Registration Rights Agreement

EXHIBIT 10(B)


REGISTRATION RIGHTS AGREEMENT


REGISTRATION RIGHTS AGREEMENT, dated as of August 20, 1995 (this "Agreement"), by and among Pharmacia & Upjohn, Inc., a corporation organized under the laws of the State of Delaware ("Newco"), The Upjohn Company, a corporation organized under the laws of the State of Delaware ("Upjohn"), Pharmacia Aktiebolag, a limited liability company organized under the laws of the Kingdom of Sweden ("Pharmacia"), and AB Volvo, a limited liability company organized under the laws of the Kingdom of Sweden (the "Stockholder").


WHEREAS, the Boards of Directors of Pharmacia and Upjohn have determined that it is in the best interests of their respective companies and stockholders to combine their respective businesses in a "merger of equals" transaction (the "Combination"); and


WHEREAS, Newco, Upjohn, Pharmacia and Newco Sub, a corporation organized under the laws of the State of Delaware and a wholly owned subsidiary of Newco ("Newco Sub"), have entered into an agreement, dated as of August 20, 1995 (the "Combination Agreement"), pursuant to which it is contemplated, among other things, that Newco will conduct exchange offers (the "Exchange Offer") for all of the outstanding Class A Common Shares, nominal value SEK 25 per share, of Pharmacia (the "Pharmacia Class A Shares"), all of the outstanding Class B Common Shares, nominal value SEK 25 per share, of Pharmacia (the "Pharmacia Class B Shares" and, collectively with the Pharmacia Class A Shares, the "Pharmacia Shares") and all of the American Depositary Shares representing Pharmacia Class A Shares (the "ADSs" and, collectively with the Pharmacia Shares, the "Pharmacia Securities") in compliance with the securities laws of the Kingdom of Sweden and United States federal and state securities laws, on substantially the terms set forth in the Combination Agreement; and


WHEREAS, pursuant to the Exchange Offer, each Pharmacia Security tendered into the Exchange Offer will be exchanged for one newly-issued share of Common Stock, par value $.01 per share, of Newco (the "Newco Common Stock"), or, at the option of the holder, one Swedish Depositary Share (each, an "SDS") representing one newly issued share of Newco Common Stock; and


WHEREAS, as of the date hereof, the Stockholder is the beneficial owner of 45,902,847 Pharmacia Class A Shares and 23,862,919 Pharmacia Class B Shares (such shares, together with all Pharmacia Securities subsequently acquired by the Stockholder and its Affiliates during the term of this Agreement, the "Stockholder Pharmacia Shares"); and


WHEREAS, the Stockholder may tender all of the Stockholder Pharmacia Shares into the Exchange Offer, which Stockholder Pharmacia Shares will thereupon be exchanged for shares of Newco Common Stock or SDSs (such securities, together with any securities received as a distribution or dividend thereon, the "Stockholder Newco Shares") in accordance with the Combination Agreement; and


WHEREAS, the parties each desire to make certain covenants and agreements concerning, among other things, the registration from time to time of the Stockholder Newco Shares under the United States Securities Act of 1933, as it shall be amended from time to time (the "Securities Act").


NOW, THEREFORE, in consideration of the premises, and of the mutual covenants, representations, warranties and agreements contained herein, the parties hereto agree as follows:


ARTICLE I


DEFINITIONS AND CONSTRUCTION


1.01 As used in this Agreement, the following terms shall have the following respective meanings:


(a) "Affiliate," with respect to any particular person, shall mean
any other person which directly or indirectly controls or is controlled by
or is under direct or indirect common control with such person. For 2


the purposes of this definition, "control," when used with respect to any
particular person, means the power to direct the management and policies of
such person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.


(b) "Commission" shall mean the United States Securities and Exchange
Commission, or any other United States federal agency at the time
administering the Securities Act or the Exchange Act, as applicable,
whichever is the relevant statute.


(c) "Exchange Act" shall mean the United States Securities Exchange
Act of 1934, as it shall be amended from time to time.


(d) The term "person" shall mean a corporation, association,
partnership, organization, group (as such term is used in Rule 13d-5 under
the Exchange Act), business, individual, government or political
subdivision thereof, governmental agency or other entity.


(e) "Registered Shares" shall mean the shares of Newco Common Stock
acquired by the Stockholder pursuant to the transactions contemplated by
the Combination Agreement (together with any securities received as a
distribution or dividend thereon) and registered by Newco in any
Registration for resale by the Stockholder; provided, however, that a share
of Newco Common Stock shall not be deemed to be a Registered Share unless
it shall have been acquired by the Stockholder pursuant to the transactions
contemplated by the Combination Agreement; and provided, further, that a
Registered Share shall cease to be deemed to be a Registered Share after it
has been initially transferred by the Stockholder, in a public offering or
otherwise.


1.02 Headings. The descriptive headings of the several Sections and paragraphs of this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement.


ARTICLE II


REPRESENTATIONS AND WARRANTIES


2.01 Representations and Warranties of the Stockholder. The Stockholder hereby represents and warrants to each other party that it has been duly formed as a limited liability company under the laws of the Kingdom of Sweden and has all requisite corporate power and authority, and has received all requisite approvals (including any necessary approval of its board of directors) to complete the transactions contemplated hereby; this Agreement has been duly authorized, executed and delivered by the Stockholder and constitutes a valid and binding agreement enforceable against it in accordance with its terms.


2.02 Representations and Warranties of Newco, Upjohn and Pharmacia. Newco and Upjohn each represent and warrant to each other party that it has been duly organized and is an existing corporation in good standing under the laws of the State of Delaware. Pharmacia hereby represents and warrants to each other party that it has been duly formed and is an existing limited liability company in good standing under the laws of the Kingdom of Sweden. Newco, Upjohn and Pharmacia each hereby represents and warrants to each other party that (i) it has all requisite corporate power and authority, and has received all requisite approvals (including any necessary approval of its board of directors) to complete the transactions contemplated hereby and (ii) this Agreement has been duly authorized, executed and delivered by it and constitutes a valid and binding agreement enforceable by the Stockholder against it in accordance with its terms.


ARTICLE III


AGREEMENTS IN RESPECT OF THE STOCKHOLDER PHARMACIA SHARES


3.01 Certain Consents. If the Stockholder shall tender the Stockholder Pharmacia Shares into the Exchange Offer at any time prior to December 31, 1995, the Stockholder shall use its reasonable best efforts to cause Goldman Sachs International, S.G. Warburg Securities Ltd. (or its successor) and Enskilda Corporate,


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Skandinaviska Enskilda Banken (collectively, the "Underwriters") to consent to such tender prior thereto (the "Underwriters' Consent"), in accordance with that certain Agreement, dated as of May 20, 1994, between the Stockholder and Forvaltningsaktiebolaget Stattum.


3.02 Rights Plan. If the Stockholder shall have received Stockholder Newco Shares in exchange for the Stockholder Pharmacia Shares, and in the event that Newco shall enter into a rights agreement or adopt a stockholder rights plan or other similar agreement or plan (a "Rights Plan," and any rights issued thereunder, the "Rights"), Newco hereby agrees that the Rights shall not be exercisable as a consequence of (i) the beneficial ownership by the Stockholder or any of its subsidiaries of the Stockholder Newco Shares acquired in exchange for Stockholder Pharmacia Shares, or (ii) the subsequent acquisition by the Stockholder and its subsidiaries, collectively, of up to an additional one percent of the outstanding shares of Newco Common Stock. Notwithstanding any other provision of this Agreement, the rights afforded by this Section 3.02 shall be nonassignable, and any purported assignment thereof shall be null and void.


ARTICLE IV


AGREEMENTS IN RESPECT OF THE STOCKHOLDER NEWCO SHARES


4.01 Demand Registrations. (a) At any time following the date on which the Stockholder first receives Stockholder Newco Shares in connection with the Exchange Offer (the "Exchange Date"), to and including the date on which Newco shall have obtained a written opinion of legal counsel reasonably satisfactory to the Stockholder and addressed to Newco and the Stockholder to the effect that the Stockholder Newco Shares may be publicly offered for sale in the United States by the Stockholder without restriction as to manner of sale and amount of securities sold and without registration under the Securities Act (such period, the "Demand Period"), the Stockholder shall have the right on five occasions to require Newco to file a registration statement under the Securities Act in respect of all or a portion of the Stockholder Newco Shares held by it. As promptly as practicable, but in no event later than 30 days after Newco receives a written request from the Stockholder demanding that Newco so register the number of Stockholder Newco Shares specified in such request, which number shall not be less than 7,500,000, Newco shall file with the Commission and thereafter use its reasonable best efforts to cause to be declared effective promptly a registration statement (a "Demand Registration") providing for the registration of such number of Stockholder Newco Shares as the Stockholder shall have demanded be registered.


(b) Anything in this Agreement to the contrary notwithstanding, Newco shall be entitled to postpone and delay, for a reasonable period of time, not to exceed 45 days in the case of clauses (i) and (ii) below, or 30 days in the case of clause (iii) below (each, a "Blackout Period"), the filing of any Demand Registration if Newco shall determine that any such filing or the offering of any Registered Shares would (i) in the good faith judgment of the Board of Directors of Newco, impede, delay or otherwise interfere with any pending or contemplated financing, acquisition, corporate reorganization or other similar transaction involving Newco, (ii) based upon advice from Newco's investment banker or financial advisor, adversely affect any pending or contemplated offering or sale of any class of securities by Newco, or (iii) require disclosure of material nonpublic information (other than information relating to an event described in clause (i) or (ii) of this subsection (b)) which, if disclosed at such time, would be materially harmful to the interests of Newco and its stockholders; provided, however, that, in the case of a Blackout Period pursuant to clause (i) or (ii) above, the Blackout Period shall earlier terminate upon the completion or abandonment of the relevant securities offering or sale, financing, acquisition, corporate reorganization or other similar transaction; and provided, further, that in the case of a Blackout Period pursuant to clause (iii) above, the Blackout Period shall earlier terminate upon public disclosure by Newco or public admission by Newco of such material nonpublic information or such time as such material nonpublic information shall be publicly disclosed without breach of the last sentence of this subsection (b); and provided, further, that in the case of a Blackout Period pursuant to clause (i), (ii) or (iii) above, Newco shall furnish to the Stockholder a certificate of an executive officer of Newco to the effect that an event permitting a Blackout Period has occurred. Notwithstanding anything herein to the contrary, Newco shall not exercise pursuant to clause (i) or (ii) of the preceding sentence the right to postpone or delay the filing of any Demand Registration more than once in any 12 month period. Upon notice


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by Newco to the Stockholder of any such determination, the Stockholder covenants that it shall keep the fact of any such notice strictly confidential, and, in the case of a Blackout Period pursuant to clause (iii) above, promptly halt any offer, sale, trading or transfer by it or any of its affiliates of any Registered Shares for the duration of the Blackout Period set forth in such notice (or until such Blackout Period shall be earlier terminated in writing by Newco) and promptly halt any use, publication, dissemination or distribution of the Demand Registration, each prospectus included therein, and any amendment or supplement thereto by it and any of its affiliates for the duration of the Blackout Period set forth in such notice (or until such Blackout Period shall be earlier terminated in writing by Newco). After the expiration of any Blackout Period and without further request from the Stockholder, Newco shall effect the filing of the relevant Demand Registration and shall use its reasonable best efforts to cause any such Demand Registration to be declared effective as promptly as practicable unless the Stockholder shall have, prior to the effective date of such Demand Registration withdrawn in writing its initial request, in which case such withdrawn request, shall not constitute a Demand Registration for purposes of determining the number of Demand Registrations to which the Stockholder is entitled to hereunder.


(c) Any request by the Stockholder for a Demand Registration which is subsequently withdrawn prior to such Demand Registration becoming effective shall not constitute a Demand Registration for purposes of determining the number of Demand Registrations to which the Stockholder is entitled; provided, however, that other than with respect to a withdrawal which is made as a result of or after the expiration of any Blackout Period as specified in subsection (b) above, the Stockholder shall reimburse Newco for all expenses relating to the preparation of such withdrawn Demand Registration.


4.02 "Piggy-Back" Registrations. (a) If, at any time following the Exchange Date, Newco proposes to register any shares of Newco Common Stock under the Securities Act on a registration statement on Form S-1, Form S-2 or Form S-3 (or any equivalent general registration form then in effect) for purposes of a primary offering, secondary offering or combined offering of Newco Common Stock, Newco shall, at least 21 days prior to each time when any such registration statement is filed with the Commission, give prompt written notice to the Stockholder of its intention to do so. Such notice shall specify, at a minimum, the number of shares of Newco Common Stock so proposed to be registered, the proposed date of filing of such registration statement, any proposed means of distribution of such shares, any proposed managing underwriter or underwriters of such shares and a good faith estimate by Newco of the proposed maximum offering price thereof, as such price is proposed to appear on the facing page of such registration statement. Upon the written direction of the Stockholder, given within 10 days following the receipt by the Stockholder of any such written notice (which direction shall specify the number of Stockholder Newco Shares intended to be disposed of by the Stockholder, Newco shall include in such registration statement (a "Piggy-Back Registration" and, collectively with a Demand Registration, a "Registration"), subject to the provisions of Section 4.02 hereof, such numbers of Stockholder Newco Shares as shall be set forth in such notice.


(b) In the event that Newco proposes to register shares of Newco Common Stock in connection with an underwritten offering and any managing underwriter thereof reasonably and in good faith shall have advised Newco, any holder of shares of Newco Common Stock intending to offer such shares in a secondary offering or combined offering (each, an "Other Holder") the Stockholder in writing that, in its opinion, the inclusion in the registration statement of some or all of the Stockholder Newco Shares sought to be registered by the Stockholder creates a substantial risk that the price per share that Newco or any Other Holder will derive from such registration will be materially and adversely affected or that the number of shares sought to be registered (including any shares sought to be registered at the request of Newco and any Other Holder and those sought to be registered by the Stockholder) is a greater number of shares than can reasonably be sold, Newco shall include in such registration statement such number of shares as Newco, any Other Holder and the Stockholder are so advised can be sold in such offering without such an effect (the "Maximum Number"), as follows and in the following order of priority: (A) first, such number of shares as Newco intended to be registered and sold by Newco and (B) second, in the case of a secondary offering or a combined offering and if and to the extent that the number of shares to be registered under clause (A) is less than the Maximum Number, such number of shares as the Stockholder and any Other Holder shall have intended to register which, when added to the number of shares to be registered under clause (A), is less than or equal to


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the Maximum Number; provided that if such number exceeds the Maximum Number, the shares of the Stockholder and such Other Holders will be excluded on a pro rata basis.


(c) No Piggy-Back Registration effected under this Section 3.03 shall be deemed to have been effected pursuant to Section 3.01 hereof or shall release Newco of its obligations to effect any Demand Registration upon request as provided under Section 3.01 hereof.


4.03 Additional Agreements. (a) Provided that the Stockholder shall have validly tendered any of the Stockholder Pharmacia Shares into the Exchange Offer and shall not have withdrawn such Stockholder Pharmacia Shares prior to the expiration date thereof, the Stockholder and Newco hereby agree to execute, at or prior to the consummation of the Exchange Offer, a letter agreement in substantially the form set forth in Annex A hereto.


(b) Anything in this Agreement to the contrary notwithstanding, if at any time following the Exchange Date, Newco shall obtain a written opinion of legal counsel reasonably satisfactory to the Stockholder and addressed to Newco and the Stockholder to the effect that the Stockholder Newco Shares may be publicly offered for sale in the United States by the Stockholder without restriction as to manner of sale and amount of securities sold and without registration under the Securities Act, Newco shall no longer be obligated to file or maintain a registration statement with respect to the Stockholder Newco Shares pursuant to this Agreement. In such case Newco shall issue to the Stockholder certificates representing the Stockholder Newco Shares without any legend restricting transfer and shall remove all stop transfer orders relating to the Stockholder Newco Shares.


4.04 Registration Procedures. (a) In connection with each Registration, and in accordance with the intended method or methods of distribution of the Registered Shares as described in such Registration, Newco shall, as soon as reasonably practicable (and, in any event, subject to the terms of this Agreement, including, without limitation, Section 4.01(a), at or before the time required by applicable laws and regulations):


(i) prepare and file with the Commission as provided herein a
registration statement with respect to such Registered Shares on a
registration form appropriate for such registration and use its reasonable
best efforts to cause such registration statement to become effective
promptly; provided that before filing a registration statement or
prospectus or any amendments or supplements thereto, Newco will furnish to
the Stockholder, and the sales or placement agent or agents, if any, for
the Registered Shares and the managing underwriter or underwriters, if any,
draft copies of all such documents proposed to be filed at least seven (7)
days prior to such filing, which documents will be subject to the
reasonable review of the Stockholder, the sales or placement agent or
agents, if any, for the Registered Shares and the managing underwriter or
underwriters, if any, and their respective agents and representatives and
(x) Newco will not include in any Registration information concerning or
relating to the Stockholder to which the Stockholder shall reasonably
object (unless the inclusion of such information is required by applicable
law or the regulations of any securities exchange to which Newco may be
subject), and (y) Newco will not file any Demand Registration or amendment
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