act (or any similar provision then in effect) under
the Securities Act or (iii) such Registrable Securities shall cease to
be outstanding.
(x) "SEC" means the U.S. Securities and Exchange Commission.
(xi) "SECURITIES ACT" means the U.S. Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
(xii) "TELIA ADSS" means ADSs of Telia, each representing an amount of Telia
Shares and represented by American Depositary Receipts of Telia.
(xiii) "TELIA EQUITY SECURITIES" means any (i) Telia Shares, (ii) securities
of Telia convertible into or exchangeable for Telia Shares (including
without limitation, Telia ADSs), and (iii) options, rights, warrants
and similar securities issued by Telia to acquire Telia Shares
-16-
(xiv) "TELIA SHARES" means shares in the capital stock of Telia.
(xv) "13D GROUP" means any "group" (within the meaning of Section 13(d) of
the Exchange Act) formed for the purpose of acquiring, holding, voting
or disposing of Telia Shares.
-17-
