UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)
(Final)
Pharmacia & Upjohn, Inc.
(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
616130 50 4
(CUSIP Number)
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Eva Persson with copies to:
AB Volvo Maureen Brundage, Esq.
S-405 08 Goteborg Timothy B. Goodell, Esq.
Sweden White & Case
46-31-590000 1155 Avenue of the Americas
New York, New York 10036
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(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications)
July 29, 1996
____________________________________________________________
(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box ( ).
____________
Check the following box if a fee is being paid with this statement ( ).
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SCHEDULE 13D
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CUSIP No. 616130 50 4 Page 2 of Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
AB Volvo
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ( )
(b) ( )
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Sweden
NUMBER OF SHARES BENEFICIALLY 7 SOLE VOTING POWER
OWNED BY EACH REPORTING PERSON 0<F1>
WITH 8 SHARED VOTING POWER
0<F1>
9 SOLE DISPOSITIVE POWER
0<F1>
10 SHARED DISPOSITIVE POWER
0<F1>
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0<F1>
14 TYPE OF REPORTING PERSON
CO
<F1> AB Volvo may be deemed to be the beneficial owner of the shares of Common Stock owned by Sotrof Aktiebolag. Such shares of
Common Stock have been excluded to avoid double counting of the aggregate shares of Common Stock owned by AB Volvo and Sotrof
Aktiebolag.
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SCHEDULE 13D
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CUSIP No. 616130 50 4 Page 2 of Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Sotrof Aktiebolag (formerly known as Fyrstegen AB)
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ( )
(b) ( )
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) ( )
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Sweden
NUMBER OF SHARES BENEFICIALLY 7 SOLE VOTING POWER
OWNED BY EACH REPORTING PERSON 23,765,766
WITH 8 SHARED VOTING POWER
9 SOLE DISPOSITIVE POWER
23,765,766
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES ( )
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.7%
14 TYPE OF REPORTING PERSON
CO
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ITEM 1. SECURITY AND ISSUER
This Amendment No. 3 ("Amendment No. 3") relates to the Common
Stock, par value $0.01 per share (the "Common Stock"), of Pharmacia & Upjohn,
Inc. (the "Company"), a corporation organized and existing under the laws of
the State of Delaware, the principal executive offices which are located at
Knyvett House, The Causeway, Staines, Middlesex TW18 3BA, England. The
purpose of this Amendment No. 3 is to amend and supplement Amendment No. 2 to
the Schedule 13D dated June 28, 1996 ("Amendment No. 2") filed by AB Volvo
("Volvo") and Fyrstegen AB, which amends and restates the Schedule 13D dated
November 2, 1996 filed by AB Volvo ("Volvo") and AB Fortos (such Schedule 13D
<PAGE>
as amended and restated in Amendment No. 1 to the Schedule 13D dated
January 11, 1996 ("Amendment No. 1"), (the "Schedule 13D").
ITEM 4. PURPOSE OF TRANSACTION
Item 4 of the Schedule 13D is hereby amended and supplemented as
follows:
Pursuant to the Underwriting Agreements as defined in Item 6 Volvo
sold 46,000,000 shares of Common Stock to the Underwriters, as defined in
Item 6, party to the Underwriting Agreements on July 29, 1996. In addition,
Volvo agreed to sell an additional 6,900,000 shares of Common Stock in the
event the Underwriters exercise the over-allotment option granted by Volvo to
the Underwriters in the Underwriting Agreements. On August 5, 1996 the
Underwriters exercised the over-allotment option to purchase 4,006,534 shares
of Common Stock.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
Item 5 of the Schedule 13D is hereby amended and supplemented as
follows:
Pursuant to the Underwriting Agreements, Volvo sold 46,000,000
shares of Common Stock to the Underwriters as defined in Item 6 for the
aggregate consideration of $1,352,400,000 or $39.20 per share. This amount
represented the price at which such shares were offered to the public by the
Underwriters ($40.00) less the Underwriter's commission.
On July 29, 1996, after giving effect to the sale of 46,000,000
shares of Common Stock by Volvo, as described in the above paragraph, Volvo
ceased to be beneficial owner of more than five percent of the outstanding
shares of Common Stock.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER
Item 6 of the Schedule 13D is hereby amended and supplemented as
follows:
On July 23, 1996 Volvo concurrently executed three underwriting
agreements: an agreement (the "U.S. Version") with Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Goldman Sachs & Co., Bear Stearns & Co., Inc.,
J.P. Morgan Securities, and Morgan Stanley & Co., Incorporated (as
representatives of the underwriters named in Schedule I of the U.S. Version);
an agreement (the "International Underwriting Agreement") with Goldman Sachs
International, Merrill Lynch International, CS First Boston Limited, HSBC
Investment Bank plc, and UBS Limited (as representatives of the underwriters
named in Schedule I of the International Agreement); and an agreement (the
"Nordic Underwriting Agreement") with Enskilda Securities (a unit of
Skandinaviska Enskilda Banken AB (publ)), Goldman Sachs International and
Merrill Lynch International (as representatives of the underwriters named in
Schedule I of the Nordic Underwriting Agreement). The three underwriting
agreements, the U.S. Version, the International Underwriting Agreement and the
Nordic Underwriting Agreement collectively are referred to herein as the
"Underwriting Agreements" and the underwriters party thereto are collectively
referred to herein as the "Underwriters". On July 29, 1996 Volvo sold
46,000,000 shares of Common Stock to the Underwriters. The shares of Common
Stock subject to the Underwriting Agreements are referred to herein as the
"Offered Shares".
Pursuant to the Underwriting Agreements Volvo has granted the
Underwriters an option, exercisable for 30 days from July 23, 1996, to
purchase up to 6,900,000 additional shares of Common Stock. The Underwriters
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may exercise such right of purchase only for the purpose of covering over-
allotments, if any, made in connection with the sale of the Offered Shares.
On August 5, 1996 the Underwriters exercised the over-allotment option to
purchase 4,006,534 of the Offered Shares.
The Underwriting Agreements provide that Volvo may not sell or
otherwise dispose of any of its shares of Common Stock for a period of 180
days after July 23, 1996 without the prior consent of Goldman Sachs & Co. and
Merrill Lynch & Co. on behalf of the Underwriters.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following documents are added as exhibits to the Schedule 13D:
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Exhibit No. Description
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1.1 Underwriting Agreement, dated July 23, 1996 among
Volvo, Sotrof Aktiebolag, Pharmacia & Upjohn Inc.
and Goldman Sachs & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Bear Stearns & Co.,
Inc., J.P. Morgan Securities, and Morgan Stanley &
Co., Incorporated, as representatives of the several
underwriters named in Schedule I thereto.
1.2 Underwriting Agreement, dated July 23, 1996 among
Volvo, Sotrof Aktiebolag, Pharmacia & Upjohn Inc.
and Goldman Sachs International, Merrill Lynch
International, CS First Boston Limited, HSBC
Investment Bank plc, and UBS Limited, as
representatives of the several underwriters named in
Schedule I thereto.
1.3 Underwriting Agreement, dated July 23, 1996 among
Volvo, Sotrof Aktiebolag, Pharmacia & Upjohn Inc.
and Enskilda Securities (a unit of Skandinaviska
Enskilda Banken AB (publ)), Goldman Sachs
International and Merrill Lynch International, as
representatives of the several underwriters named in
Schedule I thereto.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Dated: August 7, 1996
AB VOLVO
By: /s/ Fred Bodin
Name: Fred Bodin
Title: Senior Vice President
By: /s/ Jan Engstrom
Name: Jan Engstrom
Title: Senior Vice President
and Chief Financial Officer
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Dated: August 7, 1996
SOTROF AKTIEBOLAG
By: /s/ Fred Bodin
Name: Fred Bodin
Title: Member of the Board
By: /s/ Jan Engstrom
Name: Jan Engstrom
Title: Member of the Board
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Exhibit No. Description
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1.1 Underwriting Agreement, dated July 23, 1996 among
Volvo, Sotrof Aktiebolag, Pharmacia & Upjohn Inc.
and Goldman Sachs & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Bear Stearns & Co.,
Inc., J.P. Morgan Securities, and Morgan Stanley &
Co., Incorporated, as representatives of the several
underwriters named in Schedule I thereto, Pharmacia
& Upjohn, Inc. and AB Volvo.
1.2 Underwriting Agreement, dated July 23, 1996 among
Volvo, Sotrof Aktiebolag, Pharmacia & Upjohn Inc.
and Goldman Sachs International, Merrill Lynch
International, CS First Boston Limited, HSBC
Investment Bank plc, and UBS Limited, as
representatives of the several underwriters named in
Schedule I thereto.
1.3 Underwriting Agreement, dated July 23, 1996 among
Volvo, Sotrof Aktiebolag, Pharmacia & Upjohn Inc.
and Enskilda Securities (a unit of Skandinaviska
Enskilda Banken AB (publ)), Goldman Sachs
International and Merrill Lynch International, as
representatives of the several underwriters named in
Schedule I thereto.
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PHARMACIA & UPJOHN, INC.
COMMON STOCK
PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
(U.S. VERSION)
July 23, 1996
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
Bear, Stearns & Co. Inc.
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, NY 10281-1209
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and
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY 10004
Ladies and Gentlemen:
Sotrof Aktiebolag, a stockholder (the "Selling Stockholder") of
Pharmacia & Upjohn, Inc., a Delaware corporation (the "Company"), proposes to
sell an aggregate of 46,000,000 shares of common stock, par value $.01 per
share ("Stock"), of the Company to be offered in a global offering (the
"Global Offering") comprised of an U.S. Offering, an International Offering
and a Nordic Offering (each as defined herein). The Selling Stockholder is an
indirect wholly owned subsidiary of AB Volvo (publ) ("Volvo").
The Selling Stockholder proposes, subject to the terms and
conditions stated herein, to sell to the Underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of 34,500,000 shares (the "Firm
Shares") and, at the election of the Underwriters, up to 5,175,000 additional
shares (the "Optional Shares") of Stock of the Company (the Firm Shares and
the Optional Shares that the Underwriters elect to purchase pursuant to
Section 2 hereof are herein collectively called the "Shares") for sale to the
public in the United States and in a private placement in Canada (the "U.S.
Offering").
It is understood and agreed to by all parties that the Company,
Volvo and the Selling Stockholder are concurrently entering into: (i) an
agreement (the "International Underwriting Agreement") providing for the sale
by the Selling Stockholder of up to a total of 10,580,000 shares of Stock (the
"International Shares", a portion of which may be delivered in the form of
shares and a portion of which may be deposited by the Selling Stockholder
pursuant to the Custodian Agreement referred to below and delivered in the
form of Swedish Depositary Shares ("SDSs")), including the over-allotment
option thereunder, through arrangements with certain underwriters outside the
United States and Canada and outside the Nordic countries (the "International
Underwriters"), for whom Goldman Sachs International, Merrill Lynch
International, CS First Boston Limited, HSBC Investment Bank plc and UBS
Limited are acting as lead managers (the "International Offering"); and (ii)
an agreement (the "Nordic Underwriting Agreement") providing for the sale by
the Selling Stockholder of up to a total of 2,645,000 shares of Stock (the
"Nordic Shares", a portion of which may be delivered in the form of shares and
a portion of which may be deposited by the Selling Stockholder pursuant to the
Custodian Agreement referred to below and delivered in the form of SDSs),
including the over-allotment option thereunder, through arrangements with
certain underwriters in the Nordic countries (the "Nordic Underwriters"), for
whom Enskilda Securities (a unit of Skandinaviska Enskilda Banken AB (publ)),
Goldman Sachs International and Merrill Lynch International are acting as lead
managers (the "Nordic Offering"). Anything herein or therein to the contrary
notwithstanding, the respective closings under this Agreement, the
International Underwriting Agreement and the Nordic Underwriting Agreement are
hereby expressly made conditional on one another.
SDSs will be issued in accordance with the Custodian Agreement,
dated as of November 1, 1995 (the "Custodian Agreement"), between the Company
and Skandinaviska Enskilda Banken AB (publ), as Custodian (the "Depositary"),
and the general terms and conditions under which the SDSs are issued and
governed (the "General Terms and Conditions").
The Underwriters hereunder and the International Underwriters and
the Nordic Underwriters are simultaneously entering into an Intersyndicate
Agreement between U.S., International and Nordic Underwriting Syndicates (the
"Intersyndicate Agreement") which provides, among other things, that Goldman,
Sachs & Co. and Merrill Lynch & Co. shall act as the Global Coordinators (the
"Global Coordinators") for the Global Offering and for the transfer of shares
of Stock among the three syndicates. Three forms of prospectus are to be used
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in connection with the offering and sale of shares of Stock contemplated by
the foregoing, one relating to the offering and sale of the Shares hereunder
in the United States and Canada, a second relating to the offering and sale of
the International Shares and SDSs outside the United States and Canada and
outside the Nordic countries, and a third relating to the offering and sale of
the Nordic Shares and SDSs in the Nordic countries. All forms of prospectus
will be substantially identical except for certain substitute and additional
pages. Except as used in Sections 2, 3, 4, 9 and 12 herein, and except as the
context may otherwise require, references hereinafter to the Shares shall
include all the shares of Stock and SDSs which may be sold pursuant to either
this Agreement, the International Underwriting Agreement or the Nordic
Underwriting Agreement, references to Underwriters shall include the
International Underwriters and the Nordic Underwriters, and references herein
to any prospectus, whether in preliminary or final form, and whether as
amended or supplemented, shall include the U.S., the International and Nordic
versions thereof.
1. (a) The Company represents and warrants to, and agrees with,
each of the Underwriters and (in the case of clauses (i)-(v) only) Volvo and
the Selling Stockholder that:
(i) A registration statement on Form S-3 (File No. 333-06045) (the
"Initial Registration Statement") in respect of the Shares has been filed
with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits
thereto but including all documents incorporated by reference in the
prospectus contained therein, to you for each of the other Underwriters,
have been declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the U.S. Offering
(a "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement, any post-
effective thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act,
is hereinafter called a "Preliminary U.S. Prospectus"); the various
parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including (x) the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the
time it was declared effective and (y) the documents incorporated by
reference in the prospectus contained in the registration statement at
the time such part of the registration statement became effective, each
as amended at the time such part of the registration statement became
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively
called the "Registration Statement"; such final prospectus, in the form
first filed pursuant to Rule 424(b) under the Act, is hereinafter called
the "U.S. Prospectus"; and any reference herein to any Preliminary U.S.
Prospectus or the U.S. Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Act, as of the date of such Preliminary U.S.
Prospectus or U.S. Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary U.S. Prospectus or the U.S.
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary U.S. Prospectus or U.S. Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and incorporated by reference in such Preliminary
<PAGE>
U.S. Prospectus or U.S. Prospectus, as the case may be; and any reference
to any amendment to the Registration Statement shall be deemed to refer
to and include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the
Initial Registration Statement that is incorporated by reference in the
Registration Statement;
(ii) No order preventing or suspending the use of any Preliminary
U.S. Prospectus has been issued by the Commission, and each Preliminary
U.S. Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder;
(iii) The documents incorporated by reference in the
Prospectuses, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to the
requirements of the Act or Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectuses or any further amendment or
supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain 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 not misleading; provided, however, that this
representation and warranty shall not apply to (x) any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the Global
Coordinators expressly for use therein or (y) Selling Stockholder
Information; for purposes of this Agreement, "Selling Stockholder
Information" shall comprise the statements in the Prospectuses under the
captions "Prospectus Summary - The Global Offering - Shares of Common
Stock offered by the Selling Stockholder", "Prospectus Summary - The
Selling Stockholder" and "Selling Stockholder";
(iv) The Registration Statement conforms, and the U.S. Prospectus
and any further amendments or supplements to the Registration Statement
or the U.S. Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and the Registration Statement does not and will not, as of
the applicable effective date of the Registration Statement and any
amendment thereto, contain 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 not misleading; provided, however, that this
representation and warranty shall not apply to (x) any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the Global
Coordinators expressly for use therein or (y) Selling Stockholder
Information;
(v) Each of (A) the Preliminary U.S. Prospectus, (B) the
preliminary International Prospectus (the "Preliminary International
Prospectus") and (C) the preliminary Nordic Prospectus (the "Preliminary
Nordic Prospectus", and, together with the Preliminary U.S. Prospectus
and the Preliminary International Prospectus, the "Preliminary
Prospectuses") at the respective dates thereof, did not, and each of (A)
the U.S. Prospectus, (B) the final International Prospectus (the
"International Prospectus") and (C) the final Nordic Prospectus (the
"Nordic Prospectus", and, together with the U.S. Prospectus and the
International Prospectus, the "Prospectuses") at the respective dates
thereof, does not or did not, and any further amendment or supplement
thereto, as of the date of any such amendment or supplement, will not,
<PAGE>
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to (x) any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through the Global Coordinators expressly for use therein or
(y) Selling Stockholder Information; references herein to "prospectuses",
"Preliminary Prospectuses" or "Prospectuses" shall mean each and every
relevant prospectus, unless the context otherwise requires, and shall be
deemed to refer to and include the documents incorporated by reference
therein;
(vi) Neither the Company nor any of its Principal Subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectuses any loss or
interference with its business that is material to the Company and its
subsidiaries, taken as a whole, from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectuses; and, since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries, taken as a
whole, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectuses; as used
in this Agreement, "Principal Subsidiaries" means Pharmacia & Upjohn
Company, Upjohn Manufacturing, Inc., Pharmacia & Upjohn AB and Pharmacia
S.p.A;
(vii) The Company and each of its subsidiaries have all
concessions, licenses, franchises, permits, authorizations, approvals and
orders of and from all governmental regulatory officials and bodies that
are necessary to own or lease their properties and conduct their
businesses as described in the Prospectuses, except where the failure to
have any such concession, license, franchise, permit, authorization,
approval or order would not have a material adverse effect on the
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole;
(viii) The Company and its subsidiaries own or have had licensed
to them or otherwise have the benefit or use under the authority of the
owners thereof of, all patents, patent rights, inventions, trademarks,
service marks, trade names and copyrights (in each case, registered or
not) which are necessary for the conduct of the business of the Company
and its subsidiaries as described in the Prospectuses and, except as set
forth or contemplated in the Prospectuses, there are no unresolved
assertions that the Company or any of its subsidiaries has infringed the
patents, patent rights, inventions, trademark rights, service marks,
trade names or copyrights of others, other than assertions which are not
reasonably likely to have a material adverse effect on the consolidated
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole;
(ix) The Company and its subsidiaries (A) are in compliance with all
applicable federal, state, local and foreign laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (B) have all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
businesses as described in the Prospectuses and (C) are in compliance
with all terms and conditions of any such permit, license or approval, in
each case except as described in the Prospectuses or except as would not,
<PAGE>
individually or in the aggregate, result in a material adverse effect on
the consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole;
(x) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
and each Principal Subsidiary of the Company has been duly organized and
is validly existing as a corporation under the laws of its jurisdiction
of incorporation, and, in the case of Principal Subsidiaries incorporated
in the United States, is in good standing under the laws of its
jurisdiction of incorporation; and each of the Company and each Principal
Subsidiary of the Company has corporate power and authority to own its
properties and conduct its business as described in the Prospectuses, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except for any such failure
to be so qualified in any such jurisdiction which would not result in a
material adverse effect on the consolidated financial position,
shareholder's equity or results of operations of the Company and its
subsidiaries, taken as a whole;
(xi) The Company has an authorized capitalization as set forth in or
incorporated by reference in the Prospectuses, and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and conform to
the description of the Stock contained in or incorporated by reference in
the Prospectuses; shares of Stock are listed for trading on the New York
Stock Exchange and are quoted on the SEAQ International system operated
by the London Stock Exchange Limited, and SDSs are traded on the
Stockholm Stock Exchange; and all of the issued shares of capital stock
of each Principal Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and (except for
directors' qualifying shares and except as set forth in the Prospectuses)
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(xii) The sale and delivery of the Shares and SDSs to be sold by
the Selling Stockholder hereunder and under the International
Underwriting Agreement and the Nordic Underwriting Agreement and the
compliance by the Company with all of the provisions of this Agreement,
the International Underwriting Agreement and the Nordic Underwriting
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound or to which any
of the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the provisions
of the Certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties, except for such conflicts,
breaches, violations and defaults that would not have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole or that
would otherwise materially prejudice the consummation of the transactions
contemplated by this Agreement, the International Underwriting Agreement
or the Nordic Underwriting Agreement; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required to be obtained or made
by the Company for the sale and delivery of the Shares or SDSs by the
Selling Stockholder or the consummation by the Company of the
transactions contemplated by this Agreement, the International
Underwriting Agreement or the Nordic Underwriting Agreement, except for
<PAGE>
the registration under the Act of the Shares and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state or foreign securities or Blue Sky laws in connection
with the purchase and distribution of the Shares and SDSs by the
Underwriters, the International Underwriters or the Nordic Underwriters;
(xiii) This Agreement, the International Underwriting Agreement
and the Nordic Underwriting Agreement have been duly authorized, executed
and delivered by the Company;
(xiv) The Custodian Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and legally binding
agreement of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; upon the deposit of
Shares evidencing SDSs to be delivered at each Time of Delivery in
respect thereof in accordance with the provisions of the Custodian
Agreement and the General Terms and Conditions, the persons in whose
names the SDSs are registered will be entitled to the rights specified in
the Custodian Agreement and, in the General Terms and Conditions; and the
Custodian Agreement and the General Terms and Conditions conform in all
material respects to the descriptions thereof contained in the
International Prospectus and in the Nordic Prospectus;
(xv) The description of the Stock included in or incorporated by
reference in the Prospectuses, insofar as it purports to constitute a
summary of the terms of the Stock, the description of the SDSs included
in the International Prospectus and in the Nordic Prospectus, insofar as
it purports to constitute a summary of the terms of the SDSs, and the
statements set forth in the International Prospectus and in the Nordic
Prospectuses under the caption "Certain United States Tax Consequences to
Non-U.S. Holders of Common Stock", insofar as they purport to describe
the provisions of documents or laws therein described, are complete and
accurate in all material respects;
(xvi) Other than as set forth in the Prospectuses, there are no
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which are reasonably likely,
individually or in the aggregate, to have a material adverse effect on
the current or future consolidated financial position, shareholders'
equity or results of operations of the Company and its subsidiaries,
taken as a whole; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(xvii) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xviii) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes;
and
(xix) Coopers & Lybrand L.L.P. and KPMG Peat Marwick LLP, who
have certified certain financial statements of the Company and its
subsidiaries, are each independent public accountants as required by the
Act and the rules and regulations of the Commission thereunder.
(b) Volvo represents and warrants to, and agrees with, each of the
Underwriters and the Company that:
<PAGE>
(i) All consents, approvals, authorizations, orders, registrations
and qualifications necessary for the execution and delivery by Volvo and
the Selling Stockholder of this Agreement, the International Underwriting
Agreement and the Nordic Underwriting Agreement, and for the sale and
delivery of the Shares and SDSs to be sold by the Selling Stockholder,
and the performance of their respective obligations, hereunder and under
the International Underwriting Agreement and the Nordic Underwriting
Agreement, have been obtained and are in full force and effect; and each
of Volvo and the Selling Stockholder has full right, power and authority
to enter into this Agreement, the International Underwriting Agreement
and the Nordic Underwriting Agreement and the Selling Stockholder has
full right, power and authority to sell, assign, transfer and deliver the
Shares and SDSs to be sold by it hereunder and under the International
Underwriting Agreement and the Nordic Underwriting Agreement;
(ii) The sale and delivery of the Shares and SDSs to be sold by the
Selling Stockholder hereunder and under the International Underwriting
Agreement and the Nordic Underwriting Agreement and the compliance by
Volvo and the Selling Stockholder with all of the provisions of this
Agreement, the International Underwriting Agreement and the Nordic
Underwriting Agreement and the consummation of the transactions herein
and therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any statute, indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument to which Volvo or the Selling Stockholder
is a party or by which Volvo or the Selling Stockholder is bound, or to
which any of the property or assets of Volvo or the Selling Stockholder
is subject, nor will such action result in any violation of the
provisions of the articles of association of Volvo or the Selling
Stockholder or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over Volvo or the
Selling Stockholder or the property of Volvo or the Selling Stockholder;
(iii) This Agreement, the International Underwriting Agreement
and the Nordic Underwriting Agreement have been duly authorized, executed
and delivered by Volvo or the Selling Stockholder;
(iv) Volvo currently holds the Shares through the Selling
Stockholder, which is an indirect wholly owned subsidiary of Volvo, and
the Selling Stockholder has good and valid title to the Shares, free and
clear of all liens, encumbrances, equities or claims, and, with respect
to each Time of Delivery (as defined in Section 4 hereof) (A) immediately
prior to such Time of Delivery, the Selling Stockholder will have good
and valid title to the Shares to be sold by it hereunder and under the
International Underwriting Agreement and the Nordic Underwriting
Agreement, free and clear of all liens, encumbrances, equities and
claims; (B) immediately prior to such Time of Delivery, the Selling
Stockholder will have good and valid title to the Shares deposited by it
pursuant to the Custodian Agreement against issuance of the SDSs to be
delivered by the Selling Stockholder at such Time of Delivery, free and
clear of all liens, encumbrances, equities and claims (except such as
arise under the terms of the Custodian Agreement); (C) immediately prior
to such Time of Delivery, the Selling Stockholder will have good and
valid title to the SDSs to be delivered by it at such Time of Delivery,
free and clear of all liens, encumbrances, equities and claims; and (D)
upon delivery of the Shares and SDSs to be delivered by the Selling
Stockholder at such Time of Delivery pursuant to this Agreement, the
International Underwriting Agreement and the Nordic Underwriting
Agreement and payment therefor as provided herein and therein, good and
valid title thereto, free and clear of all liens, encumbrances, equities
and claims, will have passed to the several Underwriters or the
International Underwriters or Nordic Underwriters, as the case may be;
(v) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, any Prospectus or any
amendment or supplement thereto are made in reliance upon and in
<PAGE>
conformity with written information furnished to the Company by Volvo
expressly for use therein, such Preliminary Prospectus and the
Registration Statement did, and such Prospectus and any further
amendments or supplements to the Registration Statement and such
Prospectus, when they become effective or are filed with the Commission,
as the case may be, will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(vi) The statements in the Prospectuses under the captions
"Prospectus Summary - The Global Offering - Shares of Common Stock
offered by the Selling Stockholder", "Prospectus Summary - Selling
Stockholder" and "Selling Stockholder" do not, as of the effective date
as to the Registration Statement and on the applicable date as to any
Prospectus and as of each Time of Delivery, did not and will not include
any untrue statement of a material fact or omit to state any material
fact necessary in order to make such statements not misleading; and
(vii) Neither Volvo nor the Selling Stockholder has taken,
directly or indirectly, any action which is designed to or which
constitutes or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
in connection with the Global Offering; provided, however, that this
provision shall not apply to stabilization activities conducted by the
Global Coordinators on behalf of the Underwriters, as described in the
Prospectuses.
2. Subject to the terms and conditions herein set forth, (a) Volvo
agrees to cause the Selling Stockholder to sell, and the Selling Stockholder
agrees to sell, to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Selling Stockholder,
at a purchase price per share of $39.20, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, Volvo agrees to cause the Selling
Stockholder to sell, and the Selling Stockholder agrees to sell, to each of
the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Selling Stockholder, at the purchase price per
share set forth in clause (a) of this Section 2, that portion of the number of
Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by
multiplying such number of Optional Shares by a fraction the numerator of
which is the maximum number of Optional Shares which such Underwriter is
entitled to purchase as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the maximum number of
Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
The Selling Stockholder hereby grants to the Underwriters the right
to purchase at their election up to 5,175,000 Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering overallotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares may be exercised from time to time on one or more
occasions only by written notice from you to Volvo, given within a period of
30 calendar days after the date of this Agreement and setting forth the
aggregate number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless you and Volvo otherwise agree in writing, earlier than two or later
than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the U.S. Prospectus.
<PAGE>
4. (a) The Shares to be purchased by each Underwriter hereunder,
in definitive form, and in such authorized denominations and registered in
such names as the Global Coordinators may request upon at least forty-eight
hours' prior notice to Volvo shall be delivered by or on behalf of the Selling
Stockholder to the Global Coordinators, through the facilities of The
Depository Trust Company ("DTC"), for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of U.S. dollars to the order of, and to such account as shall
have been notified by, the Selling Stockholder in Federal (same day) funds.
Volvo will cause the certificates representing the Shares to be made available
for checking and packaging at least twenty-four hours prior to the Time of
Delivery (as defined below) with respect thereto at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:00 a.m., New
York City time (2.00 p.m., London time), on July 29, 1996, or such other time
and date as the Global Coordinators and Volvo may agree upon in writing, and,
with respect to the Optional Shares, 9:00 a.m., New York City time (2.00 p.m.,
London time), on the date specified by the Global Coordinators in the written
notice given by the Global Coordinators of the Underwriters' election to
purchase such Optional Shares, or such other time and date as the Global
Coordinators and Volvo may agree upon in writing, provided in each case that
such day is a New York Business Day (as defined in Section 4(b) below) and, if
SDSs are to be delivered at such Time of Delivery pursuant to the
International Underwriting Agreement or the Nordic Underwriting Agreement, a
day on which commercial banks are generally open for business in Stockholm.
Such time and date for delivery of the Firm Shares is herein called the "First
Time of Delivery", such time and date for delivery of Optional Shares, if not
the First Time of Delivery, is herein called a "Second Time of Delivery", and
each such time and date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7(o) hereof, will be delivered at the offices
of Shearman & Sterling, 199 Bishopsgate, London, England (the "Closing
Location"), and the Shares will be delivered as specified in subsection (a)
above, all at each Time of Delivery. A meeting will be held at the Closing
Location at 2:00 p.m., London time, on the New York Business Day next
preceding each Time of Delivery, at which meeting the final drafts of the
documents to be delivered pursuant to the preceding sentence will be available
for review by the parties hereto. For the purposes of this Section 4, "New
York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. (a) The Company agrees with each of the Underwriters:
(i) To prepare the Prospectuses in a form approved by you and to
file the U.S. Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Act; to submit to you for prior approval with reasonable notice any
proposed amendments or supplements to the Registration Statement or any
Prospectus; to advise you, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the U.S. Prospectus or any
amended U.S. Prospectus has been filed and to furnish you a reasonable
number of copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the U.S. Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Preliminary U.S.
<PAGE>
Prospectus or U.S. Prospectus, of the suspension of the qualification of
the Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or U.S. Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary U.S. Prospectus or U.S. Prospectus
or suspending any such qualification, promptly to use its reasonable best
efforts to obtain the withdrawal of such order;
(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to use its
reasonable best efforts to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for nine
months after the time of issue of the Prospectuses, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(iii) Prior to 12:00 p.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to
time to furnish the Underwriters with a reasonable number of copies of
each Prospectus in New York City and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the
time of issue of the Prospectuses in connection with the offering or sale
of the Shares or SDSs and if at such time any events shall have occurred
as a result of which the Prospectuses as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such period to amend or supplement any
Prospectus or to file under the Exchange Act any document incorporated by
reference in any Prospectus in order to comply with the Act or the
Exchange Act, to notify you and upon your request to file such document
and to prepare and furnish without charge to each Underwriter and to any
dealer in securities a reasonable number of copies as you may from time
to time request of any amended Prospectus or a supplement to any
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time nine
months or more after the time of issue of the Prospectuses, upon your
request but at the expense of such Underwriter, to prepare and deliver to
such Underwriter as many copies as you may request of an amended or
supplemented Prospectus, including with respect to any Underwriter, a
U.S. Prospectus complying with Section 10(a)(3) of the Act;
(iv) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earning statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(v) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date hereof, not to issue,
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder and under the International Underwriting Agreement and the
Nordic Underwriting Agreement, any shares of Stock or other securities of
the Company that are substantially similar to the Shares, including but
not limited to any securities that are convertible into or exchangeable
for, or that represent the right to receive, shares of Stock or any such
substantially similar securities, without the prior written consent of
the Global Coordinators; provided that this restriction will not apply to
<PAGE>
issuances or sales of shares in connection with (i) employee stock
option, savings or compensation plans or dividend reinvestment plans or
the conversion of convertible securities outstanding on the date hereof
or (ii) a merger or other combination with, or exchange offer for shares
of, another entity; and
(vi) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C.
time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
(b) Volvo and the Selling Stockholder agree with each of the
Underwriters:
(i) To bear and pay any stamp, transfer, registration, documentary
or similar taxes or duties (including interest and penalties if the
payment was due to be made by the Selling Stockholder) payable in the
Kingdom of Sweden, the Kingdom of Denmark, the Republic of Finland, the
Kingdom of Norway, the United Kingdom, the United States, France, Germany
or Japan (the "Relevant Jurisdictions") or any political subdivision or
taxing authority of any such jurisdiction not recoverable within a
reasonable period of time in connection with (A) the sale and delivery by
the Selling Stockholder of the Shares and SDSs to or for the respective
accounts of the Underwriters in the manner contemplated herein or in the
International Underwriting Agreement or the Nordic Underwriting Agreement
and in accordance with reasonable and customary procedures in global
equity offerings, (B) the deposit with the Depositary of Shares against
the issuance of SDSs at each Time of Delivery, (C) the sale and delivery
by the Underwriters of the Shares or SDSs to the initial purchasers
thereof in the manner contemplated herein or in the International
Underwriting Agreement or in the Nordic Underwriting Agreement and in
accordance with reasonable and customary procedures in global equity
offerings, or (D) the execution and delivery of this Agreement, the
International Underwriting Agreement or the Nordic Underwriting
Agreement, and any value added tax payable in connection with the
commissions and other amounts payable by the Selling Stockholder pursuant
to this Agreement, the International Underwriting Agreement or the Nordic
Underwriting Agreement;
(ii) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date hereof, not to offer,
sell, contract to sell or otherwise dispose of, except as provided
hereunder or under the International Underwriting Agreement or Nordic
Underwriting Agreement, any shares of Stock or other securities of the
Company that are substantially similar to the Shares, including but not
limited to any shares of Stock or other securities that are convertible
into or exchangeable for, or that represent the right to receive, shares
of Stock or any such substantially similar securities, without the prior
written consent of the Global Coordinators;
(iii) To not take, directly or indirectly, any action which is
designed to or which constitutes or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares;
provided, however, that this provision shall not apply to stabilization
activities conducted by the Global Coordinators on behalf of the
Underwriters, as described in the Prospectuses;
(iv) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Stockholder will deliver to you prior to or at
the First Time of Delivery (as hereinafter defined) a properly completed
<PAGE>
and executed United States Treasury Department Form W-8 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof); and
(v) Prior to each Time of Delivery, to deposit Shares with the
Depositary in accordance with the provisions of the Custodian Agreement
and the General Terms and Conditions and otherwise to comply with the
Custodian Agreement and the General Terms and Conditions so that any SDSs
to be delivered by the Selling Stockholder at such Time of Delivery
pursuant to the International Underwriting Agreement and the Nordic
Underwriting Agreement will be issued by the Depositary against receipt
of such Shares and delivered at such Time of Delivery in accordance with
the International Underwriting Agreement and the Nordic Underwriting
Agreement.
6. (a) The Company covenants and agrees with Volvo, the Selling
Stockholder and the several Underwriters that the Company will pay or cause to
be paid all expenses incident to the Company's performance of or compliance
with this Agreement, the International Underwriting Agreement and the Nordic
Underwriting Agreement, including without limitation: (i) all Commission and
any National Association of Securities Dealers registration and filing fees
and expenses, (ii) all fees and expenses in connection with the qualification
of the Shares for offering and sale under state securities or "blue sky" laws,
including reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualifications, (iii) all expenses relating to the
preparation, printing, distribution and reproduction of the Registration
Statement, each Prospectus included therein or prepared for distribution
pursuant hereto, this Agreement, the International Underwriting Agreement or
the Nordic Underwriting Agreement, each amendment or supplement of the
foregoing, the certificates representing Shares and all other documents
relating to the offering, purchase, sale and delivery of the Shares and SDSs,
(iv) internal expenses (including, without limitation, all salaries and
expenses of the Company's officers and employees performing legal or
accounting duties, and (v) fees, disbursements and expenses of the Company's
counsel and its advisors and experts and independent certified public
accountants (including the expenses of any opinions or "comfort" letters
required by or incident to the performance by the Company with its obligations
hereunder and compliance with such obligations). To the extent that any such
expenses are incurred, assumed or paid by Volvo, the Selling Stockholder or
the Underwriters, the Company shall reimburse such person for the full amount
so incurred, assumed or paid promptly after receipt of a request therefor.
(b) Except as may otherwise be agreed on behalf of the
Underwriters, Volvo covenants and agrees with the Company and the several
Underwriters that it will pay or cause to be paid all costs and expenses
incident to the performance of or compliance with this Agreement, the
International Underwriting Agreement and the Nordic Underwriting Agreement by
Volvo and the Selling Stockholder which are not otherwise specifically
provided to be paid by the Company pursuant to Section 6(a), including any
fees and expenses of counsel for Volvo and the Selling Stockholder.
It is understood, that, except as provided in this Section 6, and
Sections 8 and 12 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel.
7. The obligations of the Underwriters hereunder, as to the Shares
or SDSs to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company and of Volvo and the Selling Stockholder herein are,
at and as of such Time of Delivery, true and correct, the condition that each
of the Company, Volvo and the Selling Stockholder shall have performed all of
its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The U.S. Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
<PAGE>
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by
the Commission; and all requests for additional information on the part
of the Commission shall have been complied with to your reasonable
satisfaction; if the Company has elected to rely upon Rule 462(b), the
Rule 462(b) Registration Statement shall have become effective by 10:00
P.M., Washington, D.C. time, on the date of this Agreement;
(b) Shearman & Sterling, counsel for the Underwriters, shall have
furnished to you, the International Underwriters and the Nordic
Underwriters such opinion or opinions (a draft of each such opinion is
attached as Annex II(a) hereto), dated such Time of Delivery, with
respect to the matters covered in paragraphs (i), (ii), (iii) and (vi) of
subsection (c) below as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
(c) Sullivan & Cromwell, counsel for the Company, shall have
furnished to you, the International Underwriters, the Nordic
Underwriters, Volvo and the Selling Stockholder their written opinion (a
draft of such opinion is attached as Annex II(b) hereto), dated such Time
of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
Delaware;
(ii) All outstanding shares of common stock of the Company
(including the Shares) have been duly authorized and validly issued
and are fully paid and non-assessable;
(iii) This Agreement, the International Underwriting
Agreement and the Nordic Underwriting Agreement have been duly
authorized, executed and delivered by the Company;
(iv) The sale and delivery of the Shares by the Selling
Stockholder to the Underwriters in the manner contemplated in this
Agreement, the International Underwriting Agreement and the Nordic
Underwriting Agreement and in the Prospectuses and the performance
by the Company of its obligations under this Agreement, the
International Underwriting Agreement and the Nordic Underwriting
Agreement will not (A) violate the Company's Certificate of
Incorporation or By-Laws or (B) violate any federal law of the
United States or law of the State of New York applicable to the
Company; provided, however, that for the purposes of paragraph (iv)
(B), such counsel need express no opinion with respect to federal or
state securities laws, other anti-fraud laws and fraudulent transfer
laws; and provided further that insofar as performance by the
Company of its obligations under this Agreement is concerned, such
counsel need express no opinion as to bankruptcy, insolvency,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights;
(v) All regulatory consents, authorizations, approvals and
filings, required to be obtained or made by the Company under the
Federal laws of the United States or the laws of the State of New
York for the sale and delivery of the Shares or SDSs by the Selling
Stockholder to the Underwriters hereunder or under the International
Underwriting Agreement or the Nordic Underwriting Agreement have
been obtained or made; and
<PAGE>
(vi) The Registration Statement has been declared effective
under the Act and, to the best of such counsel's knowledge, no order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
threatened by the Commission.
In rendering such opinion, such counsel may state that such opinion
is limited to the Federal laws of the United States, the laws of the State of
New York and the General Corporation Law of the State of Delaware, and that
they are expressing no opinion as to the effect of the laws of any other
jurisdiction. In connection with the opinion set forth in (vi) above, such
counsel may state that they have relied solely upon information obtained from
the Commission and upon a certificate of officers of the Company.
In rendering such opinion, such counsel may also state that, with
your approval, they have relied as to certain matters on information obtained
from public officials, officers of the Company and other sources believed by
them to be responsible and that they assume that the certificates for the
outstanding shares of Stock of the Company, including the Shares, conform to
the specimen thereof examined by them and have been countersigned by a
transfer agent and that the signatures on all documents examined by such
counsel are genuine, which assumptions they may state they have not
independently verified.
Such counsel shall also state that they have reviewed the
Registration Statement and the Prospectuses and participated in discussions
with representatives of the Company, representatives of the Company's
accountants, Volvo and its U.S. counsel and representatives of the
Underwriters and advised the Company as to the requirements of the Act and the
applicable rules and regulations of the Commission thereunder, that between
the effectiveness of the Registration Statement and the time of the delivery
of their letter they also participated in further discussions with
representatives of the Company, representatives of the Company's accountants,
Volvo and its U.S. counsel and representatives of the Underwriters during
which the contents of certain portions of the Prospectuses and certain related
matters were discussed, and reviewed the opinions referred to in this Section
7; on the basis of the information that they gained in the course of the
performance of such services, considered in the light of their understanding
of the applicable law (including the requirements of Form S-3 and the
character of the prospectus contemplated thereby) and the experience they have
gained through their practice under the Act, such counsel shall confirm to the
Underwriters that, in their opinion, the Registration Statement, as of its
effective date, and the U.S. Prospectus, as of its date, appeared on their
face to be appropriately responsive in all material respects to the
requirements of the Act and the applicable rules and regulations of the
Commission thereunder; that nothing that came to the attention of such counsel
during the course of such review has caused them to believe that the
Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectuses, as of their respective dates, contained
any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and on the basis of the
procedures described in the second subclause of this paragraph, such counsel
shall confirm to the Underwriters that such counsel does not believe that any
Prospectus, as amended at such Time of Delivery, as of such Time of Delivery,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light
of the circumstances in which they were made, not misleading and that such
counsel do not know of any documents that are required to be filed as exhibits
to the Registration Statement and are not so filed or of any documents that
are required to be summarized in the U.S. Prospectus and are not so
summarized; (in rendering the opinion described in this paragraph such counsel
may state that the limitations inherent in the independent verification of
factual matters and the character of determinations involved in the
<PAGE>
registration process are such that they do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectuses except for (i) the description of
Stock in the Company's Registration Statement on Form 8-A and incorporated in
the Prospectuses by reference or included in the International Prospectus and
the Nordic Prospectus and (ii) the statements set forth in the International
Prospectus and in the Nordic Prospectus under the caption "Certain United
States Tax Consequences to Non-U.S. Holders of Common Stock", insofar as they
relate to the provisions of documents or U.S. Federal laws or Delaware
corporation law therein described; that they do not express any opinion or
belief as to the financial statements or other financial data derived from
accounting records included therein; and that their opinion described in this
paragraph is furnished as counsel for the Company and is solely for the
benefit of the several Underwriters, International Underwriters, Nordic
Underwriters, Volvo, the Selling Stockholder and the directors of the Company
to whom such opinion is addressed.
(d) Kenneth M. Cyrus, counsel for the Company, shall have furnished
to you, the International Underwriters, the Nordic Underwriters, Volvo
and the Selling Stockholder his written opinion (a draft of such opinion
is attached as Annex II(c) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) Each Principal Subsidiary of the Company that is
incorporated in the United States (a "Principal U.S. Subsidiary")
has been duly organized and is validly existing under the laws of
its jurisdiction of incorporation; and each of the Company and each
Principal U.S. Subsidiary of the Company has been duly qualified as
a foreign corporation for the transaction of business and is in good
standing under the laws of each jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability
by reason of failure to be so qualified in any such jurisdiction
(such counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company, provided that
such counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(ii) The Company has an authorized capitalization as set forth
in the Prospectuses, and all of the issued shares of capital stock
of each Principal U.S. Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable,
and except as otherwise set forth in the Prospectuses, are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (such counsel being entitled to
rely in respect of the opinion in this clause upon opinions of local
counsel and in respect of matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such
counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates) and the
Shares conform to the description of the Stock included in or
incorporated by reference in the Prospectuses;
(iii) The sale and delivery of the Shares and SDSs to be
sold by the Selling Stockholder hereunder and under the
International Underwriting Agreement and the Nordic Underwriting
Agreement and the compliance by the Company with all of the
provisions of this Agreement, the International Underwriting
Agreement and the Nordic Underwriting Agreement and the consummation
of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of its
Principal Subsidiaries is a party or by which the Company or any of
<PAGE>
its Principal Subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over
the Company or any of its Principal Subsidiaries or any of their
properties, except for such conflicts, breaches, violations and
defaults that would not have a material adverse effect on the
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries taken as a whole or that would not
otherwise materially prejudice the consummation of the transactions
contemplated by this Agreement, the International Underwriting
Agreement or the Nordic Underwriting Agreement;
(iv) To the best of his knowledge, the Company and each of its
Principal Subsidiaries have all concessions, licenses, franchises,
permits, authorizations, approvals and orders of and from all
relevant governmental regulatory officials and bodies that are
necessary to own or lease their properties and conduct their
businesses as described in the Prospectuses, except where the
failure to have any such concession, license, franchise, permit,
authorization, approval or order would not have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole;
(v) To the best of his knowledge, the Company and its
Principal Subsidiaries own or have had licensed to them or otherwise
have the benefit or use under the authority of the owners thereof
of, all patents, patent rights, inventions, trademarks, service
marks, trade names and copyrights (in each case, registered or not)
which are necessary for the conduct of the business of the Company
and its subsidiaries as described in the Prospectuses, except for
any such failure as would not have a material adverse effect on the
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries taken as a whole, and, to the best
of his knowledge and except for the matters described in the
Prospectuses, there are no unresolved assertions that the Company or
any of its subsidiaries has infringed the patents, patent rights,
inventions, trademark rights, service marks, trade names or
copyrights of others, other than assertions which, if determined
adversely to the Company or any of its subsidiaries, would not
individually or in the aggregate with respect to similar claims,
have a material adverse effect on the consolidated financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole;
(vi) To the best of such counsel's knowledge and other than the
matters described in the Prospectuses, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which are reasonably likely,
individually or in the aggregate with respect to similar claims, to
have a material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries taken as a whole; and, to the best
of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vii) The Custodian Agreement has been duly authorized,
executed and delivered by the Company; and
(viii) The documents incorporated by reference in the U.S.
Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
<PAGE>
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and he has no reason to believe that any of such
documents, when such documents became effective or were so filed, as
the case may be, contained in the case of a registration statement
which became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed
under the Exchange Act, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such documents were so filed, not misleading
(other than the financial statements and other financial data as to
which such counsel need express no opinion).
In rendering such opinion, such counsel may rely upon opinions of
local counsel and in respect of matters of fact upon certificates of officers
of the Company, provided that such counsel shall state that he believes both
you and he is justified in relying upon such opinions and certificates.
(e) Fred Bodin, General Counsel and Senior Vice President of Volvo,
shall have furnished to you, the International Underwriters and the
Nordic Underwriters his written opinion (a draft of such opinion is
attached as Annex II(d) hereto), dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) This Agreement, the International Underwriting Agreement
and the Nordic Underwriting Agreement have been duly authorized,
executed and delivered by or on behalf of Volvo and the Selling
Stockholder; and the sale of the Shares and SDSs to be sold by the
Selling Stockholder hereunder and thereunder and the compliance by
the Volvo and Selling Stockholder with all of the provisions of this
Agreement, the International Underwriting Agreement and the Nordic
Underwriting Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in
a breach or violation of any terms or provisions of, or constitute a
default under, any statute, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which Volvo or the Selling Stockholder is a party or by which Volvo
or the Selling Stockholder is bound, or to which any of the property
or assets of Volvo or the Selling Stockholder is subject, nor will
such action result in any violation of the provisions of the
Articles of Association of Volvo or the Selling Stockholder or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over Volvo or the
Selling Stockholder or the property of Volvo or the Selling
Stockholder;
(ii) No consent, approval, authorization or order of any
Swedish court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement, the
International Underwriting Agreement or the Nordic Underwriting
Agreement in connection with the Shares or SDSs to be sold by the
Selling Stockholder hereunder or thereunder;
(iii) (A) immediately prior to such Time of Delivery, the
Selling Stockholder had good and valid title to the Shares to be
sold by it hereunder and under the International Underwriting
Agreement and the Nordic Underwriting Agreement, free and clear of
all liens, encumbrances, equities and claims, and full right, power
and authority to sell, assign, transfer and deliver the Shares to be
sold by the Selling Stockholder hereunder and thereunder; (B)
immediately prior to such Time of Delivery, the Selling Stockholder
<PAGE>
had good and valid title to the Shares deposited by it pursuant to
the Custodian Agreement against issuance of the SDSs to be delivered
by the Selling Stockholder at such Time of Delivery, free and clear
of all liens, encumbrances, equities and claims (except such as
arise under the terms of the Custodian Agreement); and (C)
immediately prior to such Time of Delivery, the Selling Stockholder
had good and valid title to the SDSs to be delivered by it at such
Time of Delivery, free and clear of all liens, encumbrances,
equities and claims;
(iv) Good and valid title to the Shares and SDSs to be
delivered by the Selling Stockholder at such Time of Delivery, free
and clear of all liens, encumbrances, equities or claims, has been
transferred to each of the several Underwriters or International
Underwriters or Nordic Underwriters, as the case may be, who have
purchased such Shares or SDSs in good faith and without notice of
any such lien, encumbrance, equity or claim or any other adverse
claim;
(v) No stamp or other issuance or transfer taxes or duties,
and no capital gains, income, withholding or other taxes are payable
in the Kingdom of Sweden or any political subdivision or taxing
authority of such jurisdiction by or on behalf of the Underwriters
in connection with (A) the sale and delivery by the Selling
Stockholder of the Shares to or for the respective accounts of the
Underwriters in the manner contemplated herein or in the
International Underwriting Agreement or the Nordic Underwriting
Agreement, (B) the deposit with the Depositary of Shares against the
issuance of SDSs at each Time of Delivery, (C) the sale and delivery
by the Underwriters of the Shares or SDSs to the initial purchasers
thereof in the manner contemplated herein or in the International
Underwriting Agreement or in the Nordic Underwriting Agreement, or
(D) the execution and delivery of this Agreement, the International
Underwriting Agreement or the Nordic Underwriting Agreement (other
than any taxes, other than stamp or other issuance or transfer taxes
or duties, payable by the Underwriters resident, domiciled, carrying
on business or subject to taxation in Sweden); and
(vi) The irrevocable submission of Volvo and the Selling
Stockholder to the jurisdiction of New York courts in Section 16 of
this Agreement, the International Underwriting Agreement and the
Nordic Underwriting Agreement, the waiver by Volvo and the Selling
Stockholder of any objection to the venue of a proceeding of a New
York court are legal, valid and binding under Swedish law, with the
exception that the Swedish bankruptcy courts have exclusive
jurisdiction in respect of all property of Volvo or the Selling
Stockholder, as the case may be, upon the bankruptcy of Volvo or the
Selling Stockholder;
(vii) The agreement of Volvo and the Selling Stockholder
that this Agreement, the International Underwriting Agreement and
the Nordic Underwriting Agreement shall be governed by and construed
in accordance with the laws of the State of New York is legal, valid
and binding and would be recognized and given effect to by the
courts in Sweden upon proof of the relevant provisions of such law,
subject, however, to the qualification that New York law will not be
applied to the extent contrary to Swedish public policy and that
Swedish law will be applied in a bankruptcy proceeding in respect
of, or an execution against, Volvo or the Selling Stockholder;
(viii) Service of process effected in the manner set forth
in Section 16 hereof will be effective, insofar as the laws of
Sweden are concerned, to confer valid personal jurisdiction over
Volvo and the Selling Stockholder; and
<PAGE>
(ix) A judgement obtained in a New York court arising out of or
in relation to the obligations of Volvo or the Selling Stockholder
under this Agreement, the International Underwriting Agreement or
the Nordic Underwriting Agreement will not be directly enforceable
in the Kingdom of Sweden and a separate Swedish judgment must
therefore be obtained. In the light of judicial developments,
however, such counsel believes that Swedish courts would give an
enforceable Swedish judgment on the basis of a judgment obtained in
a New York court in an action instituted in the manner prescribed in
this Agreement, the International Underwriting Agreement and the
Nordic Underwriting Agreement provided that the judgment was issued
by a court of competent jurisdiction, has gained legal force, is not
inconsistent with a prior judgment rendered between the same parties
and is not contrary to public policy in Sweden.
In rendering such opinion, such counsel may make customary
assumptions, qualifications and reservations and may state that he
expresses no opinion as to the laws of any jurisdiction outside the
Kingdom of Sweden;
(f) White & Case, U.S. counsel for Volvo and the Selling
Stockholder, shall have furnished to you, the International Underwriters
and the Nordic Underwriters their written opinion (a draft of such
opinion is attached as Annex II(e) hereto), dated such Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) Assuming due authorization, execution and delivery by
Volvo and the Selling Stockholder under Swedish law, this Agreement,
the International Underwriting Agreement and the Nordic Underwriting
Agreement have been duly executed and delivered by Volvo and the
Selling Stockholder insofar as New York law is concerned;
(ii) At such Time of Delivery, all rights of the Selling
Shareholder in and to the Shares and SDSs free of any adverse claim
(as defined in Article 8 of the Uniform Commercial Code) has been
transferred to each of the several U.S. Underwriters or
International Underwriters or Nordic Underwriters, as the case may
be, who have purchased such Shares or SDSs in good faith and without
notice of any such adverse claims; and
(iii) Assuming the validity of such actions under the laws
of Sweden, under the laws of the State of New York relating to
personal jurisdiction, each of Volvo and the Selling Stockholder
has, pursuant to Section 16 of this Agreement, the International
Underwriting Agreement and the Nordic Underwriting Agreement,
validly and irrevocably submitted to the personal jurisdiction of
New York Courts in any legal suit, action or proceeding arising out
of or based upon this Agreement, the International Underwriting
Agreement, the Nordic Underwriting Agreement or the transactions
contemplated hereby or thereby, and has validly and effectively
appointed Volvo North America Corporation as the authorized agent of
Volvo and the Selling Stockholder for the purpose described in
Section 16 of this Agreement, the International Underwriting
Agreement and the Nordic Underwriting Agreement.
In rendering such opinion, such counsel may state that they express
no opinion as to the laws of any jurisdiction outside the United States;
(g) Mats Lidgard, Swedish counsel for the Company, shall have
furnished to you, the International Underwriters, the Nordic
Underwriters, Volvo and the Selling Stockholder his written opinion (a
draft of such opinion is attached as Annex II(f) hereto), dated such Time
of Delivery, in form and substance satisfactory to you, to the effect
that:
<PAGE>
(i) The Custodian Agreement has been duly authorized, executed
and delivered by the Company and, assuming the Custodian Agreement
has been duly authorized, executed and delivered by the Depositary,
constitutes a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject as to enforcement
to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; upon the deposit
of Shares evidencing SDSs to be delivered at such Time of Delivery
in respect thereof in accordance with the provisions of the
Custodian Agreement and the General Terms and Conditions, the
persons in whose names the SDSs are registered will be entitled to
the rights specified in the Custodian Agreement and in the General
Terms and Conditions; and the Custodian Agreement, the General Terms
and Conditions and the SDSs conform in all material respects to the
descriptions thereof contained in the International Prospectus and
in the Nordic Prospectus;
(ii) The statements set forth in the International Prospectus
and in the Nordic Prospectus under the caption "Description of
Swedish Depositary Shares", insofar as they purport to describe the
terms and conditions of the SDSs and the provisions of the laws and
documents referred to therein, are complete and accurate in all
material respects;
(iii) Pharmacia & Upjohn AB has been duly incorporated and
is validly existing as a corporation under the laws of the Kingdom
of Sweden and has the corporate power and authority to own its
properties and to conduct its business as described in the
Prospectuses;
(iv) The sale and delivery of the Shares and SDSs to be sold by
the Selling Stockholder hereunder and under the International
Underwriting Agreement and the Nordic Underwriting Agreement and the
compliance by the Company with all of the provisions of this
Agreement, the International Underwriting Agreement and the Nordic
Underwriting Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such
counsel to which the Company or Pharmacia & Upjohn AB is a party or
by which the Company or Pharmacia & Upjohn AB is bound or to which
any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency
or body having jurisdiction over the Company or Pharmacia & Upjohn
AB or any of their properties, except for such conflicts, breaches,
violations and defaults that would not have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole or
that would not otherwise materially prejudice the consummation of
the transactions contemplated by this Agreement, the International
Underwriting Agreement or the Nordic Underwriting Agreement;
(v) To the best of such counsel's knowledge, the Company and
Pharmacia & Upjohn AB have all concessions, licenses, franchises,
permits, authorizations, approvals and orders of and from all
relevant governmental regulatory officials and bodies that are
necessary to own or lease their properties and conduct their
businesses as described in the Prospectuses, except where the
failure to have any such concession, license, franchise, permit,
authorization, approval or order would not have a material adverse
<PAGE>
effect on the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole;
(vi) To the best of his knowledge, the Company and Pharmacia &
Upjohn AB own or have had licensed to them or otherwise have the
benefit or use under the authority of the owners thereof of, all
patents, patent rights, inventions, trademarks, service marks, trade
names and copyrights (in each case, registered or not) which are
necessary for the conduct of the business of the Company and its
subsidiaries as described in the Prospectuses, except for any such
failure as would not have a material adverse effect on the financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole, and, to the best of
his knowledge and except for the matters described in the
Prospectuses, there are no unresolved assertions that the Company or
any of its subsidiaries has infringed the patents, patent rights,
inventions, trademark rights, service marks, trade names or
copyrights of others, other than assertions which, if determined
adversely to the Company or any of its subsidiaries, would not
individually or in the aggregate with respect to similar claims have
a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and
(vii) To the best of such counsel's knowledge and other
than the matters described in the Prospectuses, there are no legal
or governmental proceedings pending to which the Company or
Pharmacia & Upjohn AB is a party or of which any property of the
Company or Pharmacia & Upjohn AB is the subject which are reasonably
likely, individually or in the aggregate with respect to similar
claims, to have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole;
and, to the best of such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others.
In rendering such opinion, such counsel may rely upon opinions of
local counsel and in respect of matters of fact upon certificates of officers
of the Company, provided that such counsel shall state that he believes both
you and he is justified in relying upon such opinions and certificates.
(h) Emanuele Barie, Italian counsel for the Company, shall have
furnished to you, the International Underwriters, the Nordic
Underwriters, Volvo and the Selling Stockholder his written opinion (a
draft of such opinion is attached as Annex II(g) hereto), dated such Time
of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) Pharmacia & Upjohn S.p.A. has been duly incorporated, is
validly existing as a corporation under the laws of Italy and has
the corporate power and authority to own its properties and to
conduct its business as described in the Prospectuses;
(ii) The sale and delivery of the Shares and SDSs to be sold by
the Selling Stockholder hereunder and under the International
Underwriting Agreement and the Nordic Underwriting Agreement and the
compliance by the Company with all of the provisions of this
Agreement, the International Underwriting Agreement and the Nordic
Underwriting Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such
counsel to which Pharmacia & Upjohn S.p.A. is a party or by which
Pharmacia & Upjohn S.p.A. is bound or to which any of the property
<PAGE>
or assets of Pharmacia & Upjohn S.p.A. is subject, nor will such
action result in any violation of the provisions of the Certificate
of Incorporation or By-laws of Pharmacia & Upjohn S.p.A. or any
statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over
Pharmacia & Upjohn S.p.A. or any of its properties, except for such
conflicts, breaches, violations and defaults that would not have a
material adverse effect on the financial position, shareholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole or that would not otherwise materially prejudice
the consummation of the transactions contemplated by this Agreement,
the International Underwriting Agreement or the Nordic Underwriting
Agreement;
(iii) To the best of such counsel's knowledge, Pharmacia &
Upjohn S.p.A. has all concessions, licenses, franchises, permits,
authorizations, approvals and orders of and from all relevant
governmental regulatory officials and bodies that are necessary to
own or lease its properties and conduct its business as described in
the Prospectuses, except where the failure to have any such
concession, license, franchise, permit, authorization, approval or
order would not have a material adverse effect on the financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole;
(iv) To the best of his knowledge, Pharmacia & Upjohn S.p.A.
owns or has had licensed to it or otherwise has the benefit or use
under the authority of the owners thereof of, all patents, patent
rights, inventions, trademarks, service marks, trade names and
copyrights (in each case, registered or not) which are necessary for
the conduct of its business as described in the Prospectuses, except
for any such failure as would not have a material adverse effect on
the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
and, to the best of his knowledge and except for the matters
described in the Prospectuses, there are no unresolved assertions
that Pharmacia & Upjohn S.p.A. has infringed the patents, patent
rights, inventions, trademark rights, service marks, trade names or
copyrights of others, other than assertions which, if determined
adversely to Pharmacia & Upjohn S.p.A., would not individually or in
the aggregate with respect to similar claims have a material adverse
effect on the consolidated financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, taken
as a whole; and
(v) To the best of such counsel's knowledge and other than the
matters described in the Prospectuses, there are no legal or
governmental proceedings pending to which Pharmacia & Upjohn S.p.A.
is a party or of which any property of Pharmacia & Upjohn S.p.A. is
the subject which are reasonably likely, individually or in the
aggregate with respect to similar claims, to have a material adverse
effect on the current or future consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
In rendering such opinion, such counsel may rely upon opinions of
local counsel and in respect of matters of fact upon certificates of officers
of the Company, provided that such counsel shall state that he believes both
you and he is justified in relying upon such opinions and certificates.
(i) Skandinaviska Enskilda Banken Legal Department, counsel for the
Depositary, shall have furnished to you, the International Underwriters,
the Nordic Underwriters, Volvo and the Selling Stockholder their written
opinion (a draft of such opinion is attached as Annex II(h) hereto),
<PAGE>
dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Custodian Agreement has been duly authorized, executed
and delivered by the Depositary and, assuming the Custodian
Agreement has been duly authorized, executed and delivered by the
Company, constitutes a valid and legally binding obligation of the
Depositary, enforceable in accordance with its terms, subject as to
enforcement to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; upon
the deposit of Shares evidencing SDSs to be delivered at such Time
of Delivery in respect thereof in accordance with the provisions of
the Custodian Agreement and the General Terms and Conditions, the
persons in whose names the SDSs are registered will be entitled to
the rights specified in the Custodian Agreement and in the General
Terms and Conditions; and the Custodian Agreement, the General Terms
and Conditions and the SDSs conform in all material respects to the
descriptions thereof contained in the International Prospectus and
in the Nordic Prospectus;
(ii) The statements set forth in the International Prospectus
and in the Nordic Prospectus, under the caption "Description of
Swedish Depositary Shares", insofar as they purport to describe the
terms and conditions of the SDSs and the provisions of the laws and
documents referred to therein, are complete and accurate in all
material respects; and
(iii) Shares represented by the SDSs to be delivered by the
Selling Stockholder at such Time of Delivery to or on behalf of the
Underwriters have been duly deposited with the Depositary or The
Bank of New York, as Sub-Custodian, under and in accordance with all
applicable laws and regulations.
(j) On the date hereof prior to the execution of this Agreement, on
the effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at each
Time of Delivery, Coopers & Lybrand L.L.P. and KPMG Peat Marwick LLP
shall have furnished to you, the International Underwriters, the Nordic
Underwriters, Volvo and the Selling Stockholder a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto; (the
executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto and a draft of the form of
letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery
is attached as Annex I(b) hereto);
(k) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectuses any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectuses, and (ii) since the respective
dates as of which information is given in the Prospectuses there shall
not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectuses, the
effect of which, in any such case described in Clause (i) or (ii), is in
the judgment of the Global Coordinators so material and adverse as to
make it impracticable or inadvisable to proceed with the Global Offering
<PAGE>
or the delivery of the Shares being delivered at such Time of Delivery on
the terms and in the manner contemplated in the Prospectuses;
(l) On or after the date hereof and prior to such Time of Delivery
there shall not have occurred any of the following: (a) (i) a suspension
or material limitation in trading in securities generally on the New York
Stock Exchange, the Stockholm Stock Exchange or the London Stock
Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange, the Stockholm Stock
Exchange or SEAQ International; (iii) a general moratorium on commercial
banking activities in New York, Sweden or London declared by the relevant
authorities; (iv) a change or development involving a prospective change
in United States taxation affecting the share capital of the Company or
the transfer thereof or the imposition of exchange controls by the United
States or Sweden; (v) the outbreak or escalation of hostilities involving
the United States or the European Union ("EU") or the declaration by the
United States or relevant EU authorities of a national emergency or war
if the effect of any such event specified in clause (iv) or (v) in the
judgment of the Global Coordinators, makes it impracticable or
inadvisable to proceed with the Global Offering or the delivery of, or
materially impairs the ability of the Underwriters to subscribe, hold or
sell, the Shares or SDSs being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectuses; or (vi) a
change in national or international political, financial or economic
conditions or taxation regimes or currency exchange rates or controls if
the effect of any such event specified in this subsection (vi) in the
judgment of the Global Coordinators is so material and adverse as to make
it impracticable or inadvisable to proceed with the Global Offering or
the delivery of, or materially impairs the ability of the Underwriters to
subscribe, hold or sell, the Shares or SDSs being delivered at such Time
of Delivery on the terms and in the manner contemplated in the
Prospectuses;
(m) Forvaltningsaktiebolaget Stattum ("Stattum") shall have
undertaken in writing, in form and substance satisfactory to you, not to,
during the period beginning from the date hereof and continuing to and
including the date 12 months after the date hereof, offer, sell, contract
to sell or otherwise dispose of, except as provided hereunder or under
the International Underwriting Agreement or Nordic Underwriting
Agreement, any shares of Stock or other securities of the Company that
are substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that
represent the right to receive, shares of Stock or any such substantially
similar securities, without the prior written consent of the Global
Coordinators;
(n) The Company shall have complied with the provisions of Section
5(a)(iii) hereof with respect to the furnishing of prospectuses on the
New York Business Day next succeeding the date of this Agreement;
(o) The Company, Volvo and the Selling Stockholder shall have
furnished or caused to be furnished to you at such Time of Delivery
(i) certificates of officers of the Company and of Volvo, respectively,
reasonably satisfactory to you as to the accuracy of the representations
and warranties of the Company and Volvo, respectively, herein at and as
of such Time of Delivery, as to the performance by the Company and Volvo
and the Selling Stockholder of all of their respective obligations
hereunder to be performed at or prior to such Time of Delivery, and, in
the case of the Company, as to the matters set forth in subsections (a)
and (k) of this Section, and as to such other matters as you may
reasonably request; and (ii) certificates of the corporate secretary or
other comparable officer of the Company, of Volvo and of the Selling
Stockholder, respectively, reasonably satisfactory to you as to the
resolutions adopted by the Company and Volvo in connection with this
Agreement, the International Underwriting Agreement and the Nordic
Underwriting Agreement, incumbency and signatures or persons executing
<PAGE>
this Agreement, the International Underwriting Agreement and the Nordic
Underwriting Agreement, and other similar matters; and
(p) The respective closings under this Agreement, the International
Underwriting Agreement and the Nordic Underwriting Agreement shall occur
simultaneously at the First Time of Delivery.
8. (a) The Company will indemnify and hold harmless each
Underwriter, Volvo and the Selling Stockholder against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter, Volvo or
the Selling Stockholder, as the case may be, may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or any Prospectus, or any amendment or
supplement thereto, or any document incorporated by reference therein, or
arise out of or are based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter, Volvo
and the Selling Stockholder for any legal or other expenses reasonably
incurred by such Underwriter, Volvo or the Selling Stockholder, as the case
may be, in connection with investigating or defending any such action,
proceeding or claim as such expenses are incurred; provided, however, that the
Company shall not be liable to any Underwriter or to Volvo or the Selling
Stockholder in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or any Prospectus, or any amendment or
supplement thereto or document incorporated by reference therein, (x) in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Global Coordinators expressly for use
therein or (y) that comprised Selling Stockholder Information; and provided,
further, however, that the Company shall not be liable to any such person in
any such case if the Company shall sustain the burden of proving that Volvo,
the Selling Stockholder or such Underwriter, as the case may be, sold
securities to the person alleging such loss, claim, damage or liability
without sending or giving, at or prior to the written confirmation of such
sale in any case where such delivery is required by the Act, a copy of the
Prospectus (excluding any documents incorporated by reference therein) or of
the Prospectus, as then amended or supplemented (excluding any documents
incorporated by reference therein) if the Company had previously furnished
copies thereof to Volvo, the Selling Stockholder or such Underwriter, and the
loss, claim, damage or liability of such person results from an untrue
statement or omission of a material fact contained in the Preliminary
Prospectus which was corrected in the Prospectus or the Prospectus as amended
or supplemented.
(b) Volvo will indemnify and hold harmless each Underwriter and the
Company against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter or the Company, as the case may be, may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Registration Statement or the Prospectus,
or any amendment or supplement thereto, or any document incorporated by
reference therein, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission in any Preliminary Prospectus, the
Registration Statement or any Prospectus or any such amendment or supplement
or document incorporated by reference therein comprised Selling Stockholder
Information; and will reimburse each Underwriter or the Company, as the case
may be, for any legal or other expenses reasonably incurred by such
Underwriter or the Company, as the case may be, in connection with
<PAGE>
investigating or defending any such action or claim as such expenses are
incurred.
(c) Each Underwriter will, severally and not jointly, indemnify and
hold harmless the Company, Volvo and the Selling Stockholder against any
losses, claims, damages or liabilities to which it may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or any Prospectus, or any
amendment or supplement thereto, or any document incorporated by reference
therein, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement or any Prospectus or any such amendment or supplement
or document incorporated by reference in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the
Global Coordinators expressly for use therein; and will reimburse the Company,
Volvo and the Selling Stockholder for any legal or other expenses reasonably
incurred by the Company, Volvo or the Selling Stockholder, as the case may be,
in connection with investigating or defending any such action or claim as such
expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action or
proceeding for which indemnification under subsection (a), (b) or (c) may be
requested, such indemnified party shall, if a claim in respect thereof is to
be made against an indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under such subsection. In
case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (which shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company, Volvo and the Selling
Stockholder on the one hand and the Underwriters on the other from the
offering of the Shares as well as any other relevant equitable considerations,
<PAGE>
including relative fault. The relative benefits received by the Company,
Volvo and the Selling Stockholder on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Shares purchased under this Agreement (before
deducting expenses) received by the Company, Volvo and the Selling Stockholder
bear to the total underwriting discounts and commissions received by the
Underwriters with respect to the Shares purchased under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. As
among the Company, Volvo and the Selling Stockholder, the relative benefit
derived by the Company, Volvo and the Selling Stockholder shall be determined
by reference to the fact that the Company entered into the Registration Rights
Agreement, dated as of August 20, 1995, among Volvo, the Company, The Upjohn
Company and Pharmacia Aktiebolag to induce Volvo to engage in the transaction
in which the Selling Stockholder acquired the Shares. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, Volvo, the Selling Stockholder or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, Volvo, the Selling
Stockholder and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this subsection (e) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of
the equitable considerations referred to above in this subsection (e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
above in this subsection (e) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (e), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by it and distributed to the public were offered
to the public exceeds the amount of any damages which such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company, Volvo and the Selling
Stockholder under this Section 8 shall be in addition to any liability which
the Company, Volvo and the Selling Stockholder may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act or the Exchange Act;
and the obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company,
Volvo or the Selling Stockholder within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, the Global Coordinators may in their discretion arrange for you or
another party or other parties to purchase such Shares on the terms contained
herein. If within thirty-six hours after such default by any Underwriter, the
Global Coordinators do not arrange for the purchase of such Shares, then Volvo
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to you to purchase such
Shares on such terms. In the event that, within the respective prescribed
periods, the Global Coordinators notify Volvo that they have so arranged for
the purchase of such Shares, or Volvo notifies the Global Coordinators that it
has so arranged for the purchase of such Shares, the Global Coordinators or
Volvo shall have the right to postpone such Time of Delivery for a period of
<PAGE>
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which may thereby
be made necessary. The term "Underwriter" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by the Global
Coordinators and Volvo as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh
of the aggregate number of all of the Shares to be purchased at such Time of
Delivery, then Volvo shall have the right to require each non-defaulting
Underwriter to purchase the number of Shares which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares
of such defaulting Underwriter or Underwriters for which such arrangements
have not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by the Global
Coordinators and Volvo as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of
Delivery, or if Volvo shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Shares of a
defaulting Underwriter or Underwriters, then this Agreement (or, with respect
to the Second Time of Delivery, the obligations of the Underwriters to
purchase and of the Selling Stockholder to sell the Optional Shares) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Stockholder, except for the expenses
to be borne by the Company and Volvo and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, Volvo, the Selling Stockholder
and the several Underwriters, as set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, or the Company, or Volvo, or the Selling
Stockholder, or any officer or director or controlling person of the Company,
or any controlling person of Volvo or the Selling Stockholder, and shall
survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, neither the Company nor Volvo nor the Selling Stockholder shall then
be under any liability to any Underwriter except as provided in Sections 6 and
8 hereof; but, if any Shares are not delivered by or on behalf of the Selling
Stockholder as provided herein by reason of a failure of the Company to
perform its obligations under Section 7 (for the avoidance of doubt, it shall
not be deemed to be a failure by the Company to perform its obligations under
Section 7 if the conditions set forth in clauses 7(b), (e), (f), (i), (k),
(l), (m), (o)(to the extent that it refers to obligations of Volvo and the
Selling Stockholder) and (p)(to the extent not due to the failure of the
Company to perform its obligations as aforementioned) have not been
satisfied), the Company will, or if for any other reason Shares are not
delivered by or on behalf of the Selling Stockholder as provided herein, Volvo
will, reimburse the Underwriters through you for all out-of-pocket expenses
approved in writing by you, including fees and disbursements of counsel,
<PAGE>
reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares not so delivered, but the Company,
Volvo and the Selling Stockholder shall then be under no further liability to
any Underwriter in respect of the Shares not so delivered except as provided
in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by you jointly or by Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Goldman, Sachs & Co. on behalf of you as the representatives;
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to you as the representatives in care of
Merrill Lynch & Co., North Tower, World Financial Center, New York, New York
10281-1201; and Goldman, Sachs & Co., 85 Broad Street, New York, New York
10004, Attention: Registration Department; if to Volvo or the Selling
Stockholder shall be delivered or sent by mail or facsimile transmission to AB
Volvo, S-405 08, Goteborg, Sweden, Attention: President, with a copy to White
& Case, counsel for Volvo and the Selling Stockholder, at 7-11 Moorgate,
London, EC2R 6HH, England; and if to the Company shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Secretary; provided, however, that
any notice to an Underwriter pursuant to Section 8(d) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the
Company, Volvo or the Selling Stockholder by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, Volvo and the Selling Stockholder
and, to the extent provided in Sections 8 and 10 hereof, the officers and
directors of the Company and each person who controls the Company, Volvo, the
Selling Stockholder or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of
the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used
herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
16. Each of Volvo and the Selling Stockholder hereby
irrevocably (i) agrees that any legal suit, action or proceeding arising out
of or based upon this Agreement or the transactions contemplated hereby may be
instituted in any state or federal court located in the Borough of Manhattan,
The City of New York, New York (a "New York Court"), (ii) waives, to the
fullest extent it may effectively do so, any objection which it may now or
hereafter have to the laying of venue of any such proceeding and (iii) submits
to the jurisdiction of such courts in any such suit, action or proceeding.
Each of Volvo and the Selling Stockholder do hereby appoint Volvo North
America Corporation, 535 Madison Avenue, New York, New York 10022, Attention:
President, as its authorized agent (the "Authorized Agent") upon whom process
may be served in any such action arising out of or based on this Agreement or
the transactions contemplated hereby which may be instituted in any New York
Court by any Underwriter or by any person who controls any Underwriter or by
the Company, expressly consents to the jurisdiction of any such court in
respect of any such action, and waives any other requirements of or objections
to personal jurisdiction with respect thereto. Each of Volvo and the Selling
<PAGE>
Stockholder may appoint a successor agent to receive service of process as
described herein; provided, however, that each of Volvo and the Selling
Stockholder shall at all times maintain an agent for service of process in New
York City. Volvo represents and warrants that the Authorized Agent has agreed
to act as such agent for service of process and each of Volvo and the Selling
Stockholder agrees to take any and all action, including the filing of any and
all documents and instruments, that may be necessary to continue such
appointment (or any appointment of a successor agent, as applicable) in full
force and effect as aforesaid. Service of process upon the Authorized Agent
and written notice of such service to Volvo or the Selling Stockholder, as the
case may be, shall be deemed, in every respect, effective service of process
upon Volvo or the Selling Stockholder.
17. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us eight counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement among each of the
Underwriters, the Company, Volvo and the Selling Stockholder. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters (U.S. Version), the form of which shall be submitted to the
Company and Volvo for examination upon request, but without warranty on your
part as to the authority of the signers thereof.
Very truly yours,
PHARMACIA & UPJOHN, INC.
By: /s/ Robert C. Salisbury
Name: Robert C. Salisbury
Title: Executive Vice President
(Chief Financial Officer and Chief
Accounting Officer)
AB VOLVO (PUBL)
By: /s/ Eva Persson
Name: Eva Persson
Title: Vice President - Head of Corporate Legal
SOTROF AKTIEBOLAG
By: /s/ Eva Persson
Name: Eva Persson
Title: Authorised Signatory
Accepted as of the date hereof:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
BEAR, STEARNS & CO. INC.
J.P. MORGAN SECURITIES INC.
MORGAN STANLEY & CO. INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ John V. Millar
Name: John V. Millar
Title: Director
<PAGE>
GOLDMAN, SACHS & CO.
/s/ Goldman, Sachs & Co.
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
<PAGE>
<TABLE>
SCHEDULE I
<S> <C> <C>
Total Number of Number of Optional Shares
Firm Shares to be to be Purchased if
Purchased Maximum Option Exercised
Underwriter
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . . . . . . . 7,559,502 1,133,925
Goldman, Sachs & Co. . . . . . . . . . . . . . . . . . . . . . 7,559,502 1,133,925
Bear, Stearns & Co. Inc. . . . . . . . . . . . . . . . . . . . 3,700,332 555,050
J.P. Morgan Securities Inc. . . . . . . . . . . . . . . . . . . 3,700,332 555,050
Morgan Stanley & Co. Incorporated . . . . . . . . . . . . . . 3,700,332 555,050
Alex. Brown & Sons Incorporated . . . . . . . . . . . . . . . . 552,000 82,800
CS First Boston Corporation . . . . . . . . . . . . . . . . . . 552,000 82,800
Donaldson, Lufkin & Jenrette Securities Corporation . . . . . . 552,000 82,800
A.G. Edwards & Sons, Inc. . . . . . . . . . . . . . . . . . . . 552,000 82,800
Lehman Brothers Inc. . . . . . . . . . . . . . . . . . . . . . 552,000 82,800
Oppenheimer & Co., Inc. . . . . . . . . . . . . . . . . . . . . 552,000 82,800
Prudential Securities Incorporated . . . . . . . . . . . . . . 552,000 82,800
Salomon Brothers Inc . . . . . . . . . . . . . . . . . . . . . 552,000 82,800
Schroder Wertheim & Co. Incorporated . . . . . . . . . . . . . 552,000 82,800
Smith Barney Inc. . . . . . . . . . . . . . . . . . . . . . . . 552,000 82,800
Wasserstein Perella Securities, Inc. . . . . . . . . . . . . . 552,000 82,800
Robert W. Baird & Co. Incorporated . . . . . . . . . . . . . . 276,000 41,400
Sanford C. Bernstein & Co., Inc. . . . . . . . . . . . . . . . 276,000 41,400
Cowen & Company . . . . . . . . . . . . . . . . . . . . . . . . 276,000 41,400
First Manhattan Co. . . . . . . . . . . . . . . . . . . . . . . 276,000 41,400
Furman Selz LLC . . . . . . . . . . . . . . . . . . . . . . . . 276,000 41,400
Rodman & Renshaw, Inc. . . . . . . . . . . . . . . . . . . . . 276,000 41,400
Roney & Co. . . . . . . . . . . . . . . . . . . . . . . . . . . 276,000 41,400
Wheat, First Securities, Inc. . . . . . . . . . . . . . . . . . 276,000 41,400
Total . . . . . . . . . . . . . . . . . . . . 34,500,00 5,175,000
</TABLE>
<PAGE>
<TABLE>
SCHEDULE II
DEFINED TERMS
<S> <C>
Act Section 1(a)(i)
Authorized Agent Section 17
Closing Location Section 4(b)
Commission Section 1(a)(i)
Company Introductory Paragraph 1
Custodian Agreement Introductory Paragraph 4
Depositary Introductory Paragraph 4
Designated Office Section 4(a)
DTC Section 4(a)
Environmental Laws Section 1(a)(ix)
EU Section 7(l)
Exchange Act Section 1(a)(i)
Firm Shares Introductory Paragraph 2
First Time of Delivery Section 4(a)
General Terms and Conditions Introductory Paragraph 4
Global Offering Introductory Paragraph 1
Global Coordinators Introductory Paragraph 5
Initial Registration Statement Section 1(a)(i)
International Offering Introductory Paragraph 3
International Shares Introductory Paragraph 3
International Underwriters Introductory Paragraph 3
International Prospectus Section 1(a)(v)
International Underwriting Agreement Introductory Paragraph 3
Intersyndicate Agreement Introductory Paragraph 5
Investment Company Act Section 1(a)(xix)
New York Business Day Section 4(b)
New York Court Section 17
Nordic Shares Introductory Paragraph 3
Nordic Prospectus Section 1(a)(v)
Nordic Underwriters Introductory Paragraph 3
Nordic Offering Introductory Paragraph 3
Nordic Underwriting Agreement Introductory Paragraph 3
Optional Shares Introductory Paragraph 2
Preliminary International Prospectus Section 1(a)(v)
Preliminary Nordic Prospectus Section 1(a)(v)
Preliminary Prospectuses Section 1(a)(v)
Preliminary U.S. Prospectus Section 1(a)(i)
Principal Subsidiaries Section 1(a)(vi)
Principal U.S. Subsidiaries Section 7(d)(i)
Prospectuses Section 1(a)(v)
Registration Statement Section 1(a)(i)
Relevant Jurisdictions Section 5(b)(i)
Rule 462(b) Registration Statement Section 1(a)(i)
SDSs Introductory Paragraph 3
Second Time of Delivery Section 4(a)
Selling Stockholder Introductory Paragraph 1
Shares Introductory Paragraph 2
Stattum Section 7(m)
Stock Introductory Paragraph 1
Time of Delivery Section 4(a)
U.S. Offering Introductory Paragraph 2
U.S. Prospectus Section 1(a)(i)
Underwriters Introductory Paragraph 2
Volvo Introductory Paragraph 1
</TABLE>
<PAGE>
ANNEX I (a)
FORM OF ORIGINAL COMFORT LETTER
<PAGE>
ANNEX I (B)
FORM OF BRING-DOWN COMFORT LETTER
<PAGE>
ANNEX II(A)
FORM OF OPINION OF SHEARMAN & STERLING
<PAGE>
ANNEX II(B)
FORMS OF OPINIONS OF SULLIVAN & CROMWELL
<PAGE>
ANNEX II(C)
FORM OF OPINION OF KEN CYRUS
<PAGE>
ANNEX II(D)
FORM OF OPINION OF FRED BODIN
<PAGE>
ANNEX II(E)
FORM OF OPINION OF WHITE & CASE
<PAGE>
ANNEX II(F)
FORM OF OPINION OF MATS LIDGARD
<PAGE>
ANNEX II(G)
FORM OF OPINION OF EMANUELE BARIE
<PAGE>
ANNEX II(H)
FORM OF OPINION OF SKANDINAVISKA ENSKILDA BANKEN LEGAL DEPARTMENT
<PAGE>
PHARMACIA & UPJOHN, INC.
COMMON STOCK
PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
(INTERNATIONAL VERSION)
July 23, 1996
Goldman Sachs International
Merrill Lynch International
CS First Boston Limited
HSBC Investment Bank plc
UBS Limited
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman Sachs International
Peterborough Court,
133 Fleet Street,
London EC4A 2BB
and
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2 9LY
Ladies and Gentlemen:
Sotrof Aktiebolag, a stockholder (the "Selling Stockholder") of
Pharmacia & Upjohn, Inc., a Delaware corporation (the "Company"), proposes to
sell an aggregate of 46,000,000 shares of common stock, par value $.01 per
share ("Stock"), of the Company to be offered in a global offering (the
"Global Offering") comprised of an U.S. Offering, an International Offering
and a Nordic Offering (each as defined herein). The Selling Stockholder is an
indirect wholly owned subsidiary of AB Volvo (publ) ("Volvo").
The Selling Stockholder proposes, subject to the terms and
conditions stated herein, to sell to the Underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of 9,200,000 shares (the "Firm
Shares") and, at the election of the Underwriters, up to 1,380,000 additional
shares (the "Optional Shares") of Stock of the Company (the Firm Shares and
the Optional Shares that the Underwriters elect to purchase pursuant to
Section 2 hereof are herein collectively called the "Shares") to be offered
for sale outside the United States and Canada and outside the Nordic countries
(the "International Offering"). At the election of the Underwriters, all or a
portion of the Shares to be sold by the Selling Stockholder to the
Underwriters hereunder may be deposited by the Selling Stockholder pursuant to
the Custodian Agreement referred to below at or prior to each Time of Delivery
(as defined below) and delivered in the form of Swedish Depositary Shares
("SDSs"), each SDS representing the right to receive one share of Stock.
It is understood and agreed to by all parties that the Company,
Volvo and the Selling Stockholder are concurrently entering into: (i) an
agreement (the "U.S. Underwriting Agreement") providing for the sale by the
Selling Stockholder of up to a total of 39,675,000 shares of Stock (the
"U.S. Shares"), including the over-allotment option thereunder, through
arrangements with certain underwriters in the United States (the
"U.S. Underwriters"), for whom Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman, Sachs & Co., Bear, Stearns & Co. Inc., J.P. Morgan
<PAGE>
Securities Inc. and Morgan Stanley & Co. Incorporated are acting as lead
managers (the "U.S. Offering"); and (ii) an agreement (the "Nordic
Underwriting Agreement") providing for the sale by the Selling Stockholder of
up to a total of 2,645,000 shares of Stock (the "Nordic Shares", a portion of
which may be delivered in the form of shares and a portion of which may be
deposited by the Selling Stockholder pursuant to the Custodian Agreement
referred to below and delivered in the form of SDSs), including the
over-allotment option thereunder, through arrangements with certain
underwriters in the Nordic countries (the "Nordic Underwriters"), for whom
Enskilda Securities (a unit of Skandinaviska Enskilda Banken AB (publ)),
Goldman Sachs International and Merrill Lynch International are acting as lead
managers (the "Nordic Offering"). Anything herein or therein to the contrary
notwithstanding, the respective closings under this Agreement, the
U.S. Underwriting Agreement and the Nordic Underwriting Agreement are hereby
expressly made conditional on one another.
SDSs will be issued in accordance with the Custodian Agreement,
dated as of November 1, 1995 (the "Custodian Agreement"), between the Company
and Skandinaviska Enskilda Banken AB (publ), as Custodian (the "Depositary"),
and the general terms and conditions under which the SDSs are issued and
governed (the "General Terms and Conditions").
The Underwriters hereunder and the U.S. Underwriters and the Nordic
Underwriters are simultaneously entering into an Intersyndicate Agreement
between U.S., International and Nordic Underwriting Syndicates (the
"Intersyndicate Agreement") which provides, among other things, that Goldman,
Sachs & Co. and Merrill Lynch & Co. shall act as the Global Coordinators (the
"Global Coordinators") for the Global Offering and for the transfer of shares
of Stock among the three syndicates and for consultation by the Lead Managers
hereunder with the Global Coordinators prior to exercising the rights of the
Underwriters under Section 7 hereof. Three forms of prospectus are to be used
in connection with the offering and sale of shares of Stock contemplated by
the foregoing, one relating to the offering and sale of the Shares and SDSs
hereunder, a second relating to the offering and sale of the U.S. Shares in
the United States and Canada and a third relating to the offering and sale of
the Nordic Shares and SDSs in the Nordic countries. All forms of prospectus
will be substantially identical except for certain substitute and additional
pages. Except as used in Sections 2, 3, 4, 9 and 12 herein, and except as the
context may otherwise require, references hereinafter to the Shares shall
include all of the shares of Stock and SDSs which may be sold pursuant to
either this Agreement, the U.S. Underwriting Agreement or the Nordic
Underwriting Agreement, references to Underwriters shall include the U.S.
Underwriters and the Nordic Underwriters, and references herein to any
prospectus, whether in preliminary or final form, and whether as amended or
supplemented, shall include the U.S., International and Nordic versions
thereof.
In addition, this Agreement incorporates by reference certain
provisions from the U.S. Underwriting Agreement (including the related
definitions of terms, which are also used elsewhere herein) and, for purposes
of applying the same, references (whether in these precise words or their
equivalent) in the incorporated provisions to the "Underwriters" shall be to
the Underwriters hereunder, to the "Shares" shall be to the Shares hereunder
as just defined, to "this Agreement" (meaning therein the U.S. Underwriting
Agreement) shall be to this Agreement (except where this Agreement is already
referred to or as the context may otherwise require) and to the
representatives of the Underwriters shall be to the addressees of this
Agreement and to Goldman, Sachs & Co. or Merrill Lynch & Co. shall be to
Goldman Sachs International ("GSI") or Merrill Lynch International ("MLI"),
respectively, and, in general, all such provisions and defined terms shall be
applied mutatis mutandis as if the incorporated provisions were set forth in
full herein having regard to their context in this Agreement as opposed to the
U.S. Underwriting Agreement.
<PAGE>
1. (a) The Company represents and warrants to, and agrees with,
each of the Underwriters and (in the case of clauses (i)-(v) only) Volvo and
the Selling Stockholder that:
(i) A registration statement on Form S-3 (File No. 333-06045) (the
"Initial Registration Statement") in respect of the Shares to be offered
and sold pursuant to the U.S. Underwriting Agreement has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus
contained therein, to you for each of the other Underwriters, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the U.S. Offering
(a "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement, any post-
effective thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act,
is hereinafter called a "Preliminary U.S. Prospectus"); the various
parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including (x) the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the
time it was declared effective and (y) the documents incorporated by
reference in the prospectus contained in the registration statement at
the time such part of the registration statement became effective, each
as amended at the time such part of the registration statement became
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively
called the "Registration Statement"; such final prospectus, in the form
first filed pursuant to Rule 424(b) under the Act, is hereinafter called
the "U.S. Prospectus"; and any reference herein to any Preliminary U.S.
Prospectus or the U.S. Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Act, as of the date of such Preliminary U.S.
Prospectus or U.S. Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary U.S. Prospectus or the U.S.
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary U.S. Prospectus or U.S. Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and incorporated by reference in such Preliminary
U.S. Prospectus or U.S. Prospectus, as the case may be; and any reference
to any amendment to the Registration Statement shall be deemed to refer
to and include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the
Initial Registration Statement that is incorporated by reference in the
Registration Statement;
(ii) No order preventing or suspending the use of any Preliminary
U.S. Prospectus has been issued by the Commission, and each Preliminary
U.S. Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder;
(iii) The documents incorporated by reference in the
Prospectuses, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to the
<PAGE>
requirements of the Act or Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectuses or any further amendment or
supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain 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 not misleading; provided, however, that this
representation and warranty shall not apply to (x) any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the Global
Coordinators expressly for use therein or (y) Selling Stockholder
Information; for purposes of this Agreement, "Selling Stockholder
Information" shall comprise the statements in the Prospectuses under the
captions "Prospectus Summary - The Global Offering - Shares of Common
Stock offered by the Selling Stockholder", "Prospectus Summary - The
Selling Stockholder" and "Selling Stockholder";
(iv) The Registration Statement conforms, and the U.S. Prospectus
and any further amendments or supplements to the Registration Statement
or the U.S. Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and the Registration Statement does not and will not, as of
the applicable effective date of the Registration Statement and any
amendment thereto, contain 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 not misleading; provided, however, that this
representation and warranty shall not apply to (x) any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the Global
Coordinators expressly for use therein or (y) Selling Stockholder
Information;
(v) Each of (A) the Preliminary U.S. Prospectus, (B) the
preliminary International Prospectus (the "Preliminary International
Prospectus") and (C) the preliminary Nordic Prospectus (the "Preliminary
Nordic Prospectus", and, together with the Preliminary U.S. Prospectus
and the Preliminary International Prospectus, the "Preliminary
Prospectuses") at the respective dates thereof, did not, and each of (A)
the U.S. Prospectus, (B) the final International Prospectus (the
"International Prospectus") and (C) the final Nordic Prospectus (the
"Nordic Prospectus", and, together with the U.S. Prospectus and the
International Prospectus, the "Prospectuses") at the respective dates
thereof, does not or did not, and any further amendment or supplement
thereto, as of the date of any such amendment or supplement, will not,
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to (x) any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through the Global Coordinators expressly for use therein or
(y) Selling Stockholder Information; references herein to "prospectuses",
"Preliminary Prospectuses" or "Prospectuses" shall mean each and every
relevant prospectus, unless the context otherwise requires, and shall be
deemed to refer to and include the documents incorporated by reference
therein;
(vi) Neither the Company nor any of its Principal Subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectuses any loss or
<PAGE>
interference with its business that is material to the Company and its
subsidiaries, taken as a whole, from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectuses; and, since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries, taken as a
whole, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectuses; as used
in this Agreement, "Principal Subsidiaries" means Pharmacia & Upjohn
Company, Upjohn Manufacturing, Inc., Pharmacia & Upjohn AB and Pharmacia
S.p.A;
(vii) The Company and each of its subsidiaries have all
concessions, licenses, franchises, permits, authorizations, approvals and
orders of and from all governmental regulatory officials and bodies that
are necessary to own or lease their properties and conduct their
businesses as described in the Prospectuses, except where the failure to
have any such concession, license, franchise, permit, authorization,
approval or order would not have a material adverse effect on the
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole;
(viii) The Company and its subsidiaries own or have had licensed
to them or otherwise have the benefit or use under the authority of the
owners thereof of, all patents, patent rights, inventions, trademarks,
service marks, trade names and copyrights (in each case, registered or
not) which are necessary for the conduct of the business of the Company
and its subsidiaries as described in the Prospectuses and, except as set
forth or contemplated in the Prospectuses, there are no unresolved
assertions that the Company or any of its subsidiaries has infringed the
patents, patent rights, inventions, trademark rights, service marks,
trade names or copyrights of others, other than assertions which are not
reasonably likely to have a material adverse effect on the consolidated
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole;
(ix) The Company and its subsidiaries (A) are in compliance with all
applicable federal, state, local and foreign laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (B) have all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
businesses as described in the Prospectuses and (C) are in compliance
with all terms and conditions of any such permit, license or approval, in
each case except as described in the Prospectuses or except as would not,
individually or in the aggregate, result in a material adverse effect on
the consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole;
(x) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
and each Principal Subsidiary of the Company has been duly organized and
is validly existing as a corporation under the laws of its jurisdiction
of incorporation, and, in the case of Principal Subsidiaries incorporated
in the United States, is in good standing under the laws of its
jurisdiction of incorporation; and each of the Company and each Principal
Subsidiary of the Company has corporate power and authority to own its
properties and conduct its business as described in the Prospectuses, and
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
<PAGE>
business so as to require such qualification, except for any such failure
to be so qualified in any such jurisdiction which would not result in a
material adverse effect on the consolidated financial position,
shareholder's equity or results of operations of the Company and its
subsidiaries, taken as a whole;
(xi) The Company has an authorized capitalization as set forth in or
incorporated by reference in the Prospectuses, and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and conform to
the description of the Stock contained in or incorporated by reference in
the Prospectuses; shares of Stock are listed for trading on the New York
Stock Exchange and are quoted on the SEAQ International system operated
by the London Stock Exchange Limited, and SDSs are traded on the
Stockholm Stock Exchange; and all of the issued shares of capital stock
of each Principal Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and (except for
directors' qualifying shares and except as set forth in the Prospectuses)
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(xii) The sale and delivery of the Shares and SDSs to be sold by
the Selling Stockholder hereunder and under the U.S. Underwriting
Agreement and the Nordic Underwriting Agreement and the compliance by the
Company with all of the provisions of this Agreement, the U.S.
Underwriting Agreement and the Nordic Underwriting Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will
such action result in any violation of the provisions of the Certificate
of Incorporation or By-laws of the Company or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties, except for such conflicts, breaches, violations and defaults
that would not have a material adverse effect on the financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole or that would otherwise materially
prejudice the consummation of the transactions contemplated by this
Agreement, the U.S. Underwriting Agreement or the Nordic Underwriting
Agreement; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body
is required to be obtained or made by the Company for the sale and
delivery of the Shares or SDSs by the Selling Stockholder or the
consummation by the Company of the transactions contemplated by this
Agreement, the U.S. Underwriting Agreement or the Nordic Underwriting
Agreement, except for the registration under the Act of the Shares and
such consents, approvals, authorizations, registrations or qualifications
as may be required under state or foreign securities or Blue Sky laws in
connection with the purchase and distribution of the Shares and SDSs by
the Underwriters, the U.S. Underwriters or the Nordic Underwriters;
(xiii) This Agreement, the U.S. Underwriting Agreement and the
Nordic Underwriting Agreement have been duly authorized, executed and
delivered by the Company;
(xiv) The Custodian Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and legally binding
agreement of the Company, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; upon the deposit of
Shares evidencing SDSs to be delivered at each Time of Delivery in
<PAGE>
respect thereof in accordance with the provisions of the Custodian
Agreement and the General Terms and Conditions, the persons in whose
names the SDSs are registered will be entitled to the rights specified in
the Custodian Agreement and, in the General Terms and Conditions; and the
Custodian Agreement and the General Terms and Conditions conform in all
material respects to the descriptions thereof contained in the
International Prospectus and in the Nordic Prospectus;
(xv) The description of the Stock included in or incorporated by
reference in the Prospectuses, insofar as it purports to constitute a
summary of the terms of the Stock, the description of the SDSs included
in the International Prospectus and in the Nordic Prospectus, insofar as
it purports to constitute a summary of the terms of the SDSs, and the
statements set forth in the International Prospectus and in the Nordic
Prospectuses under the caption "Certain United States Tax Consequences to
Non-U.S. Holders of Common Stock", insofar as they purport to describe
the provisions of documents or laws therein described, are complete and
accurate in all material respects;
(xvi) Other than as set forth in the Prospectuses, there are no
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which are reasonably likely,
individually or in the aggregate, to have a material adverse effect on
the current or future consolidated financial position, shareholders'
equity or results of operations of the Company and its subsidiaries,
taken as a whole; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(xvii) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xviii) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes;
and
(xix) Coopers & Lybrand L.L.P. and KPMG Peat Marwick LLP, who
have certified certain financial statements of the Company and its
subsidiaries, are each independent public accountants as required by the
Act and the rules and regulations of the Commission thereunder.
(b) Volvo represents and warrants to, and agrees with, each of the
Underwriters and the Company that:
(i) All consents, approvals, authorizations, orders, registrations
and qualifications necessary for the execution and delivery by Volvo and
the Selling Stockholder of this Agreement, the U.S. Underwriting
Agreement and the Nordic Underwriting Agreement, and for the sale and
delivery of the Shares and SDSs to be sold by the Selling Stockholder,
and the performance of their respective obligations, hereunder and under
the U.S. Underwriting Agreement and the Nordic Underwriting Agreement,
have been obtained and are in full force and effect; and each of Volvo
and the Selling Stockholder has full right, power and authority to enter
into this Agreement, the U.S. Underwriting Agreement and the Nordic
Underwriting Agreement and the Selling Stockholder has full right, power
and authority to sell, assign, transfer and deliver the Shares and SDSs
to be sold by it hereunder and under the U.S. Underwriting Agreement and
the Nordic Underwriting Agreement;
(ii) The sale and delivery of the Shares and SDSs to be sold by the
Selling Stockholder hereunder and under the U.S. Underwriting Agreement
<PAGE>
and the Nordic Underwriting Agreement and the compliance by Volvo and the
Selling Stockholder with all of the provisions of this Agreement, the
U.S. Underwriting Agreement and the Nordic Underwriting Agreement and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any statute, indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which Volvo or the Selling Stockholder is a party or by which Volvo or
the Selling Stockholder is bound, or to which any of the property or
assets of Volvo or the Selling Stockholder is subject, nor will such
action result in any violation of the provisions of the articles of
association of Volvo or the Selling Stockholder or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over Volvo or the Selling Stockholder or the property
of Volvo or the Selling Stockholder;
(iii) This Agreement, the U.S. Underwriting Agreement and the
Nordic Underwriting Agreement have been duly authorized, executed and
delivered by Volvo or the Selling Stockholder;
(iv) Volvo currently holds the Shares through the Selling
Stockholder, which is an indirect wholly owned subsidiary of Volvo, and
the Selling Stockholder has good and valid title to the Shares, free and
clear of all liens, encumbrances, equities or claims, and, with respect
to each Time of Delivery (as defined in Section 4 hereof) (A) immediately
prior to such Time of Delivery, the Selling Stockholder will have good
and valid title to the Shares to be sold by it hereunder and under the
U.S. Underwriting Agreement and the Nordic Underwriting Agreement, free
and clear of all liens, encumbrances, equities and claims; (B)
immediately prior to such Time of Delivery, the Selling Stockholder will
have good and valid title to the Shares deposited by it pursuant to the
Custodian Agreement against issuance of the SDSs to be delivered by the
Selling Stockholder at such Time of Delivery, free and clear of all
liens, encumbrances, equities and claims (except such as arise under the
terms of the Custodian Agreement); (C) immediately prior to such Time of
Delivery, the Selling Stockholder will have good and valid title to the
SDSs to be delivered by it at such Time of Delivery, free and clear of
all liens, encumbrances, equities and claims; and (D) upon delivery of
the Shares and SDSs to be delivered by the Selling Stockholder at such
Time of Delivery pursuant to this Agreement, the U.S. Underwriting
Agreement and the Nordic Underwriting Agreement and payment therefor as
provided herein and therein, good and valid title thereto, free and clear
of all liens, encumbrances, equities and claims, will have passed to the
several Underwriters or the U.S. Underwriters or Nordic Underwriters, as
the case may be;
(v) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, any Prospectus or any
amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by Volvo
expressly for use therein, such Preliminary Prospectus and the
Registration Statement did, and such Prospectus and any further
amendments or supplements to the Registration Statement and such
Prospectus, when they become effective or are filed with the Commission,
as the case may be, will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(vi) The statements in the Prospectuses under the captions
"Prospectus Summary - The Global Offering - Shares of Common Stock
offered by the Selling Stockholder", "Prospectus Summary - Selling
Stockholder" and "Selling Stockholder" do not, as of the effective date
as to the Registration Statement and on the applicable date as to any
Prospectus and as of each Time of Delivery, did not and will not include
any untrue statement of a material fact or omit to state any material
fact necessary in order to make such statements not misleading; and
<PAGE>
(vii) Neither Volvo nor the Selling Stockholder has taken,
directly or indirectly, any action which is designed to or which
constitutes or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
in connection with the Global Offering; provided, however, that this
provision shall not apply to stabilization activities conducted by the
Global Coordinators on behalf of the Underwriters, as described in the
Prospectuses.
2. Subject to the terms and conditions herein set forth, (a) Volvo
agrees to cause the Selling Stockholder to sell, and the Selling Stockholder
agrees to sell, to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Selling Stockholder,
at a purchase price per share of $39.20 (the "Purchase Price") and per SDS of
SEK 257.56344 (the "SDS Purchase Price") (to the extent that you elect to take
delivery of Shares in the form of SDSs pursuant to Section 4 hereof), the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto and (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Shares as provided below,
Volvo agrees to cause the Selling Stockholder to sell, and the Selling
Stockholder agrees to sell, to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Selling
Stockholder, at the purchase price per share set forth in clause (a) of this
Section 2, that portion of the number of Optional Shares as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of Optional Shares by
a fraction the numerator of which is the maximum number of Optional Shares
which such Underwriter is entitled to purchase as set forth opposite the name
of such Underwriter in Schedule I hereto and the denominator of which is the
maximum number of Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
The Selling Stockholder hereby grants to the Underwriters the right
to purchase at their election up to 1,380,000 Optional Shares, at the Purchase
Price or the SDS Purchase Price, as the case may be, for the sole purpose of
covering overallotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares may be exercised from time to time on one or more
occasions only by written notice from you to Volvo, given within a period of
30 calendar days after the date of this Agreement and setting forth the
aggregate number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless you and Volvo otherwise agree in writing, earlier than two or later
than ten business days after the date of such notice.
3. Upon the authorization by the Lead Managers of the release of
the Firm Shares, the several Underwriters propose to offer the Firm Shares for
sale upon the terms and conditions set forth in the International Prospectus
and in the form of Agreement among Underwriters (International Version), which
has been previously submitted to the Company and Volvo by you. Each
Underwriter hereby makes to and with the Company and the Selling Stockholder
the representations and agreements of such Underwriter set forth in Annex A
hereto.
4. (a) The Shares to be purchased by each Underwriter hereunder,
in definitive form, and in such authorized denominations and registered in
such names as the Global Coordinators may request upon at least forty-eight
hours' prior notice to Volvo shall be delivered by or on behalf of the Selling
Stockholder to the Global Coordinators, through the facilities of The
Depository Trust Company ("DTC"), for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
wire transfer of U.S. dollars to the order of, and to such account as shall
have been notified by, the Selling Stockholder in Federal (same day) funds.
Volvo will cause the certificates representing the Shares to be made available
for checking and packaging at least twenty-four hours prior to the Time of
Delivery (as defined below) with respect thereto at the office of DTC or its
<PAGE>
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:00 a.m., New
York City time (2.00 p.m., London time), on July 29, 1996, or such other time
and date as the Global Coordinators and Volvo may agree upon in writing, and,
with respect to the Optional Shares, 9:00 a.m., New York City time (2.00 p.m.,
London time), on the date specified by the Global Coordinators in the written
notice given by the Global Coordinators of the Underwriters' election to
purchase such Optional Shares, or such other time and date as the Global
Coordinators and Volvo may agree upon in writing, provided in each case that
such day is a New York Business Day (as defined in Section 4(c) below) and, if
SDSs are to be delivered, a day on which commercial banks are generally open
for business in Stockholm. Such time and date for delivery of the Firm Shares
is herein called the "First Time of Delivery", such time and date for delivery
of Optional Shares, if not the First Time of Delivery, is herein called a
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) With respect to all or a portion of the Shares to be purchased
and sold hereunder at each Time of Delivery, the Global Coordinators, on
behalf of the several Underwriters, may elect to have SDSs delivered and paid
for hereunder in lieu of, and in satisfaction of, the Selling Stockholder's
obligation to sell to the several Underwriters and the several Underwriters'
obligations to purchase, Shares. Notice of such election shall be given by
the Global Coordinators to Volvo at least forty-eight hours prior to such Time
of Delivery (the "Notification Time"). The purchase price for any SDSs so
delivered as a result of making such election shall be the SDS Purchase Price.
If such an election is made, the SDSs to be purchased by each Underwriter
hereunder, in such authorized denominations and registered in such names as
the Global Coordinators may request upon notice to Volvo prior to Notification
Time, shall be delivered by or on behalf of the Selling Stockholder to you,
for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer to the order of
the Selling Stockholder in same day funds in Swedish kronor in respect of the
Shares delivered in the form of SDSs.
(c) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 of this Agreement,
including the cross-receipt for the Shares and any additional documents
requested by the Underwriters pursuant to Section 7(o) of this Agreement, will
be delivered at the offices of Shearman & Sterling, 199 Bishopsgate, London,
England (the "Closing Location"), and the Shares will be delivered as
specified in subsections (a) and (b) above, all at each Time of Delivery. A
meeting will be held at the Closing Location at 2:30 p.m., London time, on the
New York Business Day next preceding each Time of Delivery, at which meeting
the final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the purposes
of this Section 4, "New York Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. (a) The Company agrees with each of the Underwriters:
(i) To prepare the Prospectuses in a form approved by you and to
file the U.S. Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Act; to submit to you for prior approval with reasonable notice any
proposed amendments or supplements to the Registration Statement or any
Prospectus; to advise you, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the U.S. Prospectus or any
amended U.S. Prospectus has been filed and to furnish you a reasonable
number of copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with
<PAGE>
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the U.S. Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Preliminary U.S.
Prospectus or U.S. Prospectus, of the suspension of the qualification of
the Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or U.S. Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary U.S. Prospectus or U.S. Prospectus
or suspending any such qualification, promptly to use its reasonable best
efforts to obtain the withdrawal of such order;
(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to use its
reasonable best efforts to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for nine
months after the time of issue of the Prospectuses, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(iii) Prior to 12:00 p.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to
time to furnish the Underwriters with a reasonable number of copies of
each Prospectus in New York City and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the
time of issue of the Prospectuses in connection with the offering or sale
of the Shares or SDSs and if at such time any events shall have occurred
as a result of which the Prospectuses as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such period to amend or supplement any
Prospectus or to file under the Exchange Act any document incorporated by
reference in any Prospectus in order to comply with the Act or the
Exchange Act, to notify you and upon your request to file such document
and to prepare and furnish without charge to each Underwriter and to any
dealer in securities a reasonable number of copies as you may from time
to time request of any amended Prospectus or a supplement to any
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time nine
months or more after the time of issue of the Prospectuses, upon your
request but at the expense of such Underwriter, to prepare and deliver to
such Underwriter as many copies as you may request of an amended or
supplemented Prospectus, including with respect to any Underwriter, a
U.S. Prospectus complying with Section 10(a)(3) of the Act;
(iv) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earning statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(v) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date hereof, not to issue,
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder and under the U.S. Underwriting Agreement and the Nordic
<PAGE>
Underwriting Agreement, any shares of Stock or other securities of the
Company that are substantially similar to the Shares, including but not
limited to any securities that are convertible into or exchangeable for,
or that represent the right to receive, shares of Stock or any such
substantially similar securities, without the prior written consent of
the Global Coordinators; provided that this restriction will not apply to
issuances or sales of shares in connection with (i) employee stock
option, savings or compensation plans or dividend reinvestment plans or
the conversion of convertible securities outstanding on the date hereof
or (ii) a merger or other combination with, or exchange offer for shares
of, another entity; and
(vi) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C.
time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
(b) Volvo and the Selling Stockholder agree with each of the
Underwriters:
(i) To bear and pay any stamp, transfer, registration, documentary
or similar taxes or duties (including interest and penalties if the
payment was due to be made by the Selling Stockholder) payable in the
Kingdom of Sweden, the Kingdom of Denmark, the Republic of Finland, the
Kingdom of Norway, the United Kingdom, the United States, France, Germany
or Japan (the "Relevant Jurisdictions") or any political subdivision or
taxing authority of any such jurisdiction not recoverable within a
reasonable period of time in connection with (A) the sale and delivery by
the Selling Stockholder of the Shares and SDSs to or for the respective
accounts of the Underwriters in the manner contemplated herein or in the
U.S. Underwriting Agreement or the Nordic Underwriting Agreement and in
accordance with reasonable and customary procedures in global equity
offerings, (B) the deposit with the Depositary of Shares against the
issuance of SDSs at each Time of Delivery, (C) the sale and delivery by
the Underwriters of the Shares or SDSs to the initial purchasers thereof
in the manner contemplated herein or in the U.S. Underwriting Agreement
or in the Nordic Underwriting Agreement and in accordance with reasonable
and customary procedures in global equity offerings, or (D) the execution
and delivery of this Agreement, the U.S. Underwriting Agreement or the
Nordic Underwriting Agreement, and any value added tax payable in
connection with the commissions and other amounts payable by the Selling
Stockholder pursuant to this Agreement, the U.S. Underwriting Agreement
or the Nordic Underwriting Agreement;
(ii) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date hereof, not to offer,
sell, contract to sell or otherwise dispose of, except as provided
hereunder or under the U.S. Underwriting Agreement or Nordic Underwriting
Agreement, any shares of Stock or other securities of the Company that
are substantially similar to the Shares, including but not limited to any
shares of Stock or other securities that are convertible into or
exchangeable for, or that represent the right to receive, shares of Stock
or any such substantially similar securities, without the prior written
consent of the Global Coordinators;
(iii) To not take, directly or indirectly, any action which is
designed to or which constitutes or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares;
provided, however, that this provision shall not apply to stabilization
activities conducted by the Global Coordinators on behalf of the
Underwriters, as described in the Prospectuses;
<PAGE>
(iv) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Stockholder will deliver to you prior to or at
the First Time of Delivery (as hereinafter defined) a properly completed
and executed United States Treasury Department Form W-8 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof); and
(v) Prior to each Time of Delivery, to deposit Shares with the
Depositary in accordance with the provisions of the Custodian Agreement
and the General Terms and Conditions and otherwise to comply with the
Custodian Agreement and the General Terms and Conditions so that any SDSs
to be delivered by the Selling Stockholder at such Time of Delivery
pursuant to the U.S. Underwriting Agreement and the Nordic Underwriting
Agreement will be issued by the Depositary against receipt of such Shares
and delivered at such Time of Delivery in accordance with the U.S.
Underwriting Agreement and the Nordic Underwriting Agreement.
6. (a) The Company covenants and agrees with Volvo, the Selling
Stockholder and the several Underwriters that the Company will pay or cause to
be paid all expenses incident to the Company's performance of or compliance
with this Agreement, the U.S. Underwriting Agreement and the Nordic
Underwriting Agreement, including without limitation: (i) all Commission and
any National Association of Securities Dealers registration and filing fees
and expenses, (ii) all fees and expenses in connection with the qualification
of the Shares for offering and sale under state securities or "blue sky" laws,
including reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualifications, (iii) all expenses relating to the
preparation, printing, distribution and reproduction of the Registration
Statement, each Prospectus included therein or prepared for distribution
pursuant hereto, this Agreement, the U.S. Underwriting Agreement or the Nordic
Underwriting Agreement, each amendment or supplement of the foregoing, the
certificates representing Shares and all other documents relating to the
offering, purchase, sale and delivery of the Shares and SDSs, (iv) internal
expenses (including, without limitation, all salaries and expenses of the
Company's officers and employees performing legal or accounting duties, and
(v) fees, disbursements and expenses of the Company's counsel and its advisors
and experts and independent certified public accountants (including the
expenses of any opinions or "comfort" letters required by or incident to the
performance by the Company with its obligations hereunder and compliance with
such obligations). To the extent that any such expenses are incurred, assumed
or paid by Volvo, the Selling Stockholder or the Underwriters, the Company
shall reimburse such person for the full amount so incurred, assumed or paid
promptly after receipt of a request therefor.
(b) Except as may otherwise be agreed on behalf of the Underwriters,
Volvo covenants and agrees with the Company and the several Underwriters that
it will pay or cause to be paid all costs and expenses incident to the
performance of or compliance with this Agreement, the U.S. Underwriting
Agreement and the Nordic Underwriting Agreement by Volvo and the Selling
Stockholder which are not otherwise specifically provided to be paid by the
Company pursuant to Section 6(a), including any fees and expenses of counsel
for Volvo and the Selling Stockholder.
It is understood, that, except as provided in this Section 6, and
Sections 8 and 12 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel.
7. The obligations of the Underwriters hereunder, as to the Shares
or SDSs to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company and of Volvo and the Selling Stockholder herein are,
at and as of such Time of Delivery, true and correct, the condition that each
of the Company, Volvo and the Selling Stockholder shall have performed all of
<PAGE>
its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The U.S. Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by
the Commission; and all requests for additional information on the part
of the Commission shall have been complied with to your reasonable
satisfaction; if the Company has elected to rely upon Rule 462(b), the
Rule 462(b) Registration Statement shall have become effective by 10:00
P.M., Washington, D.C. time, on the date of this Agreement;
(b) Shearman & Sterling, counsel for the Underwriters, shall have
furnished to you, the U.S. Underwriters and the Nordic Underwriters such
opinion or opinions (a draft of each such opinion is attached as Annex
II(a) hereto), dated such Time of Delivery, with respect to the matters
covered in paragraphs (i), (ii), (iii) and (vi) of subsection (c) below
as well as such other related matters as you may reasonably request, and
such counsel shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters;
(c) Sullivan & Cromwell, counsel for the Company, shall have
furnished to you, the U.S. Underwriters, the Nordic Underwriters, Volvo
and the Selling Stockholder their written opinion (a draft of such
opinion is attached as Annex II(b) hereto), dated such Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
Delaware;
(ii) All outstanding shares of common stock of the Company
(including the Shares) have been duly authorized and validly issued
and are fully paid and non-assessable;
(iii) This Agreement, the U.S. Underwriting Agreement and
the Nordic Underwriting Agreement have been duly authorized,
executed and delivered by the Company;
(iv) The sale and delivery of the Shares by the Selling
Stockholder to the Underwriters in the manner contemplated in this
Agreement, the U.S. Underwriting Agreement and the Nordic
Underwriting Agreement and in the Prospectuses and the performance
by the Company of its obligations under this Agreement, the U.S.
Underwriting Agreement and the Nordic Underwriting Agreement will
not (A) violate the Company's Certificate of Incorporation or By-
Laws or (B) violate any federal law of the United States or law of
the State of New York applicable to the Company; provided, however,
that for the purposes of paragraph (iv)(B), such counsel need
express no opinion with respect to federal or state securities laws,
other anti-fraud laws and fraudulent transfer laws; and provided
further that insofar as performance by the Company of its
obligations under this Agreement is concerned, such counsel need
express no opinion as to bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights;
(v) All regulatory consents, authorizations, approvals and
filings, required to be obtained or made by the Company under the
Federal laws of the United States or the laws of the State of New
York for the sale and delivery of the Shares or SDSs by the Selling
Stockholder to the Underwriters hereunder or under the U.S.
<PAGE>
Underwriting Agreement or the Nordic Underwriting Agreement have
been obtained or made; and
(vi) The Registration Statement has been declared effective
under the Act and, to the best of such counsel's knowledge, no order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
threatened by the Commission.
In rendering such opinion, such counsel may state that such opinion
is limited to the Federal laws of the United States, the laws of the State of
New York and the General Corporation Law of the State of Delaware, and that
they are expressing no opinion as to the effect of the laws of any other
jurisdiction. In connection with the opinion set forth in (vi) above, such
counsel may state that they have relied solely upon information obtained from
the Commission and upon a certificate of officers of the Company.
In rendering such opinion, such counsel may also state that, with
your approval, they have relied as to certain matters on information obtained
from public officials, officers of the Company and other sources believed by
them to be responsible and that they assume that the certificates for the
outstanding shares of Stock of the Company, including the Shares, conform to
the specimen thereof examined by them and have been countersigned by a
transfer agent and that the signatures on all documents examined by such
counsel are genuine, which assumptions they may state they have not
independently verified.
Such counsel shall also state that they have reviewed the
Registration Statement and the Prospectuses and participated in discussions
with representatives of the Company, representatives of the Company's
accountants, Volvo and its U.S. counsel and representatives of the
Underwriters and advised the Company as to the requirements of the Act and the
applicable rules and regulations of the Commission thereunder, that between
the effectiveness of the Registration Statement and the time of the delivery
of their letter they also participated in further discussions with
representatives of the Company, representatives of the Company's accountants,
Volvo and its U.S. counsel and representatives of the Underwriters during
which the contents of certain portions of the Prospectuses and certain related
matters were discussed, and reviewed the opinions referred to in this Section
7; on the basis of the information that they gained in the course of the
performance of such services, considered in the light of their understanding
of the applicable law (including the requirements of Form S-3 and the
character of the prospectus contemplated thereby) and the experience they have
gained through their practice under the Act, such counsel shall confirm to the
Underwriters that, in their opinion, the Registration Statement, as of its
effective date, and the U.S. Prospectus, as of its date, appeared on their
face to be appropriately responsive in all material respects to the
requirements of the Act and the applicable rules and regulations of the
Commission thereunder; that nothing that came to the attention of such counsel
during the course of such review has caused them to believe that the
Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectuses, as of their respective dates, contained
any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and on the basis of the
procedures described in the second subclause of this paragraph, such counsel
shall confirm to the Underwriters that such counsel does not believe that any
Prospectus, as amended at such Time of Delivery, as of such Time of Delivery,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light
of the circumstances in which they were made, not misleading and that such
counsel do not know of any documents that are required to be filed as exhibits
to the Registration Statement and are not so filed or of any documents that
are required to be summarized in the U.S. Prospectus and are not so
<PAGE>
summarized; (in rendering the opinion described in this paragraph such counsel
may state that the limitations inherent in the independent verification of
factual matters and the character of determinations involved in the
registration process are such that they do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectuses except for (i) the description of
Stock in the Company's Registration Statement on Form 8-A and incorporated in
the Prospectuses by reference or included in the International Prospectus and
the Nordic Prospectus and (ii) the statements set forth in the International
Prospectus and in the Nordic Prospectus under the caption "Certain United
States Tax Consequences to Non-U.S. Holders of Common Stock", insofar as they
relate to the provisions of documents or U.S. Federal laws or Delaware
corporation law therein described; that they do not express any opinion or
belief as to the financial statements or other financial data derived from
accounting records included therein; and that their opinion described in this
paragraph is furnished as counsel for the Company and is solely for the
benefit of the several Underwriters, U.S. Underwriters, Nordic Underwriters,
Volvo, the Selling Stockholder and the directors of the Company to whom such
opinion is addressed.
(d) Kenneth M. Cyrus, counsel for the Company, shall have furnished
to you, the U.S. Underwriters, the Nordic Underwriters, Volvo and the
Selling Stockholder his written opinion (a draft of such opinion is
attached as Annex II(c) hereto), dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) Each Principal Subsidiary of the Company that is
incorporated in the United States (a "Principal U.S. Subsidiary")
has been duly organized and is validly existing under the laws of
its jurisdiction of incorporation; and each of the Company and each
Principal U.S. Subsidiary of the Company has been duly qualified as
a foreign corporation for the transaction of business and is in good
standing under the laws of each jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability
by reason of failure to be so qualified in any such jurisdiction
(such counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company, provided that
such counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(ii) The Company has an authorized capitalization as set forth
in the Prospectuses, and all of the issued shares of capital stock
of each Principal U.S. Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable,
and except as otherwise set forth in the Prospectuses, are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (such counsel being entitled to
rely in respect of the opinion in this clause upon opinions of local
counsel and in respect of matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such
counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates) and the
Shares conform to the description of the Stock included in or
incorporated by reference in the Prospectuses;
(iii) The sale and delivery of the Shares and SDSs to be
sold by the Selling Stockholder hereunder and under the U.S.
Underwriting Agreement and the Nordic Underwriting Agreement and the
compliance by the Company with all of the provisions of this
Agreement, the U.S. Underwriting Agreement and the Nordic
Underwriting Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
<PAGE>
loan agreement or other agreement or instrument known to such
counsel to which the Company or any of its Principal Subsidiaries is
a party or by which the Company or any of its Principal Subsidiaries
is bound or to which any of the property or assets of the Company or
any of its subsidiaries is subject, nor will such action result in
any violation of the provisions of the Certificate of Incorporation
or By-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency
or body having jurisdiction over the Company or any of its Principal
Subsidiaries or any of their properties, except for such conflicts,
breaches, violations and defaults that would not have a material
adverse effect on the financial position, shareholders' equity or
results of operations of the Company and its subsidiaries taken as a
whole or that would not otherwise materially prejudice the
consummation of the transactions contemplated by this Agreement, the
U.S. Underwriting Agreement or the Nordic Underwriting Agreement;
(iv) To the best of his knowledge, the Company and each of its
Principal Subsidiaries have all concessions, licenses, franchises,
permits, authorizations, approvals and orders of and from all
relevant governmental regulatory officials and bodies that are
necessary to own or lease their properties and conduct their
businesses as described in the Prospectuses, except where the
failure to have any such concession, license, franchise, permit,
authorization, approval or order would not have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole;
(v) To the best of his knowledge, the Company and its
Principal Subsidiaries own or have had licensed to them or otherwise
have the benefit or use under the authority of the owners thereof
of, all patents, patent rights, inventions, trademarks, service
marks, trade names and copyrights (in each case, registered or not)
which are necessary for the conduct of the business of the Company
and its subsidiaries as described in the Prospectuses, except for
any such failure as would not have a material adverse effect on the
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries taken as a whole, and, to the best
of his knowledge and except for the matters described in the
Prospectuses, there are no unresolved assertions that the Company or
any of its subsidiaries has infringed the patents, patent rights,
inventions, trademark rights, service marks, trade names or
copyrights of others, other than assertions which, if determined
adversely to the Company or any of its subsidiaries, would not
individually or in the aggregate with respect to similar claims,
have a material adverse effect on the consolidated financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole;
(vi) To the best of such counsel's knowledge and other than the
matters described in the Prospectuses, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which are reasonably likely,
individually or in the aggregate with respect to similar claims, to
have a material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries taken as a whole; and, to the best
of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(vii) The Custodian Agreement has been duly authorized,
executed and delivered by the Company; and
(viii) The documents incorporated by reference in the U.S.
Prospectus or any further amendment or supplement thereto made by
<PAGE>
the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and he has no reason to believe that any of such
documents, when such documents became effective or were so filed, as
the case may be, contained in the case of a registration statement
which became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed
under the Exchange Act, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such documents were so filed, not misleading
(other than the financial statements and other financial data as to
which such counsel need express no opinion).
In rendering such opinion, such counsel may rely upon opinions of
local counsel and in respect of matters of fact upon certificates of officers
of the Company, provided that such counsel shall state that he believes both
you and he is justified in relying upon such opinions and certificates.
(e) Fred Bodin, General Counsel and Senior Vice President of Volvo,
shall have furnished to you, the U.S. Underwriters and the Nordic
Underwriters his written opinion (a draft of such opinion is attached as
Annex II(d) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) This Agreement, the U.S. Underwriting Agreement and the
Nordic Underwriting Agreement have been duly authorized, executed
and delivered by or on behalf of Volvo and the Selling Stockholder;
and the sale of the Shares and SDSs to be sold by the Selling
Stockholder hereunder and thereunder and the compliance by the Volvo
and Selling Stockholder with all of the provisions of this
Agreement, the U.S. Underwriting Agreement and the Nordic
Underwriting Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in
a breach or violation of any terms or provisions of, or constitute a
default under, any statute, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which Volvo or the Selling Stockholder is a party or by which Volvo
or the Selling Stockholder is bound, or to which any of the property
or assets of Volvo or the Selling Stockholder is subject, nor will
such action result in any violation of the provisions of the
Articles of Association of Volvo or the Selling Stockholder or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over Volvo or the
Selling Stockholder or the property of Volvo or the Selling
Stockholder;
(ii) No consent, approval, authorization or order of any
Swedish court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement, the
U.S. Underwriting Agreement or the Nordic Underwriting Agreement in
connection with the Shares or SDSs to be sold by the Selling
Stockholder hereunder or thereunder;
(iii) (A) immediately prior to such Time of Delivery, the
Selling Stockholder had good and valid title to the Shares to be
sold by it hereunder and under the U.S. Underwriting Agreement and
the Nordic Underwriting Agreement, free and clear of all liens,
encumbrances, equities and claims, and full right, power and
authority to sell, assign, transfer and deliver the Shares to be
<PAGE>
sold by the Selling Stockholder hereunder and thereunder; (B)
immediately prior to such Time of Delivery, the Selling Stockholder
had good and valid title to the Shares deposited by it pursuant to
the Custodian Agreement against issuance of the SDSs to be delivered
by the Selling Stockholder at such Time of Delivery, free and clear
of all liens, encumbrances, equities and claims (except such as
arise under the terms of the Custodian Agreement); and (C)
immediately prior to such Time of Delivery, the Selling Stockholder
had good and valid title to the SDSs to be delivered by it at such
Time of Delivery, free and clear of all liens, encumbrances,
equities and claims;
(iv) Good and valid title to the Shares and SDSs to be
delivered by the Selling Stockholder at such Time of Delivery, free
and clear of all liens, encumbrances, equities or claims, has been
transferred to each of the several Underwriters or U.S. Underwriters
or Nordic Underwriters, as the case may be, who have purchased such
Shares or SDSs in good faith and without notice of any such lien,
encumbrance, equity or claim or any other adverse claim;
(v) No stamp or other issuance or transfer taxes or duties,
and no capital gains, income, withholding or other taxes are payable
in the Kingdom of Sweden or any political subdivision or taxing
authority of such jurisdiction by or on behalf of the Underwriters
in connection with (A) the sale and delivery by the Selling
Stockholder of the Shares to or for the respective accounts of the
Underwriters in the manner contemplated herein or in the U.S.
Underwriting Agreement or the Nordic Underwriting Agreement, (B) the
deposit with the Depositary of Shares against the issuance of SDSs
at each Time of Delivery, (C) the sale and delivery by the
Underwriters of the Shares or SDSs to the initial purchasers thereof
in the manner contemplated herein or in the U.S. Underwriting
Agreement or in the Nordic Underwriting Agreement, or (D) the
execution and delivery of this Agreement, the U.S. Underwriting
Agreement or the Nordic Underwriting Agreement (other than any
taxes, other than stamp or other issuance or transfer taxes or
duties, payable by the Underwriters resident, domiciled, carrying on
business or subject to taxation in Sweden); and
(vi) The irrevocable submission of Volvo and the Selling
Stockholder to the jurisdiction of New York courts in Section 16 of
this Agreement, the U.S. Underwriting Agreement and the Nordic
Underwriting Agreement, the waiver by Volvo and the Selling
Stockholder of any objection to the venue of a proceeding of a New
York court are legal, valid and binding under Swedish law, with the
exception that the Swedish bankruptcy courts have exclusive
jurisdiction in respect of all property of Volvo or the Selling
Stockholder, as the case may be, upon the bankruptcy of Volvo or the
Selling Stockholder;
(vii) The agreement of Volvo and the Selling Stockholder
that this Agreement, the U.S. Underwriting Agreement and the Nordic
Underwriting Agreement shall be governed by and construed in
accordance with the laws of the State of New York is legal, valid
and binding and would be recognized and given effect to by the
courts in Sweden upon proof of the relevant provisions of such law,
subject, however, to the qualification that New York law will not be
applied to the extent contrary to Swedish public policy and that
Swedish law will be applied in a bankruptcy proceeding in respect
of, or an execution against, Volvo or the Selling Stockholder;
(viii) Service of process effected in the manner set forth
in Section 16 hereof will be effective, insofar as the laws of
Sweden are concerned, to confer valid personal jurisdiction over
Volvo and the Selling Stockholder; and
<PAGE>
(ix) A judgement obtained in a New York court arising out of or
in relation to the obligations of Volvo or the Selling Stockholder
under this Agreement, the U.S. Underwriting Agreement or the Nordic
Underwriting Agreement will not be directly enforceable in the
Kingdom of Sweden and a separate Swedish judgment must therefore be
obtained. In the light of judicial developments, however, such
counsel believes that Swedish courts would give an enforceable
Swedish judgment on the basis of a judgment obtained in a New York
court in an action instituted in the manner prescribed in this
Agreement, the U.S. Underwriting Agreement and the Nordic
Underwriting Agreement provided that the judgment was issued by a
court of competent jurisdiction, has gained legal force, is not
inconsistent with a prior judgment rendered between the same parties
and is not contrary to public policy in Sweden.
In rendering such opinion, such counsel may make customary
assumptions, qualifications and reservations and may state that he
expresses no opinion as to the laws of any jurisdiction outside the
Kingdom of Sweden;
(f) White & Case, U.S. counsel for Volvo and the Selling
Stockholder, shall have furnished to you, the U.S. Underwriters and the
Nordic Underwriters their written opinion (a draft of such opinion is
attached as Annex II(e) hereto), dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) Assuming due authorization, execution and delivery by
Volvo and the Selling Stockholder under Swedish law, this Agreement,
the U.S. Underwriting Agreement and the Nordic Underwriting
Agreement have been duly executed and delivered by Volvo and the
Selling Stockholder insofar as New York law is concerned;
(ii) At such Time of Delivery, all rights of the Selling
Stockholder in and to the Shares and SDSs free of any adverse claim
(as defined in Article 8 of the Uniform Commercial Code) has been
transferred to each of the several U.S. Underwriters or
International Underwriters or Nordic Underwriters, as the case may
be, who have purchased such Shares or SDSs in good faith and without
notice of any such adverse claims; and
(iii) Assuming the validity of such actions under the laws
of Sweden, under the laws of the State of New York relating to
personal jurisdiction, each of Volvo and the Selling Stockholder
has, pursuant to Section 16 of this Agreement, the U.S. Underwriting
Agreement and the Nordic Underwriting Agreement, validly and
irrevocably submitted to the personal jurisdiction of New York
Courts in any legal suit, action or proceeding arising out of or
based upon this Agreement, the U.S. Underwriting Agreement, the
Nordic Underwriting Agreement or the transactions contemplated
hereby or thereby, and has validly and effectively appointed Volvo
North America Corporation as the authorized agent of Volvo and the
Selling Stockholder for the purpose described in Section 16 of this
Agreement, the U.S. Underwriting Agreement and the Nordic
Underwriting Agreement.
In rendering such opinion, such counsel may state that they express
no opinion as to the laws of any jurisdiction outside the United States;
(g) Mats Lidgard, Swedish counsel for the Company, shall have
furnished to you, the U.S. Underwriters, the Nordic Underwriters, Volvo
and the Selling Stockholder his written opinion (a draft of such opinion
is attached as Annex II(f) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) The Custodian Agreement has been duly authorized, executed
and delivered by the Company and, assuming the Custodian Agreement
<PAGE>
has been duly authorized, executed and delivered by the Depositary,
constitutes a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject as to enforcement
to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; upon the deposit
of Shares evidencing SDSs to be delivered at such Time of Delivery
in respect thereof in accordance with the provisions of the
Custodian Agreement and the General Terms and Conditions, the
persons in whose names the SDSs are registered will be entitled to
the rights specified in the Custodian Agreement and in the General
Terms and Conditions; and the Custodian Agreement, the General Terms
and Conditions and the SDSs conform in all material respects to the
descriptions thereof contained in the International Prospectus and
in the Nordic Prospectus;
(ii) The statements set forth in the International Prospectus
and in the Nordic Prospectus under the caption "Description of
Swedish Depositary Shares", insofar as they purport to describe the
terms and conditions of the SDSs and the provisions of the laws and
documents referred to therein, are complete and accurate in all
material respects;
(iii) Pharmacia & Upjohn AB has been duly incorporated and
is validly existing as a corporation under the laws of the Kingdom
of Sweden and has the corporate power and authority to own its
properties and to conduct its business as described in the
Prospectuses;
(iv) The sale and delivery of the Shares and SDSs to be sold by
the Selling Stockholder hereunder and under the International
Underwriting Agreement and the Nordic Underwriting Agreement and the
compliance by the Company with all of the provisions of this
Agreement, the International Underwriting Agreement and the Nordic
Underwriting Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such
counsel to which the Company or Pharmacia & Upjohn AB is a party or
by which the Company or Pharmacia & Upjohn AB is bound or to which
any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency
or body having jurisdiction over the Company or Pharmacia & Upjohn
AB or any of their properties, except for such conflicts, breaches,
violations and defaults that would not have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole or
that would not otherwise materially prejudice the consummation of
the transactions contemplated by this Agreement, the International
Underwriting Agreement or the Nordic Underwriting Agreement;
(v) To the best of such counsel's knowledge, the Company and
Pharmacia & Upjohn AB have all concessions, licenses, franchises,
permits, authorizations, approvals and orders of and from all
relevant governmental regulatory officials and bodies that are
necessary to own or lease their properties and conduct their
businesses as described in the Prospectuses, except where the
failure to have any such concession, license, franchise, permit,
authorization, approval or order would not have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole;
<PAGE>
(vi) To the best of his knowledge, the Company and Pharmacia &
Upjohn AB own or have had licensed to them or otherwise have the
benefit or use under the authority of the owners thereof of, all
patents, patent rights, inventions, trademarks, service marks, trade
names and copyrights (in each case, registered or not) which are
necessary for the conduct of the business of the Company and its
subsidiaries as described in the Prospectuses, except for any such
failure as would not have a material adverse effect on the financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole, and, to the best of
his knowledge and except for the matters described in the
Prospectuses, there are no unresolved assertions that the Company or
any of its subsidiaries has infringed the patents, patent rights,
inventions, trademark rights, service marks, trade names or
copyrights of others, other than assertions which, if determined
adversely to the Company or any of its subsidiaries, would not
individually or in the aggregate with respect to similar claims have
a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and
(vii) To the best of such counsel's knowledge and other
than the matters described in the Prospectuses, there are no legal
or governmental proceedings pending to which the Company or
Pharmacia & Upjohn AB is a party or of which any property of the
Company or Pharmacia & Upjohn AB is the subject which are reasonably
likely, individually or in the aggregate with respect to similar
claims, to have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole;
and, to the best of such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others.
In rendering such opinion, such counsel may rely upon opinions of
local counsel and in respect of matters of fact upon certificates of officers
of the Company, provided that such counsel shall state that he believes both
you and he is justified in relying upon such opinions and certificates.
(h) Emanuele Barie, Italian counsel for the Company, shall have
furnished to you, the International Underwriters, the Nordic
Underwriters, Volvo and the Selling Stockholder his written opinion (a
draft of such opinion is attached as Annex II(g) hereto), dated such Time
of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) Pharmacia & Upjohn S.p.A. has been duly incorporated, is
validly existing as a corporation under the laws of Italy and has
the corporate power and authority to own its properties and to
conduct its business as described in the Prospectuses;
(ii) The sale and delivery of the Shares and SDSs to be sold by
the Selling Stockholder hereunder and under the International
Underwriting Agreement and the Nordic Underwriting Agreement and the
compliance by the Company with all of the provisions of this
Agreement, the International Underwriting Agreement and the Nordic
Underwriting Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such
counsel to which Pharmacia & Upjohn S.p.A. is a party or by which
Pharmacia & Upjohn S.p.A. is bound or to which any of the property
or assets of Pharmacia & Upjohn S.p.A. is subject, nor will such
action result in any violation of the provisions of the Certificate
of Incorporation or By-laws of Pharmacia & Upjohn S.p.A. or any
<PAGE>
statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over
Pharmacia & Upjohn S.p.A. or any of its properties, except for such
conflicts, breaches, violations and defaults that would not have a
material adverse effect on the financial position, shareholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole or that would not otherwise materially prejudice
the consummation of the transactions contemplated by this Agreement,
the International Underwriting Agreement or the Nordic Underwriting
Agreement;
(iii) To the best of such counsel's knowledge, Pharmacia &
Upjohn S.p.A. has all concessions, licenses, franchises, permits,
authorizations, approvals and orders of and from all relevant
governmental regulatory officials and bodies that are necessary to
own or lease its properties and conduct its business as described in
the Prospectuses, except where the failure to have any such
concession, license, franchise, permit, authorization, approval or
order would not have a material adverse effect on the financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole;
(iv) To the best of his knowledge, Pharmacia & Upjohn S.p.A.
owns or has had licensed to it or otherwise has the benefit or use
under the authority of the owners thereof of, all patents, patent
rights, inventions, trademarks, service marks, trade names and
copyrights (in each case, registered or not) which are necessary for
the conduct of its business as described in the Prospectuses, except
for any such failure as would not have a material adverse effect on
the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
and, to the best of his knowledge and except for the matters
described in the Prospectuses, there are no unresolved assertions
that Pharmacia & Upjohn S.p.A. has infringed the patents, patent
rights, inventions, trademark rights, service marks, trade names or
copyrights of others, other than assertions which, if determined
adversely to Pharmacia & Upjohn S.p.A., would not individually or in
the aggregate with respect to similar claims have a material adverse
effect on the consolidated financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, taken
as a whole; and
(v) To the best of such counsel's knowledge and other than the
matters described in the Prospectuses, there are no legal or
governmental proceedings pending to which Pharmacia & Upjohn S.p.A.
is a party or of which any property of Pharmacia & Upjohn S.p.A. is
the subject which are reasonably likely, individually or in the
aggregate with respect to similar claims, to have a material adverse
effect on the current or future consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
In rendering such opinion, such counsel may rely upon opinions of
local counsel and in respect of matters of fact upon certificates of officers
of the Company, provided that such counsel shall state that he believes both
you and he is justified in relying upon such opinions and certificates.
(i) Skandinaviska Enskilda Banken Legal Department, counsel for the
Depositary, shall have furnished to you, the U.S. Underwriters, the
Nordic Underwriters, Volvo and the Selling Stockholder their written
opinion (a draft of such opinion is attached as Annex II(h) hereto),
dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
<PAGE>
(i) The Custodian Agreement has been duly authorized, executed
and delivered by the Depositary and, assuming the Custodian
Agreement has been duly authorized, executed and delivered by the
Company, constitutes a valid and legally binding obligation of the
Depositary, enforceable in accordance with its terms, subject as to
enforcement to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; upon
the deposit of Shares evidencing SDSs to be delivered at such Time
of Delivery in respect thereof in accordance with the provisions of
the Custodian Agreement and the General Terms and Conditions, the
persons in whose names the SDSs are registered will be entitled to
the rights specified in the Custodian Agreement and in the General
Terms and Conditions; and the Custodian Agreement, the General Terms
and Conditions and the SDSs conform in all material respects to the
descriptions thereof contained in the International Prospectus and
in the Nordic Prospectus;
(ii) The statements set forth in the International Prospectus
and in the Nordic Prospectus, under the caption "Description of
Swedish Depositary Shares", insofar as they purport to describe the
terms and conditions of the SDSs and the provisions of the laws and
documents referred to therein, are complete and accurate in all
material respects; and
(iii) Shares represented by the SDSs to be delivered by the
Selling Stockholder at such Time of Delivery to or on behalf of the
Underwriters have been duly deposited with the Depositary or The
Bank of New York, as Sub-Custodian, under and in accordance with all
applicable laws and regulations.
(j) On the date hereof prior to the execution of this Agreement, on
the effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at each
Time of Delivery, Coopers & Lybrand L.L.P. and KPMG Peat Marwick LLP
shall have furnished to you, the U.S. Underwriters, the Nordic
Underwriters, Volvo and the Selling Stockholder a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto; (the
executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto and a draft of the form of
letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery
is attached as Annex I(b) hereto);
(k) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectuses any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectuses, and (ii) since the respective
dates as of which information is given in the Prospectuses there shall
not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectuses, the
effect of which, in any such case described in Clause (i) or (ii), is in
the judgment of the Global Coordinators so material and adverse as to
make it impracticable or inadvisable to proceed with the Global Offering
or the delivery of the Shares being delivered at such Time of Delivery on
the terms and in the manner contemplated in the Prospectuses;
<PAGE>
(l) On or after the date hereof and prior to such Time of Delivery
there shall not have occurred any of the following: (a) (i) a suspension
or material limitation in trading in securities generally on the New York
Stock Exchange, the Stockholm Stock Exchange or the London Stock
Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange, the Stockholm Stock
Exchange or SEAQ International; (iii) a general moratorium on commercial
banking activities in New York, Sweden or London declared by the relevant
authorities; (iv) a change or development involving a prospective change
in United States taxation affecting the share capital of the Company or
the transfer thereof or the imposition of exchange controls by the United
States or Sweden; (v) the outbreak or escalation of hostilities involving
the United States or the European Union ("EU") or the declaration by the
United States or relevant EU authorities of a national emergency or war
if the effect of any such event specified in clause (iv) or (v) in the
judgment of the Global Coordinators, makes it impracticable or
inadvisable to proceed with the Global Offering or the delivery of, or
materially impairs the ability of the Underwriters to subscribe, hold or
sell, the Shares or SDSs being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectuses; or (vi) a
change in national or international political, financial or economic
conditions or taxation regimes or currency exchange rates or controls if
the effect of any such event specified in this subsection (vi) in the
judgment of the Global Coordinators is so material and adverse as to make
it impracticable or inadvisable to proceed with the Global Offering or
the delivery of, or materially impairs the ability of the Underwriters to
subscribe, hold or sell, the Shares or SDSs being delivered at such Time
of Delivery on the terms and in the manner contemplated in the
Prospectuses;
(m) Forvaltningsaktiebolaget Stattum ("Stattum") shall have
undertaken in writing, in form and substance satisfactory to you, not to,
during the period beginning from the date hereof and continuing to and
including the date 12 months after the date hereof, offer, sell, contract
to sell or otherwise dispose of, except as provided hereunder or under
the U.S. Underwriting Agreement or Nordic Underwriting Agreement, any
shares of Stock or other securities of the Company that are substantially
similar to the Shares, including but not limited to any securities that
are convertible into or exchangeable for, or that represent the right to
receive, shares of Stock or any such substantially similar securities,
without the prior written consent of the Global Coordinators;
(n) The Company shall have complied with the provisions of Section
5(a)(iii) hereof with respect to the furnishing of prospectuses on the
New York Business Day next succeeding the date of this Agreement;
(o) The Company, Volvo and the Selling Stockholder shall have
furnished or caused to be furnished to you at such Time of Delivery
(i) certificates of officers of the Company and of Volvo, respectively,
reasonably satisfactory to you as to the accuracy of the representations
and warranties of the Company and Volvo, respectively, herein at and as
of such Time of Delivery, as to the performance by the Company and Volvo
and the Selling Stockholder of all of their respective obligations
hereunder to be performed at or prior to such Time of Delivery, and, in
the case of the Company, as to the matters set forth in subsections (a)
and (k) of this Section, and as to such other matters as you may
reasonably request; and (ii) certificates of the corporate secretary or
other comparable officer of the Company, of Volvo and of the Selling
Stockholder, respectively, reasonably satisfactory to you as to the
resolutions adopted by the Company and Volvo in connection with this
Agreement, the U.S. Underwriting Agreement and the Nordic Underwriting
Agreement, incumbency and signatures or persons executing this Agreement,
the U.S. Underwriting Agreement and the Nordic Underwriting Agreement,
and other similar matters; and
<PAGE>
(p) The respective closings under this Agreement, the U.S.
Underwriting Agreement and the Nordic Underwriting Agreement shall occur
simultaneously at the First Time of Delivery.
8. (a) The Company will indemnify and hold harmless each
Underwriter, Volvo and the Selling Stockholder against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter, Volvo or
the Selling Stockholder, as the case may be, may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or any Prospectus, or any amendment or
supplement thereto, or any document incorporated by reference therein, or
arise out of or are based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter, Volvo
and the Selling Stockholder for any legal or other expenses reasonably
incurred by such Underwriter, Volvo or the Selling Stockholder, as the case
may be, in connection with investigating or defending any such action,
proceeding or claim as such expenses are incurred; provided, however, that the
Company shall not be liable to any Underwriter or to Volvo or the Selling
Stockholder in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or any Prospectus, or any such
amendment or supplement thereto or document incorporated by reference therein,
(x) in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Lead Managers expressly for use
therein or (y) that comprised Selling Stockholder Information; and provided,
further, however, that the Company shall not be liable to any such person in
any such case if the Company shall sustain the burden of proving that Volvo,
the Selling Stockholder or such Underwriter, as the case may be, sold
securities to the person alleging such loss, claim, damage or liability
without sending or giving, at or prior to the written confirmation of such
sale in any case where such delivery is required by applicable law, a copy of
the Prospectus (excluding any documents incorporated by reference therein) or
of the Prospectus, as then amended or supplemented (excluding any documents
incorporated by reference therein) if the Company had previously furnished
copies thereof to Volvo, the Selling Stockholder or such Underwriter, and the
loss, claim, damage or liability of such person results from an untrue
statement or omission of a material fact contained in the Preliminary
Prospectus which was corrected in the Prospectus or the Prospectus as amended
or supplemented.
(b) Volvo will indemnify and hold harmless each Underwriter and the
Company against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter or the Company, as the case may be, may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Registration Statement or the Prospectus,
or any amendment or supplement thereto, or any document incorporated by
reference therein, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission in any Preliminary Prospectus, the
Registration Statement or any Prospectus or any such amendment or supplement
or document incorporated by reference therein comprised Selling Stockholder
Information; and will reimburse each Underwriter or the Company, as the case
may be, for any legal or other expenses reasonably incurred by such
Underwriter or the Company, as the case may be, in connection with
investigating or defending any such action or claim as such expenses are
incurred.
<PAGE>
(c) Each Underwriter will, severally and not jointly, indemnify and
hold harmless the Company, Volvo and the Selling Stockholder against any
losses, claims, damages or liabilities to which it may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or any Prospectus, or any
amendment or supplement thereto, or any document incorporated by reference
therein, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement or any Prospectus or any such amendment or supplement
or document incorporated by reference therein in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Lead Managers expressly for use therein; and will
reimburse the Company, Volvo and the Selling Stockholder for any legal or
other expenses reasonably incurred by the Company, Volvo or the Selling
Stockholder, as the case may be, in connection with investigating or defending
any such action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action or
proceeding for which indemnification under subsection (a), (b) or (c) may be
requested, such indemnified party shall, if a claim in respect thereof is to
be made against an indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under such subsection. In
case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (which shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company, Volvo and the Selling
Stockholder on the one hand and the Underwriters on the other from the
offering of the Shares as well as any other relevant equitable considerations,
including relative fault. The relative benefits received by the Company,
Volvo and the Selling Stockholder on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
<PAGE>
from the offering of the Shares purchased under this Agreement (before
deducting expenses) received by the Company, Volvo and the Selling Stockholder
bear to the total underwriting discounts and commissions received by the
Underwriters with respect to the Shares purchased under this Agreement, in
each case as set forth in the Prospectus. As among the Company, Volvo and the
Selling Stockholder, the relative benefit derived by the Company, Volvo and
the Selling Stockholder shall be determined by reference to the fact that the
Company entered into the Registration Rights Agreement, dated as of August 20,
1995, among Volvo, the Company, The Upjohn Company and Pharmacia Aktiebolag to
induce Volvo to engage in the transaction in which the Selling Stockholder
acquired the Shares. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, Volvo, the Selling Stockholder
or the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, Volvo, the Selling Stockholder and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this subsection
(e) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above
in this subsection (e). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (e) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company, Volvo and the Selling
Stockholder under this Section 8 shall be in addition to any liability which
the Company, Volvo and the Selling Stockholder may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act or the Exchange Act;
and the obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company,
Volvo or the Selling Stockholder within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, the Global Coordinators may in their discretion arrange for you or
another party or other parties to purchase such Shares on the terms contained
herein. If within thirty-six hours after such default by any Underwriter, the
Global Coordinators do not arrange for the purchase of such Shares, then Volvo
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to you to purchase such
Shares on such terms. In the event that, within the respective prescribed
periods, the Global Coordinators notify Volvo that they have so arranged for
the purchase of such Shares, or Volvo notifies the Global Coordinators that it
has so arranged for the purchase of such Shares, the Global Coordinators or
Volvo shall have the right to postpone such Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which may thereby
<PAGE>
be made necessary. The term "Underwriter" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by the Global
Coordinators and Volvo as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh
of the aggregate number of all of the Shares to be purchased at such Time of
Delivery, then Volvo shall have the right to require each non-defaulting
Underwriter to purchase the number of Shares which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares
of such defaulting Underwriter or Underwriters for which such arrangements
have not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by the Global
Coordinators and Volvo as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of
Delivery, or if Volvo shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Shares of a
defaulting Underwriter or Underwriters, then this Agreement (or, with respect
to the Second Time of Delivery, the obligations of the Underwriters to
purchase and of the Selling Stockholder to sell the Optional Shares) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Stockholder, except for the expenses
to be borne by the Company and Volvo and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, Volvo, the Selling Stockholder
and the several Underwriters, as set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, or the Company, or Volvo, or the Selling
Stockholder, or any officer or director or controlling person of the Company,
or any controlling person of Volvo or the Selling Stockholder, and shall
survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, neither the Company nor Volvo nor the Selling Stockholder shall then
be under any liability to any Underwriter except as provided in Sections 6 and
8 hereof; but, if any Shares are not delivered by or on behalf of the Selling
Stockholder as provided herein by reason of a failure of the Company to
perform its obligations under Section 7 (for the avoidance of doubt, it shall
not be deemed to be a failure by the Company to perform its obligations under
Section 7 if the conditions set forth in clauses 7(b), (e), (f), (i), (k),
(l), (m), (o)(to the extent that it refers to obligations of Volvo and the
Selling Stockholder) and (p)(to the extent not due to the failure of the
Company to perform its obligations as aforementioned) have not been
satisfied), the Company will, or if for any other reason Shares are not
delivered by or on behalf of the Selling Stockholder as provided herein, Volvo
will, reimburse the Underwriters through the Lead Managers for all
out-of-pocket expenses approved in writing by the Lead Managers, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Shares not so
delivered, but the Company, Volvo and the Selling Stockholder shall then be
<PAGE>
under no further liability to any Underwriter in respect of the Shares not so
delivered except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by you jointly or by the Lead Managers on behalf of you as the
representatives of the Underwriters.
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to the Underwriters in care of GSI,
Peterborough Court, 133 Fleet Street, London EC4A 2BB, England, Attention:
Equity Capital Markets, Telex No. 94012165, facsimile transmission No. (0171)
774-1550, and to MLI, Ropemaker Place, 25 Ropemaker Street, London EC2 9LY,
England; if to Volvo or the Selling Stockholder shall be delivered or sent by
mail or facsimile transmission to AB Volvo, S-405 08, Goteborg, Sweden,
Attention: President, with a copy to White & Case, counsel for Volvo and the
Selling Stockholder, at 7-11 Moorgate, London, EC2R 6HH, England; and if to
the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Registration
Statement, Attention: Secretary; provided, however, that any notice to an
Underwriter pursuant to Section 8(d) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company, Volvo or the
Selling Stockholder by the Lead Managers upon request. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, Volvo and the Selling Stockholder
and, to the extent provided in Sections 8 and 10 hereof, the officers and
directors of the Company and each person who controls the Company, Volvo, the
Selling Stockholder or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of
the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, United States of America.
16. Each of Volvo and the Selling Stockholder hereby
irrevocably (i) agrees that any legal suit, action or proceeding arising out
of or based upon this Agreement or the transactions contemplated hereby may be
instituted in any state or federal court located in the Borough of Manhattan,
The City of New York, New York (a "New York Court"), (ii) waives, to the
fullest extent it may effectively do so, any objection which it may now or
hereafter have to the laying of venue of any such proceeding and (iii) submits
to the jurisdiction of such courts in any such suit, action or proceeding.
Each of Volvo and the Selling Stockholder do hereby appoint Volvo North
America Corporation, 535 Madison Avenue, New York, New York 10022, Attention:
President, as its authorized agent (the "Authorized Agent") upon whom process
may be served in any such action arising out of or based on this Agreement or
the transactions contemplated hereby which may be instituted in any New York
Court by any Underwriter or by any person who controls any Underwriter or by
the Company, expressly consents to the jurisdiction of any such court in
respect of any such action, and waives any other requirements of or objections
to personal jurisdiction with respect thereto. Each of Volvo and the Selling
Stockholder may appoint a successor agent to receive service of process as
described herein; provided, however, that each of Volvo and the Selling
Stockholder shall at all times maintain an agent for service of process in New
York City. Volvo represents and warrants that the Authorized Agent has agreed
to act as such agent for service of process and each of Volvo and the Selling
<PAGE>
Stockholder agrees to take any and all action, including the filing of any and
all documents and instruments, that may be necessary to continue such
appointment (or any appointment of a successor agent, as applicable) in full
force and effect as aforesaid. Service of process upon the Authorized Agent
and written notice of such service to Volvo or the Selling Stockholder, as the
case may be, shall be deemed, in every respect, effective service of process
upon Volvo or the Selling Stockholder.
17. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us eight counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement among each of the
Underwriters, the Company, Volvo and the Selling Stockholder. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters (International Version), the form of which shall be
submitted to the Company and Volvo for examination upon request, but without
warranty on your part as to the authority of the signers thereof.
Very truly yours,
PHARMACIA & UPJOHN, INC.
By: /s/ Robert C. Salisbury
Name: Robert C. Salisbury
Title: Executive Vice President (Chief
Financial Officer and Chief
Accounting Officer)
AB VOLVO (PUBL)
By: /s/ Eva Persson
Name: Eva Persson
Title: Vice President - Head of
Corporate Legal
SOTROF AKTIEBOLAG
By: /s/ Eva Persson
Name: Eva Persson
Title: Authorized Signatory
Accepted as of the date hereof:
GOLDMAN SACHS INTERNATIONAL
MERRILL LYNCH INTERNATIONAL
CS FIRST BOSTON LIMITED
HSBC INVESTMENT BANK PLC
UBS LIMITED
By: GOLDMAN SACHS INTERNATIONAL
By: /s/ Christopher French
(Attorney-in-fact)
and
By: MERRILL LYNCH INTERNATIONAL
By: /s/ Brad England /s/ John V. Millar
(Attorney-in-fact)
<PAGE>
On behalf of each of the Underwriters
<PAGE>
<TABLE>
SCHEDULE I
<S> <C> <C>
Total Number of Number of Optional
Firm Shares to be Shares to be Purchased if
Purchased Maximum Option Exercised
Underwriter
Goldman Sachs International 1,656,460 248,469
Merrill Lynch International . . . . . . . . . . . . . . . . . . . 1,656,460 248,469
CS First Boston Limited . . . . . . . . . . . . . . . . . . . . . 828,000 155,200
HSBC Investment Bank plc . . . . . . . . . . . . . . . . . . . . 828,000 124,200
UBS Limited . . . . . . . . . . . . . . . . . . . . . . . . . . . 828,000 124,200
Barclays de Zoete Wedd Limited . . . . . . . . . . . . . . . . . 454,480 68,172
Bear, Stearns International Limited . . . . . . . . . . . . . . . 454,480 68,172
Kleinwort Benson Limited . . . . . . . . . . . . . . . . . . . . 454,480 68,172
Lehman Brothers International (Europe) . . . . . . . . . . . . . 454,480 68,172
J.P. Morgan Securities Ltd. . . . . . . . . . . . . . . . . . . . 454,480 68,172
Swiss Bank Corporation . . . . . . . . . . . . . . . . . . . . . 454,480 68,172
Banque Bruxelles Lambert S.A. . . . . . . . . . . . . . . . . . . 225,400 33,810
Banque Paribas . . . . . . . . . . . . . . . . . . . . . . . . . 225,400 33,810
Daiwa Europe Limited . . . . . . . . . . . . . . . . . . . . . . 225,400 33,810
Total 9,200,000 1,380,000
</TABLE>
<PAGE>
<TABLE>
SCHEDULE II
DEFINED TERMS
<S> <C>
Act Section 1(a)(i)
Authorized Agent Section 17
Closing Location Section 4(b)
Commission Section 1(a)(i)
Company Introductory Paragraph 1
Custodian Agreement Introductory Paragraph 4
Depositary Introductory Paragraph 4
Designated Office Section 4(a)
DTC Section 4(a)
Environmental Laws Section 1(a)(ix)
EU Section 7(l)
Exchange Act Section 1(a)(i)
Firm Shares Introductory Paragraph 2
First Time of Delivery Section 4(a)
General Terms and Conditions Introductory Paragraph 4
Global Offering Introductory Paragraph 1
Global Coordinators Introductory Paragraph 5
GSI Introductory Paragraph 6
Initial Registration Statement Section 1(a)(i)
International Offering Introductory Paragraph 3
International Prospectus Section 1(a)(v)
Intersyndicate Agreement Introductory Paragraph 5
Investment Company Act Section 1(a)(xix)
MLI Introductory Paragraph 6
New York Business Day Section 4(b)
New York Court Section 17
Nordic Shares Introductory Paragraph 3
Nordic Prospectus Section 1(a)(v)
Nordic Underwriters Introductory Paragraph 3
Nordic Offering Introductory Paragraph 3
Nordic Underwriting Agreement Introductory Paragraph 3
Notification Time Section 4(b)
Optional Shares Introductory Paragraph 2
Preliminary International Prospectus Section 1(a)(v)
Preliminary Nordic Prospectus Section 1(a)(v)
Preliminary Prospectuses Section 1(a)(v)
Preliminary U.S. Prospectus Section 1(a)(i)
Principal Subsidiaries Section 1(a)(vi)
Principal U.S. Subsidiary Section 7(d)(i)
Prospectuses Section 1(a)(v)
Purchase Price Section 2(a)
Registration Statement Section 1(a)(i)
Relevant Jurisdictions Section 5(b)(i)
Rule 462(b) Registration Statement Section 1(a)(i)
SDSs Introductory Paragraph 3
SDS Purchase Price Section 2(a)
Second Time of Delivery Section 4(a)
Selling Stockholder Introductory Paragraph 1
Shares Introductory Paragraph 2
Stattum Section 7(m)
Stock Introductory Paragraph 1
Time of Delivery Section 4(a)
U.S. Offering Introductory Paragraph 2
U.S. Prospectus Section 1(a)(i)
U.S. Shares Introductory Paragraph 3
U.S. Underwriters Introductory Paragraph 3
U.S. Underwriting Agreement Introductory Paragraph 3
Underwriters Introductory Paragraph 2
Volvo Introductory Paragraph 1
</TABLE>
<PAGE>
ANNEX A
Each of the several Underwriters represents and agrees that it will not offer
or sell any of the Shares or SDSs in any jurisdiction except under
circumstances that will result in compliance with the applicable laws thereof;
provided that no representation or agreement is made hereby with respect to
the adequacy, accuracy or completeness of any Preliminary Prospectus or
Prospectus under the laws or regulatory requirements of any jurisdiction.
Each Underwriter understands that no action has been taken to permit a public
offering in any jurisdiction outside the United States where action would be
required for such purpose.
<PAGE>
ANNEX I(a)
FORM OF ORIGINAL COMFORT LETTER
<PAGE>
ANNEX I(b)
FORM OF BRING-DOWNCOMFORT LETTER
<PAGE>
ANNEX II(a)
FORM OF OPINION OF SHEARMAN & STERLING
<PAGE>
ANNEX II(B)
FORMS OF OPINIONS OF SULLIVAN & CROMWELL
<PAGE>
ANNEX II(C)
FORM OF OPINION OF KEN CYRUS
<PAGE>
ANNEX II(D)
FORM OF OPINION OF FRED BODIN
<PAGE>
ANNEX II(E)
FORM OF OPINION OF WHITE & CASE
<PAGE>
ANNEX II(F)
FORM OF OPINION OF MATS LIDGARD
<PAGE>
ANNEX II(G)
FORM OF OPINION OF EMANUELE BARIE
<PAGE>
ANNEX II(H)
FORM OF OPINION OF SKANDINAVISKA ENSKILDA BANKEN LEGAL DEPARTMENT
<PAGE>
PHARMACIA & UPJOHN, INC.
COMMON STOCK
PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
(NORDIC VERSION)
July 23, 1996
Enskilda Securities,
Skandinaviska Enskilda Banken AB (publ)
Goldman Sachs International
Merrill Lynch International
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Enskilda Securities,
Skandinaviska Enskilda Banken AB (publ)
Kungstradsgardsgaten 8
S-1-3 22 Stockholm
Sweden
and
c/o Goldman Sachs International
Peterborough Court,
133 Fleet Street,
London EC4A 2BB
and
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2 9LY
Ladies and Gentlemen:
Sotrof Aktiebolag, a stockholder (the "Selling Stockholder") of
Pharmacia & Upjohn, Inc., a Delaware corporation (the "Company"), proposes to
sell an aggregate of 46,000,000 shares of common stock, par value $.01 per
share ("Stock"), of the Company to be offered in a global offering (the
"Global Offering") comprised of an U.S. Offering, an International Offering
and a Nordic Offering (each as defined herein). The Selling Stockholder is an
indirect wholly owned subsidiary of AB Volvo (publ) ("Volvo").
The Selling Stockholder proposes, subject to the terms and
conditions stated herein, to sell to the Underwriters named in Schedule I
hereto (the "Underwriters") an aggregate of 2,300,000 shares (the "Firm
Shares") and, at the election of the Underwriters, up to 345,000 additional
shares (the "Optional Shares") of Stock of the Company (the Firm Shares and
the Optional Shares that the Underwriters elect to purchase pursuant to
Section 2 hereof are herein collectively called the "Shares") to be offered
for sale in the Nordic countries (the "Nordic Offering"). At the election of
the Underwriters, all or a portion of the Shares to be sold by the Selling
Stockholder to the Underwriters hereunder may be deposited by the Selling
Stockholder pursuant to the Custodian Agreement referred to below at or prior
to each Time of Delivery (as defined below) and delivered in the form of
Swedish Depositary Shares ("SDSs"), each SDS representing the right to receive
one share of Stock.
It is understood and agreed to by all parties that the Company,
Volvo and the Selling Stockholder are concurrently entering into: (i) an
agreement (the "U.S. Underwriting Agreement") providing for the sale by the
Selling Stockholder of up to a total of 39,675,000 shares of Stock (the
<PAGE>
"U.S. Shares"), including the over-allotment option thereunder, through
arrangements with certain underwriters in the United States and Canada (the
"U.S. Underwriters"), for whom Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Goldman, Sachs & Co., Bear, Stearns & Co. Inc., J.P. Morgan
Securities Inc. and Morgan Stanley & Co. Incorporated are acting as lead
managers (the "U.S. Offering"); and (ii) an agreement (the "International
Underwriting Agreement") providing for the sale by the Selling Stockholder of
up to a total of 10,580,000 shares of Stock (the "International Shares", a
portion of which may be delivered in the form of shares and a portion of which
may be deposited by the Selling Stockholder pursuant to the Custodian
Agreement referred to below and delivered in the form of SDSs), including the
over-allotment option thereunder, through arrangements with certain
underwriters outside the United States and Canada and outside the Nordic
countries (the "International Underwriters"), for whom Goldman Sachs
International, Merrill Lynch International, CS First Boston Limited, HSBC
Investment Bank plc and UBS Limited are acting as lead managers (the
"International Offering"). Anything herein or therein to the contrary
notwithstanding, the respective closings under this Agreement, the
U.S. Underwriting Agreement and the International Underwriting Agreement are
hereby expressly made conditional on one another.
SDSs will be issued in accordance with the Custodian Agreement,
dated as of November 1, 1995 (the "Custodian Agreement"), between the Company
and Skandinaviska Enskilda Banken AB (publ), as Custodian (the "Depositary"),
and the general terms and conditions under which the SDSs are issued and
governed (the "General Terms and Conditions").
The Underwriters hereunder and the U.S. Underwriters and the
International Underwriters are simultaneously entering into an Intersyndicate
Agreement between U.S., International and Nordic Underwriting Syndicates (the
"Intersyndicate Agreement") which provides, among other things, that Goldman,
Sachs & Co. and Merrill Lynch & Co. shall act as the Global Coordinators (the
"Global Coordinators") for the Global Offering and for the transfer of shares
of Stock among the three syndicates and for consultation by the Lead Managers
hereunder with the Global Coordinators prior to exercising the rights of the
Underwriters under Section 7 hereof. Three forms of prospectus are to be used
in connection with the offering and sale of shares of Stock contemplated by
the foregoing, one relating to the offering and sale of the Shares and SDSs
hereunder, a second relating to the offering and sale of the U.S. Shares in
the United States and Canada, and a third relating to the offering and sale of
the International Shares and SDSs outside the United States and Canada and
outside the Nordic countries. All forms of prospectus will be substantially
identical except for certain substitute and additional pages. Except as used
in Sections 2, 3, 4, 9 and 12 herein, and except as the context may otherwise
require, references hereinafter to the Shares shall include all of the shares
of Stock and SDSs which may be sold pursuant to either this Agreement, the
U.S. Underwriting Agreement or the International Underwriting Agreement,
references to Underwriters shall include the U.S. Underwriters and the
International Underwriters, and references herein to any prospectus, whether
in preliminary or final form, and whether as amended or supplemented, shall
include the U.S., International and Nordic versions thereof.
In addition, this Agreement incorporates by reference certain
provisions from the U.S. Underwriting Agreement (including the related
definitions of terms, which are also used elsewhere herein) and, for purposes
of applying the same, references (whether in these precise words or their
equivalent) in the incorporated provisions to the "Underwriters" shall be to
the Underwriters hereunder, to the "Shares" shall be to the Shares hereunder
as just defined, to "this Agreement" (meaning therein the U.S. Underwriting
Agreement) shall be to this Agreement (except where this Agreement is already
referred to or as the context may otherwise require) and to the
representatives of the Underwriters shall be to the addressees of this
Agreement and to Goldman, Sachs & Co. or Merrill Lynch & Co. shall be to
Goldman Sachs International ("GSI") or Merrill Lynch International ("MLI"),
respectively, and, in general, all such provisions and defined terms shall be
applied mutatis mutandis as if the incorporated provisions were set forth in
<PAGE>
full herein having regard to their context in this Agreement as opposed to the
U.S. Underwriting Agreement.
1. (a) The Company represents and warrants to, and agrees with,
each of the Underwriters and (in the case of clauses (i)-(v) only) Volvo and
the Selling Stockholder that:
(i) A registration statement on Form S-3 (File No. 333-06045) (the
"Initial Registration Statement") in respect of the Shares to be offered
and sold pursuant to the U.S. Underwriting Agreement has been filed with
the Securities and Exchange Commission (the "Commission"); the Initial
Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto but
including all documents incorporated by reference in the prospectus
contained therein, to you for each of the other Underwriters, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the U.S. Offering
(a "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending
the effectiveness of the Initial Registration Statement, any post-
effective thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in the
Initial Registration Statement or filed with the Commission pursuant to
Rule 424(a) of the rules and regulations of the Commission under the Act,
is hereinafter called a "Preliminary U.S. Prospectus"); the various
parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including (x) the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the Initial Registration Statement at the
time it was declared effective and (y) the documents incorporated by
reference in the prospectus contained in the registration statement at
the time such part of the registration statement became effective, each
as amended at the time such part of the registration statement became
effective or such part of the Rule 462(b) Registration Statement, if any,
became or hereafter becomes effective, are hereinafter collectively
called the "Registration Statement"; such final prospectus, in the form
first filed pursuant to Rule 424(b) under the Act, is hereinafter called
the "U.S. Prospectus"; and any reference herein to any Preliminary U.S.
Prospectus or the U.S. Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the Act, as of the date of such Preliminary U.S.
Prospectus or U.S. Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary U.S. Prospectus or the U.S.
Prospectus shall be deemed to refer to and include any documents filed
after the date of such Preliminary U.S. Prospectus or U.S. Prospectus, as
the case may be, under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and incorporated by reference in such Preliminary
U.S. Prospectus or U.S. Prospectus, as the case may be; and any reference
to any amendment to the Registration Statement shall be deemed to refer
to and include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the
Initial Registration Statement that is incorporated by reference in the
Registration Statement;
(ii) No order preventing or suspending the use of any Preliminary
U.S. Prospectus has been issued by the Commission, and each Preliminary
U.S. Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder;
<PAGE>
(iii) The documents incorporated by reference in the
Prospectuses, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to the
requirements of the Act or Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectuses or any further amendment or
supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain 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 not misleading; provided, however, that this
representation and warranty shall not apply to (x) any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the Global
Coordinators expressly for use therein or (y) Selling Stockholder
Information; for purposes of this Agreement, "Selling Stockholder
Information" shall comprise the statements in the Prospectuses under the
captions "Prospectus Summary - The Global Offering - Shares of Common
Stock offered by the Selling Stockholder", "Prospectus Summary - The
Selling Stockholder" and "Selling Stockholder";
(iv) The Registration Statement conforms, and the U.S. Prospectus
and any further amendments or supplements to the Registration Statement
or the U.S. Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and the Registration Statement does not and will not, as of
the applicable effective date of the Registration Statement and any
amendment thereto, contain 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 not misleading; provided, however, that this
representation and warranty shall not apply to (x) any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through the Global
Coordinators expressly for use therein or (y) Selling Stockholder
Information;
(v) Each of (A) the Preliminary U.S. Prospectus, (B) the
preliminary International Prospectus (the "Preliminary International
Prospectus") and (C) the preliminary Nordic Prospectus (the "Preliminary
Nordic Prospectus", and, together with the Preliminary U.S. Prospectus
and the Preliminary International Prospectus, the "Preliminary
Prospectuses") at the respective dates thereof, did not, and each of (A)
the U.S. Prospectus, (B) the final International Prospectus (the
"International Prospectus") and (C) the final Nordic Prospectus (the
"Nordic Prospectus", and, together with the U.S. Prospectus and the
International Prospectus, the "Prospectuses") at the respective dates
thereof, does not or did not, and any further amendment or supplement
thereto, as of the date of any such amendment or supplement, will not,
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to (x) any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through the Global Coordinators expressly for use therein or
(y) Selling Stockholder Information; references herein to "prospectuses",
"Preliminary Prospectuses" or "Prospectuses" shall mean each and every
relevant prospectus, unless the context otherwise requires, and shall be
deemed to refer to and include the documents incorporated by reference
therein;
<PAGE>
(vi) Neither the Company nor any of its Principal Subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectuses any loss or
interference with its business that is material to the Company and its
subsidiaries, taken as a whole, from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectuses; and, since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, there has not been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries, taken as a
whole, or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectuses; as used
in this Agreement, "Principal Subsidiaries" means Pharmacia & Upjohn
Company, Upjohn Manufacturing, Inc., Pharmacia & Upjohn AB and Pharmacia
S.p.A;
(vii) The Company and each of its subsidiaries have all
concessions, licenses, franchises, permits, authorizations, approvals and
orders of and from all governmental regulatory officials and bodies that
are necessary to own or lease their properties and conduct their
businesses as described in the Prospectuses, except where the failure to
have any such concession, license, franchise, permit, authorization,
approval or order would not have a material adverse effect on the
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole;
(viii) The Company and its subsidiaries own or have had licensed
to them or otherwise have the benefit or use under the authority of the
owners thereof of, all patents, patent rights, inventions, trademarks,
service marks, trade names and copyrights (in each case, registered or
not) which are necessary for the conduct of the business of the Company
and its subsidiaries as described in the Prospectuses and, except as set
forth or contemplated in the Prospectuses, there are no unresolved
assertions that the Company or any of its subsidiaries has infringed the
patents, patent rights, inventions, trademark rights, service marks,
trade names or copyrights of others, other than assertions which are not
reasonably likely to have a material adverse effect on the consolidated
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole;
(ix) The Company and its subsidiaries (A) are in compliance with all
applicable federal, state, local and foreign laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (B) have all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
businesses as described in the Prospectuses and (C) are in compliance
with all terms and conditions of any such permit, license or approval, in
each case except as described in the Prospectuses or except as would not,
individually or in the aggregate, result in a material adverse effect on
the consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, taken as a whole;
(x) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware
and each Principal Subsidiary of the Company has been duly organized and
is validly existing as a corporation under the laws of its jurisdiction
of incorporation, and, in the case of Principal Subsidiaries incorporated
in the United States, is in good standing under the laws of its
jurisdiction of incorporation; and each of the Company and each Principal
Subsidiary of the Company has corporate power and authority to own its
properties and conduct its business as described in the Prospectuses, and
<PAGE>
has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, except for any such failure
to be so qualified in any such jurisdiction which would not result in a
material adverse effect on the consolidated financial position,
shareholder's equity or results of operations of the Company and its
subsidiaries, taken as a whole;
(xi) The Company has an authorized capitalization as set forth in or
incorporated by reference in the Prospectuses, and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and conform to
the description of the Stock contained in or incorporated by reference in
the Prospectuses; shares of Stock are listed for trading on the New York
Stock Exchange and are quoted on the SEAQ International system operated
by the London Stock Exchange Limited, and SDSs are traded on the
Stockholm Stock Exchange; and all of the issued shares of capital stock
of each Principal Subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and (except for
directors' qualifying shares and except as set forth in the Prospectuses)
are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(xii) The sale and delivery of the Shares and SDSs to be sold by
the Selling Stockholder hereunder and under the International
Underwriting Agreement and the U.S. Underwriting Agreement and the
compliance by the Company with all of the provisions of this Agreement,
the International Underwriting Agreement and the U.S. Underwriting
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries is bound or to which any
of the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the provisions
of the Certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties, except for such conflicts,
breaches, violations and defaults that would not have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole or that
would otherwise materially prejudice the consummation of the transactions
contemplated by this Agreement, the International Underwriting Agreement
or the U.S. Underwriting Agreement; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required to be obtained or made
by the Company for the sale and delivery of the Shares or SDSs by the
Selling Stockholder or the consummation by the Company of the
transactions contemplated by this Agreement, the International
Underwriting Agreement or the U.S. Underwriting Agreement, except for the
registration under the Act of the Shares and such consents, approvals,
authorizations, registrations or qualifications as may be required under
state or foreign securities or Blue Sky laws in connection with the
purchase and distribution of the Shares and SDSs by the Underwriters, the
International Underwriters or the U.S. Underwriters;
(xiii) This Agreement, the International Underwriting Agreement
and the U.S. Underwriting Agreement have been duly authorized, executed
and delivered by the Company;
(xiv) The Custodian Agreement has been duly authorized, executed
and delivered by the Company and constitutes a valid and legally binding
agreement of the Company, enforceable in accordance with its terms,
<PAGE>
subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; upon the deposit of
Shares evidencing SDSs to be delivered at each Time of Delivery in
respect thereof in accordance with the provisions of the Custodian
Agreement and the General Terms and Conditions, the persons in whose
names the SDSs are registered will be entitled to the rights specified in
the Custodian Agreement and, in the General Terms and Conditions; and the
Custodian Agreement and the General Terms and Conditions conform in all
material respects to the descriptions thereof contained in the
International Prospectus and in the Nordic Prospectus;
(xv) The description of the Stock included in or incorporated by
reference in the Prospectuses, insofar as it purports to constitute a
summary of the terms of the Stock, the description of the SDSs included
in the International Prospectus and in the Nordic Prospectus, insofar as
it purports to constitute a summary of the terms of the SDSs, and the
statements set forth in the International Prospectus and in the Nordic
Prospectuses under the caption "Certain United States Tax Consequences to
Non-U.S. Holders of Common Stock", insofar as they purport to describe
the provisions of documents or laws therein described, are complete and
accurate in all material respects;
(xvi) Other than as set forth in the Prospectuses, there are no
legal or governmental proceedings pending to which the Company or any of
its subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which are reasonably likely,
individually or in the aggregate, to have a material adverse effect on
the current or future consolidated financial position, shareholders'
equity or results of operations of the Company and its subsidiaries,
taken as a whole; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(xvii) The Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(xviii) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate
located in Cuba within the meaning of Section 517.075, Florida Statutes;
and
(xix) Coopers & Lybrand L.L.P. and KPMG Peat Marwick LLP, who
have certified certain financial statements of the Company and its
subsidiaries, are each independent public accountants as required by the
Act and the rules and regulations of the Commission thereunder.
(b) Volvo represents and warrants to, and agrees with, each of the
Underwriters and the Company that:
(i) All consents, approvals, authorizations, orders, registrations
and qualifications necessary for the execution and delivery by Volvo and
the Selling Stockholder of this Agreement, the International Underwriting
Agreement and the U.S. Underwriting Agreement, and for the sale and
delivery of the Shares and SDSs to be sold by the Selling Stockholder,
and the performance of their respective obligations, hereunder and under
the International Underwriting Agreement and the U.S. Underwriting
Agreement, have been obtained and are in full force and effect; and each
of Volvo and the Selling Stockholder has full right, power and authority
to enter into this Agreement, the International Underwriting Agreement
and the U.S. Underwriting Agreement and the Selling Stockholder has full
right, power and authority to sell, assign, transfer and deliver the
<PAGE>
Shares and SDSs to be sold by it hereunder and under the International
Underwriting Agreement and the U.S. Underwriting Agreement;
(ii) The sale and delivery of the Shares and SDSs to be sold by the
Selling Stockholder hereunder and under the International Underwriting
Agreement and the U.S. Underwriting Agreement and the compliance by Volvo
and the Selling Stockholder with all of the provisions of this Agreement,
the International Underwriting Agreement and the U.S. Underwriting
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
statute, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which Volvo or the Selling Stockholder is a
party or by which Volvo or the Selling Stockholder is bound, or to which
any of the property or assets of Volvo or the Selling Stockholder is
subject, nor will such action result in any violation of the provisions
of the articles of association of Volvo or the Selling Stockholder or any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over Volvo or the Selling Stockholder
or the property of Volvo or the Selling Stockholder;
(iii) This Agreement, the International Underwriting Agreement
and the U.S. Underwriting Agreement have been duly authorized, executed
and delivered by Volvo or the Selling Stockholder;
(iv) Volvo currently holds the Shares through the Selling
Stockholder, which is an indirect wholly owned subsidiary of Volvo, and
the Selling Stockholder has good and valid title to the Shares, free and
clear of all liens, encumbrances, equities or claims, and, with respect
to each Time of Delivery (as defined in Section 4 hereof) (A) immediately
prior to such Time of Delivery, the Selling Stockholder will have good
and valid title to the Shares to be sold by it hereunder and under the
International Underwriting Agreement and the U.S. Underwriting Agreement,
free and clear of all liens, encumbrances, equities and claims; (B)
immediately prior to such Time of Delivery, the Selling Stockholder will
have good and valid title to the Shares deposited by it pursuant to the
Custodian Agreement against issuance of the SDSs to be delivered by the
Selling Stockholder at such Time of Delivery, free and clear of all
liens, encumbrances, equities and claims (except such as arise under the
terms of the Custodian Agreement); (C) immediately prior to such Time of
Delivery, the Selling Stockholder will have good and valid title to the
SDSs to be delivered by it at such Time of Delivery, free and clear of
all liens, encumbrances, equities and claims; and (D) upon delivery of
the Shares and SDSs to be delivered by the Selling Stockholder at such
Time of Delivery pursuant to this Agreement, the International
Underwriting Agreement and the U.S. Underwriting Agreement and payment
therefor as provided herein and therein, good and valid title thereto,
free and clear of all liens, encumbrances, equities and claims, will have
passed to the several Underwriters or the International Underwriters or
U.S. Underwriters, as the case may be;
(v) To the extent that any statements or omissions made in the
Registration Statement, any Preliminary Prospectus, any Prospectus or any
amendment or supplement thereto are made in reliance upon and in
conformity with written information furnished to the Company by Volvo
expressly for use therein, such Preliminary Prospectus and the
Registration Statement did, and such Prospectus and any further
amendments or supplements to the Registration Statement and such
Prospectus, when they become effective or are filed with the Commission,
as the case may be, will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading;
(vi) The statements in the Prospectuses under the captions
"Prospectus Summary - The Global Offering - Shares of Common Stock
offered by the Selling Stockholder", "Prospectus Summary - Selling
<PAGE>
Stockholder" and "Selling Stockholder" do not, as of the effective date
as to the Registration Statement and on the applicable date as to any
Prospectus and as of each Time of Delivery, did not and will not include
any untrue statement of a material fact or omit to state any material
fact necessary in order to make such statements not misleading; and
(vii) Neither Volvo nor the Selling Stockholder has taken,
directly or indirectly, any action which is designed to or which
constitutes or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
in connection with the Global Offering; provided, however, that this
provision shall not apply to stabilization activities conducted by the
Global Coordinators on behalf of the Underwriters, as described in the
Prospectuses.
2. Subject to the terms and conditions herein set forth, (a) Volvo
agrees to cause the Selling Stockholder to sell, and the Selling Stockholder
agrees to sell, to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Selling Stockholder,
at a purchase price per share of $39.20 (the "Purchase Price") and per SDS of
SEK 257.56344 (the "SDS Purchase Price") (to the extent that you elect to take
delivery of Shares in the form of SDSs pursuant to Section 4 hereof), the
number of Firm Shares set forth opposite the name of such Underwriter in
Schedule I hereto and (b) in the event and to the extent that the Underwriters
shall exercise the election to purchase Optional Shares as provided below,
Volvo agrees to cause the Selling Stockholder to sell, and the Selling
Stockholder agrees to sell, to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Selling
Stockholder, at the purchase price per share set forth in clause (a) of this
Section 2, that portion of the number of Optional Shares as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of Optional Shares by
a fraction the numerator of which is the maximum number of Optional Shares
which such Underwriter is entitled to purchase as set forth opposite the name
of such Underwriter in Schedule I hereto and the denominator of which is the
maximum number of Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
The Selling Stockholder hereby grants to the Underwriters the right
to purchase at their election up to 345,000 Optional Shares, at the Purchase
Price or the SDS Purchase Price, as the case may be, for the sole purpose of
covering overallotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares may be exercised from time to time on one or more
occasions only by written notice from you to Volvo, given within a period of
30 calendar days after the date of this Agreement and setting forth the
aggregate number of Optional Shares to be purchased and the date on which such
Optional Shares are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless you and Volvo otherwise agree in writing, earlier than two or later
than ten business days after the date of such notice.
3. Upon the authorization by the Lead Managers of the release of
the Firm Shares, the several Underwriters propose to offer the Firm Shares for
sale upon the terms and conditions set forth in the Nordic Prospectus and in
the form of Agreement among Underwriters (Nordic Version), which has been
previously submitted to the Company and Volvo by you. Each Underwriter hereby
makes to and with the Company and the Selling Stockholder the representations
and agreements of such Underwriter set forth in Annex A hereto.
4. (a) The Shares to be purchased by each Underwriter hereunder,
in definitive form, and in such authorized denominations and registered in
such names as the Global Coordinators may request upon at least forty-eight
hours' prior notice to Volvo shall be delivered by or on behalf of the Selling
Stockholder to the Global Coordinators, through the facilities of The
Depository Trust Company ("DTC"), for the account of such Underwriter, against
payment by or on behalf of such Underwriter of the purchase price therefor by
<PAGE>
wire transfer of U.S. dollars to the order of, and to such account as shall
have been notified by, the Selling Stockholder in Federal (same day) funds.
Volvo will cause the certificates representing the Shares to be made available
for checking and packaging at least twenty-four hours prior to the Time of
Delivery (as defined below) with respect thereto at the office of DTC or its
designated custodian (the "Designated Office"). The time and date of such
delivery and payment shall be, with respect to the Firm Shares, 9:00 a.m., New
York City time (2.00 p.m, London time), on July 29, 1996, or such other time
and date as the Global Coordinators and Volvo may agree upon in writing, and,
with respect to the Optional Shares, 9:00 a.m., New York City time (2.00 p.m.
London time), on the date specified by the Global Coordinators in the written
notice given by the Global Coordinators of the Underwriters' election to
purchase such Optional Shares, or such other time and date as the Global
Coordinators and Volvo may agree upon in writing, provided in each case that
such day is a New York Business Day (as defined in Section 4(c) below) and, if
SDSs are to be delivered, a day on which commercial banks are generally open
for business in Stockholm. Such time and date for delivery of the Firm Shares
is herein called the "First Time of Delivery", such time and date for delivery
of the Optional Shares, if not the First Time of Delivery, is herein called a
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) With respect to all or a portion of the Shares to be purchased
and sold hereunder at each Time of Delivery, the Global Coordinators, on
behalf of the several Underwriters, may elect to have SDSs delivered and paid
for hereunder in lieu of, and in satisfaction of, the Selling Stockholder's
obligation to sell to the several Underwriters and the several Underwriters'
obligations to purchase, Shares. Notice of such election shall be given by
the Global Coordinators to Volvo at least forty-eight hours prior to such Time
of Delivery (the "Notification Time"). The purchase price for any SDSs so
delivered as a result of making such election shall be the SDS Purchase Price.
If such an election is made, the SDSs to be purchased by each Underwriter
hereunder, in such authorized denominations and registered in such names as
the Global Coordinators may request upon notice to Volvo prior to Notification
Time, shall be delivered by or on behalf of the Selling Stockholder to you,
for the account of such Underwriter, against payment by or on behalf of such
Underwriter of the purchase price therefor by wire transfer to the order of
the Selling Stockholder in same day funds in Swedish kronor in respect of the
Shares delivered in the form of SDSs.
(c) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 of this Agreement,
including the cross-receipt for the Shares and any additional documents
requested by the Underwriters pursuant to Section 7(o) of this Agreement, will
be delivered at the offices of Shearman & Sterling, 199 Bishopsgate, London,
England (the "Closing Location"), and the Shares will be delivered as
specified in subsections (a) and (b) above, all at each Time of Delivery. A
meeting will be held at the Closing Location at 2:00 p.m., London time, on the
New York Business Day next preceding each Time of Delivery, at which meeting
the final drafts of the documents to be delivered pursuant to the preceding
sentence will be available for review by the parties hereto. For the purposes
of this Section 4, "New York Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.
5. (a) The Company agrees with each of the Underwriters:
(i) To prepare the Prospectuses in a form approved by you and to
file the U.S. Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day
following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Act; to submit to you for prior approval with reasonable notice any
proposed amendments or supplements to the Registration Statement or any
Prospectus; to advise you, promptly after it receives notice thereof, of
<PAGE>
the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the U.S. Prospectus or any
amended U.S. Prospectus has been filed and to furnish you a reasonable
number of copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the U.S. Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares; to advise you, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or of
any order preventing or suspending the use of any Preliminary U.S.
Prospectus or U.S. Prospectus, of the suspension of the qualification of
the Shares for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statement or U.S. Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary U.S. Prospectus or U.S. Prospectus
or suspending any such qualification, promptly to use its reasonable best
efforts to obtain the withdrawal of such order;
(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to use its
reasonable best efforts to comply with such laws so as to permit the
continuance of sales and dealings therein in such jurisdictions for nine
months after the time of issue of the Prospectuses, provided that in
connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in
any jurisdiction;
(iii) Prior to 12:00 p.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to
time to furnish the Underwriters with a reasonable number of copies of
each Prospectus in New York City and, if the delivery of a prospectus is
required at any time prior to the expiration of nine months after the
time of issue of the Prospectuses in connection with the offering or sale
of the Shares or SDSs and if at such time any events shall have occurred
as a result of which the Prospectuses as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such period to amend or supplement any
Prospectus or to file under the Exchange Act any document incorporated by
reference in any Prospectus in order to comply with the Act or the
Exchange Act, to notify you and upon your request to file such document
and to prepare and furnish without charge to each Underwriter and to any
dealer in securities a reasonable number of copies as you may from time
to time request of any amended Prospectus or a supplement to any
Prospectus which will correct such statement or omission or effect such
compliance, and in case any Underwriter is required to deliver a
prospectus in connection with sales of any of the Shares at any time nine
months or more after the time of issue of the Prospectuses, upon your
request but at the expense of such Underwriter, to prepare and deliver to
such Underwriter as many copies as you may request of an amended or
supplemented Prospectus, including with respect to any Underwriter, a
U.S. Prospectus complying with Section 10(a)(3) of the Act;
(iv) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earningstatement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
<PAGE>
(v) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date hereof, not to issue,
offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder and under the International Underwriting Agreement and the U.S.
Underwriting Agreement, any shares of Stock or other securities of the
Company that are substantially similar to the Shares, including but not
limited to any securities that are convertible into or exchangeable for,
or that represent the right to receive, shares of Stock or any such
substantially similar securities, without the prior written consent of
the Global Coordinators; provided that this restriction will not apply to
issuances or sales of shares in connection with (i) employee stock
option, savings or compensation plans or dividend reinvestment plans or
the conversion of convertible securities outstanding on the date hereof
or (ii) a merger or other combination with, or exchange offer for shares
of, another entity; and
(vi) If the Company elects to rely upon Rule 462(b), the
Company shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C.
time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
(b) Volvo and the Selling Stockholder agree with each of the
Underwriters:
(i) To bear and pay any stamp, transfer, registration, documentary
or similar taxes or duties (including interest and penalties if the
payment was due to be made by the Selling Stockholder) payable in the
Kingdom of Sweden, the Kingdom of Denmark, the Republic of Finland, the
Kingdom of Norway, the United Kingdom, the United States, France, Germany
or Japan (the "Relevant Jurisdictions") or any political subdivision or
taxing authority of any such jurisdiction not recoverable within a
reasonable period of time in connection with (A) the sale and delivery by
the Selling Stockholder of the Shares and SDSs to or for the respective
accounts of the Underwriters in the manner contemplated herein or in the
International Underwriting Agreement or the U.S. Underwriting Agreement
and in accordance with reasonable and customary procedures in global
equity offerings, (B) the deposit with the Depositary of Shares against
the issuance of SDSs at each Time of Delivery, (C) the sale and delivery
by the Underwriters of the Shares or SDSs to the initial purchasers
thereof in the manner contemplated herein or in the International
Underwriting Agreement or in the U.S. Underwriting Agreement and in
accordance with reasonable and customary procedures in global equity
offerings, or (D) the execution and delivery of this Agreement, the
International Underwriting Agreement or the U.S. Underwriting Agreement,
and any value added tax payable in connection with the commissions and
other amounts payable by the Selling Stockholder pursuant to this
Agreement, the International Underwriting Agreement or the U.S.
Underwriting Agreement;
(ii) During the period beginning from the date hereof and continuing
to and including the date 180 days after the date hereof, not to offer,
sell, contract to sell or otherwise dispose of, except as provided
hereunder or under the International Underwriting Agreement or U.S.
Underwriting Agreement, any shares of Stock or other securities of the
Company that are substantially similar to the Shares, including but not
limited to any shares of Stock or other securities that are convertible
into or exchangeable for, or that represent the right to receive, shares
of Stock or any such substantially similar securities, without the prior
written consent of the Global Coordinators;
(iii) To not take, directly or indirectly, any action which is
designed to or which constitutes or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of any
<PAGE>
security of the Company to facilitate the sale or resale of the Shares;
provided, however, that this provision shall not apply to stabilization
activities conducted by the Global Coordinators on behalf of the
Underwriters, as described in the Prospectuses;
(iv) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, the Selling Stockholder will deliver to you prior to or at
the First Time of Delivery (as hereinafter defined) a properly completed
and executed United States Treasury Department Form W-8 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof); and
(v) Prior to each Time of Delivery, to deposit Shares with the
Depositary in accordance with the provisions of the Custodian Agreement
and the General Terms and Conditions and otherwise to comply with the
Custodian Agreement and the General Terms and Conditions so that any SDSs
to be delivered by the Selling Stockholder at such Time of Delivery
pursuant to the International Underwriting Agreement and the U.S.
Underwriting Agreement will be issued by the Depositary against receipt
of such Shares and delivered at such Time of Delivery in accordance with
the International Underwriting Agreement and the U.S. Underwriting
Agreement.
6. (a) The Company covenants and agrees with Volvo, the Selling
Stockholder and the several Underwriters that the Company will pay or cause to
be paid all expenses incident to the Company's performance of or compliance
with this Agreement, the International Underwriting Agreement and the U.S.
Underwriting Agreement, including without limitation: (i) all Commission and
any National Association of Securities Dealers registration and filing fees
and expenses, (ii) all fees and expenses in connection with the qualification
of the Shares for offering and sale under state securities or "blue sky" laws,
including reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualifications, (iii) all expenses relating to the
preparation, printing, distribution and reproduction of the Registration
Statement, each Prospectus included therein or prepared for distribution
pursuant hereto, this Agreement, the International Underwriting Agreement or
the U.S. Underwriting Agreement, each amendment or supplement of the
foregoing, the certificates representing Shares and all other documents
relating to the offering, purchase, sale and delivery of the Shares and SDSs,
(iv) internal expenses (including, without limitation, all salaries and
expenses of the Company's officers and employees performing legal or
accounting duties, and (v) fees, disbursements and expenses of the Company's
counsel and its advisors and experts and independent certified public
accountants (including the expenses of any opinions or "comfort" letters
required by or incident to the performance by the Company with its obligations
hereunder and compliance with such obligations). To the extent that any such
expenses are incurred, assumed or paid by Volvo, the Selling Stockholder or
the Underwriters, the Company shall reimburse such person for the full amount
so incurred, assumed or paid promptly after receipt of a request therefor.
(b) Except as may otherwise be agreed on behalf of the Underwriters,
Volvo covenants and agrees with the Company and the several Underwriters that
it will pay or cause to be paid all costs and expenses incident to the
performance of or compliance with this Agreement, the International
Underwriting Agreement and the U.S. Underwriting Agreement by Volvo and the
Selling Stockholder which are not otherwise specifically provided to be paid
by the Company pursuant to Section 6(a), including any fees and expenses of
counsel for Volvo and the Selling Stockholder.
It is understood, that, except as provided in this Section 6, and
Sections 8 and 12 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel.
<PAGE>
7. The obligations of the Underwriters hereunder, as to the Shares
or SDSs to be delivered at each Time of Delivery, shall be subject, in their
discretion, to the condition that all representations and warranties and other
statements of the Company and of Volvo and the Selling Stockholder herein are,
at and as of such Time of Delivery, true and correct, the condition that each
of the Company, Volvo and the Selling Stockholder shall have performed all of
its obligations hereunder theretofore to be performed, and the following
additional conditions:
(a) The U.S. Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by
the Commission; and all requests for additional information on the part
of the Commission shall have been complied with to your reasonable
satisfaction; if the Company has elected to rely upon Rule 462(b), the
Rule 462(b) Registration Statement shall have become effective by 10:00
P.M., Washington, D.C. time, on the date of this Agreement;
(b) Shearman & Sterling, counsel for the Underwriters, shall have
furnished to you, the International Underwriters and the U.S.
Underwriters such opinion or opinions (a draft of each such opinion is
attached as Annex II(a) hereto), dated such Time of Delivery, with
respect to the matters covered in paragraphs (i), (ii), (iii) and (vi) of
subsection (c) below as well as such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon
such matters;
(c) Sullivan & Cromwell, counsel for the Company, shall have
furnished to you, the International Underwriters, the U.S. Underwriters,
Volvo and the Selling Stockholder their written opinion (a draft of such
opinion is attached as Annex II(b) hereto), dated such Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
Delaware;
(ii) All outstanding shares of common stock of the Company
(including the Shares) have been duly authorized and validly issued
and are fully paid and non-assessable;
(iii) This Agreement, the International Underwriting
Agreement and the U.S. Underwriting Agreement have been duly
authorized, executed and delivered by the Company;
(iv) The sale and delivery of the Shares by the Selling
Stockholder to the Underwriters in the manner contemplated in this
Agreement, the International Underwriting Agreement and the U.S.
Underwriting Agreement and in the Prospectuses and the performance
by the Company of its obligations under this Agreement, the
International Underwriting Agreement and the U.S. Underwriting
Agreement will not (A) violate the Company's Certificate of
Incorporation or By-Laws or (B) violate any federal law of the
United States or law of the State of New York applicable to the
Company; provided, however, that for the purposes of
paragraph (iv)(B), such counsel need express no opinion with respect
to federal or state securities laws, other anti-fraud laws and
fraudulent transfer laws; and provided further that insofar as
performance by the Company of its obligations under this Agreement
is concerned, such counsel need express no opinion as to bankruptcy,
insolvency, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights;
<PAGE>
(v) All regulatory consents, authorizations, approvals and
filings, required to be obtained or made by the Company under the
Federal laws of the United States or the laws of the State of New
York for the sale and delivery of the Shares or SDSs by the Selling
Stockholder to the Underwriters hereunder or under the International
Underwriting Agreement or the U.S. Underwriting Agreement have been
obtained or made; and
(vi) The Registration Statement has been declared effective
under the Act and, to the best of such counsel's knowledge, no order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
threatened by the Commission.
In rendering such opinion, such counsel may state that such opinion
is limited to the Federal laws of the United States, the laws of the State of
New York and the General Corporation Law of the State of Delaware, and that
they are expressing no opinion as to the effect of the laws of any other
jurisdiction. In connection with the opinion set forth in (vi) above, such
counsel may state that they have relied solely upon information obtained from
the Commission and upon a certificate of officers of the Company.
In rendering such opinion, such counsel may also state that, with
your approval, they have relied as to certain matters on information obtained
from public officials, officers of the Company and other sources believed by
them to be responsible and that they assume that the certificates for the
outstanding shares of Stock of the Company, including the Shares, conform to
the specimen thereof examined by them and have been countersigned by a
transfer agent and that the signatures on all documents examined by such
counsel are genuine, which assumptions they may state they have not
independently verified.
Such counsel shall also state that they have reviewed the
Registration Statement and the Prospectuses and participated in discussions
with representatives of the Company, representatives of the Company's
accountants, Volvo and its U.S. counsel and representatives of the
Underwriters and advised the Company as to the requirements of the Act and the
applicable rules and regulations of the Commission thereunder, that between
the effectiveness of the Registration Statement and the time of the delivery
of their letter they also participated in further discussions with
representatives of the Company, representatives of the Company's accountants,
Volvo and its U.S. counsel and representatives of the Underwriters during
which the contents of certain portions of the Prospectuses and certain related
matters were discussed, and reviewed the opinions referred to in this Section
7; on the basis of the information that they gained in the course of the
performance of such services, considered in the light of their understanding
of the applicable law (including the requirements of Form S-3 and the
character of the prospectus contemplated thereby) and the experience they have
gained through their practice under the Act, such counsel shall confirm to the
Underwriters that, in their opinion, the Registration Statement, as of its
effective date, and the U.S. Prospectus, as of its date, appeared on their
face to be appropriately responsive in all material respects to the
requirements of the Act and the applicable rules and regulations of the
Commission thereunder; that nothing that came to the attention of such counsel
during the course of such review has caused them to believe that the
Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectuses, as of their respective dates, contained
any untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances in which they were made, not misleading; and on the basis of the
procedures described in the second subclause of this paragraph, such counsel
shall confirm to the Underwriters that such counsel does not believe that any
Prospectus, as amended at such Time of Delivery, as of such Time of Delivery,
contained any untrue statement of a material fact or omitted to state any
<PAGE>
material fact necessary in order to make the statements therein, in the light
of the circumstances in which they were made, not misleading and that such
counsel do not know of any documents that are required to be filed as exhibits
to the Registration Statement and are not so filed or of any documents that
are required to be summarized in the U.S. Prospectus and are not so
summarized; (in rendering the opinion described in this paragraph such counsel
may state that the limitations inherent in the independent verification of
factual matters and the character of determinations involved in the
registration process are such that they do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectuses except for (i) the description of
Stock in the Company's Registration Statement on Form 8-A and incorporated in
the Prospectuses by reference or included in the International Prospectus and
the Nordic Prospectus and (ii) the statements set forth in the International
Prospectus and in the Nordic Prospectus under the caption "Certain United
States Tax Consequences to Non-U.S. Holders of Common Stock", insofar as they
relate to the provisions of documents or U.S. Federal laws or Delaware
corporation law therein described; that they do not express any opinion or
belief as to the financial statements or other financial data derived from
accounting records included therein; and that their opinion described in this
paragraph is furnished as counsel for the Company and is solely for the
benefit of the several Underwriters, International Underwriters, U.S.
Underwriters, Volvo, the Selling Stockholder and the directors of the Company
to whom such opinion is addressed.
(d) Kenneth M. Cyrus, counsel for the Company, shall have furnished
to you, the International Underwriters, the U.S. Underwriters, Volvo and
the Selling Stockholder his written opinion (a draft of such opinion is
attached as Annex II(c) hereto), dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) Each Principal Subsidiary of the Company that is
incorporated in the United States (a "Principal U.S. Subsidiary")
has been duly organized and is validly existing under the laws of
its jurisdiction of incorporation; and each of the Company and each
Principal U.S. Subsidiary of the Company has been duly qualified as
a foreign corporation for the transaction of business and is in good
standing under the laws of each jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification, or is subject to no material liability or disability
by reason of failure to be so qualified in any such jurisdiction
(such counsel being entitled to rely in respect of the opinion in
this clause upon opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Company, provided that
such counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(ii) The Company has an authorized capitalization as set forth
in the Prospectuses, and all of the issued shares of capital stock
of each Principal U.S. Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable,
and except as otherwise set forth in the Prospectuses, are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims (such counsel being entitled to
rely in respect of the opinion in this clause upon opinions of local
counsel and in respect of matters of fact upon certificates of
officers of the Company or its subsidiaries, provided that such
counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates) and the
Shares conform to the description of the Stock included in or
incorporated by reference in the Prospectuses;
(iii) The sale and delivery of the Shares and SDSs to be
sold by the Selling Stockholder hereunder and under the
International Underwriting Agreement and the U.S. Underwriting
Agreement and the compliance by the Company with all of the
<PAGE>
provisions of this Agreement, the International Underwriting
Agreement and the U.S. Underwriting Agreement and the consummation
of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of its
Principal Subsidiaries is a party or by which the Company or any of
its Principal Subsidiaries is bound or to which any of the property
or assets of the Company or any of its subsidiaries is subject, nor
will such action result in any violation of the provisions of the
Certificate of Incorporation or By-laws of the Company or any
statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over
the Company or any of its Principal Subsidiaries or any of their
properties, except for such conflicts, breaches, violations and
defaults that would not have a material adverse effect on the
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries taken as a whole or that would not
otherwise materially prejudice the consummation of the transactions
contemplated by this Agreement, the International Underwriting
Agreement or the U.S. Underwriting Agreement;
(iv) To the best of his knowledge the Company and each of its
Principal Subsidiaries have all concessions, licenses, franchises,
permits, authorizations, approvals and orders of and from all
relevant governmental regulatory officials and bodies that are
necessary to own or lease their properties and conduct their
businesses as described in the Prospectuses, except where the
failure to have any such concession, license, franchise, permit,
authorization, approval or order would not have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole;
(v) To the best of his knowledge, the Company and its
Principal Subsidiaries own or have had licensed to them or otherwise
have the benefit or use under the authority of the owners thereof
of, all patents, patent rights, inventions, trademarks, service
marks, trade names and copyrights (in each case, registered or not)
which are necessary for the conduct of the business of the Company
and its subsidiaries as described in the Prospectuses, except for
any such failure as would not have a material adverse effect on the
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries taken as a whole, and, to the best
of his knowledge and except for the matters described in the
Prospectuses, there are no unresolved assertions that the Company or
any of its subsidiaries has infringed the patents, patent rights,
inventions, trademark rights, service marks, trade names or
copyrights of others, other than assertions which, if determined
adversely to the Company or any of its subsidiaries, would not
individually or in the aggregate with respect to similar claims,
have a material adverse effect on the consolidated financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries, taken as a whole;
(vi) To the best of such counsel's knowledge and other than the
matters described in the Prospectuses, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which are reasonably likely,
individually or in the aggregate with respect to similar claims, to
have a material adverse effect on the current or future consolidated
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries taken as a whole; and, to the best
of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
<PAGE>
(vii) The Custodian Agreement has been duly authorized,
executed and delivered by the Company; and
(viii) The documents incorporated by reference in the U.S.
Prospectus or any further amendment or supplement thereto made by
the Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion), when they became effective or were filed
with the Commission, as the case may be, complied as to form in all
material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and he has no reason to believe that any of such
documents, when such documents became effective or were so filed, as
the case may be, contained in the case of a registration statement
which became effective under the Act, an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or, in the case of other documents which were filed
under the Exchange Act, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made when such documents were so filed, not misleading
(other than the financial statements and other financial data as to
which such counsel need express no opinion).
In rendering such opinion, such counsel may rely upon opinions of
local counsel and in respect of matters of fact upon certificates of officers
of the Company, provided that such counsel shall state that he believes both
you and he is justified in relying upon such opinions and certificates.
(e) Fred Bodin, General Counsel and Senior Vice President of Volvo,
shall have furnished to you, the International Underwriters and the U.S.
Underwriters his written opinion (a draft of such opinion is attached as
Annex II(d) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) This Agreement, the International Underwriting Agreement
and the U.S. Underwriting Agreement have been duly authorized,
executed and delivered by or on behalf of Volvo and the Selling
Stockholder; and the sale of the Shares and SDSs to be sold by the
Selling Stockholder hereunder and thereunder and the compliance by
the Volvo and Selling Stockholder with all of the provisions of this
Agreement, the International Underwriting Agreement and the U.S.
Underwriting Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in
a breach or violation of any terms or provisions of, or constitute a
default under, any statute, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which Volvo or the Selling Stockholder is a party or by which Volvo
or the Selling Stockholder is bound, or to which any of the property
or assets of Volvo or the Selling Stockholder is subject, nor will
such action result in any violation of the provisions of the
Articles of Association of Volvo or the Selling Stockholder or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over Volvo or the
Selling Stockholder or the property of Volvo or the Selling
Stockholder;
(ii) No consent, approval, authorization or order of any
Swedish court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement, the
International Underwriting Agreement or the U.S. Underwriting
Agreement in connection with the Shares or SDSs to be sold by the
Selling Stockholder hereunder or thereunder;
<PAGE>
(iii) (A) immediately prior to such Time of Delivery, the
Selling Stockholder had good and valid title to the Shares to be
sold by it hereunder and under the International Underwriting
Agreement and the U.S. Underwriting Agreement, free and clear of all
liens, encumbrances, equities and claims, and full right, power and
authority to sell, assign, transfer and deliver the Shares to be
sold by the Selling Stockholder hereunder and thereunder; (B)
immediately prior to such Time of Delivery, the Selling Stockholder
had good and valid title to the Shares deposited by it pursuant to
the Custodian Agreement against issuance of the SDSs to be delivered
by the Selling Stockholder at such Time of Delivery, free and clear
of all liens, encumbrances, equities and claims (except such as
arise under the terms of the Custodian Agreement); and (C)
immediately prior to such Time of Delivery, the Selling Stockholder
had good and valid title to the SDSs to be delivered by it at such
Time of Delivery, free and clear of all liens, encumbrances,
equities and claims;
(iv) Good and valid title to the Shares and SDSs to be
delivered by the Selling Stockholder at such Time of Delivery, free
and clear of all liens, encumbrances, equities or claims, has been
transferred to each of the several Underwriters or International
Underwriters or U.S. Underwriters, as the case may be, who have
purchased such Shares or SDSs in good faith and without notice of
any such lien, encumbrance, equity or claim or any other adverse
claim;
(v) No stamp or other issuance or transfer taxes or duties,
and no capital gains, income, withholding or other taxes are payable
in the Kingdom of Sweden or any political subdivision or taxing
authority of such jurisdiction by or on behalf of the Underwriters
in connection with (A) the sale and delivery by the Selling
Stockholder of the Shares to or for the respective accounts of the
Underwriters in the manner contemplated herein or in the
International Underwriting Agreement or the U.S. Underwriting
Agreement, (B) the deposit with the Depositary of Shares against the
issuance of SDSs at each Time of Delivery, (C) the sale and delivery
by the Underwriters of the Shares or SDSs to the initial purchasers
thereof in the manner contemplated herein or in the International
Underwriting Agreement or in the U.S. Underwriting Agreement, or (D)
the execution and delivery of this Agreement, the International
Underwriting Agreement or the U.S. Underwriting Agreement (other
than any taxes, other than stamp or other issuance or transfer taxes
or duties, payable by the Underwriters resident, domiciled, carrying
on business or subject to taxation in Sweden); and
(vi) The irrevocable submission of Volvo and the Selling
Stockholder to the jurisdiction of New York courts in Section 16 of
this Agreement, the International Underwriting Agreement and the
U.S. Underwriting Agreement, the waiver by Volvo and the Selling
Stockholder of any objection to the venue of a proceeding of a New
York court are legal, valid and binding under Swedish law, with the
exception that the Swedish bankruptcy courts have exclusive
jurisdiction in respect of all property of Volvo or the Selling
Stockholder, as the case may be, upon the bankruptcy of Volvo or the
Selling Stockholder;
(vii) The agreement of Volvo and the Selling Stockholder
that this Agreement, the International Underwriting Agreement and
the U.S. Underwriting Agreement shall be governed by and construed
in accordance with the laws of the State of New York is legal, valid
and binding and would be recognized and given effect to by the
courts in Sweden upon proof of the relevant provisions of such law,
subject, however, to the qualification that New York law will not be
applied to the extent contrary to Swedish public policy and that
<PAGE>
Swedish law will be applied in a bankruptcy proceeding in respect
of, or an execution against, Volvo or the Selling Stockholder;
(viii) Service of process effected in the manner set forth
in Section 16 hereof will be effective, insofar as the laws of
Sweden are concerned, to confer valid personal jurisdiction over
Volvo and the Selling Stockholder; and
(ix) A judgement obtained in a New York court arising out of or
in relation to the obligations of Volvo or the Selling Stockholder
under this Agreement, the International Underwriting Agreement or
the U.S. Underwriting Agreement will not be directly enforceable in
the Kingdom of Sweden and a separate Swedish judgment must therefore
be obtained. In the light of judicial developments, however, such
counsel believes that Swedish courts would give an enforceable
Swedish judgment on the basis of a judgment obtained in a New York
court in an action instituted in the manner prescribed in this
Agreement, the International Underwriting Agreement and the U.S.
Underwriting Agreement provided that the judgment was issued by a
court of competent jurisdiction, has gained legal force, is not
inconsistent with a prior judgment rendered between the same parties
and is not contrary to public policy in Sweden.
In rendering such opinion, such counsel may make customary
assumptions, qualifications and reservations and may state that he
expresses no opinion as to the laws of any jurisdiction outside the
Kingdom of Sweden;
(f) White & Case, U.S. counsel for Volvo and the Selling
Stockholder, shall have furnished to you, the International Underwriters
and the U.S. Underwriters their written opinion (a draft of such opinion
is attached as Annex II(e) hereto), dated such Time of Delivery, in form
and substance satisfactory to you, to the effect that:
(i) Assuming due authorization, execution and delivery by
Volvo and the Selling Stockholder under Swedish law, this Agreement,
the International Underwriting Agreement and the U.S. Underwriting
Agreement have been duly executed and delivered by Volvo and the
Selling Stockholder insofar as New York law is concerned;
(ii) At such Time of Delivery, all rights of the Selling
Stockholder in and to the Shares and SDSs free of any adverse claim
(as defined in Article 8 of the Uniform Commercial Code) has been
transferred to each of the several U.S. Underwriters or
International Underwriters or Nordic Underwriters, as the case may
be, who have purchased such Shares or SDSs in good faith and without
notice of any such adverse claims; and
(iii) Assuming the validity of such actions under the laws
of Sweden, under the laws of the State of New York relating to
personal jurisdiction, each of Volvo and the Selling Stockholder
has, pursuant to Section 16 of this Agreement, the International
Underwriting Agreement and the U.S. Underwriting Agreement, validly
and irrevocably submitted to the personal jurisdiction of New York
Courts in any legal suit, action or proceeding arising out of or
based upon this Agreement, the International Underwriting Agreement,
the U.S. Underwriting Agreement or the transactions contemplated
hereby or thereby, and has validly and effectively appointed Volvo
North America Corporation as the authorized agent of Volvo and the
Selling Stockholder for the purpose described in Section 16 of this
Agreement, the International Underwriting Agreement and the U.S.
Underwriting Agreement.
In rendering such opinion, such counsel may state that they express
no opinion as to the laws of any jurisdiction outside the United States;
<PAGE>
(g) Mats Lidgard, Swedish counsel for the Company, shall have
furnished to you, the International Underwriters, the U.S. Underwriters,
Volvo and the Selling Stockholder his written opinion (a draft of such
opinion is attached as Annex II(f) hereto), dated such Time of Delivery,
in form and substance satisfactory to you, to the effect that:
(i) The Custodian Agreement has been duly authorized, executed
and delivered by the Company and, assuming the Custodian Agreement
has been duly authorized, executed and delivered by the Depositary,
constitutes a valid and legally binding obligation of the Company,
enforceable in accordance with its terms, subject as to enforcement
to applicable bankruptcy, insolvency, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; upon the deposit
of Shares evidencing SDSs to be delivered at such Time of Delivery
in respect thereof in accordance with the provisions of the
Custodian Agreement and the General Terms and Conditions, the
persons in whose names the SDSs are registered will be entitled to
the rights specified in the Custodian Agreement and in the General
Terms and Conditions; and the Custodian Agreement, the General Terms
and Conditions and the SDSs conform in all material respects to the
descriptions thereof contained in the International Prospectus and
in the Nordic Prospectus;
(ii) The statements set forth in the International Prospectus
and in the Nordic Prospectus under the caption "Description of
Swedish Depositary Shares", insofar as they purport to describe the
terms and conditions of the SDSs and the provisions of the laws and
documents referred to therein, are complete and accurate in all
material respects;
(iii) Pharmacia & Upjohn AB has been duly incorporated and
is validly existing as a corporation under the laws of the Kingdom
of Sweden and has the corporate power and authority to own its
properties and to conduct its business as described in the
Prospectuses; and
(iv) The sale and delivery of the Shares and SDSs to be sold by
the Selling Stockholder hereunder and under the International
Underwriting Agreement and the Nordic Underwriting Agreement and the
compliance by the Company with all of the provisions of this
Agreement, the International Underwriting Agreement and the Nordic
Underwriting Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such
counsel to which the Company or Pharmacia & Upjohn AB is a party or
by which the Company or Pharmacia & Upjohn AB is bound or to which
any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency
or body having jurisdiction over the Company or Pharmacia & Upjohn
AB or any of their properties, except for such conflicts, breaches,
violations and defaults that would not have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole or
that would not otherwise materially prejudice the consummation of
the transactions contemplated by this Agreement, the International
Underwriting Agreement or the Nordic Underwriting Agreement;
(v) To the best of such counsel's knowledge, the Company and
Pharmacia & Upjohn AB have all concessions, licenses, franchises,
permits, authorizations, approvals and orders of and from all
<PAGE>
relevant governmental regulatory officials and bodies that are
necessary to own or lease their properties and conduct their
businesses as described in the Prospectuses, except where the
failure to have any such concession, license, franchise, permit,
authorization, approval or order would not have a material adverse
effect on the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole;
(vi) To the best of his knowledge, the Company and Pharmacia &
Upjohn AB own or have had licensed to them or otherwise have the
benefit or use under the authority of the owners thereof of, all
patents, patent rights, inventions, trademarks, service marks, trade
names and copyrights (in each case, registered or not) which are
necessary for the conduct of the business of the Company and its
subsidiaries as described in the Prospectuses, except for any such
failure as would not have a material adverse effect on the financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole, and, to the best of
his knowledge and except for the matters described in the
Prospectuses, there are no unresolved assertions that the Company or
any of its subsidiaries has infringed the patents, patent rights,
inventions, trademark rights, service marks, trade names or
copyrights of others, other than assertions which, if determined
adversely to the Company or any of its subsidiaries, would not
individually or in the aggregate with respect to similar claims have
a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and
(vii) To the best of such counsel's knowledge and other
than the matters described in the Prospectuses, there are no legal
or governmental proceedings pending to which the Company or
Pharmacia & Upjohn AB is a party or of which any property of the
Company or Pharmacia & Upjohn AB is the subject which are reasonably
likely, individually or in the aggregate with respect to similar
claims, to have a material adverse effect on the current or future
consolidated financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole;
and, to the best of such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others.
In rendering such opinion, such counsel may rely upon opinions of
local counsel and in respect of matters of fact upon certificates of officers
of the Company, provided that such counsel shall state that he believes both
you and he is justified in relying upon such opinions and certificates.
(h) Emanuele Barie, Italian counsel for the Company, shall have
furnished to you, the International Underwriters, the Nordic
Underwriters, Volvo and the Selling Stockholder his written opinion (a
draft of such opinion is attached as Annex II(g) hereto), dated such Time
of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) Pharmacia & Upjohn S.p.A. has been duly incorporated, is
validly existing as a corporation under the laws of Italy and has
the corporate power and authority to own its properties and to
conduct its business as described in the Prospectuses;
(ii) The sale and delivery of the Shares and SDSs to be sold by
the Selling Stockholder hereunder and under the International
Underwriting Agreement and the Nordic Underwriting Agreement and the
compliance by the Company with all of the provisions of this
Agreement, the International Underwriting Agreement and the Nordic
Underwriting Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in
<PAGE>
a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such
counsel to which Pharmacia & Upjohn S.p.A. is a party or by which
Pharmacia & Upjohn S.p.A. is bound or to which any of the property
or assets of Pharmacia & Upjohn S.p.A. is subject, nor will such
action result in any violation of the provisions of the Certificate
of Incorporation or By-laws of Pharmacia & Upjohn S.p.A. or any
statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body having jurisdiction over
Pharmacia & Upjohn S.p.A. or any of its properties, except for such
conflicts, breaches, violations and defaults that would not have a
material adverse effect on the financial position, shareholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole or that would not otherwise materially prejudice
the consummation of the transactions contemplated by this Agreement,
the International Underwriting Agreement or the Nordic Underwriting
Agreement;
(iii) To the best of such counsel's knowledge, Pharmacia &
Upjohn S.p.A. has all concessions, licenses, franchises, permits,
authorizations, approvals and orders of and from all relevant
governmental regulatory officials and bodies that are necessary to
own or lease its properties and conduct its business as described in
the Prospectuses, except where the failure to have any such
concession, license, franchise, permit, authorization, approval or
order would not have a material adverse effect on the financial
position, shareholders' equity or results of operations of the
Company and its subsidiaries taken as a whole;
(iv) To the best of his knowledge, Pharmacia & Upjohn S.p.A.
owns or has had licensed to it or otherwise has the benefit or use
under the authority of the owners thereof of, all patents, patent
rights, inventions, trademarks, service marks, trade names and
copyrights (in each case, registered or not) which are necessary for
the conduct of its business as described in the Prospectuses, except
for any such failure as would not have a material adverse effect on
the financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
and, to the best of his knowledge and except for the matters
described in the Prospectuses, there are no unresolved assertions
that Pharmacia & Upjohn S.p.A. has infringed the patents, patent
rights, inventions, trademark rights, service marks, trade names or
copyrights of others, other than assertions which, if determined
adversely to Pharmacia & Upjohn S.p.A., would not individually or in
the aggregate with respect to similar claims have a material adverse
effect on the consolidated financial position, shareholders' equity
or results of operations of the Company and its subsidiaries, taken
as a whole; and
(v) To the best of such counsel's knowledge and other than the
matters described in the Prospectuses, there are no legal or
governmental proceedings pending to which Pharmacia & Upjohn S.p.A.
is a party or of which any property of Pharmacia & Upjohn S.p.A. is
the subject which are reasonably likely, individually or in the
aggregate with respect to similar claims, to have a material adverse
effect on the current or future consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries taken as a whole; and, to the best of such counsel's
knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.
In rendering such opinion, such counsel may rely upon opinions of
local counsel and in respect of matters of fact upon certificates of officers
of the Company, provided that such counsel shall state that he believes both
you and he is justified in relying upon such opinions and certificates.
<PAGE>
(i) Skandinaviska Enskilda Banken Legal Department, counsel for the
Depositary, shall have furnished to you, the International Underwriters,
the U.S. Underwriters, Volvo and the Selling Stockholder their written
opinion (a draft of such opinion is attached as Annex II(h) hereto),
dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Custodian Agreement has been duly authorized, executed
and delivered by the Depositary and, assuming the Custodian
Agreement has been duly authorized, executed and delivered by the
Company, constitutes a valid and legally binding obligation of the
Depositary, enforceable in accordance with its terms, subject as to
enforcement to applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles; upon
the deposit of Shares evidencing SDSs to be delivered at such Time
of Delivery in respect thereof in accordance with the provisions of
the Custodian Agreement and the General Terms and Conditions, the
persons in whose names the SDSs are registered will be entitled to
the rights specified in the Custodian Agreement and in the General
Terms and Conditions; and the Custodian Agreement, the General Terms
and Conditions and the SDSs conform in all material respects to the
descriptions thereof contained in the International Prospectus and
in the Nordic Prospectus;
(ii) The statements set forth in the International Prospectus
and in the Nordic Prospectus, under the caption "Description of
Swedish Depositary Shares", insofar as they purport to describe the
terms and conditions of the SDSs and the provisions of the laws and
documents referred to therein, are complete and accurate in all
material respects; and
(iii) Shares represented by the SDSs to be delivered by the
Selling Stockholder at such Time of Delivery to or on behalf of the
Underwriters have been duly deposited with the Depositary or The
Bank of New York, as Sub-Custodian, under and in accordance with all
applicable laws and regulations.
(j) On the date hereof prior to the execution of this Agreement, on
the effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at each
Time of Delivery, Coopers & Lybrand L.L.P. and KPMG Peat Marwick LLP
shall have furnished to you, the International Underwriters, the U.S.
Underwriters, Volvo and the Selling Stockholder a letter or letters,
dated the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto; (the
executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto and a draft of the form of
letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery
is attached as Annex I(b) hereto);
(k) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectuses any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectuses, and (ii) since the respective
dates as of which information is given in the Prospectuses there shall
not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the Prospectuses, the
<PAGE>
effect of which, in any such case described in Clause (i) or (ii), is in
the judgment of the Global Coordinators so material and adverse as to
make it impracticable or inadvisable to proceed with the Global Offering
or the delivery of the Shares being delivered at such Time of Delivery on
the terms and in the manner contemplated in the Prospectuses;
(l) On or after the date hereof and prior to such Time of Delivery
there shall not have occurred any of the following: (a) (i) a suspension
or material limitation in trading in securities generally on the New York
Stock Exchange, the Stockholm Stock Exchange or the London Stock
Exchange; (ii) a suspension or material limitation in trading in the
Company's securities on the New York Stock Exchange, the Stockholm Stock
Exchange or SEAQ International; (iii) a general moratorium on commercial
banking activities in New York, Sweden or London declared by the relevant
authorities; (iv) a change or development involving a prospective change
in United States taxation affecting the share capital of the Company or
the transfer thereof or the imposition of exchange controls by the United
States or Sweden; (v) the outbreak or escalation of hostilities involving
the United States or the European Union ("EU") or the declaration by the
United States or relevant EU authorities of a national emergency or war
if the effect of any such event specified in clause (iv) or (v) in the
judgment of the Global Coordinators, makes it impracticable or
inadvisable to proceed with the Global Offering or the delivery of, or
materially impairs the ability of the Underwriters to subscribe, hold or
sell, the Shares or SDSs being delivered at such Time of Delivery on the
terms and in the manner contemplated in the Prospectuses; or (vi) a
change in national or international political, financial or economic
conditions or taxation regimes or currency exchange rates or controls if
the effect of any such event specified in this subsection (vi) in the
judgment of the Global Coordinators is so material and adverse as to make
it impracticable or inadvisable to proceed with the Global Offering or
the delivery of, or materially impairs the ability of the Underwriters to
subscribe, hold or sell, the Shares or SDSs being delivered at such Time
of Delivery on the terms and in the manner contemplated in the
Prospectuses;
(m) Forvaltningsaktiebolaget Stattum ("Stattum") shall have
undertaken in writing, in form and substance satisfactory to you, not to,
during the period beginning from the date hereof and continuing to and
including the date 12 months after the date hereof, offer, sell, contract
to sell or otherwise dispose of, except as provided hereunder or under
the International Underwriting Agreement or U.S. Underwriting Agreement,
any shares of Stock or other securities of the Company that are
substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that
represent the right to receive, shares of Stock or any such substantially
similar securities, without the prior written consent of the Global
Coordinators;
(n) The Company shall have complied with the provisions of Section
5(a)(iii) hereof with respect to the furnishing of prospectuses on the
New York Business Day next succeeding the date of this Agreement;
(o) The Company, Volvo and the Selling Stockholder shall have
furnished or caused to be furnished to you at such Time of Delivery
(i) certificates of officers of the Company and of Volvo, respectively,
reasonably satisfactory to you as to the accuracy of the representations
and warranties of the Company and Volvo, respectively, herein at and as
of such Time of Delivery, as to the performance by the Company and Volvo
and the Selling Stockholder of all of their respective obligations
hereunder to be performed at or prior to such Time of Delivery, and, in
the case of the Company, as to the matters set forth in subsections (a)
and (k) of this Section, and as to such other matters as you may
reasonably request; and (ii) certificates of the corporate secretary or
other comparable officer of the Company, of Volvo and of the Selling
Stockholder, respectively, reasonably satisfactory to you as to the
<PAGE>
resolutions adopted by the Company and Volvo in connection with this
Agreement, the International Underwriting Agreement and the U.S.
Underwriting Agreement, incumbency and signatures or persons executing
this Agreement, the International Underwriting Agreement and the U.S.
Underwriting Agreement, and other similar matters; and
(p) The respective closings under this Agreement, the International
Underwriting Agreement and the U.S. Underwriting Agreement shall occur
simultaneously at the First Time of Delivery.
8. (a) The Company will indemnify and hold harmless each
Underwriter, Volvo and the Selling Stockholder against any losses, claims,
damages or liabilities, joint or several, to which such Underwriter, Volvo or
the Selling Stockholder, as the case may be, may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or any Prospectus, or any amendment or
supplement thereto, or any document incorporated by reference therein, or
arise out of or are based upon any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter, Volvo
and the Selling Stockholder for any legal or other expenses reasonably
incurred by such Underwriter, Volvo or the Selling Stockholder, as the case
may be, in connection with investigating or defending any such action,
proceeding or claim as such expenses are incurred; provided however, that the
Company shall not be liable to any Underwriter or to Volvo or the Selling
Stockholder in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or any Prospectus, or any such
amendment or supplement thereto or document incorporated by reference therein,
(x) in reliance upon and in conformity with written information furnished to
the Company by any Underwriter through the Lead Managers expressly for use
therein or (y) that comprised Selling Stockholder Information; and provided,
further, however, that the Company shall not be liable to any such person in
any such case if the Company shall sustain the burden of proving that Volvo,
the Selling Stockholder or such Underwriter, as the case may be, sold
securities to the person alleging such loss, claim, damage or liability
without sending or giving, at or prior to the written confirmation of such
sale in any case where such delivery is required by applicable law, a copy of
the Prospectus (excluding any documents incorporated by reference therein) or
of the Prospectus, as then amended or supplemented (excluding any documents
incorporated by reference therein) if the Company had previously furnished
copies thereof to Volvo, the Selling Stockholder or such Underwriter, and the
loss, claim, damage or liability of such person results from an untrue
statement or omission of a material fact contained in the Preliminary
Prospectus which was corrected in the Prospectus or the Prospectus as amended
or supplemented.
(b) Volvo will indemnify and hold harmless each Underwriter and the
Company against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter or the Company, as the case may be, may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, the Registration Statement or the Prospectus,
or any amendment or supplement thereto, or any document incorporated by
reference therein, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission in any Preliminary Prospectus, the
Registration Statement or any Prospectus or any such amendment or supplement
or document incorporated by reference therein comprised Selling Stockholder
Information; and will reimburse each Underwriter or the Company, as the case
<PAGE>
may be, for any legal or other expenses reasonably incurred by such
Underwriter or the Company, as the case may be, in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Each Underwriter will, severally and not jointly, indemnify and
hold harmless the Company, Volvo and the Selling Stockholder against any
losses, claims, damages or liabilities to which it may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or any Prospectus, or any
amendment or supplement thereto, or any document incorporated by reference
therein, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary Prospectus, the
Registration Statement or any Prospectus or any such amendment or supplement
or document incorporated by reference therein in reliance upon and in
conformity with written information furnished to the Company by such
Underwriter through the Lead Managers expressly for use therein; and will
reimburse the Company, Volvo and the Selling Stockholder for any legal or
other expenses reasonably incurred by the Company, Volvo or the Selling
Stockholder, as the case may be, in connection with investigating or defending
any such action or claim as such expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection
(a), (b) or (c) above of notice of the commencement of any action or
proceeding for which indemnification under subsection (a), (b) or (c) may be
requested, such indemnified party shall, if a claim in respect thereof is to
be made against an indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the omission so
to notify the indemnifying party shall not relieve it from any liability which
it may have to any indemnified party otherwise than under such subsection. In
case any such action shall be brought against any indemnified party and it
shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (which shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a), (b) or (c) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company, Volvo and the Selling
<PAGE>
Stockholder on the one hand and the Underwriters on the other from the
offering of the Shares as well as any other relevant equitable considerations,
including relative fault. The relative benefits received by the Company,
Volvo and the Selling Stockholder on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Shares purchased under this Agreement (before
deducting expenses) received by the Company, Volvo and the Selling Stockholder
bear to the total underwriting discounts and commissions received by the
Underwriters with respect to the Shares purchased under this Agreement, in
each case as set forth in the Prospectus. As among the Company, Volvo and the
Selling Stockholder, the relative benefit derived by the Company, Volvo and
the Selling Stockholder shall be determined by reference to the fact that the
Company entered into the Registration Rights Agreement, dated as of August 20,
1995, among Volvo, the Company, The Upjohn Company and Pharmacia Aktiebolag to
induce Volvo to engage in the transaction in which the Selling Stockholder
acquired the Shares. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company, Volvo, the Selling Stockholder
or the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company, Volvo, the Selling Stockholder and the Underwriters agree that it
would not be just and equitable if contributions pursuant to this subsection
(e) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above
in this subsection (e). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (e) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this
subsection (e) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(f) The obligations of the Company, Volvo and the Selling
Stockholder under this Section 8 shall be in addition to any liability which
the Company, Volvo and the Selling Stockholder may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act or the Exchange Act;
and the obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each officer and
director of the Company and to each person, if any, who controls the Company,
Volvo or the Selling Stockholder within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Shares which it has agreed to purchase hereunder at a Time of
Delivery, the Global Coordinators may in their discretion arrange for you or
another party or other parties to purchase such Shares on the terms contained
herein. If within thirty-six hours after such default by any Underwriter the
Global Coordinators do not arrange for the purchase of such Shares, then Volvo
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to you to purchase such
Shares on such terms. In the event that, within the respective prescribed
periods, the Global Coordinators notify Volvo that they have so arranged for
the purchase of such Shares, or Volvo notifies the Global Coordinators that it
has so arranged for the purchase of such Shares, the Global Coordinators or
<PAGE>
Volvo shall have the right to postpone such Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which may thereby
be made necessary. The term "Underwriter" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Shares.
(b) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by the Global
Coordinators and Volvo as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh
of the aggregate number of all of the Shares to be purchased at such Time of
Delivery, then Volvo shall have the right to require each non-defaulting
Underwriter to purchase the number of Shares which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the number
of Shares which such Underwriter agreed to purchase hereunder) of the Shares
of such defaulting Underwriter or Underwriters for which such arrangements
have not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Shares of a defaulting Underwriter or Underwriters by the Global
Coordinators and Volvo as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of
Delivery, or if Volvo shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Shares of a
defaulting Underwriter or Underwriters, then this Agreement (or, with respect
to the Second Time of Delivery, the obligations of the Underwriters to
purchase and of the Selling Stockholder to sell the Optional Shares) shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company or the Selling Stockholder, except for the expenses
to be borne by the Company and Volvo and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Company, Volvo, the Selling Stockholder
and the several Underwriters, as set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain in full
force and effect, regardless of any investigation (or any statement as to the
results thereof) made by or on behalf of any Underwriter or any controlling
person of any Underwriter, or the Company, or Volvo, or the Selling
Stockholder, or any officer or director or controlling person of the Company
or any controlling person of Volvo or the Selling Stockholder, and shall
survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9
hereof, neither the Company nor Volvo nor the Selling Stockholder shall then
be under any liability to any Underwriter except as provided in Sections 6 and
8 hereof; but, if any Shares are not delivered by or on behalf of the Selling
Stockholder as provided herein by reason of a failure of the Company to
perform its obligations under Section 7 (for the avoidance of doubt, it shall
not be deemed to be a failure by the Company to perform its obligations under
Section 7 if the conditions set forth in clauses 7(b), (e), (f), (i), (k),
(l), (m), (o)(to the extent that it refers to obligations of Volvo and the
Selling Stockholder) and (p)(to the extent not due to the failure of the
Company to perform its obligations as aforementioned) have not been
satisfied), the Company will, or if for any other reason Shares are not
delivered by or on behalf of the Selling Stockholder as provided herein, Volvo
will, reimburse the Underwriters through the Lead Managers for all
<PAGE>
out-of-pocket expenses approved in writing by the Lead Managers, including
fees and disbursements of counsel, reasonably incurred by the Underwriters in
making preparations for the purchase, sale and delivery of the Shares not so
delivered, but the Company, Volvo and the Selling Stockholder shall then be
under no further liability to any Underwriter in respect of the Shares not so
delivered except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of
the Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of any Underwriter
made or given by you jointly or by the Lead Managers on behalf of you as the
representatives of the Underwriters.
All statements, requests, notices and agreements hereunder shall be
in writing, and if to the Underwriters shall be delivered or sent by mail,
telex or facsimile transmission to the Underwriters in care of Enskilda
Securities, Skandinaviska Enskilda Banken AB (publ), Kungstradsgardsgatan 8,
S-1-3 22 Stockholm, Sweden, and to GSI, Peterborough Court, 133 Fleet Street,
London EC4A 2BB, England, Attention: Equity Capital Markets, Telex
No. 94012165, facsimile transmission No. (0171) 774-1550, and to MLI,
Ropemaker Place, 25 Ropemaker Street, London EC2 9LY, England; if to Volvo or
the Selling Stockholder shall be delivered or sent by mail or facsimile
transmission to AB Volvo, S-405 08, Goteborg, Sweden, Attention: President,
with a copy to White & Case, counsel for Volvo and the Selling Stockholder, at
7-11 Moorgate, London, EC2R 6HH, England; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of
the Company set forth in the Registration Statement, Attention: Secretary;
provided, however, that any notice to an Underwriter pursuant to Section 8(d)
hereof shall be delivered or sent by mail, telex or facsimile transmission to
such Underwriter at its address set forth in its Underwriters' Questionnaire,
or telex constituting such Questionnaire, which address will be supplied to
the Company, Volvo or the Selling Stockholder by the Lead Managers upon
request. Any such statements, requests, notices or agreements shall take
effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Underwriters, the Company, Volvo and the Selling Stockholder
and, to the extent provided in Sections 8 and 10 hereof, the officers and
directors of the Company and each person who controls the Company, Volvo, the
Selling Stockholder or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of
the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, United States of America.
16. Each of Volvo and the Selling Stockholder hereby
irrevocably (i) agrees that any legal suit, action or proceeding arising out
of or based upon this Agreement or the transactions contemplated hereby may be
instituted in any state or federal court located in the Borough of Manhattan,
The City of New York, New York (a "New York Court"), (ii) waives, to the
fullest extent it may effectively do so, any objection which it may now or
hereafter have to the laying of venue of any such proceeding and (iii) submits
to the jurisdiction of such courts in any such suit, action or proceeding.
Each of Volvo and the Selling Stockholder do hereby appoint Volvo North
America Corporation, 535 Madison Avenue, New York, New York 10022, Attention:
President, as its authorized agent (the "Authorized Agent") upon whom process
may be served in any such action arising out of or based on this Agreement or
the transactions contemplated hereby which may be instituted in any New York
Court by any Underwriter or by any person who controls any Underwriter or by
the Company, expressly consents to the jurisdiction of any such court in
respect of any such action, and waives any other requirements of or objections
<PAGE>
to personal jurisdiction with respect thereto. Each of Volvo and the Selling
Stockholder may appoint a successor agent to receive service of process as
described herein; provided, however, that each of Volvo and the Selling
Stockholder shall at all times maintain an agent for service of process in New
York City. Volvo represents and warrants that the Authorized Agent has agreed
to act as such agent for service of process and each of Volvo and the Selling
Stockholder agrees to take any and all action, including the filing of any and
all documents and instruments, that may be necessary to continue such
appointment (or any appointment of a successor agent, as applicable) in full
force and effect as aforesaid. Service of process upon the Authorized Agent
and written notice of such service to Volvo or the Selling Stockholder, as the
case may be, shall be deemed, in every respect, effective service of process
upon Volvo or the Selling Stockholder.
17. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please
sign and return to us eight counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement among each of the
Underwriters, the Company, Volvo and the Selling Stockholder. It is
understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters (Nordic Version), the form of which shall be submitted to
the Company and Volvo for examination upon request, but without warranty on
your part as to the authority of the signers thereof.
Very truly yours,
PHARMACIA & UPJOHN, INC.
By: /s/ Robert C. Salisbury
Name: Robert C. Salisbury
Title: Executive Vice President (Chief
Financial Officer and Chief
Accounting Officer)
AB VOLVO (PUBL)
By: /s/ Eva Persson
Name: Eva Persson
Title: Vice President - Head of
Corporate Legal
SOTROF AKTIEBOLAG
By: /s/ Eva Persson
Name: Eva Persson
Title: Authorized Signatory
Accepted as of the date hereof:
ENSKILDA SECURITIES,
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
GOLDMAN SACHS INTERNATIONAL
MERRILL LYNCH INTERNATIONAL
By: ENSKILDA SECURITIES,
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
By: /s/ Bo Zethraeus
(Attorney-in-fact)
<PAGE>
By: GOLDMAN SACHS INTERNATIONAL
By: /s/ Christopher French
(Attorney-in-fact)
By: MERRILL LYNCH INTERNATIONAL
By: /s/ Brad England /s/ John V. Millar
(Attorney-in-fact)
On behalf of each of the Underwriters
<PAGE>
<TABLE>
SCHEDULE I
<S> <C> <C>
Total Number of Number of Optional
Firm Shares to be Shares to be Purchased
Purchased if Maximum Option
Exercised
Underwriter
Enskilda Securities,
Skandinaviska Enskilda Banken AB (publ) . . . . . . . . . . 920,000 138,000
Goldman Sachs International . . . . . . . . . . . . . . 230,000 34,500
Merrill Lynch International . . . . . . . . . . . . . . . . . . 230,000 34,500
Alfred Berg Fondkommision AB . . . . . . . . . . . . . . . . . 230,000 34,500
Den Danske Bank Aktieselskab . . . . . . . . . . . . . . . . . 230,000 34,500
D. Carnegie AB . . . . . . . . . . . . . . . . . . . . . . . . 230,000 34,500
Svenska Handelsbanken AB (publ) . . . . . . . . . . . . . . . . 230,000 34,500
Total . . . . . . . . . . . . . . . . . . . . . 2,300,000 345,000
</TABLE>
<PAGE>
<TABLE>
SCHEDULE II
DEFINED TERMS
<S> <C>
Act Section 1(a)(i)
Authorized Agent Section 17
Closing Location Section 4(b)
Commission Section 1(a)(i)
Company Introductory Paragraph 1
Custodian Agreement Introductory Paragraph 4
Depositary Introductory Paragraph 4
Designated Office Section 4(a)
DTC Section 4(a)
Environmental Laws Section 1(a)(ix)
EU Section 7(l)
Exchange Act Section 1(a)(i)
Firm Shares Introductory Paragraph 2
First Time of Delivery Section 4(a)
General Terms and Conditions Introductory Paragraph 4
Global Offering Introductory Paragraph 1
Global Coordinators Introductory Paragraph 5
GSI Introductory Paragraph 6
Initial Registration Statement Section 1(a)(i)
International Offering Introductory Paragraph 3
International Shares Introductory Paragraph 3
International Underwriters Introductory Paragraph 3
International Prospectus Section 1(a)(v)
International Underwriting Agreement Introductory Paragraph 3
Intersyndicate Agreement Introductory Paragraph 5
Investment Company Act Section 1(a)(xix)
MLI Introductory Paragraph 6
New York Business Day Section 4(b)
New York Court Section 17
Nordic Prospectus Section 1(a)(v)
Nordic Offering Introductory Paragraph 3
Notification Time Section 4(b)
Optional Shares Introductory Paragraph 2
Preliminary International Prospectus Section 1(a)(v)
Preliminary Nordic Prospectus Section 1(a)(v)
Preliminary Prospectuses Section 1(a)(v)
Preliminary U.S. Prospectus Section 1(a)(i)
Principal Subsidiaries Section 1(a)(vi)
Principal U.S. Subsidiary Section 7(d)(i)
Prospectuses Section 1(a)(v)
Purchase Price Section 2
Registration Statement Section 1(a)(i)
Relevant Jurisdictions Section 5(b)(i)
Rule 462(b) Registration Statement Section 1(a)(i)
SDS Purchase Price Section 2
SDSs Introductory Paragraph 3
Second Time of Delivery Section 4(a)
Selling Stockholder Introductory Paragraph 1
Shares Introductory Paragraph 2
Stattum Section 7(m)
Stock Introductory Paragraph 1
Time of Delivery Section 4(a)
U.S. Offering Introductory Paragraph 3
U.S. Prospectus Section 1(a)(i)
U.S. Shares Introductory Paragraph 3
U.S. Underwriters Introductory Paragraph 3
U.S. Underwriting Agreement Introductory Paragraph 3
Underwriters Introductory Paragraph 2
Volvo Introductory Paragraph 1
</TABLE>
<PAGE>
ANNEX A
Each of the several Underwriters represents and agrees that it will not offer
or sell any of the Shares or SDSs in any jurisdiction except under
circumstances that will result in compliance with the applicable laws thereof;
provided that no representation or agreement is made hereby with respect to
the adequacy, accuracy or completeness of any Preliminary Prospectus or
Prospectus under the laws or regulatory requirements of any jurisdiction.
Each Underwriter understands that no action has been taken to permit a public
offering in any jurisdiction outside the United States where action would be
required for such purpose.
<PAGE>
ANNEX I(A)
FORM OF ORIGINAL COMFORT LETTER
<PAGE>
ANNEX I(B)
FORM OF BRING-DOWN COMFORT LETTER
<PAGE>
ANNEX II(A)
FORM OF OPINION OF SHEARMAN & STERLING
<PAGE>
ANNEX II(B)
FORMS OF OPINIONS OF SULLIVAN & CROMWELL
<PAGE>
ANNEX II(C)
FORM OF OPINION OF KEN CYRUS
<PAGE>
ANNEX II(D)
FORM OF OPINION OF FRED BODIN
<PAGE>
ANNEX II(E)
FORM OF OPINION OF WHITE & CASE
<PAGE>
ANNEX II(F)
FORM OF OPINION OF MATS LIDGARD
<PAGE>
ANNEX II(G)
FORM OF OPINION OF EMANUELE BARIE
<PAGE>
ANNEX II(H)
FORM OF OPINION OF SKANDINAVISKA ENSKILDA BANKEN LEGAL DEPARTMENT
