EXHIBIT 10.1
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CERTAIN PORTIONS OF THIS AGREEMENT, FOR WHICH CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED, HAVE BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. SECTIONS OF THE AGREEMENT WHERE
PORTIONS HAVE BEEN OMITTED HAVE BEEN IDENTIFIED IN THE TEXT.
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FRAMEWORK AGREEMENT
The following Framework Agreement has been entered into on 15 March 2001 between
(1) Telia AB (publ), company registration number 556103-4249, hereinafter
referred to as Telia, and Telia Mobile AB, company registration number
556025-7932, hereinafter referred to as Mobile, of the one part and
(2) NetCom AB (publ), company registration number 556410-8917, hereinafter
referred to as NetCom, and Tele2 AB, company registration number
556267-5164, hereinafter referred to as Tele2, of the other part.
1. BACKGROUND
Following an application procedure at the Swedish National Post and Telecom
Agency, Tele2 has been awarded one of four UMTS licences. Telia applied for such
a licence but was not granted one. Telia has appealed against this decision.
Both Telia and Tele2 intend to provide UMTS services. The Parties have decided
to cooperate in Sweden on the development of a UMTS network and use jointly the
Licence awarded to Tele2.
The Parties are of the opinion that they stand to gain considerably from pooling
their resources on a long-term basis with a view to developing a UMTS network in
Sweden together in accordance with the terms and conditions of the Licence.
2. THE COOPERATION BETWEEN THE PARTIES
The Parties are to cooperate through a jointly owned Swedish limited liability
company, the Network Company, as set out in greater detail in this Framework
Agreement and in the Agreements. Each Party is to hold 50% of the shares in the
Network Company. The ownership of these shares is governed by the terms of a
separate Shareholder Agreement.
The Licence is to be transferred to the Licence Company free of charge as set
out in this Framework Agreement and in the Agreements, after [CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION]. The transfer of the Licence is to take place in such a
way that it is first transferred to the Licence Company, which will initially be
owned as set out in the Shareholder Agreement. The Network Company and the
Licence Company are to provide the Parties with network capacity in accordance
with the agreements appended to this Framework Agreement.
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The Network Company is to be financed by the Parties equally as set out in the
Shareholder Agreement. In addition, each Party is to grant the Network Company
the right to use specific existing infrastructure as set out in the Collocation
Agreements and Transmission Agreements. The Network Company is to implement the
development of the Network. The Network Company has contracted out the planning
and construction of the Network to the respective Parties in accordance with the
Implementation Agreements. All work carried out by the Parties for the Network
Company within the framework of the cooperation between the Parties is to be
undertaken on market terms.
The Network Company is to conduct its affairs in a businesslike manner and apply
market terms when setting prices. The Network Company's return targets are set
out in the Shareholder Agreement.
The cooperation between the Parties through the Network Company is to be limited
to the ownership, operation and maintenance of the Network and the provision of
network capacity. The cooperation between the Parties is limited to the above so
that the Parties will be able to continue to compete freely as independent
competitors in the future.
This Framework Agreement, the Shareholder Agreement and the Other Agreements are
to govern the cooperation between the Parties.
3. DEFINITIONS
The terms below are to have the following definitions in this Framework
Agreement, the Shareholder Agreement and the Other Agreements unless otherwise
specified:
Agreements: The Shareholder Agreement and the
Other Agreements
Appendices: The appendices to this Framework
Agreement and the Agreements
Base Network: The UMTS network that Tele2 has
undertaken to build under the Licence
and which the Partners have
undertaken to build in accordance
with the Business Plan, and which
includes buildings, towers/masts,
radio links, cables, fibres, contacts
and so on for the functionality of
the requisite equipment
Business Plan: The business plan, financing plan and
technical plan for the Network
Company as set out in an Appendix to
the Shareholder Agreement
Capacity Provision Agreements: The agreements under which the
Network Company agrees on the
Provision of Capacity
Credit Agreements: The agreements on credit which the
Network Company is to enter into in
order to finance the Implementation
of the Base Network, including
supplier credits
Equity-related Instruments: Shares, convertible debentures,
debentures with attached warrants,
participating debentures and other
such instruments issued by the
Network Company
Implementation: The network planning and building of
the Base Network or the Network in
general
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Licence Company: AB Xxxxxxxxxxx 00000, company
registration number 556606-7772
Licence: The UMTS licence granted to Tele2 and
the Terms and Conditions of the
Licence in respect of Tele2's licence
Network Company: AB Xxxxxxxxxxx 00000, company
registration number 556606-7796
Network: The Base Network and extensions
thereto
Other Agreements: The agreements set out in section 4
below
Parties: Each individual Party to the
Framework Agreement
Party: Telia and Mobile of the one part and
NetCom and Tele2 of the other part
Provision of Capacity: The provision of capacity in the
Network
PTS: The Swedish National Post and Telecom
Agency
Shareholder Agreement: The Shareholder Agreement attached as
Appendix A
Subsidiaries: Companies that are controlled through
direct or indirect ownership that
results in more than 50% of the
voting rights in the company in
question
Terms and Conditions of the The licence terms and conditions that
PTS
Licence: will announce in respect of the
Licence
UMTS: Universal Mobile Telecommunication
System
4. THE OTHER AGREEMENTS
This Framework Agreement is being entered into at the same time as the Other
Agreements, namely:
a. the Capacity Provision Agreements between the Network Company and
Mobile and between the Network Company and Tele2, Appendix B
b. the Operation Agreements between the Network Company and Mobile
and between the Network Company and Tele2, Appendix C
c. the Implementation Agreements (construction contract and network
planning services) between the Network Company and Mobile and
between the Network Company and Tele2, Appendix D
d. the Collocation Agreements between the Network Company and Mobile
and between the Network Company and Tele2, Appendix E
e. the Interconnection Agreement between Tele2 and Mobile, Appendix
F
f. the Transmission Agreements between the Network Company and Telia
AB/Skanova AB and between the Network Company and Tele2, Appendix
G
g. the Cooperation Agreement between the Licence Company and the
Network Company, Appendix H
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h. the Transfer Agreement (Shares) between the Network Company and
Tele2, Appendix I
i. the Transfer Agreement (Licence) between Tele2 and the Licence
Company, Appendix J
j. the Network Planning Services Agreements between the Network
Company and Tele2 and between the Network Company and Mobile,
Appendix K
5. MATTERS OF COMPETITION LAW
The Parties are to notify the Swedish Competition Authority jointly of the
cooperation between the Parties in accordance with this Framework Agreement and
certain of the Agreements as soon as possible after entering into this Framework
Agreement, requesting either confirmation of non-intervention or individual
exemption from the rules prohibiting anti-competitive alliances. The Parties
agree to give this matter top priority and to handle the matter in such a way
that no time is wasted.
6. PERIOD OF AGREEMENT AND EARLY TERMINATION
This Framework Agreement enters into force upon it being signed by the Parties
and applies until 31 December 2015 or for the life of the Licence in the event
that the Licence continues to apply after this date on account of its extension
or otherwise. Thereafter this Framework Agreement will continue to apply until
terminated.
In the event that either Party requests that the Licence be extended, the
Parties are to ensure that the Licence is extended if possible.
This Framework Agreement may be terminated no earlier than 31 December 2015 or
upon the expiry of the Licence in the event that the Licence expires after this
date on account of its extension or otherwise, subject to a notice period of two
years. Such notice of termination must always be given in writing to be valid.
The Shareholder Agreement and the Other Agreements are to apply for the same
period and be subject to the same notice period as set out above here in section
6 unless otherwise specified in these agreements.
Notwithstanding the above, either Party is entitled to give notice of early
termination of this Framework Agreement and the Agreements in the event that
winding-up proceedings are instituted against the other Party pursuant to a
final judgement under law or in the event that winding-up proceedings are
instituted against the Network Company pursuant to a final judgement under law,
provided that such proceedings have not been caused by breach of agreement on
the part of the Party giving notice of termination.
This Framework Agreement may not be terminated early, rescinded or nullified
unless expressly specified otherwise.
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7. PLEDGING OF SECURITY
Tele2 is to ensure that the shares in the Licence Company are pledged as
security for the rights enjoyed by the Network Company in accordance with the
Cooperation Agreement as soon as possible after the entry into force of this
Framework Agreement. This security must always be subordinate and in all
respects come after any liens and other security pledged in favour of the
Network Company's creditors. In the event that the pledging of these shares as
security significantly impairs the Network Company's financing options or the
terms and conditions of these options, the Network Company is to take back this
security where this is not unreasonable.
8. BREACH OF THIS FRAMEWORK AGREEMENT, THE SHAREHOLDER AGREEMENT AND THE
OTHER AGREEMENTS
8.1 The provisions set out here in section 8 are to apply to this Framework
Agreement and the Shareholder Agreement and to the Other Agreements
where specified. In this respect each Party is liable for those of its
Subsidiaries which are parties to certain of these Other Agreements.
8.2 In the event of a breach of this Framework Agreement, the Shareholder
Agreement or the Other Agreements, the Party in breach is always to be
entitled to a period of 45 days from the receipt of a written request
for remedial action in which to remedy the breach, unless a longer
period is specified.
8.3 In the event of a breach of this Framework Agreement, the Shareholder
Agreement or the Other Agreements in the form of late payment, penalty
interest will be payable as set out in law.
8.4 The Parties are making various financing commitments in respect of the
Base Network in accordance with this Framework Agreement, the
Shareholder Agreement and the Capacity Provision Agreement. These
financing commitments in respect of the Base Network are namely that
each Party is
(a) to pay capital of up to SEK 500,000,000 into the Network
Company in accordance with the Business Plan,
(b) to pay fixed charges in accordance with the Capacity Provision
Agreement between the Network Company and the Party in
question, and
(c) to provide guarantees in proportion to its shareholding and
within the limits agreed in the Business Plan for external
borrowing to fund the development of the Base Network.
In the event that either Party is in breach of the financing
commitments set out in (a) to (c) above and so is late in effecting
payment of an amount that has fallen due or in providing the agreed
guarantees (hereinafter referred to as the Amount Due), the following
provisions are to apply:
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(i) The Party not in breach is to be entitled to pay or guarantee
the Amount Due to the Network Company and then claim this
amount plus interest from the Party in breach or demand that
the Party in breach provide the guarantees that the Party not
in breach has provided on behalf of the Party in breach.
Thereby the Party not in breach is entitled only to make the
same financing commitments to the Network Company as the Party
in breach should have done, in other words pay the amounts set
out in (a) and (b) above or provide the guarantees set out in
(c) above. The Party in breach's status as creditor will not
be affected.
In the event that the Party not in breach effects the payment
set out in (a) above on behalf of the Party in breach and so
receives shares in the Network Company, the Party in breach is
to be entitled to acquire these shares from the Party not in
breach in return for cash payment of an amount corresponding
to the amount paid by the Party not in breach for the shares
plus interest. In order not to forfeit this right, the Party
in breach must effect payment in accordance with this
paragraph within six months of the Party not in breach
acquiring the shares.
(ii) In the event that the Amount Due that the Party in breach is
to pay or guarantee to the Network Company exceeds a total of
SEK 300,000,000 and the Party in breach does not remedy the
delay in payment within three months of a written request
referring to this provision, the Party not in breach is to be
entitled to nominate the chairman of the board for the
duration of the breach, and the chairman is then to have a
casting vote for the duration of the breach.
(iii) In the event that the Amount Due that the Party in breach is
to pay or guarantee to the Network Company exceeds a total of
SEK 750,000,000 and the Party in breach does not remedy the
delay in payment within three months of a written request
referring to this provision, the Party not in breach is to be
entitled to subscribe for additional shares in a new issue of
shares in the Network Company at a price equivalent to the
shares' realisable value. This value is to be based on the
value that can be obtained through the sale of all shares in
the Network Company but may not be less than their par value
(any shareholder contributions made by a Party, whether
conditional or not, are to be treated in this valuation as a
liability in the Network Company's balance sheet). The number
of shares that the Party not in breach is entitled to
subscribe for in such a new issue is to be such that the
number of shares subscribed for multiplied by the subscription
price corresponds to the Amount Due. In the event that the
Party in breach's holding of shares in the Network Company
following such a new issue falls below 25% of the shares in
the company, the Party in breach is to be entitled to sell its
remaining shares to the Party not in breach and the Party not
in breach is to be entitled to purchase the remaining shares
from the Party in breach, in both cases at a price
corresponding to the realisable value of
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the shares as set out above. In the event of such a purchase
of the remaining shares, the Party not in breach is entitled
when effecting payment to offset its claim for redress from
the Party in breach against the purchase price. Following such
an acquisition through the transfer of shares in the Network
Company, the Party not in breach is also to assume the Party
in breach's liability under guarantees provided to the Network
Company's external creditors.
In the event of a dispute over the value of the shares as set
out in the previous paragraph, the following valuation
procedure is to be applied. Valuations of the shares are to be
obtained from experts. Each Party will appoint one expert.
Each expert is to be an internationally recognised auditing
firm or investment bank. In the event that the two experts are
unable to reach agreement, they are to appoint a third expert
with the same qualifications as the first two. Should they be
unable to agree on the choice of a third expert, the third
expert is to be chosen from the names put forward by each
Party by the drawing of lots.
The shares are to be valued by the three experts independently
at their realisable value as set out in the first paragraph
above based on all shares in the Network Company being offered
for sale. The purchase price is to correspond to the average
of the third expert's valuation and the closest of the other
two valuations.
The cost of such a valuation is to be split equally (50/50)
between the Parties. The valuations are to be completed within
90 days of the valuation procedure being invoked.
The Party in breach is always to be entitled to have a
Capacity Provision Agreement with the Network Company or
another relevant party on market terms.
In the event that either Party has difficulty fulfilling its
financing commitments, the Parties agree first to engage in
negotiations with a view to identifying solutions that are
constructive for both the Network Company and the Parties in
order to ensure that the Base Network can be built and brought
into operation.
8.5 In the event of either Party breaching this Framework Agreement, the
Shareholder Agreement or the Other Agreements in any other way,
specific performance orders and claims for damages are to be the sole
forms of redress unless otherwise specified here in section 8.
8.6 In the event of either Party breaching the Implementation Agreements,
the Operation Agreements, the Collocation Agreements or the
Transmission Agreements, the rules set out in the agreement in question
are to apply, including the right for the Network Company to rescind
the agreement in the event of fundamental breach, if the breach is not
remedied within three months of a written request referring to this
provision.
8.7 With respect to the Capacity Provision Agreements entered into between
the Network Company and each Party, the Network Company's right to
rescind the agreement is to apply only if the breach relates to an
amount in excess of SEK 750,000,000
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and has lasted for more than 12 months. However, the Network Company is
to be entitled to suspend the provision of capacity on the Network for
as long as the Party in question is late in paying charges totalling
more than SEK 400,000,000 for a period of more than three months or
charges totalling more than SEK 200,000,000 for a period of more than
six months.
8.8 A Party is not entitled to terminate early, rescind or nullify
agreements between that Party or that Party's Subsidiaries and the
Network Company unless expressly specified otherwise.
9. CONSEQUENCES OF THE DISCHARGE OF THIS FRAMEWORK AGREEMENT
The discharge of this Framework Agreement will not mean that the Shareholder
Agreement or the Other Agreements are discharged. The Shareholder Agreement and
the Other Agreements will be discharged as set out in the relevant provisions
applying to these agreements.
10. CONFIDENTIALITY
The content of this Framework Agreement and the Agreements may not be disclosed
to third parties without the express consent of the Parties.
The Parties undertake not to disclose to third parties without consent any
confidential information received in accordance with this Framework Agreement or
the Agreements and not to use such information for any purpose other than that
for which the information was received.
"Confidential information" is taken to mean any information of a technical,
commercial, financial or other nature, irrespective of whether such information
has been documented or not, with the exception of
(a) information that is in the public domain or comes into the public
domain in any way other than through the breach of this Framework
Agreement or the Agreements,
(b) information to which the Party in question was demonstrably already
justly party prior to receiving this information from the other Party,
and
(c) information that the Party in question has received or will receive
from a third party without being bound by a duty of confidentiality to
this third party.
However, in the case referred to under (c) above, the Party receiving the
information is not entitled to disclose to others that the same information has
also been received in accordance with this Framework Agreement or the
Agreements.
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The provisions set out above here in section 10 will not apply where otherwise
required by law, ordinance, official order or the Parties' disclosure
obligations in respect of Swedish or foreign stock markets.
11. ROAMING AGREEMENTS ETC
11.1 The Parties agree that it is not the Network Company but the Parties
that are to enter into agreements with third parties on the provision
of international roaming, national roaming and service provider
services relating to the Network. Should this agreement between the
Parties fail to function in practice on account of technical
implications, the Parties are to establish an alternative solution that
in all material respects impacts neutrally on the Parties relative to
this main alternative.
11.2 In the event that the equivalent of today's MOU membership for the GSM
network is introduced for the UMTS network, both Telia/Mobile and Tele2
are to be entitled to such membership so as to ensure that both Parties
can enjoy the rights associated with such membership. Should it prove
impossible for Telia/Mobile to obtain such membership, the Parties are
to take the steps necessary to ensure that Telia/Mobile can still enjoy
equivalent rights.
12. FRAMEWORK AGREEMENTS WITH SUPPLIERS
The Parties agree that the Network Company is to enter into framework agreements
with one or more suppliers on the delivery of major network components and that
orders for these network components for the Base Network are to be placed by the
Network Company. Here in section 12 "major network components" is taken to mean
antennae, towers/masts, radio links, cables, fibres, contacts and UTRAN
equipment as well as the requisite number of nodes in the core network (eg SGSN
and MSC).
13. AMENDMENTS AND SUPPLEMENTS
Amendments and supplements to this Framework Agreement or the Agreements are
binding on the Parties only when documented in writing and signed by authorised
representatives of the Parties.
14. GROUP COMPANIES
Telia and NetCom are responsible for ensuring that all companies in the Telia
group and the NetCom group respectively observe the provisions of this Framework
Agreement and the Agreements. This will continue to apply even after such a
company has ceased to be a group company unless the other Party has agreed
otherwise in writing.
15. ASSIGNMENT OF RIGHTS AND OBLIGATIONS
No Party is entitled to assign the rights and obligations set out in this
Framework Agreement or the Agreements to another party without the written
consent of the other Parties unless agreed otherwise.
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16. DUTY OF LOYALTY
The Parties are loyally to promote cooperation between the Parties and the
interests of the Network Company.
17. MISCELLANEOUS
The aides-memoire of 23 December 2000 and the Agreement in Principle of 7
January 2001 herewith cease to apply.
18. COMMUNICATIONS
All communications that are to be sent by one Party to the other Party or the
Network Company in accordance with this Framework Agreement and the Agreements
must be in writing and sent to the following addresses unless otherwise
specified or subsequently agreed:
Chief legal adviser Managing director Managing director
Telia AB Telia Mobile AB Tele2 AB/NetCom AB
M#ri#rbackagatan 11 Augustendalsv 7
123 86 FARSTA 131 86 NACKA STRAND 000 00 XXXXX
Xxxxxx Xxxxxx Xxxxxx
Fax: x00 0 00 00 00 Fax: x00 0 000 00 00 Fax: x00 0 00 00 00 00
A communication is to be considered to have been received by a Party five (5)
days after being sent by recorded post unless it can be demonstrated that the
Party received the communication earlier. A communication sent by fax, telex,
telegram or courier is to be considered to have been received by a Party on the
day on which the communication is sent and a receipt is received confirming that
the communication has been sent correctly, provided that the message is also
sent by recorded post within five (5) days of the despatch of the communication
by fax, telex, telegram or courier.
19. GOVERNING LAW AND ARBITRATION
This Framework Agreement and the Agreements are subject to Swedish law.
Disputes over this Framework Agreement or any of the Agreements or over
associated issues or relationships are to be settled by arbitration in
accordance with the Swedish Arbitration Act (1999:116). The arbitration
proceedings are to be held in Stockholm.Should there be two or more parties on
either side of the dispute, the complainants together are to appoint one
arbitrator and the defendants together are to appoint one arbitrator. An
arbitrator may be appointed by the Stockholm City Court at the request of a
party in such a dispute if
(a) the complainants are unable to agree on an arbitrator within thirty
(30) days of the matter of choosing an arbitrator being raised with all
of the complainants,
(b) the defendants are unable to agree on an arbitrator within thirty (30)
days of the call to arbitration being received by all of the
defendants.
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In the event of more than one dispute arising in connection with this Framework
Agreement or any of the Agreements, these disputes are to be settled by one and
the same arbitration tribunal and in the same proceedings where considered
appropriate by the arbitration tribunal.
This Framework Agreement has been prepared in quadruplicate, with each Party
retaining one original.
Stockholm, 15 March 2001
TELIA AB (PUBL) NETCOM AB (PUBL)
TELIA XXXXXX XX XXXX0 XX
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