0000950162-01-500922.txt : 20011119 0000950162-01-500922.hdr.sgml : 20011119 ACCESSION NUMBER: 0000950162-01-500922 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 18 FILED AS OF DATE: 20011106 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHIRE FINANCE LTD CENTRAL INDEX KEY: 0001161960 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-72862-01 FILM NUMBER: 1776280 BUSINESS ADDRESS: STREET 1: HAMPSIRE INTERNATIONAL BUSINESS PARK STREET 2: CHINCHAM BASINGS CITY: HAMPSHIRE ENGLAND STATE: X0 ZIP: 00000 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SHIRE PHARMACEUTICALS GROUP PLC CENTRAL INDEX KEY: 0000936402 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-72862 FILM NUMBER: 1776279 BUSINESS ADDRESS: STREET 1: HAMPSHIRE INTL BUSINESS PARK STREET 2: CHINEHAM BASINGSTOKE CITY: HAMPSHIRE ENGLAND RG STATE: X0 BUSINESS PHONE: 1264333455 MAIL ADDRESS: STREET 1: HAMPSHIRE INTL BUSINESS PARK STREET 2: CHINEHAM BASINGSTOKE CITY: HAMPSHIRE ENGLAND RG STATE: X0 S-3 1 shires3.txt FORM S-3 As filed with the Securities and Exchange Commission on November 6, 2001 Registration No. 333- ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 -------------------
SHIRE FINANCE LIMITED SHIRE PHARMACEUTICALS GROUP PLC (Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter) Cayman Islands England and Wales (State or other jurisdiction of (State or other jurisdiction of incorporation or organization) incorporation or organization) Applied For Applied For (I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.) Hampshire International Business Park Hampshire International Business Park Chineham, Basingstoke Chineham, Basingstoke Hampshire RG24 8EP Hampshire RG24 8EP England England (44) 1-256-894-000 (44) 1-256-894-000 (Address, including zip code, and telephone number, (Address, including zip code, and telephone number, including area including area code, of registrant's principal executive offices) code, of registrant's principal executive offices)
CT Corporation System 111 Eighth Avenue New York, New York 10011 (212) 590-9200 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------------- Copies to: William A. Nuerge John P. Mitchell, Esq. Shire US Inc. Cahill Gordon & Reindel 7900 Tanners Gate Drive 80 Pine Street Florence, Kentucky 41042 New York, NY 10005-1702 ------------------- Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. / / If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box./X/ If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. / /
CALCULATION OF REGISTRATION FEE ======================== ================ ===================== ============================= ======================= Proposed Maximum Title of Securities to Amount to Be Offering Price Proposed Maximum Amount of Be Registered Registered Per Note (1) Aggregate Offering Price Registration Fee (1) ------------------------ ---------------- --------------------- ----------------------------- ----------------------- 2% Senior Guaranteed Convertible Notes of Shire Finance Limited $400,000,000 100% $400,000,000 $100,000 due 2011 ------------------------ ---------------- --------------------- ----------------------------- ----------------------- Preference Shares of Shire Finance Limited 400,000 shares (2) (2) (2) ------------------------ ---------------- --------------------- ----------------------------- ----------------------- Guarantees of Shire Pharmaceuticals Group plc (3) (3) (3) (3) ------------------------ ---------------- --------------------- ----------------------------- ----------------------- Ordinary Shares of Shire Pharmaceuticals Group plc, nominal (5) (6) (6) (6) value 5p per Ordinary Share (4) ======================== ================ ===================== ============================= =======================
(1) This estimate is made pursuant to Rule 457(c) of the Securities Act solely for purposes of determining the registration fee and is exclusive of accrued interest. (2) Pursuant to Rule 457(i), there is no additional filing fee required with respect to the Preference Shares issued upon conversion of the Notes because no additional consideration will be received in connection with the exercise of the conversion privilege. (3) Shire Pharmaceuticals Group plc has fully and unconditionally guaranteed all payments of principal and interest on the Notes and all payments of dividends, redemption amounts and liquidation preferences in respect of the Preference Shares. Pursuant to Rule 457(n), there is no additional filing fee required with respect to the Guarantees. (4) American Depositary Shares ("ADSs") evidenced by American Depositary Receipts issuable upon deposit of Ordinary Shares, nominal value 5p each, of Shire Pharmaceuticals Group plc are registered on a separate Registration Statement on Form F-6 (Registration No. 333-13190), filed with the Securities and Exchange Commission on February 16, 2001. Each ADS represents three Ordinary Shares. (5) There is being registered hereunder an indeterminate number of Ordinary Shares which may be issued upon exchange of the Preference Shares issuable upon conversion of the Notes. Each $1,000 principal amount of Notes may be converted into one Preference Share. No additional consideration will be received in connection with the exercise of the conversion privilege or the exchange of Preference Shares. The Preference Shares will be immediately exchanged, subject to the option of Shire Finance Limited to have Shire Pharmaceuticals Group plc pay cash upon exchange, into Ordinary Shares at the rate of 49.61745 Ordinary Shares per Preference Share or 16.5392 ADSs per Preference Share, subject to adjustment under certain circumstances. At the date hereof, the number of Ordinary Shares which may be issued upon exchange of the Preference Shares issued upon conversion of the Notes is 19,846,980 and the number of ADSs which may be issued upon exchange of the Preference Shares issued upon conversion of the Notes is 6,615,680. Pursuant to Rule 416 under the Securities Act, such number of Ordinary Shares registered hereby shall include an indeterminate number of Ordinary Shares that may be issued in connection with a stock split, stock dividend, recapitalization or similar event or adjustment in the number of Ordinary Shares which may be issued upon exchange of the Preference Shares as provided in the terms of the Preference Shares contained in the Amended and Restated Memorandum and Articles of Association of Shire Finance Limited. (6) Pursuant to Rule 457(i), there is no additional filing fee required with respect to the Ordinary Shares which may be issued upon exchange of the Preference Shares because no additional consideration will be received in connection with the exchange. The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine. The information in this prospectus is not complete and may be changed. The selling securityholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED NOVEMBER 6, 2001 PRELIMINARY PROSPECTUS SHIRE FINANCE LIMITED $400,000,000 2% Senior Guaranteed Convertible Notes due 2011 Guaranteed by Shire Pharmaceuticals Group plc --------------- SHIRE PHARMACEUTICALS GROUP PLC Ordinary Shares and American Depositary Shares which may be issued upon exchange of Preference Shares that will be issued upon Conversion of the Notes --------------- Selling securityholders will use this prospectus to resell their notes and the ordinary shares or American Depositary Shares, or ADSs, issuable upon exchange of the preference shares that will be issued upon conversion of the notes. The notes are: o unsecured; o unsubordinated; o in respect of payments of principal and interest, fully and unconditionally guaranteed by Shire Pharmaceuticals Group plc; o convertible, at any time prior to August 14, 2011 or their redemption or repurchase, into preference shares of Shire Finance, which shares will then be immediately exchanged by Shire Finance for - ordinary shares of Shire Pharmaceuticals Group or - at your option in specified circumstances, ADSs of Shire Pharmaceuticals Group, representing ordinary shares, at an exchange ratio, subject to adjustment, equal to 49.6175 ordinary shares per preference share or 16.5392 ADSs per preference share. At Shire Finance's option, Shire Pharmaceuticals Group may deliver cash instead of ordinary shares or ADSs in exchange for the preference shares; o redeemable by Shire Finance for cash on or after August 21, 2004 at the redemption price described in this prospectus; o redeemable at the option of holders on each of August 21, 2004, August 21, 2006, and August 21, 2008 at the purchase price described in this prospectus; and o redeemable at the option of holders under specified change of control events as described in this prospectus. On November 5, 2001, the last reported sale price for Shire Pharmaceuticals Group's ordinary shares on the London Stock Exchange was (pound)10.65 per share, and the last reported sale price for Shire Pharmaceuticals Group's ADSs on the Nasdaq National Market was $46.74 per ADS. Each ADS represents three ordinary shares. The ordinary shares are listed under the symbol "SHP.L" and the ADSs are quoted under the symbol "SHPGY." Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense. See "Risk Factors" beginning on page 6 of this prospectus to read about important factors you should consider before buying the notes or Shire Pharmaceuticals Group's ordinary shares or ADSs. --------------- The date of this prospectus is [________], 2001. --------------- TABLE OF CONTENTS Prospectus Page About this Prospectus..................................................... ii Cautionary Statement Concerning Forward-Looking Statements................ ii Summary................................................................... 1 Risk Factors.............................................................. 6 Use of Proceeds........................................................... 8 Price Range of Common Equity and Dividend Policy.......................... 8 Capitalization............................................................ 10 Selected Financial and Operating Data..................................... 11 Description of the Notes.................................................. 12 Description of the Preference Shares...................................... 40 The Issuer................................................................ 43 Description of the Ordinary Shares........................................ 44 Description of the American Depositary Shares and American Depositary Receipts..................................................... 52 Certain Cayman Islands, U.K. and U.S. Tax Considerations.................. 59 Selling Securityholders................................................... 72 Plan of Distribution...................................................... 76 Enforcement of Civil Liabilities.......................................... 79 Legal Matters............................................................. 79 Independent Auditors...................................................... 79 Available Information..................................................... 79 Incorporation of Documents by Reference................................... 80 There are restrictions on the offer and sale of the notes in the United Kingdom. All applicable provisions of the Financial Services Act 1986, the Financial Services and Markets Act 2000 and the Public Offers of Securities Regulations 1995 with respect to anything done by any person in relation to the notes, the ordinary shares and the ADSs in, from or otherwise involving the United Kingdom must be complied with. No invitation to the public in the Cayman Islands to subscribe for or purchase any of the notes or preference shares may be made unless the issuer is, at the relevant time, listed on the Cayman Islands Stock Exchange. No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the notes and ordinary shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The distribution of this prospectus and the offer or sale of the notes, ordinary shares and ADSs in certain jurisdictions may be restricted by law. This prospectus does not constitute an offer or invitation to sell the notes, ordinary shares or ADSs in any jurisdiction in which such offer or invitation would be unlawful and Shire Finance and Shire Pharmaceuticals Group do not accept any responsibility for any violation by any person of any such restrictions. The information contained in this prospectus is current only as of its date. Until , 2002 all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the -i- dealers' obligations to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions. -ii- ABOUT THIS PROSPECTUS This prospectus constitutes part of a registration statement on Form S-3 that Shire and the issuer filed with the SEC using a "shelf" registration process. Under this shelf process, any selling securityholder may sell any combination of the securities described in this prospectus in one or more negotiated transactions or otherwise, at market prices prevailing at the time of sale or at negotiated prices. This prospectus provides you with a general description of the securities the selling securityholders may offer. Each time the selling securityholders sell securities, we or the selling securityholders will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described under the heading "Available Information" and "Incorporation of Documents by Reference." This prospectus summarizes certain documents and other information, and Shire and the issuer refer you to the actual documents for a more complete understanding of what Shire and the issuer discuss in this prospectus. Shire will make copies of the actual documents available to you upon request. In this prospectus, references to "dollars," "U.S.$" and "$" are to U.S. dollars. CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS Statements contained in this prospectus and in Shire's filings with the SEC incorporated by reference in this prospectus that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the federal securities laws. These forward-looking statements involve risks and uncertainties, including, but not limited to, risks associated with the inherent uncertainty of pharmaceutical research, product development and commercialization, the impact of competitive products, patents and other risks and uncertainties, including those detailed from time to time in periodic reports, including the annual report for the year ended December 31, 2000 on Form 10-K and in the proxy statement for the extraordinary general meeting of shareholders, dated March 1, 2001, filed by Shire with the SEC. Shire and the issuer caution that the risks and factors discussed in these filings are not exclusive. Shire and the issuer have no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or risks. New information, future events or risks may cause the forward-looking events Shire and the issuer discuss in this prospectus and in the filings with the SEC that Shire and the issuer incorporate by reference in this prospectus not to occur. -iii- SUMMARY The following summary is qualified in its entirety by the more detailed information appearing elsewhere in or incorporated by reference into this prospectus. Prospective investors should consider carefully the information set forth in this prospectus under the heading "Risk Factors" and the documents incorporated in this prospectus by reference identified under the heading "Incorporation of Documents by Reference." Unless the context requires otherwise, references to the "issuer" refer to Shire Finance Limited, references to "Shire" refer to Shire Pharmaceuticals Group plc, and references to "we," "us" and "our" refer to Shire Pharmaceuticals Group plc and its subsidiaries, including the issuer. Shire Following the merger with BioChem Pharma Inc. on May 11, 2001, we became one of the world's leading international specialty pharmaceutical companies. We have a strategic focus on three therapeutic areas: central nervous systems disorders, oncology and anti-infectives. Our strategy is further supported by two technology platforms, drug delivery and biologics. We have a global sales and marketing infrastructure with a broad portfolio of products and our own direct marketing capability in the United States, Canada, the United Kingdom, the Republic of Ireland, France, Germany, Italy and Spain, with plans to add Japan by 2004. We also cover other significant pharmaceuticals markets indirectly through distributors. Our business is managed within three individual operating segments: U.S., International and global research and development. Within these segments revenues are derived from three sources: sales of products by our own sales and marketing operations, royalties and licensing and development fees. We refer to ourselves as "specialty" because our principal products tend to be prescribed by specialists as opposed to primary care physicians. A comparatively small sales force such as ours can promote specialty products effectively while it could not be expected to achieve the necessary coverage of primary care physicians. Our main approach is to in-license projects, to develop them and launch them ourselves in the eight key world markets. We seek to protect the intellectual property upon which we rely through a range of patents and patent applications (both our own and those of our licensors). Our principal products include: o in the United States, Adderall for the treatment of Attention Deficit Hyperactivity Disorder; Agrylin for the treatment of elevated blood platelets; Pentasa for the treatment of ulcerative colitis; Carbatrol for the treatment of epilepsy; and ProAmatine for the treatment of orthostatic hypotension. In addition, we receive royalties on the sales of Reminyl for the treatment of Alzheimer's disease, marketed by Johnson & Johnson, and on Epivir, Combivir and Trizivir for the treatment of HIV/AIDS and Epivir-HBV for the treatment of hepatitis B, each marketed by GlaxoSmithKline; o in the United Kingdom, the Calcichew range, used primarily as adjuncts in the treatment of osteoporosis, and Reminyl, which was launched in September 2000 and is co-promoted by Janssen-Cilag; o in Canada, 3TC for the treatment of HIV/AIDS, Combivir and Heptovir (marketed in partnership with GlaxoSmithKline); Amatine; Second Look, a breast cancer diagnostics product (Shire hopes to receive U.S. Food and Drug Administration approval in 2001 for this product); and Fluviral S/F, a vaccine for the prevention of influenza; and o in the rest of the world, we receive royalties on the sales of Zeffix for the treatment of hepatitis B, marketed by GlaxoSmithKline, and will receive royalties on sales of Reminyl from Janssen Pharmaceutica. -1- In addition, we have a number of products in late stage development including Dirame for the treatment of moderate to severe pain, Foznol for the treatment of high blood phosphate levels associated with kidney failure and Troxatyl for the treatment of leukemia and solid tumors. We submitted the first regulatory submission for Foznol under the European Mutual Recognition Procedure on March 13, 2001. The BioChem merger was accounted for as a pooling of interests under U.S. generally accepted accounting principles. Accordingly, all prior period information contained in this prospectus includes the results of BioChem as though it had always been a part of us. Shire is a public limited company incorporated under the laws of England and Wales. Our principal executive offices and registered office are located at Hampshire International Business Park, Chineham, Basingstoke, Hampshire RG24 8EP, England, and our telephone number is (44) 1-256-894-000. -2- The Offering The following summary contains basic information about the notes. It may not contain all the information that is important to you. For a more complete understanding of the terms of the notes, please refer to the section of this prospectus entitled "Description of the Notes." Securities Offered $400,000,000 aggregate principal amount of 2% Senior Guaranteed Convertible Notes of the issuer due 2011, convertible into preference shares of the issuer; and ordinary shares or ADSs of Shire which will be immediately issued in exchange for the preference shares upon their issuance, in each case to be sold by the selling securityholders listed under "Selling Securityholders" beginning on page 72. Interest The issuer will pay interest on the notes at a rate of 2% per year on February 21 and August 21 of each year to the holders of record of the notes on the February 6 or August 6, respectively, preceding the relevant interest payment date. The first interest payment will be made on February 21, 2002. Issue Price 100%. Maturity Date August 21, 2011. Redemption at Maturity Unless previously redeemed, converted or repurchased and canceled, the issuer will redeem the notes at 100% of their principal amount together with accrued and unpaid interest on August 21, 2011. Ranking The notes are senior unsecured obligations of the issuer, ranking equally with all of the other unsecured senior indebtedness of the issuer and effectively junior to all of its secured indebtedness. Conversion and Exchange You may convert your notes into preference shares of the issuer at any time prior to August 14, 2011 or their redemption or repurchase. Each $1,000 principal amount of notes may be converted into one preference share, which will be issued at an issue price of $1,000 each. These preference shares may, in turn, be immediately exchanged by the issuer for (i) our ordinary shares or (ii) at your option, in specified circumstances, ADSs representing ordinary shares, initially at an exchange ratio equal to 49.6175 ordinary shares per preference share or 16.5392 ADSs per preference share. The exchange ratio is subject to adjustment upon the occurrence of specified events described under "Description of the Notes--Conversion and Exchange Rights--Adjustments to the Exchange Ratio." Each ADS represents three ordinary shares. At the issuer's option, we may deliver cash instead of our ordinary shares or ADSs in exchange for the preference shares. -3- Redemption at Option of Holders On each of August 21, 2004, August 21, 2006 and August 21, 2008, you will have the right to require the issuer to redeem all or part of your notes not previously redeemed, repurchased or converted at 100% of their principal amount plus accrued interest. At the issuer's option, the issuer may choose, instead of redeeming a note in cash, to convert all or part of a note into preference shares which will then be exchanged by the issuer into our ordinary shares or, at your option and in specified circumstances, ADSs, at a specified exchange ratio. Change in Control If we experience specific kinds of changes in control, you will have the right to require the issuer to redeem all or part of your notes not previously redeemed, repurchased or converted at 101% of their principal amount, plus accrued interest. At the issuer's option, the issuer may choose, subject to specified conditions, to convert all or part of a note into preference shares which will then be exchanged by the issuer for our ordinary shares or, at your option and in specified circumstances, ADSs, at a specified exchange ratio. Optional Redemption by the Issuer On or after August 21, 2004, the issuer may redeem all or part of a note which has not previously been converted at a redemption price equal to 100% of its principal amount, plus accrued interest, in the circumstances described under "Description of the Notes--Optional Redemption by the Issuer." The Guarantees We are fully and unconditionally guaranteeing all payments of principal and interest on the notes and, following conversion of the notes into preference shares of the issuer, all payments of dividends, redemption amounts and liquidation preferences in respect of the preference shares. We have agreed not to alter our obligation to the issuer to issue our ordinary shares in order that the issuer may comply with it's exchange obligations under the preference shares. We have also agreed to ensure the issuer's performance of its conversion and exchange obligations under the notes and preference shares and its articles and memorandum of association. Limitation on Mergers and Sales of Assets The indenture governing the notes, among other things, limits our ability to sell our assets substantially as an entirety or consolidate or merge with or into other companies, unless certain conditions are met. Listing The notes have been admitted to the Official List of the U.K. Listing Authority and to trading on the London Stock Exchange's market for listed securities. Shire's ordinary shares are traded on the London Stock Exchange under the symbol "SHP.L" and its ADSs are traded on the Nasdaq National Market under the symbol "SHPGY." Governing Law The notes, the indenture and the preference share guarantee are governed by New York law. The terms of the preference shares are governed by the memorandum and articles of association of the issuer, a Cayman Islands exempted limited company. -4- Tax Status All payments in respect of the notes or the guarantees will be made without withholding of or deduction for or on account of taxation unless the withholding or deduction is required by law. Neither the issuer nor we will be required to pay you any additional amounts as a result of any withholding or deduction that is required by law. Use of Proceeds We will not receive any proceeds from the sale by the selling securityholders of the notes or the ordinary shares or ADSs which may be issued upon exchange of the preference shares issued upon conversion of the notes. Trustee, Registrar, Transfer Agent, Principal Paying Agent and London Paying Agent The Bank of New York. Risk Factors Before deciding to purchase any notes or ordinary shares or ADSs which may be issued upon exchange of the preference shares issued upon conversion of the notes you should consider carefully all of the information in this prospectus and, in particular, you should evaluate the specific risk factors set forth under "Risk Factors" immediately following this summary. -5- RISK FACTORS Before deciding to purchase any notes or the ordinary shares or ADSs which may be issued upon exchange of the preference shares issued upon conversion of the notes you should carefully consider the following factors, the risk factors contained in our annual report on Form 10-K for the year ended December 31, 2000 and the risk factors related to BioChem contained in our proxy statement for the extraordinary general meeting of shareholders dated March 1, 2001, incorporated by reference into this prospectus, and other information in and incorporated into this prospectus. An active trading market for the notes may not develop. We cannot assure you that an active trading market for the notes will develop or as to the liquidity or sustainability of any such market, the ability of holders to sell their notes or the price at which holders will be able to sell their notes. Future trading prices of the notes will depend on many factors, including, among other things, prevailing interest rates, the market for similar securities, the price of our ordinary shares and ADSs, our performance and other factors. The price of our ordinary shares and ADSs is volatile. The trading price of the ordinary shares and ADSs issuable to you in exchange for the preference shares issued to you upon conversion or redemption of your notes may be subject to fluctuations in response to variations in our operating results, regulatory developments, technological and manufacturing evolution, global and regional economic conditions and other events or factors. In addition, global stock markets have from time to time experienced significant price and volume fluctuations, which may lead to a drop in the market price of the ordinary shares and/or ADSs. Factors which may add to the volatility of the price of the ordinary shares and/or the ADSs include, among others, the following: o actual or anticipated variations in our results and those of our competitors; o the introduction of competing pharmaceutical products into the markets we serve; o conditions or trends in the pharmaceuticals industry; o announcements by us or our competitors of significant acquisitions or divestitures; o announcements of strategic partnerships or joint ventures entered into by us or our competitors or their termination or other changes in our business or operations, or those of our competitors; o our capital commitments or downgrades in our credit rating; o liquidity in the ordinary shares and/or the ADSs; o sales of the ordinary shares and/or the ADSs; and o investor sentiment towards the business sector in which we operate and conditions in the capital markets generally. Many of these factors are beyond our control. These factors may decrease the market price of the ordinary shares and/or the ADSs, regardless of our operating performance. -6- We may enter into transactions that will not result in a change in control. The change of control provisions may not protect you from transactions in which we borrow a large amount of money but which do not result in a shift in voting power or beneficial ownership large enough to trigger a change of control. Such transactions may include a reorganization, restructuring, merger or other similar transaction. The change of control provisions may not offer you protection as transactions of that kind may not involve any shift in voting power or beneficial ownership, or may not involve a shift large enough to trigger a change of control. The notes are unsecured obligations of the issuer. The notes are senior unsecured indebtedness of the issuer. Our guarantee relating to the notes ranks equally in right of payment with all of our existing and future unsecured indebtedness. In addition, the guarantee will be effectively subordinated to all of our and the issuer's future secured indebtedness, to the extent of the value of the collateral securing such indebtedness and is and will be effectively subordinated to all of the existing and future indebtedness and other liabilities of our wholly-owned subsidiaries. The indenture governing the notes does not limit the amount of additional indebtedness which we or our subsidiaries can create, incur, assume or guarantee. You will have no shareholder rights prior to conversion of the notes. As a holder of a note, you will not be a holder of our equity securities. You will not have any voting rights, any right to receive dividends or other distributions or any other rights with respect to our equity securities until such time, if any, as you convert your notes into preference shares of the issuer and such preference shares are exchanged for our ordinary shares or ADSs, and you become a registered holder thereof. -7- USE OF PROCEEDS We will not receive any of the proceeds from the sale by any of the selling securityholders of the notes or the ordinary shares or ADSs which may be issued upon exchange of the preference shares issued upon conversion of the notes. PRICE RANGE OF COMMON EQUITY AND DIVIDEND POLICY Ordinary Shares Our ordinary shares are traded on the London Stock Exchange (the "LSE"). The following table presents the per share closing mid-market quotation for our ordinary shares as quoted in the Daily Official List of the LSE for the quarters indicated. High (pound) Low (pound) per ordinary per ordinary Year Ended December 31, 1999 share share First Quarter (pound)5.17 (pound)3.74 Second Quarter 5.28 3.96 Third Quarter 6.13 4.74 Fourth Quarter 7.34 5.59 Year Ended December 31, 2000 First Quarter (pound)14.28 (pound)5.98 Second Quarter 12.40 7.37 Third Quarter 13.69 11.35 Fourth Quarter 14.92 9.53 Year Ending December 31, 2001 First Quarter (pound)13.39 (pound)8.85 Second Quarter 12.94 10.01 Third Quarter 13.19 8.50 Fourth Quarter (through November 5, 2001) 11.12 8.87 The number of record holders of ordinary shares as of November 5, 2001 was 11,020 (105 U.S. holders), holding 479,367,095 ordinary shares in the aggregate (125,323,942 shares held by U.S. holders in the aggregate). The total number of ordinary shares includes 124,745,601 ordinary shares represented by ADSs of which the depositary of the ADSs is the record holder. Since certain of the ordinary shares are held by broker nominees, the number of record holders may not be representative of the number of beneficial owners. -8- American Depositary Shares Our ADSs, each representing three ordinary shares, evidenced by American Depositary Receipts ("ADRs") issued by Morgan Guaranty Trust Company of New York, as depositary, are quoted on the Nasdaq National Market. As of November 5, 2001, the proportion of ordinary shares represented by ADRs was approximately 26% of the ordinary shares outstanding. The following table presents the high and low market quotations for the ADSs quoted on the Nasdaq National Market for the quarters indicated. High $ Low $ Year Ended December 31, 1999 per ADS per ADS First Quarter $25.50 $19.13 Second Quarter 26.00 18.88 Third Quarter 29.31 23.75 Fourth Quarter 35.06 26.19 Year Ended December 31, 2000 First Quarter $67.19 $28.31 Second Quarter 59.75 33.19 Third Quarter 60.63 51.38 Fourth Quarter 65.00 42.06 Year Ending December 31, 2001 First Quarter $58.19 $39.13 Second Quarter 55.50 42.38 Third Quarter 57.20 36.30 Fourth Quarter (through November 5, 2001) 47.85 42.95 The number of record holders of ADSs as of November 5, 2001 was approximately 426 (413 U.S. holders), holding 41,581,867 ADSs in the aggregate (41,577,178 ADSs held by U.S. holders in the aggregate). Since certain of the ADRs are held by broker nominees, the number of record holders may not be representative of the number of beneficial owners. Dividend Policy Historically, Shire has not paid any dividends. Shire does not anticipate paying any dividends on our ordinary shares, or indirectly on ADSs, in the foreseeable future. As a matter of English law, Shire may pay dividends only out of its distributable profits, which are accumulated realized profits under U.K. GAAP, so far as not previously utilized by distribution or capitalization, less accumulated realized losses, so far as not written off in a reduction or reorganization of capital duly made. Future dividend policy will be dependent upon Shire's distributable profits, our financial condition, the terms of any then existing debt facilities and other relevant factors existing at that time. -9- Capitalization The following table sets forth as of June 30, 2001: (1) the actual consolidated capitalization of Shire and (2) the consolidated capitalization of Shire on a pro forma basis giving effect to the issuance of the notes.
As reported Pro Forma June 30, 2001 June 30, 2001 (in thousands of U.S. $) Long term debt 8,575 408,575 Shareholders' equity: Common stock, 5p par value: 800,000,000 shares authorized; and 461,391,822 shares issued and outstanding 35,518 35,518 Exchangeable shares: 10,038,008 shares issued and outstanding 459,880 459,880 Additional paid-in capital 783,185 783,185 Accumulated deficit (97,531) (97,531) Accumulated other comprehensive losses (90,307) (90,307) ---------- ----------- ---------- ----------- Total Capitalization 1,090,745 1,090,745 ---------- -----------
-10- SELECTED FINANCIAL AND OPERATING DATA The financial results as of December 31, 1999 and 2000 and for each of the three years in the period ended December 31, 2000 have been restated to reflect the combined results of Shire and BioChem. The financial results as of and for the period ended December 31, 1998 also have been restated to reflect the combined results of Shire and Roberts Pharmaceutical Corporation. The financial results as of December 31, 1996 and 1997 and for each of the two years in the period ended December 31, 1997 have been restated to reflect the combined results of Shire and Roberts. Each of the BioChem and Roberts mergers was accounted for as a pooling of interests. The summary historical data as of December 31, 1999 and 2000 and for the years ended December 31, 1998, 1999 and 2000 is derived from actual audited results for such years. The unaudited results as of December 31, 1996, 1997 and 1998 and for the years ended December 31, 1996 and 1997 are also included for comparative purposes. The selected consolidated financial data for Shire should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and with Shire's consolidated financial statements and related notes included in Shire's Current Report on Form 8-K filed with the SEC on August 15, 2001 and incorporated by reference herein.
Year Ended December 31, 1996 1997 1998 1999 2000 ---- ---- ---- ---- ---- (Unaudited) (Unaudited) (in thousands of U.S. $ except for share information and ratios) Income Statement Data: Revenues 289,675 298,656 435,905 537,253 671,110 Operating income (30,015) (35,661) 73,336 (36,654) 151,358 Income before income taxes (23,320) (24,957) 91,812 (13,590) 259,391 Net income from continuing (11,659) (28,037) 84,147 (35,253) 211,727 operations Net income (11,103) (28,403) 82,040 (47,432) 211,727 Basic net income per ordinary share continuing operations (3.2)c (6.5)c 17.5c (7.3)c 43.8c net income (3.1)c (6.6)c 17.1c (9.8)c 43.8c Basic net income per ADS continuing operations (9.7)c (19.5)c 52.5c (21.9)c 131.4c net income (9.2)c (19.8)c 51.3c (29.4)c 131.4c Fully diluted net income per ordinary share continuing operations (3.2)c (6.5)c 17.0c (7.3)c 42.8c net income (3.1)c (6.5)c 16.6c (9.8)c 42.8c Fully diluted net income per ADS continuing operations (9.7)c (19.5)c 51.0c (21.9)c 128.4c net income (9.2)c (19.8)c 49.8c (29.4)c 128.4c Weighted average ordinary shares outstanding - basic 361,094,196 431,276,428 480,827,784 484,358,876 482,890,070 Weighted average ordinary shares outstanding - fully diluted 361,094,196 431,276,428 494,149,715 488,138,499 494,691,805 Other Financial Data: Earnings to fixed charges (1) (1) 14.17 0.01 16.27
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As at As at As at As at As at ----- ----- ----- ----- ----- December 31, December 31, December 31, December 31, December 31, ------------ ------------ ------------ ------------ ------------ 1996 1997 1998 1999 2000 ---- ---- ---- ---- ---- (Unaudited) (Unaudited) (Unaudited) (in thousands of U.S. $) Balance Sheet Data: Current assets 530,271 495,360 445,972 520,023 695,853 Non-current assets 853,210 1,121,773 1,210,153 1,351,789 1,548,495 Current liabilities 115,191 141,196 99,770 233,818 227,850 Non-current liabilities 63,094 59,834 137,151 238,087 146,259 Minority interests 9,154 9,011 -- -- -- Shareholders' equity 665,771 911,732 973,232 879,886 1,174,386
(1) In calculating the ratio of earnings to fixed charges, earnings consist of income before income taxes plus fixed charges. Fixed charges consist of interest expense, amortization of debt issuance costs and one-third of rental expense, deemed representative of that portion of rental expense estimated to be attributable to interest. Earnings for the years ended December 31, 1996 and 1997 were insufficient to cover fixed charges for such periods by approximately $23.32 million and $24.96 million, respectively. -12- DESCRIPTION OF THE NOTES The notes were issued under a document called the "indenture." The indenture is a contract between the issuer, us and The Bank of New York, who acts as trustee. Because this section is a summary, it does not describe every aspect of the notes. This summary is subject to and qualified in its entirety by reference to all of the provisions of the indenture, including the definitions of some terms that are used in the indenture and which we use in this section. We describe the meaning for only the more important terms, and wherever we refer to particular defined terms, those defined terms as they are used in the indenture are incorporated by reference here. In this section, references to "Shire," "we," "us" or "our" refer solely to Shire Pharmaceuticals Group plc and not its subsidiaries, and references to the "issuer" refer solely to Shire Finance Limited. General The notes are senior unsecured obligations of the issuer. The notes are unsubordinated, which means that they rank equally among themselves and with all of the issuer's other present and future senior and unsubordinated indebtedness, except as required by mandatory provisions of law, and senior to all of its other indebtedness, if any. The indenture does not limit the issuer's or our ability to incur other indebtedness. The notes are limited to $400 million aggregate principal amount. Payment of the full principal amount of the notes is due on August 21, 2011, to the extent the notes are not converted, redeemed or repurchased prior to that date. The notes bear interest at the annual rate shown on the front cover of this prospectus. The issuer will pay interest semi-annually on February 21 and August 21 of each year, beginning February 21, 2002, until the principal is paid or made available for payment or the notes are converted or redeemed in accordance with their terms. Interest will be paid to the holders of record of the notes at the close of business on the February 6 or August 6, as applicable, preceding the relevant interest payment date. Interest payable in respect of any period which is not a full interest period will be calculated on the basis of a 360-day year consisting of 12 months of 30 days each and, in the case of an incomplete month, the number of days elapsed. The notes are represented by global notes in registered form without interest coupons. Notes that were sold in transactions outside the United States in compliance with Regulation S under the U.S. Securities Act of 1933, as amended (the "Securities Act"), are represented by interests in the "Regulation S global note." We refer to these notes as "Regulation S notes." Notes which were sold pursuant to Rule 144A under the Securities Act ("Rule 144A") are represented by interests in the "Rule 144A global note." We refer to these notes as the "Rule 144A notes." Any purchaser of notes pursuant to this prospectus will receive a beneficial interest in an unrestricted global note, which we refer to as the "registered resale global note." The Regulation S global note, the Rule 144A global note and the registered resale global note are referred to together in this section as the "global notes." Interests and transfers of interests in the global notes are shown on and effected only through the book-entry systems operated by The Depository Trust Company, or DTC, Euroclear or Clearstream and their respective participants. You may convert the notes into preference shares of the issuer, which will then be exchanged for our ordinary shares or ADSs representing our ordinary shares in accordance with the issuer's memorandum and articles of association at any time before the close of business on August 14, 2011, unless the notes have been previously converted, redeemed or repurchased. Until either (a) the note being converted has been transferred pursuant to an effective registration statement or (b) the note is not otherwise a "restricted security" within the meaning of Rule 144(a)(3) under the Securities Act, however, holders may only exchange the preference shares for our ordinary shares and not ADSs. At the issuer's option, the issuer may procure the delivery to you of cash in U.S. dollars upon conversion and exchange rather than ordinary shares or ADSs, as described below under "--Conversion and Exchange Rights--Cash-Out Option." The exchange ratio may be adjusted upon the occurrence of certain events which change the number of our ordinary shares outstanding or provide for distributions of our ordinary shares, as described below under "--Conversion and Exchange Rights--Adjustments to the Exchange Ratio." -13- The issuer may redeem the notes at its option at any time on or after August 21, 2004, in whole or in part, at par plus accrued and unpaid interest to the redemption date, if the conditions described below under "--Optional Redemption by the Issuer" are met. If there is a change in control of Shire, you may have the right to require the issuer to redeem your notes at a redemption price equal to 101% of the principal amount of the notes. In addition, you will have the right to require the issuer to redeem your notes at par on August 21, 2004, 2006 and 2008 as described below under "--Redemption at Option of Holders--Redemption at Option of Holders on Selected Dates." In the event that you elect for notes to be redeemed prior to final maturity, the issuer may at its option instead choose to convert the relevant notes into its preference shares, which will then be exchanged by the issuer into our ordinary shares or, at your option, ADSs as described below under "--Redemption at Option of Holders--Redemption at Option of Holders upon a Change in Control" and "--Redemption at Option of Holders on Selected Dates." The issuer will pay you any cash amounts to which you may be entitled under the terms of the notes in respect of the principal of and any accrued interest on the notes at maturity (including upon the issuer's repurchase or redemption of the notes) in U.S. dollars. We fully and unconditionally guarantee payments of principal and interest on the notes and, following conversion into preference shares of the issuer, payments in respect of the preference shares of dividends and liquidation preference upon any liquidation of the issuer. We have agreed not to alter our obligation to the issuer to issue our ordinary shares in order that the issuer might meet its exchange obligations under the terms of its preference shares, and we have agreed to ensure the issuer's performance of its conversion and exchange obligations under the notes and its memorandum and articles of association. We discuss these guarantees and agreements in more detail below under "--The Guarantees." The principal corporate trust office of the trustee in the City of New York is designated as the principal paying agent. We may at any time designate additional paying agents or rescind the designation of any paying agents or approve a change in the office through which any paying agent acts. The trustee has been appointed as the London paying agent. For so long as any of the notes are listed on the LSE, we will maintain a paying agent in the United Kingdom. So long as the notes are represented by global notes, payment of interest on and, if applicable, principal of the notes will be made in immediately available funds. Obligations to Direct Holders The issuer's obligations under the notes and our obligations under the guarantees, as well as the obligations of the trustee and those of any third parties employed by the issuer, us or the trustee, run only to persons who are registered as holders of notes. Neither we nor the issuer has obligations to you if you hold in street name or other indirect means, either because you choose to hold notes in that manner or because the notes are issued in the form of global notes as described below. For example, once payment is made to the person with whom the global note is deposited, neither we nor the issuer has any further responsibility for the payment even if that holder is legally required to pass the payment along to you as a street name customer but does not do so. In the remainder of this description "you" means direct holders and not street name or other indirect holders of notes. Form, Exchange and Transfer The notes are each represented by global notes in registered form, without coupons. The global notes are issued in denominations that in the aggregate equal the outstanding principal amount of notes represented thereby. The notes have denominations of $1,000 or even multiples of $1,000. The Rule 144A global note and the registered -14- resale global note are deposited with a custodian for and registered in the name of Cede & Co., as nominee of DTC. The Regulation S global note is deposited with, and registered in the name of a nominee for, a common depositary for Euroclear and Clearstream. You may have your notes broken into more notes of smaller denominations or combined into fewer notes of larger denominations, as long as the total principal amount is not changed. If definitive registered notes are issued in the special situations described under "--Special Situations in Which a Global Note Will Be Terminated" below, you may exchange or transfer your notes at the office of the trustee. The trustee acts as our agent for registering notes in the names of holders and transferring registered notes. We may change this appointment to another entity or perform the service ourselves. The entity performing the role of maintaining the list of registered holders is called the "security registrar." It will also register transfers of the registered notes. You may not, however, exchange registered notes for bearer notes. You will not be required to pay a service charge to transfer or exchange notes, but you may be required to pay any tax or other governmental charge associated with the exchange or transfer. The transfer or exchange of registered notes will only be made if the security registrar is satisfied with your proof of ownership. We may designate additional transfer agents. We may cancel the designation of any particular transfer agent. We may also approve a change in the office through which any transfer agent acts. Special Situations in Which a Global Note Will Be Terminated In a few special situations described below, a global note will terminate and interests in it will be exchanged for physical certificates representing definitive registered notes. After that exchange, the choice of whether to hold notes directly or in street name will be up to the investor. Investors must consult their own bank or brokers to find out how to have their interests in notes transferred to their own name so that they will be direct holders. The special situations for termination of a global note are: In the case of the Rule 144A global note or the registered resale global note, when DTC notifies the trustee that it is unwilling, unable or no longer qualified to continue holding the global note or notes, and we do not appoint a successor within 120 days. In the case of the Regulation S global note, when either Euroclear or Clearstream is closed for business for a continuous period of 14 days, other than public holidays, or permanently ceases business or announces an intention to do so. When the issuer elects to exchange the global notes representing such notes for physical certificates representing such notes in registered form. When an event of default on the notes has occurred and has not been cured, if requested by the holder of a book-entry interest in the notes. Defaults on notes are discussed below under "--Events of Default." In addition, if instructions have been given to transfer a beneficial interest in one global note to a person who would otherwise take delivery in the form of an interest in another global note, and such other global note has previously been exchanged for definitive registered notes, then the transferee will receive its interest in the form of definitive registered notes. -15- No definitive notes in bearer form will be issued. Definitive notes issued in exchange for book-entry securities will be issued in registered form only, without coupons. They will be registered in the name or names instructed by the registrar based on the instructions of DTC, Euroclear and Clearstream. Payment and Paying Agents The issuer will pay interest to you if you are a direct holder listed in the trustee's records at the close of business on the February 6 or August 6, as applicable, in advance of each interest payment date, even if you no longer own the security on the interest payment date. That particular day is called the "regular record date." The issuer will pay interest, principal and any other money due on global notes to the registered holder thereof by wire transfer of same-day funds. For a discussion of payments with respect to book-entry securities issued in respect of global notes, see "--Arrangements Relating to Notes in Global Form--Payments" below. Payments on definitive registered notes, if any, will be made at the corporate trust office of the trustee in New York City. That office is currently located at 101 Barclay Street, Floor 21 West, New York, New York 10286. You must make arrangements to have your payments picked up at or wired from that office. The issuer may also choose to pay interest on definitive registered notes by mailing checks. Street name and other indirect holders should consult their banks or brokers for information on how they will receive payments. We may also arrange for additional payment offices, and may cancel or change these offices, including our use of the trustee's corporate trust office as a payment office. These offices are called "paying agents." The issuer may also choose to act as its own paying agent. We must notify you of changes in the paying agents for the notes that you hold. Conversion and Exchange Rights You may, at your option, convert any portion of the principal amount of a note in an even multiple of $1,000 into fully paid 2% exchangeable redeemable preference shares of the issuer at any time before the close of business on the maturity date, unless the note has been previously converted, redeemed or repurchased. Each $1,000 principal amount of notes may be converted into one preference share, which will be issued at an issue price of $1,000 each. Subject to the issuer's option to procure the exchange of the preference shares for cash as described below under "Conversion and Exchange Rights--Cash-Out Option," upon conversion the issuer will procure the issue of our ordinary shares or, at your option, ADSs representing our ordinary shares in exchange for the preference shares, at an exchange ratio equal to 49.6175 ordinary shares per preference share (or 16.5392 ADSs per preference share). This exchange ratio is based on an effective exchange price of $20.154 per ordinary share (or (pound)14.107 per ordinary share, converted into U.S. dollars based on the $/(pound) closing buying rate of 1.4289 on August 14, 2001) and $60.4625 per ADS. The exchange ratio is subject to adjustment as described below. Until either (a) the note being converted has been transferred pursuant to an effective registration statement or (b) the note is not otherwise a "restricted security" within the meaning of Rule 144(a)(3) under the Securities Act, however, you may only exchange preference shares for our ordinary shares and not ADSs. Your right to convert a note called or delivered for redemption will terminate at the close of business on the business day (as defined in the indenture) immediately preceding the redemption date for that note, unless the issuer and we default in making the payment due upon redemption. You can convert a note by delivering the note at the corporate trust office of the trustee accompanied by a duly signed and completed notice of conversion and exchange, a copy of which may be obtained from the trustee. If you prefer to receive ADSs upon exchange, you must so specify in your conversion and exchange notice. In the case of a global note, DTC will effect the conversion upon notice from the holder of a book-entry security in accordance with DTC's customary procedures. The conversion and exchange date will be the date on which the note and the duly signed and completed notice of conversion and exchange are so delivered. As promptly as practicable on or -16- after the conversion and exchange date, and in any event within 14 days of such date, the issuer will cause to be issued or delivered to the trustee a certificate or certificates for the number of full ordinary shares or ADSs issuable upon exchange, together with a cash payment instead of any fraction of an ordinary share or ADS. The certificates will be sent by the trustee to the conversion agent for delivery to you. Our ordinary shares issuable upon conversion of the notes and exchange of the preference shares will be fully paid and nonassessable and will also rank equally with our other ordinary shares outstanding from time to time. If the deposit agreement with respect to the ADSs is terminated for any reason and no successor deposit agreement is established, it will no longer be possible for us to deliver ADSs upon exchange. If you surrender a note for conversion and exchange on a date that is not an interest payment date, you will not be entitled to receive any interest for the period from the preceding interest payment date to the date of conversion and exchange, except as described below. However, if you are a holder of a registered note on a regular record date, including a note surrendered for conversion and exchange after the regular record date, you will receive the interest payable on that note on the next succeeding interest payment date. Accordingly, any notes surrendered for conversion and exchange during the period from the close of business on a regular record date to the opening of business on the next succeeding interest payment date must be accompanied by payment of an amount equal to the interest payable on such interest payment date on the principal amount of notes being surrendered for conversion. However, you will not be required to make that payment if you are converting a note, or a portion of a note, that the issuer has called for redemption, or that you are entitled to require the issuer to redeem, if your conversion and exchange right would terminate because of the redemption between the regular record date and the close of business on the next succeeding interest payment date. No other payment or adjustment for interest, or for any dividends on our ordinary shares, will be made upon conversion and exchange. If you receive our ordinary shares or ADSs upon conversion and exchange, you will not be entitled to receive any dividends payable to holders of our ordinary shares as of any record date before the close of business on the conversion and exchange date. If the issuer does not exercise its option to procure the exchange of your preference shares for cash, as described below under "--Cash-Out Option," you will be treated as if you were a holder of our ordinary shares as of the conversion and exchange date and therefore entitled to receive, in addition to the ordinary shares or ADSs, cash consideration equal to any dividends payable to holders of our ordinary shares as of any record date between the conversion and exchange date and the date on which the ordinary shares are issued to you. You will not be entitled to exercise any voting rights of such ordinary shares or ADSs if the relevant record date falls after the conversion and exchange date but before the date on which the ordinary shares or ADSs are issued to you. We will not issue fractional shares or ADSs upon conversion and exchange. Instead, we will pay an amount in cash based on the market price of our ordinary shares at the close of business on the conversion and exchange date. Except as provided below, if you deliver a note for conversion and exchange, you will not in any circumstances be required to pay any U.K. transfer taxes or duties in respect of the issue or delivery of the preference shares on conversion of the notes, the subsequent transfer of the preference shares to us or the issue of our ordinary shares or ADSs in exchange for the preference shares. Instead, we will hold you harmless against any U.K. stamp duty or stamp duty reserve tax liability you may be required to pay on conversion and exchange. We will not pay any tax or duty, however, that may be payable in respect of any transfer involved in the issue or delivery of our ordinary shares or ADSs in a name other than that of the holder of the note. We will not issue or deliver certificates representing our ordinary shares or ADSs unless the person to whom the ordinary shares or ADSs are being issued or delivered has paid to us the amount of any such tax or duty or has established to our satisfaction that no such tax or duty is payable. Any of our ordinary shares issued on exchange will be fully paid and will rank equally in all respects with our fully paid and issued ordinary shares on the conversion and exchange date, except that the issued ordinary -17- shares will not be entitled to any dividend or other distribution declared or paid on our ordinary shares with respect to a record date prior to the conversion and exchange date. Our ordinary shares (unless they are to be represented by ADSs issued by Morgan Guaranty Trust Company, the ADS depositary) will not be issued to: o DTC, Euroclear, Clearstream, the Depositary and Clearing Centre or any of their nominees or agents or any other person providing a clearance service within Section 96 of the Finance Act 1986 of the United Kingdom or any of their nominees or agents; or o any person whose business includes issuing depositary receipts within Section 93 of the Finance Act 1986 of the United Kingdom, or any nominee or agent of such a person, in each case at any time before the "abolition day" as defined in Section 111(1) of the Finance Act 1990 of the United Kingdom. Street name and other indirect holders should consult their banks or brokers for information on how to direct the conversion of notes into preference shares and the exchange of preference shares into our ordinary shares or ADSs. Adjustments to the Exchange Ratio The issuer's preference shares issued upon conversion of the notes will be, in accordance with the issuer's memorandum and articles of association, exchanged by the issuer for our ordinary shares or ADSs, or, as described below, at the issuer's option for cash. The following is a summary of the issuer's memorandum and articles of association relating to adjustments that may be made to the exchange ratio. You should refer to "Description of the Preference Shares" for more provisions of the issuer's memorandum and articles of association as they relate to the preference shares. The exchange ratio is subject to adjustment upon the occurrence of any of the events described below: (1) If there is a change in the nominal value of our ordinary shares as a result of consolidation or subdivision of our ordinary shares, the exchange ratio will be adjusted by multiplying the exchange ratio in force immediately before such change by the following fraction: A - B where: A is the nominal amount of one ordinary share immediately before such change; and B is the nominal amount of one ordinary share immediately after such change. This adjustment will become effective on the date the change in nominal value takes effect. (2) If we pay a dividend or other distribution payable in our ordinary shares, that is, we issue fully paid ordinary shares to our shareholders by way of capitalization of profits or reserves (including any share premium account or capital redemption reserve), the exchange ratio will be adjusted by multiplying the exchange ratio in force immediately before we pay the stock dividend by the following fraction: -18- A - B where: A is the aggregate nominal amount of our issued ordinary shares immediately after such issue; and B is the aggregate nominal amount of our issued ordinary shares immediately before such issue. This adjustment will become effective on the date of issue of such ordinary shares. This adjustment will not be made if we pay a scrip dividend, that is, a dividend or other distribution in our ordinary shares instead of all or any part of a cash dividend which our shareholders would otherwise have received. If, however, we pay a scrip dividend where the market value of the ordinary shares issued exceeds the amount of the cash dividend, or the relevant portion of the cash dividend if the scrip dividend is offered in place of only part of the cash dividend, then the exchange ratio will be adjusted by multiplying the exchange ratio in force immediately before we pay the stock dividend by the following fraction: A + B ----- A + C where: A is the aggregate nominal amount of our issued ordinary shares immediately before such issue; B is the aggregate nominal amount of our ordinary shares issued by way of scrip dividend; and C is the aggregate nominal amount of ordinary shares issued by way of scrip dividend multiplied by a fraction of which (x) the numerator is the amount of the cash dividend per share, or the part of such cash dividend in respect of which the scrip dividend applies, and (y) the denominator is the amount per share used for the purpose of determining the number of ordinary shares to be issued by way of scrip dividend. This adjustment will become effective on the date of issue of such ordinary shares. As used in this adjustment, "market value" means the price or value of the ordinary shares stated in, or calculated in accordance with the provisions of and at the time of, any circular or other document issued by us relating to the scrip dividend. (3) If we pay or make any capital distribution (as defined below) to our shareholders, the exchange ratio will be adjusted by multiplying the exchange ratio in force immediately before such extraordinary dividend by the following fraction: A ----- A - B where: A is the current market price (as defined below) of one ordinary share on the dealing day immediately preceding the date on which the ordinary shares are traded on the LSE ex-capital distribution; and -19- B is the portion of the capital distribution attributable to one ordinary share. This adjustment will become effective on the date on which our ordinary shares are first traded on the LSE ex-extraordinary dividend or on which the protected share repurchase is actually made, as the case may be. As used in this section, "current market price" means the average of the closing bid and offer quotations per ordinary share published in the LSE Daily Official List for the five consecutive dealing days ending on the dealing day immediately preceding the date in question, subject to adjustment to take into account dividend payments. Any day on which the LSE is open for business is a "dealing day." "Capital distribution" means the premium attributable to an extraordinary dividend or a protected share repurchase. An "extraordinary dividend" is any dividend or distribution on our ordinary shares, whether in cash or in kind, where the aggregate amount of the dividend or distribution, without taking into account any tax credit that may arise in respect of the dividend or distribution, when added to the aggregate amount of all other dividends or distributions paid or made in the preceding 12 months other than dividends or distributions to the extent an adjustment was made pursuant to paragraph (2) above, exceeds 5% of our market capitalization on the dealing day immediately preceding the payment date of the dividend or distribution in question. Extraordinary dividends do not include any dividend or distribution to the extent an adjustment pursuant to paragraph (2) above is applicable. The amount of the premium attributable to an extraordinary dividend is the amount by which the extraordinary dividend exceeds 5% of our market capitalization on the dealing day immediately preceding the payment date of the dividend or distribution in question. For purposes of determining whether an adjustment is appropriate under this paragraph (3), our "market capitalization" will be calculated as if we had already issued all ordinary shares issuable upon the exchange of the exchangeable shares issued by Shire Acquisition Inc. in connection with the merger between us and BioChem. A "protected share repurchase" occurs when we purchase our ordinary shares on the market on any one day at a weighted average price, before expenses, that exceeds by more than 5% the average price quoted for our ordinary shares on the LSE on the five dealing days before we make the purchase. If we announce our intention to purchase ordinary shares at some future date at a specified price, then a protected share repurchase occurs when the announced purchase price exceeds by more than 5% the average price quoted for our ordinary shares on the LSE on the five dealing days preceding the announcement. The amount of the premium attributable to a protected share repurchase is the amount by which the repurchase amount or announced repurchase amount, as the case may be, exceeds 5% of the average price quoted for our ordinary shares on the LSE on the five dealing days before we make the purchase or announcement, as the case may be. (4) If we issue ordinary shares to our shareholders as a class by way of rights, or issue or grant to our shareholders as a class by way of rights, options, warrants or other rights to subscribe for or purchase any ordinary shares, in each case at a price per ordinary share which is less than 95% of the current market price per ordinary share on the dealing day immediately preceding the date of the announcement of the terms of the issue or grant of such ordinary shares, options, warrants or other rights, the exchange ratio will be adjusted by multiplying the exchange ratio in force immediately before such issue or grant by the following fraction: -20- A + B ----- A + C where: A is the number of ordinary shares in issue immediately before we announce the issue or grant; B is the number of ordinary shares issued or, as the case may be, included in the grant; and C is the number of ordinary shares which could have been purchased, at the current market price per ordinary share indicated above, for the aggregate amount (if any) payable for the new ordinary shares issued by way of rights, or for the options or warrants or other rights issued by way of rights and for the total number of ordinary shares comprised in such options, warrants or other rights. This adjustment will become effective on the first date on which the ordinary shares are traded ex-rights, ex-options or ex-warrants, as the case may be, on the LSE. (5) If we issue any securities to our shareholders as a class, not including ordinary shares or options, warrants or other rights to subscribe for or purchase any ordinary shares, by way of rights, of if we grant to our shareholders as a class by way of rights any options, warrants or other rights to subscribe for or purchase any securities other than ordinary shares or options, warrants or other rights to subscribe for or purchase ordinary shares, the exchange ratio will be adjusted by multiplying the exchange ratio in force immediately prior to such issue or grant by the following fraction: A ----- A - B where: A is the current market price of one ordinary share on the dealing day immediately preceding the date on which we publicly announce the terms of such issue or grant; and B is the fair market value on the date of such announcement of the portion of the rights attributable to one ordinary share. The fair market value of the offer will be determined in good faith by an independent investment bank of international repute that we select. This adjustment will become effective on the first date on which the ordinary shares are traded ex-rights, ex-options or ex-warrants, as the case may be, on the LSE. (6) If we issue or grant wholly for cash, other than as mentioned in (4) above, any ordinary shares or any options, warrants or other rights to subscribe for or purchase any ordinary shares, in each case at a price per ordinary share which is less than 95% of the current market price per ordinary share on the dealing day immediately preceding the date we announce the terms of such issue or grant, the exchange ratio will be adjusted by multiplying the exchange ratio in force immediately prior to such issue or grant by the following fraction: A + B ----- A + C where: -21- A is the number of ordinary shares in issue immediately before we issue such ordinary shares or grant such options, warrants or rights; B is the maximum number of ordinary shares to be issued pursuant to such issue of additional ordinary shares or upon exercise of such options, warrants or rights; and C is the number of ordinary shares which the aggregate consideration (if any) receivable for the issue of the additional ordinary shares, or, as the case may be, for the ordinary shares to be issued upon the exercise of any such options, warrants or rights, would purchase at the current market price per ordinary share indicated above. This adjustment does not apply to ordinary shares issued on the exchange of the preference shares or on the exercise of any other rights of conversion into, or exchange or subscription for, ordinary shares. This adjustment will become effective on the date we issue such additional ordinary shares or, as the case may be, we grant such options, warrants or rights. (7) If we or any of our subsidiaries issue any securities (other than the notes or the preference shares) wholly for cash or for no consideration, otherwise than as mentioned in paragraphs (4), (5) or (6) above, and these securities carry rights of conversion into, or exchange or subscription for, our ordinary shares or grant any such rights in respect of existing securities, or if we or any of our subsidiaries issue any securities which by their terms might be redesignated as ordinary shares, and the consideration per ordinary share receivable by us upon conversion, exchange, subscription or redesignation is less than 95% of the current market price per ordinary share on the dealing day immediately preceding the date we announce the terms of issue of such securities or the terms of such grant, the exchange ratio will be adjusted by multiplying the exchange ratio in force immediately prior to such issue or grant by the following fraction: A + B ----- A + C where: A is the number of ordinary shares in issue immediately before such issue or grant (but if we have already issued the ordinary shares into which the relevant securities may be converted or for which they may be exchanged or provide subscription rights, then less the number of such ordinary shares); B is the maximum number of ordinary shares that may be issued upon conversion or exchange of such securities or upon the exercise of such rights of subscription attached to such securities at the initial conversion, exchange or subscription price or rate or, as the case may be, the maximum number of ordinary shares to be issued or to arise from any such redesignation; and C is the number of ordinary shares that could be purchased at the current market price per ordinary share indicated above for the aggregate consideration (if any) receivable for the ordinary shares to be issued upon conversion or exchange or upon exercise of the right of subscription attached to such securities or, as the case may be, for the ordinary shares to be issued or to arise from any such redesignation. This adjustment will become effective on the date of issue or grant of the securities in question. -22- (8) If there is any modification of the rights of conversion, exchange or subscription attaching to any securities described in paragraph (7) above (other than in accordance with the terms (including terms as to adjustment) applicable to such securities) so that following such modification the consideration per ordinary share receivable by us has been reduced and is less than 95% of the current market price per ordinary share on the dealing day immediately preceding the date of announcement of the proposals for such a modification, the exchange ratio will be adjusted by multiplying the exchange ratio in force immediately prior to such modification by the following fraction: A + B ----- A + C where: A is the number of ordinary shares in issue immediately before such modification (but if we have already issued the ordinary shares into which the relevant securities may be converted or for which they may be exchanged or provide subscription rights, then less the number of such ordinary shares); B is the maximum number of ordinary shares to be issued upon conversion or exchange of such securities or upon the exercise of such rights of subscription attached to such securities at the modified conversion, exchange or subscription price or rate, but giving credit as appropriate for any previous adjustment under this paragraph (8) or under paragraph (7) above; and C is the number of ordinary shares which the aggregate consideration (if any) receivable by us for the ordinary shares to be issued upon conversion or exchange or upon exercise of the right of subscription attached to the modified securities would purchase at the current market price per ordinary share indicated above. This adjustment will become effective on the date of modification of the rights of conversion, exchange or subscription attaching to such securities. (9) If we or any of our subsidiaries offer any securities and our shareholders as a class are entitled to participate in arrangements whereby such securities may be acquired by them, the exchange ratio will be adjusted by multiplying the exchange ratio in force immediately before we make such offer by the following fraction: A ------ A -- B where: A is the current market price of one ordinary share on the dealing day immediately preceding the date on which the terms of such offer are publicly announced; and B is the fair market value on the date of such announcement of the portion of the relevant offer attributable to one ordinary share. The fair market value of the offer will be determined in good faith by an independent investment bank of international repute that we select. This adjustment will become effective on the first date on which the ordinary shares trade ex-rights on the LSE. -23- This adjustment will not apply when the exchange ratio is adjusted under paragraph (4) or (5) above or would be so adjusted if the relevant issue or grant were at less than 95% of the current market price per ordinary share on the relevant dealing day. (10) If any adjustment has been made pursuant to paragraph (4) or (6) above, and any such rights, options, warrants or other rights to subscribe for or purchase any ordinary shares have lapsed or expired or are otherwise no longer exercisable and we have not issued all of the ordinary shares in respect of such lapsed, expired or unexercisable rights, options, warrants or other rights to subscribe for or purchase any ordinary shares, the exchange ratio will be readjusted to the exchange ratio which would otherwise be in effect had the adjustment made upon the issuance of such rights, options, warrants or other rights to subscribe for or purchase any ordinary shares been made on the basis of delivery of only the number of ordinary shares actually delivered. This adjustment will become effective on the date on which the rights, options, warrants or other rights to subscribe for or purchase any ordinary shares lapsed, expired or otherwise became no longer exercisable. No adjustment of the exchange ratio pursuant to any of paragraphs (1) through (10) above will be required to be made: o until the cumulative adjustments amount to 1.0% or more of the exchange ratio; o if, as a result, on conversion and exchange ordinary shares would be issued at a discount to their par value; o to the extent ordinary shares or other securities are issued, allotted or granted to employees, including directors and executive officers, of Shire or any of its subsidiaries pursuant to any employees' share scheme or option plan; o upon the conversion or exchange of convertible or exchangeable securities outstanding as of the date of this prospectus, including: - the exchangeable shares of Shire Acquisition Inc.; and - our unsecured convertible zero coupon loan note due to Arenol Corporation; or o upon the exchange of any remaining shares of Roberts for our ordinary shares. We will compute any adjustments to the exchange ratio and give notice to the holders of any such adjustments. If (a) we merge or consolidate with another person or sell or transfer all or substantially all of our assets, in each case which results in a change of control (as defined below), or (b) we participate in a statutory merger that results in a reclassification, conversion, exchange or cancellation of our ordinary shares, then the preference shares will, without the consent of the holder of any note or preference share, become exchangeable only for the kind and amount of securities, cash and other property that a holder of the number of our ordinary shares into which the preference shares were exchangeable immediately prior to the merger, consolidation, sale or transfer could have received at the time of such merger, consolidation, sale or transfer. This calculation will be made based on the assumption that the holder of our ordinary shares failed to exercise any rights of election that the holder may have to select a particular type of consideration. The adjustment will not be made for a merger that does not result in any reclassification, conversion, exchange or cancellation of our ordinary shares. -24- We may, from time to time, increase the exchange ratio by any amount for any period of at least 20 days if our board of directors has determined that such increase would be in our best interests. If our board of directors makes such a determination, it will be conclusive. We will give holders of notes at least 15 days' notice of such an increase in the exchange ratio. Cash-Out Option If you exercise your conversion and exchange right, the issuer will have the right, at its option, to procure the exchange of your preference shares for cash in U.S. dollars rather than for our ordinary shares or ADSs. The issuer will calculate this cash payment based on the average LSE volume-weighted average price, as seen on Bloomberg Professional Service, of our ordinary shares on the fourth through eighth business days following the conversion and exchange date (each such price converted into U.S. dollars at the $/(pound) noon buying rate in New York prevailing on such date). The issuer will inform you within three business days after the conversion and exchange date of its election to procure the payment to you of cash rather than procure the issue to you of our ordinary shares or ADSs, and will procure the payment to you not later than 14 days after the conversion and exchange date. If this payment is not made to you by the 14th day after the conversion and exchange date, you may again elect to receive our ordinary shares or ADSs in exchange for your preference shares in lieu of cash. Redemption at Option of Holders Redemption at Option of Holders upon a Change in Control If a change in control (as defined below) occurs, you will have the right, at your option, to require the issuer to redeem all of your notes not previously called for redemption, or any portion of the principal amount of your notes that is equal to $5,000 or any greater even multiple of $1,000. The price the issuer is required to pay will be 101% of the principal amount of the notes, plus accrued interest to the redemption date. At the issuer's option, instead of redeeming the notes in respect of which you have exercised your right to require redemption, the issuer may elect to convert such notes in whole or in part into preference shares, exchangeable into our ordinary shares (or, at your option as specified in your notice of exercise described below, ADSs, if an effective registration statement is in effect with respect to such ADSs) at a special exchange ratio equal to 101% of the principal amount of the notes being converted divided by the market price of our ordinary shares valued at 95% of the average of the LSE volume-weighted average prices, as seen on Bloomberg Professional Service, of our ordinary shares for the five trading days immediately following the date the issuer informs you of its election to convert the notes into preference shares rather than redeem the notes (each such price converted into U.S. dollars at the $/(pound) noon buying rate in New York prevailing on such date). The issuer may only choose to convert notes into preference shares under these circumstances if, following the change in control, our ordinary shares continue to be listed for trading on the LSE, if the public float of our ordinary shares at such time corresponds to at least 50% of our outstanding ordinary share capital, and if we satisfy other conditions provided in the indenture. Within 30 days after the occurrence of a change in control, the issuer is obligated to give you notice of the change in control and of the redemption right arising as a result of the change in control. The issuer must also deliver a copy of this notice to the trustee. To exercise your redemption right, you must deliver to the trustee, on or before the 30th day after the date of the notice to you, irrevocable written notice of your exercise of your redemption right, together with the notes with respect to which that right is being exercised. The notice should include your election to receive either our ordinary shares or ADSs in the event the issuer elects not to redeem the notes but to convert them into preference shares instead. The issuer will inform you of its election to convert the notes into preference shares within two business days after the last date you may give notice of your decision to exercise your redemption right. The issuer is required to effect the redemption or conversion on the date that is 44 days after the date of the change of control notice. -25- A "change in control" will be deemed to have occurred at any time after the notes are originally issued that any of the following occurs: (1) Any person, including any syndicate or group deemed to be a "person" under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of our capital stock entitling that person to exercise more than 50% of the total voting power of all shares of our capital stock entitled to vote generally in elections of directors; however, any acquisition by us, any subsidiary of ours or any employee benefit plan of ours will not trigger this provision. (2) Either: o an offer is made to all or practicably all our ordinary shareholders or all or practicably all such shareholders other than the offeror and/or any associate of the offeror (as defined in Section 430E(4) of the Companies Act 1985 of the United Kingdom), to acquire the whole or any part of our issued ordinary share capital; or o a scheme is proposed with regard to such acquisition, and we become aware that the right to cast more than 50% of the votes which may ordinarily be cast at a general meeting of shareholders has or will become unconditionally vested in the offeror and/or its associates. No change of control will be deemed to have occurred under this definition (2), however, if the holders of 50% or more of the total voting power of our capital stock entitled to vote generally in elections of directors prior to the offer have, directly or indirectly, 50% or more of the total voting power of all shares of capital stock of the offeror or acquiror entitled to vote generally in elections of directors of the offeror or acquiror following the consummation of the acquisition. (3) We convey, transfer, sell, lease or otherwise dispose of all or substantially all of our assets to another person. For purposes of these provisions: o whether a person is a "beneficial owner" will be determined in accordance with Rule 13d-3 under the Exchange Act; and o "person" includes any syndicate or group that would be deemed to be a "person" under Section 13(d)(3) of the Exchange Act. The definition of change in control includes a phrase relating to the conveyance, transfer, sale, lease or disposition of "all or substantially all" of our assets. There is no precise, established definition of the phrase "substantially all" under applicable law. Accordingly, your ability to require the issuer to redeem your notes as a result of conveyance, transfer, sale, lease or other disposition of less than all of our assets may be uncertain. The foregoing provisions would not necessarily provide you with protection if we are involved in a highly leveraged or other transaction that may adversely affect you. Redemption at Option of Holders on Selected Dates You will have the right, at your option, to require the issuer to redeem, on each of August 21, 2004, August 21, 2006 and August 21, 2008, all of your notes not previously called for redemption, or any portion of the principal amount of your notes that is equal to $5,000 or any greater even multiple of $1,000. The price the issuer is required -26- to pay is 100% of the principal amount of the notes to be redeemed, together with interest accrued to the redemption date. In order to exercise this option, you must give the issuer notice of your decision between 30 and 15 business days prior to the applicable redemption date. At the issuer's option, instead of redeeming the notes in respect of which you have exercised your right to require redemption, the issuer may elect to convert all or part of the notes into preference shares, exchangeable into our ordinary shares (or, at your option as specified in your notice of exercise, ADSs, if an effective registration statement is in effect with respect to such ADSs) at a special exchange ratio equal to 100% of the principal amount of the notes being converted divided by the market price of our ordinary shares valued at 95% of the average of the LSE volume-weighted average prices, as seen on Bloomberg Professional Service, of our ordinary shares for the five trading days immediately following the date the issuer gives you notice of its election to convert the notes into preference shares rather than redeem the notes (each such price converted into U.S. dollars at the $/(pound) noon buying rate in New York prevailing on such date). The issuer may only choose to convert notes into preference shares exchangeable for our ordinary shares or ADSs if we satisfy conditions provided in the indenture. The issuer will inform you of its election to convert the notes into preference shares rather than redeem the notes on the tenth business day prior to the applicable redemption date. If ordinary shares or ADSs are not issued to you by the 14th day after the applicable redemption date, you may elect for the issuer to procure the payment to you of cash in an amount equal to the original redemption amount, plus accrued interest to the payment date, rather than procure the issue of our ordinary shares or ADSs. General Rule 13e-4 under the Exchange Act requires the dissemination of prescribed information to securityholders in the event of an issuer tender offer and may apply in the event that a redemption option becomes available to you. We and the issuer will comply with this rule to the extent it applies at that time. We and any of our subsidiaries, including the issuer, may, to the extent permitted by applicable law, including the requirements of the U.K. Listing Authority or the LSE, or any other stock exchange on which the notes may be listed, at any time purchase notes in the open market or by tender at any price or by private agreement. Any note that we or any of our subsidiaries other than the issuer purchases may, at our option, be surrendered to the trustee for cancellation. Any notes the issuer purchases will be canceled promptly. None of the notes we or any of our subsidiaries purchases may be reissued or resold. All notes redeemed or converted will be canceled promptly. The issuer's ability to redeem notes at the option of the holders is subject to important limitations. We cannot assure you that the issuer would have the financial resources, or would be able to arrange financing, to pay the redemption price for all the notes that might be delivered by holders of notes seeking to exercise the redemption right. If the issuer were to fail to redeem the notes when required following a change in control or on any of the specified dates, an event of default under the indenture would occur. Street name and other indirect holders should consult their banks or brokers for information on how to direct the exercise of the option to require the issuer to redeem the notes upon a change in control or on the specified dates. Optional Redemption by the Issuer The issuer may redeem the notes at its option at any time on or after August 21, 2004, in whole or in part, at a redemption price equal to 100% of the principal amount of the notes redeemed, plus accrued and unpaid interest to the redemption date. The issuer may only exercise this option during this period if the average of the closing bid and offer quotations per ordinary share published in the LSE Daily Official List for twenty of the thirty consecutive dealing days ending within fourteen days of giving notice of the redemption is at least 130% of the exchange price in effect on that dealing day. The exchange price is equal to $1,000 divided by the exchange ratio. -27- The indenture requires the issuer to give notice of redemption pursuant to this option between 30 and 60 days before the redemption date. No "sinking fund" is provided for the notes, which means that the indenture does not require the issuer to redeem or retire the notes periodically. The Guarantees Shire, which holds 100% of the issued shares (not including preference shares) of the issuer, has fully and unconditionally guaranteed: o all payments of principal and interest payable under the notes by the issuer; and o following any conversion of the notes into preference shares of the issuer, all payments of dividends on the preference shares and all liquidation preferences of the preference shares if the issuer is liquidated. We have agreed, in the indenture and in a separate guarantee agreement covering our payment guarantee of the preference shares, not to alter our obligation, pursuant to a bilateral contract between the issuer and us, to issue our ordinary shares to the holders of preference shares in order that the issuer might meet its exchange obligations under the terms of its preference shares. We also agreed in these documents to procure that the issuer complies with its conversion and exchange obligations under the notes and its memorandum and articles of association. We have guaranteed the payment of these amounts and the performance of these obligations when they become due and payable or are required to be performed. You do not need to proceed against the issuer before you can proceed against us under the payment guarantees. The payment guarantees are senior, unsubordinated and unsecured obligations of Shire, which means that they rank on a parity with all of our other present and future senior, unsubordinated indebtedness, except as required by mandatory provisions of law, and senior to all of our other indebtedness. Mergers and Sales of Assets by Shire We may not consolidate with or merge into any other person or convey, transfer, sell or lease our properties and assets substantially as an entirety to any person, and we may not permit any person to consolidate with or merge into us, unless each of the following requirements is met: o the person formed by the consolidation or merger or the person to which our properties and assets are conveyed, transferred, sold or leased is a corporation, limited liability company, partnership or trust organized and existing under the laws of England and Wales, any member state of the European Union, Switzerland, the United States, any state thereof or the District of Columbia and, if other than us, shall expressly assume the due and punctual payment of the principal of, any premium and interest on the notes and the performance of our other covenants under the indenture; o immediately after giving effect to that transaction, no event of default, and no event which, after notice or lapse of time or both, would become an event of default, shall have occurred and be continuing; and o an officer's certificate and legal opinion relating to these conditions is delivered to the trustee. -28- Taxation All payments in respect of the notes or the guarantees will be made without withholding of or deduction for taxation unless the withholding or deduction is required by law. Neither the issuer nor we will be required to pay you any additional amounts as a result of any withholding or deduction that is required by law. Further Undertakings of Shire We have agreed, for so long as any notes are outstanding: (1) to keep enough ordinary shares available for issue free from pre-emptive rights to enable the issuer to meet at any time its obligations in full to exchange preference shares issuable on conversion of outstanding notes for our ordinary shares or ADSs in accordance with the issuer's memorandum and articles of association; (2) not to modify in any way the rights attaching to our ordinary shares with respect to voting, dividends or liquidation, nor to issue any other class of equity share capital carrying any rights which are more favorable than such rights. This agreement, however, will not preclude: o the issue of equity share capital to employees, including executive officers, or directors of Shire or any of our subsidiaries or associated companies pursuant to any employees' or directors' share plan or option plan; o any consolidation or subdivision of the ordinary shares; o any modification of such rights which is not materially prejudicial to the interests of the holders of the notes; o any issue of ordinary shares upon exchange of the exchangeable shares of Shire Acquisition Inc. or the remaining shares of Roberts or the conversion of the unsecured convertible zero coupon loan note due to Arenol Corporation; o any issue of equity share capital where the issue of such equity share capital results in an adjustment to the exchange ratio, or would result in an adjustment to the exchange ratio if (1) the adjustment were greater than 1% of the exchange ratio or (2) the relevant issue were at less than 95% of the current market price per ordinary share on the relevant dealing day; or o any alteration to our articles of association in connection with or incidental to any of the above; and (3) not to reduce our issued share capital, share premium account or capital redemption reserve or any uncalled liability in respect of any of these, except: o pursuant to the terms of issue of the relevant share capital; o by means of a purchase or redemption; o as permitted by Section 130(2) of the Companies Act 1985 of the United Kingdom; o where the reduction does not involve any distribution of assets; o where the reduction results in an adjustment to the exchange ratio, or would result in an adjustment to the exchange ratio if the adjustment were greater than 1% of the exchange ratio; or -29- o solely in relation to a change in the currency in which the nominal value of the ordinary shares is expressed. These obligations may only be waived by the holders of a majority in principal amount of the outstanding notes or the consent of the trustee where, in the opinion of the trustee, it is not materially prejudicial to the interests of the noteholders to give such approval. Deemed Conversion Rights upon the Liquidation of Shire If an effective resolution is passed or an order of a court is made on or before the maturity date of the notes for the winding-up of Shire, then we will give notice to you that such a resolution has been passed or such an order has been made. (We do not, however, have to give you notice of such a resolution or court order for the purpose of or in connection with a reconstruction, amalgamation, reorganization or similar arrangement on terms that have been previously approved by the trustee or by the holders of a majority in principal amount of the outstanding notes.) After receiving such a notice, you will have the right at any time within three months of the date of our notice to you to elect to be treated as if you had exercised your conversion and exchange rights immediately before the date of passing of such resolution or the making of such order, as the case may be. If you exercise this election, you will be entitled to receive, out of the assets which will be available to our shareholders on our liquidation, an amount equal to the amount which you would have received had you in fact been the holder of the ordinary shares to which you would have been entitled by virtue of such exercise. You may not make this election in respect of any note on or after the record date for the payment of the principal due on the note. We will indicate in our notice to you the applicable exchange ratio. Events of Default The following are events of default under the indenture: o failure to pay principal of or any premium on any note when due (including upon any requirement that the issuer redeem the notes); o failure to pay any interest on any note when due and that default continues for 30 days; o failure to give the notice required to be given in the event of a change in control; o failure to perform any other covenant in the indenture and that failure continues for 60 days after written notice to the issuer and to us by the trustee or the holders of at least 25% in aggregate principal amount of outstanding notes; o failure to pay when due the principal of, or acceleration of, any indebtedness for money borrowed by us or any of our subsidiaries (including the issuer) in excess of $25 million (excluding equipment and facilities leases) if the indebtedness is not discharged, or the acceleration is not annulled, within 30 days after written notice to the issuer and to us by the trustee or the holders of at least 25% in aggregate principal amount of the outstanding notes; and o events of the issuer's or our bankruptcy, insolvency or reorganization specified in the indenture. Subject to the provisions of the indenture relating to the duties of the trustee in case an event of default shall occur and be continuing, the trustee is under no obligation to exercise any of its rights or powers under the indenture at the request or direction of any of the holders, unless such holders shall have offered to the trustee reasonable indemnity. Subject to the provisions for the indemnification of the trustee, the holders of a majority in ag- -30- gregate principal amount of the outstanding notes has the right to direct the time, method and place of conducting any proceeding for any remedy available to the trustee or exercising any trust or power conferred on the trustee. If an event of default, other than an event of default arising from events of bankruptcy, insolvency or reorganization of Shire, occurs and is continuing, either the trustee or the holders of at least 25% in principal amount of the outstanding notes may accelerate the maturity of all of the notes. After acceleration, but before a judgment or decree based on acceleration, the holders of a majority in aggregate principal amount of the outstanding notes may, under circumstances set forth in the indenture, rescind the acceleration if all events of default, other than the nonpayment of principal of the notes which have become due solely because of the acceleration, have been cured or waived as provided in the indenture. If an event of default arising from events of our bankruptcy, insolvency or reorganization occurs and is continuing, then the principal of, and accrued interest on, all of the notes will automatically become immediately due and payable without any declaration or other act on the part of the holders of notes or the trustee. Before you may take any action to institute any proceeding relating to the indenture, or to appoint a receiver or a trustee, or for any other remedy, each of the following must occur: o you must have given the trustee written notice of a continuing event of default; o the holders of at least 25% of the aggregate principal amount of all outstanding notes must make a written request of the trustee to take action because of the default and must have offered reasonable indemnification to the trustee against the cost, liabilities and expenses of taking such action; and o the trustee must not have taken action for 60 days after receipt of such notice and offer of indemnification. These limitations do not apply to a suit for the enforcement of payment of the principal of or any premium or interest on a note, or the redemption amount of a note, on or after the due dates for such payments or of the right to convert the note in accordance with the indenture. We and the issuer will furnish to the trustee annually a statement as to our performance of our respective obligations under the indenture and as to any default in performance. Street name and other indirect holders should consult their banks or brokers for information on how to give notice or direction to or make a request of the trustee and to make or annul a declaration of acceleration. Modification and Waiver The consent of the holders of a majority in principal amount of the outstanding notes affected is required to make a modification or amendment to the indenture. However, a modification or amendment requires the consent of the holder of each outstanding note affected if it would: o change the stated maturity of the principal or interest of a note; o reduce the principal amount, any premium or interest on any note; o reduce the amount payable upon a redemption of a note; o modify the provisions with respect to the redemption rights of holders of notes in a manner adverse to the holders; -31- o change the place or currency of payment on a note; o impair the right to institute suit for the enforcement of any payment on any note; o adversely affect the right to convert the notes; o reduce the percentage of holders whose consent is needed to modify or amend the indenture; o reduce the percentage of holders whose consent is needed to waive compliance with certain provisions of the indenture or to waive certain defaults; or o modify the provisions dealing with modification and waiver of the indenture. The holders of a majority in principal amount of the outstanding notes must provide written consent to waive compliance by the issuer or us with certain restrictive provisions of the indenture. The holders of a majority in principal amount of the outstanding notes may waive any past default, except a default in the payment of principal, any premium, interest or redemption amounts. Noteholder consent will not be required in connection with the following amendments: o to cure any inconsistency, omission, defect or ambiguity in the indenture; o to add to the issuer's or our covenants and agreements; o to assign the trustee's rights and duties to a qualified successor; o to evidence the succession of another person to the issuer or to us and the assumption by the successor to the issuer's or our obligations and our covenants, where the parties are amending the indenture in a similar way; o to comply with the Securities Act, the Exchange Act, the Investment Company Act of 1940 or the Trust Indenture Act of 1939, each as amended; or o to modify, alter, amend or supplement the indenture in any other manner that is not adverse to the holders of the notes. No amendment to the indenture or the notes or the book-entry securities that affects DTC, Euroclear, Clearstream or the holders of book-entry securities in an adverse way will be allowed without the consent of DTC, Euroclear or Clearstream, as the case may be. Notes will not be considered outstanding if money for their payment or redemption has been deposited or set aside in trust for the holders. The issuer will generally be entitled to set any day as a record date for the purpose of determining the holders of outstanding notes that are entitled to take any action under the indenture. In limited circumstances, the trustee will be entitled to set a record date for action by holders. If a record date is set for any action to be taken by holders, such action may be taken only by persons who are holders of outstanding notes on the record date and must be taken within 180 days following the record date or such other period as we may specify (or as the trustee may specify, if it set the record date), this period may be shortened or lengthened (but not beyond 180 days) from time to time. -32- Street name and other indirect holders should consult their banks or brokers for information on how approval may be granted or denied if we seek to modify or amend the indenture or the notes or request a waiver. Meetings of Noteholders The indenture contains provisions for convening meetings of the holders of notes for any of the following purposes: o to give any notice to the issuer, us or the trustee, or to give any directions to the trustee, or to consent to the waiving of any default under the indenture and its consequences, or to take any other action authorized to be taken by holders under the indenture; o to remove the trustee and appoint a successor trustee; or o to consent to the execution of a supplemental indenture. Notice of at least 21 days must be given of any meeting. A meeting must be called if requested in writing by the holders of at least one-tenth of the aggregate principal amount of the outstanding notes. The quorum for any meeting, other than an adjourned meeting, shall be the holders of at least one-third of the aggregate principal amount of the outstanding notes. No action at a meeting of holders will be effective unless approved by persons holding or representing notes in the aggregate principal amount required by the applicable provision of the indenture. At any meeting of holders, each holder or proxy will be entitled to one vote for each $1,000 principal amount of outstanding notes held or represented. A proxy need not be a holder of the notes. Listing The notes have been admitted to the Official List of the U.K. Listing Authority and to trading on the LSE. Notices The issuer will give notice to holders of notes by mail to the addresses of the holders as they appear in the security register. Notices will be deemed to have been given on the date of mailing. The issuer will give holders of notes irrevocable notice that it is exercising its option to redeem the notes not less than 30 nor more than 60 days before the redemption date. Replacement of Notes The issuer will replace, at the expense of the holders, notes that become mutilated, destroyed, stolen or lost upon delivery to the trustee of the mutilated notes or evidence of the loss, theft or destruction of the notes satisfactory to the issuer and the trustee. In the case of a lost, stolen or destroyed note, indemnity satisfactory to the trustee and the issuer may be required at the expense of the holder of the note before a replacement note will be issued. The Trustee The trustee for the holders of notes issued under the indenture is The Bank of New York. If an event of default occurs and is not cured, the trustee is required to use the degree of care of a prudent person in the conduct of his own affairs in the exercise of its powers. Subject to these provisions, the trustee is under no obligation to exercise any of its rights or powers under the indenture at the request of any holders of notes, unless they shall have offered to the trustee reasonable security or indemnity. -33- Governing Law and Consent to Jurisdiction and Service The indenture and the notes are governed by New York law. The issuer and we have appointed CT Corporation System as our agent for the service of process in any suit, action or proceeding with respect to the indenture or the notes and for actions brought in a U.S. federal or state court in New York City under U.S. federal or state securities laws. Arrangements Relating to Notes in Global Form The Rule 144A global note and the registered resale global note have been deposited with a custodian for, and registered in the name of, Cede & Co., as nominee of DTC. The Regulation S global note has been deposited with, and registered in the name of a nominee for, a common depositary for Euroclear and Clearstream. The global note that will be issued upon the effectiveness of the registration statement of which this prospectus forms a part, which we refer to as the "registered resale global note," will on issue be deposited with a custodian for, and registered in the name of, Cede & Co., as nominee of DTC. Holders can hold a beneficial interest in the Rule 144A global note or the registered resale global note only directly through DTC or indirectly through participants or indirect participants in DTC. Holders can hold a beneficial interest in the Regulation S global note only directly through Euroclear or Clearstream or indirectly through participants or indirect participants in Euroclear or Clearstream. These beneficial interests may be held in such denominations as are permitted by DTC, Euroclear or Clearstream, as applicable. Indirect participants are banks, brokers, dealers, trust companies and other parties that clear through or maintain a custodial relationship with a participant. Beneficial interests in the global notes are called book-entry securities. Ownership of beneficial interests in the global notes will be in the form of book-entry securities. The ultimate beneficial owners of the global notes can only be indirect holders. We do not recognize this type of investor as a holder of notes and instead only deal with the registered holders of the global notes. As an indirect holder, an investor's rights and obligations relating to a global note will be governed by the account rules of DTC, Euroclear or Clearstream and the investor's financial institution. We, the trustee, any paying agent, the registrar and any of our or their agents will not be responsible for the obligations under the rules and procedures of DTC, Euroclear or Clearstream, any of their respective participants or an investor's financial institution. We have no responsibility for any aspect of the actions of any participant in DTC, Euroclear or Clearstream or for payments related to, or for its records of, ownership interests in the global notes. We also do not supervise the participants in DTC, Euroclear or Clearstream in any way, nor will we govern payments, transfers, exchange and other matters relating to the investor's interest in the global notes. Payments Payments related to the notes are made through the facilities of The Bank of New York, as principal paying agent to the nominee of DTC as the registered holder of the Rule 144A note and the registered resale global note and to the nominee of the common depositary as the registered holder of the Regulation S note. Payments to DTC's nominee and to the nominee of the common depositary will discharge our payment obligations in respect of the notes. Upon receipt, DTC, Euroclear and Clearstream have informed us that they will credit their participants' accounts on that date with payments in amounts proportionate to their respective ownership interests as shown on their respective records. Payments by participants in DTC, Euroclear or Clearstream to the owners of book-entry securities will be the participants' responsibility. We expect that payment by participants in DTC, Euroclear or Clearstream to the owners of interests in book-entry securities will be governed by standard customary practices, as is now the case with the securities held for the accounts of customers registered in street name. -34- All payments will be made through the facilities of the paying agent or agents. Payments will be made subject to the deduction or withholding of any taxes, duties, assessments or other governmental charges required by applicable laws or regulations. Redemption If and when the global notes are redeemed, all amounts in respect of the redemption will be paid through the facilities of the paying agent or agents to the nominee of DTC or the nominee of the common depositary for Euroclear or Clearstream, as the case may be. The redemption price that will be paid for the book-entry securities will be equal to the amount paid to the depositary systems for the applicable global notes. Transfers and Transfer Restrictions Transfers of all or any portion of the global notes may be made only through the book-entry register. Until the book-entry securities are exchanged for definitive notes, the global notes may only be transferred as a whole by: o DTC to a nominee of DTC; o the common depositary to a nominee of the common depositary; o by a nominee of DTC to DTC or another nominee of DTC; o by a nominee of the common depositary to the common depositary or another nominee of the common depositary; o by DTC or any such nominee to a successor of DTC or a nominee of such successor; or o by the common depositary or any such nominee to a successor of the common depositary or a nominee of such successor. DTC, Euroclear and Clearstream, as the case may be, will record all transfers of the interests in book-entry securities using their respective book-entry systems. DTC, Euroclear and Clearstream will use their customary procedures in this regard. A beneficial interest in a Rule 144A global note may be transferred to a person who wishes to take delivery of such interest in the form of an interest in the Regulation S global note only in accordance with Regulation S. Clearance and Settlement General The notes are held through the book-entry systems operated by DTC, Euroclear and Clearstream and their respective participants. These systems have established electronic securities and payment transfer, processing, depositary and custodial links among themselves and others, either directly or through custodians and depositaries. These links allow notes to be issued, held and transferred among these clearing systems without the physical transfer of certificates. The policies of DTC, Euroclear and Clearstream govern payments, transfers, exchange and other matters relating to the investor's interest in notes held by them. -35- We have no responsibility for any aspect of the actions of DTC, Clearstream or Euroclear or any of their direct or indirect participants. We have no responsibility for any aspect of the records kept by DTC, Clearstream or Euroclear or any of their direct or indirect participants. We also do not supervise these systems in any way. DTC, Euroclear and Clearstream and their participants perform these clearance and settlement functions under agreements they have made with one another or with their customers. You should be aware that they are not obligated to perform these procedures and may modify them or discontinue them at any time. The description of the clearing systems in this section reflects our understanding of the rules and procedures of DTC, Euroclear and Clearstream as they are currently in effect. These systems could change their rules and procedures at any time. Transfers of Beneficial Interests in the Global Notes Trading between DTC participants Ownership of the Rule 144A global note or the registered resale global note may only be transferred in whole and may only be transferred to another nominee of DTC or to a successor of DTC or its nominee. A beneficial owner of an interest in the Rule 144A global note or the registered resale global note may hold its interest directly through DTC if such person is a participant in DTC, or indirectly through organizations which are direct DTC participants if such person is not a participant in DTC. Transfers between direct DTC participants will be effected in accordance with DTC's rules and will be settled using the procedures applicable to U.S. corporate debt obligations or depositary receipts, as the case may be, in DTC's SDFS system in same-day funds, if payment is made in U.S. dollars, or free of payment, if payment is not effected in US dollars. If payment is not made in U.S. dollars, separate payment arrangements outside DTC are required to be made between the DTC participants. Beneficial owners may also own interests in the global note held by DTC through banks, brokers, dealers, trust companies and other parties that clear through or maintain a custodial relationship, either directly or indirectly, with a direct DTC participant. Trading between participants in Euroclear and Clearstream Transfers between participants in Euroclear or Clearstream will be effected in accordance with the normal rules and operating procedures of Euroclear and Clearstream and will be settled using the procedures applicable to conventional eurobonds. Euroclear and Clearstream will hold interests in the Regulation S global note on behalf of their participants through customers' securities accounts in their respective names on the books of their common depositary. Euroclear and Clearstream have established an electronic bridge between their two systems across which their respective participants may settle trades with each other. Trading between a DTC seller and a Euroclear or Clearstream purchaser When an interest in a global note held by DTC is to be transferred from the account of a DTC participant to the account of a Euroclear or Clearstream participant, the DTC participant must send to DTC a free of payment instruction at least two business days prior to the settlement date. DTC will in turn transmit this instruction to Euroclear or Clearstream, as the case may be, on the settlement date. Separate payment arrangements are required to be made between the DTC participant and the relevant Euroclear or Clearstream, Luxembourg participant. On the settlement date, DTC will debit the account of its participant and will instruct the paying and transfer agent to instruct Euroclear or Clearstream, as the case may be. In addition, on the settlement date, DTC will instruct the paying and transfer agent and the registrar to (1) decrease the amount of book-entry interests in the name of Cede & Co. representing interests in the global note held by DTC, and (2) increase the amount of book-entry interests registered in the name of the common depositary for the accounts of Euroclear and Clearstream and representing interests in the Regulation S global note. -36- Trading between a Euroclear or Clearstream seller and a DTC purchaser When interests in the Regulation S global note are to be transferred from the account of a Euroclear or Clearstream participant to the account of a DTC participant, the Euroclear or Clearstream participant must send to Euroclear or Clearstream a free of payment instruction at least one business day prior to the settlement date. Euroclear or Clearstream, as the case may be, will in turn transmit this instruction to DTC on the settlement date. Separate payment arrangements are required to be made between the DTC participant and the relevant Euroclear or Clearstream participant, as the case may be. On the settlement date, Euroclear or Clearstream, as the case may be, will debit the account of its participant and will instruct the paying and transfer agent to instruct DTC to credit the relevant account of Euroclear or Clearstream, as the case may be, at DTC. DTC will then debit its account, as the case may be, and will deliver such interests in the Regulation S global note, free of payment, to the relevant account of the DTC participant. In addition, Euroclear or Clearstream, as the case may be, shall on the settlement date instruct the paying and transfer agent and the registrar to (1) decrease the amount of the book-entry interests registered in the name of the common depositary for the account of Euroclear or Clearstream and representing interests in the Regulation S global note, and (2) increase the amount of the book-entry interests registered in the name of Cede & Co. and representing interests in the applicable global note held by DTC. Special Timing Considerations You should be aware that investors will only be able to make and receive deliveries, payments and other communications involving notes through Euroclear and Clearstream on days when those systems are open for business. Those systems may not be open for business on days when banks, brokers and other institutions are open for business in the United States. In addition, because of time-zone differences, there may be problems with completing transactions involving Euroclear and Clearstream on the same business day as in the United States. U.S. investors who wish to transfer their interests in the notes, or to receive or make a payment or delivery of notes, on a particular day, may find that the transactions will not be performed until the next business day in Brussels or Luxembourg, depending on whether Euroclear or Clearstream is involved. The Registration Rights Agreement We have entered into a registration rights agreement with the initial purchasers. Pursuant to the registration rights agreement, we have agreed to keep the shelf registration statement, of which this prospectus forms a part, continuously effective until the earliest of o the sale of all the securities registered under the shelf registration statement; o the expiration of the period referred to in Rule 144(k) under the Securities Act with respect to notes and the ordinary shares or ordinary shares underlying the ADSs issuable upon conversion of the notes and exchange of the preference shares held by non-affiliates of Shire (including conversion and exchange at the option of the issuer following the exercise of a holder's right to have its notes redeemed); and o two years from the date the shelf registration statement is declared effective. We and the issuer will also take all reasonable steps to enable holders to use this prospectus to offer and sell notes or ordinary shares and ADSs which may be issued upon exchange of the preference shares issued upon conversion of the notes, including identifying such holders who wish to be included as selling securityholders in the shelf registration statement. In this section, we refer to these holders as "electing holders." We refer to the notes and the ordinary shares that may be issued, in the form of ordinary shares or ADSs, upon exchange of the preference -37- shares issued upon conversion of the notes and covered by the shelf registration statement collectively as the "covered securities." Electing holders who sell covered securities pursuant to the shelf registration statement generally will be required to be named as a selling securityholder in the related prospectus and to deliver a prospectus to purchasers. In order to be named as a selling securityholder, electing holders must complete and return to us a completed and signed notice and questionnaire. Electing holders will also be subject to certain of the civil liability provisions under the Securities Act in connection with such sales, and they will be bound by some of the provisions of the registration rights agreement, including certain indemnification obligations. If at any time the preference shares are exchangeable into securities other than our ordinary shares or ADSs, we and the issuer will take steps to cause such securities to be included in the shelf registration statement. We and the issuer will have the right to suspend the use of the prospectus for up to 45 days in any 90-day period (extendible up to 75 days in any 90-day period in the circumstances described below) or an aggregate of 90 days in any 12-month period. We and the issuer may only suspend the use of the prospectus if our board of directors has determined in good faith that because of valid reasons, including the acquisition or divestiture of assets, pending corporate developments and similar events, it is in our best interest to do so. We and the issuer can extend the suspension to 75 days in any 90-day period if we or the issuer possess material non-public information: o the disclosure of which would have a material adverse effect on us and our subsidiaries, taken as a whole; o if such information relates to an undisclosed proposal or pending transaction and, in our reasonable belief, its disclosure would impede our or its ability to consummate such transaction; or o or otherwise with the prior written permission of Bear, Stearns International Limited and Goldman Sachs International in their capacity as the representatives of the initial purchasers. We and the issuer will provide notice of any such suspension in advance. The notice need not specify the nature of the event giving rise to the suspension. Covered securities will not be resold in an underwritten offering unless we and the issuer agree in our sole discretion to do so. We and the issuer will cover all expenses customarily borne by issuers in an underwritten offering to which we and the issuer agree. We and the issuer will be responsible for the costs of registration of offers and sales of the covered securities pursuant to the shelf registration statement. Under certain circumstances we may grant third parties "piggy-back" registration rights with respect to the shelf registration statement. In the event that the shelf registration statement ceases to be effective for more than 45 days (or 60 days if extended as described above) in any 90-day period, or for more than 90 days in any 12-month period, then the issuer will be required to pay additional interest in cash on each interest payment date in an amount equal to one half of one percent (0.5%) per annum of the principal amount of the covered securities from the 46th, 61st or 91st day, as the case may be. Such additional interest will cease to accrue from the date the shelf registration statement becomes effective again. If, however, after any such additional interest ceases to accrue, the shelf registration statement again ceases to be effective, additional interest will again accrue as described above. In no event will the issuer ever be required to pay additional interest of more than 0.5%. -38- DESCRIPTION OF THE PREFERENCE SHARES The preference shares, which will be issued in registered form, will be issued upon conversion of the notes. The terms of the preference shares are contained in the memorandum and articles of association of the issuer. The holders of the preference shares will be entitled to the benefits of (x) the provisions of the issuer's memorandum and articles of association relating to the preference shares and (y) Shire's guarantees and agreements under the separate preference share guarantee agreement as described above under "Description of the Notes--The Guarantees." Set forth below is a brief summary of certain significant provisions of the issuer's memorandum and articles of association. Issuance of the Preference Shares The issuer will issue preference shares only upon conversion of the notes in accordance with the terms and conditions of the notes and the indenture. Each $1,000 principal amount of notes may be converted into one preference share. The preference shares will be issued, credited as fully paid, at the price of $1,000 per preference share. The issue price corresponds to a nominal value of $1 per preference share and a premium on issue of $999 each. Dividends Each preference share entitles its holder to receive a fixed cumulative preferential cash dividend equivalent to a dividend of 2% per year (accruing daily) on the paid-up value of the preference share of $1,000. The issuer will pay dividends semi-annually on February 22 and August 22 of each year, from and including the preceding dividend payment date (or, in the case of the first dividend payment date, the date of issue of the preference share) to, but excluding, the redemption date of the preference share. Dividends payable in respect of any period which is not a full dividend period will be calculated on the basis of a 365-day year and the number of days elapsed. Each preference share will cease to accrue dividends on its date for redemption unless payment of the redemption price is not made on that date. Dividends on the issuer's preference shares will be payable prior to any dividend in respect of any other class of share capital of the issuer, other than any class of preference shares having equal preference with respect to dividend payments. As of the date of this prospectus, there is no such class of preference shares having equal preference with respect to dividend payments either authorized or outstanding. Holders of preference shares will not have any claim on the profits of the issuer other than the payment of dividends. The obligation of the issuer to pay dividends is subject to applicable law in the Cayman Islands. Our guarantee of dividend payments, however, is full and unconditional, regardless of whether: o the profits of the issuer justify the payment of any dividend; o the relevant amounts are available for payment or distribution; o payment has been declared or approved by or on behalf of the issuer or any general meeting of the issuer; o payment is prohibited by law; or o the preference shares have been issued, to the extent the conversion rights requiring the issue of such preference shares were duly exercised. -39- Voting Rights Holders of preference shares shall be entitled to receive notice of general meetings of the issuer, but are not entitled to attend or vote at general meetings. Liquidation Rights In the event of a winding up of the issuer or other return of capital other than a purchase or redemption of the preference shares or other redeemable shares, holders of the preference shares are entitled to receive all arrears and accruals of dividends on the preference shares, whether or not such a dividend has been declared or approved, up to, but excluding, the date of the commencement of the winding up, together with an amount equal to the amount paid up on the preference shares. Holders of preference shares have priority over any payment to holders of other classes of the issuer's share capital, other than any class of preference shares having equal preference with respect to liquidation rights. As of the date of this prospectus, there is no such class of preference shares having equal preference with respect to liquidation rights either authorized or outstanding. Exchange Rights Upon the exercise of conversion and exchange rights by any holder of notes, the issuer will procure the exchange of the preference shares issued upon conversion of the notes for Shire ordinary shares or ADSs or, at the issuer's option, cash. This exchange will have effect from the conversion and exchange date. Any preference shares which are exchanged will be immediately transferred to Shire or its nominee in exchange for the issue to the holder of the preference shares of the number of ordinary shares or ADSs or, at the issuer's option, the amount of cash to which the holder is entitled. A description of the memorandum and articles of association to be adopted by the issuer relating to the noteholders' conversion and exchange rights is set out above under "Description of the Notes--Conversion and Exchange Rights." If the issuer does not exercise its option to procure the exchange of your preference shares for cash, as described above under "Description of the Notes--Cash-Out Option," you will be treated as if you were a holder of our ordinary shares as of the conversion and exchange date and therefore entitled to receive, in addition to the ordinary shares or ADSs, cash consideration equal to any dividends payable to holders of our ordinary shares as of any record date between the conversion and exchange date and the date on which the ordinary shares are issued to you. You will not be entitled to exercise any voting rights of such ordinary shares or ADSs if the relevant record date falls after the conversion and exchange date but before the date on which the ordinary shares or ADSs are issued to you. The issuer will effect the transfer as agent for the holder of the preference share, and the holder will be deemed to have authorized the issuer to enter into all agreements and take all steps necessary to complete the transfer and exchange. Other than any tax or duty that may be payable in respect of any transfer involved in the issue or delivery of our ordinary shares or ADSs in a name other than that of the holder of the preference share, there will be no transfer or documentary taxes due from, or any further action required by, the holder in respect of the exchange. Redemption Rights Subject to Cayman Islands law, the issuer will, at the request of the holder, redeem all preference shares for cash equal to their paid-up value, together with all arrears and accruals of dividends on the preference shares, whether or not such a dividend has been declared or approved, up to, but excluding, the redemption date at any time after their transfer into the name of Shire or its nominee. The issuer will cancel any redeemed preference shares. -40- Amendment of Class Rights Subject to applicable Cayman Islands law, so long as the capital of the issuer is divided into different classes of shares, the rights attached to any class of shares may be varied or eliminated with the written consent of the holders of not less than 75% in nominal value of the issued shares of that class or by the passing of an extraordinary resolution at a separate meeting of the holders of the shares of that class. The necessary quorum of any such meeting will be two or more persons holding or representing by proxy not less than one-third in nominal value of the issued shares of that class. The following actions will be deemed to be variations of the rights attached to the preference shares: o the creation or issue of any shares of the issuer ranking ahead of the preference shares with respect to dividend payments, liquidation preference or redemption rights; o any allotment of shares pursuant to a capitalization of the share premium account of the issuer; or o any reduction in the share premium account or the share capital of the issuer, or any uncalled liability in respect of the share capital of the issuer. Except as set out above, neither the issuance or creation of other classes of shares ranking equally with the preference shares nor the redemption of any of the preference shares will be deemed to vary the rights of the preference shares. -41- THE ISSUER Organization Shire Finance Limited, the issuer of the notes and the preference shares issuable upon conversion of the notes, is organized as an exempted limited company organized under the laws of the Cayman Islands. The issuer was incorporated on July 19, 2001, under the number 111672. Its registered office is located at Maples and Calder, Ugland House, South Church Street, P.O. Box 309, George Town, Grand Cayman, Cayman Islands, British West Indies. The objects of the issuer as set forth in its memorandum and articles of association are unrestricted and the issuer has full power and authority to carry out any object not prohibited by the laws of the Cayman Islands. The issuer has not engaged in any activities other than those incidental to its formation, the authorization and issuance of the notes and the preference shares, approval of the terms of the notes and the preference shares, the lending of the proceeds of the notes and activities incidental to or connected with the foregoing. Directors and Executive Officers The directors of the issuer are Messrs. Rolf Stahel and Angus Russell. Subject to the making of any requisite declarations of interest under Cayman Islands law, a director may vote on any transaction or arrangement in which he is interested or upon any related matter. The secretary of the issuer is Tatjana May. Ms. May is also our General Counsel and Company Secretary, having joined us in May 2001. Prior to joining us Ms. May had practiced as a lawyer at AstraZeneca plc since January 1995, before which she was a solicitor with Slaughter and May. Capitalization and Indebtedness The authorized share capital of the issuer is US$50,000, divided into 50,000 shares with a par value of US$1 each. Except as described below, as of the date of this prospectus the issuer does not have any outstanding indebtedness. The table below sets out the capitalization and indebtedness of the issuer as of August 15, 2001, adjusted to reflect the issuance of the notes. $'000 Share capital (100 shares issued, $1.00 par value) 0.1 Preference shares (No shares issued) -- Total shareholders' equity 0.1 ============== $'000 Convertible notes 400,000 Total indebtedness 400,000 =============== -42- DESCRIPTION OF THE ORDINARY SHARES Shire is a public limited company incorporated under the laws of England and Wales. As of November 5, 2001, there were 479,367,095 ordinary shares (including ordinary shares represented by ADSs) outstanding. This summary does not purport to be complete and is qualified in its entirety by reference to our full memorandum and articles of association. In this section, references to "we," "us" and "our" refer solely to Shire Pharmaceuticals Group plc and not its subsidiaries. General All of our issued ordinary shares are fully paid or credited as fully paid, and therefore no holder of ordinary shares will be required to make additional contributions of capital in respect of the shares in the future. Share Capital The provisions of Section 89(1) of the Companies Act 1985 confer on shareholders rights of pre-emption in respect of the allotment of equity securities, as defined in Section 94(2) of the Company Act 1985, which are, or are to be, paid up wholly in cash, other than by way of allotment to employees under an employees' share scheme, as defined in Section 743 of the Companies Act 1985. This section applies to our authorized but unissued share capital, to the extent not disapplied in accordance with Section 95 of the Companies Act 1985. The provisions of Section 89 of the Companies Act 1985 may be disapplied by a special resolution of the shareholders, either generally or specifically, for a maximum period not exceeding five years. By ordinary resolution passed on July 7, 2000, the directors were generally and unconditionally authorized to exercise all powers to allot relevant securities, within the meaning of Section 80 of the Companies Act 1985, up to an aggregate nominal amount of (pound)4,197,625.90. This authority expires on the fifth anniversary of the date of the passing of the resolution. However, we may make offers or agreements before the expiration, which would or might require relevant securities to be allotted after the expiration, and the directors may allot relevant securities in pursuance of the offers or agreements as if the authority conferred by that resolution had not expired. By a special resolution passed at the same annual general meeting on July 7, 2000, subject to the resolution referred to above and in addition and without prejudice to all existing authorities, the directors were empowered pursuant to Section 95 of the Companies Act 1985 to allot equity securities (within the meaning of Section 94(2) of the Companies Act 1985) pursuant to the authority conferred upon them above as if Section 89(1) of the Companies Act 1985 did not apply to such allotment, provided that this power: (i) should expire five years after the date of the passing of the resolution, save that we might make an offer or agreement which would or might require equity securities to be allotted after such expiry, and the directors might allot equity securities pursuant to any such offer or agreement as if the power conferred by this resolution had not expired; (ii) should be limited to allotment of equity securities to raise funds solely for the purposes of repaying in whole or in part any outstanding amounts under the facility agreement entered into on November 19, 1999, as amended, between, inter alia, us and our subsidiaries in the United States as borrowers and DLJ Capital Funding, Inc. as agent; and (iii) should not involve the allotment of more than (pound)430,000 in nominal value of equity securities. By special resolution passed on March 29, 2001, the directors were empowered under Section 95 of the Companies Act 1985 to allot equity securities under the authority referred to in the paragraph below, as if Section 89(1) of the Companies Act 1985 did not apply to any of these allotments, provided that this power is limited to: o the allotment of equity securities where such securities have been offered (whether by way of a rights issue, open offer or other pre-emptive offer) to holders of ordinary shares in proportion (as nearly as may be) to their existing holdings of ordinary shares but subject to the directors having a right to make such exclusions or other arrangements in connection with such offering as they may deem necessary or expedient: -43- - to deal with equity securities representing fractional entitlements; - to deal with ordinary shares represented by depository receipts; and - to deal with legal or practical problems under the laws of, or the requirements of any recognized regulatory body or any stock exchange in, any territory; and o allotments of equity securities for cash otherwise than pursuant to the preceding bullet point up to an aggregate nominal amount of approximately (pound)1,279,868. This power expires on the fifth anniversary of the date of the resolution, except that we may before this expiration make an offer or agreement that would or might require equity securities to be allotted after the expiration and the directors may allot equity securities under the offer or agreement as if that power had not expired. The directors have undertaken that, to the extent that the aggregate nominal amount of relevant securities (within the meaning of Section 80 of the Companies Act 1985) up to which the directors are generally and unconditionally authorized for the purposes of Section 80 and Section 95 of the Companies Act 1985 to allot such relevant securities exceeds IPC guidelines, the directors shall not allot relevant securities pursuant to any outstanding authorities. Dividends Subject to the Companies Act 1985 and other applicable law and the articles of association, we may by ordinary resolution from time to time declare dividends to be paid to shareholders according to their rights and interests in the profits available for distribution, but no dividend shall be declared in excess of the amount recommended by the board of directors. Except insofar as the rights attaching to, or the terms of issue of, any of our shares otherwise provide, all dividends shall be apportioned and paid proportionately according to the amounts paid on the shares during any portion or portions of the period in respect of which the dividend is paid, but no amount paid up on a share in advance of a call shall be treated as paid up on the share for this purpose. The board of directors may from time to time and subject to the Companies Act 1985 and other applicable laws also pay to the shareholders an amount of interim dividends that the board of directors considers to be justified by our profits available for distribution. Our board of directors may, with the prior authority of an ordinary resolution, direct that payment of any dividend may be satisfied wholly or in part by the distribution of specific assets and, in particular, of paid up shares or debentures of another company. The board may, if authorized by an ordinary resolution, allot to those holders of a particular class of shares who have elected to receive further shares of that class or ordinary shares, in either case, credited as fully paid, instead of cash in respect of all or part of a dividend or dividends specified by the resolution, subject to any exclusions, restrictions or other arrangements which the board may in its absolute discretion deem necessary or expedient. Any dividend unclaimed for a period of 12 years from the date such dividend was declared or became due for payment shall be forfeited and shall cease to remain owing by us. No dividend shall be paid otherwise than out of the profits available for distribution under the provisions of the Companies Act 1985. Where a person is, under the provisions as to the transmission of shares contained in the articles of association, entitled to become a shareholder, the board may at any time serve a notice on this person requiring him to elect either to be registered himself or to have a person nominated by him registered as a member. If the notice is not complied with within 60 days, the board may withhold payment of all dividends payable in respect of these shares until the requirements of the notice have been complied with. Where any person has an interest of 0.25% or more in the nominal value of shares of a particular class in us, the board may withhold dividends payable on shares held by this person if there has been a failure to provide us with information concerning interests on those shares required to be provided under the articles of association and the Companies Act 1985 until this failure has been remedied. -44- Rights in a Winding-Up On a voluntary winding-up, the liquidator may, on obtaining any sanction required by law, divide among the shareholders in kind the whole or any part of our assets, whether they shall consist of property of the same kind or not, and, for that purpose, set those values as the liquidator determines fair upon any property to be divided and determine how the division shall be carried out as between the shareholders or different classes of shareholders. The liquidator may not, however, distribute to a member, without his consent, any asset to which there is attached a liability or potential liability for the owner. Shareholder Meetings An annual general meeting of shareholders must be held once each year within a period of not more than 15 months after the date of the last preceding annual general meeting. The board of directors may convene an extraordinary general meeting of shareholders at its discretion. General meetings may be held at the time and place as may be determined by the board of directors. An annual general meeting shall be convened on at least 21 clear days' written notice to shareholders entitled to receive notices. Most extraordinary general meetings may be convened on at least 14 clear days' written notice, but extraordinary general meetings at which it is proposed to pass special resolutions must be convened on at least 21 clear days' written notice. Two shareholders entitled to vote must be present in person or by proxy to constitute a quorum for all purposes at general meetings except that the absence of a quorum shall not prevent the appointment of a chairman of the meeting in accordance with the articles of association. Voting Rights Subject to any special rights, terms or restrictions as to voting upon which shares may be issued or held or any suspension or abrogation of voting rights pursuant to the provisions of the articles of association (including in circumstances where a statutory notice requiring disclosure of beneficial ownership of shares has not been complied with), every shareholder present in person at a general meeting shall have one vote on a show of hands, and on a poll every shareholder present in person or by proxy shall have one vote for every ordinary share of which he is the holder. No shareholder shall, unless otherwise authorized by the board of directors, be entitled to be present or vote at any of our general meetings or at any separate general meeting of the holders of any class of our shares unless all calls or other sums presently payable by the shareholder in respect of our shares have been paid. See also "--Disclosure of Interests" and "--Special Voting Shares" below. Voting at any general meeting of shareholders is by a show of hands unless a poll is duly demanded. A poll may be demanded by: o the chairman of the meeting; o not less than five shareholders present in person or by proxy entitled to vote at the meeting; o any shareholder or shareholders present in person or by proxy and representing in aggregate not less than one-tenth of the total voting rights of all shareholders entitled to attend and vote at the meeting; or o any shareholder or shareholders present in person or by proxy holding shares conferring a right to attend and vote at the meeting on which shares there have been paid sums in the aggregate equal to not less than one-tenth of the total sum paid on all the shares conferring that right. -45- Voting rights are only conferred on registered holders of shares and therefore a person holding through a nominee may not directly demand a poll. This includes holders of ADSs, as they are not registered holders of shares. Unless otherwise required by law or the articles of association, voting in a general meeting is by ordinary resolution. These resolutions include: o the election of directors; o the approval of financial statements; o the declaration of final dividends; o the appointment of auditors; o the increase of authorized share capital; and o the grant of authority to issue shares. An ordinary resolution requires the affirmative vote of a majority of the votes of those who are eligible to vote and vote in person in the case of individuals or are represented by duly authorized representatives in the case of corporations. If a poll is demanded, the affirmative vote of shareholders who are present in person or by proxy in the case of individuals or are represented by duly authorized representatives in the case of corporations and who in the aggregate hold shares conferring a majority of the votes actually cast on the resolution is required. A special resolution or an extraordinary resolution requires the affirmative vote of not less than three-fourths of those who are eligible to vote and vote in person in the case of individuals or are represented by duly authorized representatives in the case of corporations. If a poll is demanded, the affirmative vote of shareholders who are present in person or by proxy in the case of individuals or are represented by duly authorized representatives in the case of corporations and who in the aggregate hold shares conferring three-fourths of the votes actually cast on the resolution is required. Examples of special resolutions include resolutions relating to matters concerning an alteration of our memorandum or articles of association or a members' voluntary winding-up of us or the disapplication of statutory preemption rights in respect of the issuance of equity securities to be paid up wholly in cash. An example of an extraordinary resolution is one which modifies the rights of any class of shares at a meeting of the holders of such class. The chairman of the meeting has a second or deciding vote in the case of a tied vote. Authorization to Issue Shares The Companies Act 1985 provides that the directors may be authorized by means of an ordinary resolution of the shareholders to issue up to the maximum number of ordinary shares designated in such resolution for a maximum period not exceeding five years, although generally in the case of companies whose shares are admitted to the Official List of the U.K. Listing Authority and to trading on the LSE, these authorizations expire and are renewed at the same time as the disapplication of pre-emptive rights. See "--Share Capital" above. Variation of Rights If at any time our share capital is divided into different classes of shares, the rights attached to any class may be varied or abrogated, subject to the provisions of the Companies Act 1985, in the manner as may be provided by those rights or, in the absence of such a provision, either with the written consent of the holders of at least three-fourths of the nominal amount of the issued shares of the class or with the sanction of any extraordinary resolution passed at a separate general meeting of the holders of the issued shares of that class but not otherwise. At every such separate meeting, the quorum shall be two persons present in person holding or representing by proxy at least one- -46- third in nominal amount of the issued shares of the class or, at an adjourned meeting, any two holders of the shares in question whether present in person or by proxy. The rights conferred upon the holders of any class of shares shall not, unless expressly provided in the rights attached to those shares, be deemed to be altered by the creation or issuance of further shares ranking equally with or subsequent to those shares or by the purchase or redemption by us of our own shares in accordance with the Companies Act 1985 and our articles of association. Alteration of Capital Subject to the provisions of the Companies Act 1985 and to any special rights previously conferred on the holders of any existing shares, any share may be issued with or have attached to it such rights and restrictions as we may determine by ordinary resolution or, if no resolution has been passed, as the board of directors may decide. Redeemable shares may be issued subject to the provisions of the Companies Act 1985 and to any rights conferred on the holders of any class of existing shares. We may by ordinary resolution: o increase our share capital; o consolidate and divide all or any of our share capital into shares of a larger amount; o subject to the provisions of the Companies Act 1985, subdivide all or any of our shares into shares of a smaller nominal amount and decide that the shares resulting from the subdivision have among themselves a preference or other advantage or are subject to a restriction; and o cancel any shares which have not been taken or agreed to be taken by any person and diminish the amount of our authorized share capital by the amount of the shares so canceled. Subject to the provisions of the Companies Act 1985 and the rights attached to existing shares, we may by special resolution reduce our authorized and issued share capital, any capital redemption reserve and any share premium account in any manner. We may also, subject to the requirements of the Companies Act 1985 and to the rights conferred on holders of any class of shares, purchase all or any of our own shares, including any redeemable shares. Disclosure of Interests Section 198 of the Companies Act 1985 provides that a person, including a company and other legal entities, that acquires an interest of 3.0% or more of any class of shares, including through ADRs, comprising part of a company's issued share capital carrying the right to vote in all circumstances at a general meeting of such company is required to notify the company in writing of its interest within two days following the day on which the notification obligation arises. After the 3.0% level is exceeded, similar notifications must be made in respect of increases or decreases taking the shareholding above or below a whole percentage figure. Interests held by some investment fund managers may be disregarded for the purposes of calculating the 3.0% threshold, but the disclosure obligation will still apply where those interests exceed 10% or more of any class of our relevant share capital and to increases or decreases taking the shareholding above or below a whole percentage figure after that time. For purposes of the notification obligation, the interest of a person in shares means any kind of interest in shares including an interest in any shares: o in which a spouse, or child or stepchild under the age of 18 is interested; o in which a corporate body is interested and either -47- - that corporate body or its directors are generally accustomed to act in accordance with that person's directions or instructions, or - that person controls one-third or more of the voting power of that corporate body; or o in which another party is interested and the person and that other party are parties to a "concert party" agreement under Section 204 of the Companies Act 1985. An agreement is a "concert party" agreement if: - it provides for one or more parties to acquire interests in shares of a particular company, - it imposes obligations or restrictions on any one or more of the parties as to the use, retention or disposal of the interests acquired under the agreement and - any interest in our shares is in fact acquired by any of the parties under the agreement. In addition, Section 212 of the Companies Act 1985 provides that a public company may by written notice require a person whom the company knows or has reasonable cause to believe to be, or to have been at any time during the three years immediately preceding the date on which the notice is issued, interested in shares comprised in the company's issued share capital carrying the right to vote in all circumstances at a general meeting of such company to confirm that fact or to indicate whether or not that is the case, and where such person holds or during the relevant time had held an interest in those shares, to give such further information as may be required relating to that interest and any other interest in the shares of which that person is aware. Where notice is served by a company under the foregoing provisions on a person who is or was interested in shares of the company and that person fails to give the company any information required by the notice within the time specified in the notice, the company may apply to the English court for an order directing that the shares in question be subject to restrictions prohibiting, among other things, any transfer of those shares, the exercise of the voting rights in respect of those shares, the taking up of rights in respect of those shares and, other than in liquidation, payments in respect of those shares. A person who fails to fulfill the obligation imposed by Sections 198 to 202 and 212 of the Companies Act 1985 described above is subject to criminal penalties. Share Acquisitions The City Code on Takeovers and Mergers, issued and administered by the Panel on Takeovers and Mergers in London, is applicable to us because we are a public limited company incorporated and resident in England and Wales. The City Code is intended to operate principally to ensure fair and equal treatment of all shareholders in transactions involving companies to which it applies. When persons hold or acquire certain percentages of voting rights of a U.K. public company such as ours, these persons may be required, in certain circumstances, to make an offer to all shareholders of that company for its shares. For purposes of the City Code, the term persons includes all persons "acting in concert" as that term is defined in the City Code. Transfer of Shares Any holder of certificated shares may transfer all or any of those shares by an instrument of transfer in any usual form or in any other form approved by the board. The instrument of transfer shall be signed by or on behalf of the transferor and, in the case of a partly paid share, by or on behalf of the transferee. The transferor shall remain the holder of the share until the name of the transferee is entered in our register of members in respect of it. -48- Subject to the articles of association and requirements of the LSE, the directors may, in their absolute discretion and without assigning any reason, refuse to register any transfer of certificated shares unless: o it is in respect of a fully paid share; provided that where any nil paid or partly paid shares are admitted to the Official List of the U.K. Listing Authority, such discretion may not be exercised in such a way as to prevent dealings in such shares taking place on an open and proper basis; o it is duly stamped, if required, is lodged with us and is accompanied by the certificate for the shares to which it relates and such other evidence as the directors may reasonably require to show the right of the transferor to make the transfer; o it is in respect of only one class of shares; o it is in favor of not more than four transferees; and o it is in respect of a share on which we have no liens. Notwithstanding anything in the articles of association to the contrary, any of our shares may be issued, held, registered, converted to, transferred or otherwise dealt with in uncertificated form and converted from uncertificated form to certificated form in accordance with The Uncertificated Securities Regulations 1995 (SI 1995/3272) including any modification of and rules made under those provisions or any regulations in substitution for those provisions made under Section 207 of the Companies Act 1989 for the time being in force and practices instituted by an operator of the relevant system. Any provision of the articles of association shall not apply to any uncertificated shares to the extent that those provisions are inconsistent with: o the holding of shares in uncertificated form; o the transfer of title of shares by means of a relevant system; or o any provision of the regulations referred to in this paragraph. Miscellaneous There are currently no U.K. foreign exchange controls on the payment of dividends on the ordinary shares or the conduct of our operations. There are no restrictions under our memorandum and articles of association or under English law that limit the right of non-resident or foreign owners to hold or vote our ordinary shares. However, no shareholders are entitled to receive notices from us, including notices of shareholders' meetings, unless they have given an address in the United Kingdom to us to which those notices may be sent. Notwithstanding the foregoing, we provide information to the depositary, which in turn forwards that information to the holders of ADSs. Special Voting Shares 17,292,149 special voting shares were authorized for issuance pursuant to the merger agreement among us, BioChem and Shire Acquisition Inc., a corporation incorporated under the laws of Canada and our wholly owned subsidiary, and, pursuant to the plan of arrangement, these special voting shares were issued to the trustee appointed under the voting and exchange trust agreement. These special voting shares were created by the subdivision of such number of existing authorized but unissued ordinary shares into special voting shares of a nominal value of 0.00001p, as gave rise to such number of special voting shares as was equal to the number of issued and outstanding exchangeable shares in Shire Acquisition Inc. immediately after the effective date of the arrangement. The trustee holds the special voting shares in trust for the benefit of the holders of the exchangeable shares (other than us and -49- our affiliates) and is able to vote in person or by proxy on any matters put before our shareholders at a general meeting. Each holder of exchangeable shares (other than us or our affiliates) is entitled to direct the trustee how to vote three special voting shares for each exchangeable share owned by such holder or to attend the meeting personally and vote directly as proxy for the trustee in respect of such special voting shares. Unless instructed, the trustee may not vote, and any exchangeable shares held by us or our affiliates may not be voted. Such votes may be exercised for the election of directors and on all other matters submitted to a vote of our shareholders. The holders of ordinary shares and the holder of the special voting shares will vote together as a single class on all matters, except to the extent voting as a separate class is required by applicable laws or our memorandum and articles of association. The holder of the special voting shares is not entitled to receive dividends from us and, in the event of our winding up, will be entitled to receive an amount equal to the higher of 1p and the par value thereof but only after holders of ordinary shares have received an amount equal to the nominal amount of such shares held by them. To the extent that exchangeable shares are exchanged for ordinary shares or ADSs pursuant to, and on the terms of, the voting and exchange trust agreement, and to the extent that there are no shares of stock, debt, options or other agreements of Shire Acquisition Inc. that could give rise to the issuance of any exchangeable shares to any person (other than us and our affiliates), the trustee shall forfeit such number of special voting shares to us as corresponds to the number of exchangeable shares thus exchanged. -50- DESCRIPTION OF THE AMERICAN DEPOSITARY SHARES AND AMERICAN DEPOSITARY RECEIPTS In this section, references to "we," "us" and "our" refer solely to Shire Pharmaceuticals Group plc and not its subsidiaries. American Depositary Shares and American Depositary Receipts Morgan Guaranty Trust Company of New York as depositary will issue the ADSs which you may elect to receive pursuant to the conversion or redemption of the notes and exchange of the preference shares. Each ADS will represent ownership interest in three ordinary shares, which we will deposit with the custodian under the deposit agreement among us, the depositary and yourself as an ADR holder. In the future, each ADS will also represent any securities, cash or other property deposited with the depositary but not distributed by it directly to you. Your ADSs will be evidenced by what are known as ADRs. An ADR may be issued in either book-entry or certificated form by the depositary. If an ADR is issued in book-entry form, you will receive periodic statements from the depositary showing your ownership interest in ADSs. The depositary's office is located at 60 Wall Street, New York, New York 10260. You may hold ADSs either directly or indirectly through your broker or other financial institution. If you hold ADSs directly, you are an ADR holder. This description assumes you hold your ADSs directly. If you hold the ADSs through your broker or financial institution nominee, you must rely on the procedures of that broker or financial institution to assert the rights of ADR holders described in this section. You should consult with your broker or financial institution to find out what those procedures are. Because the depositary's nominee will actually be the registered owner of the ordinary shares, you must rely on it to exercise the rights of a shareholder on your behalf. The obligations of the depositary and its agents are set out in the deposit agreement. The deposit agreement and the ADSs are generally governed by New York law. The following is a summary of the material terms of the deposit agreement. Because it is a summary, it does not contain all the information that may be important to you. For more complete information, you should read the entire deposit agreement and the form of ADR which contains the terms of your ADSs. We will make copies of the actual documents available to you upon request. Share Dividends and Other Distributions How will I receive dividends and other distributions on the ordinary shares underlying my ADSs? The depositary has agreed to pay to you the cash dividends or other distributions it or the custodian receives on ordinary shares or other deposited securities, after deducting its expenses. You will receive these distributions in proportion to the number of underlying ordinary shares your ADSs represent. We may make various types of distributions with respect to our securities. Except as stated below, to the extent the depositary is legally permitted it will deliver such distributions to ADR holders in proportion to their interests in the following manner: Cash. The depositary shall convert cash distributions from foreign currency to U.S. dollars if this is permissible and can be done on a reasonable basis. The depositary will endeavor to distribute such cash in a practicable manner and may deduct any taxes required to be withheld, any expenses of converting foreign currency and transferring funds to the United States and certain other expenses and adjustments. In addition, before making a distribu- -51- tion the depositary will deduct any taxes withheld. If the exchange rates fluctuate during a time when the depositary cannot convert the currency, you may lose all or part of the value of the distribution. Ordinary shares. In the case of a distribution in ordinary shares, the depositary will issue additional ADRs to evidence the number of ADSs representing such ordinary shares. Only whole ADSs will be issued. Any ordinary shares which would result in fractional ADSs will be sold, and the net proceeds will be distributed to the ADR holders entitled thereto. Rights to receive additional ordinary shares. In the case of a distribution of rights to subscribe for additional ordinary shares or other rights, if we provide satisfactory evidence that the depositary may lawfully distribute such rights, the depositary may arrange for ADR holders to instruct the depositary as to the exercise of such rights. However, if we do not furnish such evidence, the depositary may - sell such rights if practicable and distribute the net proceeds as cash, or - allow such rights to lapse, whereupon ADR holders will receive nothing. We have no obligation to file a registration statement under the Securities Act in order to make any rights available to ADR holders. Other distributions. In the case of a distribution of securities or property other than those described above, the depositary may either - distribute such securities or property in any manner it deems fair and equitable or - sell such securities or property and distribute any net proceeds in the same way it distributes cash. Any U.S. dollars will be distributed by checks drawn on a bank in the United States for whole dollars and cents. Fractional cents will be withheld without liability for interest and added to future cash distributions. The depositary may choose any practical method of distribution for any specific ADR holder, including the distribution of foreign currency, securities or property, or it may retain the item, without paying interest on or investing it, on behalf of the ADR holder as deposited securities. The depositary may not be able to convert any currency at a specified exchange rate or sell any property, rights, shares or other securities at a specified price. We cannot assure you that any of such transactions can be completed within a specified time period. Deposit, Withdrawal and Cancellation How does the depositary issue ADSs? The depositary will issue ADSs if you deposit or your broker deposits ordinary shares or evidence of rights to receive ordinary shares with the custodian. In the case of the ADSs to be issued following the exchange of preference shares of the issuer, we will arrange to deposit such ordinary shares. Ordinary shares deposited in the future with the custodian must be accompanied by certain documents, including instruments showing that such ordinary shares have been properly transferred or endorsed to the person on whose behalf the deposit is being made. -52- The custodian will hold all deposited ordinary shares for the account of the depositary. This includes those ordinary shares being deposited by or on behalf of us in connection with the exchange of preference shares of the issuer. ADR holders thus have no direct ownership interest in the ordinary shares and only have the rights that are contained in the deposit agreement. The custodian will also hold any additional securities, property and cash received on or in substitution for the deposited ordinary shares. The deposited ordinary shares and any such additional items are referred to as "deposited securities." Upon each deposit of ordinary shares, receipt of related delivery documentation and compliance with the other provisions of the deposit agreement, including the payment of the fees and charges of the depositary, the depositary will issue an ADR or ADRs in the name of the person entitled thereto evidencing the number of ADSs to which such person is entitled. Certificated ADRs will be delivered at the depositary's principal New York office or any other location that it may designate as its transfer office. If ADRs are in book-entry form, a statement setting forth such ownership interest will be mailed to holders by the depositary. All of the ADSs issued other than following the exchange of preference shares of the issuer will, unless specifically requested to the contrary, be part of the depositary's book-entry direct registration system, and registered holders will receive periodic statements from the depositary which will show the number of ADSs registered in such holder's name. An ADR holder can always request that the ADSs not be held through the depositary's direct registration system and that a certificated ADR be issued. How do ADR holders cancel an ADS and obtain deposited securities? When you turn in your ADS at the depositary's office, it will, upon payment of certain applicable fees, charges and taxes, deliver at the custodian's office the underlying ordinary shares. At your risk, expense and request, the depositary may deliver at another place that you may request. The depositary may only restrict the withdrawal of deposited securities in connection with: o temporary delays caused by closing transfer books of the depositary or us, the deposit of ordinary shares in connection with voting at a shareholders' meeting or the payment of dividends; o the payment of fees, taxes and similar charges; or o compliance with any U.S. or foreign laws or governmental regulations relating to the ADRs. This right of withdrawal may not be limited by any other provision of the deposit agreement. Voting Rights How do I vote? If you are an ADR holder and the depositary asks you to provide it with voting instructions, you may instruct the depositary how to exercise the voting rights for the ordinary shares which underlie your ADSs. After receiving voting materials from us, the depositary will notify all of the ADR holders of any shareholder meeting or solicitation of consents or proxies. This notice will describe how you may instruct the depositary to exercise the voting rights for the ordinary shares which underlie your ADSs. For instructions to be valid, the depositary must receive them on or before the date specified. The depositary will try, as far as practical, subject to the provisions of and governing the underlying ordinary shares or other deposited securities, to vote or to have its agents vote the ordinary shares or other deposited securities as you instruct. The depositary will only vote or attempt to vote as you instruct. The depositary will not itself exercise any voting discretion. Furthermore, neither the depositary nor its agents are responsible for any failure to carry out any voting instructions, for the manner in which any vote is cast or for the effect of any vote. -53- Because there is no guarantee that you will receive voting materials in time to instruct the depositary to vote, it is possible that you, or persons who hold their ADSs through brokers, dealers or other third parties, will not have the opportunity to exercise a right to vote. Fees and Expenses What fees and expenses will I be responsible for paying? ADR holders will be charged a fee for each issuance of ADSs, including without limitation upon issuances resulting from distributions of shares, rights and other property, and for each surrender of ADSs in exchange for deposited securities, except that we will pay such fee for each initial issuance of ADSs in exchange for preference shares. The fee in each case is $5.00 for each 100 ADSs or any portion thereof issued or surrendered. ADR holders or persons depositing ordinary shares may also be charged the following expenses: o stock transfer or other taxes and other governmental charges; o cable, telex and facsimile transmission and delivery charges; o transfer or registration fees for the registration of transfer of deposited securities on any applicable register in connection with the deposit or withdrawal of deposited securities; and o expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars. We will pay all other charges and expenses of the depositary and any agent of the depositary pursuant to agreements from time to time between us and the depositary. However, we will not pay any charges and expenses of the custodian. The fees described above may be amended from time to time. Payment of Taxes ADR holders must pay any tax or other governmental charge payable by the custodian or the depositary on any ADS or ADR, deposited security or distribution. However, except as provided below, if you deliver a note for conversion and exchange, you will not be required to pay any U.K. transfer taxes or duties in respect of the issue of ADSs in exchange for the preference shares. Instead, we will hold you harmless against any U.K. stamp duty or stamp duty reserve tax liability you may be required to pay on exchange. We will not pay any tax or duty, however, that may be payable in respect of any transfer involved in the issue or delivery of our ADSs in a name other than that of the holder of the note. If an ADR holder owes any tax or other governmental charge, the depositary may o deduct the amount thereof from any cash distributions or o sell deposited securities and deduct the amount owing from the net proceeds of such sale. In either case the ADR holder remains liable for any shortfall. Additionally, if any tax or governmental charge is unpaid, the depositary may also refuse to effect any registration, registration of transfer, split-up or combination of deposited securities or any withdrawal of deposited securities, except under limited circumstances mandated by securities regulations. If any tax or governmental charge is required to be withheld on any non-cash distribution, the depositary may sell the distributed property or securities to pay these taxes or charges and distribute any remaining net proceeds to the ADR holders entitled thereto. -54- Reclassifications, Recapitalizations and Mergers If we take certain actions that affect the deposited securities, including: o any change in par value, split-up, consolidation, cancellation or other reclassification of deposited securities; or o any recapitalization, reorganization, merger, consolidation, liquidation, receivership, bankruptcy or sale of all or substantially all of our assets, then the depositary may choose to: (1) amend the form of ADR; (2) distribute additional or amended ADRs; (3) distribute cash, securities or other property it has received in connection with such actions; (4) sell any securities or property received and distribute the proceeds as cash; or (5) none of the above. If the depositary does not choose any of (1) through (4), any of the cash, securities or other property it receives shall constitute part of the deposited securities and each ADS will then represent a proportionate interest in such property. Amendment and Termination How may the deposit agreement be amended? We may agree with the depositary to amend the deposit agreement and the ADSs without your consent for any reason. ADR holders must be given at least 30 days' notice of any amendment that imposes or increases any fees or charges, other than taxes and other charges specifically payable by ADR holders under the deposit agreement, or affects any substantial existing right of ADR holders. If an ADR holder continues to hold ADRs or ADSs after being so notified, the ADR holder will be deemed to have agreed to the amendment. An amendment can become effective before notice is given if effectiveness is necessary to ensure compliance with a new law, rule or regulation. No amendment will impair your right to surrender your ADSs and receive the underlying securities. If a governmental body adopts new laws or rules which require the deposit agreement or ADS to be amended, we and the depositary may make the necessary amendments, which could take effect before you receive notice of the amendments. How may the deposit agreement be terminated? The depositary may terminate the deposit agreement by giving ADR holders at least 30 days prior notice, and it must do so at our request. After termination, the depositary's only responsibility will be o to deliver deposited securities to ADR holders who surrender their ADRs and o to hold or sell distributions received on deposited securities. -55- As soon as practicable after the expiration of six months from the termination date, the depositary will sell the deposited securities which remain and hold the net proceeds of such sales, without liability for interest, in trust for ADR holders who have not yet surrendered their ADRs. After making a sale, the depositary shall have no obligations except to account for the proceeds and other cash. Limits on Our Obligations and the Obligations of the Depositary; Limits on Liability to ADR Holders and Holders of ADSs The deposit agreement expressly limits the obligations and liability of each of the depositary, us and its and our respective agents. Neither we nor the depositary will be liable: o if we or the depositary is prevented or hindered in performing any obligation by circumstances beyond its control, including, without limitation, requirements of law, rule, regulation, the terms of the deposited securities and acts of God; o for exercising or failing to exercise discretion under the deposit agreement; o if we perform our or the depositary performs its obligations without gross negligence or bad faith; or o for any action based on advice or information from legal counsel, accountants, any person presenting ordinary shares for deposit, any holder or any other qualified person. Neither the depositary nor its agents have any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities or the ADRs. We and our agents shall only be obligated to appear in, prosecute or defend any action, suit or other proceeding in respect of any deposited securities or the ADRs, which in our opinion may involve us in expense or liability, if indemnity satisfactory to us against all expense, including fees and disbursements of counsel, and liability be furnished as often as we require. The depositary will not be responsible for failing to carry out instructions to vote the ADSs or for the manner in which the ADSs are voted or the effect of the vote. The depositary may own and deal in securities and in ADSs. Requirements for Depositary Actions We, the depositary or the custodian may refuse to o issue, register or transfer an ADR or ADRs, o effect a split-up or combination of ADRs, o deliver distributions on any such ADRs or o unless the deposit agreement provides otherwise, permit the withdrawal of deposited securities, until the following conditions have been met: - the holder has paid all taxes, governmental charges and fees and expenses as required in the deposit agreement; - the holder has provided the depositary with any information it may deem necessary or proper, including, without limitation, proof of identity and the genuineness of any signature; and -56- - the holder has complied with the regulations that the depositary may establish under the deposit agreement. Unless the deposit agreement provides otherwise, the depositary may also suspend the issuance of ADSs, the deposit of ordinary shares, the registration, transfer, split-up or combination of ADRs or the withdrawal of deposited securities if the register for ADRs or any deposited securities is closed or if the depositary or we decide any such action is advisable. Pre-release of ADSs The depositary may also issue ADRs prior to the deposit with the custodian of ordinary shares or rights to receive ordinary shares. This is called a pre-release of the ADS. A pre-release is closed out as soon as the underlying ordinary shares are delivered to the depositary. The depositary may pre-release ADSs only if: o the depositary has received collateral for the full market value of the pre-released ADRs; and o each recipient of pre-released ADRs agrees in writing that he or she - owns the underlying ordinary shares, - assigns all rights in such ordinary shares to the depositary, - holds such ordinary shares for the account of the depositary and - will deliver such ordinary shares to the custodian as soon as practicable, and promptly if the depositary so demands. In general, the number of pre-released ADSs will not evidence more than 30% of all ADSs outstanding at any given time, excluding those evidenced by pre-released ADRs. However, the depositary may change or disregard such limit from time to time in certain circumstances. The Depositary Who is the depositary? Morgan Guaranty Trust Company of New York, a New York banking corporation, is a commercial bank offering a wide range of banking and trust services to its customers in the New York metropolitan area, throughout the United States and around the world. -57- CERTAIN CAYMAN ISLANDS, U.K. AND U.S. TAX CONSIDERATIONS This summary is of a general nature and is included herein solely for informational purposes. It is not intended to be, nor should it be construed to be, legal or tax advice. No representation with respect to the consequences to any particular purchaser of the book-entry interests is made hereby. Prospective purchasers should consult their own tax advisers with respect to their particular circumstances and the effects of national, state or local tax laws to which they may be subject. In this section, references to "Shire," "we," "us" or "our" refer solely to Shire Pharmaceuticals Group plc and not its subsidiaries, and references to the "issuer" refer solely to Shire Finance Limited. Cayman Islands Tax Considerations The Cayman Islands currently have no exchange control restrictions and no income, corporate or capital gains tax, estate duty, inheritance tax, gift tax or withholding tax applicable to Shire Finance Limited or any holder of notes. Accordingly, payment of principal of (including any premium) and interest on, and any transfer or conversion of, the notes will not be subject to taxation in the Cayman Islands, no Cayman Islands withholding tax will be required on such payments to any holder of a note and gains derived from the sale of notes or shares will not be subject to Cayman Islands capital gains tax. The Cayman Islands are not party to any double taxation treaties. Shire Finance Limited has applied for and expects to receive an undertaking from the Governor-in-Council of the Cayman Islands that, in accordance with Section 6 of the Tax Concessions Law (Revised) of the Cayman Islands for a period or 20 years from the date of the undertaking, no law which is enacted in the Cayman Islands imposing any tax to be levied on profits or income or gains or appreciation shall apply to Shire Finance Limited or its operations and that the aforesaid tax or any tax in the nature of estate duty or inheritance tax shall not be payable on the notes, the preference shares, debentures or other obligations of Shire Finance Limited. No stamp duties or similar taxes or charges are payable under the laws of the Cayman Islands in respect of the execution and issue of the notes unless they are executed in or brought within (for example, for the purposes of enforcement) the jurisdiction of the Cayman Islands, in which case stamp duty of 0.25% of the face amount thereof may be payable on each note (up to a maximum of CI$250) unless Shire Finance Limited has paid stamp duty of CI$500 in respect of the entire issue of notes. An instrument of transfer in respect of a note if executed in or brought within the jurisdiction of the Cayman Islands will attract a Cayman Islands stamp duty of CI$100. No stamp duties or similar taxes or charges are payable under the laws of the Cayman Islands in respect of the conversion of the notes or the issue of the preference shares. U.K. Tax Considerations The comments below are of a general nature based on current U.K. law and practice. They do not necessarily apply where the income is deemed for tax purposes to be the income of any other person. They relate only to the position of persons who are the absolute beneficial owners of their notes and may not apply to certain classes of persons such as dealers. They assume that the notes will be listed on a recognized stock exchange within the meaning of Section 841 of the Income and Corporation Taxes Act 1988 before any payment of interest is made on the notes. They also assume that holders of ADRs representing ADSs will be treated in practice as the beneficial owners of the ordinary shares represented by the ADSs for the purpose of U.K. tax. Any noteholders who are in doubt as to their personal tax position should consult their professional advisers. -58- 1. Interest 1.1. While the notes continue to be listed on a recognized stock exchange within the meaning of Section 841 of the Income and Corporation Taxes Act 1988, payments of interest (including payments of interests made through paying or collecting agents) may be made without withholding or deduction for or on account of income tax. Persons in the United Kingdom paying interest to or receiving interest on behalf of another person may be required to provide certain information to the U.K. Inland Revenue regarding the identity of the payee or person entitled to the interest and, in certain circumstances, such information may be exchanged with tax authorities in other countries. If the notes cease to be listed, interest will generally be paid under deduction of income tax at the lower rate (currently 20%). The terms and conditions of the notes do not provide for any additional payments to be made in this or any other situation. Noteholders who are not resident in the United Kingdom may, however, be able to recover all or part of the tax deducted if there is an appropriate provision in an applicable double tax treaty and where such a treaty applies a direction may be given in advance by the Inland Revenue to enable the interest to be paid without deduction of withholding tax. 1.2. The interest has a U.K. source and accordingly may be chargeable to U.K. tax by direct assessment. Where the interest is paid without withholding or deduction, the interest will not be assessed to U.K. tax in the hands of holders of the notes who are not resident in the U.K., except where such persons carry on a trade, profession or vocation in the United Kingdom through a U.K. branch or agency in connection with which the interest is received or to which the notes are attributable, in which case (subject to exemptions for interest received by certain categories of agent) tax may be levied on the U.K. branch or agency. Noteholders should again note that since the terms and conditions of the notes do not provide for additional payments to be made in any circumstances, no additional payments would be made even if the Inland Revenue sought to assess U.K. tax directly on the person entitled to the relevant interest. However, exemption from or reduction of such U.K. tax liability might be available under an applicable double taxation treaty. 1.3. Where interest has been paid under deduction of U.K. tax (for example, if the notes lost their listing), noteholders who are not resident in the United Kingdom may be able to recover all or part of the tax deducted if there is an appropriate provision in an applicable double taxation treaty. 1.4. Noteholders within the charge to U.K. corporation tax will be subject to tax as income on interest arising in respect of the notes broadly in accordance with their statutory accounting treatment. Such noteholders will generally be charged in each accounting period by reference to interest which, in accordance with such noteholder's authorized accounting method, is applicable to that period. 1.5. Noteholders who are not subject to U.K. corporation tax but who are subject to U.K. income tax will generally be subject to income tax on interest arising in respect of the notes on a receipt basis. 1.6. The European Union is currently considering proposals for a new directive regarding the taxation of savings income. Subject to a number of important conditions being met, it is proposed that Member States will be required to provide to the tax authorities of another Member State details of payments of interest or other similar income paid by a person within its jurisdiction to an indi- -59- vidual resident in that other Member State, subject to the right of certain Member States to opt instead for a withholding system for a transitional period in relation to such payments. 2. Disposal (including Redemption), Conversion or Exchange 2.1. Non-U.K. Resident Noteholders Noteholders who are not resident or ordinarily resident for tax purposes in the United Kingdom and who do not carry on a trade, profession or vocation in the United Kingdom through a branch or agency to which the notes are attributable are outside the charge to U.K. taxation on chargeable gains with respect to the disposal of the notes, conversion of the notes into preference shares and the exchange of the latter for ordinary shares or ADSs. 2.2. Noteholders Within the Charge to U.K. Corporation Tax 2.2.1. Disposal Except in respect of amounts relating to interest on the notes, a noteholder within the charge to U.K. corporation tax will not be subject to tax on any profits in respect of the notes as income. The notes will, however, be treated as "chargeable assets" for the purposes of the U.K. taxation of chargeable gains. Accordingly, a disposal of notes may give rise to a chargeable gain or allowable loss. In calculating any gain or loss on disposal of a note, sterling values are compared at acquisition and transfer. Accordingly, a taxable profit can arise even where the foreign currency amount received on a disposal is less than or the same as the amount paid for the notes. It follows that notes will not be "qualifying assets" for the purpose of the foreign exchange provisions contained in Finance Act 1993. For the purposes of the taxation of chargeable gains, the consideration for any disposal or acquisition of the notes will be treated as adjusted so as to exclude, on a just and reasonable basis, the amount of such consideration which relates to interest which has accrued but has not been paid as at the date of such disposal or acquisition. 2.2.2. Conversion Conversion of the notes should not be treated as a disposal of the notes (except for the purpose of the adjustment for accrued interest above) and should not of itself give rise to a charge to U.K. taxation of chargeable gains. 2.2.3. Exchange The exchange of the preference shares of the issuer for the ordinary shares or ADSs of Shire should not be treated as occasioning a disposal of the preference shares by, and accordingly should not give rise to a chargeable gain for, those holders of the preference shares who, either alone or together with persons connected with them, do not hold more than 5% of, or of any class of, the shares in or debentures of the issuer. Any chargeable gain or allowable loss which would otherwise have arisen on a disposal of the preference shares will be "rolled over" into the ordinary shares or ADSs, and the ordinary shares or ADSs will be treated as the same asset as the preference shares, acquired at the same time and for the same consideration as the preference shares. -60- A holder of preference shares who, either alone or together with persons connected with him, holds more than 5% of, or of any class of, the shares in or debentures of the issuer will be treated in the manner described in the preceding paragraph with respect to the exchange, provided that the exchange is effected for bona fide commercial reasons and does not form part of a scheme or arrangements of which the main purpose, or one of the main purposes, is avoidance of liability to capital gains tax or corporation tax. Such holders of preference shares should note that an application for clearance has not been made in this regard to the Inland Revenue under Section 138 of the Taxation of Chargeable Gains Act 1992. Noteholders should also note that, because exchanges of preference shares will take place at different times, a noteholder holding less than 5% of the notes may hold more than 5% of the preference shares at the time of exchange. 2.2.4. If Shire exercises the cash-out option, a holder of preference shares will be treated as disposing of his preference shares. A disposal by a holder within the charge to U.K. corporation tax may give rise to a chargeable gain or allowable loss. In calculating any gain or loss on disposal of the preference shares, sterling values are compared at acquisition and transfer. Accordingly, a taxable profit can arise even where the foreign currency amount received on a disposal is less than or the same as the amount paid for the notes. 2.2.5. Proposed Change in Law Noteholders within the charge to U.K. corporation tax should note that a consultative document issued by the Inland Revenue on 26th July, 2001 contains proposed legislation which would, if implemented in its current form, have the effect that many of the statements made in paragraphs 2.2.1 to 2.2.4 above will not apply. In particular, under the proposed legislation, a noteholder within the charge to U.K. corporation tax: (a) will be subject to tax on all profits on the notes as income (broadly in accordance with its statutory accounting treatment); (b) on conversion and exchange, will be treated for the purposes of computing its profits that are subject to U.K. corporation tax as income as disposing of the relevant notes for their market value at the time of conversion and exchange; and (c) on conversion and exchange, will be treated for the purposes of U.K. corporation tax on chargeable gains as acquiring its ordinary shares or ADSs of Shire for an amount equal to the market value of the relevant notes at the time of conversion and exchange. It is quite possible that the form of this legislation may change prior to its enactment. Noteholders within the charge to U.K. corporation tax should consult their own tax advisors as to the effect of the proposed change in law. 2.3. Other Noteholders 2.3.1. Disposal A disposal of a note by a noteholder resident or ordinarily resident for tax purposes in the United Kingdom -61- or who carries on a trade, profession or vocation in the United Kingdom through a branch or agency to which the note is attributable may give rise to a chargeable gain or allowable loss for the purposes of taxation of capital gains. In calculating any gain or loss on disposal of a note, sterling values are compared at acquisition and transfer. Accordingly, a taxable profit can arise even where the foreign currency amount received on a disposal is less than or the same as the amount paid for the note. The provisions of the accrued income scheme contained in Chapter II of Part XVII of the Income and Corporation Taxes Act 1988 (the "scheme") may apply on the transfer of a note by a holder and may apply to a person to whom the note is transferred. Generally, persons who are neither resident nor ordinarily resident in the United Kingdom and dealers in securities will not be subject to the provisions of the scheme. On a transfer of securities with accrued interest, the scheme would normally deem the transferor to receive an amount of income equal to the accrued interest and deem the transferee to obtain an equivalent credit to set against the deemed or actual interest he subsequently receives. However, as the notes arguably bear a variable interest rate, the amount of accrued income deemed to be received by a holder upon the transfer of a note may be such amount as the Inland Revenue decides is just and reasonable and the purchaser of a note may not be entitled to any equivalent credit under the scheme to set against any deemed or actual interest in respect of the notes except to the extent that the absence of any such credit is taken into account in the application of the just and reasonable basis of charge on disposal. In addition, on a redemption of the notes, interest which is deemed to have accrued since the interest payment date preceding redemption could be chargeable to U.K. tax as income under the scheme. 2.3.2. Conversion (i) The scheme On a conversion, interest which is deemed to have accrued since the last interest payment date may be chargeable to U.K. tax as income under the scheme even though on conversion accrued interest may not be payable. In those circumstances an amount equal to the deemed accrued interest may be treated for capital gains purposes as consideration given by the noteholder for the preference shares received on conversion (and in turn the ordinary shares or ADSs received on exchange). As the notes are arguably variable rate securities for the purposes of the scheme, the amount of the accrued income deemed to have accrued may be such amount as the Inland Revenue decides is just and reasonable. (ii) Capital gains tax Conversion of the notes should not of itself give rise to a charge to U.K. capital gains tax. 2.3.3. Exchange The tax treatment will be the same as that described for noteholders within the charge to U.K. corporation tax in paragraph 2.2.3 above. -62- 3. Dividends on Ordinary Shares or ADSs Shire will not be required to withhold tax at source when paying a dividend on the ordinary shares or ADSs. An individual holder of ordinary shares or ADSs who is resident in the United Kingdom (for tax purposes) and who receives a dividend from Shire will be entitled to a tax credit which such shareholder or ADS holder may set off against his total income tax liability on the dividend. The tax credit will be equal to 10% of the aggregate of the dividend and the tax credit (the "gross dividend"), which is also equal to one-ninth of the cash dividend received. A U.K. resident individual shareholder or ADS holder who is liable to income tax at the starting or basic rate will be subject to tax on the dividend at the rate of 10% of the gross dividend, so that the tax credit will satisfy in full such shareholder's or ADS holder's liability to income tax on the dividend. A U.K. resident individual shareholder or ADS holder who is not liable to income tax in respect of the gross dividend will not be entitled to repayment of the tax credit. In the case of a U.K. resident individual shareholder or ADS holder who is liable to income tax at the higher rate, the tax credit will be set against but not fully match his tax liability on the gross dividend and he will have to account for additional tax equal to 22.5% of the gross dividend (which is also equal to 25% of the cash dividend received) to the extent that the gross dividend when treated as the top slice of his income falls above the threshold for higher rate income tax. U.K. resident taxpayers who are not liable to U.K. tax on dividends, including pension funds and charities, will not be entitled to claim repayment of the tax credit attaching to dividends paid by Shire, although charities will be entitled to limited compensation in lieu of repayable tax credits until April 5, 2004. Tax credits on dividends paid by Shire in respect of the ordinary shares held in personal equity plans ("PEPs") or individual savings accounts ("ISAs") will be repayable on dividends paid on or before April 5, 2004. U.K. resident corporate shareholders or ADS holders will generally not be subject to corporation tax on dividends paid by Shire. Such shareholders or ADS holders will not be able to claim repayment of tax credits attaching to dividends. Non-U.K. resident shareholders or ADS holders will not generally be able to claim repayment from the Inland Revenue of any material part of the tax credit attaching to dividends paid by Shire. A shareholder or ADS holder resident outside the United Kingdom may also be subject to foreign taxation on dividend income under local law. A shareholder or ADS holder who is not resident in the United Kingdom (for tax purposes) should consult his own tax adviser concerning his tax liabilities on dividends received from Shire. 4. Disposal of the Ordinary Shares or ADSs U.K. resident holders of the ordinary shares or ADSs may, depending on their circumstances, be liable to U.K. taxation on chargeable gains in respect of gains arising from a sale or other disposal of the ordinary shares or ADSs. 5. Stamp Duty and Stamp Duty Reserve Tax No U.K. stamp duty reserve tax ("SDRT") will be payable on the issue, transfer or conversion of a note. No U.K. stamp duty will be payable on the issue or conversion of the notes, or on the transfer of the notes, provided that any transfer documents are executed and retained outside the United Kingdom. -63- No U.K. stamp duty or SDRT is payable on the issue of the preference shares. No U.K. stamp duty or SDRT is payable on the transfer of the preference shares in exchange for ordinary shares or ADSs, or the issue of ordinary shares save where the ordinary shares are issued to issuers of depositary receipts or providers of clearance services (or their nominees or agents) in which event SDRT at 1.5% of the issue price of the relevant shares will arise unless (in the case of an issue to a clearance service) the clearance service has made an election under Section 97A of the Finance Act 1986 which applies to the relevant shares. Under Section 97A of the Finance Act 1986, clearance services may, provided they meet certain conditions, elect for the 0.5% rate of stamp duty or SDRT to apply to transfers of securities within such services instead of the 1.5% rate applying to an issue or transfer of such securities into the clearance service. The transfer on sale of an ordinary share will be liable to ad valorem stamp duty generally at the rate of 0.5% of the amount or value of the consideration for the transfer rounded up to the nearest (pound)5. The purchaser normally pays the stamp duty. An unconditional agreement to sell an ordinary share will generally give rise to a liability on the purchaser to SDRT, at the rate of 0.5% of the amount or value of the consideration for the sale. If a duly stamped transfer in respect of the agreement is produced within six years of the date that the agreement is entered into or (if later) the date that it becomes unconditional, any SDRT paid is repayable generally with interest, and any unpaid SDRT charge is canceled. Transfers of ordinary shares: (1) to, or to a nominee or agent for, a person whose business is or includes issuing depositary receipts within Section 67 or Section 93 of the Finance Act 1986 or (2) to, or to a nominee or agent for, a person providing a clearance service within Section 70 or Section 96 of the Finance Act 1986, will generally be subject to stamp duty or SDRT at 1.5% of the amount or value of the consideration or, in certain circumstances, the value of the ordinary shares transferred (rounded up to the nearest (pound)5 in the case of stamp duty) unless, in the case of a transfer to a clearance service, the clearance service has made an election under Section 97A of the Finance Act 1986 which applies to the ordinary shares. Under Section 97A of the Finance Act 1986, clearance services may, provided they meet certain conditions, elect for the 0.5% rate of stamp duty or SDRT to apply to transfers of securities within such services instead of the 1.5% rate applying to an issue or transfer of such securities into the clearance service. A transfer of depositary receipts will not be subject to U.K. stamp duty, provided that the depositary receipts are not held on a register in the United Kingdom and that any transfer documents are executed and retained outside the United Kingdom. Under the CREST system for paperless share transfers, no stamp duty or SDRT will arise on a transfer of ordinary shares into the system unless such transfer is made for a consideration in money or money's worth, in which case a liability to SDRT (usually at a rate of 0.5%) will arise. Paperless transfers of ordinary shares within CREST will be liable to SDRT rather than stamp duty. Material U.S. Federal Income Tax Considerations The following summary describes the material U.S. federal income tax consequences resulting from beneficial ownership of the notes. It deals only with purchasers of the notes who hold the notes as capital assets. This summary is based upon the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), administrative pronouncements, judicial decisions, and Treasury regulations currently in effect, any of which may be changed, possibly on a retroactive basis, so as to result in federal income tax consequences different from those discussed below. This summary is also based in part on the provisions of the current income tax convention between the United Kingdom and the United States (the "U.S./U.K. Treaty"). On July 24, 2001, U.K. and U.S. tax authorities -64- signed a new income tax convention. This convention has not been ratified by the U.S. Congress, and there can be no assurance that it will be ratified; thus, the new convention does not currently have the force and effect of law. This summary has no binding effect or official status of any kind; we cannot assure holders that the conclusions reached below would be sustained by a court if challenged by the Internal Revenue Service. We have not obtained and do not intend to obtain a ruling from the IRS regarding the classification of the notes for U.S. federal income tax purposes or for any other aspect of the tax consequences described herein. For purposes of the Code, U.S. holders of Shire's ADRs evidencing its ADSs will be treated for U.S. federal income tax purposes as the owner of Shire's ordinary shares represented by those ADSs. This summary does not address all aspects of U.S. federal income taxation that may be applicable to holders in light of their particular circumstances and does not address special classes of holders subject to special treatment (such as dealers in securities or currencies, partnerships or other pass-through entities, financial institutions, life insurance companies, banks, tax-exempt organizations, certain expatriates, persons holding the notes as part of a straddle or hedging or conversion transaction, persons whose functional currency is not the U.S. dollar, or persons holding notes that own, or are deemed for U.S. tax purposes to own, ten percent or more of the total combined voting power of all classes of the voting stock of Shire). This summary also does not address the effect of any state, local, or foreign tax laws that may apply, or the application of the federal estate or gift tax or the alternative minimum tax. A "U.S. holder" is a beneficial owner of a note that is, for U.S. federal income tax purposes, o a citizen or resident of the U.S.; o a corporation that is organized under the laws of the U.S. or any political subdivision thereof; o an estate, the income of which is subject to U.S. federal income tax without regard to its source; or o a trust if a court within the U.S. is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or if the trust has made a valid election to be treated as a U.S. person. A "Non-U.S. holder" is any beneficial owner that, for U.S. federal income tax purposes, is a nonresident alien, or a corporation, estate or trust that is not a U.S. holder. If a partnership holds notes, the tax treatment of a partner will generally depend on the status of the partner and on the activities of the partnership. Partners of partnerships holding notes should consult their tax advisors. Prospective purchasers of the notes should consult their own tax advisors concerning the federal income tax consequences applicable to their particular situations as well as any consequences to them arising under the tax laws of any foreign, state or local taxing jurisdiction. U.S. Holders Payment of Interest Payments of stated interest on a note will generally be taxable to a U.S. holder as ordinary income at the time it is received or accrued, in accordance with such holder's method of accounting for federal income tax purposes. The interest will be treated as foreign source interest income for foreign tax credit limitation and other purposes. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income; for this purpose, interest on the notes should generally constitute "passive income" or, in the case of certain U.S. holders, "financial services income." -65- Market Discount If a U.S. holder purchases a note for an amount that is less than its principal amount by more than a de minimis amount, the excess of the principal amount over the U.S. holder's purchase price will be treated as "market discount". Under the market discount rules, a U.S. holder will be required to treat any gain realized on the sale, exchange, retirement or other disposition of a note as ordinary income to the extent of the lesser of (i) the amount of such realized gain, or (ii) the market discount which has not previously been included in income and is treated as having accrued on such note at the time of such disposition. Market discount will be considered to accrue on a straight-line basis during the period from the date of acquisition to the maturity date of the note unless the U.S. holder elects to accrue market discount on the basis of semiannual compounding. A U.S. holder may be required to defer the deduction of all or a portion of the interest paid or accrued on any indebtedness incurred or maintained to purchase or carry a note with market discount until the maturity of the note or certain earlier dispositions. A U.S. holder may elect to include market discount in income currently as it accrues, in which case the rules described above regarding the treatment as ordinary income of gain upon the disposition of the note and regarding the deferral of interest deductions will not apply. Persons considering making this election should consult their tax advisors. If a note with accrued market discount is exchanged for ordinary shares or ADSs (by means of the initial conversion of notes into preference shares and the exchange of the preference shares), the amount of such accrued market discount at the time of conversion generally will be taxable to the U.S. holder as ordinary income upon disposition of the ordinary shares or ADSs to the extent there is gain on the disposition. Amortizable Bond Premium A U.S. holder that purchases a note at a premium over its stated principal amount generally may elect to amortize such premium ("amortizable bond premium") from the purchase date to the note's maturity date under a constant-yield method. Amortizable bond premium, however, will not included any premium attributable to a note's conversion feature. The premium attributable to the conversion feature is the excess, if any, of the note's purchase price over what the note's fair market value would be if there were no conversion feature. Amortized bond premium is treated as an offset to interest income on a note and not as a separate deduction. In general, a U.S. holder's tax basis in the notes will be reduced by the amount of any bond premium as it is amortized or used to offset interest income. Such amortization will cease upon exchange of the notes for ordinary shares or ADSs (by means of the initial conversion of notes into preference shares and the exchange of the preference shares). Any election to amortize bond premium applies to all taxable debt instruments acquired by the U.S. holder on or after the first day of the first taxable year to which such election applies and may be revoked only with the consent of the IRS. Sale, Exchange or Redemption of Notes Except as set forth below under "--Exercise of Conversion and Exchange Rights," upon a sale, exchange or redemption of a note, a U.S. holder generally will recognize gain or loss equal to the difference between the amount realized upon the sale, exchange or redemption (less any accrued interest that has not previously been included in income, which will be taxable as ordinary income) and the holder's adjusted tax basis in the note at that time. A U.S. holder's adjusted tax basis in a note will generally equal the purchase price of the note increased by any accrued market discount that the U.S. holder has included in income and decreased by the amount of any amortizable bond premium taken with respect to such note. Except as set forth above under "--Market Discount," such -66- gain or loss will be capital gain or loss and will be long-term capital gain or loss if at the time of sale, exchange or redemption, the note has been held by the U.S. holder for more than one year. Under current law, long-term capital gains of certain non-corporate holders are generally taxed at lower rates than items of ordinary income. The use of capital losses is subject to limitations. Exercise of Conversion and Exchange Rights The treatment of the exchange of notes for ordinary shares or ADSs (by means of the initial conversion of notes into preference shares and the exchange of preference shares for ordinary shares or ADSs) is unclear. Shire will elect to treat the issuer as a disregarded entity for U.S. federal income tax purposes. Therefore, the notes should be treated for U.S. federal income tax purposes as indebtedness of Shire. Further, the issuance and exchange of the preference shares should be disregarded. Accordingly, the exchange of notes for ordinary shares or ADSs should not result in the recognition of gain or loss for U.S. federal income tax purposes. The tax basis and holding period of the ordinary shares or ADSs received upon the exchange should be the same as the U.S. holder's adjusted tax basis and holding period for the notes. However, U.S. holders who receive cash in lieu of a fractional share of Shire's ordinary shares or ADSs upon the exchange of notes for Shire's ordinary shares or ADSs, will be treated as if they received the fractional share and then had such fractional share redeemed for the cash. Such U.S. holders would then recognize gain or loss equal to the difference between the amount of cash received and that portion of their basis in the stock attributable to the fractional share. The aggregate basis in the remaining ordinary shares or ADSs will equal the holder's adjusted basis in the ordinary shares or ADSs received, less any basis allocable to the fractional share. If the issuance and exchange of the preference shares are not disregarded for U.S. federal income tax purposes, the exchange of notes for ordinary shares or ADSs will give rise to gain or loss for U.S. federal income tax purposes. In such event, the amount of gain or loss will be equal to the difference between the value of the ordinary shares or ADSs received in the exchange (which will become the new tax basis of such ordinary shares or ADSs) and the U.S. holder's adjusted tax basis in the notes. If Shire exercises the cash-out option, holders should be treated as though they exchanged their notes for cash and should be treated as described above under "--Sale, Exchange or Redemption of Notes." Prospective investors should consult their tax advisors regarding the likelihood that the issuance and exchange of preference shares will be disregarded. Adjustment to the Conversion Rate The terms of the notes allow for changes in the conversion rate of the notes in certain circumstances. A change in conversion rate that allows noteholders to receive more ordinary shares or ADSs of Shire on conversion may be treated as increasing the noteholders' proportionate interests in Shire's earnings and profits or assets. In that case, the noteholders would be treated as if they received a dividend in the form of Shire's stock. Such a constructive stock dividend could be taxable to the noteholders, even though such holders would not actually receive any cash or other property. For example, an increase in the conversion rate in the event of a distribution of cash or property to Shire's stockholders will generally result in deemed dividend treatment to the noteholders, but generally an increase in the conversion rate to prevent dilution of the noteholders' interests upon a stock split or other change in capital structure would not result in deemed dividend treatment. Similarly, a failure to adjust the conversion rate to reflect a stock dividend or similar event could in some circumstances give rise to a constructive dividend to the U.S. holders of Shire's ordinary shares or ADSs. Any taxable constructive stock dividends resulting from an adjustment to the conversion rate, or a failure to adjust the conversion rate, would be treated like dividends paid in cash or other property. They would result in ordinary income to the recipient to the extent of Shire's current or accumulated earnings and profits, with any excess treated as a tax-free return of capital up to the recipient's tax basis, and then as capital gain. Shire does not intend to calculate its earnings or profits for U.S. federal income tax purposes. -67- Passive Foreign Investment Company Considerations The notes may be treated as including an option to acquire stock of Shire. A special and adverse set of U.S. tax rules applies to a U.S. holder that holds stock or an option to acquire stock in a passive foreign investment company ("PFIC"). In general, a PFIC is any non-U.S. corporation, if (1) 75% or more of the gross income of the corporation for the taxable year is passive income (the PFIC income test) or (2) the average percentage of assets held by the corporation during the taxable year that produce passive income or that are held for the production of passive income is at least 50% (the PFIC asset test). In applying the PFIC income test and the PFIC asset test, a corporation that owns, directly or indirectly, at least 25% by value of the stock of a second corporation must take into account its proportionate share of the second corporation's income and assets. If a corporation is classified as a PFIC for any year during which a U.S. holder is a shareholder or has an option to become a shareholder, then the corporation generally will continue to be treated as a PFIC with respect to that shareholder in all succeeding years, regardless of whether the corporation continues to meet the PFIC income test or the PFIC asset test, subject to elections to recognize gain that may be available to the shareholder. Shire does not believe that it will be treated as a PFIC or has been treated as a PFIC for any of its previous taxable years. However, Shire can provide no assurance that it will not be treated as a PFIC in the current taxable year, or in a future taxable year. U.S. holders are advised to consult their own tax advisor as to the application and effect of the PFIC provisions. Registration Rights The registration of the notes and the ordinary shares in the form of ordinary shares and the ADSs issuable upon exchange of the preference shares pursuant to the shelf registration statement of which this prospectus forms a part will not be a taxable event for U.S. federal income tax purposes because the registered securities will not be considered to differ materially in kind or extent. In the unlikely event of an increase in the interest payable on the notes as a result of the shelf registration statement ceasing to be effective, such increase will not constitute a realization event for U.S. federal income tax purposes. Any additional amounts paid due to the occurrence of the shelf registration statement ceasing to be effective will be taxable to a U.S. holder as ordinary interest at the time it accrues or is received in accordance with such U.S. holder's regular method of tax accounting. Ownership and Disposition of Ordinary Shares and ADSs Distributions Under the U.S./U.K. Treaty, subject to certain exceptions, a U.S. holder that is a resident of the United States (and is not a resident of the United Kingdom) for purposes of the U.S./U.K. Treaty is entitled to receive, in addition to any dividend paid on the ordinary shares or ADSs, a payment from the U.K. Inland Revenue in respect of such dividend equal to the tax credit to which an individual resident in the United Kingdom for tax purposes would have been entitled had he received the dividend (which is currently equal to one-ninth of the dividend received), reduced by a U.K. withholding tax equal to an amount not exceeding 15% of the sum of the dividend paid and the U.K. tax credit payment. At current rates, the withholding tax entirely eliminates the tax credit payment, but no U.K. withholding tax in excess of the tax credit payment is imposed upon the U.S. holder. Accordingly, for example, a U.S. holder that is entitled to receive a $100 dividend on the ordinary shares or ADSs also will be treated as receiving from the Inland Revenue a tax credit payment of $11.11 (one-ninth of the dividend received), but the entire $11.11 payment will be eliminated by U.K. withholding tax, resulting in a net $100 distribution to the U.S. holder. -68- For U.S. federal income tax purposes, distributions with respect to the ordinary shares or ADSs, other than distributions in liquidation and distributions in redemption of stock that are treated as exchanges, will be taxed to U.S. holders as ordinary dividend income to the extent that the distributions do not exceed Shire's current and accumulated earnings and profits. The amount of any distribution will equal the sum of the cash distribution and the associated U.K. tax credit payment; thus, as described above, if a U.S. holder is entitled to receive a $100 cash distribution, then he will be deemed to have received a total distribution of $111.11. Distributions, if any, in excess of Shire's current and accumulated earnings and profits will constitute a non-taxable return of capital and will be applied against and reduce the holder's tax basis in the ordinary shares or ADSs. To the extent that these distributions exceed the U.S. holder's tax basis in the ordinary shares or ADSs, the excess generally will be treated as capital gain. Shire does not intend to calculate its earnings or profits for U.S. federal income tax purposes. Dividend income derived with respect to the ordinary shares and ADSs will constitute "portfolio income" for purposes of the limitation on the use of passive activity losses, and, therefore, generally may not be offset by passive activity losses, and as "investment income" for purposes of the limitation on the deduction of investment interest expense. Such dividends will not be eligible for the dividends received deduction generally allowed to a U.S. corporation under Section 243 of the Code. In computing his U.S. federal income tax liability, a U.S. holder may elect for each taxable year to claim a deduction or, subject to the limitations on foreign tax credits generally, a U.S. foreign tax credit for foreign income taxes withheld from any distributions paid on the ordinary shares or ADSs. The IRS has confirmed in a recent revenue procedure that, in the case of U.S. holders and subject to certain limitations, a foreign tax credit may be claimed for the amount of U.K. withholding tax deemed to be imposed under the U.S./U.K. Treaty. As discussed above, the amount of U.K. withholding tax deemed to be imposed is equal to one-ninth of the associated cash distribution. To qualify for this credit, a U.S. holder must make an election on Form 8833 (Treaty-Based Return Position Disclosure), which must be filed with its tax return for the relevant taxable year, in addition to any other filings that may be required. For U.S. foreign tax credit purposes, dividends paid on the ordinary shares and ADSs generally will be treated as foreign-source income and as passive income, subject to the separate foreign tax credit limitation for passive income. The availability of foreign tax credits depends on a U.S. holder's particular circumstances. U.S. holders are advised to consult their own tax advisors. If the income tax convention signed July 24, 2001, which does not currently have the force and effect of law, is ratified by the U.S. Congress and is entered into force, U.S. holders would no longer be entitled to receive a tax credit payment from the U.K. Inland Revenue in respect of dividends on the ordinary shares or ADSs. Accordingly, the amount of any distributions on the ordinary shares or ADSs would be limited to the value of the cash or other property distributed. Further, as described above under "U.K. Tax Considerations--3. Dividends on Ordinary Shares or ADSs," U.S. holders would not be subject to U.K. withholding tax on the amount of any distributions in respect of the ordinary shares or ADSs and therefore would not be entitled to claim a deduction or credit for foreign withholding taxes relating thereto. U.S. holders should consult their tax advisors regarding the effect of the new convention if it is entered into force, including the availability of an election to continue to receive the foreign tax credits described above for a 12-month period from the effective date of the convention if the holder elects to apply the U.S./U.K. Treaty in its entirety for such period. In the case of distribution in sterling, the amount of the distributions generally will equal the U.S. dollar value of the sterling distributed, determined by reference to the spot currency exchange rate on the date of receipt, regardless of whether a U.S. holder reports income on a cash basis or on an accrual basis. A U.S. holder will realize separate foreign currency gain or loss only to the extent that this gain or loss arises on the actual disposition of sterling received. For U.S. holders claiming foreign tax credits on a cash basis, taxes withheld from the distribution are translated into U.S. dollars at the spot rate on the date of the distribution; for U.S. holders claiming foreign tax credits on an accrual basis, taxes withheld from the distribution are translated into U.S. dollars at the average rate for the taxable year. -69- Sale or Exchange Upon a sale or exchange of ordinary shares or ADSs to a person other than Shire, a U.S. holder will recognize gain or loss in an amount equal to the difference between the amount realized on the sale or exchange and such holder's adjusted tax basis in the ordinary shares or ADSs. Except as set forth above under "--Market Discount," such gain or loss will be capital gain or loss and will be long-term capital gain or loss if the U.S. holder has held the ordinary shares or ADSs for more than one year. Gain or loss recognized by a U.S. holder on the sale or exchange of ordinary shares or ADSs generally will be treated as U.S.-source gain or loss for U.S. foreign tax credit purposes. Non-U.S. Holders Payments to a Non-U.S. holder on the notes or on Shire's ordinary shares or ADSs, or gain realized by a Non-U.S. holder on the sale, exchange or redemption of the notes or Shire's ordinary shares or ADSs, will not be subject to U.S. federal income or withholding tax, as the case may be, unless such income is effectively connected with a trade or business conducted by such Non-U.S. holder in the United States. Income that is effectively connected to the conduct of a U.S. trade or business by a Non-U.S. holder will generally be subject to regular U.S. federal income tax in the same manner as if it were realized by a U.S. holder. Non-U.S. holders that realize such income with respect to the notes or our ordinary shares or ADSs should consult their tax advisors as to the treatment of such income or gain. Information Reporting and Backup Withholding U.S. Holders Payments made in the United States or through certain U.S.-related financial intermediaries of interest or dividends, or the proceeds of the sale or other disposition of, the notes or Shire's ordinary shares or ADSs may be subject to information reporting and U.S. federal backup withholding if the recipient of such payment fails to supply an accurate taxpayer identification number or otherwise fails to comply with applicable U.S. information reporting or certification requirements. Any amount withheld from a payment to a U.S. holder under the backup withholding rules is refundable or allowable as a credit against the holder's U.S. federal income tax, provided that the required information is furnished to the IRS. Non-U.S. Holders A Non-U.S. holder may be required to comply with certification procedures to establish that the holder is not a U.S. person in order to avoid backup withholding tax and information reporting requirements discussed above. -70- SELLING SECURITYHOLDERS The notes were originally issued by the issuer and sold by Bear, Stearns International Limited, Goldman Sachs International, Merrill Lynch International Limited and WestLB Panmure Limited (the "Initial Purchasers") in a transaction exempt from the registration requirements of the Securities Act to persons reasonably believed by the Initial Purchasers to be "qualified institutional buyers" as defined by Rule 144A under the Securities Act or pursuant to Regulation S under the Securities Act. The selling securityholders may from time to time offer and sell pursuant to this prospectus any or all of the notes listed below and our ordinary shares or ADSs which may be issued upon exchange of the preference shares issued upon conversion of such notes. When we refer to the "selling securityholders" in this prospectus, we mean those persons listed in the table below, as well as the permitted pledgees, donees, assignees, transferees, successors and others who later hold any of the selling securityholders' interests. The table below sets forth the name of each selling securityholder, the principal amount of notes that each selling securityholder may offer pursuant to this prospectus and the number of our ordinary shares or ADSs which will be issued upon exchange, subject to the option of the issuer to have Shire pay cash upon exchange, of the preference shares into which such notes are convertible. Unless set forth below, none of the selling securityholders has, or within the past three years has had, any material relationship with us or any of our predecessors or affiliates. We have prepared the table below based on information given to us by the selling securityholders on or prior to November 5, 2001. However, any or all of the notes or our ordinary shares or ADSs listed below may be offered for sale pursuant to this prospectus by the selling securityholders from time to time. Accordingly, no estimate can be given as to the amounts of notes or number of our ordinary shares or ADSs that will be held by the selling securityholders upon consummation of any such sales. In addition, the selling securityholders listed in the table below may have acquired, sold or transferred, in transactions exempt from the registration requirements of the Securities Act, some or all of their notes since the date as of which the information in the table is presented. Information about the selling securityholders may change over time. Any changed information will be set forth in prospectus supplements. From time to time, additional information concerning ownership of the notes and our ordinary shares or ADSs may rest with certain holders thereof not named in the table below and of whom we are unaware.
Number of Our Ordinary Percentage of Aggregate Principal Percentage Shares/ADSs That Our Ordinary Amount of Notes That of Notes May Be Sold (1) Shares/ADSs Name May Be Sold Outstanding Outstanding (2) Triborough Partners QP, LLC $1,250,000 * 62,022/ */* 20,674 Triborough Partners International, 500,000 * 24,809/ */* Ltd. 8,270 Tribeca Investments LLC 6,000,000 1.5 297,705/ */* 99,235 AIG SoundShore Overseas Holding 4,500,000 1.1 223,279/ */* Fund Ltd. 74,426 -71- Number of Our Ordinary Percentage of Aggregate Principal Percentage Shares/ADSs That Our Ordinary Amount of Notes That of Notes May Be Sold (1) Shares/ADSs Name May Be Sold Outstanding Outstanding (2) AIG SoundShore Strategic Holding 1,500,000 * 74,426/ */* Fund Ltd. 24,809 First Union Securities Inc. 2,100,000 * 104,197/ */* 34,732 UBS Warburg LLC 1,000,000 * 49,617/ */* 16,539 Highbridge International LLC 12,000,000 3.0 595,409/ */* 198,470 TD Securities (USA) Inc. 7,500,000 1.9 372,131/ */* 124,044 Deutsche Banc Alex Brown Inc. 42,700,000 10.7 2,118,665/ */1.7 706,223 National Fuel & Gas Company 150,000 * 7,443/ */* Retirement Plan 2,481 Radian Guaranty, Inc. 2,000,000 * 99,235/ */* 33,078 Radian Asset Guaranty 1,250,000 * 62,022/ */* 20,674 Total Fina E/F Finance U.S.A., Inc. 200,000 * 9,923/ */* 3,308 Oxford, Lord Abbett & Co. 1,500,000 * 74,426/ */* 24,809 Sagamore Hill Hub Fund Ltd. 4,000,000 1.0 198,469/ */* 66,157 B.C. McCabe Foundation 300,000 * 14,885/ */* 4,961 Clinton Riverside Convertible 3,350,000 * 166,218/ */* Portfolio Limited 55,406 -72- Number of Our Ordinary Percentage of Aggregate Principal Percentage Shares/ADSs That Our Ordinary Amount of Notes That of Notes May Be Sold (1) Shares/ADSs Name May Be Sold Outstanding Outstanding (2) Clinton Multistrategy Master Fund, 2,150,000 * 106,678/ */* Ltd. 35,559 Bank Austria Cayman Islands Ltd. 10,875,000 2.7 539,590/ */* 179,863 RCG Latitude Master Fund Ltd. 2,610,000 * 129,502/ */* 43,167 Ramius Capital Group 725,000 * 35,973/ */* 11,991 RCG Multistrategy LP 290,000 * 14,389/ */* 4,796 Forest Fulcrum Fund LP 2,500,000 * 124,044/ */* 41,348 Susquehanna Capital Group 10,500,000 2.6 520,983/ */* 173,662 Goldman Sachs International 81,500,000 20.4 4,043,822/ */3.2 1,347,944 Goldman Sachs and Company 2,750,000 * 136,448/ */* 45,483 All other holders of notes or 194,300,000 48.6 9,640,671/ 2.0/ future transferees, pledgees, 3,213,567 7.7 donees, assignees or successors of any such holders (3)(4) Total.............................. $400,000,000 100% 19,640,671/ 4.1/ 6,615,680 15.9
o Less than one percent (1%). --------------- (footnotes appear on following page) -73- (1) Assumes conversion of all of the holder's notes into preference shares and exchange of the preference shares at an exchange ratio of 49.6175 ordinary shares per preference share or 16.5392 ADSs per preference share. This exchange ratio is subject to adjustment, however, as described under "Description of the Notes -- Adjustments to the Exchange Ratio." As a result, the number of our ordinary shares or ADSs which may be issued upon exchange of the preference shares issued upon conversion of the notes may increase or decrease in the future. Does not include our ordinary shares or ADSs that may be issued by us upon election by the issuer to convert notes into preference shares instead of redeeming notes at the holder's option, as described under "Description of the Notes -- Redemption at Option of Holders." (2) Calculated based on Rule 13d-3(d)(i) of the Exchange Act, using 479,367,095 ordinary shares (including ordinary shares underlying ADSs) or 41,581,867 ADSs outstanding as of November 5, 2001. In calculating this amount for each holder, we treated as outstanding the number of our ordinary shares or ADSs which may be issued upon exchange of the preference shares issued upon conversion of all notes held by that holder, but we did not assume conversion of any other holder's notes. Does not include our ordinary shares or ADSs that may be issued by us upon election by the issuer to convert notes into preference shares instead of redeeming notes at the holder's option, as described under "Description of the Notes -- Redemption at Option of Holders." (3) Information about other selling securityholders will be set forth in prospectus supplements, if required. (4) Assumes that any other holders of notes, or any future pledgees, donees, assignees, transferees or successors of or from any such other holders of notes, do not beneficially own any of our ordinary shares or ADSs other than the ordinary shares or ADSs which may be issued upon exchange of the preference shares issued upon conversion of the notes. -74- PLAN OF DISTRIBUTION We are registering the notes and our ordinary shares, including ordinary shares underlying the ADSs, which may be issued upon exchange of the preference shares issued upon conversion of the notes covered by this prospectus to permit securityholders to conduct public secondary trading of these securities from time to time after the date of this prospectus. We have agreed, among other things, to bear all expenses, other than underwriting discounts and selling commissions, in connection with the registration and sale of the notes and our ordinary shares covered by this prospectus. We will not receive any of the proceeds from the offering of the notes, our ordinary shares or our ADSs by the selling securityholders. We have been advised by the selling securityholders that the selling securityholders may sell all or a portion of the notes and our ordinary shares or ADSs beneficially owned by them and offered hereby from time to time: o directly; or o through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, commissions or concessions from the selling securityholders or from the purchasers of the notes and our ordinary shares or ADSs for whom they may act as agent; provided that a sale will take the form of an underwritten offering only with the prior consent of Shire in its sole discretion. The notes, our ordinary shares and our ADSs may be sold from time to time in one or more transactions at: o fixed prices, which may be changed; o prevailing market prices at the time of sale; o varying prices determined at the time of sale; or o negotiated prices. These prices will be determined by the holders of the securities or by agreement between these holders and underwriters or dealers who may receive fees or commissions in connection with the sale. The aggregate proceeds to the selling securityholders from the sale of the notes, our ordinary shares or our ADSs offered by them hereby will be the purchase price of the notes, our ordinary shares or our ADSs less discounts and commissions, if any. The sales described in the preceding paragraph may be effected in transactions: o on any national securities exchange or quotation service on which the notes and our ordinary shares and ADSs may be listed or quoted at the time of sale, including the London Stock Exchange in the case of the ordinary shares and the notes and the Nasdaq National Market in the case of the ADSs; o in the over-the-counter market; o in transactions otherwise than on such exchanges or services or in the over-the-counter market; or o through the writing of options. These transactions may include block transactions or crosses. Crosses are transactions in which the same broker acts as an agent on both sides of the trade. -75- In connection with sales of the notes, our ordinary shares and our ADSs or otherwise, the selling securityholders may enter into hedging transactions with broker-dealers. These broker-dealers may in turn engage in short sales of the notes, our ordinary shares and our ADSs in the course of hedging their positions. The selling securityholders may also sell the notes, our ordinary shares and our ADSs short and deliver notes, our ordinary shares and our ADSs to close out short positions, or loan or pledge notes, our ordinary shares and our ADSs to broker-dealers that in turn may sell the notes, our ordinary shares and our ADSs. To our knowledge, there are currently no plans, arrangements or understandings between any selling securityholders and any underwriters, broker-dealer or agent regarding the sale of the notes, our ordinary shares and our ADSs by the selling securityholders. Selling securityholders may not sell any, or may not sell all, of the notes, our ordinary shares and our ADSs offered by them pursuant to this prospectus. In addition, we cannot assure you that a selling securityholder will not transfer, devise or gift the notes, our ordinary shares or our ADSs by other means not described in this prospectus. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant to this prospectus. Our outstanding ordinary shares and notes are listed for trading on the London Stock Exchange. Our ADSs are listed for trading on the Nasdaq National Market. Each ADS represents three ordinary shares. The selling securityholders and any broker and any broker-dealers, agents or underwriters that participate with the selling securityholders in the distribution of the notes, our ordinary shares or our ADSs may be deemed to be "underwriters" within the meaning of the Securities Act. In this case, any commissions received by these broker-dealers, agents or underwriters and any profit on the resale of the notes, our ordinary shares or our ADSs purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. In addition, any profits realized by the selling securityholders may be deemed to be underwriting commissions. The notes were issued and sold in August 2001 in transactions exempt from the registration requirements of the Securities Act to persons reasonably believed by the Initial Purchasers to be "qualified institutional buyers," as defined in Rule 144A under the Securities Act, or pursuant to Regulation S under the Securities Act. We have agreed to indemnify the Initial Purchasers and each selling securityholder, and each selling securityholder has agreed to indemnify us, the Initial Purchasers and each other selling securityholder, against specified liabilities arising under the Securities Act. The selling securityholders and any other person participating in such distribution will be subject to the Exchange Act. The Exchange Act rules include, without limitation, Regulation M, which may limit the timing of purchases and sales of any of the notes and the ordinary shares or ADSs by the selling securityholders and any such other person. In addition, Regulation M of the Exchange Act may restrict the ability of any person engaged in the distribution of the notes and the ordinary shares or ADSs to engage in market-making activities with respect to the particular notes and the ordinary shares or ADSs being distributed for a period of up to five business days prior to the commencement of the distribution. This may affect the marketability of the notes and the ordinary shares or ADSs and the ability of any person or entity to engage in market-making activities with respect to the notes and the ordinary shares or ADSs. All expenses of the registration of the securities, including, without limitation, SEC filing fees and expenses of compliance with state securities or "blue sky" laws will be paid by Shire and the issuer; provided, however, that the selling holders will pay all underwriting discounts and selling commissions, if any. Subject to some limitations, the selling holders will be indemnified by Shire and the issuer against civil liabilities, including liabilities under the Securities Act, or will be entitled to contribution in connection therewith. Subject to some limitations, Shire and the issuer will be indemnified by the selling holders against civil liabilities, including liabilities under the Securities Act, or will be entitled to contribution in connection therewith. -76- ENFORCEMENT OF CIVIL LIABILITIES We are a public limited company incorporated under the laws of England and Wales and the issuer is an exempted limited company organized under the laws of the Cayman Islands. We and the issuer have consented in the indenture to jurisdiction in the U.S. federal and state courts in The City of New York and to service of process in The City of New York in any legal suit, action or proceeding brought to enforce any rights under or with respect to the indenture and the notes. Accordingly, any judgment against us or the issuer in respect of the indenture or the notes, including for civil liabilities under the U.S. federal securities laws, obtained in any U.S. federal or state court may have to be enforced in the courts of England and Wales or the Cayman Islands. Investors should not assume that the courts of England and Wales or the Cayman Islands would enforce judgments of U.S. courts obtained against us predicated upon the civil liability provisions of the U.S. federal securities laws or that such courts would enforce, in original actions, liabilities against us predicated solely upon such laws. LEGAL MATTERS Certain matters of English law will be passed upon for us by our counsel, Slaughter and May, London, England, U.K. Certain U.S. legal matters with respect to the notes will be passed upon for us and the issuer by Cahill Gordon & Reindel, New York, New York. Certain Cayman Islands legal matters will be passed upon for us and the issuer by Maples and Calder Europe, London, England, U.K. INDEPENDENT AUDITORS The restated financial statements as of December 31, 2000 and 1999 and for each of the years in the three-year period ended December 31, 2000 included in the Form 8-K filed on August 15, 2001 and incorporated by reference in this registration statement have been audited by Arthur Andersen, independent public accountants, as set forth in their reports. In those reports, that firm states that with respect to certain entities its opinion is based on the reports of other independent public accountants, namely Ernst & Young LLP and Raymond Chabot Grant Thornton. The financial statements referred to above have been included herein in reliance upon the authority of those firms as experts in giving said reports. The financial statements of BioChem Pharma Inc. included in the Form 20-F for the year ended December 31, 1999 and incorporated by reference in this registration statement have been audited by Raymond Chabot Grant Thornton, independent public accountants, as indicated in their report with respect thereto, which is incorporated by reference in reliance upon the authority of said firm as experts in giving said report. The financial statements of Roberts Pharmaceutical Corporation included in the Form 10-K for the year ended December 31, 1998 and incorporated by reference in this registration statement have been audited by Ernst & Young LLP, independent public accountants, as indicated in their report with respect thereto, which is incorporated by reference in reliance upon the authority of said firm as experts in giving said report. AVAILABLE INFORMATION We are subject to the informational requirements of the Exchange Act which means that we file reports, proxy and information statements and other information with the SEC. You can inspect and copy those reports, proxy and information statements and other information at the SEC's public reference room located at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. You can obtain copies of this material at prescribed rates by writing to the Securities and Exchange Commission, Public Reference Section, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC toll-free at 1-800-SEC-0330. The SEC also maintains an Internet website that contains reports, proxy and information statements and other information regarding registrants such as us that file electronically with the SEC. The address of this website is http://www.sec.gov. -77- INCORPORATION OF DOCUMENTS BY REFERENCE We "incorporate by reference" into this prospectus certain information we file with the SEC, which means that we can disclose important information to you by referring to another document filed separately with the SEC. The information that we file after the date of this prospectus with the SEC will automatically update and supersede this information. In addition, the information that we file after the date of the initial registration statement and prior to the effectiveness of the registration statement shall be deemed to be incorporated by reference into this prospectus. We incorporate by reference into this prospectus the documents listed below (File No. 0-29630) and any future filings made with the SEC, including prior to the effectiveness of the registration statement of which this prospectus is a part, under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, and any reports submitted on Form 6-K by identifying on such forms that they are being incorporated by reference into this prospectus, until all of the notes offered hereby are sold or until this offering is otherwise terminated: o our annual report on Form 10-K for the year ended December 31, 2000, filed on February 27, 2001; o our proxy statement for the extraordinary general meeting of shareholders, filed on March 1, 2001; o our quarterly reports on Form 10-Q for the periods ended March 31, 2001 and June 30, 2001, filed on May 14, 2001 and August 13, 2001, respectively; o our current reports on Form 8-K dated May 4, May 11, May 15, July 17, July 23, as amended, July 25, August 15, and October 18 2001; and o our proxy statement for the 2000 annual meeting of shareholders, filed on April 30, 2001. The following documents filed with the SEC by BioChem Pharma Inc. (File No. 0-19539) are incorporated in this document by reference: o annual report on Form 20-F for the year ended December 31, 1999; o current reports on Form 6-K submitted on January 10, January 26, February 15, March 6, March 9, March 15, April 3, April 11, April 20, April 27, April 28, May 1, May 24, June 19, June 27, July 11, July 18, July 26, August 4, August 28, September 22, October 26, November 1, November 15, November 20, December 1, December 11, December 13, December 18, December 22 and December 31, 2000; and o current reports on Form 6-K submitted on January 10, January 26, February 1, February 6, March 1, March 28, March 30 and April 5, 2001. Any statement contained in a document incorporated or considered to be incorporated by reference in this prospectus shall be considered to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus or in any subsequently filed document that is or is considered to be incorporated by reference modifies or supersedes such statement. Any statement that is modified or superseded shall not, except as so modified or superseded, constitute a part of this prospectus. You may request a copy of any of the documents which are incorporated by reference in this prospectus, other than exhibits which are not specifically incorporated by reference into such documents and our memorandum and articles of association, at no cost, by writing or telephoning us at the following: Shire Pharmaceuticals Group plc Hampshire International Business Park -78- Chineham Basingstoke Hampshire, England RG24 8EP Telephone: +44 (0) 1256 894 000 -79- PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. Shire Pharmaceuticals Group plc ("Shire") and Shire Finance Limited ("Shire Finance" and, together with Shire, the "Registrants") are paying all of the selling securityholders' expenses related to this offering, except the selling securityholders will pay any applicable broker's commissions and expenses. The following table sets forth the approximate amount of fees and expenses payable by the Registrants in connection with this registration statement and the distribution of the Notes and Ordinary Shares of Shire being registered hereby. All amounts shown are estimated, except the SEC registration fee and the London Stock Exchange listing fee for the Notes and Ordinary Shares. SEC registration fee............................................. $ 100,000 London Stock Exchange listing fee for Notes and Ordinary Shares.. 4,589 Printing and engraving expenses.................................. * Legal fees and expenses.......................................... * Accounting fees and expenses..................................... * Trustee and transfer agent fees.................................. * Miscellaneous.................................................... __________ Total................................................... $ * ---------- * To be provided by amendment. Item 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS. Except as hereinafter set forth, there is no charter provision, by-law, contract, arrangement or statute under which any director or officer of the Registrants is insured or indemnified in any manner against any liability which he may incur in his capacity as such. Pursuant to Paragraph 142 of the Articles of Association of Shire and subject to the Companies Act 1985, every person who was or is a director, alternate director or secretary of Shire shall be indemnified out of the assets of Shire for all costs, charges, losses and liabilities incurred by such person in the proper execution of such person's duties or the proper exercise of such person's powers, authorities and discretions. Under Section 310 of the Companies Act 1985 of Great Britain, any provision contained in Shire's articles or in any contract with Shire or otherwise for exempting any officer of Shire or any person (whether an officer or not) employed by Shire as auditor from, or indemnifying such person against, any liability that by virtue of any rule of law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to Shire is void, except that under Section 310(3) of the Companies Act 1985, Shire is not prevented, inter alia, (a) from purchasing and maintaining for any such officer insurance against any such liability, or (b) from indemnifying an officer against any liability incurred by him in defending any proceedings (whether civil or criminal) in which judgment is given in his favor or he is acquitted, or in connection with any application under Section 144(3), 144(4) or 727 of the Companies Act 1985 in which relief is granted to him by the court. Shire maintains an insurance policy for its directors and officers in respect of liabilities arising out of any act, error or omission while acting in their capacities as directors or officers of Shire or its affiliated companies. Pursuant to Article 138 of the Articles of Association of Shire Finance, every director, agent or officer of Shire Finance shall be indemnified out of the assets of Shire Finance against any liability incurred by him as a result of any act or failure to act in carrying out his functions other than such liability (if any) that he may incur by his own willful neglect or default. II-1 Item 16. EXHIBITS. Exhibit Number Description 3.1 Amended and Restated Memorandum and Articles of Association of Shire Finance Limited 3.2* Memorandum and Articles of Association of Shire 4.1* Deposit Agreement among Shire Pharmaceuticals Group plc, Morgan Guaranty Trust Company of New York and Holders from time to time of Shire ADSs 4.2* Form of Ordinary Share certificate 4.3* Form of ADR certificate (included within Exhibit 4.1) 4.4 Indenture dated August 21, 2001 by and among Shire Finance Limited, Shire Pharmaceuticals Group plc and The Bank of New York, as Trustee 4.5 Form of 2% Senior Guaranteed Note due 2011 (included in Exhibit 4.4) 4.6 Registration Rights Agreement dated August 21, 2001, between Shire Finance Limited, Shire Pharmaceuticals Group plc and Bear, Stearns International Limited and Goldman Sachs International, as representatives of the Initial Purchasers 4.7 Purchase Agreement dated August 15, 2001, between Shire Finance Limited, Shire Pharmaceuticals Group plc and Bear, Stearns International Limited and Goldman Sachs International, as representatives of the Initial Purchasers 4.8 Preference Share Guarantee Agreement dated August 21, 2001 among Shire Finance Limited, Shire Pharmaceuticals Group plc and The Bank of New York, as Guarantee Trustee 4.9 Form of Shire Pharmaceuticals Group plc Guarantee 5.1** Opinion of Maples and Calder Europe 5.2 Opinion of Cahill Gordon & Reindel 5.3 Opinion of Slaughter and May 8.1** Opinion of Maples and Calder Europe as to certain tax matters (included in Exhibit 5.1) 8.2 Opinion of Cahill Gordon & Reindel as to certain tax matters 8.3 Opinion of Slaughter and May as to certain tax matters 12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges 23.1 Consent of Arthur Andersen II-2 Exhibit Number Description 23.2 Consent of Ernst & Young LLP 23.3 Consent of Raymond Chabot Grant Thornton 23.4 Consent of Raymond Chabot Grant Thornton 23.5 Consent of Maples and Calder Europe (included in Exhibit 5.1) 23.6 Consent of Cahill Gordon & Reindel (included in Exhibit 5.2) 23.7 Consent of Slaughter and May (included in Exhibit 5.3) 23.8 Consent of Maples and Calder Europe (included in Exhibit 8.1) 23.9 Consent of Cahill Gordon & Reindel (included in Exhibit 8.1) 23.10 Consent of Slaughter and May (included in Exhibit 8.3) 24.1 Powers of Attorney (included on the signature pages of this registration statement) 25.1 Form T-1 Statement of Eligibility of Trustee under the Indenture 99.1 Appointment of CT Corporation System as U.S. Agent for Service of Process ---------------------------------- * Incorporated by reference to the exhibits to Shire's Registration Statement on Form F-1 (No. 333-8394). ** To be filed by amendment. Item 17. UNDERTAKINGS. (A) The undersigned registrants hereby undertake: 1. to file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (a) To include any prospectus required by Section 10(a)(3) of the Securities Act; (b) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and (c) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs 1(a) and 1(b) do not apply if the information required to be included in such post-effective amendment is contained in a periodic report filed by Shire pursuant to Section 13 or Section 15(d) of the Exchange Act and incorporated herein by reference. II-3 2. that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. 3. to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. 4. that, for purposes of determining any liability under the Securities Act, each filing of an annual report pursuant to Section 13(a) or 15(d) of the Exchange Act that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (B) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the undersigned pursuant to the provisions described under Item 15 above, or otherwise, the undersigned have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the undersigned of expenses incurred or paid by a director, officer or controlling person of the undersigned in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the undersigned will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. II-4 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Shire Finance Limited certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Basingstoke, England, on November 6, 2001. SHIRE FINANCE LIMITED By: /s/ Rolf Stahel -------------------------- Name: Rolf Stahel Title: Chairman of the Board POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Rolf Stahel and Angus Russell, and each of them acting individually, as his attorney-in-fact, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to this Registration Statement (including post-effective amendments), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorney to any and all amendments to said Registration Statement. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/ Rolf Stahel Chairman of the Board November 6, 2001 ----------------------------- Name: Rolf Stahel /s/ Angus Russell Director November 6, 2001 ----------------------------- Name: Angus Russell /s/ William Nuerge Authorized Representative in the United States November 6, 2001 ----------------------------- Name: William Nuerge
II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, Shire Pharmaceuticals Group plc certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Town of Basingstoke, England, on November 6, 2001. SHIRE PHARMACEUTICALS GROUP PLC By: /s/ Rolf Stahel -------------------------- Name: Rolf Stahel Title: Chief Executive POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Rolf Stahel and Angus Russell, and each of them acting individually, as his attorney-in-fact, each with full power of substitution, for him in any and all capacities, to sign any and all amendments to this Registration Statement (including post-effective amendments), and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming our signatures as they may be signed by our said attorney to any and all amendments to said Registration Statement. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.
Signature Title Date --------- ----- ---- /s/ James Cavanaugh Non-executive Chairman November 6, 2001 ----------------------------- Name: James Cavanaugh /s/ Rolf Stahel Chief Executive (Principal executive officer) November 6, 2001 ----------------------------- Name: Rolf Stahel /s/ Angus Russell Group Finance Director (Principal financial November 6, 2001 ----------------------------- officer and principal accounting officer) Name: Angus Russell /s/ Wilson Totten Group R&D Director November 6, 2001 ----------------------------- Name: Wilson Totten /s/ Barry Price Director, Non-executive November 6, 2001 ----------------------------- Name: Barry Price /s/ Bernard Canavan Director, Non-executive November 6, 2001 ----------------------------- Name: Bernard Canavan /s/ Ronald Nordman Director, Non-executive November 6, 2001 ----------------------------- Name: Ronald Nordmann Director, Non-executive ----------------------------- Name: Francesco Bellini II-6 /s/ Jamees Grant Director, Non-executive November 6, 2001 ----------------------------- Name: James Grant /s/ Gerard Veilleux Director, Non-executive November 6, 2001 ----------------------------- Name: Gerard Veilleux /s/ William Nuerge Authorized Representative in the United States November 6, 2001 ----------------------------- Name: William Nuerge
II-7 EXHIBIT INDEX Exhibit Number Description 3.1 Amended and Restated Memorandum and Articles of Association of Shire Finance Limited 3.2* Memorandum and Articles of Association of Shire 4.1* Deposit Agreement among Shire Pharmaceuticals Group plc, Morgan Guaranty Trust Company of New York and Holders from time to time of Shire ADSs 4.2* Form of Ordinary Share certificate 4.3* Form of ADR certificate (included within Exhibit 4.1) 4.4 Indenture dated August 21, 2001 by and among Shire Finance Limited, Shire Pharmaceuticals Group plc and The Bank of New York, as Trustee 4.5 Form of 2% Senior Guaranteed Note due 2011 (included in Exhibit 4.4) 4.6 Registration Rights Agreement dated August 21, 2001, between Shire Finance Limited, Shire Pharmaceuticals Group plc and Bear, Stearns International Limited and Goldman Sachs International, as representatives of the Initial Purchasers 4.7 Purchase Agreement dated August 15, 2001, between Shire Finance Limited, Shire Pharmaceuticals Group plc and Bear, Stearns International Limited and Goldman Sachs International, as representatives of the Initial Purchasers 4.8 Preference Share Guarantee Agreement dated August 21, 2001 among Shire Finance Limited, Shire Pharmaceuticals Group plc and The Bank of New York, as Guarantee Trustee 4.9 Form of Shire Pharmaceuticals Group plc Guarantee 5.1** Opinion of Maples and Calder Europe 5.2 Opinion of Cahill Gordon & Reindel 5.3 Opinion of Slaughter and May 8.1** Opinion of Maples and Calder Europe as to certain tax matters (included in Exhibit 5.1) 8.2 Opinion of Cahill Gordon & Reindel as to certain tax matters 8.3 Opinion of Slaughter and May as to certain tax matters 12.1 Statement Regarding Computation of Ratio of Earnings to Fixed Charges 23.1 Consent of Arthur Andersen II-8 Exhibit Number Description 23.2 Consent of Ernst & Young LLP 23.3 Consent of Raymond Chabot Grant Thornton 23.4 Consent of Raymond Chabot Grant Thornton 23.5 Consent of Maples and Calder Europe (included in Exhibit 5.1) 23.6 Consent of Cahill Gordon & Reindel (included in Exhibit 5.2) 23.7 Consent of Slaughter and May (included in Exhibit 5.3) 23.8 Consent of Maples and Calder Europe (included in Exhibit 8.1) 23.9 Consent of Cahill Gordon & Reindel (included in Exhibit 8.1) 23.10 Consent of Slaughter and May (included in Exhibit 8.3) 24.1 Powers of Attorney (included on the signature pages of this registration statement) 25.1 Form T-1 Statement of Eligibility of Trustee under the Indenture 99.1 Appointment of CT Corporation System as U.S. Agent for Service of Process ---------------------------------- * Incorporated by reference to the exhibits to Shire's Registration Statement on Form F-1 (No. 333-8394). ** To be filed by amendment. EX-3.1 3 shiremem.txt AMENDED AND RESTATED MEMORANDUM AND ARTICLES THE COMPANIES LAW (2001 SECOND REVISION) OF THE CAYMAN ISLANDS COMPANY LIMITED BY SHARES AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION OF ------------------------------------ SHIRE FINANCE LIMITED ------------------------------------ THE COMPANIES LAW (2001 SECOND REVISION) OF THE CAYMAN ISLANDS COMPANY LIMITED BY SHARES AMENDED AND RESTATED MEMORANDUM OF ASSOCIATION OF SHIRE FINANCE LIMITED (adopted by Special Resolution on 21st August, 2001) 1. The name of the Company is SHIRE FINANCE LIMITED. 2. The registered office of the Company shall be at the offices of Maples and Calder, Ugland House, P.O. Box 309, George Town, Grand Cayman, Cayman Islands, or at such other place as the Directors may from time to time decide. 3. The objects for which the Company is established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Law (2001 Second Revision) or as revised, or any other law of the Cayman Islands. 4. The liability of each Member is limited to the amount from time to time unpaid on such Member's shares. 5. The share capital of the Company is US$800,100 divided into 100 Founders' Shares of a nominal or par value of US$1.00 each, 400,000 Nominal Shares of a nominal or par value of US$1.00 each and 400,000 Preference Shares of a nominal or par value of US$1.00 each, with power for the Company insofar as is permitted by law, to redeem or purchase any of its shares and to increase or reduce the said capital subject to the provisions of the Companies Law (2001 Second Revision) and the Articles of Association and to issue any part of its capital, whether original, redeemed or increased with or without any preference, priority or special privilege or subject to any postponement of rights or to any conditions or restrictions and so that unless the conditions of issue shall otherwise expressly declare every issue of shares whether declared to be preference or otherwise shall be subject to the powers hereinbefore contained. 6. The Company has power to register by way of continuation as a body corporate limited by shares under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands. 2 7. Capitalised terms which are not defined in this Memorandum bear the same meaning as those given in the Articles. THE COMPANIES LAW (2001 SECOND REVISION) OF THE CAYMAN ISLANDS COMPANY LIMITED BY SHARES AMENDED AND RESTATED ARTICLES OF ASSOCIATION OF SHIRE FINANCE LIMITED (adopted by Special Resolution dated 21st August, 2001) INTERPRETATION 1. In these Articles Table A in the Schedule to the Statute does not apply and, unless there is something in the subject or context inconsistent therewith: "ADS Depositary" means Morgan Guaranty Trust Company of New York. "Articles" means these articles of association of the Company. "Auditor" means the person for the time being performing the duties of auditor of the Company (if any). "Business Days" has the meaning given in the Indenture. "Cash-Out Option" has the meaning given in Article 9(e)(B). "Company" means Shire Finance Limited. "Conversion Date" means the date on which any Notes in respect of which a Conversion Right has been exercised pursuant to the Indenture are converted in accordance with the Indenture. "Conversion Notice" means the notice to be delivered by a Noteholder to -2- exercise a Conversion Right pursuant to the Indenture. "Conversion Ratio" means the ratio at which the Notes may be converted into Preference Shares, being one Preference Share for each US$1,000 principal amount of Notes. "Conversion Right" means the right of a Noteholder or the Company, pursuant to and in accordance with the Indenture, to convert Notes into Preference Shares at the Conversion Ratio. "Current Market Price" means, save in the case of Article 9(e)(G)(3), the closing mid-market price of one Shire Ordinary Share on the relevant day, as derived from the London Stock Exchange Daily Official List. "dealing day" means a day on which the London Stock Exchange is open for the trading of listed securities. "debenture" means debenture stock, mortgages, bonds and any other such securities of the Company whether constituting a charge on the assets of the Company or not. "Deposit Agreement" means the deposit agreement dated as of 20th March, 1998 between Shire, the ADS Depositary and the holders and beneficial owners from time to time of Shire ADSs issued thereunder. "Directors" means the directors for the time being of the Company. "Dividend" means any dividend or distribution, whether of cash, assets or other property, and whenever paid or made and however described (and for these purposes a distribution of assets includes without limitation an issue of shares or other securities credited as fully or partly paid up). "Dividend Payment Date" has the meaning given in Article 9(a) of these Articles. "Electronic Record" has the same meaning as in the Electronic Transactions Law (2000 Revision). -3- "Exchange Ratio" means the ratio applied to determine the number of Shire Ordinary Shares or Shire ADSs which may be issued to the holder of a Preference Share upon the exercise of an Exchange Right, determined in accordance with the provisions of Article 9(e)(E), as adjusted from time to time in accordance with Article 9(e)(G), of these Articles. "Exchange Right" means the right, pursuant to and subject to the terms of Article 9(e) of these Articles, of a holder of a Preference Share to require the Company to procure that such Preference Share be exchanged in accordance with Article 9(e) of these Articles. "Fair Market Value" means, with respect to any property on any date, the fair market value of that property as determined by an independent investment bank of international repute in London selected by Shire and approved in writing by the Trustee; provided, that (i) the fair market value of a cash dividend paid or to be paid shall be the amount of such cash dividend; (ii) where options, warrants or other rights are publicly traded in a market of adequate liquidity (as determined by an independent investment bank of international repute in London selected by Shire and approved in writing by the Trustee) the fair market value of such options, warrants or other rights shall equal the arithmetic mean of the daily closing prices of such options, warrants or other rights during the period of five trading days on the relevant market commencing on the first such trading day such options, warrants or other rights are publicly traded; and (iii) in the case of (i) converted into sterling (if declared or paid in a currency other than sterling) at the rate of exchange used to determine the amount payable to holders of Shire Ordinary Shares who were paid or are to be paid the cash dividend in sterling; and in the case of (ii) converted into sterling (if expressed in a currency other than sterling) at such rate of exchange as may be determined in good faith by an independent investment bank of international repute in London selected by Shire and approved in writing by the Trustee to be the spot rate at the close of business on that date (or if no such rate is available on that date the equivalent rate on the immediately preceding date on which such a rate is -4- available); "Founders' Shares" means the Founders' Shares in the capital of the Company of US$1.00 par or nominal value each having the rights attaching thereto prescribed in these Articles. "Indenture" means the Indenture between the Company, Shire and the Trustee to be dated 21st August, 2001. "Member" has the same meaning as in the Statute. "Memorandum" means the memorandum of association of the Company as amended and restated from time to time. "Nominal Shares" means the Nominal Shares in the capital of the Company of US$1 par or nominal value each having the rights attaching thereto prescribed in these Articles. "Noteholder" means the holder of any Note. "Notes" means 2 per cent Senior Guaranteed Convertible Notes due 21 August 2011 to be issued by the Company, governed by the Indenture and guaranteed by Shire, and "Note" shall be construed accordingly. "Ordinary Resolution" means a resolution passed by a simple majority of the Members as, being entitled to do so, vote in person or, where proxies are allowed, by proxy at a general meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each Member is entitled by the regulations of the Company. "Paid-up Value" means the price of US$1,000 at which each Preference Share is issued credited as fully paid-up comprising the nominal value thereof of US$1 and the premium on issue thereof of US$999. "Preferential Dividend" has the meaning given in Article 9(a). "Preference Shares" means the redeemable Preference Shares in the capital of the Company of US$1 par or nominal -5- value each having the rights attaching thereto prescribed in these Articles. "Preference Shareholder" means a holder of a Preference Share. "Registered Office" means the registered office for the time being of the Company. "Seal" means the common seal of the Company and includes every duplicate seal. "Secretary" includes an assistant secretary and any person appointed to perform the duties of secretary of the Company. "securities" includes, without limitation, shares in the share capital of Shire. "Share" and "Shares" means a share or shares in the Company. "Shire" means Shire Pharmaceuticals Group plc, a company incorporated in England and Wales with registered number 2883758. "Shire ADSs" means American Depositary Shares, each representing three Shire Ordinary Shares. "Shire Ordinary Shares" means ordinary shares in the capital of Shire having, as at the date of adoption of these Articles, a nominal value of 5 pence each (and any other shares or stock resulting from any sub-division, consolidation or re-classification of such ordinary shares) for which the Preference Shares may be exchanged in accordance with the provisions of these Articles. "Special Resolution" has the same meaning as in the Statute, and includes a unanimous written resolution. "Statute" means the Companies Law (2001 Second Revision) of the Cayman Islands. "Subsidiaries" means the subsidiaries of Shire, from time to time, within the meaning of section 736 of the Companies Act 1985 of the United Kingdom. "Trustee" means The Bank of New York acting in its capacity -6- as trustee or such other persons or companies for the time being the trustee under the Indenture. "Unclassified Shares" means the Unclassified Shares in the capital of the Company of US$1.00 par or nominal value each available for issue as provided in these Articles. "United Kingdom" means the United Kingdom of Great Britain and Northern Ireland. "written" and "in writing" include all modes of representing or reproducing words in visible form. "US $ Dollars", "US$" and "cents" means the lawful currency of the United States of America. "(pound)" and "pence" means pounds sterling, the lawful currency of the United Kingdom. 2. In the Articles: 2.1 Words importing the singular number include the plural number and vice-versa. 2.2 Words importing the masculine gender include the feminine gender. 2.3 Words importing persons include corporations. 2.4 "written" and "in writing" include all modes of representing or reproducing words in visible form, including in the form of an Electronic Record. 2.5 References to provisions of any law or regulation shall be construed as references to those provisions as amended, modified, re-enacted or replaced from time to time. 2.6 Headings are inserted for reference only and shall be ignored in construing these Articles. COMMENCEMENT OF BUSINESS 3. The business of the Company may be commenced as soon after incorporation as the Directors shall see fit, notwithstanding that part only of the Shares may have been allotted. -7- 4. The Directors may pay, out of the capital or any other monies of the Company, all expenses incurred in or about the formation and establishment of the Company, including the expenses of registration. ISSUE OF SHARES AND REGISTER OF MEMBERS 5. (a) Subject to the provisions, if any, in the Memorandum (and to any direction that may be given by the Company in general meeting) and without prejudice to any rights attached to any existing Shares, the Directors may allot, issue, grant options over or otherwise dispose of Shares (including fractions of a Share) with or without preferred, deferred or other rights or restrictions, whether in regard to dividend, voting, return of capital or otherwise and to such persons, at such times and on such other terms as they think proper. (b) Without limitation to the generality of the foregoing Article 5(a), the Directors may issue Notes upon terms that such Notes are exchangeable for one or more Preference Shares. (c) The Company shall maintain a register of its Members and every person whose name is entered as a Member in the register of Members (other than a Preference Shareholder) shall be entitled without payment to receive within two months after allotment or lodgement of transfer (or within such other period as the conditions of issue shall provide) one certificate for all his Shares or several certificates each for one or more of his Shares upon payment of fifty cents (US$0.50) for every certificate after the first or such lesser sum as the Directors shall from time to time determine provided that in respect of a Share or Shares held jointly by several persons the Company shall not be bound to issue more than one certificate and delivery of a certificate for a Share to one of the several joint holders shall be sufficient delivery to all such holders. The register of Members shall be maintained at all times outside the United Kingdom. 5. The Company shall not issue Shares to bearer. SHARE RIGHTS FOUNDERS' SHARES 7. (a) The rights attaching to the Founders' Shares are as follows: (i) As regards Income - Each Founders' Share shall confer on the holder thereof the right to receive such profits of the Company available for distribution as the Members entitled to -8- vote may resolve, after the payment to the Preference Shareholders of the Preferential Dividend and after payment of any other preferential dividend on any other class of shares. (ii) As regards Capital - On a winding-up or other return of capital (other than a purchase or redemption of any Preference Share or any other class of redeemable share) the holder of each Founders' Share shall be entitled, following payment to the Preference Shareholders of all amounts then due under Article 9(b) and following payment in accordance with the rights of any other class of shares having priority in accordance herewith and following repayment to the holder of each Nominal Share of the nominal amount of the capital and any premium paid-up or credited as paid-up on such Nominal Share, to repayment of the nominal amount of the capital and any premium paid-up or credited as paid-up thereon and thereafter any surplus assets then remaining shall be distributed pari passu among the holders of the Founders' Shares in proportion to the amounts paid-up or credited as paid-up on the Founders' Shares. (iii) As regards Voting - The holder of each Founders' Share shall be entitled to receive notice of general meetings of the Company and to attend and vote thereat. On a poll every holder of Founders' Shares who (being an individual) is present in person or by proxy or (being a corporation) is present by representative or by proxy shall have one million votes in respect of each Founders' Share registered in the name of such holder. (b) Founders' Shares shall only be issued to or for the benefit of Shire or to or for the benefit of a person previously approved in writing by Shire. NOMINAL SHARES 8. (a) The rights attaching to the Nominal Shares are as follows:- (i) As regards Income - No dividend will be paid on the Nominal Shares. (ii) As regards Capital - On a winding-up or other return of capital (other than a purchase or redemption of any Preference Share or any other class of redeemable share) the holder of each Nominal Share shall be entitled to repayment in full of the nominal amount of the capital and any premium paid-up or credited as paid-up thereon following payment to the holders of the Preference Shares of all amounts due to them under Article 9(b) and following payment in accordance with the rights of any other class of shares having priority in accordance herewith. -9- (iii) As regards Voting - The holders of the Nominal Shares shall be entitled to receive notice of general meetings of the Company and to attend and vote thereat. On a poll every holder of Nominal Shares who (being an individual) is present in person or by proxy or (being a corporation) present by representative or by proxy shall have one vote in respect of each Nominal Share registered in the name of such holder. (b) Nominal Shares shall only be issued to or for the benefit of Shire or to or for the benefit of a person nominated by Shire and only for the purpose of providing funds for the redemption of redeemable shares of any class. PREFERENCE SHARES 9. The rights attaching to the Preference Shares are as follows:- (a) As regards Income - Each Preference Share shall confer on the holder a right to receive, out of the profits of the Company available for distribution and resolved to be distributed, a fixed cumulative dividend (the "Preferential Dividend") at the rate of 2000 per cent. per annum of the nominal value of each such Preference Share which shall be paid semi-annually in arrear in equal instalments on 22 February and 22 August in each year, (or if any such date is not a Business Day, the next Business Day (each a "Dividend Payment Date")) from and including the immediately preceding Dividend Payment Date (or the date of its issue in the case of the first Dividend Payment Date) to, but excluding, the earlier of the next Dividend Payment Date to fall and the date on which the Preference Share is redeemed. Dividends payable in respect of any period which is not a full dividend period will be calculated on the basis of a 365-day year and the number of days elapsed. The Preferential Dividend shall accrue from day to day. The Preferential Dividend will cease to accrue in respect of a Preference Share from and including its due date for redemption unless payment of the amount due to the Preference Shareholder on redemption is not made in full on such date, in which case the Preferential Dividend shall cease to accrue from and including the date such payment is made. The Preferential Dividend shall be paid in priority to any dividend in respect of any other class of shares in the capital of the Company, other than any which shall rank pari passu with the Preference Shares as regards rights to participate in the profits of the Company. The Preference Shares shall not confer any right of participation in the profits of the Company save for the right to receive the Preferential Dividend and a payment in respect of any arrears or accruals of Preferential Dividend pursuant to Articles 9(b) and 9(d)(C). (b) As regards Capital - On a winding-up of the Company or other return of capital (other than a purchase or redemption of any Preference -10- Share or any other class of redeemable shares) each Preference Share shall carry the right to payment of the Paid-Up Value thereof, together with a sum equal to any arrears or accruals of Preferential Dividend due in respect of such Preference Share (whether or not such dividend has been declared or has become due and payable and calculated up to, but excluding, the date of commencement of the winding-up or, as the case may be, return of capital) in priority to any payment in respect of any other class of Shares save for any class of Shares ranking pari passu with the Preference Shares as regards the right to participate in the assets of the Company. In the event that the assets of the Company available for distribution are insufficient to pay the full amount due to each holder of Preference Shares under this Article 9(b), the available assets shall be distributed amongst the Preference Shareholders and any class of Shares ranking pari passu with the Preference Shares as regards rights to participate in the assets of the Company in proportion to the amounts paid-up or credited as paid-up on such Shares. (c) As regards Voting - The holders of the Preference Shares shall be entitled to receive notice of general meetings of the Company but shall not be entitled to attend and vote thereat. (d) As regards Redemption - The Preference Shares may be redeemed by the Company upon and subject to the provisions of the applicable laws in the Cayman Islands as follows:- (A) Any Preference Share which is transferred to Shire or its nominee pursuant to Article 9(e)(D) below may be redeemed at the option of the transferee of such Preference Share upon notice to the Company at any time after such Preference Share has been transferred to Shire or its nominee and Shire or its nominee has been registered as the holder of such Preference Share in the register of members of the Company. On redemption, the Company shall pay, in respect of each Preference Share being redeemed, an amount equal to the aggregate of the Paid-Up Value in respect of such Preference Share and all arrears and accruals of Preferential Dividend in respect thereof up to but excluding the date of redemption (irrespective of whether or not such Preferential Dividend has been declared or has become due and payable). The Company shall redeem any Preference Shares on the date specified by the holder thereof for the time being in any notice given by the holder to the Company requiring such redemption. Any such notice may be a standing notice (which may be revoked or amended at any time) requiring all or any Preference Shares transferred from time to time into the name of such holder to be redeemed immediately following transfer and registration or at any time thereafter as specified therein and different directions may be given concerning different Preference Shares so transferred and registered and accordingly such notice will apply to all such transfers following -11- such notice (without the need for a separate notice requiring redemption to be served in respect of each transfer of a Preference Share) until such directions are amended or revoked. (B) On redemption of a Preference Share, the Company will cancel the Preference Share and any certificate relating thereto. (C) If redemption monies due to a Preference Shareholder are not paid on redemption of such Preference Share (for whatever reason), the Preferential Dividend in respect of that Preference Share shall be deemed, for the purpose of calculating the amount payable by the Company pursuant to Article 9(d)(A) above, to continue to accrue and be payable up to, but excluding, the date of payment of such redemption monies. (D) The obligations of the Company to redeem Preference Shares in accordance with these Articles are subject to applicable law in the Cayman Islands. (e) As regards Exchange (A) Following the exercise of a Conversion Right in respect of any Note, the Company shall allot and issue the relevant number of Preference Shares (calculated in accordance with the Conversion Ratio), credited as fully paid, on the relevant Conversion Date to the relevant Noteholder or such person as such Noteholder may direct. (B) Each Preference Share confers on the holder an Exchange Right in respect of such Preference Share, pursuant to which the holder may require the Company, in exchange for such Preference Share, (save as provided in Articles 9(e)(H), 9(e)(I) and 9(e)(J) below) to procure the issue to such holder of such number of Shire Ordinary Shares or (if so elected by the holder in the relevant Conversion Notice) Shire ADSs as shall be determined in accordance with the Exchange Ratio or, at the Company's option (the "Cash-Out Option"), to procure the delivery to such holder of a cash amount in US Dollars, determined in accordance with Article 9(e)(F), in each case to the Preference Shareholder. The provisions of Article 9(e)(D) shall apply upon the exercise or deemed exercise of an Exchange Right. If the Cash-Out Option is exercised, the Company shall inform the person to whom the Preference Share was issued of such election within three Business Days of the relevant Conversion Date. (C) The holder of a Preference Share shall be deemed to have irrevocably exercised the Exchange Right in respect of such Preference Share immediately following the issue of such Preference Share and registration of such Preference Share in the name of the -12- person to whom the relevant Preference Share was issued in the register of Members, without any action being required to be taken by the Preference Shareholder. (D) Immediately following the exercise, or deemed exercise pursuant to Article 9(e)(C) above, of an Exchange Right in respect of a Preference Share, such Preference Share shall be transferred to Shire or such person as Shire shall direct. Any such transfer shall be effected by the Company (or a person appointed for this purpose by the Company) outside the United Kingdom as agent for the holder thereof and the Company (or a person appointed as aforesaid) shall be and is hereby authorised on behalf of the holder to execute all such documents outside the United Kingdom and do all such things as may be necessary properly to effect the same, without (save as provided in the Article 9(e)(O) below) any cost or liability to, or any further action required by, the holder. (E) The number of Shire Ordinary Shares or ADSs which the Company may be required to procure are issued pursuant to Article 9(e)(B) in respect of a Preference Share in respect of which an Exchange Right is deemed to have been exercised pursuant to Article 9(e)(C) shall, save in the circumstances referred to in Articles 9(e)(H) and 9(e)(I) below, be equal to, in the case of an exchange for Shire Ordinary Shares, the Exchange Ratio in effect on the relevant Conversion Date and, in the case of an exchange for Shire ADSs, one-third of such ratio. The Exchange Ratio at the date of these Articles is 49.6175 Shire Ordinary Shares for each Preference Share and, in the case of an exchange for Shire ADSs, 16.5392 Shire ADSs for each Preference Share. The Exchange Ratio shall hereafter be subject to adjustment in the circumstances described in Article 9(e)(G) below. Any Shire Ordinary Shares or Shire ADSs issued upon the exercise of an Exchange Right will be issued, and any cash amounts in respect of fractional entitlements shall be paid, to the person to whom the relevant Preference Share was issued. The Company shall procure that any Shire Ordinary Shares or Shire ADSs issued in respect of a Preference Share pursuant to Article 9(e)(B) shall, save as provided in Articles 9(e)(H) and 9(e)(I), be issued on or as promptly as practicable after the Conversion Date on which such Preference Share was issued, subject always to the period of three Business Days following the Conversion Date during which the Cash-Out Option may be exercised. (F) The cash amount referred to in Article 9(e)(B) shall be calculated by multiplying (x) the number of Shire Ordinary Shares which would have been issued in respect of the relevant Preference Share pursuant to Article 9(e)(E) if the Cash-Out Option had not been exercised (and the holder had not elected to receive Shire ADSs) by (y) the average of the -13- volume-weighted average prices (VWAP) on the London Stock Exchange of one Shire Ordinary Share, as shown on Bloomberg Professional Service, on the fourth, fifth, sixth, seventh and eighth dealing days following the Conversion Date (each such price being converted into US Dollars at the US$/(pound)noon buying rate in New York prevailing on such date). The Company shall procure that such cash amount shall be paid within 14 days of the relevant Conversion Date and if, for any reason, such amount is not so paid, the person to whom the Preference Share was issued shall be entitled to require that the Company procures that such number of Shire Ordinary Shares or Shire ADSs be issued to him as would have been so issued had the Cash-Out Option not been exercised. (G) Adjustment of Exchange Ratio (a) Upon the happening of any of the events described below, the Exchange Ratio shall be adjusted in respect of any subsequent exercise of an Exchange Right as follows: (1) If and whenever there shall be an alteration to the nominal value of Shire Ordinary Shares as a result of consolidation or subdivision of Shire Ordinary Shares, the Exchange Ratio shall be adjusted by multiplying the Exchange Ratio in force immediately prior to such alteration by the following fraction: A B where: A is the nominal amount of one Shire Ordinary Share immediately before such alteration; and B is the nominal amount of one Shire Ordinary Share immediately after such alteration. Such adjustment shall become effective on the date the alteration takes effect. (2) If and whenever Shire shall issue any fully paid Shire Ordinary Shares to its shareholders by way of capitalization of profits or reserves (including any share premium account or capital redemption reserve) other than by way of a Scrip Dividend, the Exchange Ratio shall be adjusted by multiplying the Exchange -14- Ratio in force immediately prior to such issue by the following fraction: A B where: A is the aggregate nominal amount of the Shire Ordinary Shares in issue immediately after such issue; and B is the aggregate nominal amount of the Shire Ordinary Shares in issue immediately before such issue. Such adjustment shall become effective on the date of issue of such Shire Ordinary Shares. No adjustment shall be made under this sub-paragraph (2) if Shire pays a Scrip Dividend provided, however, that if and whenever Shire shall pay a Scrip Dividend where the Market Value of the Shire Ordinary Shares issued exceeds the amount of the relevant cash dividend or the relevant portion of the cash dividend if the Scrip Dividend is offered in place of only part of the cash dividend, then the Exchange Ratio shall be adjusted by multiplying the Exchange Ratio in force immediately prior to the payment of such Scrip Dividend by the following fraction: A + B ----- A + C where: A is the aggregate nominal amount of the Shire Ordinary Shares in issue immediately before such issue; B is the aggregate nominal amount of the Shire Ordinary Shares issued by way of Scrip Dividend; and C is the aggregate nominal amount of the Shire Ordinary Shares issued by way of Scrip Dividend multiplied by a fraction of which (x) -15- the numerator is the amount of the cash dividend per Shire Ordinary Share, or the part of such cash dividend in respect of which such Scrip Dividend applies, and (y) the denominator is the amount per Shire Ordinary Share used for the purpose of determining the number of Shire Ordinary Shares to be issued by way of Scrip Dividend. For the purposes of this sub-paragraph (2):- "Scrip Dividend" means an issue of Shire Ordinary Shares paid up out of profits or reserves (including any share premium account or capital redemption reserve) and issued instead of the whole or any part of a cash dividend which the holders of Shire Ordinary Shares would or could otherwise have received; and "Market Value" means the price or value of Shire Ordinary Shares stated in, or calculated in accordance with the provisions of and at the time of, any circular or other document issued by Shire relating to the Scrip Dividend. (3) If and whenever Shire shall pay or make any Capital Distribution to its shareholders, the Exchange Ratio shall be adjusted by multiplying the Exchange Ratio in force immediately prior to such Capital Distribution by the following fraction: A ----- A - B where: A is the Current Market Price (as defined below) of one Shire Ordinary Share on the dealing day immediately preceding the date on which Shire Ordinary Shares are traded on the London Stock Exchange ex-the relevant Capital Distribution; and B is the portion of the Fair Market Value of the Capital Distribution attributable to one Shire Ordinary Share. -16- Such adjustment shall become effective on the date on which Shire Ordinary Shares are first traded on the London Stock Exchange ex-the Extraordinary Dividend or on which the Protected Share Repurchase is actually made, as the case may be. For the purpose of this sub-paragraph (3):- o "Capital Distribution" means the premium attributable to an Extraordinary Dividend or a Protected Share Repurchase; o "Current Market Price" means, the average of the closing bid and offer quotations per Shire Ordinary Share published in the London Stock Exchange Daily Official List for the five consecutive dealing days ending on the dealing day immediately preceding the relevant date, provided that if at any time during the said five day period the Shire Ordinary Shares shall have been quoted ex-dividend and during some other part of that period the Shire Ordinary Shares shall have been quoted cum-dividend then: (a) if the Shire Ordinary Shares to be issued do not rank for the dividend in question, the quotations on the dates on which the Shire Ordinary Shares shall have been quoted cum-dividend shall for the purpose of this definition be deemed to be the amount thereof reduced by an amount equal to the amount of that dividend per Shire Ordinary Share (excluding any associated tax credit and less the tax (if any) falling to be deducted on payment thereof to a resident of the United Kingdom); and (b) if the Shire Ordinary Shares to be issued do rank for the dividend in question, the quotations on the dates on which the Shire Ordinary Shares shall have been quoted ex-dividend shall for the purpose of this definition be deemed to be the amount thereof increased by such similar amount, and provided further that if the Shire Ordinary Shares on each of the said five dealing days have been quoted cum-dividend in respect of a dividend -17- which has been declared or announced but the Shire Ordinary Shares to be issued do not rank for that dividend the quotations on each of such dates shall for the purposes of this definition be deemed to be the amount thereof reduced by an amount equal to the amount of that dividend per Shire Ordinary Share (excluding any associated tax credit and less the tax (if any) falling to be deducted on payment thereof to a resident of the United Kingdom); o "Extraordinary Dividend" means any dividend or distribution on Shire Ordinary Shares, whether in cash, assets or other property, and whenever paid or made and however described (and for these purposes a distribution of assets includes without limitation an issue of shares or other securities credited as fully or party paid up (other than an issue of Shire Ordinary Shares falling within sub-paragraph (2) above) by way of capitalisation of profits or reserves), where the aggregate amount of such dividend or distribution, without taking into account any tax credit that may arise in respect of the dividend or distribution, when added to the aggregate Fair Market Value of all other dividends or distributions paid or made in the preceding 12 months other than dividends or distributions to the extent an adjustment was made pursuant to sub-paragraph (2) above, exceeds 5% of the Market Capitalisation of Shire on the dealing day immediately preceding the payment date of the dividend or distribution in question. Extraordinary Dividends do not include any dividend or distribution to the extent an adjustment pursuant to sub-paragraph (2) is applicable; o the "Market Capitalisation of Shire" will be calculated as if Shire had already issued all Shire Ordinary Shares issuable upon the exchange of the exchangeable shares issued by Shire Acquisition Inc. in connection with the merger between Shire and BioChem Pharma Inc; o the amount of the premium attributable to an Extraordinary Dividend is the amount by which the -18- Extraordinary Dividend exceeds 5% of the Market Capitalisation of Shire on the dealing day immediately preceding the payment date of the dividend or distribution in question; o "Protected Share Repurchase" means a purchase by Shire of Shire Ordinary Shares on the market on any one day at a weighted average price, before expenses, that exceeds by more than 5% the average of the closing middle market prices quoted for Shire Ordinary Shares on the London Stock Exchange as derived from the Official Daily List of the London Stock Exchange on the five dealing days before Shire makes the purchase. If Shire announces its intention to purchase Shire Ordinary Shares at some future date at a specified price, then a Protected Share Repurchase occurs when the announced purchase price exceeds by more than 5% the average of the closing middle market prices quoted for Shire Ordinary Shares on the London Stock Exchange as derived from the Official Daily List of the London Stock Exchange on the five dealing days preceding the announcement; and o the amount of the premium attributable to a Protected Share Repurchase is the amount by which the repurchase amount, as the case may be, exceeds 5% of the average of the closing middle market prices quoted for Shire Ordinary Shares on the London Stock Exchange as derived from the Official Daily List of the London Stock Exchange on the five dealing days before Shire makes the purchase or announcement, as the case may be. (4) If and whenever Shire shall issue Shire Ordinary Shares to its shareholders as a class by way of rights, or issues or grants to its shareholders as a class by way of rights, options, warrants or other rights to subscribe for or purchase any Shire Ordinary Shares, in each case at a price per Shire Ordinary Share which is less than 95% of the Current Market Price per Shire Ordinary Share on the dealing day immediately preceding the date of the announcement of the terms of the issue or grant of such Shire Ordinary Shares, options, warrants or other rights, the Exchange Ratio shall be adjusted by multiplying the Exchange Ratio in force immediately prior to such issue or grant by the following fraction: -19- A + B ----- A + C where: A is the number of Shire Ordinary Shares in issue immediately before such announcement; B is the number of Shire Ordinary Shares issued or, as the case may be, included in the grant; and C is the number of Shire Ordinary Shares which could have been purchased, at the Current Market Price per Shire Ordinary Share referred to above, for the aggregate amount (if any) payable for the new Shire Ordinary Shares issued by way of rights, or for the options or warrants or other rights issued by way of rights and for the total number of Shire Ordinary Shares comprised in such options, warrants or other rights. Such adjustment shall become effective on the first date on which Shire Ordinary Shares are traded ex-rights, ex-options or ex-warrants, as the case may be, on the London Stock Exchange. (5) If and whenever Shire shall issue any securities to its Shareholders as a class, (other than Shire Ordinary Shares or options, warrants or other rights to subscribe for or purchase any Shire Ordinary Shares), by way of rights, or if Shire shall grant to its shareholders as a class by way of rights any options, warrants or other rights to subscribe for or purchase any securities (other than Shire Ordinary Shares or options, warrants or other rights to subscribe for or purchase Shire Ordinary Shares) the Exchange Ratio shall be adjusted by multiplying the Exchange Ratio in force immediately prior to such issue or grant by the following fraction: A ----- A - B where: -20- A is the Current Market Price of one Shire Ordinary Share on the dealing day immediately preceding the date on which the terms of such issue or grant are publicly announced; and B is the Fair Market Value on the date of such announcement of the portion of the rights attributable to one Shire Ordinary Share. This adjustment shall become effective on the first date on which Shire Ordinary Shares are traded ex-rights, ex-options or ex-warrants, as the case may be, on the London Stock Exchange. (6) If and whenever Shire shall issue or grant wholly for cash (other than as mentioned in sub-paragraph (4) above) any Shire Ordinary Shares or grant (other than as mentioned in sub-paragraph (4) above) wholly for cash or for no consideration any options, warrants or other rights to subscribe for or purchase any Shire Ordinary Shares, in each case at a price per Shire Ordinary Share which is less than 95% of the Current Market Price per Shire Ordinary Share on the dealing day immediately preceding the date Shire announces the terms of such issue or grant, the Exchange Ratio shall be adjusted by multiplying the Exchange Ratio in force immediately prior to such issue or grant by the following fraction: A + B ----- A + C where: A is the number of Shire Ordinary Shares in issue immediately before Shire issues such Shire Ordinary Shares or grants such options, warrants or rights; B is the maximum number of Shire Ordinary Shares to be issued pursuant to such issue of additional Shire Ordinary Shares or upon exercise of such options, warrants or rights; and C is the number of Shire Ordinary Shares which the aggregate consideration (if any) receivable -21- for the issue of the additional Shire Ordinary Shares, or, as the case may be, for Shire Ordinary Shares to be issued upon the exercise of any such options, warrants or rights, would purchase at such Current Market Price per Shire Ordinary Share. Such adjustment shall not apply to Shire Ordinary Shares issued on the exchange of the Preference Shares or on the exercise of any other rights of conversion into, or exchange or subscription for, Shire Ordinary Shares. Such adjustment shall become effective on the date Shire shall issue such additional Shire Ordinary Shares or, as the case may be, Shire shall grant such options, warrants or rights. (7) If and whenever Shire or any of its Subsidiaries shall issue any securities (other than the Notes or the Preference Shares) wholly for cash or for no consideration, otherwise than as mentioned in sub-paragraphs (4), (5) or (6) above, and such securities carry (directly or indirectly) rights of conversion into, or exchange or subscription for, Shire Ordinary Shares or grant any such rights in respect of existing securities, or if Shire or any of its Subsidiaries shall issue any securities which by their terms might be redesignated as Shire Ordinary Shares, and the consideration per Shire Ordinary Share receivable by Shire upon conversion, exchange, subscription or redesignation is less than 95% of the Current Market Price per Shire Ordinary Share on the dealing day immediately preceding the date Shire announces the terms of issue of such securities or the terms of such grant, the Exchange Ratio shall be adjusted by multiplying the Exchange Ratio in force immediately prior to such issue or grant by the following fraction: A + B ----- A + C where: A is the number of Shire Ordinary Shares in issue immediately before such issue or grant (but if the relevant securities carry rights of -22- conversion into or rights of exchange or subscription for Shire Ordinary Shares which have been issued by Shire for the purposes of or in connection with such issue, then less the number of such Shire Ordinary Shares so issued); B is the maximum number of Shire Ordinary Shares that may be issued upon conversion or exchange of such securities or upon the exercise of such rights of subscription attached to such securities at the initial conversion, exchange or subscription price or rate or, as the case may be, the maximum number of Shire Ordinary Shares to be issued or to arise from any such redesignation; and C is the number of Shire Ordinary Shares that could be purchased at the Current Market Price per Shire Ordinary Share indicated above for the aggregate consideration (if any) receivable for Shire Ordinary Shares to be issued upon conversion or exchange or upon exercise of the right of subscription attached to such securities or, as the case may be, for Shire Ordinary Shares to be issued or to arise from any such redesignation. Such adjustment shall become effective on the date of issue or grant of the securities in question. (8) If and whenever there shall be any modification of the rights of conversion, exchange or subscription attaching to any securities described in sub-paragraph (7) above (other than in accordance with the terms (including terms as to adjustment) applicable to such securities) so that following such modification the consideration per Shire Ordinary Share has been reduced and is less than 95% of the Current Market Price per Shire Ordinary Share on the dealing day immediately preceding the date of announcement of the proposals for such a modification, the Exchange Ratio shall be adjusted by multiplying the Exchange Ratio in force immediately prior to such modification by the following fraction: A + B ----- A + C -23- where: A is the number of Shire Ordinary Shares in issue immediately before such modification (but if the relevant securities carry rights of conversion into or rights of exchange or subscription for Shire Ordinary Shares which have been issued by Shire for the purposes of or in connection with such issue, then less the number of such Shire Ordinary Shares so issued); B is the maximum number of Shire Ordinary Shares to be issued upon conversion or exchange of such securities or upon the exercise of such rights of subscription attached to such securities at the modified conversion, exchange or subscription price or rate, but giving credit as appropriate for any previous adjustment under this sub-paragraph (8) or under sub-paragraph (7) above; and C is the number of Shire Ordinary Shares which the aggregate consideration (if any) receivable by Shire for Shire Ordinary Shares to be issued upon conversion or exchange or upon exercise of the right of subscription attached to the modified securities would purchase at the Current Market Price per Shire Ordinary Share indicated above. Such adjustment shall become effective on the date of modification of the rights of conversion, exchange or subscription attaching to such securities. (9) If and whenever Shire or any of its Subsidiaries shall offer any securities and the holders of Shire Ordinary Shares as a class are entitled to participate in arrangements whereby such securities may be acquired by them, the Exchange Ratio shall be adjusted by multiplying the Exchange Ratio in force immediately before such offer is made by the following fraction: A ----- A - B -24- where: A is the Current Market Price of one Shire Ordinary Share on the dealing day immediately preceding the date on which the terms of such offer are publicly announced; and B is the Fair Market Value on the date of such announcement of the portion of the relevant offer attributable to one Shire Ordinary Share. Such adjustment shall become effective on the first date on which Shire Ordinary Shares trade ex-rights on the London Stock Exchange. Such adjustment shall not apply when the Exchange Ratio falls to be adjusted under sub-paragraphs (4) or (5) above or would fall to be so adjusted if the relevant issue or grant were at less than 95% of the Current Market Price per Shire Ordinary Share on the relevant dealing day. (10)If any adjustment shall have been made pursuant to sub-paragraphs (4) or (6) above, and any such rights, options, warrants or other rights to subscribe for or purchase any Shire Ordinary Shares shall have lapsed or expired or are otherwise no longer exercisable and Shire has not issued all of the Shire Ordinary Shares issuable in respect of such lapsed, expired or unexercisable rights, options, warrants or other rights to subscribe for or purchase any Shire Ordinary Shares, the Exchange Ratio shall be readjusted to the Exchange Ratio which would otherwise be in effect had the adjustment made upon the issuance of such rights, options, warrants or other rights to subscribe for or purchase any Shire Ordinary Shares been made on the basis of delivery of only the number of Shire Ordinary Shares actually delivered. Such adjustment shall become effective on the date on which the rights, options, warrants or other rights to subscribe for or purchase any Shire Ordinary Shares lapsed, expired or otherwise became no longer exercisable. -25- (b) For the purpose of any calculation of the consideration receivable pursuant to sub-paragraphs (6), (7) and (8), the following provisions shall apply: (i) the aggregate consideration receivable for Shire Ordinary Shares issued for cash shall be the amount of such cash provided that in no case shall any deduction be made for any commission, fees or any expenses paid or incurred by Shire for any underwriting of the issue or otherwise in connection therewith; (ii) (x) the aggregate consideration receivable for Shire Ordinary Shares to be issued or otherwise made available upon the conversion or exchange of any securities shall be deemed to be the consideration received or receivable for any such securities and (y) the aggregate consideration receivable for Shire Ordinary Shares to be issued or otherwise made available upon the exercise of rights of subscription attached to any securities or upon the exercise of any options, warrants or rights shall be deemed to that part (which may be the whole) of the consideration received or receivable for such securities or, as the case may be, for such options, warrants or rights which is attributed by Shire to such rights of subscription or, as the case may be, such options, warrants or rights or, if no part of such consideration is so attributed or the Trustee so requires by notice in writing to Shire, the fair market value of such rights of subscription or, as the case may be, such options, warrants or rights as at the date of the announcement of the terms of issue of such securities or, as the case may be, such options, warrants or rights (as determined on good faith by an independent investment bank of international repute selected by Shire and approved in writing by the Trustee), plus in the case of each of (x) and (y) above, the additional minimum consideration (if any) to be received upon the conversion or exchange of such securities, or upon the exercise of such rights or subscription attached thereto or, as the case may be, upon exercise of such options, warranties or rights and (z) the consideration per Shire Ordinary Share receivable upon the conversion or exchange of, or upon the exercise of such rights of subscription attached to, such securities or, as the case may be, upon exercise of such options, warrants or rights shall be the aggregate consideration referred to in (x) or (y) above (as the case may be) converted into pounds sterling if such consideration is expressed in a -26- currency other than pounds sterling at such rate of exchange as may be determined in good faith by an independent investment bank of international repute selected by Shire and approved in writing by the Trustee to be the spot rate ruling at the close of business on the date of announcement of the terms of issue of such securities, divided by the number of Shire Ordinary Shares to be issued upon such conversion or exchange or exercise at the initial conversion, exchange or subscription price or rate. (c) In this Article 9(e)(G), references to any issue or offer to Shire's shareholders "as a class" or "by way of rights" shall be taken to be references to an issue or offer to all or substantially all of its shareholders other than shareholders to whom, by reason of the laws of any territory or requirements of any recognised regulatory body or any other stock exchange in any territory or in connection with fractional entitlements, it is determined not to make such issue or offer. (d) No adjustment shall be made to the Exchange Ratio pursuant to Article 9(e)(G)(a): (i) until the cumulative adjustments amount to 1.0% or more of the Exchange Ratio; (ii) if, as a result, Shire Ordinary Shares would be issued upon exchange of the Preference Shares at a discount to their par value; (iii) to the extent Shire Ordinary Shares or other securities are issued, allotted or granted to employees, including directors and executive officers, of Shire or any of its subsidiaries pursuant to any employees' share scheme or option plan; (iv) upon the conversion or exchange of convertible or exchangeable securities of Shire or its subsidiaries outstanding as of 15th August 2001, including: - the exchangeable shares of Shire Acquisition Inc.; and - the unsecured convertible zero coupon loan note of Shire due to Arenol Corporation; or -27- (v) upon the exchange of any remaining shares of Roberts Pharmaceutical Corporation for Shire Ordinary Shares. (e) The Company may, from time to time, increase the Exchange Ratio by any amount for any period of not less than 20 days if the Board of Directors of Shire has determined that such increase would be in Shire's best interests. If the Board of Directors of Shire makes such a determination and the same is adopted by the Company, it will be conclusive. At the end of any such period, the Exchange Ratio in force immediately before such period shall be reinstated. (H) If the Company elects pursuant to, and in accordance with, Section 12.1 of the Indenture to convert into Preference Shares any Notes in respect of which a Noteholder has exercised his rights under Section 12.1 of the Indenture, the number of Shire Ordinary Shares or Shire ADSs to be issued in respect of any such Preference Shares upon the exercise of the Exchange Right attaching to such Preference Shares, and the date on which such Shire Ordinary Shares or Shire ADSs shall be issued, shall be determined in accordance with Section 12.1 of the Indenture but otherwise the provisions of Article 9(e) shall apply upon the exercise of such Exchange Right. (I) If the Company elects pursuant to and in accordance with Section 13.1 of the Indenture to convert into Preference Shares any Notes in respect of which a Noteholder has exercised his rights under Section 13.1 of the Indenture, the number of Shire Ordinary Shares or Shire ADSs to be issued in respect of any such Preference Shares upon the exercise of the Exchange Right attaching to such Preference Shares, and the date on which such Shire Ordinary Shares or Shire ADSs shall be issued, shall be determined in accordance with Section 13.1 of the Indenture but otherwise the provisions of Article 9(e) shall apply upon the exercise of such Exchange Right. (J) If (i) Shire shall merge or consolidate with another person or sell or transfer all or substantially all of its assets, in each case which results in a Change of Control (as defined in the Indenture) or (ii) Shire shall participate in a statutory merger that results in a reclassification, conversion, exchange or cancellation of Shire Ordinary Shares, then, as regards the consideration due upon exchange of a Preference Share, Article 9(e)(B) shall cease to have effect and thereafter each Preference Share may be exchanged only for the kind and amount of securities, cash and other property that a holder of the number of Shire Ordinary Shares which the holder of a Preference Share may have been issued pursuant to Article 9(e)(B) had the Exchange Right in respect of such Preference Share been exercised immediately prior to such merger, -28- consolidation, sale or transfer would have received pursuant to such merger, consolidation, sale or transfer. This calculation will be made based on the assumption that the holder of Shire Ordinary Shares failed to exercise any rights of election that the holder may have to select a particular type of consideration. This Article 9(e)(J) only applies in the case of a merger which results in a reclassification, conversion, exchange or cancellation of Shire Ordinary Shares. (K) Shire ADSs will not be issued upon the exercise of an Exchange Right in respect of any Preference Share issued upon the exercise of a Conversion Right: (i) until either (a) the Note which is to be converted has been transferred pursuant to an effective registration statement under the US Securities Act of 1933 or (b) such Note is not otherwise a "restricted security" within the meaning of Rule 144(a)(3) under the US Securities Act of 1933; or (ii) if the Deposit Agreement with respect to the Shire ADSs is terminated for any reason, until a successor Deposit Agreement is established. In such circumstances, any holder of a Preference Share electing to receive Shire ADSs upon the exercise of his Exchange Right in respect of such Preference Share shall receive Shire Ordinary Shares instead, subject to the Company's option to procure the delivery of cash pursuant to Article 9(e)(B). (L) The obligations of the Company to procure the exchange of Preference Shares in accordance with these Articles are subject to applicable law in the Cayman Islands and, in the case of the issue of Shire Ordinary Shares and Shire ADSs, subject to Shire's compliance with the terms of its agreement with the Company in respect thereof. (M) Neither the Preference Shares nor Shire Ordinary Shares (unless they are to be represented by ADSs issued by the ADS Depositary) will be issued to (i) The Depositary Trust Company, Euroclear Bank S.A./N.V. as operator of the Euroclear system, Clearstream Banking, Societe anonyme or the Depositary and Clearing Centre or any of their nominees or agents or any other person providing a clearance service within Section 96 of the Finance Act 1986 of the United Kingdom or any of their nominees or agents or (ii) to any person whose business includes issuing depositary receipts within Section 93 of the Finance Act 1986 of the United Kingdom or any nominee or agent of such a person, in each case at any time prior to the "abolition day" as defined in Section 111 (1) of the Finance Act 1990 of the United Kingdom. -29- (N) The Company undertakes that it will procure that any Shire Ordinary Shares issued upon the exercise of an Exchange Right will be issued fully paid and will rank pari passu in all respects with Shire Ordinary Shares in issue on the relevant Conversion Date, except that the holders of any Shire Ordinary Shares so issued will not be entitled to any dividend or other distribution declared, paid or made in respect of Shire Ordinary Shares by reference to a record date prior to such Conversion Date. The holder of any Shire Ordinary Shares or Shire ADSs issued upon the exercise of any Exchange Right will be treated (to the extent described in this paragraph only) as if he were the holder of such Shire Ordinary Shares or Shire ADSs on the relevant Conversion Date and therefore shall be entitled to receive, in addition to the Shire Ordinary Shares or Shire ADSs, cash consideration equal to any dividends or other distributions declared, paid or made in respect of Shire Ordinary Shares by reference to a record date falling on or after the relevant Conversion Date but before the date on which Shire Ordinary Shares or Shire ADSs are issued to such holder. (O) No holder of Notes will in any circumstances be required to pay any U.K. transfer taxes or duties in respect of the issue or delivery of Preference Shares on conversion of such holder's Notes, the subsequent transfer of such Preference Shares to Shire or the issue of Shire Ordinary Shares or Shire ADSs in exchange for such Preference Shares, and the Company will procure that Shire covenants and agrees to hold each such holder harmless against any U.K. stamp duty or stamp duty reserve tax liability such holder may be required to pay on conversion of such holder's Notes, the subsequent transfer of such Preference Shares to Shire or the issue of Shire Ordinary Shares or Shire ADSs in exchange for such Preference Shares, provided, however, that Shire shall not be required to pay any tax or duty which may be payable in respect of any transfer involved in the issue or delivery of Preference Shares, Shire Ordinary Shares or ADSs in a name other than that of the holder of the Note(s) to be converted. A holder of a Note will be responsible for all, if any, taxes arising by reference to any disposal or deemed disposal of a Note or a Preference Share in connection with the conversion of such Notes for a Preference Share. (P) The Company shall not be obliged to procure the issue or delivery of certificates representing Shire Ordinary Shares or Shire ADSs unless the person to whom Shire Ordinary Shares or Shire ADSs are being issued or delivered has paid to Shire the amount of any tax or duty that may be payable in respect of any transfer involved in the issue or delivery of Shire Ordinary Shares or ADSs in a name other than that of the holder of the Note being converted or has established to Shire's satisfaction that no such tax or duty is payable. -30- (Q) No fractions of Shire Ordinary Shares or Shire ADSs will be issued upon the exercise of an Exchange Right and, instead, the Company shall procure that a cash amount will be paid by Shire in respect of any fractional entitlement, calculated by reference to the Current Market Price of a Shire Ordinary Share on the relevant Conversion Date, which amount shall be paid to the relevant holder of Shire Ordinary Shares or Shire ADSs within 14 days of the relevant Conversion Date. (f) Transfer Save as provided in Article 9(e)(D), the Preference Shares are not transferable. Transfers of Preference Shares shall be effected outside the United Kingdom by any transfer in common or usual form or such other form as may be approved by the Board from time to time. The transferor shall be deemed to remain the holder of the Preference Share until the name of the transferee is entered in the register of Members of the Company in respect of it. All instruments of transfer may be retained by the Company. General (g) Forthwith upon the exercise, or deemed exercise of an Exchange Right in respect of any Preference Share, such Preference Share shall cease to have attached to it any Exchange Right save, to the extent such obligation has not been satisfied, for the right to require the Company pursuant to Article 9(e) to procure the issue of Shire Ordinary Shares or Shire ADSs or, as the case may be, to procure the delivery of cash upon the exercise of the Exchange Right. (h) The Preference Shares shall only be issued on conversion of Notes pursuant to the Indenture and in accordance with these Articles and shall be issued at the Paid-up Value per Preference Share and will rank pari passu with all (if any) fully paid Preference Shares then in issue. TRANSFER OF SHARES 9. Subject to Article 9, shares in the Company are transferable subject to the consent of the Directors who may, in their absolute discretion, decline to register any transfer of Shares without giving any reason. If the Directors refuse to register a transfer they shall notify the transferee within two months of such refusal. 10. Subject to Article 9, the instrument of transfer of any Share shall be in writing and shall be executed outside the United Kingdom by or on behalf of the transferor (and if the Directors so require, signed by the transferee Provided that, if so required, the transferee shall sign before the instrument is executed by the transferor). The -31- transferor shall be deemed to remain the holder of a Share until the name of the transferee is entered in the register of Members. 11. The registration of transfers, other than in respect of Preference Shares, may be suspended at such time and for such period as the Directors may from time to time determine, provided always that such registration shall not be suspended for more than forty-five days in any year. REDEMPTION AND REPURCHASE OF SHARES 12. (a) Subject to the provisions of the Statute and Articles 7, 8 and 9, the Company may issue Shares which are to be redeemed or are liable to be redeemed at the option of the Member or the Company. The redemption of such Shares shall, subject to Article 9, be effected in such manner as the Company may, by Special Resolution, determine before the issue of the Shares. (b) Subject to the provisions of the Statute and Articles 7, 8 and 9, the Company may purchase its own Shares (including any redeemable Shares) provided that the Members shall have approved the manner of purchase by Ordinary Resolution. (c) Subject to the provisions of Articles 7, 8 and 9, the Company may make a payment in respect of the redemption or purchase of its own Shares in any manner permitted by the Statute, including out of capital. 13. The provisions of Articles 7, 8 and 9 shall apply to the redemption of the Founders' Shares, the Nominal Shares and the Preference Shares. VARIATION OF RIGHTS OF SHARES 14. If at any time the share capital of the Company is divided into different classes of Shares, the rights attached to any class (unless otherwise provided by the terms of issue of the Shares of that class) may, whether or not the Company is being wound-up, be varied with the consent in writing of the holders of three-quarters in nominal value of the issued Shares of that class, or with the sanction of a Special Resolution passed at a general meeting of the holders of the Shares of that class provided, however, that the rights attaching to the Preference Shares may only be varied as provided in the Indenture. 15. The provisions of these Articles relating to general meetings shall apply to every such general meeting of the holders of one class of Shares except that the necessary quorum shall be two or more persons holding or representing by proxy at least one-third of the issued Shares of the class (provided always that if there is only one holder of shares of the relevant class at the relevant time, the quorum shall be that one holder) and that any holder of Shares of the class present in person or by proxy may demand a poll. -32- 16. (a) The rights attaching to the Preference Shares shall be deemed to be varied by:- (i) the creation or issue of any Shares having priority over the Preference Shares with respect of rights to participate in the profits or assets of the Company or rights of redemption; (ii) any allotment of Shares pursuant to a capitalisation of the Company's share premium account; or (iii) any reduction in the share capital or share premium account of the Company or the cancellation of any uncalled liability in respect of any Shares, Provided that neither the creation nor issue of any class of Shares ranking pari passu with or behind the Preference Shares nor the redemption of any Preference Shares shall be deemed to vary the rights attaching to the Preference Shares. (b) The rights conferred upon the holders of the Shares of any class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that class, be deemed to be varied by the creation or issue of further Shares ranking pari passu therewith. COMMISSION ON SALE OF SHARES 17. The Company may, in so far as the Statute permits, pay a commission to any person in consideration of his subscribing or agreeing to subscribe whether absolutely or conditionally for any Shares of the Company. Such commissions may be satisfied by the payment of cash and/or the issue of fully or partly paid-up Shares. The Company may also on any issue of Shares pay such brokerage as may be lawful. NON-RECOGNITION OF TRUSTS 18. The Company shall not be bound by or compelled to recognise in any way (even when notified) any equitable, contingent, future or partial interest in any Share, or (except only as is otherwise provided by these Articles or the Statute) any other rights in respect of any Share other than an absolute right to the entirety thereof in the registered holder. LIEN ON SHARES 19. The Company shall have a first and paramount lien on all Shares except Preference Shares (whether fully paid-up or not) registered in the name of a Member (whether solely or jointly with others) for all debts, liabilities or engagements to or with the -33- Company (whether presently payable or not) by such Member or his estate, either alone or jointly with any other person, whether a Member or not, but the Directors may at any time declare any Share to be wholly or in part exempt from the provisions of this Article. The registration of a transfer of any such Share shall operate as a waiver of the Company's lien thereon. The Company's lien on such a Share shall also extend to any amount payable in respect of that Share. 20. The Company may sell, in such manner as the Directors think fit, any Shares on which the Company has a lien, if a sum in respect of which the lien exists is presently payable, and is not paid within fourteen clear days after notice has been given to the holder of the Shares, or to the person entitled to it in consequence of the death or bankruptcy of the holder, demanding payment and stating that if the notice is not complied with the Shares may be sold. 21. To give effect to any such sale the Directors may authorise any person to execute an instrument of transfer of the Shares sold to, or in accordance with the directions of, the purchaser. The purchaser or his nominee shall be registered as the holder of the Shares comprised in any such transfer, and he shall not be bound to see to the application of the purchase money, nor shall his title to the Shares be affected by any irregularity or invalidity in the sale or the exercise of the Company's power of sale under these Articles. 22. The net proceeds of such sale after payment of costs, shall be applied in payment of such part of the amount in respect of which the lien exists as is presently payable and any residue shall (subject to a like lien for sums not presently payable as existed upon the Shares before the sale) be paid to the person entitled to the Shares at the date of the sale. CALL ON SHARES 23. (a) Subject to the terms of the allotment the Directors may from time to time make calls upon the Members in respect of any monies unpaid on their Shares (whether in respect of par value or premium), and each Member shall (subject to receiving at least fourteen days notice specifying the time or times of payment) pay to the Company at the time or times so specified the amount called on the Shares. A call may be revoked or postponed as the Directors may determine. A call may be required to be paid by instalments. A person upon whom a call is made shall remain liable for calls made upon him notwithstanding the subsequent transfer of the Shares in respect of which the call was made. (b) A call shall be deemed to have been made at the time when the resolution of the Directors authorising such call was passed. The joint holders of a Share shall be jointly and severally liable to pay all calls in respect thereof. -34- 24. If a call remains unpaid after it has become due and payable, the person from whom it is due shall pay interest on the amount unpaid from the day it became due and payable until it is paid at such rate as the Directors may determine, but the Directors may waive payment of the interest wholly or in part. 25. An amount payable in respect of a Share on allotment or at any fixed date, whether on account of the par value of the Share or premium or otherwise, shall be deemed to be a call and if it is not paid all the provisions of these Articles shall apply as if that amount had become due and payable by virtue of a call. 26. The Directors may issue Shares with different terms as to the amount and times of payment of calls, or the interest to be paid. 27. (a) The Directors may, if they think fit, receive an amount from any Member willing to advance all or any part of the monies uncalled and unpaid upon any Shares held by him, and may (until the amount would otherwise become payable) pay interest at such rate as may be agreed upon between the Directors and the Member paying such amount in advance. (b) No such amount paid in advance of calls shall entitle the Member paying such amount to any portion of a dividend declared in respect of any period prior to the date upon which such amount would, but for such payment, become payable. FORFEITURE OF SHARES 28. (a) If a call remains unpaid after it has become due and payable the Directors may give to the person from whom it is due not less than fourteen clear days notice requiring payment of the amount unpaid together with any interest which may have accrued. The notice shall specify where payment is to be made and shall state that if the notice is not complied with the Shares in respect of which the call was made will be liable to be forfeited. (b) If the notice is not complied with any Share in respect of which it was given may, before the payment required by the notice has been made, be forfeited by a resolution of the Directors. Such forfeiture shall include all dividends or other monies declared payable in respect of the forfeited Share and not paid before the forfeiture. (c) A forfeited Share may be sold, re-allotted or otherwise disposed of on such terms and in such manner as the Directors think fit and at any time before a sale, re-allotment or disposition the forfeiture may be cancelled on such terms as the Directors think fit. Where for the purposes of its disposal a forfeited Share is to be transferred to any person the Directors may authorise some person to execute an instrument of transfer of the Share in favour of that person. -35- 29. A person any of whose Shares have been forfeited shall cease to be a Member in respect of them and shall surrender to the Company for cancellation the certificate for the Shares forfeited and shall remain liable to pay to the Company all monies which at the date of forfeiture were payable by him to the Company in respect of those Shares together with interest, but his liability shall cease if and when the Company shall have received payment in full of all monies due and payable by him in respect of those Shares. 30. A certificate in writing under the hand of one Director or officer of the Company that a Share has been forfeited on a specified date shall be conclusive evidence of the fact as against all persons claiming to be entitled to the Share. The certificate shall (subject to the execution of an instrument of transfer) constitute a good title to the Share and the person to whom the Share is disposed of shall not be bound to see to the application of the purchase money, if any, nor shall his title to the Share be affected by any irregularity or invalidity in the proceedings in reference to the forfeiture, sale or disposal of the Share. 31. The provisions of these Articles as to forfeiture shall apply in the case of non-payment of any sum which, by the terms of issue of a Share, becomes payable at a fixed time, whether on account of the par value of the Share or by way of premium as if it had been payable by virtue of a call duly made and notified. TRANSMISSION OF SHARES 32. If a Member dies the survivor or survivors where he was a joint holder, and his legal personal representatives where he was a sole holder, shall be the only persons recognised by the Company as having any title to his interest. The estate of a deceased Member is not thereby released from any liability in respect of any Share which had been jointly held by him. 33. Any person becoming entitled to a Share in consequence of the death or bankruptcy or liquidation or dissolution of a Member (or in any other way than by transfer) may, upon such evidence being produced as may from time to time be required by the Directors, elect either to become the holder of the Share or to have some person nominated by him as the transferee. If he elects to become the holder he shall give notice to the Company to that effect, but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by that Member before his death or bankruptcy as the case may be. 34. If the person so becoming entitled shall elect to be registered himself as holder he shall deliver or send to the Company a notice in writing signed by him stating that he so elects. 35. A person becoming entitled to a Share by reason of the death or bankruptcy or liquidation or dissolution of the holder (or in any other case than by transfer) shall be entitled to the same dividends and other advantages to which he would be -36- entitled if he were the registered holder of the Share. However, he shall not, before being registered as a Member in respect of the Share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company and the Directors may at any time give notice requiring any such person to elect either to be registered himself or to transfer the Share. If the notice is not complied with within ninety days the Directors may thereafter withhold payment of all dividends, bonuses or other monies payable in respect of the Share until the requirements of the notice have been complied with. AMENDMENTS OF MEMORANDUM AND ARTICLES OF ASSOCIATION AND ALTERATION OF CAPITAL 36. The Company may by Ordinary Resolution: (a) increase the share capital by such sum as the resolution shall prescribe and with such rights, priorities and privileges annexed thereto, as the Company in general meeting may determine; (b) consolidate and divide all or any of its share capital into Shares of larger amount than its existing Shares; (c) by subdivision of its existing Shares or any of them divide the whole or any part of its Share capital into Shares of smaller amount than is fixed by the Memorandum or into Shares without par value; and (d) cancel any Shares which at the date of the passing of the resolution have not been taken or agreed to be taken by any person. 37. All new Shares created in accordance with the provisions of the preceding Article shall be subject to the same provisions of the Articles with reference to the payment of calls, liens, transfer, transmission, forfeiture and otherwise as the Shares in the original share capital. 38. Subject to the provisions of the Statute and the provisions of these Articles as regards the matters to be dealt with by Ordinary Resolution, the Company may by Special Resolution: (a) change its name; (b) alter or add to these Articles; (c) alter or add to the Memorandum with respect to any objects, powers or other matters specified therein; and (d) reduce its share capital and any capital redemption reserve fund. -37- REGISTERED OFFICE 39. Subject to the provisions of the Statute, the Company may by resolution of the Directors change the location of its Registered Office to any place other than a place in the United Kingdom. CLOSING REGISTER OF MEMBERS OR FIXING RECORD DATE 40. For the purpose of determining Members entitled to notice of or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any Dividend, or in order to make a determination of Members for any other proper purpose, the Directors of the Company may provide that the register of Members shall be closed for transfers other than transfers of Preference Shares for a stated period but not to exceed in any case forty days. If the register of Members shall be so closed for the purpose of determining Members entitled to notice of or to vote at a meeting of Members such register shall be so closed for at least ten days immediately preceding such meeting and the record date for such determination shall be the date of the closure of the register of Members. 41. In lieu of or apart from closing the register of Members, the Directors may fix in advance a date as the record date for any such determination of Members entitled to notice of or to vote at a meeting of the Members and for the purpose of determining the Members entitled to receive payment of any dividend the Directors may, at or within 90 days prior to the date of declaration of such dividend fix a subsequent date as the record date for such determination. 42. If the register of Members is not so closed and no record date is fixed for the determination of Members entitled to notice of or to vote at a meeting of Members or Members entitled to receive payment of a dividend, the date on which notice of the meeting is mailed or the date on which the resolution of the Directors declaring such dividend is adopted, as the case may be, shall be the record date for such determination of Members. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this section, such determination shall apply to any adjournment thereof. GENERAL MEETING 43. All general meetings other than annual general meetings shall be called extraordinary general meetings. 44. The Company shall, if required by the Statute, in each year hold a general meeting as its annual general meeting, and shall specify the meeting as such in the notices calling it. The annual general meeting shall be held at such time and place as the Directors shall appoint and if no other time and place is prescribed by them, it shall be held at the Registered Office on the second Wednesday in December of each year -38- at ten o'clock in the morning. At these meetings the report of the Directors (if any) shall be presented. 45. The Company may hold an annual general meeting, but shall not (unless required by Statute) be obliged to hold an annual general meeting. 46. The Directors may call general meetings, and they shall on a Members requisition forthwith proceed to convene an extraordinary general meeting of the Company. 47. A Members requisition is a requisition of Members of the Company holding at the date of deposit of the requisition not less than one tenth in par value of the capital of the Company as at that date carries the right of voting at general meetings of the Company. 48. The requisition must state the objects of the meeting and must be signed by the requisitionists and deposited at the Registered Office of the Company, and may consist of several documents in like form each signed by one or more requisitionists. 49. If the Directors do not within twenty-one days from the date of the deposit of the requisition duly proceed to convene a general meeting to be held within a further twenty one days, the requisitionists, or any of them representing more than one-half of the total voting rights of all of them, may themselves convene a general meeting, but any meeting so convened shall not be held after the expiration of three months after the expiration of the said twenty-one days. 50. A general meeting convened as aforesaid by requisitionists shall be convened in the same manner as nearly as possible as that in which general meetings are to be convened by Directors. NOTICE OF GENERAL MEETINGS 51. At least five days' notice shall be given of any general meeting. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business and shall be given in manner hereinafter mentioned or in such other manner if any as may be prescribed by the Company, provided that a general meeting of the Company shall, whether or not the notice specified in this regulation has been given and whether or not the provisions of the Articles regarding general meetings have been complied with, be deemed to have been duly convened if it is so agreed: (a) in the case of an annual general meeting, by all the Members (or their proxies) entitled to attend and vote thereat; and (b) in the case of an extraordinary general meeting, by a majority in number of the Members (or their proxies) having a right to attend and vote at the -39- meeting, being a majority together holding not less than ninety-five per cent in par value of the Shares giving that right. 52. The accidental omission to give notice of a general meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings of that meeting. PROCEEDINGS AT GENERAL MEETINGS 53. No business shall be transacted at any general meeting unless a quorum is present. Two Members entitled to attend and vote at the meeting present in person or by proxy or if a corporation by its duly authorised representative shall be a quorum unless the Company has one Member entitled to attend and vote at the meeting in which case the quorum shall be that one Member present in person or by proxy or (in the case of a corporation or other non-natural person) by a duly authorised representative. Participation by a person in a general meeting in this manner is treated as presence in person at that meeting. 54. A person may participate at a general meeting by conference telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with each other. 55. A resolution (including a Special Resolution) in writing (in one or more counterparts) signed by all Members for the time being entitled to receive notice of and to attend and vote at general meetings (or, being corporations, signed by their duly authorised representatives) shall be as valid and effective as if the resolution had been passed at a general meeting of the Company duly convened and held. 56. If a quorum is not present within half an hour from the time appointed for the meeting or if during such a meeting a quorum ceases to be present, the meeting, if convened upon the requisition of Members, shall be dissolved and in any other case it shall stand adjourned to the same day in the next week at the same time and place or to such other day, time or such other place as the Directors may determine, and if at the adjourned meeting a quorum is not present within half an hour from the time appointed for the meeting the Members present shall be a quorum. 57. The chairman, if any, of the board of Directors shall preside as chairman at every general meeting of the Company, or if there is no such chairman, or if he shall not be present within fifteen minutes after the time appointed for the holding of the meeting, or is unwilling to act, the Directors present shall elect one of their number to be chairman of the meeting. 58. If no Director is willing to act as chairman or if no Director is present within fifteen minutes after the time appointed for holding the meeting, the Members present shall choose one of their number to be chairman of the meeting. -40- 59. The chairman may, with the consent of a meeting at which a quorum is present, (and shall if so directed by the meeting), adjourn the meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a general meeting is adjourned for thirty days or more, notice of the adjourned meeting shall be given as in the case of an original meeting. Otherwise it shall not be necessary to give any such notice. 60. A resolution put to the vote of the meeting shall be decided on a show of hands unless before, or on the declaration of the result of, the show of hands, a poll is demanded by the chairman, or any other Member or Members collectively present in person or by proxy and holding at least ten per cent. in par value of the Shares giving a right to attend and vote at the meeting. 61. Unless a poll is duly demanded a declaration by the chairman that a resolution has been carried or carried unanimously, or by a particular majority, or lost or not carried by a particular majority, an entry to that effect in the minutes of the proceedings of the meeting shall be conclusive evidence of that fact without proof of the number or proportion of the votes recorded in favour of or against such resolution. 62. The demand for a poll may be withdrawn. 63. Except on a poll demanded on the election of a chairman or on a question of adjournment, a poll shall be taken as the chairman directs, and the result of the poll shall be deemed to be the resolution of the general meeting at which the poll was demanded. 64. A poll demanded on the election of a chairman or on a question of adjournment shall be taken forthwith. A poll demanded on any other question shall be taken at such time as the chairman of the general meeting directs, and any business other than that upon which a poll has been demanded or is contingent thereon may proceed pending the taking of the poll. 65. In the case of an equality of votes, whether on a show of hands or on a poll, the chairman shall be entitled to a second or casting vote. VOTES OF MEMBERS 66. Subject to Articles 7, 8 and 9 in particular and to any rights or restrictions attached to any Shares, on a show of hands every Member entitled to vote who (being an individual) is present in person or by proxy or, if a corporation or other non-natural person is present by its duly authorised representative, shall have one vote and on a poll every Member entitled to vote shall have one vote for every Share of which he is the holder. -41- 67. In the case of joint holders of record the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and seniority shall be determined by the order in which the names of the holders stand in the register of Members. 68. A Member of unsound mind, or in respect of whom an order has been made by any court, having jurisdiction in lunacy, may vote, whether on a show of hands or on a poll, by his committee, receiver, curator bonis, or other person on such Member's behalf appointed by that court, and any such committee, receiver, curator bonis or other person may vote by proxy. 69. No person shall be entitled to vote at any general meeting or at any separate meeting of the holders of a class of Shares unless he is registered as a Member entitled to attend and vote at such meeting on the record date for such meeting nor unless all calls or other monies then payable by him in respect of Shares in the Company have been paid. 70. No objection shall be raised to the qualification of any voter except at the general meeting or adjourned general meeting at which the vote objected to is given or tendered and every vote not disallowed at the meeting shall be valid. Any objection made in due time shall be referred to the chairman whose decision shall be final and conclusive. 71. On a poll or on a show of hands votes may be cast either personally or by proxy. A Member entitled to vote at a meeting may appoint more than one proxy or the same proxy under one or more instruments to attend and vote at a meeting. Where such Member appoints more than one proxy the instrument of proxy shall state which proxy is entitled to vote on a show of hands. 72. A Member entitled to vote at a meeting and holding more than one Share need not cast the votes in respect of his Shares in the same way on any resolution and therefore may vote a Share or some or all such Shares either for or against a resolution and/or abstain from voting a Share or some or all of the Shares and, subject to the terms of the instrument appointing him, a proxy appointed under one or more instruments may vote a Share or some or all of the Shares in respect of which he is appointed either for or against a resolution and/or abstain from voting. PROXIES 73. The instrument appointing a proxy shall be in writing, be executed under the hand of the appointor or of his attorney duly authorised in writing, or, if the appointor is a corporation under the hand of an officer or attorney duly authorised for that purpose. A proxy need not be a Member of the Company. 74. The instrument appointing a proxy (and any authority under which it is executed) shall be deposited at the Registered Office or at such other place as is specified for that purpose in the notice convening the meeting no later than the time for holding -42- the meeting or adjourned meeting, provided that the chairman may at his discretion direct that an instrument of proxy shall be deemed to have been duly deposited. An instrument of proxy which is not deposited in the manner permitted shall be invalid. 75. The instrument appointing a proxy may be in any usual or common form and may be expressed to be for a particular meeting or any adjournment thereof or generally until revoked. An instrument appointing a proxy shall be deemed to include the power to demand or join or concur in demanding a poll. 76. Votes given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal or revocation of the proxy or of the authority under which the proxy was executed, or the transfer of the Share in respect of which the proxy is given unless notice in writing of such death, insanity, revocation or transfer was received by the Company at the Registered Office before the commencement of the general meeting, or adjourned meeting at which it is sought to use the proxy. CORPORATE MEMBERS 77. Any corporation or other non-natural person which is a Member may in accordance with its constitutional documents, or in the absence of such provision by resolution of its directors or other governing body, authorise such person as it thinks fit to act as its representative at any meeting of the Company or of any class of Members, and the person so authorised shall be entitled to exercise the same powers on behalf of the corporation which he represents as the corporation could exercise if it were an individual Member. SHARES WHICH MAY NOT BE VOTED 78. Shares in the Company which are beneficially owned by the Company shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding Shares at any given time. NUMBER OF DIRECTORS 79. There shall be a board of Directors consisting of not less than one person (exclusive of alternate Directors) provided however that the Company may from time to time by Ordinary Resolution increase or reduce the limits in the number of Directors provided always that all Directors must be residents of the United Kingdom. The first Directors of the Company shall be determined in writing by, or appointed by a resolution of, the subscriber. -43- POWERS OF DIRECTORS 80. Subject to the provisions of the Statute, the Memorandum and the Articles and to any directions given by Special Resolution, the business of the Company shall be managed by the Directors who may exercise all the powers of the Company. No alteration of the Memorandum or Articles and no such direction shall invalidate any prior act of the Directors which would have been valid if that alteration had not been made or that direction had not been given. A duly convened meeting of Directors at which a quorum is present may exercise all powers exercisable by the Directors. 81. All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for monies paid to the Company shall be signed, drawn, accepted, endorsed or otherwise executed as the case may be in such manner as the Directors shall determine by resolution. 82. The Directors on behalf of the Company may pay a gratuity or pension or allowance on retirement to any Director who has held any other salaried office or place of profit with the Company or to his widow or dependants and may make contributions to any fund and pay premiums for the purchase or provision of any such gratuity, pension or allowance. 83. The Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking, property and uncalled capital or any part thereof and to issue debentures, debenture stock, mortgages, bonds and other such securities whether outright or as security for any debt, liability or obligation of the Company or of any third party. APPOINTMENT AND REMOVAL OF DIRECTORS 84. The Company may by Ordinary Resolution appoint any person to be a Director provided that any person appointed as a Director must be a resident of the United Kingdom. The Company may by Ordinary Resolution remove any Director. 85. The Directors may appoint any person to be a Director, either to fill a vacancy or as an additional Director provided that the appointment does not cause the number of Directors to exceed any number fixed by or in accordance with the Articles as the maximum number of Directors and provided further that any person appointed as a Director must be a resident of the United Kingdom. VACATION OF OFFICE OF DIRECTOR 86. The office of a Director shall be vacated if: (a) he gives notice in writing to the Company that he resigns the office of Director; or -44- (b) if he absents himself (without being represented by proxy or an alternate Director appointed by him) from three consecutive meetings of the board of Directors without special leave of absence from the Directors, and they pass a resolution that he has by reason of such absence vacated office; or (c) if he dies, becomes bankrupt or makes any arrangement or composition with his creditors generally; or (d) if he is found a lunatic or becomes of unsound mind; or (e) if he ceases to be resident in the United Kingdom; or (f) if all the other Directors of the Company (being not less than two in number) resolve that he should be removed as a Director. QUORUM 87. The quorum for the transaction of the business of the Directors may be fixed by the Directors, and unless so fixed shall be two if there are two or more Directors, and shall be one if there is only one Director. A person who holds office only as an alternate Director shall, if his appointor is not present, be counted in the quorum. PROCEEDINGS OF DIRECTORS 88. Subject to the provisions of the Articles, the Directors may regulate their proceedings as they think fit provided that all meetings shall take place in the United Kingdom. Questions arising at any meeting shall be decided by a majority of votes. In the case of an equality of votes, the chairman shall have a second or casting vote. A Director who is also an alternate Director shall be entitled in the absence of his appointor to a separate vote on behalf of his appointor in addition to his own vote. 89. A person may participate in a meeting of the Directors or committee of Directors by conference telephone or other communications equipment by means of which all the persons participating in the meeting can communicate with each other at the same time provided that all participants are located in the United Kingdom. Participation by a person in a meeting in this manner is treated as presence in person at that meeting. 90. A resolution in writing (in one or more counterparts) signed by all the Directors or all the members of a committee of Directors (an alternate Director being entitled to sign such a resolution on behalf of his appointor) shall be as valid and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened and held provided that each Director is located in the United Kingdom when he executes the resolution. -45- 91. A Director or alternate Director may, or other officer of the Company on the requisition of a Director or alternate Director shall, call a meeting of the Directors by at least two days' notice in writing to every Director and alternate Director which notice shall set forth the general nature of the business to be considered unless notice is waived by all the Directors (or their alternates) either at, before or after the meeting is held. 92. The continuing Directors may act notwithstanding any vacancy in their body, but if and so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors the continuing Directors or Director may act for the purpose of increasing the number of Directors to that number, or of summoning a general meeting of the Company, but for no other purpose. 93. The Directors may elect a chairman of their board and determine the period for which he is to hold office; but if no such chairman is elected, or if at any meeting the chairman is not present within five minutes after the time appointed for holding the same, the Directors present may choose one of their number to be chairman of the meeting. 94. All acts done by any meeting of the Directors or of a committee of Directors (including any person acting as an alternate Director) shall, notwithstanding that it be afterwards discovered that there was some defect in the appointment of any Director or alternate Director, or that they or any of them were disqualified, be as valid as if every such person had been duly appointed and qualified to be a Director or alternate Director as the case may be. 95. A Director but not an alternate Director may be represented at any meetings of the board of Directors by a proxy appointed in writing by him. The proxy shall count towards the quorum and the vote of the proxy shall for all purposes be deemed to be that of the appointing Director. PRESUMPTION OF ASSENT 96. A Director of the Company who is present at a meeting of the board of Directors at which action on any Company matter is taken shall be presumed to have assented to the action taken unless his dissent shall be entered in the minutes of the meeting or unless he shall file his written dissent from such action with the person acting as the chairman or secretary of the meeting before the adjournment thereof or shall forward such dissent by registered post to such person immediately after the adjournment of the meeting. Such right to dissent shall not apply to a Director who voted in favour of such action. -46- DIRECTORS' INTERESTS 97. A Director may hold any other office or place of profit under the Company (other than the office of Auditor) in conjunction with his office of Director for such period and on such terms as to remuneration and otherwise as the Directors may determine. 98. A Director may act by himself or his firm in a professional capacity for the Company and he or his firm shall be entitled to remuneration for professional services as if he were not a Director or alternate Director. 99. A Director or alternate Director of the Company may be or become a director or other officer of or otherwise interested in any company promoted by the Company or in which the Company may be interested as shareholder or otherwise, and no such Director or alternate Director shall be accountable to the Company for any remuneration or other benefits received by him as a director or officer of, or from his interest in, such other company. 100. No person shall be disqualified from the office of Director or alternate Director or prevented by such office from contracting with the Company, either as vendor, purchaser or otherwise, nor shall any such contract or any contract or transaction entered into by or on behalf of the Company in which any Director or alternate Director shall be in any way interested be or be liable to be avoided, nor shall any Director or alternate Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or transaction by reason of such Director holding office or of the fiduciary relation thereby established. A Director (or his alternate Director in his absence) shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that the nature of the interest of any Director or alternate Director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote thereon. 101. A general notice that a Director or alternate Director is a shareholder, director, officer or employee of any specified firm or company and is to be regarded as interested in any transaction with such firm or company shall be sufficient disclosure for the purposes of voting on a resolution in respect of a contract or transaction in which he has an interest, and after such general notice it shall not be necessary to give special notice relating to any particular transaction. MINUTES 102. The Directors shall cause minutes to be made in books kept for the purpose of all appointments of officers made by the Directors, all proceedings at meetings of the Company or the holders of any class of Shares and of the Directors, and of committees of Directors including the names of the Directors or alternate Directors present at each meeting. -47- DELEGATION OF DIRECTORS' POWERS 103. The Directors may delegate any of their powers to any committee consisting of one or more Directors. They may also delegate to any managing director or any Director holding any other executive office such of their powers as they consider desirable to be exercised by him provided that an alternate Director may not act as managing director and the appointment of a managing director shall be revoked forthwith if he ceases to be a Director. Any such delegation may be made subject to any conditions the Directors may impose, and either collaterally with or to the exclusion of their own powers and may be revoked or altered. Subject to any such conditions, the proceedings of a committee of Directors shall be governed by the Articles regulating the proceedings of Directors, so far as they are capable of applying. 104. The Directors may establish any committees, local boards or agencies or appoint any person to be a manager or agent for managing the affairs of the Company and may appoint any person to be a member of such committees or local boards. 105. The Directors may by power of attorney or otherwise appoint any person to be the agent of the Company on such conditions as the Directors may determine, provided that the delegation is not to the exclusion of their own powers and may be revoked by the Directors at any time. 106. The Directors may by power of attorney or otherwise appoint any company, firm, person or body of persons, whether nominated directly or indirectly by the Directors, to be the attorney or authorised signatory of the Company for such purpose and with such powers, authorities and discretions (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such powers of attorney or other appointment may contain such provisions for the protection and convenience of persons dealing with any such attorneys as the Directors may think fit and may also authorise any such attorney or other company, firm or person to delegate all or any of the powers, authorities and discretions vested in him. 107. The Directors may appoint such officers as they consider necessary on such terms, at such remuneration and to perform such duties, and subject to such provisions as to disqualification and removal as the Directors may think fit provided that such officers are residents of the United Kingdom. Unless otherwise specified in the terms of his appointment an officer may be removed by resolution of the Directors or Members. ALTERNATE DIRECTORS 108. Any Director (other than an alternate Director) may by writing appoint any other Director, or any other person who is a resident of the United Kingdom willing to act, to be an alternate Director and by writing may remove from office an alternate Director so appointed by him. -48- 109. An alternate Director shall be entitled to receive notice of all meetings of Directors and of a meetings of committees of Directors of which his appointor is a member, to attend and vote at every such meeting at which the Director appointing him is not personally present, and generally to perform all the functions of his appointor as a Director in his absence. 110. An alternate Director shall cease to be an alternate Director if his appointor ceases to be a Director or if he ceases to be resident in the United Kingdom. 111. Any appointment or removal of an alternate Director shall be by notice to the Company signed by the Director making or revoking the appointment or in any other manner approved by the Directors. 112. An alternate Director shall be deemed for all purposes to be a Director and shall alone be responsible for his own acts and defaults and shall not be deemed to be the agent of the Director appointing him. NO MINIMUM SHAREHOLDING 113. The Company in general meeting may fix a minimum shareholding required to be held by a Director, but unless and until such a shareholding qualification is fixed a Director is not required to hold Shares. REMUNERATION OF DIRECTORS 114. The remuneration to be paid to the Directors, if any, shall be such remuneration as the Directors shall determine. The Directors shall also be entitled to be paid all travelling, hotel and other expenses properly incurred by them in connection with their attendance at meetings of Directors or committees of Directors, or general meetings of the Company, or separate meetings of the holders of any class of Shares or debentures of the Company, or otherwise in connection with the business of the Company, or to receive a fixed allowance in respect thereof as may be determined by the Directors, or a combination partly of one such method and partly the other. 115. The Directors may by resolution approve additional remuneration to any Director for any services other than his ordinary routine work as a Director. Any fees paid to a Director who is also counsel or solicitor to the Company, or otherwise serves it in a professional capacity shall be in addition to his remuneration as a Director. SEAL 116. The Company may, if the Directors so determine, have a Seal. The Seal shall only be used by the authority of the Directors or of a committee of the Directors authorised by the Directors. Every instrument to which the Seal has been affixed -49- shall be signed by at least one person who shall be either a Director or some officer or other person appointed by the Directors for the purpose. 117. The Company may have for use in any place or places outside the Cayman Islands a duplicate Seal or Seals each of which shall be a facsimile of the common Seal of the Company and, if the Directors so determine, with the addition on its face of the name of every place where it is to be used. 118. A Director or officer, representative or attorney of the Company may without further authority of the Directors affix the Seal over his signature alone to any document of the Company required to be authenticated by him under seal or to be filed with the Registrar of Companies in the Cayman Islands or elsewhere wheresoever. DIVIDENDS, DISTRIBUTIONS AND RESERVE 119. Subject to the Statute and this Article, the Directors may declare Dividends and distributions on Shares of the Company in issue and authorise payment of the Dividends or distributions out of the funds of the Company lawfully available therefor. No Dividend or distribution shall be paid except out of the realised or unrealised profits of the Company, or out of the share premium account or as otherwise permitted by the Statute. 120. Except as otherwise provided by the rights attached to Shares, all Dividends shall be declared and paid according to the nominal value of the Shares which a Member holds. If any Share is issued on terms providing that it shall rank for dividend as from a particular date, that Share shall rank for dividend accordingly. 121. The Directors may deduct from any Dividend or distribution payable to any Member all sums of money (if any) then payable by him to the Company on account of calls or otherwise provided that this Article shall not apply to the Preference Shares. 122. The Directors may declare that any dividend or distribution be paid wholly or partly by the distribution of specific assets and in particular of shares, debentures, or securities of any other company or in any one or more of such ways and where any difficulty arises in regard to such distribution, the Directors may settle the same as they think expedient and in particular may issue fractional Shares and fix the value for distribution of such specific assets or any part thereof and may determine that cash payments shall be made to any Members upon the basis of the value so fixed in order to adjust the rights of all Members and may vest any such specific assets in trustees as may seem expedient to the Directors provided that this Article shall not apply to any Dividend or distribution payable to a Member in respect of a Preference Share. 123. Any Dividend, distribution, interest or other monies payable in cash in respect of Shares may be paid by wire transfer to the holder or by cheque or warrant sent -50- through the post directed to the registered address of the holder or, in the case of joint holders, to the registered address of the holder who is first named on the register of Members or to such person and to such address as such holder or joint holders may in writing direct. Every such cheque or warrant shall be made payable to the order of the person to whom it is sent. Any one of two or more joint holders may give effectual receipts for any Dividends, bonuses, or other monies payable in respect of the Share held by them as joint holders. 124. No Dividend or distribution shall bear interest against the Company. CAPITALISATION 125. Subject to the rights attaching to the Preference Shares, the Directors may capitalise any sum standing to the credit of any of the Company's reserve accounts (including share premium account and capital redemption reserve fund) or any sum standing to the credit of profit and loss account or otherwise available for distribution and to appropriate such sum to Members in the proportions in which such sum would have been divisible amongst them had the same been a distribution of profits by way of Dividend and to apply such sum on their behalf in paying up in full unissued Shares for allotment and distribution credited as fully paid-up to and amongst them in the proportion aforesaid. In such event the Directors shall do all acts and things required to give effect to such capitalisation, with full power to the Directors to make such provisions as they think fit for the case of Shares becoming distributable in fractions (including provisions whereby the benefit of fractional entitlements accrue to the Company rather than to the Members concerned). The Directors may authorise any person to enter on behalf of all of the Members interested into an agreement with the Company providing for such capitalisation and matters incidental thereto and any agreement made under such authority shall be effective and binding on all concerned. This Article shall not apply to the Preference Shares. BOOKS OF ACCOUNT 126. The Directors shall cause proper books of account to be kept with respect to all sums of money received and expended by the Company and the matters in respect of which the receipt or expenditure takes place, all sales and purchases of goods by the Company and the assets and liabilities of the Company. Proper books shall not be deemed to be kept if there are not kept such books of account as are necessary to give a true and fair view of the state of the Company's affairs and to explain its transactions. 127. The Directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Members not being Directors and no Member (not being a Director) shall have any right of -51- inspecting any account or book or document of the Company except as conferred by Statute or authorised by the Directors or by the Company in general meeting. 128. The Directors may from time to time cause to be prepared and to be laid before the Company in general meeting profit and loss accounts, balance sheets, group accounts (if any) and such other reports and accounts as may be required by law. AUDIT 129. The Directors may appoint an Auditor of the Company who shall hold office until removed from office by a resolution of the Directors, and may fix his or their remuneration. 130. Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and officers of the Company such information and explanation as may be necessary for the performance of the duties of the Auditor. 131. Auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an ordinary company, and at the next extraordinary general meeting following their appointment in the case of a company which is registered with the Registrar of Companies as an exempt company, and at any other time during their term of office, upon request of the Directors or any general meeting of the Members. NOTICES 132. Notices shall be in writing and may be given by the Company to any Member either personally or by sending it by post, cable, telex, fax or e-mail to him or to his address as shown in the register of Members (or where the notice is given by e-mail by sending it to the e-mail address provided by such Member). Any notice, if posted abroad, is to be sent airmail. 133. Where a notice is sent by post, service of the notice shall be deemed to be effected by properly addressing, pre-paying and posting a letter containing the notice, and shall be deemed to have been received on the fifth day (not including Saturdays or Sundays or public holidays) following the day on which the notice was posted. Where a notice is sent by cable, telex or fax, service of the notice shall be deemed to be effected by properly addressing and sending such notice and shall be deemed to have been received on the same day that it was transmitted. Where a notice is given by e-mail service shall be deemed to be effected by transmitting the e-mail to the e-mail address provided by the intended recipient and shall be deemed to have -52- been received on the same day that it was sent, and it shall not be necessary for the receipt of the e-mail to be acknowledged by the recipient. 134. A notice may be given by the Company to the person or persons which the Company has been advised are entitled to a Share or Shares in consequence of the death or bankruptcy of a Member in the same manner as other notices which are required to be given under these Articles and shall be addressed to them by name, or by the title of representatives of the deceased, or trustee of the bankrupt, or by any like description at the address supplied for that purpose by the persons claiming to be so entitled, or at the option of the Company by giving the notice in any manner in which the same might have been given if the death or bankruptcy had not occurred. 135. Notice of every general meeting shall be given in any manner hereinbefore authorised to every person shown as a Member in the register of Members as of the record date for such meeting except that in the case of joint holders the notice shall be sufficient if given to the joint holder first named in the register of Members and every person upon whom the ownership of a Share devolves by reason of his being a legal personal representative or a trustee in bankruptcy of a Member of record where the Member of record but for his death or bankruptcy would be entitled to receive notice of the meeting, and no other person shall be entitled to receive notices of general meetings. WINDING UP 136. On a winding-up of the Company or other return of capital (other than a purchase or redemption of any Preference Share or other class of redeemable share), the assets of the Company available for distribution shall be applied in accordance with Articles 7, 8 and 9. INDEMNITY 137. Every Director, agent or officer of the Company shall be indemnified out of the assets of the Company against any liability incurred by him as a result of any act or failure to act in carrying out his functions other than such liability (if any) that he may incur by his own wilful neglect or default. No such Director, agent or officer shall be liable to the Company for any loss or damage in carrying out his functions unless that liability arises through the wilful neglect or default of such Director, agent or officer. -53- FINANCIAL YEAR 138. Unless the Directors otherwise prescribe, the financial year of the Company shall end on 31st December in each year and, following the year of incorporation, shall begin on 1st January in each year. TRANSFER BY WAY OF CONTINUATION 139. If the Company is exempted as defined in the Statute, it shall, subject to the provisions of the Statute and with the approval of a Special Resolution, have the power to register by way of continuation as a body corporate under the laws of any jurisdiction outside the Cayman Islands and to be deregistered in the Cayman Islands. EX-4.4 4 shireindent.txt INDENTURE EXECUTION COPY --------------------------------------------------- SHIRE FINANCE LIMITED ISSUER SHIRE PHARMACEUTICALS GROUP PLC GUARANTOR TO THE BANK OF NEW YORK TRUSTEE ---------------- INDENTURE Dated as of August 21, 2001 ---------------- U.S.$400,000,000 2.00% GUARANTEED CONVERTIBLE SENIOR NOTES DUE AUGUST 21, 2011 --------------------------------------------------- CROSS-REFERENCE TABLE(1) SHIRE FINANCE LIMITED Reconciliation and tie between Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and the Indenture, dated as of August 21, 2001. Trust Indenture Act Section Indenture Section ------------------ ----------------- ss.310 (a)(1).................................. 6.8 (a)(2).................................. 6.8 (a)(3).................................. Not Applicable (a)(4).................................. Not Applicable (b)..................................... 6.9 6.13 ss.311 (a)..................................... 6.14 (b)..................................... 6.14 ss.312 (a)..................................... 14.1 14.2(a) (b)..................................... 14.2(b) (c)..................................... 14.2(c) ss.313 (a)..................................... 14.4(a) (b)..................................... 14.4(a) (c)..................................... 1.6, 14.4(a) (d)..................................... 14.4(b) ss.314 (a)..................................... 14.5 (a)(4).................................. 6.2 9.7 (b)..................................... Not Applicable (c)(1).................................. 1.2 (c)(2).................................. 1.2 (c)(3).................................. Not Applicable (d)..................................... Not Applicable (e)..................................... 1.2 ss.315 (a)..................................... 6.1, 6.3 (b)..................................... 6.2 (c)..................................... 6.1(b) (d)..................................... 6.1(c), 6.3 (e)..................................... 5.14 ss.316 (a)(1)(A)............................... 5.12 (a)(1)(B)............................... 5.13 (a)(2).................................. Not Applicable (a)(2)(last sentence)................... 1.1 (b)..................................... 5.8 (c)..................................... 1.4 ss.317 (a)(1).................................. 5.3 (a)(2).................................. 5.4 (b)..................................... 9.3 ss.318 (a)..................................... 1.14 ---------- 1 This Cross-Reference Table does not constitute part of the Indenture and shall not affect the interpretation of any of its terms or provisions. TABLE OF CONTENTS Page RECITALS OF THE ISSUER RECITALS OF THE COMPANY ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 1.1. Definitions....................................................2 SECTION 1.2. Compliance Certificates and Opinions..........................10 SECTION 1.3. Form of Documents Delivered to the Trustee....................10 SECTION 1.4. Acts of Holders of Securities.................................11 SECTION 1.5. Notices, Etc., to Trustee, Issuer and Company.................13 SECTION 1.6. Notice to Holders of Securities; Waiver.......................13 SECTION 1.7. Notice of Adjustments of Exchange Ratio.......................14 SECTION 1.8. Effect of Headings and Table of Contents......................14 SECTION 1.9. Successors and Assigns........................................14 SECTION 1.10. Separability Clause...........................................14 SECTION 1.11. Benefits of Indenture.........................................15 SECTION 1.12. Governing Law, Etc............................................15 SECTION 1.13. Legal Holidays................................................15 SECTION 1.14. Conflict with Trust Indenture Act.............................16 ARTICLE TWO SECURITY FORMS SECTION 2.1. Form Generally................................................16 SECTION 2.2 Restrictive Legends...........................................17 SECTION 2.3. Form of the Guarantee.........................................18 -i- ARTICLE THREE THE SECURITIES SECTION 3.1. Title and Terms...............................................19 SECTION 3.2. Denominations.................................................19 SECTION 3.3. Execution, Authentication, Delivery and Dating................20 SECTION 3.4. Reserved......................................................20 SECTION 3.5. Transfer and Exchange.........................................24 SECTION 3.6 Reserved......................................................24 SECTION 3.7 Special Transfer Provisions...................................24 SECTION 3.8. Mutilated, Destroyed, Lost or Stolen Securities...............26 SECTION 3.9. Payment of Interest; Interest Rights Preserved................27 SECTION 3.10. Persons Deemed Owners.........................................28 SECTION 3.11. Cancellation..................................................28 SECTION 3.12. Computation of Interest.......................................28 SECTION 3.13. CUSIP, CINS, ISIN and/or Common Code Numbers..................28 ARTICLE FOUR SATISFACTION AND DISCHARGE SECTION 4.1. Satisfaction and Discharge of Indenture.......................29 SECTION 4.2. Application of Trust Money....................................30 ARTICLE FIVE REMEDIES SECTION 5.1. Events of Default.............................................30 SECTION 5.2. Acceleration of Maturity; Rescission and Annulment............32 SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.......................................................33 SECTION 5.4. Trustee May File Proofs of Claim..............................34 -ii- SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities...34 SECTION 5.6. Application of Money Collected................................35 SECTION 5.7. Limitation on Suits...........................................35 SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and Interest and to Convert...........................36 SECTION 5.9. Restoration of Rights and Remedies............................36 SECTION 5.10. Rights and Remedies Cumulative................................36 SECTION 5.11. Delay or Omission Not Waiver..................................36 SECTION 5.12. Control by Holders of Securities..............................36 SECTION 5.13. Waiver of Past Defaults.......................................37 SECTION 5.14. Undertaking for Costs.........................................37 SECTION 5.15. Waiver of Stay, Usury or Extension Laws.......................37 ARTICLE SIX THE TRUSTEE SECTION 6.1. Certain Duties and Responsibilities...........................38 SECTION 6.2. Notice of Defaults............................................39 SECTION 6.3. Certain Rights of Trustee.....................................39 SECTION 6.4. Not Responsible for Recitals or Issuance of Securities........40 SECTION 6.5. May Hold Securities, Act as Trustee Under Other Indentures....................................................41 SECTION 6.6. Money Held in Trust...........................................41 SECTION 6.7. Compensation and Reimbursement................................41 SECTION 6.8. Corporate Trustee Required; Eligibility.......................42 SECTION 6.9. Resignation and Removal; Appointment of Successor.............42 SECTION 6.10. Acceptance of Appointment by Successor........................43 SECTION 6.11. Merger, Conversion, Consolidation or Succession to Business......................................................44 SECTION 6.12. Authenticating Agents.........................................44 SECTION 6.13. Disqualification; Conflicting Interests.......................45 SECTION 6.14. Preferential Collection of Claims Against Company.............45 -iii- ARTICLE SEVEN CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE SECTION 7.1. Company May Consolidate, Etc., Only on Certain Terms..........46 SECTION 7.2. Successor Substituted.........................................46 ARTICLE EIGHT SUPPLEMENTAL INDENTURES SECTION 8.1. Supplemental Indentures Without Consent of Holders of Securities....................................................47 SECTION 8.2. Supplemental Indentures with Consent of Holders of Securities....................................................48 SECTION 8.3. Execution of Supplemental Indentures..........................49 SECTION 8.4. Effect of Supplemental Indentures.............................49 SECTION 8.5. Reference in Securities to Supplemental Indentures............49 SECTION 8.6. Conformity with Trust Indenture Act...........................49 SECTION 8.7. Notice of Supplemental Indentures.............................49 ARTICLE NINE COVENANTS SECTION 9.1. Payment of Principal, Premium and Interest....................50 SECTION 9.2. Maintenance of Offices or Agencies............................50 SECTION 9.3. Money for Security Payments To Be Held in Trust...............51 SECTION 9.4. Existence.....................................................52 SECTION 9.5. Registration and Listing......................................52 SECTION 9.6 Further Undertakings of the Company...........................52 SECTION 9.7. Statement by Officers as to Default...........................53 SECTION 9.8. Waiver of Certain Covenants...................................54 -iv- ARTICLE TEN REDEMPTION OF SECURITIES AT THE OPTION OF THE ISSUER SECTION 10.1. Right of Redemption at the Option of the Issuer...............54 SECTION 10.2. Applicability of Article......................................54 SECTION 10.3. Election to Redeem; Notice to Trustee.........................54 SECTION 10.4. Selection by Trustee of Securities To Be Redeemed.............55 SECTION 10.5. Notice of Redemption..........................................55 SECTION 10.6. Deposit of Redemption Price...................................56 SECTION 10.7. Securities Payable on Redemption Date.........................56 SECTION 10.8. Securities Redeemed in Part...................................56 SECTION 10.9. Conversion Arrangement on Call for Redemption.................57 ARTICLE ELEVEN CONVERSION OF SECURITIES SECTION 11.1. Conversion Privilege and Conversion Rate......................57 SECTION 11.2. Exercise of Conversion Privilege..............................58 SECTION 11.3. Issuer to Reserve Preference Shares; Instructions to Trustee.......................................................59 SECTION 11.4. Taxes on Conversions..........................................59 SECTION 11.5. Covenant as to Preference Shares; Limitations on Issuance......................................................60 SECTION 11.6. Cancellation of Converted Securities..........................60 SECTION 11.7. No Responsibility of Trustee for Conversion Provisions...................................................60 SECTION 11.8. Deemed Conversion and Exchange upon the Liquidation of the Company...............................................61 ARTICLE TWELVE REDEMPTION OF SECURITIES AT THE OPTION OF THE HOLDER UPON A CHANGE IN CONTROL SECTION 12.1. Right to Require Redemption..................................61 -v- SECTION 12.2. Conditions to the Issuer's Election to Convert Securities Elected for Redemption into Preference Shares.......................................................62 SECTION 12.3. Notices; Method of Exercising Redemption Right, Etc..........63 SECTION 12.4. Certain Definitions..........................................66 ARTICLE THIRTEEN REDEMPTION OF SECURITIES AT THE OPTION OF THE HOLDER on CERTAIN DATES SECTION 13.1. Right to Require Redemption on Certain Dates.................67 SECTION 13.2. Conditions to the Issuer's Election to Convert Securities Elected for Redemption into Preference Shares.......................................................67 SECTION 13.3. Notices; Method of Exercising Redemption Right, Etc..........69 ARTICLE FOURTEEN HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE SECTION 14.1. Issuer to Furnish Trustee Names and Addresses of Holders......................................................70 SECTION 14.2. Preservation of Information..................................71 SECTION 14.3. No Recourse Against Others...................................71 SECTION 14.4. Reports by Trustee...........................................71 SECTION 14.5. Reports by Issuer and Company................................72 ARTICLE FIFTEEN THE GUARANTEE SECTION 15.1. The Guarantee................................................72 SECTION 15.2. Execution and Delivery of the Guarantee......................74 ARTICLE SIXTEEN MEETINGS OF HOLDERS OF THE SECURITIES SECTION 16.1. Purposes of Meetings.........................................74 -vi- SECTION 16.2. Place of Meetings............................................75 SECTION 16.3 Call and Notice of Meetings..................................75 SECTION 16.4 Voting at Meetings...........................................75 SECTION 16.5 Voting Rights, Conduct and Adjournment.......................76 EXHIBITS Exhibit A-1 Form of Rule 144A Global Security Exhibit A-2 Form of Regulation S Global Security Exhibit A-3 Form of Unrestricted Global Security Exhibit B Form of Definitive Security Exhibit C Form of Certificate of Authentication Exhibit D Form of Conversion and Exchange Notice Exhibit E Form of Notice of Redemption at the Option of the Holder Exhibit F Form of Guarantee Exhibit G Form of Transfer Certificate -vii- INDENTURE, dated as of August 21, 2001, among Shire Finance Limited, an exempted limited company duly organized and existing under the laws of the Cayman Islands, having its registered office at Ugland House, P.O. Box 309, George Town, Grand Cayman, Cayman Islands, as issuer (herein called the "Issuer"); Shire Pharmaceuticals Group plc, a public limited company duly organized and existing under the laws of England and Wales, having its principal office at Hampshire International Business Park, Chineham, Basingstoke, Hampshire RG24 8EP, England, as guarantor (herein called the "Company"); and The Bank of New York, a New York banking corporation, as Trustee hereunder (herein called the "Trustee"). RECITALS OF THE ISSUER The Issuer has duly authorized the creation of an issue of its 2.00% Guaranteed Convertible Senior Notes due August 21, 2011 (herein called the "Securities") of substantially the tenor and amount hereinafter set forth, and to provide therefor the Issuer has duly authorized the execution and delivery of this Indenture. All things necessary to make the Securities, when the Securities are executed by the Issuer and authenticated and delivered hereunder, the valid obligations of the Issuer, and to make this Indenture a valid and legally binding agreement of the Issuer, in accordance with their and its terms, have been done. Further, all things necessary to duly authorize the issuance of the Preference Shares of the Issuer issuable upon the conversion of the Securities, and to duly reserve for issuance the number of Preference Shares issuable upon such conversion, have been done. RECITALS OF THE COMPANY The Company desires to make the Guarantee provided for herein. All things necessary to make this Indenture a valid and legally binding agreement of the Company, in accordance with its terms, have been done, and the Company proposes to do all things necessary to make the Guarantee, when executed by the Company and endorsed on the Securities authenticated and delivered hereunder, the valid and legally binding obligations of the Company as hereinafter provided. Further, all things necessary to duly authorize the issuance of the Ordinary Shares or ADSs of the Company issuable upon the exchange of the Preference Shares, and to duly reserve for issuance the number of Ordinary Shares issuable upon such exchange, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as follows: Article One DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION One.1. Definitions. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (2) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; and (3) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. "Act", when used with respect to any Holder of a Security, has the meaning specified in Section 1.4. "ADSs" means American Depositary Shares, each initially representing three Ordinary Shares. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under directly or indirect common control with such specified Person. For the purposes of this definition, "control", when used with respect to any specified 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. "Agent Member" means a member of, or participant in, DTC, Clearstream or Euroclear, as the case may be. "Applicable Procedures" means, with respect to any transfer or transaction involving a Global Security or beneficial interest therein, the rules and procedures of the depositary for such Security, to the extent applicable to such transaction and as in effect from time to time. "Articles of Association" means the Amended and Restated Memorandum and Articles of Association of the Issuer, as may be further amended and restated from time to time. 2 "Associate" has the meaning set forth in Section 430E(4) of the Companies Act 1985 of the United Kingdom. "Authenticating Agent" means any Person authorized pursuant to Section 6.12 to act on behalf of the Trustee to authenticate Securities. "Board of Directors" means either the board of directors of the Issuer or the Company, as the case may be, or any duly authorized committee of such board. "Board Resolution" means a resolution duly adopted by the Board of Directors, a copy of which, certified by the Company Secretary or an Assistant Company Secretary of the Issuer or the Company, as the case may be, to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, shall have been delivered to the Trustee. "Business Day", when used with respect to any Place of Payment, Place of Conversion or any other place, as the case may be, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in such Place of Payment, Place of Conversion or other place, as the case may be, are authorized or obligated by law or executive order to close; provided, however, that a day on which banking institutions in New York, New York or London, England are authorized or obligated by law or executive order to close shall not be a Business Day for purposes of Section 10.6. "Change in Control" has the meaning specified in Section 12.4(b). "Change of Control Exchange Ratio" has the meaning specified in Section 12.1. "Change of Control Redemption Date" has the meaning specified in Section 12.1. "Change of Control Redemption Price" has the meaning specified in Section 12.1. "Clearstream" means Clearstream Banking, societe anonyme, or its successor in such capacity. "Closing Date" means the date on which the Securities are originally issued under this Indenture. "Closing Price Per Share" means, with respect to the Ordinary Shares of the Company, for any day, the closing price quoted for the Ordinary Shares on the London Stock Exchange or such other securities exchange on which the Ordinary Shares are listed or admitted to trading (converted, when applicable, into Dollars at the U.S.$/U.K.(pound) noon buying rate prevailing on such day). "Code" has the meaning specified in Section 2.1. "Commission" means the United States Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the 3 execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person. "Company Notice" has the meaning specified in Section 12.3. "Company Request" or "Company Order" means a written request or order signed in the name of the Company by (i) its Chief Executive, Finance Director or other Director; and (ii) its Chief Accounting Officer, its Treasurer, its Company Secretary or an Assistant Company Secretary, and delivered to the Trustee. "Conversion and Exchange Agent" means any Person authorized by the Company to convert Securities in accordance with Article Eleven and to exchange Preference Shares for Ordinary Shares or ADSs or, at the option of the Issuer, cash. The Company has initially appointed the Trustee as its Conversion and Exchange Agent in the State of New York, County of New York, City of New York. "Corporate Trust Office" means the office of the Trustee, which shall be outside of the United Kingdom, at which at any particular time its corporate trust business shall be principally administered (which at the date of this Indenture is located at 101 Barclay Street, New York, New York 10286). "corporation" means a corporation, company, association, joint-stock company or business trust. "Defaulted Interest" has the meaning specified in Section 3.9. "Definitive Security" means any definitive registered Security substantially in the form set forth in Exhibit B hereto issued in accordance with Section 3.5. "Depositary" means Morgan Guaranty Trust Company of New York or any Successor thereto. "Dollar" or "U.S.$" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debts. "DTC" means The Depository Trust Company, a New York corporation. "DTC Agreement" shall have the meaning specified in Section 3.5 (A)(a). "Euroclear" means Euroclear S.A./N.V., as operator of the Euroclear System, or its successor in such capacity. 4 "Event of Default" has the meaning specified in Section 5.1. "Exchange Act" means the U.S. Securities Exchange Act of 1934 (or any successor statute), as amended from time to time. "Exchange Ratio" means the rate at which Ordinary Shares or ADSs shall be delivered upon exchange of one Preference Share in accordance with the provisions of the Memorandum and Articles of Association of the Issuer, which Exchange Ratio initially shall be 49.6175 Ordinary Shares or 16.5392 ADSs per Preference Share, as adjusted from time to time in certain instances as provided or as otherwise provided in the Memorandum and Articles of Association of the Issuer. "Global Security" means a Security evidencing all or a part of all of the Securities substantially in the forms set forth in Exhibit A hereto. "Guarantee" means the guarantee of the obligations of the Issuer by the Company as endorsed on each Security authenticated and delivered pursuant to this Indenture in accordance with and subject to the terms of Article 15 hereof and all other obligations and covenants of the Company contained in this Indenture and the Securities. "Holder" means in the case of any Security, the Person in whose name the Security is registered in the Security Register. "Holder Option Redemption Date" has the meaning specified in Section 13.1. "Holder Option Redemption Price" has the meaning specified in Section 13.1. "Indenture" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof, including, for all purposes of this instrument and any such supplemental indenture, the provisions of the Trust Indenture Act that are deemed to be a part of and govern this instrument and any such supplemental indenture, respectively. "Interest Payment Date" means the Stated Maturity of an installment of interest on the Securities. "Investment Company Act" means the U.S. Investment Company Act of 1940 (or any successor statute), as amended from time to time. "Issuer" means the Person named as the "Issuer" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Issuer" shall mean such successor Person. "Issuer Request" or "Issuer Order" means a written request or order signed in the name of the Issuer by any two Persons who shall each be a director or officer of the Issuer and delivered to the Trustee. 5 "Maturity", when used with respect to any Security, means the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption, exercise of the Holders' rights to require redemption set forth in Article Twelve or Article Thirteen or otherwise. "Non-U.S. Persons" means a Person who is not a "U.S. person" as defined in Regulation S. "Notice of Default" has the meaning specified in Section 5.1. "Officers' Certificate" means a certificate delivered to the Trustee signed by, in the case of the Company, (i) the Chief Executive, Finance Director or other Director; and (ii) the Chief Accounting Officer, the Treasurer, the Company Secretary or an Assistant Company Secretary of the Company, and, in the case of the Issuer, any two Persons who shall each be a director or officer of the Issuer. "Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Issuer or the Company. "Ordinary Share VWAP" means the London Stock Exchange volume-weighted average price with respect to the Ordinary Shares on any given Trading Day, as seen on Bloomberg Professional Service. "Ordinary Shares" mean the ordinary shares, nominal value U.K. five pence per share, in the capital of the Company at the date of this instrument as originally executed. Shares issuable on conversion of Securities into Preference Shares and exchange of Preference Shares shall include only Ordinary Shares or shares of any class or classes of ordinary shares resulting from any reclassification or reclassifications thereof; provided, however, that if at any time there shall be more than one such resulting class, the shares so issuable on conversion of Securities into Preference Shares and exchange of Preference Shares shall include shares of all such classes, and the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications. "Outstanding", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (ii)Securities for the payment or redemption of which money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company) in trust or set aside and segregated in trust by the Company (if the Company shall act as its own Paying Agent) for the Holders of such Securities; provided that if such Securities are to be redeemed, notice of such redemption has been duly given 6 pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (iii)Securities which have been paid pursuant to Section 3.8 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a bona fide purchaser in whose hands such Securities are valid obligations of the Company; provided, however, that in determining whether the Holders of the requisite principal amount of Outstanding Securities are present at a meeting of Holders of Securities for quorum purposes or have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Securities owned by the Issuer or the Company or any other obligor upon the Securities or any Affiliate of the Issuer or the Company or such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such determination as to the presence of a quorum or upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Issuer or the Company or any other obligor upon the Securities or any Affiliate of the Issuer or the Company or such other obligor. "Paying Agent" means any Person authorized by the Issuer to pay the principal of or interest on any Securities on behalf of the Issuer and, except as otherwise specifically set forth herein, such term shall include the Issuer if it shall act as its own Paying Agent. The Issuer has initially appointed the Trustee as its Paying Agent in the State of New York, County of New York, City of New York. "Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof or any other entity of whatever nature. "Place of Conversion" has the meaning specified in Section 3.1. "Place of Payment" has the meaning specified in Section 3.1. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.8 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "Preference Shares" means the 2000.00% Exchangeable Redeemable Preference Shares with a nominal value of $1 each in the capital of the Issuer. 7 "Private Placement Legend" means the legend initially set forth on the Securities in the form set forth in Section 2.2. "Purchasers" shall have the meaning set forth in Section 10.9. "QIB" means a "qualified institutional buyer" as defined under Rule 144A. "Record Date" means any Regular Record Date or Special Record Date. "Record Date Period" means the period from the close of business of any Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date. "Redemption Date", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price", when used with respect to any Security to be redeemed in accordance with Article 10 of this Indenture, means 100% of the principal amount of the Securities to be redeemed, plus accrued interest to the Redemption Date. "Registration Rights Agreement" means the Registration Rights Agreement dated as of August 21, 2001 among the Issuer, the Company and Bear, Stearns International Limited and Goldman Sachs International as representatives of the initial purchasers of the Securities. "Registration Statement" has the meaning set forth in the Registration Rights Agreement. "Regulation S" means Regulation S under the Securities Act. "Regulation S Global Security" has the meaning specified in Section 2.1. "Regulation S Definitive Security" means a Definitive Security issued in respect of an interest in the Regulation S Global Security. "Regular Record Date" for interest payable in respect of any Definitive Security on any Interest Payment Date means the sixth day of February or the sixth day of August (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. "Responsible Officer", when used with respect to the Trustee, means any officer within the Corporate Trust Office of the Trustee, including, without limitation, any vice president, assistant vice president, assistant treasurer, corporate trust officer or other employee of the Trustee customarily performing functions similar to those performed by any of the above designated officers, and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture. 8 "Rule 144A" means Rule 144A under the Securities Act. "Rule 144A Global Security" has the meaning specified in Section 2.1. "Rule 144A Definitive Security" means a Definitive Security issued in respect of an interest in the Rule 144A Global Security. "Securities" has the meaning ascribed to it in the first paragraph under the caption "Recitals of the Issuer". "Securities Act" means the U.S. Securities Act of 1933 (or any successor statute), as amended from time to time. "Security Register" and "Security Registrar" have the respective meanings specified in Section 3.5. "Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Issuer pursuant to Section 3.9. "Stated Maturity", when used with respect to any Security or any installment of interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of interest is due and payable. "Subsidiary" means a corporation more than 50% of the outstanding voting stock of which is owned, directly or indirectly, by the Company or by one or more other Subsidiaries, or by the Company and one or more other Subsidiaries. For the purposes of this definition, "voting stock" means stock or other similar interests in the corporation which ordinarily has or have voting power for the election of directors, or persons performing similar functions, whether at all times or only so long as no senior class of stock or other interests has or have such voting power by reason of any contingency. "Trading Days" means days on which the London Stock Exchange or such other securities exchange on which the Ordinary Shares are listed or admitted for trading, is open for trading. "Trust Indenture Act" means the U.S. Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed; provided, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by any such amendment, the Trust Indenture Act of 1939 as so amended. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean such successor Trustee. "Unrestricted Global Security" means any Global Security that does not and is not required to bear the Private Placement Legend. 9 "United States" or "U.S." means the United States of America (including the States and the District of Columbia), its territories, its possessions and other areas subject to its jurisdiction (its "possessions" including Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana Islands). SECTION One.2. Compliance Certificates and Opinions. Upon any application or request by the Issuer or the Company to the Trustee to take any action under any provision of this Indenture, the Issuer or the Company, as the case may be, shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and, if required by the Trust Indenture Act, an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (including certificates provided for in Section 9.7) shall include: (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. SECTION One.3. Form of Documents Delivered to the Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Issuer or the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, 10 counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which such certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Issuer or the Company or any other Person stating that the information with respect to such factual matters is in the possession of the Issuer or the Company or such other Person, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. SECTION One.4. Acts of Holders of Securities. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be given or taken by Holders of Securities may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent or proxy duly appointed in writing by such Holders. Such action shall become effective when such instrument or instruments record is delivered to the Trustee and, where it is hereby expressly required, to the Issuer and the Company. The Trustee shall promptly deliver to the Issuer and the Company copies of all such instruments delivered to the Trustee. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders of Securities signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent or proxy, or of the holding by any Person of a Security, shall be sufficient for any purpose of this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee, the Issuer and the Company if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. (c) The ownership, principal amount and serial number of any Security held by any Person, and the date of his holding the same, shall be proved by the Security Register. In the case of a Global Security, the Holder thereof shall be entitled to give or take, or vote on, any relevant action with respect to all or only a portion of the principal amount represented by such Global Security as of the record date fixed for such action, as indicated in Security Register. (d) The fact and date of execution of any such instrument or writing and the authority of the Person executing the same may also be proved in any other manner which the Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section 1.4. 11 (e) The Issuer may set any day as the record date for the purpose of determining the Holders entitled to give or take any request, demand, authorization, direction, notice, consent, waiver or other action, or to vote on any action, authorized or permitted by this Indenture to be given or taken by Holders. Promptly and in any case not later than 10 days after setting a record date, the Issuer shall notify the Trustee and the Holders of such record date. If not set by the Issuer prior to the first solicitation of a Holder made by any Person in respect of any such action, or, in the case of any such vote, prior to such vote, the record date for any such action or vote shall be the 30th day (or, if later, the date of the most recent list of Holders required to be provided pursuant to Section 14.1) prior to such first solicitation or vote, as the case may be. With regard to any record date, the Holders on such date (or their duly appointed agents or proxies), and only such Persons, shall be entitled to give or take, or vote on, the relevant action, whether or not such Holders remain Holders after such record date. Notwithstanding the foregoing, the Issuer shall not set a record date for, and the provisions of this paragraph shall not apply with respect to, any notice, declaration or direction referred to in the next paragraph. Upon receipt by the Trustee from any Holder of (i) any notice of default or breach referred to in Section 5.1(4), if such default or breach has occurred and is continuing and the Trustee shall not have given such a notice to the Issuer and the Company; (ii) any declaration of acceleration referred to in Section 5.2, if an Event of Default has occurred and is continuing and the Trustee shall not have given such a declaration to the Issuer and the Company; or (iii) any direction referred to in Section 5.12, if the Trustee shall not have taken the action specified in such direction, then, with respect to clauses (ii) and (iii), a record date shall automatically and without any action by the Issuer, the Company or the Trustee be set for determining the Holders entitled to join in such declaration or direction, which record date shall be the close of business on the tenth day (or, if such day is not a Business Day, the first Business Day thereafter) following the day on which the Trustee receives such declaration or direction, and, with respect to clause (i), the Trustee may set any day as a record date for the purpose of determining the Holders entitled to join in such notice of default. Promptly after such receipt by the Trustee of any such declaration or direction referred to in clause (ii) or (iii), and promptly after setting any record date with respect to clause (i), and as soon as practicable thereafter, the Trustee shall notify the Issuer, the Company and the Holders of any such record date so fixed. The Holders on such record date (or their 12 duly appointed agents or proxies), and only such Persons, shall be entitled to join in such notice, declaration or direction, whether or not such Holders remain Holders after such record date; provided that, unless such notice, declaration or direction shall have become effective by virtue of Holders of the requisite principal amount of Securities on such record date (or their duly appointed agents or proxies) having joined therein on or prior to the 180th day after such record date, such notice, declaration or direction shall automatically and without any action by any Person be cancelled and of no further effect. Nothing in this paragraph shall be construed to prevent a Holder (or a duly appointed agent or proxy thereof) from giving, before or after the expiration of such 180-day period, a notice, declaration or direction contrary to or different from, or, after the expiration of such period, identical to, the notice, declaration or direction to which such record date relates, in which event a new record date in respect thereof shall be set pursuant to this paragraph. In addition, nothing in this paragraph shall be construed to render ineffective any notice, declaration or direction of the type referred to in this paragraph given at any time to the Trustee and the Issuer by Holders (or their duly appointed agents or proxies) of the requisite principal amount of Securities on the date such notice, declaration or direction is so given. (f) Except as provided in Sections 5.12 and 5.13, any request, demand, authorization, direction, notice, consent, election, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, the Issuer or the Company in reliance thereon, whether or not notation of such action is made upon such Security. SECTION One.5. Notices, Etc., to Trustee, Issuer and Company. Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of Holders of Securities or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with: (1) the Trustee by any Holder of Securities or by the Issuer or the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (which may be via facsimile) to or with the Trustee and received at its Corporate Trust Office, Attention: Corporate Trust Administration, and shall be deemed given when received; or (2) the Issuer or the Company by the Trustee or by any Holder of Securities shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing, mailed, first-class postage prepaid, or telecopied and confirmed by mail, first-class postage prepaid, or delivered by hand or overnight courier, addressed to the Issuer and the Company at Hampshire International Business Park, Chineham, Basingstoke, Hampshire RG24 8EP, England, Attention: Company Secretary, or at any other address previously furnished in writing to the Trustee by the Issuer or the Company, and shall be deemed given when received. Any request, demand, authorization, direction, notice, consent, election or waiver required or permitted under this Indenture shall be in the English language, except that any published notice may be in an official language of the country of publication. SECTION One.6. Notice to Holders of Securities; Waiver. Except as otherwise expressly provided herein, where this Indenture provides for notice to Holders of Securities of any event, such notice shall be sufficiently given to Holders if in writing and mailed, first-class postage prepaid to each Holder affected by such event, at the address of such Holder as it appears in the Security Register, not earlier than the earliest date and not later than the latest date prescribed for the giving of such notice. Neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders of Securities. In case by reason of the suspension of regular mail service or by reason of any other 13 cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee, which approval shall not be unreasonably withheld or delayed, shall constitute a sufficient notification to such Holders for every purpose hereunder. Such notice shall be deemed to have been given when such notice is mailed. In addition to notices by mail, the Issuer undertakes that any notice of redemption of the Securities, or notice of any Change in Control and of the related redemption right arising as a result thereof, shall further include a public announcement thereof by release made to Reuters Economic Services and Bloomberg Business News. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders of Securities shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. SECTION One.7. Notice of Adjustments of Exchange Ratio. Whenever the Exchange Ratio is adjusted as provided in the Articles of Association: (1) the Issuer shall compute the adjusted Exchange Ratio in accordance with the Articles of Association and shall prepare a certificate signed by a director or officer of the Issuer and the Chief Financial Officer of the Company setting forth the adjusted Exchange Ratio and showing in reasonable detail the facts upon which such adjustment is based, and such certificate shall promptly be filed with the Trustee and with each Conversion and Exchange Agent; and (2) upon each such adjustment, a notice stating that the Exchange Ratio has been adjusted and setting forth the adjusted Exchange Ratio shall be required, and as soon as practicable after it is required, such notice shall be provided by the Issuer to all Holders in accordance with Section 1.6. Neither the Trustee nor any Conversion and Exchange Agent shall be under any duty or responsibility with respect to any such certificate or the information and calculations contained therein, except to exhibit the same to any Holder of Securities desiring inspection thereof at its office during normal business hours. SECTION One.8. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. 14 SECTION One.9. Successors and Assigns. All covenants and agreements in this Indenture by the Issuer or the Company shall bind their respective successors and assigns, whether so expressed or not. SECTION One.10. Separability Clause. In case any provision in this Indenture or the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION One.11. Benefits of Indenture. Except as provided in the next sentence, nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors and assigns hereunder and the Holders of Securities, any benefit or legal or equitable right, remedy or claim under this Indenture. SECTION One.12. Governing Law, Etc. (a) THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. THE PARTIES HERETO EACH HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE SECURITIES OR ANY TRANSACTION RELATED HERETO OR THERETO. (b) Each of the Issuer and the Company hereby: (i) agrees that any suit, action or proceeding against it arising out of or relating to this Indenture or the Securities, as the case may be, under U.S. federal or state securities laws may be instituted in any U.S. federal or state court sitting in New York City; (ii)waives to the extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, and any claim that any suit, action or proceeding in such a court has been brought in an inconvenient forum; (iii)irrevocably submits to the non-exclusive jurisdiction of such courts in any suit, action or proceeding; (iv)agrees that final judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding and may be enforced in the courts of the jurisdiction of which it is subject by a suit upon judgment; and 15 (v) irrevocably appoints CT Corporation System as its agent upon which process may be served in any such suit, action or proceeding, and agrees that service of process upon such agent at its office at 111 8th Avenue, 13th Floor, New York, New York 10011 and written notice of said service to the Issuer and the Company by such agent shall constitute personal service of such process on the Issuer and the Company in any such suit, action or proceeding. SECTION One.13. Legal Holidays. In any case where any Interest Payment Date, Redemption Date, Change of Control Redemption Date, Holder Option Redemption Date or Stated Maturity of any Security or the last day on which a Holder of a Security has a right to convert his Security shall not be a Business Day at a Place of Payment or Place of Conversion, as the case may be, then (notwithstanding any other provision of this Indenture or of the Securities) payment of principal of, premium, if any, or interest on, or the payment of any Redemption Price, Change of Control Redemption Price or Holder Option Redemption Price (or issue of Preference Shares on conversion of a Security or Ordinary Shares or ADSs in exchange for Preference Shares into which Securities may be converted in lieu of payment thereof) with respect to, or delivery for conversion of, such Security need not be made at such Place of Payment or Place of Conversion, as the case may be, on or by such day, but may be made on or by the next succeeding Business Day at such Place of Payment or Place of Conversion, as the case may be, with the same force and effect as if made on the Interest Payment Date, Redemption Date Change of Control Redemption Date or Holder Option Redemption Date, or at the Stated Maturity or by such last day for conversion; provided, however, that in the case that payment is made on such succeeding Business Day, no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date, Redemption Date, Change of Control Redemption Date, Holder Option Redemption Date, Stated Maturity or last day for conversion, as the case may be. SECTION One.14. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with a provision of the Trust Indenture Act that is required under such Act to be a part of and govern this Indenture, the latter provision shall control. If any provision of this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may be. Article Two SECURITY FORMS SECTION Two.1. Form Generally. The Securities shall be in substantially the form set forth in this Article and in the forms of Securities set forth in Exhibits A and B to this Indenture, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends 16 or endorsements placed thereon as may be required to comply with the rules of any securities exchange or the Internal Revenue Code of 1986, as amended, and regulations thereunder (the "Code"), or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. The Securities shall initially be represented by two or more Global Securities in registered form, as opposed to bearer form. Securities initially offered and sold to U.S. investors shall be issued in the form of one or more permanent global certificates in registered form, substantially in the form set forth in Exhibit A-1 hereto (a "Rule 144A Global Security"), duly executed by the Issuer and authenticated by the Trustee as hereinafter provided and deposited with a custodian for and registered in the name of Cede & Co. as nominee of DTC. Securities initially offered and sold outside of the United States shall be issued in the form of one or more permanent global certificates in registered form, substantially in the form set forth in Exhibit A-2 hereto (a "Regulation S Global Security"), duly executed by the Issuer and authenticated by the Trustee as hereinafter provided and deposited with, and registered in the name of a nominee for, a common depositary for Clearstream and Euroclear. The aggregate principal amount of the Global Securities may from time to time be increased or decreased by adjustments made on the records of the Securities Registrar in accordance with instructions given by DTC, Clearstream and Euroclear (which shall not be kept in the United Kingdom). Definitive Securities may be issued from time to time in accordance with the provisions of this Indenture, in the form of Exhibit B hereto. The Trustee's certificates of authentication shall be in substantially the form set forth in Exhibit C. Conversion notices shall be in substantially the form set forth in Exhibit D. Notices of redemption at the option of the Holder shall be substantially in the form set forth in Exhibit E. Any definitive Securities shall be printed, lithographed, typewritten or engraved or produced by any combination of these methods on steel engraved borders if so required by any securities exchange upon which the Securities may be listed, or may be produced in any other manner permitted by the rules of any such securities exchange, or, if the Securities are not listed on a securities exchange, in any other manner approved by the Issuer, all as determined by the officers executing such Securities, as evidenced by their execution thereof. SECTION Two.2. Restrictive Legends. (a) Unless and until a Security is sold or otherwise transferred in connection with an effective Registration Statement pursuant to the Registration Rights Agreement, (i) the Rule 144A Global Securities and Rule 144A Definitive Securities shall bear the legend set forth 17 below on the face thereof and (ii) until at least the 41st day after the Closing Date, the Regulation S Global Securities and the Regulation S Definitive Securities shall bear the legend set forth below on the face thereof: THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT (A "QIB") OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) UNDER THE SECURITIES ACT, OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO SHIRE PHARMACEUTICALS GROUP PLC OR ANY SUBSIDIARY THEREOF, (B) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S, (B) IN ACCORDANCE WITH RULE 144A TO A PERSON WHOM THE SELLER AND ANY PERSON ACTING ON BEHALF OF THE SELLER REASONABLY BELIEVE IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A AND TO WHOM NOTICE IS GIVEN THAT SUCH OFFER, SALE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS SECURITY IN VIOLATION OF THE FOREGOING RESTRICTIONS. (b) Each Global Security shall also bear the following legend on the face thereof: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO. THE REGISTERED HOLDER HEREOF MAY BE TREATED BY THE ISSUER, THE TRUSTEE AND ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES. TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO A SUCCESSOR BOOK-ENTRY DEPOSITARY, AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 3.7 OF THE INDENTURE. 18 SECTION Two.3. Form of the Guarantee. The Guarantee of the Company shall be endorsed on each Security and shall be in substantially the form set forth in Exhibit F or such other form or forms as shall be established by a Board Resolution of the Company or an indenture supplemental hereto, with such appropriate insertions, omissions, substitutions and other corrections as are required or permitted by this Indenture or any indenture supplemental hereto, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Guarantees. Such execution of such Guarantees shall be conclusive evidence as regards the Company as to any such determination made by the Company. Article Three THE SECURITIES SECTION Three.1. Title and Terms. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is limited to U.S.$400,000,000, except for Securities authenticated and delivered in exchange for, or in lieu of, other Securities pursuant to Section 3.5, 3.8, 8.5, 10.8, 11.2 or 12.3(f). The Securities shall be known and designated as the "2.00% Guaranteed Convertible Senior Notes due August 21, 2011" of the Issuer. Their Stated Maturity shall be August 21, 2011, and they shall bear interest on their principal amount from August 21, 2001, payable semi-annually in arrears on February 21 and August 21 in each year, commencing February 21, 2002, at the rate of 2.00% per annum until the principal thereof is due and at the rate of 2.00% per annum on any overdue principal and, to the extent permitted by law, on any overdue interest; provided, however, that payments shall only be made on Business Days as provided in Section 1.13. The principal of, premium, if any, and interest on the Securities shall be payable as provided in the form of Securities set forth in Exhibit A and Exhibit B, and any Redemption Price, Change of Control Redemption Price or Holder Option Redemption Price shall be payable at such places as are identified in the notice of redemption delivered pursuant to Section 10.5, the Company Notice given pursuant to Section 12.3 or any notice from the Issuer delivered pursuant to Section 13.3 (any city in which any Paying Agent is located being herein called a "Place of Payment"). The Securities shall be redeemable at the option of the Issuer, as provided in Article Ten and in the form of Securities set forth in Exhibit A and Exhibit B. The Securities shall be convertible as provided in Article Eleven (any city in which any Conversion Agent is located being herein called a "Place of Conversion"). 19 The Securities shall be subject to redemption by the Company at the option of the Holders as provided in Article Twelve and Article Thirteen. SECTION Three.2. Denominations. The Securities shall be issuable only in global registered or definitive registered form, without coupons, in denominations of U.S.$1,000 and integral multiples thereof. SECTION Three.3. Execution, Authentication, Delivery and Dating. The Securities shall be executed on behalf of the Issuer by its Chief Executive, its Finance Director or one of its other Directors, or by its Treasurer, under a facsimile of its corporate seal reproduced thereon attested by its Company Secretary or one of its Assistant Company Secretaries. Any such signature may be manual or facsimile. Securities bearing the manual or facsimile signature of individuals who were at any time the proper officers of the Issuer shall bind the Issuer , notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Securities executed by the Issuer to the Trustee or to its order for authentication, together with an Issuer Order for the authentication and delivery of such Securities, and the Trustee in accordance with such Issuer Order shall authenticate and make available for delivery such Securities as in this Indenture provided and not otherwise. Each Security shall be dated the date of its authentication. No Security shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature of an authorized signatory, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder. SECTION Three.4. Reserved. SECTION Three.5. Transfer and Exchange. The Issuer shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Issuer designated pursuant to Section 9.2 being herein sometimes collectively referred to as the "Security Register") in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "Security Registrar" for the purpose of registering Securities and transfers and exchanges of Securities as herein provided. The Security Register shall be maintained at all times outside the United Kingdom. 20 Upon surrender of a Security for registration of transfer of any Security at an office or agency of the Issuer designated pursuant to Section 9.2 for such purpose, the Issuer shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of any authorized denominations and of a like aggregate principal amount. (A) Global Securities (a) The Rule 144A Global Security authenticated under this Indenture shall be deposited with a custodian for and registered in the name of Cede & Co., as nominee of DTC. Pursuant to the terms of the agreement to be entered into between DTC and the Issuer (the "DTC Agreement"), DTC will operate a book-entry system for the securities registered in its name or the name of its nominee. The Regulation S Global Security authenticated under this Indenture shall be deposited with, and registered in the name of a nominee for, a common depositary for Clearstream and Euroclear, which will each operate a book-entry system for the Securities registered in the name of the common depositary. Each such Global Security shall constitute a single Security for all purposes of this Indenture. (b) The Rule 144A Global Security and the Regulation S Global Security shall bear legends as set forth in Section 2.2. Transfers of any Global Security shall be limited to transfers of such Global Security in whole, but not in part. Transfers of interests from one Global Security to another Global Security shall be effected by an increase or a reduction in the aggregate principal amount of Securities represented by the first Global Security and the corresponding reduction or increase in the aggregate principal amount of Securities represented by the other Global Security. Any beneficial interest in one of the Global Securities that is transferred to a person who takes delivery in the form of an interest in another Global Security will, upon transfer, cease to be an interest in such Global Security and become an interest in such other Global Security and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other procedures or conditions applicable to beneficial interests in such other Global Security for as long as it remains such an interest. (c) Notwithstanding any other provision in this Indenture, no Global Securities held by DTC may be exchanged for Definitive Securities unless: (i) DTC notifies the Trustee that it is unwilling or unable to continue to hold such Global Securities, or if at any time DTC is unable to or ceases to be a clearing agency registered under the Exchange Act and as successor to DTC registered under the Exchange Act is not appointed by the Trustee at the written request of the Issuer within 120 days; (ii) an Event of Default under the Securities occurs, upon the request of the holder of a beneficial interest in the relevant 21 Securities; or (iii) at any time the Issuer at its option and in its sole discretion determines that a Global Security should be exchanged (in whole but not in part) for Definitive Securities. The Regulation S Global Securities may not be exchanged for Definitive Securities unless: (i) either Clearstream or Euroclear is closed for business for a continuous period of 14 days (other than by reason of holidays, statutory or otherwise) or announces an intention permanently to cease business and does in fact do so and no alternative clearing system satisfactory to the Issuer is available; (ii) an Event of Default under the Securities occurs, upon the request of the holder of a a beneficial interest in the relevant Securities; or (iii) at any time the Issuer at its option and in its sole discretion determines that a Global Security should be exchanged (in whole but not in part) for Definitive Securities. Any Global Security that is exchangeable pursuant to the preceding paragraph shall be exchangeable only for Definitive Securities issuable in authorized denominations of a like aggregate principal amount and tenor as the Global Security so exchangeable, and bearing interest at the same rate, having the same date of issuance, the same date or dates from which such interest shall accrue, the same Interest Payment Dates, and subject to the same redemption and conversion provisions and other terms as the Global Security so exchangeable. Definitive Securities shall be registered in the names of the owners of the beneficial interests in such Securities as such names are from time to time provided by the relevant Agent Members holding interests in such Global Securities (as the names of such Agent Members are provided to the Company from time to time by DTC, Clearstream or Euroclear). Except as provided above, owners solely of beneficial interests in a Global Security shall not be entitled to receive physical delivery of Securities in definitive form and will not be considered the Holders thereof for any purpose under this Indenture. (d) Definitive Securities issued upon any exchange of beneficial interests in the Rule 144A Global Security or the Regulations S Global Security shall bear the legends set forth in Section 2.2 and shall be subject to all restrictions on transfer contained therein to the same extent as the Global Security so exchanged. (e) In the event that a Global Security is surrendered for redemption in part pursuant to Section 10.8, Section 12 or Section 13 either (i) the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Global Security, without service charge, a new Global Security in a denomination equal to and in exchange for the unredeemed portion of the principal of the Global Security so surrendered or (ii) the Trustee shall endorse Schedule A to such Global Security to reflect the reduction in the principal amount at maturity of such Global Security as a result of such redemption. (f) Upon the effectiveness of the Registration Statement pursuant to the Registration Rights Agreement and the sale or other transfer of a beneficial interest in a Global Security in connection therewith, the Issuer shall issue and upon receipt of an authentication order in accordance with Section 3.3, the Trustee (or its agent in accordance with Section 6.12) shall authenticate one or more Unrestricted Global Securities in the form of Exhibit A-3 hereto in an initial aggregate principal amount equal to the principal amount of the beneficial interest so transferred. Concurrently with the issuance of any such Unrestricted Global Security, the Trustee shall cause the aggregate principal amount of the applicable initial Global Security to be reduced accordingly and direct the Security Registrar to make a corresponding reduction in the Security Register in respect of the initial Global Security. (g) The Agent Members, DTC, Clearstream, Euroclear and any beneficial owners shall have no rights under this Indenture with respect to any Global Security held on their behalf by a Holder, or in relation to which they hold, directly or indirectly, beneficial interests, and such Holder shall be treated by the Issuer, the Company, the Trustee, and any agent of the Issuer, the 22 Company or the Trustee as the owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Company, the Trustee, or any agent of the Issuer, the Company or the Trustee, from giving effect to any written certification, proxy or other authorization furnished by a Holder or impair, as between DTC, Clearstream, Euroclear or another clearing agency and any of their respective Agent Members and Holders, the operation of customary practices governing the exercise of the rights of a holder or any security, including without limitation the granting of proxies or other authorization of participants to give or take any request, demand, authorization, direction, notice, consent, waiver, or other action which a Holder is entitled to give or take under this Indenture. (h) DTC, Clearstream and Euroclear may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture with respect to the Securities. (i) Pending the preparation of Definitive Securities, the Issuer may execute, and upon Issuer Order the Trustee shall authenticate and make available for delivery, temporary Securities provided to it which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the Definitive Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Definitive Securities may determine, as evidenced by their execution of such Securities. If temporary Securities are issued, the Issuer will cause definitive registered Securities to be prepared without unreasonable delay. After the preparation of definitive registered Securities, the temporary Securities shall be exchangeable for Definitive Securities upon surrender of the temporary Securities at any office or agency of the Issuer designated pursuant to Section 9.2, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities the Issuer shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a like principal amount of Definitive Securities of authorized denominations. Until so exchanged the temporary Securities shall in all respects be entitled to the same benefits under this Indenture as Definitive Securities. (B) Definitive Securities (a) At the option of a Holder, and subject to the other provisions of this Section 3.5, Definitive Securities may be exchanged for other Definitive Securities of any authorized denomination and of a like aggregate principal amount, upon surrender of the Definitive Securities to be exchanged at any such office or agency. Whenever any Definitive Securities are so surrendered for exchange, and subject to the other provisions of this Section 3.5, the Issuer shall execute, and the Trustee shall authenticate and make available for delivery, the Securities which the Holder making the exchange is entitled to receive. Every Definitive Security presented or surrendered for registration of transfer and/or surrendered for exchange shall (if so required by the Issuer or the Security Registrar) be duly endorsed, or be accompanied 23 by a written instrument of transfer in form satisfactory to the Issuer and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. All Definitive Securities issued upon any registration of transfer or exchange of Definitive Securities shall be the valid and legally binding obligations of the Issuer, evidencing the same debt, and subject to the other provisions of this Section 3.5, entitled to the same benefits under this Indenture, as the Definitive Securities surrendered upon such registration of transfer or exchange. (b) No service charge shall be made for any registration of transfer or exchange of Securities except as provided in Section 3.8, but the Issuer may require payment of a sum sufficient to cover any tax, duty or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to this Section 3.5 or Section 8.5, 10.8 or 11.2 (other than where the Preference Shares, Ordinary Shares or ADSs are to be issued or delivered in a name other than that of the Holder of the Security), in each case not involving any transfer. Any stamp, stamp duty reserve tax and other duties, if any, which may be imposed by the United Kingdom or any political subdivision thereof or therein in connection with any exchanges pursuant to this Section 3.5 or Section 8.5, 10.8, 11.2, 12.3(f) or 13.3(e) (other than where the Preference Shares, Ordinary Shares or ADSs are to be issued or delivered in a name other than that of the Holder of the Security), in each case not involving any transfer, shall be paid by the Issuer. In the event of a redemption of the Securities, the Issuer will not be required (a) to register the transfer of or exchange Securities for a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Securities called for such redemption; or (b) to register the transfer of or exchange any Security, or portion thereof, called for redemption. (c) Neither the Trustee, the Paying Agent nor any of their agents shall (1) have any duty to monitor compliance with or with respect to any U.S. federal or state or other securities or tax laws; or (2) have any duty to obtain documentation on any transfers or exchanges other than as specifically required hereunder. SECTION Three.6. Reserved. SECTION Three.7. Special Transfer Provisions. Unless and until a Security is sold or otherwise transferred in connection with an effective Registration Statement pursuant to the Registration Rights Agreement, the following provisions shall apply: (a) Transfers to QIBs. The following provisions shall apply with respect to any proposed transfer of a Security to a QIB, other than any QIB that is a Non-U.S. Person: (i) If the Security to be transferred is (A) either a Rule 144A Definitive Security or a Regulation S Definitive Security prior to the removal of the Private Placement Legend, the transferor must advise the Issuer and the Trustee in writing 24 that the sale has been made in compliance with the provisions of Rule 144A to a transferee who has advised the Issuer and the Trustee in writing that it is purchasing the Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a QIB within the meaning of Rule 144A and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer and the Company as it has requested pursuant to Rule 144A, or has determined not to request such information, and that it is aware that the transferor is relying upon its foregoing representations in order to claim the exemption from registration provided by Rule 144A; or (B) an interest in a Rule 144A Global Security, the transfer of such interest may be effected only through the book-entry system maintained by DTC. (ii) If the proposed transferee is an Agent Member and the Security to be transferred consists of Rule 144A Definitive Securities, upon receipt by the Trustee of the documents referred to in paragraph (i) above and instructions given in accordance with the procedures of DTC, Clearstream or Euroclear, as the case may be, the Security Registrar shall reflect on its books and records the date and an increase in the principal amount of the Rule 144A Global Security in an amount equal to the principal amount of the Rule 144A Definitive Securities to be transferred, and the Trustee shall cancel the Rule 144A Definitive Securities so transferred. (b) Transfers of Interests in the Regulation S Global Security or Regulation S Definitive Securities. The following provisions shall apply with respect to any transfer of interests in the Regulation S Global Security or Regulation S Definitive Securities: (i) prior to the removal of the Private Placement Legend from the Regulation S Global Security or Regulation S Definitive Securities pursuant to Section 2.2, such transfer must comply with paragraph (a) or (c) of this Section 3.7, and (ii) after such removal, transfers of any such Security may be made without provision of any additional certification. (c) Transfers to Non-U.S. Persons at Any Time. The following provisions shall apply with respect to any transfer of a Security to a Non-U.S. Person: (i) any proposed transfer to any Non-U.S. Person of a Rule 144A Definitive Security or an interest in a Rule 144A Global Security may be made upon receipt by the Trustee of a certificate substantially in the form of Exhibit G hereto from the proposed transferor. (ii) (A) If the proposed transferor is an Agent Member holding a beneficial interest in a Rule 144A Global Security, upon receipt by the Trustee of (1) the documents, if any, required by paragraph (i) and (2) instructions in accordance with the procedures of DTC, the Security Registrar shall reflect on its books and records the date and a decrease in the principal amount of the Rule 144A Global Security in an amount equal to the principal amount of the beneficial interest in the Rule 144A Global Security 25 to be transferred, and (B) if the proposed transferee is an Agent Member, upon receipt by the Trustee of instructions given in accordance with the procedures of DTC, the Security Registrar shall reflect on its books and records the date and an increase in the principal amount of the Regulation S Global Security in an amount equal to the principal amount of the Rule 144A Definitive Security or the Rule 144A Global Security, as the case may be, to be transferred, and the Trustee shall cancel the Definitive Security, if any, so transferred or decrease the amount of the Rule 144A Global Security. (d) Private Placement Legend. Upon the transfer, exchange or replacement of Securities not bearing the Private Placement Legend, the Trustee shall deliver Securities that do not bear the Private Placement Legend. Upon the transfer, exchange or replacement of Securities bearing the Private Placement Legend, the Trustee shall deliver only Securities that bear the Private Placement Legend unless (i) the Private Placement Legend is no longer required by Section 2.2, or (ii) if the time period referred to in Rule 144(k) has expired and there is delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Issuer and the Trustee to the effect that neither such legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act. (e) General. By its acceptance of any Security bearing the Private Placement Legend, each Holder of such Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in the Private Placement Legend and agrees that it will transfer such Security only as provided in this Indenture. In connection with any transfer of Securities, each Holder agrees by its acceptance of the Securities to furnish the Trustee, the Book-Entry Depositary or the Issuer such certifications, legal opinions or other information as any of them may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act; provided that the Trustee shall not be required to determine (but may conclusively rely on a determination made by the Issuer with respect to) the sufficiency of any such certifications, legal opinions or other information. The Trustee shall retain copies of all letters, notices and other written communications received pursuant to Section 3.5 or this Section 3.7 in accordance with its customary record retention procedures. The Issuer and the Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Trustee. SECTION Three.8. Mutilated, Destroyed, Lost or Stolen Securities. If any mutilated Security is surrendered to the Trustee, the Issuer shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding. If there be delivered to the Issuer and to the Trustee: 26 (1) evidence to their satisfaction of the destruction, loss or theft of any Security; and (2) such security or indemnity as may be satisfactory to the Issuer and the Trustee to save each of them and any agent of either of them harmless, then, in the absence of actual notice to the Issuer or the Trustee that such Security has been acquired by a bona fide purchaser, the Issuer shall execute and the Trustee shall authenticate and make available for delivery, in lieu of any such destroyed, lost or stolen Security, a new Security of like tenor and principal amount and bearing a number not contemporaneously outstanding. In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Issuer in its discretion, but subject to any conversion rights, may, instead of issuing a new Security, pay such Security, upon satisfaction of the conditions set forth in the preceding paragraph. Upon the issuance of any new Security under this Section 3.8, the Issuer may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security issued pursuant to this Section 3.8 in lieu of any mutilated, destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Security shall be at any time enforceable by anyone, and such new Security shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities duly issued hereunder. The provisions of this Section 3.8 are exclusive and shall preclude (to the extent lawful) all other rights and remedies of any Holder with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. SECTION Three.9. Payment of Interest; Interest Rights Preserved. Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid, (i) in the case of Definitive Securities, to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest and, at the option of the Issuer, may be paid by check mailed to the address of the Person as it appears in the Security Register; and (ii) in the case of Global Securities, to the Holder by wire transfer of same-day funds to the Holder in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Any interest on any Security which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been 27 such Holder, and such Defaulted Interest may be paid by the Issuer, at its election in each case, as provided in clause (1) or (2) below: (1) The Issuer may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Issuer shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security, the date of the proposed payment and the Special Record Date, and at the same time the Issuer shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. The Special Record Date for the payment of such Defaulted Interest shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee, in the name and at the expense of the Issuer, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder at such Holder's address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2). (2) The Issuer may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Issuer to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section and Section 3.5, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. Interest on any Security which is converted in accordance with Section 11.2 during a Record Date Period shall be payable in accordance with the provisions of Section 11.2. SECTION Three.10. Persons Deemed Owners. The Issuer, the Company, the Trustee and any agent of the Issuer, the Company or the Trustee may treat the Person in whose name a Security is registered as the owner of such Security for the purpose of receiving payment of principal of, premium, if any, and (subject to Section 3.9) interest on such Security and for all other purposes whatsoever, whether or not such 28 Security be overdue, and neither the Issuer, the Company, the Trustee nor any agent of the Issuer, the Company or the Trustee shall be affected by notice to the contrary. SECTION Three.11. Cancellation. All Securities surrendered for payment, redemption, repurchase, registration of transfer or exchange or conversion shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee. All Securities so delivered to the Trustee shall be canceled promptly by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities canceled as provided in this Section 3.11. The Trustee shall dispose of all canceled Securities in accordance with applicable law and its customary practices in effect from time to time. SECTION Three.12. Computation of Interest. Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months and, in the case of an incomplete month, the number of days elapsed. SECTION Three.13. CUSIP, CINS, ISIN and/or Common Code Numbers. The Issuer in issuing Securities may use "CUSIP," "CINS," "ISIN," and/or "Common Code" numbers (if then generally in use) in addition to serial numbers; the Trustee shall use such CUSIP, CINS, ISIN and/or Common Code numbers in addition to serial numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such CUSIP, CINS, ISIN and/or Common Code numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the serial or other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such CUSIP, CINS, ISIN and/or Common Code numbers. The Issuer shall promptly notify the Trustee in writing of any change in any such CUSIP, CINS, ISIN and/or Common Code number. Article Four SATISFACTION AND DISCHARGE SECTION Four.1. Satisfaction and Discharge of Indenture. This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of conversion, or registration of transfer or exchange, or replacement of Securities herein expressly provided for and the Issuer's obligations to the Trustee pursuant to Section 6.7), and the Trustee, at the expense of the Issuer, shall execute proper instruments in form and substance satisfactory to the Trustee acknowledging satisfaction and discharge of this Indenture, when 29 (1) either (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.8; and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Section 9.3) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee or its agent for cancellation (other than Securities referred to in clauses (i) and (ii) of clause (1)(A) above) (i) have become due and payable, or (ii) will have become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer, and the Issuer, in the case of clause (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds (immediately available to the Holders in the case of clause (i)) in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal, premium, if any, and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (2) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer; and (3) the Issuer has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Issuer to the Trustee under Section 6.7, the obligations of the Issuer to any Authenticating Agent under Section 6.12, and, if money shall have been deposited with the Trustee pursuant to clause (1)(B) of this Section 4.1, the obligations of the Trustee under Section 4.2 and the last paragraph of Section 9.3, the obligations of the Issuer and the Trustee under Section 3.5 and Article Eleven and the obligations of the Company under Article Fifteen shall survive such satisfaction and discharge. 30 SECTION Four.2. Application of Trust Money. Subject to the provisions of the last paragraph of Section 9.3, all money deposited with the Trustee pursuant to Section 4.1 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent), to the Persons entitled thereto, of the principal, premium, if any, and interest for whose payment such money has been deposited with the Trustee. All moneys deposited with the Trustee pursuant to Section 4.1 (and held by it or any Paying Agent) for the payment of Securities subsequently converted shall be returned to the Issuer upon Issuer Request. Article Five REMEDIES SECTION Five.1. Events of Default. "Event of Default", wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) default in the payment of the principal of or premium, if any, on any Security at its Maturity; or (2) default in the payment of any interest upon any Security when it becomes due and payable, and continuance of such default for a period of 30 days; or (3) failure by the Issuer to give the Company Notice in accordance with Section 12.3; or (4) default in the performance, or breach, of any covenant or warranty of the Issuer or the Company in this Indenture (other than a covenant or warranty a default in the performance or breach of which is specifically dealt with elsewhere in this Section), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Issuer and the Company by the Trustee or to the Issuer and the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (5) a default in the payment when due of the principal of, or acceleration of, any Indebtedness under any bond, debenture, note or other evidence of indebtedness for money borrowed by the Company or any Subsidiary of the Company or under any 31 mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness of the Company or any Subsidiary of the Company with a principal amount then outstanding in excess of U.S.$25,000,000, whether such Indebtedness now exists or shall hereafter be created, if such Indebtedness is not discharged, or such acceleration is not rescinded or annulled, within a period of 30 days after there shall have been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities a written notice specifying such default and requiring the Company to cause such Indebtedness to be discharged or such acceleration to be rescinded or annulled and stating that such notice is a "Notice of Default" hereunder; or (6) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Issuer or the Company in an involuntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Issuer or the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Issuer or the Company under any applicable law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Issuer or the Company or of any substantial part of the property of the Issuer or the Company, or ordering the winding up or liquidation of the Company's or the Issuer's affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 60 consecutive days; or (7) the commencement by the Company of a voluntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by the Issuer or the Company to the entry of a decree or order for relief in respect of the Issuer or the Company in an involuntary case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by the Issuer or the Company of a petition or answer or consent seeking reorganization or similar relief under any applicable law, or the consent by the Issuer or the Company to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of the property of the Issuer or the Company, or the making by the Issuer or the Company of an assignment for the benefit of creditors, or the admission by the Issuer or the Company in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Issuer or the Company in furtherance of any such action; or (8) the Issuer's or the Company's stopping payment of, or being unable to, or admitting an inability to, pay, its debts (or any class of its debts) as they fall due, or being deemed unable to pay its debts, or being adjudicated or found bankrupt or insolvent or 32 entering into any composition or other similar arrangements with its creditors under any applicable bankruptcy, insolvency, reorganization or other similar law; or (9) an administrative or other receiver, manager, administrator or other similar official being appointed in relation to the Issuer or the Company or, as the case may be, in relation to the whole or a substantial part of the undertaking or assets of it, or an encumbrancer taking possession of the whole or a substantial part of the undertaking or assets of it, or a distress, execution, attachment, sequestration or other process being levied, enforced upon, sued out or put in force against the whole or a substantial part of the undertaking or assets of it and in any case (other than the appointment of an administrator) not being discharged, removed or stayed within 90 days. SECTION Five.2. Acceleration of Maturity; Rescission and Annulment. If an Event of Default (other than an Event of Default specified in Section 5.1(6), 5.1(7)) 5.1(8) or 5.1(9) occurs and is continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities may declare the principal of all the Securities to be due and payable immediately, by a notice in writing to the Issuer and the Company (and to the Trustee if given by the Holders), and upon any such declaration such principal and all accrued interest thereon shall become immediately due and payable. If an Event of Default specified in Section 5.1(6), 5.1(7), 5.1(8) or 5.1(9) occurs, the principal of, and accrued interest on, all the Securities shall ipso facto become immediately due and payable without any declaration or other Act of the Holder or any act on the part of the Trustee. At any time after such declaration of acceleration has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article Five provided, the Holders of a majority in principal amount of the Outstanding Securities, by written notice to the Issuer, the Company and the Trustee, may rescind and annul such declaration and its consequences if: (1) the Issuer has paid or deposited with the Trustee a sum sufficient to pay, without duplication: (A) all overdue interest on all Securities; (B) the principal of and premium, if any, on any Securities which have become due otherwise than by such declaration of acceleration and any interest thereon at the rate borne by the Securities; (C) to the extent permitted by applicable law, interest upon overdue interest at a rate of 2.00% per annum; and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents 33 and its counsel, except to the extent such amounts would not be required to be paid pursuant to Section 6.7; and (2) all Events of Default, other than the nonpayment of the principal of, and any premium and interest on, Securities which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13. No rescission or annulment referred to above shall affect any subsequent default or impair any right consequent thereon. SECTION Five.3. Collection of Indebtedness and Suits for Enforcement by Trustee. The Issuer covenants that if: (1) default is made in the payment of any interest on any Security when it becomes due and payable and such default continues for a period of 30 days; or (2) default is made in the payment of the principal of or premium, if any, on any Security at the Maturity thereof; then the Issuer will upon demand of the Trustee pay to it, for the benefit of the Holders of such Securities the whole amount then due and payable on such Securities for principal and interest and interest on any overdue principal and premium, if any, and, to the extent permitted by applicable law, on any overdue interest, at a rate of 2.00% per annum, and in addition thereto, such further amount as shall be sufficient to cover the reasonable costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel. If the Issuer fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Issuer or any other obligor upon the Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Issuer or any other obligor upon the Securities, wherever situated. If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities by such appropriate judicial proceedings as the Trustee shall deem necessary to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. SECTION Five.4. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the 34 Issuer, the Company or any other obligor upon the Securities or the property of the Issuer, the Company or such other obligor or the creditors of either, the Trustee (irrespective of whether the principal of, and any interest on, the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Issuer or the Company for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, (1) to file and prove a claim for the whole amount of principal, premium, if any, and interest owing and unpaid in respect of the Securities and take such other actions, including participating as a member, voting or otherwise, of any official committee of creditors appointed in such matter, and to file such other papers or documents, in each of the foregoing cases, as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel) and of the Holders of Securities allowed in such judicial proceeding; and (2) to collect and receive any moneys or other property payable or deliverable on any such claim and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of Securities to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders of Securities to pay to the Trustee any amount due to it. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of a Security any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder of a Security in any such proceeding; provided, however, that the Trustee may, on behalf of such Holders, vote for the election of a trustee in bankruptcy or similar official. SECTION Five.5. Trustee May Enforce Claims Without Possession of Securities. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, be for the ratable benefit of the Holders of the Securities in respect of which judgment has been recovered. SECTION Five.6. Application of Money Collected. Any money collected by the Trustee pursuant to this Article Five shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal, premium, if any, or interest, upon presentation of the 35 Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 6.7; SECOND: To the payment of the amounts then due and unpaid for principal of, premium, if any, or interest on, the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal, premium, if any, and interest, respectively; and THIRD: Any remaining amounts shall be repaid to the Issuer. SECTION Five.7. Limitation on Suits. No Holder of any Security shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default; (2) the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request; and (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders. SECTION Five.8. Unconditional Right of Holders to Receive Principal, Premium and Interest and to Convert. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of and (subject to Section 3.9) interest on such Security on the respective Stated Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date, Change of Control Redemption Date or Holder Option Redemption Date, as the case may be), and to 36 convert such Security in accordance with Article Eleven, and to institute suit for the enforcement of any such payment and right to convert, and such rights shall not be impaired without the consent of such Holder. SECTION Five.9. Restoration of Rights and Remedies. If the Trustee or any Holder of a Security has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Issuer, the Company, the Trustee and the Holders of Securities shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and such Holders shall continue as though no such proceeding had been instituted. SECTION Five.10. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 3.8, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders of Securities is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION Five.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or any acquiescence therein. Every right and remedy given by this Article Five or by law to the Trustee or to the Holders of Securities may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or (subject to the limitations contained in this Indenture) by the Holders of Securities as the case may be. SECTION Five.12. Control by Holders of Securities. The Holders of a majority in principal amount of the Outstanding Securities shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee; provided that: (1) such direction shall not be in conflict with any rule of law or with this Indenture; and (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. 37 SECTION Five.13. Waiver of Past Defaults. The Holders, either (a) through the written consent of not less than a majority in principal amount of the Outstanding Securities; or (b) by the adoption of a resolution, at a meeting of Holders of the Outstanding Securities at which a quorum is present, by the Holders of at least a majority in principal amount of the Outstanding Securities represented at such meeting, may on behalf of the Holders of all the Securities waive any past default hereunder and its consequences, except a default (1) in the payment of the principal of or interest on any Security; or (2) in respect of a covenant or provision hereof which under Article Eight cannot be modified or amended without the consent of the Holder of each Outstanding Security affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. SECTION Five.14. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.14 shall not apply to any suit instituted by the Issuer or the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities, or to any suit instituted by any Holder of any Security for the enforcement of the payment of the principal of or interest on any Security on or after the respective Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date, Change of Control Redemption Date or Holder Option Redemption Date, as the case may be), or for the enforcement of the right to convert any Security in accordance with Article Eleven. SECTION Five.15. Waiver of Stay, Usury or Extension Laws. The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, usury or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede by reason of such law the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 38 Article Six THE TRUSTEE SECTION Six.1. Certain Duties and Responsibilities. (a) Except during the continuance of an Event of Default: (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they substantially conform to the requirements of this Indenture, but not to verify the contents thereof. (b) In case an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (c) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that (1) this paragraph (c) shall not be construed to limit the effect of paragraph (a) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (3) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a majority in principal amount of the Outstanding Securities relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture; and (4) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable 39 grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (d) Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. SECTION Six.2. Notice of Defaults. Within 90 days after the occurrence of any default hereunder as to which a Responsible Officer of the Trustee has actually received written notice, the Trustee shall give to all Holders of Securities, in the manner provided in Section 1.6, notice of such default, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of or interest on any Security the Trustee shall be protected in withholding such notice if and so long as the Trustee in good faith determines that the withholding of such notice is in the interest of the Holders; and provided, further, that in the case of any default of the character specified in Section 5.1(4), no such notice to Holders of Securities shall be given until at least 60 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default. SECTION Six.3. Certain Rights of Trustee. Subject to the provisions of Section 6.1: (1) the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, Officers' Certificate, other certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon, other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties; (2) any request or direction of the Issuer mentioned herein shall be sufficiently evidenced by an Issuer Request or Issuer Order; (3) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or Company Order and any resolution of the Board of Directors shall be sufficiently evidenced by a Board Resolution; (4) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (5) the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and 40 protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (6) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders of Securities pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (7) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon, other evidence of indebtedness or other paper or document, but the Trustee may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine, during business hours and upon reasonable notice, the books, records and premises of the Issuer and the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation; (8) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (9) the rights, privileges, protections and indemnities given to the Trustee, are extended to and shall be enforceable by the Trustee in each of its capacities hereunder; (10) the Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture; and (11) the Trustee may request that the Company deliver an Officers' Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers' Certificate may be signed by any person authorized to sign an Officers' Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded. SECTION Six.4. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities (except the Trustee's certificates of authentication) shall be taken as the statements of the Issuer and the Company, and the Trustee assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture, of the Securities, of the 41 Preference Shares issuable upon the conversion of the Securities, or of the Ordinary Shares or ADSs issuable upon the exchange of the Preference Shares. The Trustee shall not be accountable for the use or application by the Issuer of Securities or the proceeds thereof. SECTION Six.5. May Hold Securities, Act as Trustee Under Other Indentures. The Trustee, any Authenticating Agent, any Paying Agent, any Conversion Agent or any other agent of the Issuer, the Company or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Conversion Agent or such other agent. The Trustee may become and act as trustee under other indentures under which other securities, or certificates of interest or participation in other securities, of the Issuer or the Company are outstanding in the same manner as if it were not Trustee hereunder. SECTION Six.6. Money Held in Trust. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing with the Issuer. SECTION Six.7. Compensation and Reimbursement. The Issuer, and failing which the Company, agrees: (1) to pay to the Trustee from time to time such compensation as the Issuer and the Trustee shall from time to time agree in writing for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its own negligence or willful misconduct; and (3) to fully indemnify the Trustee (and its directors, officers, employees and agents) for, and to hold it harmless against, any and all loss, damage, claim, liability or expense, including taxes (other than taxes based on the income of the Trustee) and reasonable legal fees and expenses, incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this trust, including the reasonable costs, expenses and reasonable attorneys' fees of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. 42 When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 5.1(6) or Section 5.1(7), the expenses (including the reasonable charges of its counsel) and the compensation for the services are intended to constitute expenses of the administration under any applicable bankruptcy, insolvency, reorganization or other similar law. The Trustee shall have a lien prior to the Securities as to all property and funds held by it hereunder for any amount owing it or any predecessor Trustee pursuant to this Section 6.7, except with respect to funds held in trust for the benefit of the Holders of particular Securities. The provisions of this Section shall survive the termination of this Indenture or the earlier resignation or removal of the Trustee. SECTION Six.8. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder which shall be a Person that is eligible pursuant to the Trust Indenture Act to act as such, having a combined capital and surplus (or for such purposes, the combined capital and surplus of any parent holding company) of at least U.S.$50,000,000, subject to supervision or examination by U.S. federal or State authority, in good standing and having an office or agent in the Borough of Manhattan, The City of New York. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article and a successor shall be appointed pursuant to Section 6.9. SECTION Six.9. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 6.10. (b) The Trustee may resign at any time by giving written notice thereof to the Issuer and the Company. If the instrument of acceptance by a successor Trustee required by Section 6.10 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may, at the expense of the Issuer, petition any court of competent jurisdiction for the appointment of a successor Trustee. (c) The Trustee may be removed at any time by Act of the Holders of a majority in principal amount of the Outstanding Securities, delivered to the Trustee, the Issuer and the Company. If the instrument of acceptance by a successor Trustee required by Section 6.10 shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, 43 the removed Trustee may, at the expense of the Issuer, petition any court of competent jurisdiction for the appointment of a successor Trustee. (d) If at any time: (1) the Trustee shall cease to be eligible under Section 6.8 and shall fail to resign after written request therefor by the Issuer or by any Holder of a Security who has been a bona fide Holder of a Security for at least six months; or (2) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case (i) the Issuer by a Board Resolution may remove the Trustee; or (ii) subject to Section 5.14, any Holder of a Security who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, the Issuer, by a Board Resolution, shall promptly appoint a successor Trustee and shall comply with the applicable requirements of this Section and Section 6.10. If, within one year after such resignation, removal or incapability, or occurrence of such vacancy, a successor Trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities delivered to the Issuer, the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.10, become the successor Trustee and supersede the successor Trustee appointed by the Issuer. If no successor Trustee shall have been so appointed by the Issuer or the Holders of Securities and accepted appointment in the manner required by this Section and Section 6.10, any Holder of a Security who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee. (f) The Issuer shall give notice of each resignation and each removal of the Trustee and each appointment of a successor Trustee to all Holders of Securities in the manner provided in Section 1.6. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. SECTION Six.10. Acceptance of Appointment by Successor. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuer, the Company and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become 44 effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Issuer or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. Upon request of any such successor Trustee, the Issuer shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts. No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be eligible under this Article. SECTION Six.11. Merger, Conversion, Consolidation or Succession to Business. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder; provided such corporation shall be otherwise eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. SECTION Six.12. Authenticating Agents. The Trustee may, with the consent of the Issuer, appoint an Authenticating Agent or Agents acceptable to the Issuer with respect to the Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities issued upon exchange or substitution pursuant to this Indenture. Securities authenticated by an Authenticating Agent shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder, and every reference in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be subject to acceptance by the Issuer and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent and subject to supervision or examination by government or other fiscal authority. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.12, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section 6.12. 45 Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent; provided such corporation shall be otherwise eligible under this Section 6.12, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Issuer. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Issuer. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 6.12, the Trustee may appoint a successor Authenticating Agent which shall be subject to acceptance by the Issuer. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section 6.12. The Issuer agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section 6.12. If an Authenticating Agent is appointed with respect to the Securities pursuant to this Section 6.12, the Securities may have endorsed thereon, in addition to or in lieu of the Trustee's certification of authentication, an alternative certificate of authentication in the following form: This is one of the Securities referred to in the within-mentioned Indenture. ---------------------------------------, as Trustee By Authenticating Agent, as Authenticating Agent By ---------------------------------------- Authorized Signatory SECTION Six.13. Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. 46 SECTION Six.14. Preferential Collection of Claims Against Company. If and when the Trustee shall be or become a creditor of the Issuer or the Company (or any other obligor upon the Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection of claims against the Issuer, the Company (or any such other obligor), as the case may be. Article Seven CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE SECTION Seven.1. Company May Consolidate, Etc., Only on Certain Terms. The Company shall not consolidate with or merge into any other Person or convey, transfer, sell or lease all its properties and assets substantially as an entirety to any Person, and the Company shall not permit any Person to consolidate with or merge into the Company, unless: (1) in case the Company shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company is merged, or the Person which acquires by conveyance, transfer or sale, or which leases the properties and assets of the Company substantially as an entirety, shall be a corporation, limited liability company, partnership or trust, shall be organized and validly existing under the laws of England and Wales, any other member state of the European Union, Switzerland or the United States of America, any State thereof or the District of Columbia and if such Person if not the Company shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed and shall have provided for conversion and exchange rights in accordance with Article Eleven; (2) immediately after giving effect to such transaction, no Event of Default, and no event that after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer, sale or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with, together with any documents required under Section 8.3. 47 SECTION Seven.2. Successor Substituted. Upon any consolidation of the Company with, or merger of the Company into any other Person or any conveyance, transfer or lease of all or substantially all the properties and assets of the Company in accordance with Section 7.1, the successor Person formed by such consolidation or into or with which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities. Article Eight SUPPLEMENTAL INDENTURES SECTION Eight.1. Supplemental Indentures Without Consent of Holders of Securities. Without the consent of any Holders of Securities, the Issuer, the Company, when authorized by a Board Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto for any of the following purposes: (1) to evidence the succession of another Person to the Issuer or the Company and the assumption by any such successor of the covenants and obligations of the Company herein and in the Securities as permitted by this Indenture; or (2) to add to the covenants of the Issuer or the Company for the benefit of the Holders of Securities or to surrender any right or power herein conferred upon the Issuer or the Company; or (3) to secure the Securities; or (4) to comply with the requirements of the Trust Indenture Act or the rules and regulations of the Commission thereunder in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act, as contemplated by this Indenture or otherwise; or (5) to comply with the requirements of the Securities Act, the Exchange Act or the Investment Company Act or the rules and regulation of the Commission under any such Acts; or (6) if application is made for the Securities to be admitted to the Official List of the United Kingdom Listing Authority and to trading on the London Stock Exchange, to comply with the listing rules of the United Kingdom Listing Authority; and if application is made for the Securities to be listed on the Luxembourg Stock Exchange, to comply with the relevant requirements of the Luxembourg Stock Exchange; or 48 (7) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee; or (8) to cure any ambiguity, omission or defect or to correct or supplement any provision herein which may be inconsistent with any other provision herein or which is otherwise defective, or to make any other provisions with respect to matters or questions arising under this Indenture as the Issuer, the Company and the Trustee may deem necessary or desirable; provided such action pursuant to this clause (7) shall not, in the judgment of the Issuer and the Company, adversely affect the interests of the Holders of Securities in any material respect; or (9) to modify, alter, amend or supplement the Indenture in any other manner that is not adverse to any Holder of Securities. Upon Issuer Request and Company Request, accompanied by a Board Resolution authorizing the execution of any such supplemental indenture, and subject to and upon receipt by the Trustee of the documents described in Section 8.3 hereof, the Trustee shall join with the Issuer and the Company in the execution of any supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations which may be therein contained. SECTION Eight.2. Supplemental Indentures with Consent of Holders of Securities. With either (a) the written consent of the Holders of not less than a majority in principal amount of the Outstanding Securities, by the Act of said Holders delivered to the Issuer, the Company and the Trustee; or (b) by the adoption of a resolution, at a meeting of Holders of the Outstanding Securities at which a quorum is present, by the Holders of a majority in principal amount of the Outstanding Securities represented at such meeting, the Issuer, the Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities under this Indenture; provided, however, that no such supplemental indenture shall, without the consent or affirmative vote of the Holder of each Outstanding Security affected thereby: (1) change the Stated Maturity of the principal of, or any installment of interest on, any Security, or reduce the principal amount or the rate of interest payable thereon or any amount payable upon redemption pursuant to Article Ten, Article Twelve or Article Thirteen hereof in a manner adverse to the Holders, or change the place at which or the coin or currency in which any Security or the interest or any premium thereon or any other amount in respect thereof is payable, or impair the right to institute suit for the enforcement of any payment in respect of any Security on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date Change of Control Redemption Date or Holder Option Redemption Date, as the case may be) or adversely affect the right to convert any Security as provided in Article Eleven; or 49 (2) reduce the percentage in principal amount of the Outstanding Securities the consent of whose Holders is required for any such supplemental indenture or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture; or (3) modify any of the provisions of this Section and Section 5.13 or 9.8, except to increase any percentage contained herein or therein or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby; or (4) modify the provisions of Article Twelve or Article Thirteen in a manner adverse to the Holders. It shall not be necessary for any Act of Holders of Securities under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. SECTION Eight.3. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture, and that such supplemental indenture has been duly authorized, executed and delivered by the Issuer and the Company and constitutes a valid and legally binding obligation of the Issuer and the Company enforceable against the Issuer and the Company in accordance with its terms. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION Eight.4. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder appertaining thereto shall be bound thereby. SECTION Eight.5. Reference in Securities to Supplemental Indentures. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Issuer shall so determine, new Securities so modified as to conform, in the opinion of the Issuer and the Trustee, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Trustee in exchange for Outstanding Securities. 50 SECTION Eight.6. Conformity with Trust Indenture Act. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as in effect at the time of the execution thereof. SECTION Eight.7. Notice of Supplemental Indentures. Promptly after the execution by the Issuer, the Company and the Trustee of any supplemental indenture pursuant to the provisions of Section 8.2, the Issuer shall give notice to all Holders of Securities of such fact, setting forth in general terms the substance of such supplemental indenture, in the manner provided in Section 1.6. Any failure of the Issuer to give such notice, or any defect therein, shall not in any way impair or affect the validity of any such supplemental indenture. Article Nine COVENANTS SECTION Nine.1. Payment of Principal, Premium and Interest. The Issuer covenants and agrees that, subject to Section 1.13, it will duly and punctually pay the principal of premium, if any, and interest on the Securities in accordance with the terms of the Securities and this Indenture. The Issuer will deposit or cause to be deposited with the Trustee, no later than the opening of business on the date of the Stated Maturity of any Security or no later than the opening of business on the due date for any principal, premium, if any, and any installment of interest, all payments so due, which payments shall be in immediately available funds on the date of such Stated Maturity or due date, as the case may be. The Issuer hereby covenants and agrees that it shall make all payments in respect of principal of (and premium, if any, on) and interest (including interest on amounts in default, if any,) on the Securities or the payment of any other sums due on the Securities without deduction or withholding for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied upon or as a result of such payments by or on behalf of any taxing authority, unless deduction or withholding of such taxes, duties, assessments or governmental charges is required by law. SECTION Nine.2. Maintenance of Offices or Agencies. The Issuer hereby appoints the Corporate Trust Office of the Trustee or such other office or agency of the Trustee as its agent in the Borough of Manhattan, The City of New York, where Securities may be presented or surrendered for payment, where Securities may be surrendered for registration of transfer or exchange, where Securities may be surrendered for conversion, and where notices and demands to or upon the Issuer and the Company in respect of the Securities and this Indenture may be served. The Trustee shall upon receipt forward any such notices and demands to the Company and the Issuer at the address specified in Section 1.5(2). 51 The Issuer may at any time and from time to time vary or terminate the appointment of any such agent or appoint any additional agents for any or all of such purposes; provided, however, that until all of the Securities have been delivered to the Trustee for cancellation, or moneys sufficient to pay the principal of, premium, if any, and interest on the Securities have been made available for payment and either paid or returned to the Issuer pursuant to the provisions of Section 9.3, the Issuer will maintain in the State of New York, The City of New York, an office or agency where Securities may be presented or surrendered for payment and conversion, where Securities may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuer and the Company in respect of the Securities and this Indenture may be served. The Issuer will give prompt written notice to the Trustee, and notice to the Holders in accordance with Section 1.6, of the appointment or termination of any such agents and of the location and any change in the location of any such office or agency. If at any time the Issuer shall fail to maintain any such required office or agency, or shall fail to furnish the Trustee with the address thereof, presentations and surrenders may be made and notices and demands may be served on the Corporate Trust Office of the Trustee. SECTION Nine.3. Money for Security Payments To Be Held in Trust. If the Issuer shall act as its own Paying Agent, it will, on or before each due date of the principal of or interest on any of the Securities, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and the Issuer will promptly notify the Trustee of its action or failure so to act. Whenever the Issuer shall have one or more Paying Agents, it will, no later than the opening of business on each due date of the principal of, premium, if any, or interest on any Securities, deposit with the Trustee a sum sufficient to pay the principal or interest so becoming due, such sum to be held for the benefit of the Persons entitled to such principal, premium, if any, or interest, and (unless such Paying Agent is the Trustee) the Issuer will promptly notify the Trustee of any failure so to act. The Issuer will cause each Paying Agent other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (1) hold all sums held by it for the payment of the principal of, premium, if any, or interest on Securities for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee notice of any default by the Issuer (or any other obligor upon the Securities) in the making of any payment of principal or interest; and 52 (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held by such Paying Agent. The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Issuer Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Issuer or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Issuer or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. Anything contained herein to the contrary notwithstanding, any money held by the Trustee or any Paying Agent in trust for the payment and discharge of the principal of or interest on any Security which remains unclaimed for two years after the date when each payment of such principal, premium or interest has become payable shall be repaid within 60 days of such date by the Trustee to the Issuer as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Holders shall look only to the Issuer for the payment of the principal or interest on such Security. The Trustee shall not be liable to the Issuer, the Company or any Holder for interest on funds held by it for the payment and discharge of the principal, premium or interest on any of the Securities to any Holder. The Issuer shall not be liable for any interest on the sums paid to it pursuant to this paragraph and shall not be regarded as a trustee of such money. SECTION Nine.4. Existence. Subject to Article Seven, the Issuer and the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its existence, rights (charter and statutory) and franchises; provided, however, that the Issuer and the Company shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Issuer or the Company, as the case may be, and that the loss thereof is not disadvantageous in any material respect to the Holders. SECTION Nine.5. Registration and Listing. Within a reasonable time after the issuance of the Global Securities, the Issuer and the Company (i) will effect all registrations with, and obtain all approvals by, all governmental authorities that may be necessary under any applicable law (including the Securities Act, the Exchange Act and state securities and Blue Sky laws) before the Ordinary Shares or ADSs issuable upon any exchange of the Preference Shares may be lawfully issued and certification in respect thereof delivered, and qualified or listed as contemplated by clause (ii); and (ii) will cause the Ordinary Shares that may be issued and certification in respect thereof delivered upon any exchange of the Preference Shares, prior to such issuance and delivery, to be admitted to the official list of the United Kingdom Listing Authority and admitted to trading on the London Stock Exchange or, if the Ordinary Shares are not then admitted to trading on the London Stock Exchange, will list the Ordinary Shares or qualify the Ordinary Shares for quotation on each 53 securities exchange or quotation system on which outstanding Ordinary Shares are listed or quoted at the time of such issue and delivery. SECTION Nine.6. Further Undertakings of the Company The Company covenants and agrees that it will, at all times while Securities are outstanding, save with either (a) the written consent of the Holders of not less than a majority in principal amount of the Outstanding Securities, by Act of said Holders delivered to the Issuer, the Company and the Trustee; (b) the adoption of a resolution, at a meeting of Holders of the Outstanding Securities at which a quorum is present, by the Holders of a majority in principal amount of the Outstanding Securities represented at such meeting: or (c) the consent of the Trustee where, in the opinion of the Trustee, it is not materially prejudicial to the interests of the Holders of the Securities to give such approval: (a) at all times keep available for issue free from pre-emptive rights out of its authorized but unissued capital such number of Ordinary Shares as would enable the obligation of the Issuer to procure that Preference Shares issued upon conversion of the Securities be exchanged for Ordinary Shares in accordance with the Articles of Association to be satisfied in full; (b) not in any way modify the rights attaching to the Ordinary Shares with respect to voting, dividends or liquidation nor issue any other class of equity share capital carrying any rights which are more favorable than such rights except that nothing in this clause (b) shall prevent (i) the issue of equity share capital to employees (including executive officers) or directors of the Company or any of its Subsidiaries or associated undertakings pursuant to any employees' or directors' share plan or option plan; (ii) any consolidation or subdivision of the Ordinary Shares; (iii) any modification of such rights which is not materially prejudicial to the interests of the Holders of the Securities; (iv) any alteration to the articles of association of the Company made in connection with any matters referred to in this clause (b) or supplemental or incidental thereto; or (v) any issue of Ordinary Shares in connection with and upon (1) exchange of the exchangeable shares of Shire Acquisition Inc. or the remaining outstanding shares of Roberts Pharmaceutical Corporation or (2) the conversion of the unsecured convertible zero coupon loan note due to Arenol Corporation; or (vi) any issue of equity share capital where the issue of such equity share capital results (or would, but for the fact that the adjustment would be less than one percent of the Exchange Ratio or that the relevant issue were at less than 95% of the current market price per Ordinary Share on the relevant Trading Day, result) in an adjustment to the Exchange Ratio; and (c) not reduce its issued share capital, share premium account or capital redemption reserve or any uncalled liability in respect thereof except (i) pursuant to the terms of issue of the relevant share capital; (ii) by means of a purchase or redemption; (iii) as permitted by Section 130(2) of the Companies Act 1985; (iv) where the reduction does not involve any distribution of assets; (v) where the reduction results in (or would, but for the fact that the adjustment would be less than one percent of the 54 Exchange Ratio then in effect, result in) an adjustment to the Exchange Ratio; or (vi) solely in relation to a change in the currency in which the nominal value of the Ordinary Shares is expressed. SECTION Nine.7. Statement by Officers as to Default. The Issuer and the Company shall deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof, an Officers' Certificate (one of the signers of which shall be the Company's principal executive, principal financial or principal accounting officer), stating whether or not to the best knowledge of the signers thereof the Issuer is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided hereunder) and, if the Issuer shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. The Issuer will deliver to the Trustee, forthwith upon becoming aware of any default in the performance or observance of any covenant, agreement or condition contained in this Indenture, or any Event of Default, an Officers' Certificate specifying with particularity such default or Event of Default and further stating what action the Issuer has taken, is taking or proposes to take with respect thereto. Any notice required to be given under this Section 9.7 shall be delivered to the Trustee at its Corporate Trust Office. SECTION Nine.8. Waiver of Certain Covenants. The Issuer and the Company may omit in any particular instance to comply with any covenant or conditions set forth in any covenant provided pursuant to Section 8.1(2) for the benefit of the Holders or in Section 9.4 or Section 9.5 (other than a covenant or condition which under Article Eight cannot be modified or amended without the consent of the Holder of each Outstanding Security affected), if before the time for such compliance the Holders shall, through the written consent of not less than a majority in principal amount of the Outstanding Securities, either waive such compliance in such instance or generally waive compliance with such covenant or condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Issuer and the Company and the duties of the Trustee or any Paying or Conversion Agent in respect of any such covenant or condition shall remain in full force and effect. Article Ten REDEMPTION OF SECURITIES AT THE OPTION OF THE ISSUER SECTION Ten.1. Right of Redemption at the Option of the Issuer. The Securities may be redeemed at the option of the Issuer in accordance with the provisions of the form of Securities set forth in Exhibit A and Exhibit B. 55 SECTION Ten.2. Applicability of Article. Redemption of Securities at the election of the Issuer or otherwise, as permitted or required by any provision of the Securities or this Indenture, shall be made in accordance with such provision and this Article Ten. SECTION Ten.3. Election to Redeem; Notice to Trustee. The election of the Issuer to redeem any Securities shall be evidenced by a Board Resolution. In case of any redemption at the election of the Issuer of any of the Securities, the Issuer shall, at least 45 days prior to the Redemption Date fixed by the Issuer (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee in writing of such Redemption Date. If the Securities are to be redeemed pursuant to an election of the Issuer which is subject to a condition specified in the form of Securities set forth in Exhibit A or Exhibit B, the Issuer shall furnish the Trustee with an Officers' Certificate stating that the Issuer is entitled to effect such redemption and setting forth a statement of facts showing that the conditions precedent to the right of the Issuer so to redeem have occurred. SECTION Ten.4. Selection by Trustee of Securities To Be Redeemed. If less than all the Securities are to be redeemed, the particular Securities to be redeemed shall be selected by the Trustee within three Business Days after it receives the notice described in Section 10.3, from the Outstanding Securities not previously called for redemption, by such method as the Trustee may deem fair and appropriate. If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Securities which have been converted during a selection of Securities to be redeemed may be treated by the Trustee as Outstanding for the purpose of such selection. The Trustee shall promptly notify the Issuer and each Security Registrar in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount and certificate numbers thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. SECTION Ten.5. Notice of Redemption. Notice of redemption shall be given in the manner provided in Section 1.6 to the Holders of Securities to be redeemed not less than 30 nor more than 60 days prior to the Redemption Date, and such notice shall be irrevocable. 56 All notices of redemption shall identify the Securities to be redeemed (including CUSIP, CINS, ISIN and/or Common Code numbers) and shall state: (1) the Redemption Date; (2) the Redemption Price, and accrued interest, if any; (3) if fewer than all Outstanding Securities are to be redeemed, the aggregate principal amount of Securities to be redeemed; (4) that on the Redemption Date the Redemption Price, and accrued interest, if any, will become due and payable upon each such Security to be redeemed, and that interest thereon shall cease to accrue on and after said date; (5) the date on which the right to convert the Securities to be redeemed will terminate and the places where such Securities may be surrendered for conversion; and (6) the place or places where such Securities are to be surrendered for payment of the Redemption Price and accrued interest, if any. Notice of redemption of Securities to be redeemed at the election of the Issuer shall be given by the Issuer or, on Issuer Request delivered at least 15 days prior to the date on which such notice is to be given (unless a shorter period shall be acceptable to the Trustee), by the Trustee in the name of and at the expense of the Issuer. Notice of redemption of Securities to be redeemed at the election of the Issuer received by the Trustee shall be given by the Trustee to each Paying Agent in the name of and at the expense of the Issuer. SECTION Ten.6. Deposit of Redemption Price. Not less than one Business Day prior to any Redemption Date, the Issuer shall deposit with the Trustee (or, if the Issuer is acting as its own Paying Agent, segregate and hold in trust as provided in Section 9.3) an amount of money (which shall be in immediately available funds on such Redemption Date) sufficient to pay the Redemption Price of all the Securities which are to be redeemed on that date other than any Securities called for redemption on that date which have been converted prior to the date of such deposit. If any Security called for redemption is converted, any money deposited with the Trustee or so segregated and held in trust for the redemption of such Security shall (subject to any right of the Holder of such Security or any Predecessor Security to receive interest as provided in Section 3.9) be paid to the Issuer on Issuer Request or, if then held by the Issuer, shall be discharged from such trust. SECTION Ten.7. Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified and from and after such date (unless the Issuer shall default in the payment of 57 the Redemption Price) such Securities shall cease to bear interest. Upon surrender of any Security for redemption in accordance with said notice such Security shall be paid by the Issuer at the Redemption Price; provided, however, that installments of interest on Securities whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Record Date according to their terms and the provisions of Section 3.9. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal amount of, premium, if any, and, to the extent permitted by applicable law, accrued interest on such Security shall, until paid, bear interest from the Redemption Date at a rate of 2.00% per annum and such Security shall remain convertible until the principal of such Security (or portion thereof, as the case may be) shall have been paid or duly provided for. SECTION Ten.8. Securities Redeemed in Part. Any Security which is to be redeemed only in part shall be surrendered at an office or agency of the Issuer designated for that purpose pursuant to Section 9.2 (with, if the Issuer or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Issuer shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. SECTION Ten.9. Conversion Arrangement on Call for Redemption. In connection with any redemption of the Securities, the Issuer may arrange for the purchase and conversion of any Securities by an agreement with one or more investment bankers or other purchasers (the "Purchasers") to purchase such Securities by paying to the Trustee in trust for the Holders, on or before the Redemption Date, an amount not less than the applicable Redemption Price, together with interest accrued and unpaid to the Redemption Date, of such Securities. Notwithstanding anything to the contrary contained in this Article Ten, the obligation of the Issuer to pay the Redemption Price, together with interest accrued and unpaid to the Redemption Date, shall be deemed to be satisfied and discharged to the extent such amount is so paid by such Purchasers. If such an agreement is entered into (a copy of which shall be filed with the Trustee prior to the close of business on the second Business Day immediately prior to the Redemption Date), any Securities called for redemption that are not duly surrendered for conversion by the Holders thereof may, at the option of the Issuer, be deemed, to the fullest extent permitted by law, and consistent with any agreement or agreements with such Purchasers, to be acquired by such Purchasers from such Holders and (notwithstanding anything to the contrary contained in this Article Ten) surrendered by such Purchasers for conversion, all as of immediately prior to the close of business on the Redemption Date (and the right to convert any such Securities shall be extended through such time), subject to payment of the above amount as 58 aforesaid. At the direction of the Issuer, the Trustee shall hold and dispose of any such amount paid to it by the Purchasers to the Holders in the same manner as it would monies deposited with it by the Issuer for the redemption of Securities. Without the Trustee's prior written consent, no arrangement between the Issuer and such Purchasers for the purchase and conversion of any Securities shall increase or otherwise affect any of the powers, duties, responsibilities or obligations of the Trustee as set forth in this Indenture, and the Issuer agrees to indemnify the Trustee from, and hold it harmless against, any loss, liability or expense arising out of or in connection with any such arrangement for the purchase and conversion of any Securities between the Issuer and such Purchasers, including the costs and expenses, including reasonable legal fees, incurred by the Trustee in the defense of any claim or liability arising out of or in connection with the exercise or performance of any of its powers, duties, responsibilities or obligations under this Indenture. Article Eleven CONVERSION OF SECURITIES SECTION Eleven.1. Conversion Privilege and Conversion Rate. Subject to and upon compliance with the provisions of this Article, at the option of the Holder thereof, any Security or any portion of the principal amount thereof that is U.S.$1,000 or an integral multiple of U.S.$1,000 may be converted into fully paid and nonassessable Preference Shares at the conversion price of one Preference Share per U.S.$1,000 principal amount of Securities. Such conversion right shall commence upon the date of the original issuance of the Securities and expire at the close of business on August 14, 2011, subject, in the case of conversion of any Global Security, to any Applicable Procedures. In case a Security or portion thereof is called for redemption at the election of the Issuer or the Holder thereof exercises his right to require the Issuer to redeem the Security, such conversion right in respect of the Security, or portion thereof so called, shall expire at the close of business on the Business Day immediately preceding the Redemption Date, Change of Control Redemption Date or Holder Option Redemption Date, as the case may be, unless the Issuer defaults in making the payment due upon redemption, as the case may be (in each case subject as aforesaid to any Applicable Procedures with respect to any Global Security). A Holder of Securities shall not be entitled to any rights of a holder of Preference Shares until such holder has converted such Security into Preference Shares, and only to the extent that such Securities are deemed to have been converted into Preference Shares under this Article Eleven. SECTION Eleven.2. Exercise of Conversion Privilege. In order to exercise the conversion privilege, the Holder of any Security to be converted shall surrender such Security, duly endorsed or assigned to the Issuer or in blank, at any office or agency of the Issuer maintained for that purpose pursuant to Section 9.2, accompanied by a duly signed conversion notice substantially in the form set forth in Exhibit D stating that the Holder elects to convert such Security or, if less than the entire principal amount 59 thereof is to be converted, the portion thereof to be converted. Each Security surrendered for conversion (in whole or in part) during the period from the close of business on any Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date shall (except in the case of any Security or portion thereof which has been called for redemption on a Redemption Date, or is to be redeemed on a Change of Control Redemption Date or Holder Option Redemption Date, with the consequence that the conversion right of such Security would terminate between such Regular Record Date and the close of business on such Interest Payment Date) be accompanied by payment in New York Clearing House funds or other funds acceptable to the Issuer of an amount equal to the interest payable on such Interest Payment Date on the principal amount of such Security (or part thereof, as the case may be) being surrendered for conversion. The interest so payable on such Interest Payment Date with respect to any Security (or portion thereof, if applicable) which is surrendered for conversion during the period from the close of business on any Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date and which Security has been called for redemption on a Redemption Date, or is redeemable on a Change of Control Redemption Date or a Holder Option Redemption Date, with the consequence that the conversion right of such Security would terminate between such Regular Record Date and the close of business on such Interest Payment Date, shall be paid to the Holder of such Security being converted in an amount equal to the interest that would have been payable on such Security if such Security had been converted as of the close of business on such Interest Payment Date. The interest so payable on such Interest Payment Date in respect of any Security (or portion thereof, as the case may be) which has not been called for redemption on a Redemption Date, or is not eligible for redemption on a Change of Control Redemption Date or Holder Option Redemption Date, with the consequence of termination of the conversion right as aforesaid, which Security (or portion thereof, as the case may be) is surrendered for conversion during the period from the close of business on any Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date, shall be paid to the Holder of such Security as of such Regular Record Date. Interest payable in respect of any Security surrendered for conversion on an Interest Payment Date shall be paid to the Holder of such Security as of the next preceding Regular Record Date, notwithstanding the exercise of the right of conversion. Except as provided in this paragraph and subject to the last paragraph of Section 3.9, no cash payment or adjustment shall be made upon any conversion on account of any interest accrued from the Interest Payment Date next preceding the conversion date, in respect of any Security (or part thereof, as the case may be) surrendered for conversion, or on account of any dividends on the Preference Shares issued upon conversion. The Issuer's delivery to the Holder of the number of Preference Shares into which a Security is convertible will be deemed to satisfy the Issuer's obligation to pay the principal amount of the Security. Securities shall be deemed to have been converted on the day of surrender of such Securities for conversion in accordance with the foregoing provisions, and at such time the rights of the Holders of such Securities as Holders shall cease, and the Person or Persons entitled to receive the Preference Shares issuable upon conversion shall be treated for all purposes as if such Person or Persons were the record holder or holders of such Preference Shares at such time. 60 In the case of any Security which is converted in part only, upon such conversion the Issuer shall execute and the Trustee shall authenticate and make available for delivery to the Holder thereof, at the expense of the Issuer, a new Security or Securities of authorized denominations in an aggregate principal amount equal to the unconverted portion of the principal amount of such Security. A Security may be converted in part, but only if the principal amount of such Security to be converted is any integral multiple of U.S.$1,000 and the principal amount of such security to remain Outstanding after such conversion is equal to U.S.$1,000 or any integral multiple of U.S.$1,000 in excess thereof. SECTION Eleven.3. Issuer to Reserve Preference Shares; Instructions to Trustee. (a) The Issuer shall at all times reserve and keep available, free from preemptive rights, out of its authorized but unissued Preference Shares, for the purpose of effecting the conversion of Securities, the full number of Preference Shares then issuable upon the conversion of all Outstanding Securities. (b) The Issuer and the Company shall irrevocably instruct the Trustee to deliver, or cause the delivery of, the requisite number of Ordinary Shares or ADSs to any Holder issued upon conversion of such Holder's Securities in accordance with the terms of Section 11.2 and the exchange of such Holder's resulting Preference Shares for Ordinary Shares or ADSs. Such exchange shall be effected in accordance with the provisions set forth in Article 9 of the Articles of Association. SECTION Eleven.4. Taxes on Conversions. No Holder will in any circumstances be required to pay any U.K. transfer taxes or duties in respect of the issue of, or delivery of certificates for, Preference Shares on conversion of such Holder's Securities, the subsequent transfer of such Preference Shares to the Company or the issue of Ordinary Shares or ADSs in exchange for such Preference Shares, and the Issuer covenants and agrees to hold each Holder harmless against any U.K. stamp duty or stamp duty reserve tax liability such Holder may be required to pay on conversion of such Holder's Securities, the subsequent transfer of such Preference Shares to the Company or the issue of Ordinary Shares or ADSs in exchange for such Preference Shares, provided, however, that the Issuer shall not be required to pay any tax or duty which may be payable in respect of any transfer involved in the issue of, or delivery of certificates for, Preference Shares, Ordinary Shares or ADSs in a name other than that of the Holder of the Security or Securities to be converted, and no such issue or delivery shall be made unless and until the Person requesting such issue or delivery has paid to the Issuer the amount of any such tax or duty, or has established to the satisfaction of the Issuer that no such tax or duty is payable. SECTION Eleven.5. Covenant as to Preference Shares; Limitations on Issuance. (a) The Issuer agrees that all Preference Shares which may be allotted and issued upon conversion of Securities, upon such allotment and issue, will be newly allotted and issued shares and will have been duly authorized and validly issued and will be fully paid and 61 nonassessable and, except as provided in Section 11.4, the Issuer will pay all liens and charges with respect to the issue thereof other than taxes (except as set forth in Section 11.4). (b) Ordinary Shares to be issued upon conversion of the Securities and exchange of Preference Shares or otherwise under this Indenture, unless they are to be represented by ADSs issued by the Depositary, shall not be issued to: (i) DTC, Euroclear, Clearstream, the Depositary and Clearing Centre or any of their nominees or agents or any other person providing a clearance service within Section 96 of the Finance Act 1986 of the United Kingdom or any of their nominees or agents; or (ii) a person whose business includes issuing depositary receipts within Section 93 of the Finance Act 1986 of the United Kingdom, or any nominee or agent of such a person, in each case at any time before the "abolition day" as defined in Section 111(1) of the Finance Act 1990 of the United Kingdom. SECTION Eleven.6. Cancellation of Converted Securities. All Securities delivered for conversion shall be delivered to the Trustee or its agent to be canceled by or at the direction of the Trustee, which shall dispose of the same as provided in Section 3.11. SECTION Eleven.7. No Responsibility of Trustee for Conversion Provisions. Neither the Trustee, subject to the provisions of Section 6.1, nor any Conversion Agent shall be accountable with respect to the validity or value (or the kind or amount) of any Preference Shares which may at any time be issued or delivered upon the conversion of any Security; and it or they do not make any representation with respect thereto. Neither the Trustee, subject to the provisions of Section 6.1, nor any Conversion Agent shall be responsible for any failure of the Issuer to make or calculate any cash payment or to issue, transfer or deliver any Preference Shares or cash upon the surrender of any Security for the purpose of conversion; and the Trustee, subject to the provisions of Section 6.1, and any Conversion Agent shall not be responsible for any failure of the Issuer to comply with any of the covenants of the Issuer contained in this Article. SECTION Eleven.8. Deemed Conversion and Exchange upon the Liquidation of the Company. If, while any Securities are outstanding, an effective resolution is passed or an order of a court is made on or before the Stated Maturity of the Securities for the winding-up of the Company, then (unless it is for the purpose of or in connection with a reconstruction, amalgamation, reorganization or similar arrangement on terms that have been previously approved by the Trustee or with the consent of the Holders of not less than a majority in principal amount of the outstanding Securities) the Company will forthwith give notice to the Holders that 62 such a resolution has been passed or such an order has been made and that the Holder of an outstanding Security shall be entitled (without prejudice to any rights of the Trustee) at any time within three months after the date of such notice (but not thereafter) to elect by notice in writing to be treated as if such Holder had, immediately before the date of passing of such resolution or the making of such order, as the case may be, exercised such Holder's right to convert such Holder's Security and shall be entitled to receive, out of the assets which would otherwise be available in the liquidation to the shareholders of the Company, an amount equal to the amount which such Holder would have received had such Holder been the holder of the Ordinary Shares which may have been issued on exchange of the Preference Shares issuable on conversion of such Holder's Security, except that no such election shall be made in respect of any Security on or after the Record Date in respect of the principal due on the Security. Any such notice the Company gives pursuant to this Section 11.8 shall state the applicable Exchange Ratio. Article Twelve REDEMPTION OF SECURITIES AT THE OPTION OF THE HOLDER UPON A CHANGE IN CONTROL SECTION Twelve.1. Right to Require Redemption. In the event that a Change in Control (as hereinafter defined) shall occur, then each Holder shall have the right, at the Holder's option, but subject to the provisions of Section 12.2, to require the Issuer to redeem, and upon the exercise of such right the Issuer shall redeem, all of such Holder's Securities not theretofore called for redemption, or any portion of the principal amount thereof that is equal to U.S.$5,000 or any greater integral multiple of U.S.$1,000, on the date (the "Change of Control Redemption Date") that is 44 days after the date of the Company Notice (as defined in Section 12.3) at 101% of the principal amount of the Securities to be redeemed, plus accrued interest to the Change of Control Redemption Date (the "Change of Control Redemption Price"); provided, however, that installments of interest on Securities whose Stated Maturity is on or prior to the Change of Control Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Record Date according to their terms and the provisions of Section 3.9. Such right to require the redemption of the Securities shall not continue after a discharge of the Issuer from its obligations with respect to the Securities in accordance with Article Four, unless a Change in Control shall have occurred prior to such discharge. At the option of the Issuer, the Issuer may elect not to redeem the Securities in respect of which a Holder has exercised rights pursuant to this Section 12.1 and instead may elect to convert such Securities, or any portion thereof in integral multiples of $1,000, into Preference Shares, subject to the fulfillment by the Issuer and the Company of the conditions set forth in Section 12.2. Such Preference Shares shall be exchanged for Ordinary Shares (or, at the option of the Holder requiring redemption, ADSs) at a special exchange ratio (the "Change of Control Exchange Ratio") equal to 101% of the principal amount of the Security divided by the market price per Ordinary Share on the London Stock Exchange valued at 95% of the average of the Ordinary Share VWAP for each of the five Trading Days immediately following the date the Issuer gives notice pursuant to Section 12.3(c) of its intention to elect to convert the Securities in respect of which a Holder has exercised rights 63 pursuant to this Section 12.1, or any portion thereof, into Preference Shares rather than redeem such Securities, or the relevant portion thereof, for cash. Each such price will be converted into Dollars at the U.S.$/U.K.(pound) noon buying rate prevailing on such date. Whenever in this Indenture (including Sections 3.1, 5.1(1) and 5.8, and Exhibit A and Exhibit B) there is a reference, in any context, to the principal of any Security as of any time, such reference shall be deemed to include reference to the Change of Control Redemption Price payable in respect of such Security to the extent that such Change of Control Redemption Price is, was or would be so payable at such time, and express mention of the Change of Control Redemption Price in any provision of this Indenture shall not be construed as excluding the Change of Control Redemption Price in those provisions of this Indenture when such express mention is not made; provided, however, that for the purposes of Article Twelve such reference shall be deemed to include reference to the Change of Control Redemption Price only to the extent the Change of Control Redemption Price is payable in cash. SECTION Twelve.2. Conditions to the Issuer's Election to Convert Securities Elected for Redemption into Preference Shares . (a) The Issuer may elect to convert the Securities in respect of which a Holder has exercised rights pursuant to Section 12.1 into Preference Shares exchangeable for Ordinary Shares or ADSs (as elected by the Holder) at the Change of Control Exchange Ratio if and only if the following conditions shall have been satisfied: (i) As to each Holder, the Change of Control Redemption Price shall be paid only in cash in the event any Ordinary Shares to be issued upon exchange of Preference Shares issued upon conversion hereunder (A) require registration under any U.S. federal securities law before such shares may be freely transferable without being subject to any transfer restrictions under the Securities Act upon exchange and if such registration is not completed or does not become effective prior to the Change of Control Redemption Date; and/or (B) require registration with or approval of any governmental authority under any state law or any other U.S. federal law before such shares may be validly issued or delivered upon exchange of the Preference Shares and if such registration is not completed or does not become effective or such approval is not obtained prior to the Redemption Date; provided, however, that, except as otherwise prohibited by this Section 12.2, notwithstanding the foregoing, the Issuer may elect to convert Securities into Preference Shares exchangeable for Ordinary Shares (but not ADSs) if the applicable Holder has certified in the Holder's written notice in the form of Exhibit E delivered pursuant to Section 12.3(b) that the Company Notice was not delivered to such Holder in the United States and, at the time of completion of the Holder's written notice, such Holder was not in the United States. (ii)The Issuer may not elect to convert Securities into Preference Shares exchangeable for Ordinary Shares or ADSs pursuant to Section 12.1 unless (A) such Ordinary Shares or ADSs are, or shall have been, approved for listing on the London Stock Exchange or NASDAQ, respectively, or listed or quoted on a national securities 64 exchange or quotation system, in either case, prior to the Change of Control Redemption Date and following the Change in Control, the Ordinary Shares or ADSs will continue to be listed for trading on the London Stock Exchange or NASDAQ, respectively, or listed or quoted on a national securities exchange or quotation system; and (B) at the Change of Control Redemption Date, the percentage of the Company's ordinary share capital represented by Ordinary Shares (including Ordinary Shares held in the form of ADSs) which are not (i) held by the Company or any Subsidiary or Affiliate of the Company or (ii) otherwise "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act is not less than 50%. (iii)All Ordinary Shares which may be issued upon conversion of the Securities into Preference Shares and exchange of such Preference Shares will be issued out of the Company's authorized but unissued Ordinary Shares and, will upon issue, be duly and validly issued and fully paid and non-assessable and free of any preemptive rights. If all of the conditions set forth in this Section 12.2(a) are not satisfied in accordance with the terms thereof, the Issuer may only redeem the relevant Securities for cash. (b) As to each Holder, ADSs will not be issued upon exchange of the Preference Shares issued upon conversion of the Securities unless and until either (a) the Securities being converted have been transferred pursuant to an effective registration statement under the Securities Act or (b) the Securities being converted are not otherwise "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act. SECTION Twelve.3. Notices; Method of Exercising Redemption Right, Etc. (a) Unless the Issuer shall have theretofore called for redemption all of the Outstanding Securities, on or before the 30th day after the occurrence of a Change in Control, the Issuer or, at the request and expense of the Company on or before the 30th day after such occurrence, the Trustee, shall give to all Holders of Securities, in the manner provided in Section 1.6, notice (the "Company Notice") of the occurrence of the Change in Control and of the redemption right set forth herein arising as a result thereof. The Company shall also deliver a copy of such Company Notice to the Trustee. Each Company Notice shall state: (1) the Change of Control Redemption Date; (2) the date by which the right to require redemption must be exercised; (3) a description of the procedure which a Holder must follow to exercise a right to require redemption, to elect to receive Ordinary Shares or ADSs upon exchange of any Preference Shares which may be issued and the place or places where such Securities are to be surrendered for payment of the Change of Control Redemption Price; 65 (4) that on the Change of Control Redemption Date the Change of Control Redemption Price, including accrued interest, if any, will become due and payable upon each such Security designated by the Holder to be redeemed, and that interest thereon shall cease to accrue on and after said date; (5) the date on which the right to convert the principal amount of the Securities to be redeemed will terminate and the place or places where such Securities may be surrendered for conversion; (6) the place or places that the Notice of Election of Holder To Require Redemption as provided in Exhibit E shall be delivered, and the form of such Notice; and (7) the CUSIP, CINS, ISIN and/or Common Code number or numbers of such Securities. No failure of the Company to give the foregoing notices or defect therein shall limit any Holder's right to exercise a right to require redemption or affect the validity of the proceedings for the redemption or conversion of Securities. If any of the foregoing provisions or other provisions of this Article Twelve are inconsistent with applicable law, such law shall govern. (b) To exercise a right to require redemption, a Holder shall deliver to the Trustee on or before the 30th day after the date of the Company Notice (i) written notice of the Holder's exercise of such right, which notice shall set forth the name of the Holder, the principal amount of the Securities to be redeemed (and, if any Security is to redeemed in part, the serial number thereof, the portion of the principal amount thereof to be redeemed and the name of the Person in which the portion thereof to remain Outstanding after such redemption is to be registered) and a statement that an election to exercise the right to require redemption is being made thereby, and, in the event that the Issuer shall elect to convert Securities into Preference Shares rather than redeem the Securities, the Holder's election to exchange such Preference Shares for Ordinary Shares or ADSs and the name or names (with addresses) in which the certificate or certificates for Ordinary Shares or ADSs shall be issued; and (ii) the Securities with respect to which the right to require redemption is being exercised. Such written notice shall be irrevocable, except that the right of the Holder to convert the Securities with respect to which the right to require redemption is being exercised shall continue until the close of business on the Business Day immediately preceding the Change of Control Redemption Date. (c) The Issuer shall give notice to the relevant Holder or Holders of its election to convert all or part of the Securities with respect to which such Holder or Holders has exercised a right to require redemption within two Business Days after the last date on which Holders may deliver notice to the Trustee pursuant to Section 12.3(b) of their election to require redemption. If less than all the Securities in respect of which Holders have exercised rights to require redemption are to be converted into Preference Shares, the particular Securities to be redeemed and the particular Securities to be converted shall be selected by the Trustee by such method as the Trustee may deem fair and appropriate. 66 (d) In the event a right to require redemption shall be exercised in accordance with the terms hereof, the Issuer shall pay or cause to be paid to the Trustee the Change of Control Redemption Price with respect to the Securities as to which the right to require redemption has been exercised, in cash for payment to the Holder on the Change of Control Redemption Date, or, if the Issuer has elected to convert the Securities in accordance with this Section 12, the Issuer shall procure the issue of Ordinary Shares or ADSs to the relevant holder of any Preference Share issued upon such conversion in exchange for any Preference Shares issued upon such conversion; provided, however, that installments of interest that mature on or prior to the Change of Control Redemption Date shall be payable in cash to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular Record Date. (e) If any Security (or portion thereof) surrendered for redemption shall not be so paid on the Change of Control Redemption Date, the principal amount of such Security (or portion thereof, as the case may be) shall, until paid, bear interest to the extent permitted by applicable law from the Change of Control Redemption Date at the rate of 2.00% per annum, and each Security shall remain convertible into Preference Shares until the principal of such Security (or portion thereof, as the case may be) shall have been paid or duly provided for. (f) Any Security which is to be redeemed only in part shall be surrendered to the Trustee (with, if the Issuer or the Trustee so requires, due endorsement by, or a written instrument in form satisfactory to the Issuer and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Issuer shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security without service charge, a new Security or Securities, containing identical terms and conditions, each in an authorized denomination in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. (g) Any issue of Ordinary Shares or ADSs in exchange for Preference Shares shall be effected immediately prior to the close of business on the Change of Control Redemption Date and the Person or Persons in whose name or names any certificate or certificates for Ordinary Shares or ADSs shall be issued upon such exchange shall be treated as if such Person or Persons were on the Change of Control Redemption Date the holder or holders of record of the shares represented thereby; provided, however, that any surrender for redemption on a date when the stock transfer books of the Issuer shall be closed shall result in the Person or Persons in whose name or names the certificate or certificates for such shares are to be issued being treated as the record holder or holders thereof for all purposes at the opening of business on the next succeeding day on which such stock transfer books are open. No payment or adjustment shall be made for dividends or distributions on any Ordinary Shares issued upon exchange of any Preference Share declared prior to the Change of Control Redemption Date. (h) Responsibility for transfer taxes or duties imposed in connection with any conversion of Securities pursuant to Section 12.1 shall be in accordance with the provisions set forth in Section 11.4. 67 (i) All Securities delivered for redemption or conversion shall be delivered to the Trustee to be canceled at the direction of the Trustee, which shall dispose of the same as provided in Section 3.11. SECTION Twelve.4. Certain Definitions. For purposes of this Article Twelve, (a) the terms "beneficial owner" and "beneficial ownership" shall be determined in accordance with Rule 13d-3, as in effect on the date of the original execution of this Indenture, promulgated by the Commission pursuant to the Exchange Act; (b) a "Change in Control" shall be deemed to have occurred at the time, after the original issuance of the Securities, of: (i) the acquisition by any person of beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of capital stock of the Company entitling such person to exercise more than 50% of the total voting power of all shares of capital stock of the Company entitled to vote generally in the elections of directors, other than any such acquisition by the Company, any Subsidiary of the Company or any employee benefit plan of the Company existing on the date of this Indenture; or (ii) an offer is made to all (or as nearly as may be practicable all) holders of Ordinary Shares or all (or as nearly as may be practicable all) such holders of Ordinary Shares other than the offeror and/or any Associate of the offeror, to acquire the whole or any part of the Company's issued ordinary share capital or if a scheme is proposed with regard to such acquisition, and the Company becomes aware that the right to cast more than 50% of the votes which may ordinarily be cast at a general meeting of the Company has or will become unconditionally vested in the offeror and/or its Associates; provided, however, that there shall be no Change of Control under this Section 12.4(b)(ii) if the holders of 50% or more of the total voting power of the Company's capital stock entitled to vote generally in elections of directors of the Company prior to the offer or scheme have, directly or indirectly, 50% or more of the total voting power of all shares of capital stock or the offeror or acquiror entitled to vote generally in elections of directors of the offeror or acquiror following the consummation of the acquisition; or (iii) any conveyance, transfer, sale, lease or similar disposition of all or substantially all of the Company's assets to another person; and (c) for purposes of Section 12.4(b)(i), the term "person" shall include any syndicate or group which would be deemed to be a "person" under Section 13(d)(3) of the Exchange Act, as in effect on the date of the original execution of this Indenture. 68 Article Thirteen REDEMPTION OF SECURITIES AT THE OPTION OF THE HOLDER ON CERTAIN DATES SECTION Thirteen.1. Right to Require Redemption on Certain Dates. On each of August 21, 2004, August 21, 2006 and August 21, 2008, (each, a "Optional Redemption Date") each Holder shall have the right, at the Holder's option, but subject to the provisions of Section 13.2, to require the Issuer to redeem, and upon the exercise of such right the Issuer shall redeem, all of such Holder's Securities not theretofore called for redemption, or any portion of the principal amount thereof that is equal to U.S.$5,000 or any greater integral multiple of U.S.$1,000, at a redemption price equal to 100% of the principal amount of the Securities to be redeemed plus accrued interest to the applicable Optional Redemption Date (the "Holder Option Redemption Price"); provided, however, that installments of interest on Securities whose Stated Maturity is on or prior to the applicable Optional Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Record Date according to their terms and the provisions of Section 3.9. Such right to require the redemption of the Securities shall not continue after a discharge of the Issuer from its obligations with respect to the Securities in accordance with Article Four, unless the applicable Optional Redemption Date shall have occurred prior to such discharge. At the option of the Issuer, the Issuer may elect not to redeem the Securities in respect of which a Holder has exercised rights pursuant to this Section 13.1 and instead may elect to convert such Securities, or any portion thereof in integral multiples of $1,000, into Preference Shares, subject to the fulfillment by the Issuer and the Company of the conditions set forth in Section 13.2. Such Preference Shares shall be exchanged for Ordinary Shares (or, at the option of the Holder requiring redemption, ADSs) at a special exchange ratio (the "Holder Option Exchange Ratio") equal to 100% of the principal amount of the Security divided by the market price per Ordinary Share on the London Stock Exchange valued at 95% of the average of the Ordinary Share VWAP for each of the five Trading Days immediately following the date the Issuer gives notice pursuant to Section 13.3(c) of its intention to elect to convert the Securities in respect of which a Holder has exercised rights pursuant to this Section 13.1, or any portion thereof, into Preference Shares rather than redeem such Securities, or the relevant portion thereof, for cash. Each such price will be converted into Dollars at the U.S.$/U.K.(pound) noon buying rate prevailing on such date SECTION Thirteen.2. Conditions to the Issuer's Election to Convert Securities Elected for Redemption into Preference Shares . (a) The Issuer may elect to convert the Securities in respect of which a Holder has exercised rights pursuant to Section 13.1 into Preference Shares exchangeable for Ordinary Shares or ADSs (as elected by the Holder) at the Holder Option Exchange Ratio if and only if the following conditions shall have been satisfied: (i) As to each Holder, the Holder Option Redemption Price shall be paid only in cash in the event any Ordinary Shares to be issued upon exchange of Preference Shares 69 issued upon conversion hereunder (A) require registration under any U.S. federal securities law before such shares may be freely transferable without being subject to any transfer restrictions under the Securities Act upon exchange and if such registration is not completed or does not become effective prior to the applicable Holder Option Redemption Date; and/or (B) require registration with or approval of any governmental authority under any state law or any other U.S. federal law before such shares may be validly issued or delivered upon exchange of the Preference Shares and if such registration is not completed or does not become effective or such approval is not obtained prior to the applicable Holder Option Redemption Date; provided, however, that, except as otherwise prohibited by this Section 13.2, notwithstanding the foregoing, the Issuer may elect to convert Securities into Preference Shares exchangeable for Ordinary Shares (but not ADSs) if the applicable Holder has certified in the Holder's written notice in the form of Exhibit E delivered pursuant to Section 13.3(b) that at the time of completion of the Holder's written notice, such Holder was not in the United States. (ii)The Issuer may not elect to convert Securities into Preference Shares exchangeable for Ordinary Shares or ADSs pursuant to Section 13.1 unless such Ordinary Shares or ADSs are, or shall have been, approved for listing on the London Stock Exchange or NASDAQ, respectively, or listed or quoted on a national securities exchange or quotation system, in either case, prior to the applicable Holder Option Redemption Date and following such applicable Holder Option Redemption Date, the Ordinary Shares or ADSs will continue to be listed for trading on the London Stock Exchange or NASDAQ, respectively, or listed or quoted on a national securities exchange or quotation system. (iii)All Ordinary Shares which may be issued upon conversion of the Securities into Preference Shares and exchange of such Preference Shares will be issued out of the Company's authorized but unissued Ordinary Shares and, will upon issue, be duly and validly issued and fully paid and non-assessable and free of any preemptive rights. If all of the conditions set forth in this Section 13.2(a) are not satisfied in accordance with the terms thereof, the Issuer may only redeem the relevant Securities for cash. (b) As to each Holder, ADSs will not be issued upon exchange of the Preference Shares issued upon conversion of the Securities unless and until either (a) the Securities being converted have been transferred pursuant to an effective registration statement under the Securities Act or (b) the Securities being converted are not otherwise "restricted securities" within the meaning of Rule 144(a)(3) under the Securities Act. SECTION Thirteen.3. Notices; Method of Exercising Redemption Right, Etc. (a) To exercise a right to require redemption pursuant to Section 13.1, a Holder shall deliver to the Trustee not more than 30 nor less than 15 Business Days prior to the applicable Optional Redemption Date written notice of the Holder's exercise of such right, which notice shall set forth the name of the Holder, the principal amount of the Securities to be 70 redeemed (and, if any Security is to redeemed in part, the serial number thereof, the portion of the principal amount thereof to be redeemed and the name of the Person in which the portion thereof to remain Outstanding after such redemption is to be registered) and a statement that an election to exercise the right to require redemption pursuant to Section 13.1 is being made thereby, and, in the event that the Issuer elects in lieu of such redemption to convert the Securities, or a portion thereof, in respect of which rights to require redemption pursuant to Section 13.1 have been exercised into Preference Shares exchangeable into Ordinary Shares or ADSs at the Holder Option Exchange Ratio, the Holder's election to receive either Ordinary Shares or ADSs and the name or names (with addresses) in which the certificate or certificates for Ordinary Shares shall be issued. Such written notice shall be irrevocable, except that the right of the Holder to convert the Securities with respect to which the right to require redemption is being exercised shall continue until the close of business on the Business Day immediately preceding the applicable Optional Redemption Date. (b) In the event a right to require redemption shall be exercised in accordance with the terms hereof, the Issuer shall pay or cause to be paid or delivered to the Trustee for payment or delivery to the Holder on the Optional Redemption Date the Holder Option Redemption Price in cash, or, if the Issuer has elected to convert the Securities in accordance with this Section 13, the Issuer shall procure the issue to the relevant holder of any Preference Shares issued upon such conversion of Ordinary Shares or ADSs in exchange for any Preference Shares issued upon conversion; provided, however, that installments of interest that mature on or prior to the Optional Redemption Date shall be payable in cash to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Regular Record Date. (c) The Issuer shall give notice to the relevant Holder or Holders of its election to convert all or part of the Securities with respect to which such Holder or Holders has exercised a right to require redemption on or before the tenth Business Day prior to the applicable Optional Redemption Date. If less than all the Securities in respect of which Holders have exercised rights to require redemption are to be converted into Preference Shares, the particular Securities to be redeemed and the particular Securities to be converted shall be selected by the Trustee by such method as the Trustee may deem fair and appropriate. (d) If any Security (or portion thereof) surrendered for redemption shall not be so paid on the Optional Redemption Date, the principal amount of such Security (or portion thereof, as the case may be) shall, until paid, bear interest to the extent permitted by applicable law from the Optional Redemption Date at the rate of 2.00% per annum, and each Security shall remain convertible into Ordinary Shares or ADSs until the principal of such Security (or portion thereof, as the case may be) shall have been paid or duly provided for. (e) Any Security which is to be redeemed only in part shall be surrendered to the Trustee (with, if the Issuer or the Trustee so requires, due endorsement by, or a written instrument in form satisfactory to the Issuer and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Issuer shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of such Security without service 71 charge, a new Security or Securities, containing identical terms and conditions, each in an authorized denomination in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the Security so surrendered. (f) Any issue of Ordinary Shares or ADSs in exchange for Preference Shares pursuant to Section 13.1 shall be effected immediately prior to the close of business on the Optional Redemption Date and the Person or Persons in whose name or names any certificate or certificates for Ordinary Shares or ADSs shall be issued upon such exchange shall be treated as if such Person or Persons were on the Optional Redemption Date the holder or holders of record of the shares represented thereby; provided, however, that any surrender for redemption on a date when the stock transfer books of the Issuer shall be closed shall result in the Person or Persons in whose name or names the certificate or certificates for such shares are to be issued being treated as the record holder or holders thereof for all purposes at the opening of business on the next succeeding day on which such stock transfer books are open. No payment or adjustment shall be made for dividends or distributions on any Ordinary Shares issued upon exchange for any Preference Share declared prior to the Optional Redemption Date. If Ordinary Shares or ADSs are not issued to Holders by the 14th day after the applicable Optional Redemption Date, such Holder may elect for the Issuer to procure the payment to such Holder of cash in an amount equal to the Holder Option Redemption Price, together with accrued interest to the payment date. (g) Responsibility for transfer taxes or duties imposed in connection with any conversion of Securities pursuant to Section 13.1 shall be in accordance with the provisions set forth in Section 11.4. (h) All Securities delivered for redemption or conversion shall be delivered to the Trustee to be canceled at the direction of the Trustee, which shall dispose of the same as provided in Section 3.11. Article Fourteen HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE SECTION Fourteen.1. Issuer to Furnish Trustee Names and Addresses of Holders. The Issuer will furnish or cause to be furnished to the Trustee: (a) semi-annually, not more than 15 days after the Regular Record Date, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of Securities as of such Regular Record Date; and (b) at such other times as the Trustee may reasonably request in writing, within 30 days after the receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; 72 excluding from any such list names and addresses received by the Trustee in its capacity as Security Registrar. SECTION Fourteen.2. Preservation of Information. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 14.1 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 14.1 upon receipt of a new list so furnished. (b) After this Indenture has been qualified under the Trust Indenture Act, the rights of Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and duties of the Trustee, shall be as provided by the Trust Indenture Act. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Issuer and the Trustee that neither the Issuer nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. SECTION Fourteen.3. No Recourse Against Others. An incorporator or any past, present or future director, officer, employee or shareholder, as such, of the Issuer or the Company shall not have any liability for any obligations of the Issuer or the Company under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder shall waive and release all such liability. Such waiver and release shall be part of the consideration for the issue of the Securities. SECTION Fourteen.4. Reports by Trustee. (a) After this Indenture has been qualified under the Trust Indenture Act, the Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within 60 days after each July 15 following the date of this Indenture, deliver to Holders a brief report, dated as of such July 15, which complies with the provisions of such Section 313(a). (b) After this Indenture has been qualified under the Trust Indenture Act, a copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Securities are listed, with the Commission, with the Issuer and with the Company. The Issuer will promptly notify the Trustee when the Securities are listed on any stock exchange. 73 SECTION Fourteen.5. Reports by Issuer and Company. After this Indenture has been qualified under the Trust Indenture Act, the Issuer and the Company shall file with the Trustee and the Commission, and transmit to Holders, such information, documents and other reports, and such summaries thereof, as may be required pursuant to the Trust Indenture Act at the times and in the manner provided pursuant to such Act; provided that any such information, documents or reports required to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the Trustee within 15 days after the same is so required to be filed with the Commission. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt thereof shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer's or the Company's compliance with any of their respective covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). ARTICLE FIFTEEN THE GUARANTEE SECTION 15.1 The Guarantee. (a) The Company hereby irrevocably and unconditionally guarantees to each Holder of the Securities and to the Trustee for itself and on behalf of each such Holder, the due and punctual payment of (i) the principal of (and premium, if any), and interest, if any, on the Securities when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption at the option of the Issuer or the Holders, or otherwise, in accordance with the terms of such Securities and of this Indenture and (ii) all other obligations of the Company hereunder, including without limitation Section 6.7 (other than, for the avoidance of doubt, its obligations relating to the exchange of Preference Shares for Ordinary Shares or ADSs) . In case of the failure of the Issuer punctually to make any such payment of principal of (or premium, if any) or interest on the Securities, the Company hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption at the option of the Issuer or the Holders, or otherwise, and as if such payment were made by the Issuer. (b) The Company hereby irrevocably and unconditionally agrees, for the benefit of each Holder of the Securities and of the Trustee on behalf of each such Holder: (i) that in the event of failure of the Issuer to perform any of its obligations or to enforce when due any of the rights of the Issuer in respect of the exercise of any conversion and exchange rights, the issue of any Preference Shares on any such exercise and the exchange of Preference Shares for Ordinary Shares or ADSs pursuant to the exercise of conversion and exchange rights, in each case in accordance with the Memorandum and Articles of Association of the Issuer and as referred to in the terms of 74 the Securities and the Indenture, the Company will procure the performance by the Issuer of all such obligations and the enforcement by the Issuer of all such rights; (ii) not to alter its obligation pursuant to a bilateral contract between the Issuer and the Company to issue Ordinary Shares or ADSs to holders of Preference Shares in order that the Issuer shall comply with its exchange obligations in respect of the Preference Shares in accordance with the Articles; and (iii) that, while any Security remains Outstanding, it will not consent to, and will procure that the Issuer will not make, any amendment to Article 9 of the Articles of Association which would vary, abrogate or modify the rights attaching to the Preference Shares save with (a) the consent of the Trustee or (b) (1) the written consent of the Holders of not less than a majority in principal amount of the Outstanding Securities by the Act of said Holders delivered to the Issuer, the Company and the Trustee; or (2) by the adoption of a resolution, at a meeting of Holders of the Outstanding Securities at which a quorum is present, by the Holders of a majority in principal amount of the Outstanding Securities represented at such meeting, provided, however, that the consent or affirmative vote of the Holder of each Outstanding Security adversely affected shall be required before any amendment is made to Article 9 of the Articles of Association which is adverse to the Holders of the Securities, and provided further that no consent of the Trustee nor consent or affirmative vote of any Holder of Securities shall be required in relation to any amendment which (i) does not adversely affect the interested Holder of Securities or (ii) is to cure any ambiguity, omission or defect or to correct or supplement any provision of Article 9 of the Articles of Association which may be inconsistent with any other provision of the Articles of Association or which is otherwise defective, or to make any other provisions with respect to matters arising under the Articles of Association as the Issuer, the Company and the Trustee may deem necessary or desirable, in each case which does not adversely affect the interests of the Holders of the Securities. (c) The Company hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of the validity, regularity or enforceability of any Security or this Indenture, the absence of any action to enforce the same, any waiver or consent by the Holder of such Security or by the Trustee or the Paying Agent with respect to any provisions thereof or of this Indenture, the recovery of any judgment against the Issuer or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Company hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to such Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by complete performance of all of the obligations of the Company contained in this Indenture and the Securities and in the Guarantees. If the Trustee or the Holder of any Security is required by any court or otherwise to return (and does so return) to the Issuer or the Company, or any custodian, receiver, liquidator, trustee, sequestrator or other similar official acting in relation to the Issuer or the Company, any amount paid to the Trustee or such 75 Holder in respect of a Security, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. The Company further agrees, to the fullest extent that it lawfully may do so, that, as between the Company, on the one hand, and the Holders and the Trustee, on the other hand, the Maturity of the obligations guaranteed hereby may be accelerated as provided in Article Five hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition extant under any applicable Bankruptcy Law preventing such acceleration in respect of the obligations guaranteed hereby. (d) The Guarantee of the Company constitutes a direct, unconditional and unsecured obligation of the Guarantor and will rank at least equally with all other unsecured and unsubordinated obligations of the Company (including unsecured and unsubordinated guarantees by the Company of indebtedness of others), subject in the event of insolvency, to laws of general applicability relating to or affecting creditors' rights. (e) The Company shall be subrogated to all rights of the Holders of the Securities against the Issuer in respect of any amounts paid to such Holders by the Company pursuant to the provisions of the Guarantee; provided, however, that the Company shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of and interest, if any, on all Securities issued hereunder shall have been paid in full. SECTION 15.2. Execution and Delivery of the Guarantee. To evidence its Guarantee provided in Section 15.1, the Company hereby agrees to execute the Guarantee, in a form established pursuant to Section 2.3, to be endorsed on each Security authenticated and delivered under this Indenture. Each such Guarantee shall be executed on behalf of the Guarantor by any one of its Officers under a facsimile of its corporate seal reproduced thereon and attested by its Company Secretary or one of its Assistant or Deputy Company Secretaries. The signature of any of these officers on each Guarantee may be manual or facsimile. Any Guarantee bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of the Securities upon which any such Guarantee is endorsed or did not hold such offices at the date of such Securities. The delivery of any Security, after the authentication thereof hereunder, shall constitute due delivery of the Company endorsed thereon on behalf of the Company. The Company hereby agrees that its Guarantee set forth in Section 15.1 shall remain in full force and effect notwithstanding any failure to endorse on each Security a notation of such Guarantee. 76 ARTICLE SIXTEEN Meetings of Holders of The Securities SECTION 16.1 Purposes of Meetings. A meeting of the Holders, in each case with respect to Securities held by such Holders, may be called at any time from time to time pursuant to this Article for any of the following purposes: (a) to give any notice to the Issuer, the Company or to the Trustee, or to give any directions to the Trustee, or to consent to the waiving of any Default hereunder and its consequences, or to take any other action authorized to be taken by Holders pursuant to Article 5 hereof; (b) to remove the Trustee and appoint a successor trustee pursuant to Article 6 hereof; (c) to consent to the execution of an indenture supplemental hereto pursuant to Section 8.2 hereof; or (d) to consent to the waiving of certain covenants under Section 9.8. SECTION 16.2 Place of Meetings. Meetings of Holders may be held at such place or places as the Trustee or, in case of its failure to act, the Issuer, the Company or the Holders calling the meeting, shall from time to time determine. SECTION 16.3 Call and Notice of Meetings. (a) The Trustee may at any time (upon not less than 21 days' notice) call a meeting of Holders to be held at such time and at such place in the location determined by the Trustee pursuant to Section 16.2 hereof. Notice of every meeting of Holders, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be mailed to each Holder and published in the manner contemplated by Section 1.6 hereof. (b) In case at any time the Issuer or the Company pursuant to a Board Resolution, or the Holders of at least one-tenth in aggregate principal amount of the Securities then outstanding, shall have requested the Trustee to call a meeting of the Holders, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have made the first giving of the notice of such meeting within 20 days after receipt of such request, then the the Issuer, the Company or the Holders of the amount above specified may determine the time (not less than 21 days after notice is given) and the place in the location determined by the Issuer, the Company or the Holders pursuant to Section 16.2 hereof 77 for such meeting and may call such meeting to take any action authorized in Section 16.1 hereof by giving notice thereof as provided in Section 16.3(a) hereof. SECTION 16.4 Voting at Meetings. To be entitled to vote at any meeting of Holders, a Person shall be (i) a Holder or (ii) a Person appointed by an instrument in writing as proxy for a Holder or Holders by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders shall be the Persons so entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel, any representatives of the Issuer and its counsel and any representatives of the Company and its counsel. SECTION 16.5 Voting Rights, Conduct and Adjournment (a) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders in regard to proof of the holding of Securities and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Article 3 hereof and the appointment of any proxy shall be proved in such manner as is deemed appropriate by the Trustee or by having the signature of the person executing the proxy witnessed or guaranteed by any bank, banker or trust company customarily authorized to certify to the holding of a security such as a global security. A proxy need not be a Holder. (b) At any meeting of Holders, the presence of Persons holding or representing Securities in an aggregate principal amount sufficient under the appropriate provision of this Indenture to take action upon the business for the transaction of which such meeting was called, and in any event constituting not less than one-third of the aggregate principal amount of the Securities then outstanding, shall constitute a quorum. Any meetings of Holders duly called pursuant to Section 16.3 hereof may be adjourned from time to time by vote of the Holders (or proxies for the Holders) of a majority of the Securities represented at the meeting and entitled to vote, whether or not a quorum shall be present; and the meeting may be held as so adjourned without further notice. No action at a meeting of Holders shall be effective unless approved by Persons holding or representing Securities in the aggregate principal amount required by the provision of this Indenture pursuant to which such action is being taken. (c) At any meeting of Holders, each Holder or proxy shall be entitled to one vote for each $1,000 principal amount of outstanding Securities held or represented. (d) In determining whether the Holders of the requisite principal amount of the Securities have given or taken any direction, notice, consent, waiver or other action under this Indenture as of any date, only the principal amount (determined as above) of Securities that are to be deemed Outstanding under this Indenture can be considered. 78 --------------------- This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the day and year first above written. SHIRE FINANCE LIMITED By ---------------------------------------- Name: Title: SHIRE PHARMACEUTICALS GROUP PLC By ---------------------------------------- Name: Title: The Bank of New York, Trustee By ---------------------------------------- Name: Title: EXHIBIT A-1 FORM OF RULE 144A GLOBAL SECURITY [Insert Applicable Legend] SHIRE FINANCE LIMITED 2% SENIOR GUARANTEED CONVERTIBLE NOTE DUE AUGUST 21, 2011 No. [o] U.S.$ [o] CUSIP No. 82481UAA7 Shire Finance Limited, an exempted limited company duly organized and existing under the laws of the Cayman Islands (herein called the "Issuer", which term includes any successor Person under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to Cede & Co. or registered assigns the principal sum of [o] United States Dollars (U.S.$ [o]) (which principal amount may from time to time be increased or decreased to such other principal amounts (which, taken together with the principal amounts of all other Outstanding Securities, shall not exceed U.S.$400 million in the aggregate at any time) by adjustments endorsed by the Trustee as defined below) on August 21, 2011 and to pay interest thereon, from August 21, 2001, or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semi-annually in arrears on February 21 and August 21 in each year (each, an "Interest Payment Date"), commencing February 21, 2002, at the rate of 2% per annum, until the principal hereof is due, and at the rate of 2% per annum on any overdue principal and premium, if any, and, to the extent permitted by law, on any overdue interest until paid. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the 6th day of February or the 6th day of August (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on the relevant Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Issuer, notice whereof shall be given to Holders of Definitive Securities not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payments of principal shall be made upon the surrender of this Security at the option of the Holder at the Corporate Trust Office of the Trustee, or at such other office or agency (in each case, located outside the United Kingdom) of the Issuer as may be designated by it for such purpose in such coin or currency of the United States of America as at the time of payment shall be legal tender for the A-1-1 payment of public and private debts, or at such other offices or agencies (in each case, located outside the United Kingdom) as the Issuer may designate, by wire transfer to a Dollar account maintained by the payee with a bank. Payment of interest on this Security will be made by wire transfer to a Dollar account maintained by the payee with a bank. Except as specifically provided herein and in the Indenture, the Issuer shall not be required to make any payment with respect to any tax, assessment or other governmental charge imposed by any government or any political subdivision or taxing authority thereof or therein. All terms used in this Security which are not otherwise defined herein shall have the meanings assigned to them in the Indenture. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof or an Authenticating Agent by the manual signature of one of their respective authorized signatories, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Issuer has caused this Security to be duly executed. SHIRE FINANCE LIMITED By: ---------------------------------------- Name: Title: A-1-2 [FORM OF REVERSE OF SECURITY] This Security is one of a duly authorized issue of securities of the Issuer designated as its "2% Senior Guaranteed Convertible Notes due August 21, 2011" (herein called the "Securities"), limited in aggregate principal amount to U.S.$400 million, issued and to be issued under an Indenture, dated as of August 21, 2001 (herein called the "Indenture"), between the Issuer, Shire Pharmaceuticals Group plc, as guarantor (the "Company") and Bank of New York, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Trustee, and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. No sinking fund is provided for the Securities. In the event of a redemption of the Securities, the Issuer will not be required (a) to register the transfer or exchange of Securities for a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Securities called for such redemption; or (b) to register the transfer or exchange of any Security, or portion thereof, called for redemption. Notice to the Holders will be given not less than 30 nor more than 60 days prior to the applicable Redemption Date as provided in the Indenture. In any case where the due date for the payment of the principal of, premium, if any, or interest on any Security or the last day on which a Holder of a Security has a right to convert his Security shall be, at any Place of Payment or Place of Conversion, as the case may be, a day on which banking institutions at such Place of Payment or Place of Conversion are authorized or obligated by law or executive order to close, then payment of principal, premium, if any, or interest, or delivery for conversion of such Security need not be made on or by such date at such place but may be made on or by the next succeeding day at such place which is not a day on which banking institutions are authorized or obligated by law or executive order to close, with the same force and effect as if made on the date for such payment or the date fixed for redemption or repurchase, or by such last day for conversion, and no interest shall accrue on the amount so payable for the period from and after such due date. The Securities are subject to redemption at the option of the Issuer at any time on or after August 21, 2004, in whole or in part, upon not less than 30 nor more than 60 days' notice to the Holders prior to the Redemption Date, at a redemption price equal to 100% of the principal amount of the Securities redeemed, plus accrued and unpaid interest to the Redemption Date. The Issuer may only exercise this option during this period if the average of the closing bid and offer quotations per ordinary share published in the London Stock Exchange ("LSE") Daily Official List for twenty of the thirty consecutive dealing days ending within 14 days of giving notice of the redemption is at least 130% of the exchange price in effect on that dealing day. The exchange price is equal to $1,000 divided by the then applicable Exchange Ratio. A-1-3 Subject to and upon compliance with the provisions of Article Eleven of the Indenture, at the option of the Holder thereof, any Security or any portion of the principal amount thereof that is U.S.$1,000 or an integral multiple of U.S.$1,000 may be converted into fully paid and nonassessable Preference Shares at the conversion price of one Preference Share per U.S.$1,000 principal amount of Securities. Such conversion right shall commence upon the original issuance of the Securities and expire at the close of business on August 14, 2011, subject, in the case of conversion of any Global Security, to any Applicable Procedures. In case a Security or portion thereof is called for redemption at the election of the Issuer or the Holder thereof exercises his right to require the Issuer to redeem the Security, such conversion right in respect of the Security, or portion thereof so called, shall expire at the close of business on the Business Day immediately preceding the Redemption Date, Change of Control Redemption Date or Holder Option Redemption Date, as the case may be, unless the Issuer defaults in making the payment due upon redemption, as the case may be (in each case subject as aforesaid to any Applicable Procedures with respect to any Global Security). A Holder of Securities shall not be entitled to any rights of a holder of Preference Shares until such holder has converted such Security into Preference Shares, and only to the extent that such Securities are deemed to have been converted into Preference Shares under Article Eleven of the Indenture. In order to exercise the conversion privilege, the Holder of any Security to be converted shall surrender such Security, duly endorsed or assigned to the Issuer or in blank, at any office or agency of the Issuer maintained for that purpose pursuant to Section 9.2 of the Indenture, accompanied by a duly signed conversion notice substantially in the form set forth in Exhibit D of the Indenture stating that the Holder elects to convert such Security or, if less than the entire principal amount thereof is to be converted, the portion thereof to be converted. Each Security surrendered for conversion (in whole or in part) during the period from the close of business on any Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date shall (except in the case of any Security or portion thereof which has been called for redemption on a Redemption Date, or is to be redeemed on a Change of Control Redemption Date or Holder Option Redemption Date, with the consequence that the conversion right of such Security would terminate between such Regular Record Date and the close of business on such Interest Payment Date) be accompanied by payment in New York Clearing House funds or other funds acceptable to the Issuer of an amount equal to the interest payable on such Interest Payment Date on the principal amount of such Security (or part thereof, as the case may be) being surrendered for conversion. The interest so payable on such Interest Payment Date with respect to any Security (or portion thereof, if applicable) which is surrendered for conversion during the period from the close of business on any Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date and which Security has been called for redemption on a Redemption Date, or is redeemable on a Change of Control Redemption Date or a Holder Option Redemption Date, with the consequence that the conversion right of such Security would terminate between such Regular Record Date and the close of business on such Interest Payment Date, shall be paid to the Holder of such Security being converted in an amount equal to the interest that would have been payable on such Security if such Security had been converted as of the close of business on such Interest Payment A-1-4 Date. The interest so payable on such Interest Payment Date in respect of any Security (or portion thereof, as the case may be) which has not been called for redemption on a Redemption Date, or is not eligible for redemption on a Change of Control Redemption Date or Holder Option Redemption Date, with the consequence of termination of the conversion right as aforesaid, which Security (or portion thereof, as the case may be) is surrendered for conversion during the period from the close of business on any Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date, shall be paid to the Holder of such Security as of such Regular Record Date. Interest payable in respect of any Security surrendered for conversion on or after an Interest Payment Date shall be paid to the Holder of such Security as of the next preceding Regular Record Date, notwithstanding the exercise of the right of conversion. Except as provided in this paragraph and subject to the last paragraph of Section 3.9 of the Indenture, no cash payment or adjustment shall be made upon any conversion on account of any interest accrued from the Interest Payment Date next preceding the conversion date, in respect of any Security (or part thereof, as the case may be) surrendered for conversion, or on account of any dividends on the Preference Shares issued upon conversion. The issue by the Issuer to the Holder of the number of Preference Shares into which a Security is convertible will be deemed to satisfy the Issuer's obligation to pay the principal amount of the Security. Securities shall be deemed to have been converted on the day of surrender of such Securities for conversion in accordance with the foregoing provisions, and at such time the rights of the Holders of such Securities as Holders shall cease, and the Person or Persons entitled to receive the Preference Shares issuable upon conversion shall be treated for all purposes as the record holder or holders of such Preference Shares at such time. In the case of any Security which is converted in part only, upon such conversion the Issuer shall execute and the Trustee shall authenticate and make available for delivery to the Holder thereof, at the expense of the Issuer, a new Security or Securities of authorized denominations in an aggregate principal amount equal to the unconverted portion of the principal amount of such Security. A Security may be converted in part, but only if the principal amount of such Security to be converted is any integral multiple of U.S.$1,000 and the principal amount of such security to remain Outstanding after such conversion is equal to U.S.$1,000 or any integral multiple of U.S.$1,000 in excess thereof. In the event that a Change in Control shall occur, then each Holder shall have the right, at the Holder's option, but subject to the provisions of Section 12.2 of the Indenture, to require the Issuer to redeem, and upon the exercise of such right the Issuer shall redeem, all of such Holder's Securities not theretofore called for redemption, or any portion of the principal amount thereof that is equal to U.S.$5,000 or any greater integral multiple of U.S.$1,000, on the Change of Control Redemption Date at the Change of Control Redemption Price; provided, however, that installments of interest on Securities whose Stated Maturity is on or prior to the Change of Control Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Record Date according to the terms hereof and the provisions of Section 3.9 of the Indenture. Such right to require the redemption of the Securities shall not continue after a discharge of the Issuer from its obligations A-1-5 with respect to the Securities in accordance with Article Four of the Indenture, unless a Change in Control shall have occurred prior to such discharge. At the option of the Issuer, the Issuer may elect not to redeem the Securities in respect of which a Holder has exercised rights and instead may elect to convert such Securities, or any portion thereof in integral multiples of $1,000, into Preference Shares, subject to the fulfillment by the Issuer and the Company of the conditions set forth in Section 12.2 of the Indenture. Such Preference Shares shall be exchanged for Ordinary Shares (or, at the option of the Holder requiring redemption, ADSs) at the Change of Control Exchange Ratio. On each Optional Redemption Date each Holder shall have the right, at the Holder's option, but subject to the provisions of Section 13.2 of the Indenture, to require the Issuer to redeem, and upon the exercise of such right the Issuer shall redeem, all of such Holder's Securities not theretofore called for redemption, or any portion of the principal amount thereof that is equal to U.S.$5,000 or any greater integral multiple of U.S.$1,000, at the Holder Option Redemption Price; provided, however, that installments of interest on Securities whose Stated Maturity is on or prior to the applicable Optional Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Record Date according to the terms hereof and the provisions of Section 3.9 of the Indenture. Such right to require the redemption of the Securities shall not continue after a discharge of the Issuer from its obligations with respect to the Securities in accordance with Article Four of the Indenture, unless the applicable Optional Redemption Date shall have occurred prior to such discharge. At the option of the Issuer, the Issuer may elect not to redeem the Securities in respect of which a Holder has exercised rights and instead may elect to convert such Securities, or any portion thereof in integral multiples of $1,000, into Preference Shares, subject to the fulfillment by the Issuer and the Company of the conditions set forth in Section 13.2 of the Indenture. Such Preference Shares shall be exchanged for Ordinary Shares (or, at the option of the Holder requiring redemption, ADSs) at the Holder Option Exchange Ratio. Each such price will be converted into Dollars at the U.S.$/U.K.(pound) noon buying rate prevailing on such date. In the event of a redemption, cancellation or conversion of this Security in part only, the Notes evidenced by this Security shall be reduced by the principal amount so redeemed, cancelled or converted. Thereafter, the Notes represented by this Security shall be the principal amount of Notes most recently entered by or on behalf of the Issuer in the relevant column in Schedule A attached hereto.] If an Event of Default (other than that specified in Section 5.1(6), 5.1(7), 5.1(8) or 5.1(9) of the Indenture) shall occur and be continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities may declare the principal of all the Securities to be due and payable immediately in the manner and with the effect provided in the Indenture, and upon any such declaration such principal and all accrued interest thereon shall become immediately due and payable. If an Event of Default specified in Section 5.1(6), 5.1(7), 5.1(8) or 5.1(9) of the Indenture occurs, the principal of, and accrued A-1-6 interest on, all of the Securities shall ipso facto become immediately due and payable without any declaration or other Act of the Holder or any act on the part of the Trustee. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the written consent of the Holders of a majority in principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security or such other Security. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default, the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof, premium, if any, or interest hereon on or after the respective due dates expressed herein or for the enforcement of the right to convert this Security as provided in the Indenture. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Security at the times, places and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture. Interest payable in respect of any period which is not a full interest period will be calculated on the basis of a 360-day year of twelve 30-day months and, in the case of an incomplete month, the number of days elapsed. In accordance with the provisions of Article Fifteen of the Indenture, the obligations of the Issuer under the Indenture and the Securities have been unconditionally and irrevocably guaranteed by Shire Pharmaceuticals Group plc. An incorporator or any past, present or future director, officer, employee or shareholder, as such, of the Issuer or the Company shall not have any liability for any obligations of the Issuer or the Company under this Security or the Indenture or for any claim based on, in A-1-7 respect of or by reason of such obligations or their creation. By accepting this Security, each Holder shall waive and release all such liability. Such waiver and release is part of the consideration for the issue of this Security. The Indenture and this Security shall be governed by and construed in accordance with the laws of the State of New York, United States of America, without regard to the conflicts of laws principles thereof. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. A-1-8 SCHEDULE A SCHEDULE OF PRINCIPAL AMOUNT The initial principal amount of this Security shall be U.S.$ . The following decreases/increases in the principal amount of this Security have been made:
Date of Decrease/ Decrease in Increase in Principal Total Principal Amount Notation Made by or Increase Principal Amount Amount Following such on Behalf of Trustee Decrease/Increase ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ]
A-1-9 EXHIBIT A-2 FORM OF REGULATION S GLOBAL SECURITY [Insert Applicable Legend] SHIRE FINANCE LIMITED 2% SENIOR GUARANTEED CONVERTIBLE NOTE DUE AUGUST 21, 2011 No. [o] U.S.$ [o] ISIN No. XS0133425552 Common Code No. 013342555 Shire Finance Limited, an exempted limited company duly organized and existing under the laws of the Cayman Islands (herein called the "Issuer", which term includes any successor Person under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay [name of common depositary] or registered assigns the principal sum of [o] United States Dollars (U.S.$ [o]) (which principal amount may from time to time be increased or decreased to such other principal amounts (which, taken together with the principal amounts of all other Outstanding Securities, shall not exceed U.S.$ 400 million in the aggregate at any time) by adjustments endorsed by the Trustee as defined below) on August 21, 2011 and to pay interest thereon, from August 21, 2001, or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semi-annually in arrears on February 21 and August 21 in each year (each, an "Interest Payment Date"), commencing February 21, 2002, at the rate of 2% per annum, until the principal hereof is due, and at the rate of 2% per annum on any overdue principal and premium, if any, and, to the extent permitted by law, on any overdue interest until paid. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the 6th day of February or the 6th day of August (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on the relevant Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Issuer, notice whereof shall be given to Holders of Definitive Securities not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payments of principal shall be made upon the surrender of this Security at the option of the Holder at the Corporate Trust Office of the Trustee, or at such other office or agency (in each case, located outside the United Kingdom) of the Issuer as may be designated by it for such A-2-1 purpose in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, or at such other offices or agencies (in each case, located outside the United Kingdom) as the Issuer may designate, by wire transfer to a Dollar account maintained by the payee with a bank. Payment of interest on this Security will be made by wire transfer to a Dollar account maintained by the payee with a bank. Except as specifically provided herein and in the Indenture, the Issuer shall not be required to make any payment with respect to any tax, assessment or other governmental charge imposed by any government or any political subdivision or taxing authority thereof or therein. All terms used in this Security which are not otherwise defined herein shall have the meanings assigned to them in the Indenture. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof or an Authenticating Agent by the manual signature of one of their respective authorized signatories, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Issuer has caused this Security to be duly executed. SHIRE FINANCE LIMITED By: ----------------------------------------- Name: Title: A-2-2 [FORM OF REVERSE OF SECURITY] This Security is one of a duly authorized issue of securities of the Issuer designated as its "2% Senior Guaranteed Convertible Notes due August 21, 2011" (herein called the "Securities"), limited in aggregate principal amount to U.S.$400 million, issued and to be issued under an Indenture, dated as of August 21, 2001 (herein called the "Indenture"), between the Issuer, Shire Pharmaceuticals Group plc, as guarantor (the "Company") and Bank of New York, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Trustee, and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. No sinking fund is provided for the Securities. In the event of a redemption of the Securities, the Issuer will not be required (a) to register the transfer or exchange of Securities for a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Securities called for such redemption; or (b) to register the transfer or exchange of any Security, or portion thereof, called for redemption. Notice to the Holders will be given not less than 30 nor more than 60 days prior to the applicable Redemption Date as provided in the Indenture. In any case where the due date for the payment of the principal of, premium, if any, or interest on any Security or the last day on which a Holder of a Security has a right to convert his Security shall be, at any Place of Payment or Place of Conversion, as the case may be, a day on which banking institutions at such Place of Payment or Place of Conversion are authorized or obligated by law or executive order to close, then payment of principal, premium, if any, or interest, or delivery for conversion of such Security need not be made on or by such date at such place but may be made on or by the next succeeding day at such place which is not a day on which banking institutions are authorized or obligated by law or executive order to close, with the same force and effect as if made on the date for such payment or the date fixed for redemption or repurchase, or by such last day for conversion, and no interest shall accrue on the amount so payable for the period from and after such due date. The Securities are subject to redemption at the option of the Issuer at any time on or after August 21, 2004, in whole or in part, upon not less than 30 nor more than 60 days' notice to the Holders prior to the Redemption Date, at a redemption price equal to 100% of the principal amount of the Securities redeemed, plus accrued and unpaid interest to the Redemption Date. The Issuer may only exercise this option during this period if the average of the closing bid and offer quotations per ordinary share published in the London Stock Exchange ("LSE") Daily Official List for twenty of the thirty consecutive dealing days ending within 14 days of giving notice of the redemption is at least 130% of the exchange price in effect on that dealing day. The exchange price is equal to $1,000 divided by the then applicable Exchange Ratio. A-2-3 Subject to and upon compliance with the provisions of Article Eleven of the Indenture, at the option of the Holder thereof, any Security or any portion of the principal amount thereof that is U.S.$1,000 or an integral multiple of U.S.$1,000 may be converted into fully paid and nonassessable Preference Shares at the conversion price of one Preference Share per U.S.$1,000 principal amount of Securities. Such conversion right shall commence upon the original issuance of the Securities and expire at the close of business on August 14, 2011, subject, in the case of conversion of any Global Security, to any Applicable Procedures. In case a Security or portion thereof is called for redemption at the election of the Issuer or the Holder thereof exercises his right to require the Issuer to redeem the Security, such conversion right in respect of the Security, or portion thereof so called, shall expire at the close of business on the Business Day immediately preceding the Redemption Date, Change of Control Redemption Date or Holder Option Redemption Date, as the case may be, unless the Issuer defaults in making the payment due upon redemption, as the case may be (in each case subject as aforesaid to any Applicable Procedures with respect to any Global Security). A Holder of Securities shall not be entitled to any rights of a holder of Preference Shares until such holder has converted such Security into Preference Shares, and only to the extent that such Securities are deemed to have been converted into Preference Shares under Article Eleven of the Indenture. In order to exercise the conversion privilege, the Holder of any Security to be converted shall surrender such Security, duly endorsed or assigned to the Issuer or in blank, at any office or agency of the Issuer maintained for that purpose pursuant to Section 9.2 of the Indenture, accompanied by a duly signed conversion notice substantially in the form set forth in Exhibit D of the Indenture stating that the Holder elects to convert such Security or, if less than the entire principal amount thereof is to be converted, the portion thereof to be converted. Each Security surrendered for conversion (in whole or in part) during the period from the close of business on any Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date shall (except in the case of any Security or portion thereof which has been called for redemption on a Redemption Date, or is to be redeemed on a Change of Control Redemption Date or Holder Option Redemption Date, with the consequence that the conversion right of such Security would terminate between such Regular Record Date and the close of business on such Interest Payment Date) be accompanied by payment in New York Clearing House funds or other funds acceptable to the Issuer of an amount equal to the interest payable on such Interest Payment Date on the principal amount of such Security (or part thereof, as the case may be) being surrendered for conversion. The interest so payable on such Interest Payment Date with respect to any Security (or portion thereof, if applicable) which is surrendered for conversion during the period from the close of business on any Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date and which Security has been called for redemption on a Redemption Date, or is redeemable on a Change of Control Redemption Date or a Holder Option Redemption Date, with the consequence that the conversion right of such Security would terminate between such Regular Record Date and the close of business on such Interest Payment Date, shall be paid to the Holder of such Security being converted in an amount equal to the interest that would have been payable on such Security if such Security had been converted as of the close of business on such Interest Payment A-2-4 Date. The interest so payable on such Interest Payment Date in respect of any Security (or portion thereof, as the case may be) which has not been called for redemption on a Redemption Date, or is not eligible for redemption on a Change of Control Redemption Date or Holder Option Redemption Date, with the consequence of termination of the conversion right as aforesaid, which Security (or portion thereof, as the case may be) is surrendered for conversion during the period from the close of business on any Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date, shall be paid to the Holder of such Security as of such Regular Record Date. Interest payable in respect of any Security surrendered for conversion on or after an Interest Payment Date shall be paid to the Holder of such Security as of the next preceding Regular Record Date, notwithstanding the exercise of the right of conversion. Except as provided in this paragraph and subject to the last paragraph of Section 3.9 of the Indenture, no cash payment or adjustment shall be made upon any conversion on account of any interest accrued from the Interest Payment Date next preceding the conversion date, in respect of any Security (or part thereof, as the case may be) surrendered for conversion, or on account of any dividends on the Preference Shares issued upon conversion. The issue by the Issuer to the Holder of the number of Preference Shares into which a Security is convertible will be deemed to satisfy the Issuer's obligation to pay the principal amount of the Security. Securities shall be deemed to have been converted on the day of surrender of such Securities for conversion in accordance with the foregoing provisions, and at such time the rights of the Holders of such Securities as Holders shall cease, and the Person or Persons entitled to receive the Preference Shares issuable upon conversion shall be treated for all purposes as the record holder or holders of such Preference Shares at such time. In the case of any Security which is converted in part only, upon such conversion the Issuer shall execute and the Trustee shall authenticate and make available for delivery to the Holder thereof, at the expense of the Issuer, a new Security or Securities of authorized denominations in an aggregate principal amount equal to the unconverted portion of the principal amount of such Security. A Security may be converted in part, but only if the principal amount of such Security to be converted is any integral multiple of U.S.$1,000 and the principal amount of such security to remain Outstanding after such conversion is equal to U.S.$1,000 or any integral multiple of U.S.$1,000 in excess thereof. In the event that a Change in Control shall occur, then each Holder shall have the right, at the Holder's option, but subject to the provisions of Section 12.2 of the Indenture, to require the Issuer to redeem, and upon the exercise of such right the Issuer shall redeem, all of such Holder's Securities not theretofore called for redemption, or any portion of the principal amount thereof that is equal to U.S.$5,000 or any greater integral multiple of U.S.$1,000, on the Change of Control Redemption Date at the Change of Control Redemption Price; provided, however, that installments of interest on Securities whose Stated Maturity is on or prior to the Change of Control Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Record Date according to the terms hereof and the provisions of Section 3.9 of the Indenture. Such right to require the redemption of the Securities shall not continue after a discharge of the Issuer from its obligations A-2-5 with respect to the Securities in accordance with Article Four of the Indenture, unless a Change in Control shall have occurred prior to such discharge. At the option of the Issuer, the Issuer may elect not to redeem the Securities in respect of which a Holder has exercised rights and instead may elect to convert such Securities, or any portion thereof in integral multiples of $1,000, into Preference Shares, subject to the fulfillment by the Issuer and the Company of the conditions set forth in Section 12.2 of the Indenture. Such Preference Shares shall be exchanged for Ordinary Shares (or, at the option of the Holder requiring redemption, ADSs) at the Change of Control Exchange Ratio. On each Optional Redemption Date each Holder shall have the right, at the Holder's option, but subject to the provisions of Section 13.2 of the Indenture, to require the Issuer to redeem, and upon the exercise of such right the Issuer shall redeem, all of such Holder's Securities not theretofore called for redemption, or any portion of the principal amount thereof that is equal to U.S.$5,000 or any greater integral multiple of U.S.$1,000, at the Holder Option Redemption Price; provided, however, that installments of interest on Securities whose Stated Maturity is on or prior to the applicable Optional Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Record Date according to the terms hereof and the provisions of Section 3.9 of the Indenture. Such right to require the redemption of the Securities shall not continue after a discharge of the Issuer from its obligations with respect to the Securities in accordance with Article Four of the Indenture, unless the applicable Optional Redemption Date shall have occurred prior to such discharge. At the option of the Issuer, the Issuer may elect not to redeem the Securities in respect of which a Holder has exercised rights and instead may elect to convert such Securities, or any portion thereof in integral multiples of $1,000, into Preference Shares, subject to the fulfillment by the Issuer and the Company of the conditions set forth in Section 13.2 of the Indenture. Such Preference Shares shall be exchanged for Ordinary Shares (or, at the option of the Holder requiring redemption, ADSs) at the Holder Option Exchange Ratio. Each such price will be converted into Dollars at the U.S.$/U.K.(pound) noon buying rate prevailing on such date. In the event of a redemption, cancellation or conversion of this Security in part only, the Notes evidenced by this Security shall be reduced by the principal amount so redeemed, cancelled or converted. Thereafter, the Notes represented by this Security shall be the principal amount of Notes most recently entered by or on behalf of the Issuer in the relevant column in Schedule A attached hereto.] If an Event of Default (other than that specified in Section 5.1(6), 5.1(7), 5.1(8) or 5.1(9) of the Indenture) shall occur and be continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities may declare the principal of all the Securities to be due and payable immediately in the manner and with the effect provided in the Indenture, and upon any such declaration such principal and all accrued interest thereon shall become immediately due and payable. If an Event of Default specified in Section 5.1(6), 5.1(7), 5.1(8) or 5.1(9) of the Indenture occurs, the principal of, and accrued A-2-6 interest on, all of the Securities shall ipso facto become immediately due and payable without any declaration or other Act of the Holder or any act on the part of the Trustee. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the written consent of the Holders of a majority in principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security or such other Security. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default, the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof, premium, if any, or interest hereon on or after the respective due dates expressed herein or for the enforcement of the right to convert this Security as provided in the Indenture. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Security at the times, places and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture. Interest payable in respect of any period which is not a full interest period will be calculated on the basis of a 360-day year of twelve 30-day months and, in the case of an incomplete month, the number of days elapsed. In accordance with the provisions of Article Fifteen of the Indenture, the obligations of the Issuer under the Indenture and the Securities have been unconditionally and irrevocably guaranteed by Shire Pharmaceuticals Group plc. An incorporator or any past, present or future director, officer, employee or shareholder, as such, of the Issuer or the Company shall not have any liability for any obligations of the Issuer or the Company under this Security or the Indenture or for any claim based on, in A-2-7 respect of or by reason of such obligations or their creation. By accepting this Security, each Holder shall waive and release all such liability. Such waiver and release is part of the consideration for the issue of this Security. The Indenture and this Security shall be governed by and construed in accordance with the laws of the State of New York, United States of America, without regard to the conflicts of laws principles thereof. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. A-2-8 SCHEDULE A SCHEDULE OF PRINCIPAL AMOUNT The initial principal amount of this Security shall be U.S.$ . The following decreases/increases in the principal amount of this Security have been made:
Date of Decrease/ Decrease in Increase in Principal Total Principal Amount Notation Made by or Increase Principal Amount Amount Following such on Behalf of Trustee Decrease/Increase ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ]
A-2-9 EXHIBIT A-3 FORM OF UNRESTRICTED GLOBAL SECURITY SHIRE FINANCE LIMITED 2% SENIOR GUARANTEED CONVERTIBLE NOTE DUE AUGUST 21, 2011 No. [o] U.S.$ [o] CUSIP No. [o] Shire Finance Limited, an exempted limited company duly organized and existing under the laws of the Cayman Islands (herein called the "Issuer", which term includes any successor Person under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to Cede & Co. or registered assigns the principal sum of [o] United States Dollars (U.S.$ [o]) (which principal amount may from time to time be increased or decreased to such other principal amounts (which, taken together with the principal amounts of all other Outstanding Securities, shall not exceed U.S.$400 million in the aggregate at any time) by adjustments endorsed by the Trustee as defined below) on August 21, 2011 and to pay interest thereon, from August 21, 2001, or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semi-annually in arrears on February 21 and August 21 in each year (each, an "Interest Payment Date"), commencing February 21, 2002, at the rate of 2% per annum, until the principal hereof is due, and at the rate of 2% per annum on any overdue principal and premium, if any, and, to the extent permitted by law, on any overdue interest until paid. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the 6th day of February or the 6th day of August (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on the relevant Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Issuer, notice whereof shall be given to Holders of Definitive Securities not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payments of principal shall be made upon the surrender of this Security at the option of the Holder at the Corporate Trust Office of the Trustee, or at such other office or agency (in each case, located A-3-1 outside the United Kingdom) of the Issuer as may be designated by it for such purpose in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, or at such other offices or agencies (in each case, located outside the United Kingdom) as the Issuer may designate, by wire transfer to a Dollar account maintained by the payee with a bank. Payment of interest on this Security will be made by wire transfer to a Dollar account maintained by the payee with a bank. Except as specifically provided herein and in the Indenture, the Issuer shall not be required to make any payment with respect to any tax, assessment or other governmental charge imposed by any government or any political subdivision or taxing authority thereof or therein. All terms used in this Security which are not otherwise defined herein shall have the meanings assigned to them in the Indenture. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof or an Authenticating Agent by the manual signature of one of their respective authorized signatories, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Issuer has caused this Security to be duly executed. SHIRE FINANCE LIMITED By: ---------------------------------------- Name: Title: A-3-2 [FORM OF REVERSE OF SECURITY] This Security is one of a duly authorized issue of securities of the Issuer designated as its "2% Senior Guaranteed Convertible Notes due August 21, 2011" (herein called the "Securities"), limited in aggregate principal amount to U.S.$400 million, issued and to be issued under an Indenture, dated as of August 21, 2001 (herein called the "Indenture"), between the Issuer, Shire Pharmaceuticals Group plc, as guarantor (the "Company") and Bank of New York, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Trustee, and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. No sinking fund is provided for the Securities. In the event of a redemption of the Securities, the Issuer will not be required (a) to register the transfer or exchange of Securities for a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Securities called for such redemption; or (b) to register the transfer or exchange of any Security, or portion thereof, called for redemption. Notice to the Holders will be given not less than 30 nor more than 60 days prior to the applicable Redemption Date as provided in the Indenture. In any case where the due date for the payment of the principal of, premium, if any, or interest on any Security or the last day on which a Holder of a Security has a right to convert his Security shall be, at any Place of Payment or Place of Conversion, as the case may be, a day on which banking institutions at such Place of Payment or Place of Conversion are authorized or obligated by law or executive order to close, then payment of principal, premium, if any, or interest, or delivery for conversion of such Security need not be made on or by such date at such place but may be made on or by the next succeeding day at such place which is not a day on which banking institutions are authorized or obligated by law or executive order to close, with the same force and effect as if made on the date for such payment or the date fixed for redemption or repurchase, or by such last day for conversion, and no interest shall accrue on the amount so payable for the period from and after such due date. The Securities are subject to redemption at the option of the Issuer at any time on or after August 21, 2004, in whole or in part, upon not less than 30 nor more than 60 days' notice to the Holders prior to the Redemption Date, at a redemption price equal to 100% of the principal amount of the Securities redeemed, plus accrued and unpaid interest to the Redemption Date. The Issuer may only exercise this option during this period if the average of the closing bid and offer quotations per ordinary share published in the London Stock Exchange ("LSE") Daily Official List for twenty of the thirty consecutive dealing days ending within 14 days of giving notice of the redemption is at least 130% of the exchange price in effect on that dealing day. The exchange price is equal to $1,000 divided by the then applicable Exchange Ratio. A-3-3 Subject to and upon compliance with the provisions of Article Eleven of the Indenture, at the option of the Holder thereof, any Security or any portion of the principal amount thereof that is U.S.$1,000 or an integral multiple of U.S.$1,000 may be converted into fully paid and nonassessable Preference Shares at the conversion price of one Preference Share per U.S.$1,000 principal amount of Securities. Such conversion right shall commence upon the original issuance of the Securities and expire at the close of business on August 14, 2011, subject, in the case of conversion of any Global Security, to any Applicable Procedures. In case a Security or portion thereof is called for redemption at the election of the Issuer or the Holder thereof exercises his right to require the Issuer to redeem the Security, such conversion right in respect of the Security, or portion thereof so called, shall expire at the close of business on the Business Day immediately preceding the Redemption Date, Change of Control Redemption Date or Holder Option Redemption Date, as the case may be, unless the Issuer defaults in making the payment due upon redemption, as the case may be (in each case subject as aforesaid to any Applicable Procedures with respect to any Global Security). A Holder of Securities shall not be entitled to any rights of a holder of Preference Shares until such holder has converted such Security into Preference Shares, and only to the extent that such Securities are deemed to have been converted into Preference Shares under Article Eleven of the Indenture. In order to exercise the conversion privilege, the Holder of any Security to be converted shall surrender such Security, duly endorsed or assigned to the Issuer or in blank, at any office or agency of the Issuer maintained for that purpose pursuant to Section 9.2 of the Indenture, accompanied by a duly signed conversion notice substantially in the form set forth in Exhibit D of the Indenture stating that the Holder elects to convert such Security or, if less than the entire principal amount thereof is to be converted, the portion thereof to be converted. Each Security surrendered for conversion (in whole or in part) during the period from the close of business on any Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date shall (except in the case of any Security or portion thereof which has been called for redemption on a Redemption Date, or is to be redeemed on a Change of Control Redemption Date or Holder Option Redemption Date, with the consequence that the conversion right of such Security would terminate between such Regular Record Date and the close of business on such Interest Payment Date) be accompanied by payment in New York Clearing House funds or other funds acceptable to the Issuer of an amount equal to the interest payable on such Interest Payment Date on the principal amount of such Security (or part thereof, as the case may be) being surrendered for conversion. The interest so payable on such Interest Payment Date with respect to any Security (or portion thereof, if applicable) which is surrendered for conversion during the period from the close of business on any Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date and which Security has been called for redemption on a Redemption Date, or is redeemable on a Change of Control Redemption Date or a Holder Option Redemption Date, with the consequence that the conversion right of such Security would terminate between such Regular Record Date and the close of business on such Interest Payment Date, shall be paid to the Holder of such Security being converted in an amount equal to the interest that would have been payable on such Security if such Security had been converted as of the close of business on such Interest Payment A-3-4 Date. The interest so payable on such Interest Payment Date in respect of any Security (or portion thereof, as the case may be) which has not been called for redemption on a Redemption Date, or is not eligible for redemption on a Change of Control Redemption Date or Holder Option Redemption Date, with the consequence of termination of the conversion right as aforesaid, which Security (or portion thereof, as the case may be) is surrendered for conversion during the period from the close of business on any Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date, shall be paid to the Holder of such Security as of such Regular Record Date. Interest payable in respect of any Security surrendered for conversion on or after an Interest Payment Date shall be paid to the Holder of such Security as of the next preceding Regular Record Date, notwithstanding the exercise of the right of conversion. Except as provided in this paragraph and subject to the last paragraph of Section 3.9 of the Indenture, no cash payment or adjustment shall be made upon any conversion on account of any interest accrued from the Interest Payment Date next preceding the conversion date, in respect of any Security (or part thereof, as the case may be) surrendered for conversion, or on account of any dividends on the Preference Shares issued upon conversion. The issue by the Issuer to the Holder of the number of Preference Shares into which a Security is convertible will be deemed to satisfy the Issuer's obligation to pay the principal amount of the Security. Securities shall be deemed to have been converted on the day of surrender of such Securities for conversion in accordance with the foregoing provisions, and at such time the rights of the Holders of such Securities as Holders shall cease, and the Person or Persons entitled to receive the Preference Shares issuable upon conversion shall be treated for all purposes as the record holder or holders of such Preference Shares at such time. In the case of any Security which is converted in part only, upon such conversion the Issuer shall execute and the Trustee shall authenticate and make available for delivery to the Holder thereof, at the expense of the Issuer, a new Security or Securities of authorized denominations in an aggregate principal amount equal to the unconverted portion of the principal amount of such Security. A Security may be converted in part, but only if the principal amount of such Security to be converted is any integral multiple of U.S.$1,000 and the principal amount of such security to remain Outstanding after such conversion is equal to U.S.$1,000 or any integral multiple of U.S.$1,000 in excess thereof. In the event that a Change in Control shall occur, then each Holder shall have the right, at the Holder's option, but subject to the provisions of Section 12.2 of the Indenture, to require the Issuer to redeem, and upon the exercise of such right the Issuer shall redeem, all of such Holder's Securities not theretofore called for redemption, or any portion of the principal amount thereof that is equal to U.S.$5,000 or any greater integral multiple of U.S.$1,000, on the Change of Control Redemption Date at the Change of Control Redemption Price; provided, however, that installments of interest on Securities whose Stated Maturity is on or prior to the Change of Control Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Record Date according to the terms hereof and the provisions of Section 3.9 of the Indenture. Such right to require the redemption of the Securities shall not continue after a discharge of the Issuer from its obligations A-3-5 with respect to the Securities in accordance with Article Four of the Indenture, unless a Change in Control shall have occurred prior to such discharge. At the option of the Issuer, the Issuer may elect not to redeem the Securities in respect of which a Holder has exercised rights and instead may elect to convert such Securities, or any portion thereof in integral multiples of $1,000, into Preference Shares, subject to the fulfillment by the Issuer and the Company of the conditions set forth in Section 12.2 of the Indenture. Such Preference Shares shall be exchanged for Ordinary Shares (or, at the option of the Holder requiring redemption, ADSs) at the Change of Control Exchange Ratio. On each Optional Redemption Date each Holder shall have the right, at the Holder's option, but subject to the provisions of Section 13.2 of the Indenture, to require the Issuer to redeem, and upon the exercise of such right the Issuer shall redeem, all of such Holder's Securities not theretofore called for redemption, or any portion of the principal amount thereof that is equal to U.S.$5,000 or any greater integral multiple of U.S.$1,000, at the Holder Option Redemption Price; provided, however, that installments of interest on Securities whose Stated Maturity is on or prior to the applicable Optional Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Record Date according to the terms hereof and the provisions of Section 3.9 of the Indenture. Such right to require the redemption of the Securities shall not continue after a discharge of the Issuer from its obligations with respect to the Securities in accordance with Article Four of the Indenture, unless the applicable Optional Redemption Date shall have occurred prior to such discharge. At the option of the Issuer, the Issuer may elect not to redeem the Securities in respect of which a Holder has exercised rights and instead may elect to convert such Securities, or any portion thereof in integral multiples of $1,000, into Preference Shares, subject to the fulfillment by the Issuer and the Company of the conditions set forth in Section 13.2 of the Indenture. Such Preference Shares shall be exchanged for Ordinary Shares (or, at the option of the Holder requiring redemption, ADSs) at the Holder Option Exchange Ratio. Each such price will be converted into Dollars at the U.S.$/U.K.(pound) noon buying rate prevailing on such date. In the event of a redemption, cancellation or conversion of this Security in part only, the Notes evidenced by this Security shall be reduced by the principal amount so redeemed, cancelled or converted. Thereafter, the Notes represented by this Security shall be the principal amount of Notes most recently entered by or on behalf of the Issuer in the relevant column in Schedule A attached hereto.] If an Event of Default (other than that specified in Section 5.1(6), 5.1(7), 5.1(8) or 5.1(9) of the Indenture) shall occur and be continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities may declare the principal of all the Securities to be due and payable immediately in the manner and with the effect provided in the Indenture, and upon any such declaration such principal and all accrued interest thereon shall become immediately due and payable. If an Event of Default specified in Section 5.1(6), 5.1(7), 5.1(8) or 5.1(9) of the Indenture occurs, the principal of, and accrued A-3-6 interest on, all of the Securities shall ipso facto become immediately due and payable without any declaration or other Act of the Holder or any act on the part of the Trustee. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the written consent of the Holders of a majority in principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security or such other Security. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default, the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof, premium, if any, or interest hereon on or after the respective due dates expressed herein or for the enforcement of the right to convert this Security as provided in the Indenture. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Security at the times, places and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture. Interest payable in respect of any period which is not a full interest period will be calculated on the basis of a 360-day year of twelve 30-day months and, in the case of an incomplete month, the number of days elapsed. In accordance with the provisions of Article Fifteen of the Indenture, the obligations of the Issuer under the Indenture and the Securities have been unconditionally and irrevocably guaranteed by Shire Pharmaceuticals Group plc. An incorporator or any past, present or future director, officer, employee or shareholder, as such, of the Issuer or the Company shall not have any liability for any obligations of the Issuer or the Company under this Security or the Indenture or for any claim based on, in A-3-7 respect of or by reason of such obligations or their creation. By accepting this Security, each Holder shall waive and release all such liability. Such waiver and release is part of the consideration for the issue of this Security. The Indenture and this Security shall be governed by and construed in accordance with the laws of the State of New York, United States of America, without regard to the conflicts of laws principles thereof. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. A-3-8 SCHEDULE A SCHEDULE OF PRINCIPAL AMOUNT The initial principal amount of this Security shall be U.S.$ . The following decreases/increases in the principal amount of this Security have been made:
Date of Decrease/ Decrease in Increase in Principal Total Principal Amount Notation Made by or Increase Principal Amount Amount Following such on Behalf of Trustee Decrease/Increase ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ------------------ ----------------- --------------------- ----------------------- -------------------- ]
A-3-9 EXHIBIT B FORM OF DEFINITIVE SECURITY [Insert Applicable Legend] SHIRE FINANCE LIMITED 2% SENIOR GUARANTEED CONVERTIBLE NOTE DUE AUGUST 21, 2011 No. [o] U.S.$ [o] [ISIN No. [o]] [CUSIP No. [o]] [Common Code [o]] Shire Finance Limited, an exempted limited company duly organized and existing under the laws of the Cayman Islands (herein called the "Issuer", which term includes any successor Person under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to [o] or registered assigns, the principal sum of [o] United States Dollars (U.S.$ [o]) on August 21, 2011 and to pay interest thereon, from August 21, 2001, or from the most recent Interest Payment Date (as defined below) to which interest has been paid or duly provided for, semi-annually in arrears on February 21 and August 21 in each year (each, an "Interest Payment Date"), commencing February 21, 2002, at the rate of 2% per annum, until the principal hereof is due, and at the rate of 2% per annum on any overdue principal and premium, if any, and, to the extent permitted by law, on any overdue interest until paid. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the 6th day of February or the 6th day of August (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on the relevant Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Issuer, notice whereof shall be given to Holders of Definitive Securities not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities may be listed, and upon such notice as may be required by such exchange, all as more fully provided in the Indenture. Payments of principal shall be made upon the surrender of this Security at the option of the Holder at the Corporate Trust Office of the Trustee, or at such other office or agency (in each case, located outside the United Kingdom) of the Issuer as may B-1 be designated by it for such purpose in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, or at such other offices or agencies (in each case, located outside the United Kingdom) as the Issuer may designate, by Dollar check drawn on, or wire transfer to, a Dollar account (such a wire transfer to be made only to a Holder of an aggregate principal amount of Definitive Securities in excess of U.S.$2,000,000, and only if such Holder shall have furnished wire instructions in writing to the Trustee no later than 15 days prior to the relevant payment date) maintained by the payee with a bank. Payment of interest on this Security may be made by Dollar check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register, or, upon written application by the Holder to the Security Registrar setting forth wire instructions not later than the relevant Record Date, by wire transfer to a Dollar account (such a wire transfer to be made only to a Holder of an aggregate principal amount of Definitive Securities in excess of U.S.$2,000,000 and only if such Holder shall have furnished wire instructions in writing to the Trustee no later than 15 days prior to the relevant payment date) maintained by the payee with a bank. Except as specifically provided herein and in the Indenture, the Issuer shall not be required to make any payment with respect to any tax, assessment or other governmental charge imposed by any government or any political subdivision or taxing authority thereof or therein. All terms used in this Security which are not otherwise herein defined shall have the meanings assigned to them in the Indenture. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof or an Authenticating Agent by the manual signature of one of their respective authorized signatories, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Issuer has caused this Security to be duly executed. SHIRE FINANCE LIMITED By: -------------------------------- Name: Title: Attest: ------------------------ Name: Title: B-2 [FORM OF REVERSE OF SECURITY] This Security is one of a duly authorized issue of securities of the Issuer designated as its "2% Senior Guaranteed Convertible Notes due August 21, 2011" (herein called the "Securities"), limited in aggregate principal amount to U.S.$400 million, issued and to be issued under an Indenture, dated as of August 21, 2001 (herein called the "Indenture"), between the Issuer, Shire Pharmaceuticals Group plc, as guarantor (the "Company") and Bank of New York, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Trustee, and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. As provided in the Indenture and subject to certain limitations therein set forth, Definitive Securities are exchangeable for a like aggregate principal amount of Definitive Securities of any authorized denominations as requested by the Holder surrendering the Definitive Security or Definitive Securities to be exchanged, at the Corporate Trust Office of the Trustee. The Trustee upon such surrender by the Holder will issue the new Definitive Securities in the requested denominations. No sinking fund is provided for the Securities. In the event of a redemption of the Securities, the Issuer will not be required (a) to register the transfer or exchange of Securities for a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Securities called for such redemption; or (b) to register the transfer or exchange of any Security, or portion thereof, called for redemption. Notice to the Holders will be given not less than 30 nor more than 60 days prior to the applicable Redemption Date as provided in the Indenture. In any case where the due date for the payment of the principal of, premium, if any, or interest on any Security or the last day on which a Holder of a Security has a right to convert his Security shall be, at any Place of Payment or Place of Conversion, as the case may be, a day on which banking institutions at such Place of Payment or Place of Conversion are authorized or obligated by law or executive order to close, then payment of principal, premium, if any, or interest, or delivery for conversion of such Security need not be made on or by such date at such place but may be made on or by the next succeeding day at such place which is not a day on which banking institutions are authorized or obligated by law or executive order to close, with the same force and effect as if made on the date for such payment or the date fixed for redemption or repurchase, or by such last day for conversion, and no interest shall accrue on the amount so payable for the period from and after such due date. The Securities are subject to redemption at the option of the Issuer at any time on or after August 21, 2004, in whole or in part, upon not less than 30 nor more than 60 days' notice to the Holders prior to the Redemption Date, at a redemption price equal to 100% of the principal amount of the Securities redeemed, plus accrued and unpaid interest to the Redemption Date. The Issuer may only exercise this option during this period if the average of the closing bid and B-3 offer quotations per ordinary share published in the London Stock Exchange ("LSE") Daily Official List for twenty of the thirty consecutive dealing days ending within 14 days of giving notice of the redemption is at least 130% of the exchange price in effect on that dealing day. The exchange price is equal to $1,000 divided by the then applicable Exchange Ratio. Subject to and upon compliance with the provisions of Article Eleven of the Indenture, at the option of the Holder thereof, any Security or any portion of the principal amount thereof that is U.S.$1,000 or an integral multiple of U.S.$1,000 may be converted into fully paid and nonassessable Preference Shares at the conversion price of one Preference Share per U.S.$1,000 principal amount of Securities. Such conversion right shall commence upon the original issuance of the Securities and expire at the close of business on August 14, 2011, subject, in the case of conversion of any Global Security, to any Applicable Procedures. In case a Security or portion thereof is called for redemption at the election of the Issuer or the Holder thereof exercises his right to require the Issuer to redeem the Security, such conversion right in respect of the Security, or portion thereof so called, shall expire at the close of business on the Business Day immediately preceding the Redemption Date, Change of Control Redemption Date or Holder Option Redemption Date, as the case may be, unless the Issuer defaults in making the payment due upon redemption, as the case may be (in each case subject as aforesaid to any Applicable Procedures with respect to any Global Security). A Holder of Securities shall not be entitled to any rights of a holder of Preference Shares until such holder has converted such Security into Preference Shares, and only to the extent that such Securities are deemed to have been converted into Preference Shares under Article Eleven of the Indenture. In order to exercise the conversion privilege, the Holder of any Security to be converted shall surrender such Security, duly endorsed or assigned to the Issuer or in blank, at any office or agency of the Issuer maintained for that purpose pursuant to Section 9.2 of the Indenture, accompanied by a duly signed conversion notice substantially in the form set forth in Exhibit D of the Indenture stating that the Holder elects to convert such Security or, if less than the entire principal amount thereof is to be converted, the portion thereof to be converted. Each Security surrendered for conversion (in whole or in part) during the period from the close of business on any Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date shall (except in the case of any Security or portion thereof which has been called for redemption on a Redemption Date, or is to be redeemed on a Change of Control Redemption Date or Holder Option Redemption Date, with the consequence that the conversion right of such Security would terminate between such Regular Record Date and the close of business on such Interest Payment Date) be accompanied by payment in New York Clearing House funds or other funds acceptable to the Issuer of an amount equal to the interest payable on such Interest Payment Date on the principal amount of such Security (or part thereof, as the case may be) being surrendered for conversion. The interest so payable on such Interest Payment Date with respect to any Security (or portion thereof, if applicable) which is surrendered for conversion during the period from the close of business on any Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date and which Security has been called for redemption on a Redemption Date, or is redeemable on a B-4 Change of Control Redemption Date or a Holder Option Redemption Date, with the consequence that the conversion right of such Security would terminate between such Regular Record Date and the close of business on such Interest Payment Date, shall be paid to the Holder of such Security being converted in an amount equal to the interest that would have been payable on such Security if such Security had been converted as of the close of business on such Interest Payment Date. The interest so payable on such Interest Payment Date in respect of any Security (or portion thereof, as the case may be) which has not been called for redemption on a Redemption Date, or is not eligible for redemption on a Change of Control Redemption Date or Holder Option Redemption Date, with the consequence of termination of the conversion right as aforesaid, which Security (or portion thereof, as the case may be) is surrendered for conversion during the period from the close of business on any Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date, shall be paid to the Holder of such Security as of such Regular Record Date. Interest payable in respect of any Security surrendered for conversion on or after an Interest Payment Date shall be paid to the Holder of such Security as of the next preceding Regular Record Date, notwithstanding the exercise of the right of conversion. Except as provided in this paragraph and subject to the last paragraph of Section 3.9 of the Indenture, no cash payment or adjustment shall be made upon any conversion on account of any interest accrued from the Interest Payment Date next preceding the conversion date, in respect of any Security (or part thereof, as the case may be) surrendered for conversion, or on account of any dividends on the Preference Shares issued upon conversion. The issue by the Issuer to the Holder of the number of Preference Shares into which a Security is convertible will be deemed to satisfy the Issuer's obligation to pay the principal amount of the Security. Securities shall be deemed to have been converted on the day of surrender of such Securities for conversion in accordance with the foregoing provisions, and at such time the rights of the Holders of such Securities as Holders shall cease, and the Person or Persons entitled to receive the Preference Shares issuable upon conversion shall be treated for all purposes as the record holder or holders of such Preference Shares at such time. In the case of any Security which is converted in part only, upon such conversion the Issuer shall execute and the Trustee shall authenticate and make available for delivery to the Holder thereof, at the expense of the Issuer, a new Security or Securities of authorized denominations in an aggregate principal amount equal to the unconverted portion of the principal amount of such Security. A Security may be converted in part, but only if the principal amount of such Security to be converted is any integral multiple of U.S.$1,000 and the principal amount of such security to remain Outstanding after such conversion is equal to U.S.$1,000 or any integral multiple of U.S.$1,000 in excess thereof. In the event that a Change in Control shall occur, then each Holder shall have the right, at the Holder's option, but subject to the provisions of Section 12.2 of the Indenture, to require the Issuer to redeem, and upon the exercise of such right the Issuer shall redeem, all of such Holder's Securities not theretofore called for redemption, or any portion of the principal amount thereof that is equal to U.S.$5,000 or any greater integral multiple of U.S.$1,000, on the Change of Control Redemption Date at the Change of Control Redemption Price; provided, B-5 however, that installments of interest on Securities whose Stated Maturity is on or prior to the Change of Control Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Record Date according to the terms hereof and the provisions of Section 3.9 of the Indenture. Such right to require the redemption of the Securities shall not continue after a discharge of the Issuer from its obligations with respect to the Securities in accordance with Article Four of the Indenture, unless a Change in Control shall have occurred prior to such discharge. At the option of the Issuer, the Issuer may elect not to redeem the Securities in respect of which a Holder has exercised rights and instead may elect to convert such Securities, or any portion thereof in integral multiples of $1,000, into Preference Shares, subject to the fulfillment by the Issuer and the Company of the conditions set forth in Section 12.2 of the Indenture. Such Preference Shares shall be exchanged for Ordinary Shares (or, at the option of the Holder requiring redemption, ADSs) at the Change of Control Exchange Ratio. On each Optional Redemption Date each Holder shall have the right, at the Holder's option, but subject to the provisions of Section 13.2 of the Indenture, to require the Issuer to redeem, and upon the exercise of such right the Issuer shall redeem, all of such Holder's Securities not theretofore called for redemption, or any portion of the principal amount thereof that is equal to U.S.$5,000 or any greater integral multiple of U.S.$1,000, at the Holder Option Redemption Price; provided, however, that installments of interest on Securities whose Stated Maturity is on or prior to the applicable Optional Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the relevant Record Date according to the terms hereof and the provisions of Section 3.9 of the Indenture. Such right to require the redemption of the Securities shall not continue after a discharge of the Issuer from its obligations with respect to the Securities in accordance with Article Four of the Indenture, unless the applicable Optional Redemption Date shall have occurred prior to such discharge. At the option of the Issuer, the Issuer may elect not to redeem the Securities in respect of which a Holder has exercised rights and instead may elect to convert such Securities, or any portion thereof in integral multiples of $1,000, into Preference Shares, subject to the fulfillment by the Issuer and the Company of the conditions set forth in Section 13.2 of the Indenture. Such Preference Shares shall be exchanged for Ordinary Shares (or, at the option of the Holder requiring redemption, ADSs) at the Holder Option Exchange Ratio. Each such price will be converted into Dollars at the U.S.$/U.K.(pound) noon buying rate prevailing on such date. In the event of a redemption, cancellation or conversion of this Security in part only, a new Definitive Security or Definitive Securities for the unredeemed, non-cancelled or unconverted portion hereof will be issued in the name of the Holder hereof.] If an Event of Default (other than that specified in Section 5.1(6), 5.1(7), 5.1(8) or 5.1(9) of the Indenture) shall occur and be continuing, then in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities may declare the principal of all the Securities to be due and payable immediately in the manner and with the effect provided in the Indenture, and upon any such declaration such principal and all accrued B-6 interest thereon shall become immediately due and payable. If an Event of Default specified in Section 5.1(6), 5.1(7), 5.1(8) or 5.1(9) of the Indenture occurs, the principal of, and accrued interest on, all of the Securities shall ipso facto become immediately due and payable without any declaration or other Act of the Holder or any act on the part of the Trustee. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities under the Indenture at any time by the Company and the Trustee with the written consent of the Holders of a majority in principal amount of the Securities at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security or such other Security. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default, the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof, premium, if any, or interest hereon on or after the respective due dates expressed herein or for the enforcement of the right to convert this Security as provided in the Indenture. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Security at the times, places and rate, and in the coin or currency, herein prescribed or to convert this Security as provided in the Indenture. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of Definitive Securities is registrable on the Security Register upon surrender of a Definitive Security for registration of transfer at the Corporate Trust Office of the Trustee or at such other office or agency (in each case, located outside the United Kingdom) of the Company as may be designated by it for such purpose in the State of New York, City of New York, or at such other offices or agencies (in each case, located outside the United Kingdom) as the Company may designate, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder B-7 thereof or his attorney duly authorized in writing, and thereupon one or more new Definitive Securities, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees by the Security Registrar. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to recover any tax or other governmental charge payable in connection therewith. Prior to due presentation of a Definitive Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name such Definitive Security is registered as the owner thereof for all purposes, whether or not such Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. Interest payable in respect of any period which is not a full interest period will be calculated on the basis of a 360-day year of twelve 30-day months and, in the case of an incomplete month, the number of days elapsed. In accordance with the provisions of Article Fifteen of the Indenture, the obligations of the Issuer under the Indenture and the Securities have been unconditionally and irrevocably guaranteed by Shire Pharmaceuticals Group plc. An incorporator or any past, present or future director, officer, employee or shareholder, as such, of the Issuer or the Company shall not have any liability for any obligations of the Issuer or the Company under this Security or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting this Security, each Holder shall waive and release all such liability. Such waiver and release is part of the consideration for the issue of this Security. The Indenture and this Security shall be governed by and construed in accordance with the laws of the State of New York, United States of America, without regard to the conflicts of laws principles thereof. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. B-8 EXHIBIT C Form of Certificate of Authentication. The Trustee's certificates of authentication shall be in substantially the following form: Dated: [Date of Authentication] This is one of the Securities referred to in the within-mentioned Indenture. ----------------------------------------- as Trustee By: ----------------------------------------- Authorized Signatory C-1 EXHIBIT D Form of Conversion and Exchange Notice CONVERSION AND EXCHANGE NOTICE The undersigned Holder of this Security hereby irrevocably exercises the option to convert this Security, or any portion of the principal amount hereof (which is an integral multiple of U.S. $1,000) below designated, into Preference Shares in accordance with the terms of the Indenture referred to in this Security, and directs that such Preference Shares, any Ordinary Shares or ADSs which may be issued upon exchange of such Preference Shares and any Definitive Securities representing any unconverted principal amount hereof, be issued to and be registered in the name of the undersigned unless a different name has been indicated below. The undersigned Holder of this Security hereby irrevocably appoints the Issuer or any of its agents to execute (outside the United Kingdom) on behalf of such Holder any document necessary to effect the exchange of any Preference Shares issued to such Holder on conversion of this Security. Any Definitive Security representing any unconverted principal amount hereof will be delivered to the name of the undersigned unless a different name has been indicated below. If Preference Shares, Ordinary Shares, ADSs or Securities are to be issued to or registered in the name of a Person other than the undersigned, the undersigned will pay all taxes or duties payable with respect thereto. Any amount required to be paid by the undersigned on account of interest accompanies this Security. Capitalized terms used herein but not defined herein shall have the meanings set forth in the Indenture. Dated: _____________________ ------------------------------------- Signature [Signature Guaranteed] D-1
If Definitive Securities, Preference Shares If only a portion of the or Ordinary Shares or ADSs issued in exchange Securities is to be converted, for Preference Shares are to be registered in or please indicate: delivered to the name of a Person other than the Holder, please print such Person's name and address (note that all such securities must be 1. Principal amount to be converted: delivered to or registered in the name of only one Person): U.S.$___________ (any integral multiple of U.S.$1,000) ------------------------------------- Name 2. Principal amount and denomination of Securities representing unconverted principal amount to be issued: ------------------------------------- Address Amount: U.S.$________ Denominations: U.S.$______ (any integral multiple of U.S.$1,000) ------------------------------------- Social Security or other Taxpayer Identification Number, if any Indicate account details where any cash payments shall be made:
------------------------------------- Please indicate whether Ordinary Shares or ADSs to be received upon exchange of Preference Shares if the Issuer does not exercise its option to procure the delivery of cash: / / Ordinary Shares / / ADSs D-2 EXHIBIT E Form of Notice of Redemption at the Option of the Holder -------------------------------------------------------- ELECTION OF HOLDER TO REQUIRE REDEMPTION 1. Pursuant to [Section 12.1][Section 13.1] of the Indenture, the undersigned hereby elects to have this Security redeemed by the Issuer. 2. The undersigned hereby directs the Trustee or the Issuer to pay it or __________________ an amount in cash or, at the Issuer's election, that the Issuer procures the issue of Ordinary Shares (or ADSs, at the undersigned's election) to __________________ in exchange for the Preference Shares into which the Securities may at the Issuer's option, be converted, valued as set forth in the Indenture, equal to [101%][100%] of the principal amount to be redeemed/converted (as set forth below), plus interest accrued to the [Change of Control Redemption Date ][Holder Option Redemption Date], as provided in the Indenture. If Preference Shares, Ordinary Shares, ADSs or Securities are to be issued to or registered in the name of a Person other than the undersigned, the undersigned will pay all taxes or duties payable with respect thereto. 3. The undersigned hereby irrevocably appoints the Issuer or any of its agents to execute (outside the United Kingdom) on its behalf any document necessary to effect the exchange of any Preference Shares issued on conversion of this Security in lieu of redemption. [Check if applicable]: / / The undersigned hereby certifies that [include if notice is delivered pursuant to Section 12.1: the Company Notice was not delivered to the undersigned in the United States and] as of the date of this notice, the undersigned is not in the United States, as defined in Regulation S under the U.S. Securities Act of 1933. Dated: ------------------------------------- ------------------------------------- Signature ------------------------------------- Signature Guaranteed E-1 Principal amount to be redeemed (must be equal to U.S. $5,000 or any greater integral multiple of U.S.$1,000): Remaining principal amount following such redemption: Please indicate whether Ordinary Shares or ADSs to be received in lieu of redemption, if the Issuer elects to convert the Securities into Preference Shares: / / Ordinary Shares / / ADSs ---------------------- NOTICE: The signature to the foregoing Election must correspond to the Name as written upon the face of this Security in every particular, without alteration or any change whatsoever. E-2 EXHIBIT F Form of Guarantee GUARANTEE For value received, SHIRE PHARMACEUTICALS GROUP PLC, a public limited company organized and existing under the laws of England and Wales (herein called the "Guarantor", which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby irrevocably and unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed, and to the Trustee for itself and on behalf of each such Holder, the due and punctual payment of (i) the principal of (and premium, if any, on) and interest, if any, on such Security when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption at the option of the Issuer or the Holder, or otherwise, in accordance with the terms of said Security and of the Indenture and (ii) all other obligations of the Company hereunder, including without limitation Section 6.7 (other than, for the avoidance of doubt, the obligations of the Issuer relating to the exchange of Preference Shares for Ordinary Shares or ADSs). In case of the failure of the Issuer punctually to make any such payment of principal (or premium, if any) or interest, if any, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer. The Guarantor hereby agrees that it shall make all payments in respect of principal of (and premium, if any, on) and interest (including interest on amounts in default), if any, on the Securities or the payment of any other sums due on the Securities pursuant to this Guarantee without deduction or withholding for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied upon or as a result of such payments by or on behalf of any taxing authority, unless deduction or withholding of such taxes, duties, assessments or governmental charges is required by law. The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of the validity, regularity or enforceability of said Security or the Indenture, the absence of any action to enforce the same, any waiver or consent by the Holder of said Security or by the Trustee or the Paying Agent with respect to any provisions thereof or of the Indenture, the recovery of any judgment against the Issuer or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to said Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by complete performance of its obligations contained in the Indenture, said Security and this Guarantee. F-1 The Holder of the Security on which this Guarantee is endorsed is entitled to the further benefits relating thereto set forth in the Security and the Indenture. No reference herein to the Indenture and no provision of this Guarantee, said Security or the Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of (and premium, if any, on) and interest, if any, the Security upon which this Guarantee is endorsed. The Indenture, the Securities and this Guarantee are governed by and will be construed in accordance with the laws of the State of New York, without regard to the applicable principles of conflicts of laws to the extent that the application of the laws of another jurisdiction would be required thereby. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS GUARANTEE SET FORTH IN SAID SECURITY AND IN THE INDENTURE, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. Terms used in this Guarantee and not defined herein shall have the meaning assigned to them in the Indenture. This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the within Security has been executed by the Trustee, directly or through an Authenticating Agent, by manual or facsimile signature of an authorized signatory. F-2 IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed. Dated: SHIRE PHARMACEUTICALS GROUP PLC By: -------------------------------------------- Name: Title: F-3 EXHIBIT G Form of Certificate To Be Delivered in Connection with Transfers Pursuant to Regulation S ------------------------------------------------- The Bank of New York 101 Barclay Street Floor 21 West New York, New York 10286 Attention: Corporate Trust Administration Re: Shire Finance Limited (the "Issuer") 2.0% Guaranteed Convertible Senior Notes due 2011 (the "Securities") Ladies and Gentlemen: In connection with our proposed sale of $____________ principal amount of the Securities, we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933 and, accordingly, we represent that: (1) the offer of the Securities was not made to a person in the United States; (2) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States; (3) no directed selling efforts have been made by us in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable; (4) the transaction is not part of a plan or scheme to evade the registration requirements of the U.S. Securities Act of 1933. You, the Issuer and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. Terms used in this certificate but not defined herein have the meanings set forth in Regulation S. Very truly yours, [Name of Transferor] By:_________________________ (authorized signatory) G-1 EX-4.6 5 shirerra.txt REGISTRATION RIGHTS AGREEMENT CONFORMED COPY Shire Finance Limited 2% Senior Guaranteed Convertible Notes Due 2011 Guaranteed by Shire Pharmaceuticals Group plc Registration Rights Agreement August 21, 2001 Bear, Stearns International Limited Goldman Sachs International As representatives of the several Purchasers named in Schedule I to the Purchase Agreement c/o Bear, Stearns International Limited, One Canada Square, London, E14 5AD, England Ladies and Gentlemen: Shire Finance Limited, an exempted limited company organized under the laws of the Cayman Islands (the "Company"), proposes to issue to the Purchasers (as defined herein) upon the terms set forth in the Purchase Agreement (as defined herein) its 2% Senior Guaranteed Convertible Notes Due 2011 (the "Securities") convertible into exchangeable redeemable preference shares of the Company (the "Preference Shares") that will be exchanged for ordinary shares of Shire Pharmaceuticals Group plc, a public limited liability company organized under the laws of England and Wales ("Shire") or, at Shire's option, cash. As an inducement to the Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the obligations of the Purchasers thereunder, the Company and Shire agree with the Purchasers for the benefit of Holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as follows: 1 1. Definitions. (a) Capitalized terms used herein without definition shall have the meanings ascribed to them in the Purchase Agreement. As used in this Agreement, the following defined terms shall have the following meanings: "Act" or "Securities Act" means the United States Securities Act of 1933, as amended. "ADSs" means the American Depositary Shares representing the Ordinary Shares issuable upon conversion of the Securities. "Affiliate" of any specified person means any other person which, directly or indirectly, is in control of, is controlled by, or is under common control with such specified person. For purposes of this definition, control of a person means the power, direct or indirect, to direct or cause the direction of the management and policies of such person whether by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Closing Date" means the First Time of Delivery as defined in the Purchase Agreement. "Commission" means the United States Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose. "DTC" means The Depository Trust Company. "Effective Date" has the meaning assigned thereto in Section 2(b)(i) hereof. "Effective Failure" has the meaning assigned thereto in Section 7(b) hereof. "Effectiveness Period" has the meaning assigned thereto in Section 2(b)(i) hereof. "Effective Time" means the time at which the Commission declares the Shelf Registration Statement effective or at which the Shelf Registration Statement otherwise becomes effective. "Electing Holder" has the meaning assigned thereto in Section 3(a)(iii) hereof. "Exchange Act" means the United States Securities Exchange Act of 1934, as amended. "Holder" means, any person that is the record owner of Registrable Securities (and includes any person that has a beneficial interest in any Registrable Security in book-entry form). 2 "Indenture" means the Indenture, dated as of August 21, 2001, among Shire, the Company and The Bank of New York, as amended and supplemented from time to time in accordance with its terms. "Liquidated Damages" has the meaning assigned thereto in Section 7(a) hereof. "Managing Underwriters" means the investment banker or investment bankers and manager or managers that shall administer an underwritten offering, if any, conducted pursuant to Section 6 hereof. "NASD Rules" means the Rules of the National Association of Securities Dealers, Inc., as amended from time to time. "Notice and Questionnaire" means a Notice of Registration Statement and Selling Securityholder Questionnaire substantially in the form of Appendix A hereto. "Ordinary Shares" means Shire's ordinary shares, nominal value 5p per share. The term "person" means an individual, partnership, corporation, trust or unincorporated organization, or a government or agency or political subdivision thereof. "Prospectus" means the prospectus (including, without limitation, any preliminary prospectus, any final prospectus and any prospectus that discloses information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A under the Act) included in the Shelf Registration Statement, as amended or supplemented by any prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by the Shelf Registration Statement and by all other amendments and supplements to such prospectus, including all material incorporated by reference in such prospectus and all documents filed after the date of such prospectus by Shire under the Exchange Act and incorporated by reference therein. "Purchasers" means the Purchasers named in Schedule I to the Purchase Agreement. "Purchase Agreement" means the purchase agreement, dated as of August 15, 2001, among the Purchasers, Shire and the Company relating to the Securities. "Registrable Securities" means all or any portion of the Securities issued from time to time under the Indenture and the Ordinary Shares (including the Ordinary Shares underlying the ADSs) issuable in exchange for Preference Shares; provided, however, that a security ceases to be a Registrable Security when it is no longer a Restricted Security. "Registration Default" has the meaning assigned thereto in Section 7(a) hereof. 3 "Representatives" means Bear, Stearns International Limited and Goldman Sachs International as representatives of the several Purchasers. "Restricted Security" means any Security or Ordinary Share issuable in exchange for Preference Shares except any such Security or Ordinary Share that (i) has been effectively registered under the Securities Act and sold in a manner contemplated by the Shelf Registration Statement, (ii) has been transferred in compliance with Rule 144 under the Securities Act (or any successor provision thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any successor provision thereto) by a non-Affiliate, or (iii) has otherwise been transferred and a new Security or Ordinary Share not subject to transfer restrictions under the Securities Act has been delivered by or on behalf of the Company in accordance with Section 3.5 of the Indenture. "Rules and Regulations" means the published rules and regulations of the Commission promulgated under the Securities Act or the Exchange Act, as in effect at any relevant time. "Shelf Registration" means a registration effected pursuant to Section 2 hereof. "Shelf Registration Statement" means a "shelf" registration statement filed under the Securities Act providing for the registration of, and the sale on a continuous or delayed basis by the Holders of, all of the Registrable Securities pursuant to Rule 415 under the Securities Act and/or any similar rule that may be adopted by the Commission, filed by the Company and Shire pursuant to the provisions of Section 2 of this Agreement, including the Prospectus contained therein, any amendments and supplements to such registration statement, including post-effective amendments, and all exhibits and all material incorporated by reference in such registration statement. "Trust Indenture Act" means the Trust Indenture Act of 1939, or any successor thereto, and the rules, regulations and forms promulgated thereunder, as the same shall be amended from time to time. The term "underwriter" means any underwriter of Registrable Securities in connection with an offering thereof under a Shelf Registration Statement. (b) Wherever there is a reference in this Agreement to a percentage of the "principal amount" of Registrable Securities or to a percentage of Registrable Securities, Ordinary Shares shall be treated as representing the principal amount of Securities that was surrendered for conversion or exchange in order to receive such number of Ordinary Shares. 2. Shelf Registration. (a) The Company and Shire shall, no later than 90 calendar days following the Closing Date, file with the Commission a Shelf Registration Statement relating to the offer and 4 sale of the Registrable Securities by the Holders from time to time in accordance with the methods of distribution elected by such Holders (provided that such methods of distribution will take the form of an underwritten offering only with the prior consent of Shire in its sole discretion) and set forth in such Shelf Registration Statement and, thereafter, shall use its reasonable best efforts to cause such Shelf Registration Statement to be declared effective under the Act no later than 180 calendar days following the Closing Date; provided, however, that Shire may, upon written notice to all Holders, postpone having the Shelf Registration Statement declared effective for a reasonable period not to exceed 90 days if Shire possesses material non-public information (i), the disclosure of which would have a material adverse effect on Shire and its subsidiaries taken as a whole, or (ii) relating to a previously undisclosed proposed or pending transaction and, in Shire's reasonable belief, its disclosure would impede Shire's ability to consummate such transaction; provided, further, however, that no Holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement or to use the Prospectus forming a part thereof for resales of Registrable Securities unless such Holder is an Electing Holder. (b) Each of the Company and Shire shall use its reasonable best efforts: (i) to keep the Shelf Registration Statement continuously effective in order to permit the Prospectus forming a part thereof to be usable by Holders until the earliest of (A) the sale of all Registrable Securities registered under the Shelf Registration Statement; (B) the expiration of the period referred to in Rule 144(k) of the Act with respect to all Registrable Securities held by Persons that are not Affiliates of Shire or the Company; and (C) two years from the date (the "Effective Date") such Shelf Registration Statement is declared effective (the period ending on the earliest of such dates being referred to herein as the "Effectiveness Period"); (ii) after the Effective Time of the Shelf Registration Statement, as promptly as is practicable upon the request of any Holder of Registrable Securities that is not then an Electing Holder, to take any action reasonably necessary to enable such Holder to use the Prospectus forming a part thereof for resales of Registrable Securities, including, without limitation, any action necessary to identify such Holder as a selling securityholder in the Shelf Registration Statement, such as the filing with the Commission of a Post-Effective Amendment relating to the Shelf Registration Statement; provided, however, that nothing in this subparagraph shall relieve such Holder of the obligation to return a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(a)(ii) hereof; and (iii) if at any time the Securities, pursuant to Article 7 of the Indenture, are convertible into securities other than Preference Shares, Ordinary Shares or ADSs, to cause, or to cause any successor under the Indenture to cause, such securities to be 5 included in the Shelf Registration Statement no later than the date on which the Securities may then be convertible into such securities. The Company and Shire shall be deemed not to have used their reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if the Company or Shire, respectively, voluntarily takes any action that would result in Holders of Registrable Securities covered thereby not being able to offer and sell any of such Registrable Securities during that period, unless such action is (A) required by applicable law and the Company and/or Shire, as applicable, thereafter promptly complies with the requirements of Section 3(j) below or (B) permitted pursuant to Section 2(c) below. (c) Shire may suspend the use of the Prospectus for a period not to exceed 45 days if the Board of Directors of Shire shall have determined in good faith that because of valid business reasons (not including avoidance of Shire's obligations hereunder), including but not limited to the acquisition or divestiture of assets, pending corporate developments and similar events, it is in the best interest of Shire to suspend such use; provided, that Shire can extend such suspension for up to 75 days in any 90-day period or an aggregate of 90 days in any 12-month period (i) if Shire possesses material non-public information (A) the disclosure of which would have a material adverse effect on Shire and its subsidiaries taken as a whole, or (B) relating to an undisclosed proposed or pending transaction and, in Shire's reasonable belief, its disclosure would impede Shire's ability to consummate such transaction or (ii) otherwise with the prior written consent of the Representatives. Shire shall, prior to suspending the use of the Prospectus or extending an existing suspension, provide the Holders with written notice of such suspension, which notice need not specify the nature of the event giving rise to such suspension. 3. Registration Procedures. In connection with the Shelf Registration Statement, the following provisions shall apply: (a) (i) Not less than 30 calendar days prior to the Effective Time of the Shelf Registration Statement, the Company shall mail the Notice and Questionnaire to the Holders of Registrable Securities. No Holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement as of the Effective Time, and no Holder shall be entitled to use the Prospectus forming a part thereof for resales of Registrable Securities at any time, unless such Holder has returned a completed and signed Notice and Questionnaire to the Company by the deadline for response set forth therein; provided, however, Holders of Registrable Securities shall have at least 21 calendar days from the date on which the Notice and Questionnaire is first mailed to such Holders to return a completed and signed Notice and Questionnaire to the Company. (ii) After the Effective Time of the Shelf Registration Statement, the Company shall, upon the request of any Holder of Registrable Securities that is not then an Electing 6 Holder, as promptly as is practicable send a Notice and Questionnaire to such Holder. The Company shall not be required to take any action to name such Holder as a selling securityholder in the Shelf Registration Statement or to enable such Holder to use the Prospectus forming a part thereof for resales of Registrable Securities until such Holder has returned a completed and signed Notice and Questionnaire to the Company. (iii) The term "Electing Holder" shall mean any Holder of Registrable Securities that has returned a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(a)(i) or 3(a)(ii) hereof. (b) The Company shall furnish to each Electing Holder, prior to the Effective Time, a copy of the Shelf Registration Statement initially filed with the Commission, and shall furnish to such Holders, prior to the filing thereof with the Commission, copies of each amendment thereto and each amendment or supplement, if any, to the Prospectus included therein, and each of the Company and Shire shall use its best efforts to reflect in each such document, at the Effective Time or when so filed with the Commission, as the case may be, such comments as such Holders and their respective counsel reasonably may propose. (c) The Company and Shire shall promptly take such action as may be necessary so that (i) each of the Shelf Registration Statement and any amendment thereto and the Prospectus forming a part thereof and any amendment or supplement thereto (and each report or other document incorporated therein by reference in each case) complies in all material respects with the Securities Act and the Exchange Act and the respective rules and regulations thereunder, (ii) each of the Shelf Registration Statement and any amendment thereto does not, when it becomes effective, 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 and (iii) each of the Prospectuses forming a part of the Shelf Registration Statement, and any amendment or supplement to such Prospectus, does not at any time during the Effectiveness Period include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. (d) The Company or Shire shall as promptly as is practicable advise each Electing Holder, and shall confirm such advice in writing if so requested by any such Electing Holder: (i) when a Shelf Registration Statement and any amendment thereto has been filed with the Commission and when a Shelf Registration Statement or any post-effective amendment thereto has become effective, in each case making a public announcement thereof by release made to Reuters Economic Services or Bloomberg Business News; (ii) of any request by the Commission for amendments or supplements to the Shelf Registration Statement or the Prospectus included therein or for additional information; 7 (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of any proceedings for such purpose; (iv) of the receipt by the Company or Shire of any notification with respect to the suspension of the qualification of the securities included in the Shelf Registration Statement for sale in any jurisdiction or the initiation of any proceeding for such purpose; and (v) of the happening of any event or the existence of any state of facts that requires the making of any changes in the Shelf Registration Statement or the Prospectus included therein so that, as of such date, such Shelf Registration Statement and Prospectus do not contain an untrue statement of a material fact and do not omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading (which advice shall be accompanied by an instruction to such Holders to suspend the use of the Prospectus until the requisite changes have been made). (e) Each of the Company and Shire shall use its best efforts to prevent the issuance, and if issued to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Shelf Registration Statement. (f) The Company or Shire shall furnish to each Electing Holder, without charge, at least one copy of the Shelf Registration Statement and all post-effective amendments thereto, including financial statements and schedules, and, if such Electing Holder so requests in writing, all reports, other documents and exhibits that are filed with or incorporated by reference in the Shelf Registration Statement. (g) The Company or Shire shall, during the Effectiveness Period, deliver to each Electing Holder, without charge, as many copies of the Prospectus (including each preliminary Prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such Electing Holder may reasonably request; and the Company and Shire consent (except during the periods specified in Section 2(c) above or during the continuance of any event described in Section 3(d)(v) above) to the use of the Prospectus and any amendment or supplement thereto by each of the Electing Holders in connection with the offering and sale of the Registrable Securities covered by the Prospectus and any amendment or supplement thereto during the Effectiveness Period. (h) Prior to any offering of Registrable Securities pursuant to the Shelf Registration Statement, the Company and Shire shall (i) register or qualify or cooperate with the Electing Holders and their respective counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or "blue sky" laws of such 8 jurisdictions within the United States as any Electing Holder may reasonably request, (ii) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers and sales in such jurisdictions for so long as may be necessary to enable any Electing Holder or underwriter, if any, to complete its distribution of Registrable Securities pursuant to the Shelf Registration Statement, and (iii) take any and all other actions necessary or advisable to enable the disposition in such jurisdictions of such Registrable Securities; provided, however, that in no event shall the Company or Shire be obligated to (A) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to so qualify but for this Section 3(h) or (B) file any general consent to service of process or subject itself to taxation in excess of a nominal amount in any jurisdiction where it is not as of the date hereof so subject. (i) Unless any Registrable Securities shall be in book-entry only form, the Company and Shire shall cooperate with the Electing Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to the Shelf Registration Statement, which certificates, if so required by any securities exchange upon which any Registrable Securities are listed, shall be penned, lithographed or engraved, or produced by any combination of such methods, on steel engraved borders, and which certificates shall be free of any restrictive legends and in such permitted denominations and registered in such names as Electing Holders may request in connection with the sale of Registrable Securities pursuant to the Shelf Registration Statement. (j) Upon the occurrence of any fact or event contemplated by Section 3(d)(v) above, the Company and Shire shall as promptly as is practicable prepare a post-effective amendment to any Shelf Registration Statement or an amendment or supplement to the related Prospectus or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the Prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. If the Company or Shire notifies the Electing Holders of the occurrence of any fact or event contemplated by Section 3(d)(v) above, the Electing Holder shall suspend the use of the Prospectus until the requisite changes to the Prospectus have been made. (k) Not later than the Effective Time of the Shelf Registration Statement, the Company or Shire shall provide a CUSIP number for the Registrable Securities that are debt securities. (l) Each of the Company and Shire shall use its best efforts to comply with all applicable Rules and Regulations, and to make generally available to its securityholders as soon as practicable, but in any event not later than eighteen months after (i) the effective date (as defined in Rule 158(c) under the Securities Act) of the Shelf Registration Statement, (ii) the 9 effective date of each post-effective amendment to the Shelf Registration Statement and (iii) the date of each filing by Shire with the Commission of an Annual Report on Form 10-K that is incorporated by reference in the Shelf Registration Statement, an earning statement of Shire and its subsidiaries complying with Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder (including, at the option of the Company, Rule 158). (m) Not later than the Effective Time of the Shelf Registration Statement, the Company and Shire shall cause the Indenture to be qualified under the Trust Indenture Act; in connection with such qualification, the Company and Shire shall cooperate with the Trustee under the Indenture and the Holders (as defined in the Indenture) to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the Trust Indenture Act; and the Company and Shire shall execute, and shall use all reasonable efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner. In the event that any such amendment or modification referred to in this Section 3(m) involves the appointment of a new trustee under the Indenture, the Company and Shire shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture. (n) In the event of an underwritten offering conducted pursuant to Section 6 hereof, the Company and Shire shall, if requested, as promptly as is practicable include or incorporate in a Prospectus supplement or post-effective amendment to the Shelf Registration Statement such information as the Managing Underwriters reasonably agree should be included therein and to which Shire does not reasonably object and shall make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after it is notified of the matters to be included or incorporated in such Prospectus supplement or post-effective amendment. (o) The Company and Shire shall enter into such customary agreements (including an underwriting agreement in customary form in the event of an underwritten offering conducted pursuant to Section 6 hereof) and take all other appropriate action in order to expedite and facilitate the registration and disposition of the Registrable Securities, and in connection therewith, if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures substantially identical to those set forth in Section 5 hereof with respect to all parties to be indemnified pursuant to Section 5 hereof. (p) Each of the Company and Shire shall: (i)(A) make reasonably available for inspection by the Electing Holders, any underwriter participating in any disposition pursuant to the Shelf Registration Statement, and any attorney, accountant or other agent retained by such Electing Holders or any such underwriter all relevant financial and other records, pertinent corporate documents and 10 properties of itself and its subsidiaries, and (B) cause its officers, directors and employees to supply all information reasonably requested by such Electing Holders or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as is customary for similar due diligence examinations; provided, however, that all records, information and documents that are designated in writing by the Company or Shire, as applicable, in good faith, as confidential shall be kept confidential by such Electing Holders and any such underwriter, attorney, accountant or agent, unless such disclosure is made in connection with a court proceeding or required by law, or such records, information or documents become available to the public generally or through a third party without an accompanying obligation of confidentiality; and provided further that, such inspection and information gathering shall, to the greatest extent possible, be coordinated on behalf of the Electing Holders and the other parties entitled thereto by one counsel designated by and on behalf of the Electing Holders and other parties; (ii) in connection with any underwritten offering conducted pursuant to Section 6 hereof, make such representations and warranties to the Managing Underwriters, in form, substance and scope as are customarily made by Shire to underwriters in primary underwritten offerings of equity and convertible debt securities and covering matters customarily covered in such offerings, including, but not limited to, those set forth in the Purchase Agreement; (iii) in connection with any underwritten offering conducted pursuant to Section 6 hereof, obtain opinions of counsel to the Company and Shire (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the Managing Underwriters) addressed to the underwriters, covering such matters as are customarily covered in opinions requested in primary underwritten offerings of equity and convertible debt securities (it being agreed that the matters to be covered by such opinions shall include, without limitation, as of the date of the opinion and as of the Effective Time of the Shelf Registration Statement or most recent post-effective amendment thereto, as the case may be, the absence from the Shelf Registration Statement and the Prospectus, including the documents incorporated by reference therein, of an untrue statement of a material fact or the omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of the Prospectus, in light of the circumstances under which they were made) not misleading; (iv) in connection with any underwritten offering conducted pursuant to Section 6 hereof, obtain "cold comfort" letters and updates thereof from the independent public accountants of Shire and the Company (and, if necessary, from the independent public accountants of any subsidiary of Shire or of any business acquired by Shire for which financial statements and financial data are, or are required to be, included in the Shelf Registration Statement), addressed to the underwriters, in customary form and 11 covering matters of the type customarily covered in "cold comfort" letters in connection with primary underwritten offerings; and (v) in connection with any underwritten offering conducted pursuant to Section 6 hereof, deliver such documents and certificates as may be reasonably requested by the Managing Underwriters, if any, including, without limitation, certificates to evidence compliance with Section 3(j) hereof and with any conditions contained in the underwriting agreement or other agreements entered into by the Company. (q) Shire will use its reasonable best efforts to cause the Ordinary Shares issuable upon conversion of the Securities to be listed on the London Stock Exchange, the Luxembourg Stock Exchange or other stock exchange or trading system on which the Ordinary Shares primarily trade. (r) In the event that any broker-dealer registered under the Exchange Act shall be an "affiliate" (as defined in Rule 2720(b)(1) of the NASD Rules (or any successor provision thereto)) of the Company or Shire or has a "conflict of interest" (as defined in Rule 2720(b)(7) of the NASD Rules (or any successor provision thereto)) and such broker-dealer shall underwrite, participate as a member of an underwriting syndicate or selling group or assist in the distribution of any Registrable Securities covered by the Shelf Registration Statement, whether as a Holder of such Registrable Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company and Shire shall assist such broker-dealer in complying with the requirements of the NASD Rules, including, without limitation, by (i) engaging a "qualified independent underwriter" (as defined in Rule 2720(b)(15) of the NASD Rules (or any successor provision thereto)) to participate in the preparation of the registration statement relating to such Registrable Securities, to exercise usual standards of due diligence in respect thereto and to recommend the public offering price of such Registrable Securities, (ii) indemnifying such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 5 hereof, and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the NASD Rules. (s) Each of the Company and Shire shall use its reasonable best efforts to take all other steps necessary to effect the registration, offering and sale of the Registrable Securities covered by the Shelf Registration Statement contemplated hereby. 4. Registration Expenses. Except as otherwise provided in Section 3, the Company and Shire, jointly and severally, shall bear all fees and expenses incurred in connection with the performance of their obligations under Sections 2, 3 and 6 hereof and shall bear or reimburse the Electing Holders for the reasonable fees and disbursements of Cleary, Gottlieb, Steen & Hamilton to act as counsel therefor in connection therewith, which fees and disbursements shall 12 not in the aggregate exceed $50,000. Each Electing Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Electing Holder's Registrable Securities pursuant to the Shelf Registration Statement. 5. Indemnification and Contribution. (a) Indemnification by the Company. Upon the registration of the Registrable Securities pursuant to Section 2 hereof, the Company and Shire, jointly and severally, shall indemnify and hold harmless each Electing Holder and each underwriter, selling agent or other securities professional, if any, which facilitates the disposition of Registrable Securities, and each of their respective officers and directors and each person who controls such Electing Holder, underwriter, selling agent or other securities professional within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (each such person being sometimes referred to as an "Indemnified Person") against any losses, claims, damages or liabilities, joint or several, to which such Indemnified Person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) ("losses") arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Shelf Registration Statement under which such Registrable Securities are to be registered under the Securities Act, or any Prospectus contained therein or furnished by the Company or Shire to any Indemnified Person, or any amendment or supplement thereto, 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, in light of the circumstances under which they were made, not misleading, and the Company hereby agrees to reimburse such Indemnified Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that neither the Company nor Shire shall be liable to any such Indemnified Person 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 such Shelf Registration Statement or Prospectus, or amendment or supplement, in reliance upon and in conformity with written information furnished to Shire by such Indemnified Person expressly for use therein; and provided further, however, that neither the Company nor Shire shall be liable for losses arising out of or based upon an untrue statement or alleged untrue statement of a material fact contained in a preliminary Prospectus delivered to an Indemnified Person if (i) the untrue statement contained in the preliminary Prospectus is specifically cured in the final Prospectus, (ii) the final Prospectus was required by law to be delivered at or prior to the written confirmation of sale, (iii) the Company or Shire provided the Indemnified Person with copies of the final Prospectus on a timely basis and (iv) the Indemnified Person failed to deliver a final Prospectus prior to the written confirmation of sale. (b) Indemnification by the Electing Holders and any Agents and Underwriters. Each Electing Holder agrees, as a consequence of the inclusion of any of such Electing Holder's 13 Registrable Securities in such Shelf Registration Statement, and each underwriter, selling agent or other securities professional, if any, which facilitates the disposition of Registrable Securities shall agree, as a consequence of facilitating such disposition of Registrable Securities, severally and not jointly, to (i) indemnify and hold harmless the Company, Shire, and each of their directors, officers who sign any Shelf Registration Statement and each person, if any, who controls the Company or Shire within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, against any losses, claims, damages or liabilities to which the Company, Shire or such other persons may become subject, under the Securities 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 such Shelf Registration Statement or Prospectus, or any amendment or supplement, 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 reliance upon and in conformity with written information furnished to the Company by such Electing Holder, underwriter, selling agent or other securities professional expressly for use therein, and (ii) reimburse the Company and Shire for any legal or other expenses reasonably incurred by the Company and Shire, respectively, in connection with investigating or defending any such action or claim as such expenses are incurred. (c) Notices of Claims, Etc. Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party under this Section 5, notify such 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 this Section 5. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such 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 (who 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, such indemnifying party shall not be liable to such indemnified party under this Section 5 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 unless such indemnified party shall have reasonably concluded that there may be defenses available to it that are different from or additional to those available to one or all of the indemnifying parties, in which case the indemnifying party's liability for the fees and expenses of the indemnified party's counsel shall continue. No indemnifying party shall, without the 14 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. (d) Contribution. If the indemnification provided for in this Section 5 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) 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 fault of the indemnifying party and the indemnified party in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation (even if the Electing Holders or any underwriters, selling agents or other securities professionals or all of them 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 in this Section 5(d). 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 shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The obligations of the Electing Holders and any underwriters, selling agents or other securities professionals in this Section 5(d) to contribute shall be several in proportion to the percentage of principal amount of Registrable Securities registered or underwritten, as the case may be, by them and not joint. (e) Notwithstanding any other provision of this Section 5, in no event will any (i) Electing Holder be required to undertake liability to any person under this Section 5 for any amounts in excess of the dollar amount of the proceeds to be received by such Holder from the sale of such Holder's Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) pursuant to any Shelf Registration Statement under which such 15 Registrable Securities are to be registered under the Securities Act and (ii) underwriter, selling agent or other securities professional be required to undertake liability to any person hereunder for any amounts in excess of the discount, commission or other compensation payable to such underwriter, selling agent or other securities professional with respect to the Registrable Securities underwritten by it and distributed to the public. (f) The obligations of the Company and Shire under this Section 5 shall be in addition to any liability which they may otherwise have to any Indemnified Person and the obligations of any Indemnified Person under this Section 5 shall be in addition to any liability which such Indemnified Person may otherwise have to the Company or Shire. The remedies provided in this Section 5 are not exclusive and shall not limit any rights or remedies which may otherwise be available to an indemnified party at law or in equity. 6. Underwritten Offering. Any Holder of Registrable Securities who desires to do so may sell Registrable Securities (in whole or in part) in an underwritten offering, subject to the prior approval of Shire in its sole discretion; provided that (i) the Electing Holders of at least 33-1/3% in aggregate principal amount of the Registrable Securities then covered by the Shelf Registration Statement shall request such an offering and (ii) at least such aggregate principal amount of such Registrable Securities shall be included in such offering. Upon receipt of such a request, the Company or Shire shall provide all Holders of Registrable Securities written notice of the request, which notice shall inform such Holders that they have the opportunity to participate in the offering. In any such underwritten offering, the investment banker or bankers and manager or managers that will administer the offering will be selected by, and the underwriting arrangements with respect thereto (including the size of the offering) will be approved by, the holders of a majority of the Registrable Securities to be included in such offering; provided, however, that such investment bankers and managers and underwriting arrangements must be reasonably satisfactory to Shire. No Holder may participate in any underwritten offering contemplated hereby unless (a) such Holder agrees to sell such Holder's Registrable Securities to be included in the underwritten offering in accordance with any approved underwriting arrangements, (b) such Holder completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such approved underwriting arrangements, and (c) if such Holder is not then an Electing Holder, such Holder returns a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(a)(ii) hereof within a reasonable amount of time before such underwritten offering. The Holders participating in any underwritten offering shall be responsible for any underwriting discounts and commissions and fees and, subject to Section 4 hereof, expenses of their own counsel. The Company and Shire shall pay all expenses customarily borne by issuers in an underwritten offering, including but not limited to filing fees, the fees and disbursements of their counsel and independent public accountants and any printing expenses incurred in connection with such underwritten offering. Notwithstanding any of the foregoing or the provisions of Section 3(n) hereof, upon receipt of a request from the 16 managing Underwriters or a representative of holders of a majority of the Registrable Securities to be included in an underwritten offering to prepare and file an amendment or supplement to the Shelf Registration Statement and Prospectus in connection with an underwritten offering, the Company and Shire may delay the filing of any such amendment or supplement for up to 90 day if Shire possesses material non-public information (i), the disclosure of which would have a material adverse effect on Shire and its subsidiaries taken as a whole, or (ii) relating to a previously undisclosed proposed or pending transaction and, in Shire's reasonable belief, its disclosure would impede Shire's ability to consummate such transaction. The Company's and Shire's obligations under this Section 6 shall be joint and several. 7. Liquidated Damages. (a) Pursuant to Section 2(a) hereof, Shire may, upon written notice to all the Holders, postpone having the Shelf Registration Statement declared effective for a reasonable period not to exceed 90 days if it possesses material non-public information, the disclosure of which would have a material adverse effect on Shire and its subsidiaries taken as a whole. Notwithstanding any such postponement, if (i) on or prior to the 90th day following the Closing Date, a Shelf Registration Statement has not been filed with the Commission or (ii) on or prior to the 180th day following the Closing Date, such Shelf Registration Statement is not declared effective by the Commission (each, a "Registration Default"), the Company and Shire shall be required to pay liquidated damages ("Liquidated Damages"), from and including the day following such Registration Default until such Shelf Registration Statement is either so filed or so filed and subsequently declared effective, as applicable, at a rate per annum equal to an additional one-quarter of one percent (0.25%) of the principal amount of Registrable Securities, to and including the 90th day following such Registration Default and one-half of one percent (0.5%) thereof from and after the 91st day following such Registration Default. (b) In the event that the Shelf Registration Statement ceases to be effective (or the Holders of Registrable Securities are otherwise prevented or restricted by the Company or Shire from effecting sales pursuant thereto) (an "Effective Failure") for more than 45 days or, if Shire has received the prior written consent of the Representatives pursuant to Section 2(c), 60 days, whether or not consecutive, in any 90-day period, or for more than 90 days, whether or not consecutive, during any 12-month period, then the Company and Shire shall pay Liquidated Damages at a rate per annum equal to an additional one-half of one percent (0.5%) of the principal amount of Registrable Securities from the 46th day or 61st day, respectively, of the applicable 90-day period or the 91st day of the applicable 12-month period, as the case may be, that such Shelf Registration Statement ceases to be effective (or the Holders of Registrable Securities are otherwise prevented or restricted by the Company or Shire from effecting sales pursuant thereto) until the earlier of (i) the time the Shelf Registration Statement again becomes effective or the Holders of Registrable Securities are again able to make sales under the Shelf Registration Statement or (2) the time the Effectiveness Period expires. For the purpose of 17 determining an Effective Failure, days on which the Company and Shire have been obligated to pay Liquidated Damages in accordance with the foregoing in respect of a prior Effective Failure within the applicable 90-day or 12-month period, as the case may be, shall not be included. (c) In the event the Company and Shire fail to file a post-effective amendment to the Shelf Registration Statement, or the post-effective amendment is not declared effective, within the periods required by Section 3, the Company and Shire shall pay Liquidated Damages at a rate per annum equal to an additional one-half of one percent (0.5%) of the principal amount of Registrable Securities from and including the date of such Registration Default until such time as such Registration Default is cured. (d) Any amounts to be paid as Liquidated Damages pursuant to paragraph (a), (b) or (c) of this Section 7 shall be paid semi-annually in arrears, with the first semi-annual payment due on the first Interest Payment Date (as defined in the Indenture), as applicable, following the date of such Registration Default. Such Liquidated Damages will accrue (1) in respect of the Securities at the rates set forth in paragraph (a), (b) or (c) of this Section 7, as applicable, on the principal amount of the Securities and (2) in respect of the Ordinary Shares issued in exchange for Preference Shares, at the rates set forth in paragraph (a), (b) or (c) of this Section 7, as applicable, applied to the Exchange Price (as defined in the Restated Memorandum and Articles of Association of the Company) at that time. (e) Except as provided in Section 8(b) hereof, the Liquidated Damages as set forth in this Section 7 shall be the exclusive monetary remedy available to the Holders of Registrable Securities for such Registration Default or Effective Failure. In no event shall the Company and Shire in the aggregate be required to pay Liquidated Damages in excess of one-half of one percent (0.5%) per annum, regardless of whether one or multiple Registration Defaults exist. The Company's and Shire's liability under this Section 7 shall be joint and several. 8. Miscellaneous. (a) Other Registration Rights. Shire may grant registration rights that would permit any person that is a third party the right to piggy-back on any Shelf Registration Statement, provided that if the Managing Underwriter of any underwritten offering conducted pursuant to Section 6 hereof notifies Shire and the Electing Holders that the total amount of securities which the Electing Holders and the holders of such piggy-back rights intend to include in any Shelf Registration Statement is so large as to materially threaten the success of such offering (including the price at which such securities can be sold), then the amount, number or kind of securities to be offered for the account of holders of such piggy-back rights will be reduced to the extent necessary to reduce the total amount of securities to be included in such offering to the amount, number and kind recommended by the Managing Underwriter prior to any reduction in the amount of Registrable Securities to be included in such Shelf Registration Statement. 18 (b) Specific Performance. The parties hereto acknowledge that there would be no adequate remedy at law if the Company or Shire fails to perform any of its obligations hereunder and that the Purchasers and the Holders from time to time may be irreparably harmed by any such failure, and accordingly agree that the Purchasers and such Holders, in addition to any other remedy to which they may be entitled at law or in equity and without limiting the remedies available to the Electing Holders under Section 7 hereof, shall be entitled to compel specific performance of the obligations of the Company or Shire, respectively, under this Registration Rights Agreement in accordance with the terms and conditions of this Registration Rights Agreement, in any court of the United States or any State thereof having jurisdiction. (c) Amendments and Waivers. This Agreement, including this Section 8(c), may be amended, and waivers or consents to departures from the provisions hereof may be given, only by a written instrument duly executed by the Company, Shire and the holders of a majority in aggregate principal amount of Registrable Securities then outstanding. Each Holder of Registrable Securities outstanding at the time of any such amendment, waiver or consent or thereafter shall be bound by any amendment, waiver or consent effected pursuant to this Section 8(c), whether or not any notice, writing or marking indicating such amendment, waiver or consent appears on the Registrable Securities or is delivered to such Holder. (d) Notices. All notices and other communications provided for or permitted hereunder shall be given as provided in the Indenture. (e) Parties in Interest. The parties to this Agreement intend that all Holders of Registrable Securities shall be entitled to receive the benefits of this Agreement and that any Electing Holder shall be bound by the terms and provisions of this Agreement by reason of such election with respect to the Registrable Securities which are included in a Shelf Registration Statement. All the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the respective successors and assigns of the parties hereto and any Holder from time to time of the Registrable Securities to the aforesaid extent. In the event that any transferee of any Holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be entitled to receive the benefits of and, if an Electing Holder, be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement to the aforesaid extent. (f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 19 (g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (h) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. (i) Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired or affected thereby, it being intended that all of the rights and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law. (j) Survival. The respective indemnities, agreements, representations, warranties and other provisions set forth in this Agreement or made pursuant hereto 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 Electing Holder, any director, officer or partner of such Holder, any agent or underwriter, any director, officer or partner of such agent or underwriter, or any controlling person of any of the foregoing, and shall survive the transfer and registration of the Registrable Securities of such Holder. 20 Please confirm that the foregoing correctly sets forth the agreement between the Company and you. Very truly yours, Shire Finance Limited By: /s/ Rolf Stahel ------------------------------------------ Name: Rolf Stahel Title: Director Shire Pharmaceuticals Group plc By: /s/ Rolf Stahel ----------------------------------------- Name: Rolf Stahel Title: Chief Executive Accepted as of the date hereof: Bear, Stearns International Limited By:/s/ Stephen Parish ------------------------------------ Goldman Sachs International By: /s/ Eoghainn Calder ---------------------------------- 21 Appendix A Shire Finance Limited Shire Pharmaceuticals Group plc INSTRUCTION TO DTC PARTICIPANTS (Date of Mailing) URGENT - IMMEDIATE ATTENTION REQUESTED DEADLINE FOR RESPONSE: [DATE] The Depository Trust Company ("DTC") has identified you as a DTC Participant through which beneficial interests in the 2% Senior Guaranteed Convertible Notes due 2011 (the "Securities") of Shire Finance Limited (the "Company") guaranteed by Shire Pharmaceuticals Group plc ("Shire") are held. The Company and Shire are in the process of registering the Securities under the Securities Act of 1933 for resale by the beneficial owners thereof. In order to have their Securities included in the registration statement, beneficial owners must complete and return the enclosed Notice of Registration Statement and Selling Securityholder Questionnaire. It is important that beneficial owners of the Securities receive a copy of the enclosed materials as soon as possible as their rights to have the Securities included in the registration statement depend upon their returning the Notice and Questionnaire by [Deadline for response]. Please forward a copy of the enclosed documents to each beneficial owner that holds interests in the Securities through you. If you require more copies of the enclosed materials or have any questions pertaining to this matter, please contact the Company Secretary, c/o Hampshire International Business Park, Chineham, Basingstoke, Hampshire RG24 8EP, telephone: +44 1256 894 000. A-1 Shire Finance Limited Notice of Registration Statement and Selling Securityholder Questionnaire [Date] Shire Finance Limited (the "Company") and Shire Pharmaceuticals Group plc ("Shire") have filed with the United States Securities and Exchange Commission (the "Commission") a registration statement on Form F-3 (the "Shelf Registration Statement") for the registration and resale under Rule 415 of the United States Securities Act of 1933, as amended (the "Securities Act"), of the Company's 2% Senior Guaranteed Convertible Notes due 2011 (the "Securities") convertible into exchangeable redeemable preference shares of the Company (the "Preference Shares") and the Ordinary Shares of Shire, par value $___ per share (the "Ordinary Shares"), issuable in exchange therefore, in accordance with the Registration Rights Agreement, dated as of August 21, 2001 (the "Registration Rights Agreement"), among Shire, the Company and the purchasers named therein. The Ordinary Shares will be issued in the form of ordinary shares or American Depositary Shares ("ADSs"). A copy of the Registration Rights Agreement is attached hereto. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement. In order to have Registrable Securities included in the Shelf Registration Statement (or a supplement or amendment thereto), this Notice of Registration Statement and Selling Securityholder Questionnaire ("Notice and Questionnaire") must be completed, executed and delivered to the Company at the address set forth herein for receipt ON OR BEFORE [DEADLINE FOR RESPONSE]. Beneficial owners of Registrable Securities who do not complete, execute and return this Notice and Questionnaire by such date (i) will not be named as selling securityholders in the Shelf Registration Statement and (ii) may not use the Prospectus forming a part thereof for resales of Registrable Securities. Certain legal consequences arise from being named as a selling securityholder in the Shelf Registration Statement and related Prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration Statement and related Prospectus. 1 The term "Registrable Securities" is defined in the Registration Rights Agreement to mean all or any portion of the Securities issued from time to time under the Indenture in registered form and the Ordinary Shares (including the Ordinary Shares underlying the ADSs) issuable in exchange for Preference Shares; provided, however, that a security ceases to be a Registrable Security when it is no longer a Restricted Security. The term "Restricted Security" is defined in the Registration Rights Agreement to mean any Security or Ordinary Share issuable in exchange for Preference Shares except any such Security or Ordinary Share which (i) has been effectively registered under the Securities Act and sold in a manner contemplated by the Shelf Registration Statement, (ii) has been transferred in compliance with Rule 144 under the Securities Act (or any successor provision thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any successor provision thereto) by a non-Affiliate, or (iii) has otherwise been transferred and a new Security or Ordinary Share not subject to transfer restrictions under the Securities Act has been delivered by or on behalf of the Company in accordance with Section 3.5 of the Indenture. ELECTION The undersigned holder (the "Selling Securityholder") of Registrable Securities hereby elects to include in the Shelf Registration Statement the Registrable Securities beneficially owned by it and listed below in Item (3). The undersigned, by signing and returning this Notice and Questionnaire, agrees to be bound with respect to such Registrable Securities by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement, including, without limitation, Section 5 of the Registration Rights Agreement, as if the undersigned Selling Securityholder were an original party thereto. Upon any sale of Registrable Securities pursuant to the Shelf Registration Statement, the Selling Securityholder will be required to deliver to the Company and the Trustee the Notice of Transfer (completed and signed) set forth in Exhibit 1 to this Notice and Questionnaire. The Selling Securityholder hereby provides the following information to the Company and represents and warrants that such information is accurate and complete: 2 QUESTIONNAIRE (1) (a)Full Legal Name of Selling Securityholder: _______________________________________________________________________ (b)Full Legal Name of Registered Holder (if not the same as in (a) above) of Registrable Securities Listed in Item (3) Below: ________________________________________________________________________ (c)Full Legal Name of DTC Participant (if applicable and if not the same as (b) above) Through Which Registrable Securities Listed in Item (3) Below are Held: ________________________________________________________________________ (2) Address for Notices to Selling Securityholder: --------------------------------------- --------------------------------------- --------------------------------------- Telephone: --------------------------------------- Fax: --------------------------------------- Contact Person: --------------------------------------- (3) Beneficial Ownership of Securities: Except as set forth below in this Item (3), the undersigned Selling Securityholder does not beneficially own any Securities or Ordinary Shares issued upon conversion, repurchase or redemption of any Securities. (a) Principal amount of Registrable Securities (as defined in the Registration Rights Agreement) beneficially owned:____________________ CUSIP No(s). of such Registrable Securities:__________________________ Number of Ordinary Shares (if any) issued upon conversion, repurchase or redemption of Registrable Securities:____________________________ (b) Principal amount of Securities other than Registrable Securities beneficially owned: CUSIP No(s). of such other Securities:______________________________ Number of Ordinary Shares (if any) issued upon conversion of such other Securities:_____________________________________________________ (c) Principal amount of Registrable Securities which the undersigned wishes to be included in the Shelf Registration Statement:____________ 3 CUSIP No(s). of such Registrable Securities to be included in the Shelf Registration Statement:_________________________________________ Number of Ordinary Shares (if any) issued upon conversion of Registrable Securities which are to be included in the Shelf Registration Statement:_______________________________________________ (4) Beneficial Ownership of Other Securities of the Company: Except as set forth below in this Item (4), the undersigned Selling Securityholder is not the beneficial or registered owner of any Ordinary Shares or any other securities of the Company, other than the Securities and Ordinary Shares listed above in Item (3). State any exceptions here: (5) Relationships with the Company: Except as set forth below, neither the Selling Securityholder nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years. State any exceptions here: (6) Plan of Distribution: Except as set forth below, the undersigned Selling Securityholder intends to distribute the Registrable Securities listed above in Item (3) only as follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned Selling Securityholder or, alternatively, through underwriters, broker-dealers or agents. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions) (i) on any national securities exchange or quotation service on which the Registrable Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market, or (iv) through the writing of options. In connection with sales of the Registrable Securities or otherwise, the Selling Securityholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities in the course of hedging the positions they assume. The Selling Securityholder may also sell Registrable Securities short and deliver Registrable Securities to close out such short 4 positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities. State any exceptions here: Note: In no event may such method(s) of distribution take the form of an underwritten offering of the Registrable Securities without the prior agreement of the Company. By signing below, the Selling Securityholder acknowledges that it understands its obligation to comply, and agrees that it will comply, with the prospectus delivery and other provisions of the Securities Act and the Exchange Act and the rules and regulations thereunder, particularly Regulation M. In the event that the Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item (3) above after the date on which such information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Notice and Questionnaire and the Registration Rights Agreement. By signing below, the Selling Securityholder consents to the disclosure of the information contained herein in its answers to Items (1) through (6) above and the inclusion of such information in the Shelf Registration Statement and related Prospectus. The Selling Securityholder understands that such information will be relied upon by the Company in connection with the preparation of the Shelf Registration Statement and related Prospectus. In accordance with the Selling Securityholder's obligation under Section 3(a) of the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein which may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains in effect. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing, by hand-delivery, first-class mail or air courier guaranteeing overnight delivery as follows: (i) To the Company: Shire Finance Limited c/o Maples and Calder Ugland House P.O. Box 309 George Town Grand Cayman, Cayman Islands Attn: Directors/F.O.E. 5 (ii) With a copy to: Shire Pharmaceuticals Group plc Hampshire International Business Park Chineham, Basingstoke Hampshire RG24 8EP England Attn: Company Secretary (iii) And a copy to: Cahill Gordon & Reindel 80 Pine Street New York, NY 10005 U.S.A. Attn: John Mitchell Once this Notice and Questionnaire is executed by the Selling Securityholder and received by the Company, the terms of this Notice and Questionnaire, and the representations and warranties contained herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives, and assigns of the Company and the Selling Securityholder (with respect to the Registrable Securities beneficially owned by such Selling Securityholder and listed in Item (3) above). This Agreement shall be governed in all respects by the laws of the State of New York. 6 IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent. Dated: ---------------------------- -------------------------------------------------------------- Selling Securityholder (Print/type full legal name of beneficial owner of Registrable Securities) By: --------------------------------------------------------- Name: Title: PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY AT: Shire Finance Limited c/o Maples and Calder Ugland House P.O. Box 309 George Town Grand Cayman, Cayman Islands Attention: Directors/F.O.E. WITH A COPY TO: Cahill Gordon & Reindel 80 Pine Street New York, NY 10005 U.S.A. Attn: John Mitchell 7 Exhibit I to Appendix A NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT Shire Finance Limited c/o Maples and Calder Ugland House P.O. Box 309 George Town Grand Cayman, Cayman Islands Attention: Directors/F.O.E. Shire Pharmaceuticals Group plc Hampshire International Business Park Chineham Basingstoke, Hampshire England RG24 8EP Attention: Company Secretary Cahill Gordon & Reindel 80 Pine Street New York, NY 10005 U.S.A. Attention: John Mitchell The Bank of New York One Canada Square London England E14 5AL Attention: Sunjeeve D. Patel Re: 2% Senior Guaranteed Convertible Notes due 2011 (the "Notes") Convertible into Preference Shares of Shire Finance Limited (the "Company") Dear Sirs: Please be advised that _____________________ has transferred $___________ aggregate principal amount of the above-referenced Notes or Ordinary Shares of Shire Pharmaceuticals Group plc ("Shire") issued in exchange for Preference Shares, pursuant to an effective Registration Statement on Form F-3 (File No. 333-____) filed by the Company and Shire. We hereby certify that the prospectus delivery requirements, if any, of the Securities Act of 1933, as amended, have been satisfied with respect to the transfer described above and that the above-named beneficial owner of the Notes or Ordinary Shares is named as a selling securityholder in the Prospectus dated [date], or in amendments or supplements thereto, and that the aggregate principal amount of the Notes or number of Ordinary Shares transferred are [a portion of] the Notes or Ordinary Shares listed in such Prospectus as amended or supplemented opposite such owner's name. I-1 Dated: Very truly yours, ------------------------ (Name) By: ________________________ (Authorized Signature) I-2 EX-4.7 6 shirepa.txt PURCHASE AGREEMENT SHIRE FINANCE LIMITED 2% Senior Guaranteed Convertible Notes Due 2011 Guaranteed by SHIRE PHARMACEUTICALS GROUP PLC Purchase Agreement August 15, 2001 Bear, Stearns International Limited Goldman Sachs International, As representatives of the several Purchasers named in Schedule I hereto (the "Representatives"), c/o Bear, Stearns International Limited One Canada Square London E14 5AD England Ladies and Gentlemen: Shire Finance Limited, an exempted limited company organized under the laws of the Cayman Islands (the "Company"), proposes, subject to the terms and conditions stated herein, to issue to subscribers procured by the Purchasers named in Schedule I hereto (the "Purchasers") or, failing which, to the Purchasers an aggregate of $350,000,000 principal amount of the 2% Senior Guaranteed Convertible Notes due 2011 (the "Firm Securities") and, at the election of the Purchasers, up to an aggregate of $50,000,000 additional aggregate principal amount thereof (the "Optional Securities") (the Firm Securities and the Optional Securities are herein collectively called the "Securities"). The Securities, which are guaranteed by Shire Pharmaceuticals Group plc, a public limited liability company organized under the laws of England and Wales ("Shire"), will be convertible into exchangeable redeemable preference shares of the Company (the "Preference Shares") and then will be exchanged for ordinary shares of the capital stock of Shire in the form of ordinary shares or American Depositary Shares (the "ADSs") or, at the option of Shire, cash. Payments of dividends and liquidation preferences on the Preference Shares will be guaranteed by Shire pursuant to a guarantee agreement between Shire and The Bank of New York (the "Guarantee"). The ADSs are to be issued pursuant to a deposit agreement (the "Deposit Agreement"), dated as of March 20, 1998, as amended, among Shire, Morgan Guaranty Trust Company of New York, as depositary (the "Depositary"), and holders from time to time of the American Depositary Receipts (the "ADRs") issued by the Depositary and evidencing the ADSs. The Securities, the ordinary shares and the ordinary shares underlying the ADSs will have the benefit of a Registration Rights Agreement to be dated as of August 21, 2001, among Shire, the Company and the Purchasers (the "Registration Rights Agreement"). 1. The Company and Shire jointly and severally represent and warrant to, and agree with, each of the Purchasers that: (a) An offering circular (the "Offering Circular") has been prepared in connection with the offering of the Securities, the Preference Shares issuable upon conversion thereof and the ordinary shares and ADSs issuable upon exchange of the Preference Shares. Any reference to the Offering Circular shall be deemed to refer to and include (i) Shire's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30, 2001, Proxy Statement for the Extraordinary General Meeting of Shareholders filed on March 1, 2001, Proxy Statement for the 2000 Annual Meeting of Shareholders filed on April 30, 2001 and Current Reports on Form 8-K filed on May 4, May 11, July 17, July 23, as amended, and July 25 and any other Current Reports which are incorporated therein); (ii) BioChem Pharma Inc.'s annual report on Form 20-F for the year ended December 31, 1999, current reports on Form 6-K filed on January 10, January 26, February 15, March 6, March 9, March 15, April 3, April 11, April 20, April 27, April 28, May 1, May 24, June 19, June 27, July 11, July 18, July 26, August 4, August 28, September 22, October 26, November 1, November 15, November 20, December 1, December 11, December 13, December 18, December 22 and December 31, 2000, and current reports on Form 6-K filed on January 10, January 26, February 1, February 6, March 1, March 28, March 30 and April 5, 2001; and (iii) any other documents filed with or furnished to the United States Securities and Exchange Commission (the "Commission") pursuant to Section 13(a), 13(c) or 15(d) of the United States Securities Exchange Act of 1934, as amended (the "Exchange Act") on or prior to the date of the Offering Circular and expressly incorporated by reference therein, and any reference to the Offering Circular as amended or supplemented as of any specified date shall be deemed to include any documents filed with or furnished to the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act after the date of the Offering Circular and prior to such specified date; and all documents filed or furnished under the Exchange Act and so deemed to be included in the Offering Circular or any amendment or supplement thereto are hereinafter called the "Exchange Act Reports." The Exchange Act Reports, when they were or are filed with or furnished to the Commission, conformed or will conform in all material respects to the applicable requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder. The Offering Circular and any amendments or supplements thereto and the Exchange Act Reports did not and will not, as of their respective dates, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a Purchaser through the Representatives expressly for use therein; 2 (b) If Securities are listed on the London Stock Exchange, (i) the Listing Particulars to be prepared by the Company and Shire relating to the Securities (the "Listing Particulars"), when published, will contain all particulars and information required by, and will comply with, the Companies Act 1985 of Great Britain (the "Companies Act"), the Financial Services Act 1986 of the United Kingdom (the "FSA"), the listing rules made by the United Kingdom Listing Authority (the "UKLA") pursuant to Part IV of the FSA (the "Listing Rules") and, so far as the Company and Shire are aware (having not made inquiries other than in respect of matters relating to the United Kingdom), all other relevant statutes and regulations and (ii) having regard to the particular nature of the Company, Shire and each of Shire's subsidiaries and Shire's and the Company's share capital and the other matters referred to in Sections 146(2) and (3) of the FSA (other than, in the case of the Offering Circular, the information required by Section 146(3)(d) of the FSA), the Offering Circular contains and the Listing Particulars will contain all such information as investors and their professional advisers would reasonably require, and reasonably expect to find there, for the purposes of making an informed assessment of the assets and liabilities, financial position, profits and losses, and prospects of the Company, Shire and Shire's subsidiaries, and of the rights attached to the Securities, the Preference Shares and the ordinary shares; (c) If an application is made for the Securities to be admitted to the Official List of the UKLA, all statements made in writing by or on behalf of the Company or Shire in connection with any application to the UKLA for certain information to be omitted from the Listing Particulars will be true and accurate in all material respects and will not be materially misleading, and there are no material facts which will not be disclosed to the UKLA in connection therewith which by their omission would make any such statements misleading in any material respect or which would be material for disclosure to the UKLA, and there are no matters other than those that will be disclosed in the Listing Particulars or otherwise disclosed in writing to the UKLA that should be taken into account by the UKLA in considering the suitability for listing of the Securities or the ordinary shares; (d) If an application is made to list the Securities on the Luxembourg Stock Exchange, the Offering Circular, as may be supplemented for the purpose of such application, will contain all information required by and will comply with all relevant requirements of the Luxembourg Stock Exchange; and such application will be made in accordance with all applicable requirements; (e) Neither Shire nor any of its subsidiaries has sustained since the date of the latest audited financial statements included or incorporated by reference in the Offering Circular any material 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 Offering Circular; and, since the respective dates as of which information is given or incorporated by reference in the Offering Circular, there has not been any material change in the capital stock (other than pursuant to the exercise of outstanding options, the exchange of Exchangeable Shares of Shire Acquisition Inc., the 3 conversion of Shire's unsecured convertible zero coupon loan note due to Arenol Corporation and the exchange of any remaining shares of Roberts Pharmaceutical Corporation) or long-term debt of Shire or any of its subsidiaries 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 Shire and its subsidiaries, otherwise than as set forth or contemplated in the Offering Circular; (f) Shire and its subsidiaries have good and marketable title in fee simple to all real property of which they hold the freehold interest and good and marketable title to all material personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as are described in the Offering Circular or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by Shire and its subsidiaries; and any material real property and buildings held under lease by Shire and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by Shire and its subsidiaries; (g) Shire has been duly incorporated and is validly existing as a public limited liability company under the laws of England and Wales, with power and authority to own its properties and conduct its business as described in the Offering Circular, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing (to the extent such concept exists) under the laws of each other 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 the failure to be so qualified in any such jurisdiction; and each subsidiary of Shire, including the Company, has been duly organized and is validly existing in good standing (to the extent such concept exists) under the laws of its jurisdiction of organization; and the Company has power and authority to own its properties and conduct its business as described in the Offering Circular, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing (to the extent such concept exists) under the laws of each other 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 the failure to be so qualified in any such jurisdiction; (h) Each of the Company and Shire has an authorized capitalization as set forth in the Offering Circular, and all of the issued shares in the capital of the Company and Shire have been duly and validly authorized and issued and are fully paid and non-assessable; the holders of outstanding shares in the capital of Shire are not entitled to preemptive or other rights to acquire the ordinary shares or the ADSs which have not been complied with or waived; there are no outstanding securities convertible into or exchangeable for, or warrants, rights or options to purchase from Shire, or obligations of Shire to issue, ordinary shares or any other class of share capital of Shire or shares in the capital of any subsidiary of Shire, other than the outstanding options pursuant to employee share schemes described in the Offering Circular, the 4 Exchangeable Shares of Shire Acquisition Inc., Shire's unsecured convertible zero coupon loan note due to Arenol Corporation and any remaining shares of Roberts Pharmaceutical Corporation; the Preference Shares issuable upon conversion of the Securities, when duly and validly authorized, issued and delivered in accordance with the provisions of the Securities and the Indenture referred to below, will be duly and validly issued, fully paid and non-assessable and will conform to the description of the Preference Shares contained in the Offering Circular; the ordinary shares of Shire issuable upon exchange of the Preference Shares have been duly and validly authorized and reserved for issuance and, when issued in accordance with the provisions of the Indenture referred to below, will be duly and validly issued, fully paid and non-assessable and will conform to the description of the ordinary shares contained in the Offering Circular and may be freely deposited by or on behalf of Shire with the Depositary against issuance of ADRs evidencing ADSs; (i) The Securities have been duly authorized and, when issued and delivered pursuant to this Agreement, will have been duly executed, authenticated, issued and delivered and will constitute valid and legally binding obligations of the Company entitled to the benefits provided by the Indenture to be dated as of August 21, 2001 (the "Indenture") among the Company, Shire and The Bank of New York, as Trustee (the "Trustee"), under which they are to be issued; each of the Indenture and the Registration Rights Agreement has been duly authorized by the Company and Shire and, when executed and delivered by the parties thereto, will constitute valid and legally binding obligations of the Company and Shire, enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Securities, the Indenture and the Registration Rights Agreement will be in substantially the form previously delivered to you; (j) The Deposit Agreement has been duly authorized, executed and delivered by Shire and constitutes a valid and legally binding agreement of Shire, enforceable in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; and upon due issuance by the Depositary of ADRs evidencing ADSs and the deposit of ordinary shares in respect thereof in accordance with the provisions of the Deposit Agreement, such ADRs will be duly and validly issued and the persons in whose names the ADRs are registered will be entitled to the rights specified therein and in the Deposit Agreement; (k) The Guarantee has been duly authorized and, when executed and delivered by the parties thereto, will constitute valid and legally binding obligations of Shire, enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the Guarantee will be in substantially the form previously delivered to you; (l) None of the transactions contemplated by this Agreement (including, without limitation, the use of the proceeds from the issue of the Securities) 5 will violate or result in a violation of Section 7 of the Exchange Act or any regulation promulgated thereunder, including, without limitation, Regulations T, U, and X of the Board of Governors of the Federal Reserve System; (m) The issue of the Securities by the Company hereunder, the issuance of the Preference Shares by the Company upon conversion of the Securities, the issuance of the ordinary shares and the deposit of the ordinary shares being deposited with the Depositary against issuance of the ADRs evidencing the ADSs, and the compliance by the Company and Shire with all of the provisions of the Securities, the Preference Shares, the Indenture, the Registration Rights Agreement, the Guarantee, the Deposit Agreement, this Agreement and the consummation of the transactions herein and therein contemplated will not, subject, in the case of the issuance of the Preference Shares, to the adoption by the Company of the Amended and Restated Memorandum and Articles of Association incorporating the terms of the Preference Shares, 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, Shire or any of Shire's subsidiaries is a party or by which the Company, Shire or any of Shire's subsidiaries is bound or to which any of the property or assets of the Company, Shire or any of Shire's subsidiaries is subject, except for any such conflict, breach, violation or default which would not have a current or future material adverse affect on the consolidated financial position, shareholders' equity, results of operations, earnings, business or organizations of Shire and its subsidiaries, taken as a whole (a "Material Adverse Effect") nor will such action result in any violation of the provisions of the Articles of Association of the Company or Shire or any statute or any order, rule or regulation of any court, central bank, stock exchange or governmental agency or body in the United States, the United Kingdom or the Cayman Islands (each, a "Governmental Agency") having jurisdiction over the Company, Shire or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any such Governmental Agency (each, a "Governmental Authorization") is required for the issue and sale of the Securities, the issue of the Preference Shares and the ordinary shares, the deposit of the ordinary shares being deposited with the Depositary against issuance of the ADRs evidencing the ADSs or the consummation by the Company and Shire of the transactions contemplated by this Agreement, the Registration Rights Agreement, the Guarantee, the Deposit Agreement or the Indenture, except for having the Securities and, subject to notice of issuance, the ordinary shares either admitted to the Official List of the UKLA and to trading on the London Stock Exchange or listed on the Luxembourg Stock Exchange, as the case may be, the filing of a registration statement by the Company and Shire with the Commission pursuant to the United States Securities Act of 1933, as amended (the "Act") in accordance with the Registration Rights Agreement and the qualification of the Indenture under the Trust Indenture Act of 1939, as amended ("TIA"), and such Governmental Authorizations as may be required under state securities or Blue Sky laws in connection with the subscription and distribution of the Securities by the Purchasers; (n) Neither the Company, Shire nor any of Shire's subsidiaries is in violation of its constituent documents or in default in the performance or observance 6 of any obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except for any such default as would not result in a Material Adverse Effect; (o) The statements set forth in the Offering Circular under the captions "Description of Notes," "Description of Preference Shares", "Description of Ordinary Shares" and "Description of American Depositary Shares and American Depositary Receipts", insofar as they purport to constitute a summary of the terms of the Securities, the Indenture, the Registration Rights Agreement and the Guarantee; the Preference Shares; the ordinary shares; and the Deposit Agreement, the ADSs and the ADRs, respectively, and under the captions "Certain Cayman Islands, United Kingdom and United States Tax Consequences" and "Plan of Distribution", insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair in all material respects; (p) Other than as set forth or contemplated in the Offering Circular, there are no legal or governmental proceedings pending to which Shire, the Company or any of Shire's subsidiaries is a party or of which any property of Shire, the Company or any of Shire's subsidiaries is the subject that are reasonably likely, individually or in the aggregate, to result in a Material Adverse Effect; and, to the best of Shire's and the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (q) No Governmental Authorization is required to effect payments of principal, premium, if any, and interest on the Securities or dividend payments or other distributions on the Preference Shares, the ordinary shares or the ADSs; (r) All dividend payments or other distributions on the ordinary shares and the ADSs may under the current law and regulations of the United Kingdom be paid in pounds sterling that may be converted into foreign currency that may be freely transferred out of the United Kingdom, and all such dividends and other distributions on the ordinary shares and the ADSs will not be subject to withholding or other taxes under the laws and regulations of the United Kingdom and are otherwise free and clear of any other tax, withholding or deduction in the United Kingdom and without the necessity of obtaining any Governmental Authorization in the United Kingdom (other than, in each case, U.K. tax on income or profits of any Purchaser who is resident in the United Kingdom or carries on a trade in the United Kingdom through a branch or agency); (s) Other than as disclosed in the Offering Circular, no ad valorem stamp duty, stamp duty, stamp duty reserve tax or issue, documentary certification or other similar tax imposed by any government department or other taxing authority whether of or in the United Kingdom, the United States or the 7 Cayman Islands (each, a "Transfer Tax") and no capital gains, income, withholding or other taxes imposed by any such entity whether of or in the United Kingdom, the United States or the Cayman Islands is payable in connection with (i) the issuance and the delivery by the Company of the Securities to or for the respective accounts of the Purchasers or the subscribers or purchasers procured by them, (ii) the offering, sale and delivery of the Securities by the Purchasers to the initial purchasers, (iii) the issuance and delivery of the Preference Shares or the ordinary shares or (iv) the deposit with the Depositary or its nominee of the ordinary shares by Shire against the issuance of the ADRs evidencing ADSs (other than, in each case, U.K. or U.S. tax on income, profits or gains from the sale of the Securities, the Preferred Shares or the ordinary shares and on the income or capital gains of any person who is resident in the United Kingdom or the United States, respectively, or carries on a trade in the United Kingdom or the United States, respectively, through a branch or agency); (t) Shire, the Company and each of Shire's subsidiaries have all licenses, franchises, permits, authorizations, approvals and orders and other concessions of and from all Governmental Agencies that are necessary to own or lease their properties and conduct its businesses as described in the Offering Circular, except where the failure to have them would not result in a Material Adverse Effect; (u) None of Shire, the Company nor any of Shire's subsidiaries have taken, directly or indirectly, any action which was designed to or which has constituted or which might have been expected to cause or result in stabilization or manipulation of the price of any security of Shire or the Company in connection with the offering of the Securities; (v) When the Securities are issued and delivered pursuant to this Agreement, the Securities will not be of the same class (within the meaning of Rule 144A under the Act) as securities which are listed on a national securities exchange registered under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer quotation system; (w) Shire is subject to Section 13 or 15(d) of the Exchange Act; (x) Neither the Company, nor any affiliate of the Company, nor any person acting on its or their behalf (other than the Purchasers, as to whom no representation or warranty is given) has offered or sold the Securities by means of any (i) general solicitation or general advertising within the meaning of Rule 502(c) under the Act and (ii) any directed selling efforts within the meaning of Rule 902 under the Act, and the Company, any affiliate of the Company and any person acting on its or their behalf (other than the Purchasers, as to whom no representation or warranty is given) has complied with and will implement the "offering restriction" within the meaning of such Rule 902; (y) Within the preceding six months, neither the Company nor any other person acting on behalf of the Company has offered or issued to any person any Securities, or any securities of the same or a similar class as the Securities, other than Securities offered or issued to the Purchasers hereunder. The Company and Shire will take reasonable precautions designed to ensure that any offer or issue, direct or indirect, in the United States or to any U.S. person (as defined in Rule 902 under the Act) of any 8 Securities or any substantially similar security issued by the Company, within six months subsequent to the date on which the distribution of the Securities has been completed (as notified to the Company by Bear, Stearns International Limited), is made under restrictions and other circumstances reasonably designed not to affect the status of the offer and sale of the Securities in the United States and to U.S. persons contemplated by this Agreement as transactions exempt from the registration provisions of the Act; (z) The Company and Shire are not and, after giving effect to the offering and issue of the Securities, 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"); (aa) Each of Shire and the Company believes it is not a Passive Foreign Investment Company ("PFIC") within the meaning of Section 1297 of the United States Internal Revenue Code of 1986, as amended, and is not likely to become a PFIC; (bb) Arthur Andersen, who have certified certain financial statements of Shire and its subsidiaries, are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder; (cc) The Company is a "foreign private issuer" (as such term is defined in the rules and regulations under the Exchange Act); (dd) The audited combined balance sheet, the consolidated profit and loss account and the consolidated cash flow statements of Shire and its subsidiaries (including the notes thereto) for the years ended December 31, 1998, 1999 and 2000 and the unaudited combined balance sheet, the consolidated profit and loss account and the consolidated cash flow statement of Shire and its subsidiaries for the six month period ended June 30, 2001, included or incorporated by reference in the Offering Circular have been prepared with all relevant Statements of Standard Accounting Practice and Financial Reporting Standards currently in force and generally accepted accounting principles in the United States ("US GAAP"), consistently applied, and (i) present fairly the financial condition of the Company and its subsidiaries, as at the end of each of the relevant financial periods, and the results and cashflows of Shire and its subsidiaries, for each such period subject, in the case of the unaudited combined balance sheet, profit and loss account and consolidated cash flow, to customary year-end adjustments, (ii) in accordance with such Statements of Standard Accounting Practice, Financial Reporting Standards and such accounting principles, make proper provision for all liabilities, whether actual, deferred or contingent, and (iii) have been prepared after due and careful inquiry by Shire and, where applicable, its subsidiaries. (ee) Shire and each of its subsidiaries owns or possesses adequate rights to use pursuant to license, sublicense, agreement or permission all material patents, patent applications, trademarks, service marks, trade names, domain names, design rights, copyrights, database rights, topography rights, trade secrets and other know-how rights, rights in confidential information, proprietary rights and processes (in each case whether registered or unregistered and including applications for registration) arising or subsisting anywhere in the world ("Intellectual Property") 9 necessary for the operation of the business of Shire and its subsidiaries as a whole as described in the Offering Circular. In respect of Intellectual Property devised, developed or created by or on behalf of Shire, which is used or which Shire expects to use, in Shire's current or foreseeable future business, or which is necessary for the operation of the business of Shire and its subsidiaries as described in the Offering Circular, Shire has taken all steps necessary to secure rights to such Intellectual Property from its employees and third party creators of that Intellectual Property; to the best of Shire's knowledge, none of the material technology or other Intellectual Property employed by Shire or any of its subsidiaries has been obtained or is being used by Shire or any of its subsidiaries in violation of any law or any contractual or fiduciary obligation binding upon Shire, any of its subsidiaries or any of their respective directors or executive officers or any of their respective employees. Except as described in the Offering Circular, to Shire's knowledge, neither Shire nor any of its subsidiaries has interfered with, infringed upon, misappropriated or violated any Intellectual Property of any third party and the continued operation of the business of Shire and its subsidiaries as described in the Offering Circular will not result in the same where any such event or circumstance would reasonably be expected to have a Material Adverse Effect; and except as described in the Offering Circular, Shire and its subsidiaries have not received and, to the best of Shire's knowledge, are not aware of any charge, complaint, claim, demand or notice alleging any such interference, infringement, misappropriation or violation (including any claim that Shire or any of its subsidiaries must take a license of or refrain from using any Intellectual Property of any third party) that would have a Material Adverse Effect, and, except as described in the Offering Circular, there are no actions, suits or judicial proceedings relating to Intellectual Property to which Shire or any of its subsidiaries is subject, and no such actions, suits or judicial proceedings are, to the best of Shire's knowledge, threatened by governmental authorities or other third parties; to the best of Shire's knowledge, except as described in the Offering Circular, there is no patent or published patent application which contains claims that dominate or may dominate any Intellectual Property described in the Offering Circular as being owned by or licensed to Shire or that interferes with the issued or pending claims of any such Intellectual Property; and, to the best of Shire's knowledge, except as described in the Offering Circular, there is and has been no infringement, interference, misappropriation or violation by any third parties of any Intellectual Property owned by Shire or any of its subsidiaries; and Shire and its subsidiaries have taken and will maintain reasonable measures to prevent the unauthorized use dissemination or publication of its trade secrets, proprietary information and other confidential information; and (ff) Shire and its subsidiaries (i) are in compliance with any and all applicable laws and all rules, regulations and orders relating to the protection of human health and safety (including occupational health and safety), the manufacture, processing, distribution, use, handling, transportation, disposal, treatment, storage or release of chemicals, pollutants, contaminants, wastes or hazardous or toxic substances or the protection or restoration of the environment or wildlife (collectively, "Environmental Laws"), (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and are in 10 compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a Material Adverse Effect; and to Shire's knowledge, no material expenditures are or will be required to comply with the Environmental Laws. 2. Subject to the terms and conditions herein set forth, (a) the Company agrees to issue to the subscribers procured by the Purchasers or, failing which, to each of the Purchasers, and each of the Purchasers agrees, severally and not jointly, to procure subscribers for or, failing which, to subscribe, at a subscription price per Security of $1,000, the aggregate principal amount of Firm Securities set forth opposite the name of such Purchaser in Schedule I hereto and (b) in the event and to the extent that the Purchasers shall exercise the election to require the Company to issue Optional Securities as provided below, the Company agrees to issue to each of the subscribers procured by the Purchasers or, failing which, to each of the Purchasers, and each of the Purchasers agrees, severally and not jointly, to procure subscribers for or, failing which, to subscribe, at the subscription price per Security set forth in clause (a) of this Section 2, that portion of the number of Optional Securities as to which such election shall have been exercised (to be adjusted by the Representatives so as to eliminate fractional shares) determined by multiplying such number of Optional Securities by a fraction, the numerator of which is the number of Optional Securities set forth opposite the name of such Purchaser in Schedule I hereto and the denominator of which is the maximum number of Optional Securities hereunder. The Company hereby grants to the Purchasers the right to procure subscribers for or, failing which, to subscribe, at their election, up to $50,000,000 aggregate principal amount of Optional Securities, at the subscription price per Security set forth in clause (a) of the paragraph above. Any such election may be exercised only by written notice from the Representatives to the Company, given within a period of 30 calendar days after the date hereof and setting forth the aggregate principal amount of Optional Securities to be subscribed and the date on which such Optional Securities are to be delivered, as determined by the Representatives, but in no event earlier than the First Time of Delivery or, unless the Representatives and the Company otherwise agree in writing, earlier than two or later than ten business days after the date of such notice. As compensation to the Purchasers for their commitments hereunder, the Company at each Time of Delivery (as defined in Section 4 hereof) will pay to the Representatives, for the accounts of the several Purchasers, an underwriting commission equal to $22.50 per Security to be delivered by the Company hereunder at such Time of Delivery. The Purchasers may accept payment of the underwriting commission by offsetting the amount thereof against the payment of the subscription price for the Firm Securities or Optional Securities. 3. Upon the authorization by the Representatives of the release of the Firm Securities, the several Purchasers propose to procure subscribers for the Firm Securities upon the terms and conditions set forth herein and in the Offering Circular and each Purchaser hereby represents and warrants to, and agrees with the Company and Shire that: 11 (a) It will offer and sell the Securities only (i) to persons who it reasonably believes are "qualified institutional buyers" ("QIBs") within the meaning of Rule 144A under the Act in transactions meeting the requirements of Rule 144A or (ii) upon the terms and conditions set forth in Annex I to this Agreement; (b) It is an "accredited investor" within the meaning of Rule 501 under the Act; and (c) It will not offer or sell the Securities by any form of general solicitation or general advertising, including but not limited to the methods described in Rule 502(c) under the Act. 4. The Securities that the Purchasers procure subscribers for or, failing which, subscribe hereunder shall be delivered by or on behalf of the Company to Goldman Sachs International, for the respective accounts of such subscribers or Purchasers, as the case may be, against payment by or on behalf of such subscribers or Purchasers, respectively, of the subscription price therefor by wire transfer of federal (same-day) funds to the account specified by the Company to the Representatives at least forty-eight hours in advance. The time and date of such delivery and payment shall be, with respect to the Firm Securities, 2:00 p.m., London time, on August 21, 2001, or such other time and date as Goldman Sachs International and the Company may agree upon and, with respect to the Optional Securities, 2:00 p.m., London time, on the dates specified by Goldman Sachs International in the written notices given by Goldman Sachs International of the Purchasers' elections to procure subscribers for or, failing which, to subscribe such Optional Securities, or such other time and date as Goldman Sachs International and the Company may agree upon; provided, that there shall be no more than two such times and dates with respect to the Optional Securities. Such time and date for delivery of the Firm Securities is herein called the "First Time of Delivery", and each such time and date for delivery is herein called a "Time of Delivery". It is understood that the Securities will initially be represented by global securities in book-entry form (the "Global Securities"), one of which will be deposited by or on behalf of the Company with The Depositary Trust Company ("DTC") or its nominee and the other of which will be deposited by or on behalf of the Company with The Bank of New York, as common depositary for Euroclear Bank S.A./N.V. and Clearstream Banking, S.A. (the "Common Depositary"). The Global Securities will be made available for checking at least twenty-four hours prior to the Time of Delivery through the facilities of the Book-Entry Depositary and the Common Depositary. The documents to be delivered at the Time of Delivery by or on behalf of the parties hereto pursuant to Section 7 hereof, including the cross-receipt for the Securities and any additional documents requested by the Purchasers pursuant to Section 7(j) hereof, will be delivered at the offices of Cleary, Gottlieb, Steen and Hamilton, City Place House, 55 Basinghall Street, London EC2V 5EH, telephone: +44 (0)20 7614 2220, facsimile: +44 (0)20 7600 1698 (the "Closing Location"), and the Securities will be delivered through the facilities of DTC and the Common Depositary, all at the Time of Delivery. A meeting will be held at the Closing Location at 3:00 p.m., London time, on the Business Day next preceding the 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, "Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is 12 not a day on which banking institutions in London or New York City are generally authorized or obligated by law or executive order to close. 5. The Company and Shire agree with each of the Purchasers as follows: (a) To prepare the Offering Circular in a form approved by the Representatives; and to make no further amendment or any supplement to the Offering Circular prior to the last Time of Delivery which shall be reasonably disapproved by you promptly after reasonable notice thereof; and to file promptly all reports required to be filed by Shire with the Commission pursuant to Section 13(a), 13(c) or 15(d) of the Exchange Act subsequent to the date of the Offering Circular and for so long as the delivery of an offering circular is required in connection with the offering or sale of the Securities; (b) Promptly from time to time to take such action as you may reasonably request to qualify the Securities, the Preference Shares issuable upon conversion of the Securities or the ordinary shares and ADSs issuable in exchange for the Preference Shares for offering and sale under the securities laws of such jurisdictions as you may reasonably request and to comply with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be reasonably necessary to complete the distribution of the Securities by the Purchasers, 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 or be subjected to taxation in more than a nominal amount; (c) Prior to 10:00 a.m., London time, on the third London Business Day after the date hereof, or as soon thereafter as is practicable, and from time to time, to furnish the Purchasers with copies of the Offering Circular, and any amendment or supplement containing amendments to the financial statements covered by such report(s), signed by the accountants, and additional written and electronic copies thereof in London in such quantities as the Representatives may reasonably request, and, if the delivery of an Offering Circular is required at any time prior to the expiration of six months after the time of issue of the Offering Circular in connection with the offering or sale of the Securities and if at such time any event shall have occurred as a result of which the Offering Circular 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 Offering Circular is delivered, not misleading, or, if for any other reason it shall be necessary or desirable during such same period to amend or supplement the Offering Circular or to file under the Exchange Act any document incorporated by reference in the Offering Circular in order to comply with the Exchange Act, to notify you and upon your request to file such document and to prepare and furnish without charge to each Purchaser and to any dealer in Securities as many written and electronic copies as you may from time to time reasonably request of an amended Offering Circular or a supplement to the Offering Circular which will correct such statement or omission or effect such compliance; 13 (d) During the period beginning from the date hereof and continuing to the date 90 days after the date hereof, (i) not to, directly or indirectly, offer, sell, contract to sell or otherwise dispose of, except as provided hereunder any securities of the Company or Shire that are substantially similar to the Securities, the Preference Shares, the ordinary shares or the ADSs, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, ordinary shares or any such substantially similar securities (other than pursuant to employee stock option plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this Agreement, including the Exchangeable Shares of Shire Acquisition Inc., Shire's unsecured convertible zero coupon loan note due to Arenol Corporation and any remaining shares of Roberts Pharmaceutical Corporation); and (ii) not to permit any of the officers and directors of Shire to engage in any of the aforementioned transactions on their own behalf, in each case without your prior written consent; provided, however, that (i) after September 8, 2001, Dr. Francesco Bellini may exercise options representing the right to receive up to 3,413,550 ordinary shares or ADSs representing 3,413,550 ordinary shares and sell or otherwise dispose of such ordinary shares or ADSs; and (ii) James Grant may exercise options representing the right to receive up to 179,321 ordinary shares or ADSs representing up to 179,321 ordinary shares and sell or dispose of such ordinary shares or ADSs; (e) Not to be or become, at any time prior to the expiration of three years after the last Time of Delivery, an open-end investment company, unit investment trust, closed-end investment company or face-amount certificate company that is or is required to be registered under Section 8 of the Investment Company Act; (f) If at any time Shire is exempt from registration under Section 12(b) of the Exchange Act and is not subject to Section 13 or 15(d) of the Exchange Act, for the benefit of holders from time to time of Securities, to furnish at its expense, upon request, to holders of Securities and prospective purchasers of Securities information satisfying the requirements of subsection (d)(4)(i) of Rule 144A under the Act; (g) To use their best efforts to cause the Securities to be eligible for the PORTAL trading system of the National Association of Securities Dealers, Inc.; (h) During a period of five years from the date of the Offering Circular, to furnish to you copies of all reports or other communications (financial or other) furnished to shareholders of Shire, and to deliver to you (i) as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any securities exchange on which any class of securities of Shire is listed; and (ii) such additional information otherwise generally made publicly available concerning the business and financial condition of Shire as you may from time to time reasonably request (such financial statements to be on a consolidated basis to the extent the accounts of Shire and its subsidiaries are consolidated in reports furnished to its shareholders generally or to the Commission); 14 (i) During the period of two years after the Time of Delivery, not to, and not to permit any of its "affiliates" (as defined in Rule 144 under the Act) to, resell any of the Securities that constitute "restricted securities" under Rule 144 that have been reacquired by any of them; (j) Not to (and to cause its subsidiaries not to) 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 or Shire to facilitate the issue or sale of the Securities, the Preference Shares, the ordinary shares or the ADSs; (k) To use the net proceeds received from the issue of the Securities pursuant to this Agreement in the manner specified in the Offering Circular under the caption "Use of Proceeds"; (l) In the case of Shire, to reserve and keep available at all times, free of preemptive rights, ordinary shares for the purpose of satisfying any obligation to issue ordinary shares in exchange for the Preference Shares; (m) To use their best efforts to have, subject to notice of issuance, the ordinary shares admitted to the official list of the UKLA and admitted to trading on the London Stock Exchange, and to comply with all filing and other requirements under the Companies Act, the FSA, the Listing Rules and all other relevant statutes and regulations; (n) To use their best efforts to have, prior to September 30, 2001, the Securities (i) admitted to the official list of the UKLA and admitted to trading on the London Stock Exchange or (ii) listed on the Luxembourg Stock Exchange; and (o) To pay or cause to be paid any stamp duty or stamp duty reserve tax imposed by the United Kingdom upon the issue of the ordinary shares to the Depositary. 6. The Company and Shire covenant and agree with the several Purchasers that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company's counsel and Shire's counsel and accountants in connection with the issue of the Securities, the Preference Shares issuable upon conversion of the Securities and the ordinary shares and ADSs issuable in exchange for the Preference Shares and all other expenses in connection with the preparation and printing of the Offering Circular and amendments and supplements thereto and the mailing and delivering of copies thereof to the Purchasers; (ii) all expenses in connection with the qualification of the Securities, the ordinary shares and the ADSs for offering and sale under state securities laws as provided in Section 5(b) hereof; (iii) all fees and expenses in connection with listing the Securities on the official list of the UKLA and admission of the Securities to trading on the London Stock Exchange; (iv) the cost of preparing certificates for the Securities; (v) any fees charged by securities rating services for rating the Securities; (vi) the fees and expenses of the Trustee and any agent of the Trustee and the fees and disbursements of counsel for the Trustee in connection with the Indenture and the Securities; (vii) the fees and expenses (including fees and disbursements of counsel), if any, of the Depositary and any custodian appointed under the Deposit Agreement, other than the fees and 15 expenses to be paid by holders of ADRs; (viii) any costs incurred in connection with the designation of the Securities for trading in PORTAL and the listing and admission of the ordinary shares and ADSs issuable in exchange for the Preference Shares; and (ix) the fees, disbursements and expenses of the Company's counsel and Shire's counsel and accountants in connection with the registration of the Securities, the ordinary shares and the ADSs under the Act. 7. The obligations of the Purchasers hereunder shall be subject, in their discretion, at each Time of Delivery, to the condition that all representations and warranties and other statements of the Company and Shire herein are, at and as of such Time of Delivery, true and correct, the condition that the Company and Shire shall have performed in all material respects all of their obligations hereunder theretofore to be performed, and the following additional conditions: (a) Cleary, Gottlieb, Steen & Hamilton, counsel for the Purchasers, shall have furnished to you such opinion or opinions, dated such Time of Delivery, in form and substance reasonably satisfactory to you; (b) Cahill, Gordon & Reindel, U.S. counsel for Shire, shall have furnished to you their written opinion, dated such Time of Delivery, in substantially the form attached hereto as Exhibit A; (c) Slaughter and May, English counsel for Shire, shall have furnished to you their written opinion, dated such Time of Delivery, in substantially the form attached hereto as Exhibit B; (d) Tatjana May, General Counsel of Shire, shall have furnished to you her written opinion, dated such Time of Delivery, in substantially the form attached hereto as Exhibit C; (e) Maples and Calder Europe, Cayman Islands counsel for the Company, shall have furnished to you their written opinion, dated such Time of Delivery, in substantially the form attached hereto as Exhibit D; (f) On the date of the Offering Circular prior to the execution of this Agreement and also at the Time of Delivery, Arthur Andersen shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to you, to the effect set forth in Exhibit E hereto; (g) (i) Neither Shire nor any of its subsidiaries shall have sustained since the date of the latest audited financial statements included or incorporated by reference in the Offering Circular 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 or incorporated by reference in the Offering Circular, and (ii) since the respective dates as of which information is given or incorporated by reference in the 16 Offering Circular there shall not have been any change in the capital stock or long-term debt of Shire 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 Shire and its subsidiaries, otherwise than as set forth or contemplated in the Offering Circular, the effect of which, in any such case described in clause (i) or (ii), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the issuance, sale or delivery of the Securities being delivered at such Time of Delivery on the terms and in the manner contemplated in the Offering Circular; (h) There shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the New York Stock Exchange, NASDAQ, the London Stock Exchange or the Toronto Stock Exchange; (ii) a suspension or material limitation in trading in the Company's securities on NASDAQ or the London Stock Exchange; (iii) a general moratorium on commercial banking activities in New York, the United Kingdom, Canada or the Cayman Islands declared by the relevant authorities; (iv) a change or development involving a prospective change in U.K. taxation adversely affecting Shire, the Company, the Securities or the transfer thereof or the imposition or proposal of exchange controls by the United States, the United Kingdom or the Cayman Islands; (v) the outbreak or escalation of hostilities involving the United States, the United Kingdom, Canada or the Cayman Islands or the declaration by the United States, the United Kingdom, Canada or the Cayman Islands of a national emergency or war, if the effect of any such event specified in this clause (v) in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the issuance, sale or delivery of the Securities on the terms and in the manner contemplated in the Offering Circular; or (vi) the occurrence of any material adverse change in the existing financial, political or economic conditions in the United States, the United Kingdom, Canada, the Cayman Islands or elsewhere which, in the judgment of the Representatives would materially and adversely affect the financial markets or the market for the Securities and other debt securities; (i) The Company, Shire and The Bank of New York shall have executed and delivered the Indenture and the Company and Shire shall have executed and delivered the Registration Rights Agreement; (j) The Securities shall have been designated for trading on PORTAL; (k) Shire shall have furnished or caused to be furnished to you lock-up letters from each of its officers and directors in form and substance satisfactory to you consistent with Section 5(d); (l) Shire shall have caused an election for the Company to be filed with the U.S. Internal Revenue Service to disregard the Company as an entity separate from its owner for U.S. federal income tax purposes, where the effective date of 17 that election shall be on or prior to the day preceding the date of issuance of the Securities; and (m) Each of the Company and Shire shall have furnished or caused to be furnished to you at such Time of Delivery certificates of its officers, satisfactory to you as to the accuracy of the representations and warranties of the Company and Shire herein at and as of such Time of Delivery, as to the performance by the Company and Shire, in all material respects, of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (g)(i) and (ii) of this Section and as to such other matters as you may reasonably request. 8. (a) The Company and Shire, jointly and severally, will indemnify and hold harmless each Purchaser against any losses, claims, damages or liabilities, joint or several, to which such Purchaser 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 the Offering Circular or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact necessary to make the statements therein not misleading, and will reimburse each Purchaser for any legal or other expenses reasonably incurred by such Purchaser in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company and Shire shall not be liable 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 the Offering Circular or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company or Shire by any Purchaser through the Representatives expressly for use therein. (b) Each Purchaser, severally and not jointly, will indemnify and hold harmless the Company and Shire against any losses, claims, damages or liabilities to which the Company or Shire 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 the Offering Circular or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact 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 the Offering Circular or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company or Shire by such Purchaser through the Representatives expressly for use therein; and will reimburse the Company and Shire for any legal or other expenses reasonably incurred by the Company or Shire in connection with investigating or defending any such action or claim as such expenses are incurred. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the 18 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 (who 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 unless such indemnified party shall have reasonably concluded that there may be defenses available to it that are different from or additional to those available to one or all of the indemnifying parties, in which case the indemnifying party's liability for the fees and expenses of the indemnified party's counsel shall continue. 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. (d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) 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 and/or Shire on the one hand and the Purchasers on the other from the issue and subscription of the Securities. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and/or Shire on the one hand and the Purchasers on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company and/or Shire on the one hand and the Purchasers on the other shall be deemed to be in the same proportion as the total net proceeds from the offering of the Securities subscribed under this Agreement (before deducting expenses) received by the Company and/or Shire bear to the total underwriting commissions received by the Purchasers with respect to the Securities subscribed under this Agreement, in each case as set forth in the Offering Circular. 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 or Shire 19 on the one hand or the Purchasers on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, Shire and the Purchasers agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation (even if the Purchasers 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 (d). 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 (d) 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 (d), no Purchaser shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to investors were offered to investors exceeds the amount of any damages which such Purchaser has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The Purchasers' obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint. The Company's and Shire's obligations under this subsection (d) are joint and several. (e) All sums payable to an indemnified party under this Section 8 shall be paid free and clear of all deductions or withholdings unless the deduction or withholding is required by law. If the deduction or withholding is required by U.K. law, the indemnified party shall be paid such additional amount as shall be required to ensure that the net amount received by the payee will equal the full amount which would have been received by it had no deduction or withholding been made; provided, however, that, to the extent that any indemnified party or any associated person actually receives a credit, relief, remission or repayment of any nature in respect of or relating to the deduction or withholding, the indemnified party shall pay an amount equal to the credit, relief, remission or repayment to the party who made the increased payment pursuant to this clause. (f) The obligations of the Company and Shire under this Section 8 shall be in addition to any liability which they may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Purchaser within the meaning of the Act; and the obligations of the Purchasers under this Section 8 shall be in addition to any liability which the respective Purchasers may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of Shire and the Company and to each person, if any, who controls Shire and the Company within the meaning of the Act. 9. (a) If any Purchaser shall default in its obligation to procure subscribers for or, failing which, to subscribe the Securities which it has agreed to do so hereunder at a Time of Delivery, you may in your discretion arrange for you or another party or other parties to subscribe such Securities on the terms contained herein. If within thirty-six hours after such default by any Purchaser you do not arrange for the subscription of such Securities, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to subscribe such Securities on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the subscription of such Securities, or the Company notifies you that it has so arranged for the 20 subscription of such Securities, you or the Company 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 Offering Circular, or in any other documents or arrangements, and the Company agrees to prepare promptly any amendments to the Offering Circular which in your opinion may thereby be made necessary. The term "Purchaser" 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 Securities. (b) If, after giving effect to any arrangements for the subscription of the Securities of a defaulting Purchaser or Purchasers by you and the Company as provided in subsection (a) above, the aggregate principal amount of such Securities which have not been subscribed does not exceed one-tenth of the aggregate principal amount of all the Securities to be issued at such Time of Delivery, then the Company shall have the right to require each non-defaulting Purchaser to procure subscribers for or, failing which, to subscribe the principal amount of Securities which such Purchaser agreed to do so hereunder at such Time of Delivery and, in addition, to require each non-defaulting Purchaser to procure subscribers for or, failing which, to subscribe its pro rata share (based on the principal amount of Securities which such Purchaser agreed to procure subscribers for or, failing which, to subscribe hereunder) of the Securities of such defaulting Purchaser or Purchasers for which such arrangements have not been made; but nothing herein shall relieve a defaulting Purchaser from liability for its default. (c) If, after giving effect to any arrangements for the subscription of the Securities of a defaulting Purchaser or Purchasers by you and the Company as provided in subsection (a) above, the aggregate principal amount of such Securities which remains unsubscribed exceeds one-tenth of the aggregate principal amount of all the Securities to be issued at such Time of Delivery, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Purchasers to procure subscribers for or, failing which, to subscribe, Securities of a defaulting Purchaser or Purchasers, then this Agreement (or, with respect to an Optional Time of Delivery, the obligation of the Purchasers to procure subscribers for or, failing which, to subscribe and of the Company to issue the Optional Securities) shall thereupon terminate, without liability on the part of any non-defaulting Purchaser or the Company, except for the expenses to be borne by the Company and the Purchasers as provided in Section 6 hereof and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve a defaulting Purchaser from liability for its default. 10. The respective indemnities, agreements, representations, warranties and other statements of the Company, Shire and the several Purchasers, 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 Purchaser or any controlling person of any Purchaser, the Company, Shire or any officer or director or controlling person of the Company or Shire and shall survive delivery of and payment for the Securities. 11. If this Agreement shall be terminated pursuant to Section 9 hereof, the Company and Shire shall not then be under any liability to any Purchaser except as provided in Section 6 and Section 8 hereof, but, if for any other reason any Securities are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Purchasers through Bear, 21 Stearns International Limited for all out-of-pocket expenses approved in writing by the Representatives, including fees and disbursements of counsel, reasonably incurred by the Purchasers in making preparations for the subscription, sale and delivery of the Securities not so delivered, but the Company shall then be under no further liability to any Purchaser in respect of the Securities 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 Purchasers, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Purchaser made or given by you jointly or by Bear, Stearns International Limited on your behalf. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Purchasers shall be delivered or sent by mail, telex or facsimile transmission to the Purchasers in care of Bear, Stearns International Limited, One Canada Square, London E14 5AD, Attention: Equity Capital Markets, facsimile no. +44 20 7516 5187, with a copy to; Goldman Sachs International, Peterborough Court, 133 Fleet Street, London EC4A 2BB, England, Attention: Equity Capital Markets, facsimile transmission no. +44 20 7774 5670; and if to the Company shall be delivered or sent by registered mail, telex or facsimile transmission to the address of the Company set forth in the Offering Circular, Attention: Company Secretary. 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 Purchasers, the Company, Shire and, to the extent provided in Sections 8 and 10 hereof, the officers and directors of the Company and Shire and each person who controls the Company, Shire or any Purchaser, 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 Securities from any Purchaser shall be deemed a successor or assign by reason merely of such purchase. 14. Time shall be of the essence of this Agreement. 15. Each of the parties hereto irrevocably (a) agrees that any legal suit, action or proceeding against the Company or Shire brought by any Purchaser or by any person who controls any Purchaser arising out of or based upon this Agreement or the transactions contemplated hereby or any other document delivered hereunder may be instituted in any U.S. federal or New York court located in the Borough of Manhattan, The City of New York, New York, (b) 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 (c) submits to the non-exclusive jurisdiction of such courts in any such suit, action or proceeding. Nothing herein shall preclude any legal suit, action or proceeding against the Company or Shire being instituted in a court in London, England. The Company has appointed CT Corporation System, New York, New York, 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 Purchaser or by any person who controls any Purchaser, 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. Such appointment shall be irrevocable. The Company represents and warrants 22 that the Authorized Agent has agreed to act as such agent for service of process and 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 in full force and effect as aforesaid. Service of process upon the Authorized Agent and written notice of such service to the Company shall be deemed, in every respect, effective service of process upon the Company. 16. In respect of any judgment or order given or made for any amount due hereunder that is expressed and paid in a currency (the "judgment currency") other than United States dollars, the Company and Shire will indemnify each Purchaser against any loss incurred by such Purchaser as a result of any variation as between (a) the rate of exchange at which the United States dollar amount is converted into the judgment currency for the purpose of such judgment or order and (b) the rate of exchange at which an Purchaser is able to purchase United States dollars with the amount of the judgment currency actually received by such Purchaser. The foregoing indemnity shall constitute a separate and independent obligation of the Company and Shire and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term "rate of exchange" shall include any premiums and costs of exchange payable in connection with the purchase of or conversion into United States dollars. The Company's and Shire's obligations under this Section 16 are joint and several. 17. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, United States of America. 18. 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. 23 If the foregoing is in accordance with your understanding, please sign and return to us five counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Purchasers, this letter and such acceptance hereof shall constitute a binding agreement among each of the Purchasers, Shire and the Company. Shire Finance Limited By: .............................................. Name: Title: Shire Pharmaceuticals Group plc By: .............................................. Name: Title: Accepted as of the date hereof: Bear, Stearns International Limited By:............................................ (Attorney-in-fact) Goldman Sachs International By:............................................ (Attorney-in-fact) On behalf of each of the Purchasers 24
SCHEDULE I Aggregate Principal Amount Aggregate Principal of Firm Amount of Optional Securities Securities to be to be Subscribed Subscribed if Maximum Option Exercised Purchaser Bear, Stearns International Limited.............................. $157,500,000 $180,000,000 Goldman Sachs International...................................... 157,500,000 180,000,000 Merrill Lynch International Limited.............................. 26,250,000 30,000,000 WestLB Panmure Limited........................................... 8,750,000 10,000,000 ------------------- -------------------------- Total.......................................... $350,000,000 $400,000,000 =================== ==========================
I-1 ANNEX I SELLING RESTRICTIONS (1) The Securities have not been and will not be registered under the Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S under the Act or pursuant to an exemption from the registration requirements of the Act. Each Purchaser represents that it has offered and sold the Securities, and will offer and sell the Securities (i) as part of their distribution at any time and (ii) otherwise until 40 days after the later of the commencement of the offering and the Time of Delivery, only in accordance with Rule 903 of Regulation S or Rule 144A under the Act. Accordingly, each Purchaser agrees that neither it, its affiliates nor any persons acting on its or their behalf has engaged or will engage in any directed selling efforts with respect to the Securities, and it and they have complied and will comply with the offering restrictions requirement of Regulation S. Each Purchaser agrees that, at or prior to confirmation of sale of Securities (other than a sale pursuant to Rule 144A), it will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases Securities from it during the restricted period a confirmation or notice to substantially the following effect: "The Securities covered hereby have not been registered under the U.S. Securities Act of 1933 (the "Securities Act") and may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering and the closing date, except in either case in accordance with Regulation S (or Rule 144A if available) under the Securities Act. Terms used above have the meaning given to them by Regulation S." Terms used in this paragraph have the meanings given to them by Regulation S. Each Purchaser further agrees that it has not entered and will not enter into any contractual arrangement with respect to the distribution or delivery of the Securities, except with its affiliates or with the prior written consent of the Company. (2) Notwithstanding the foregoing, Securities in registered form may be offered, sold and delivered by the Purchasers in the United States and to U.S. persons pursuant to Section 3 of this Agreement without delivery of the written statement required by paragraph (1) above. (3) Each Purchaser further represents and agrees that (a) it has not offered or sold and will not offer or sell any Securities to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995, (b) it has complied, and will comply, with all applicable provisions of the Financial Services Act of 1986 of Great Britain with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom, and (c) it has only issued or passed on and will only issue or pass on in the United Kingdom any document received by it in connection with the issuance of the Securities to a person who is of a kind described in Article 11(3) of the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 of Great Britain or is a person to whom the document may otherwise lawfully be issued or passed on. (4) Each Purchaser agrees that it will not offer, sell or deliver any of the Securities in any jurisdiction outside the United States except under circumstances that will result in compliance with the applicable laws thereof, and that it will take at its own expense whatever action is required to permit its purchase and resale of the Securities in such jurisdictions. Each Purchaser 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. Each Purchaser agrees not to cause any advertisement of the Securities to be published in any newspaper or periodical or posted in any public place and not to issue any circular relating to the Securities, except in any such case with the Representatives' express written consent and then only at its own risk and expense. (5) Each Purchaser agrees that it will not offer, sell, transfer or deliver Securities in or from The Netherlands, as part of their initial distribution or as part of any re-offering, and will not distribute or circulate the Offering Circular or any other document in respect of the offering in The Netherlands, other than to individuals or legal entities which include, but are not limited to, banks, brokers, dealers, institutional investors and undertakings with a treasury department, who or which trade or invest in securities in the conduct of a business or profession. (6) No invitation to the public in the Cayman Islands to subscribe for or purchase any of the Securities or Preference Shares may be made unless the Company is, at the relevant time, listed on the Cayman Islands Stock Exchange. I-2 EXHIBIT A Cahill, Gordon & Reindel, U.S. counsel for Shire, shall furnish an opinion pursuant to Section 7(b) in the following form: [to come] A-1 EXHIBIT B Slaughter and May, English counsel to Shire, shall furnish an opinion pursuant to Section 7(c) in the following form: [to come] B-1 EXHIBIT C Tatjana May, General Counsel of Shire, shall furnish an opinion pursuant to Section 7(d) in the following form: (i) As of July 23, 2001, Shire had been duly qualified as a foreign corporation for the transaction of business and, to the best of such counsel's knowledge, (a) was 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, or (b) was subject to no material liability or disability by reason of the 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 Shire, provided that such counsel shall state that they believe that both you and they are justified in relying upon such opinions and certificates); (ii) To the best of such counsel's knowledge and other than as set forth in the Offering Circular, there are no legal or governmental proceedings pending to which Shire or any of its subsidiaries is a party or of which any property of Shire or any of its subsidiaries is the subject which, if determined adversely to Shire or any of its subsidiaries, would individually or in the aggregate have a Material Adverse Effect; and, to the best of such counsel's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; and (iii) To the best of such counsel's knowledge, neither Shire nor any of its subsidiaries is in violation of its Articles of Incorporation or By-laws or in default in the performance or observance of any obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound, except for any such conflict, breach, violation or default which would not have a Material Adverse Effect; (iv) Shire has an authorized capitalization as set forth in the Offering Circular, and all of the issued shares of capital stock of Shire have been duly and validly authorized and issued and are fully paid and non-assessable; and the ordinary shares issuable in exchange for the Preference Shares have been duly and validly authorized and reserved for issuance and, when issued and delivered in accordance with the provisions of the Preference Shares and the Indenture will be duly and validly issued and fully paid and non-assessable; and (v) To the best of such counsel's knowledge, the issue of the ordinary shares upon exchange of the Preference Shares and Shire's execution and compliance with all of the provisions of the Indenture, the Registration Rights Agreement, the Guarantee, the Deposit Agreement and this 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 Shire or any of its subsidiaries is a party or by which Shire or any of its subsidiaries is bound or to which any of the property or assets of Shire or any of its subsidiaries is subject, except for any such conflict, breach, violation or default which would not have a Material Adverse Effect. C-1 EXHIBIT D Maples and Calder Europe, Cayman Islands counsel for the Company, shall deliver an opinion pursuant to Section 7(e) in the following form: We have acted as Cayman Islands legal advisers to Shire Finance Limited (the "Issuer") in connection with its issue of US$350,000,000 (subject to over allotment) 2% Senior Guaranteed Convertible Notes due 2011 (the "Notes") unconditionally and irrevocably guaranteed by Shire Pharmaceuticals Group plc (the "Guarantor") and convertible into Exchangeable Redeemable Preference Shares in the Issuer (the "Preference Shares"). We are giving this opinion to you pursuant to the purchase agreement (the "Purchase Agreement") dated 15 August, 2001 between the Issuer, the Guarantor, Bear, Stearns International Limited and Goldman Sachs International and the other purchasers named therein (together, the "Purchasers"). We understand that the Notes will be constituted by the Indenture (as defined below). For the purposes of this opinion, we have reviewed only originals, copies or final forms or drafts of the following documents: (a) the certificate of incorporation of the Issuer dated 19th July, 2001 and the amended and restated memorandum and articles of association of the Issuer as adopted on [ ] August, 2001; (b) the register of directors and officers, the register of mortgages and charges and the register of members of the Issuer as maintained at its registered office in the Cayman Islands; (c) the minutes of the meetings of the board of directors of the Issuer held on [ ] and [ ] August 2001 and the corporate records of the Issuer maintained at its registered office in the Cayman Islands; (d) a certificate from a director of the Issuer dated [ ] August, 2001 a copy of which is attached hereto (the "Director's Certificate"); (e) the Purchase Agreement; (f) the offering circular (the "Offering Circular") dated [ ] August, 2001 relating to the issue of the Notes; (g) the form of the Indenture (the "Indenture") between the Issuer, the Guarantor and the Trustee and including the form of the Rule 144A Global Note and the Regulation S Global Note set out in the Schedules thereto (together, "the Global Notes"); and (h) the form of the Registration Rights Agreement between the Issuer, the Guarantor and the Purchasers (the "Registration Rights Agreement"). D-1 Save as aforesaid we have not been instructed to undertake and have not undertaken any further enquiry or due diligence in relation to the transaction the subject of this opinion and the following opinions are given only as to and based on circumstances and matters of fact existing at the date hereof and of which we are aware consequent upon the instructions we have received in relation to the matter the subject of this opinion and as to the laws of the Cayman Islands as the same are in force at the date hereof. In giving this opinion, we have relied upon the completeness and accuracy (and assumed the continuing completeness and accuracy as at the date hereof) of the Director's Certificate without further verification and have relied upon the following assumptions, which we have not independently verified: (i) The Purchase Agreement, the Indenture and the Registration Rights Agreement (collectively, the "Agreements") and the Notes (which expression includes, for the purposes of this opinion, the Global Notes) have been duly authorised, executed, delivered and (if appropriate) authenticated and registered by or on behalf of all relevant parties (other than the Issuer). (ii) The Agreements and the Notes are, or will be, legal, valid, binding and enforceable against all relevant parties in accordance with the laws of New York and all other relevant laws (other than, with respect to the Issuer, the laws of the Cayman Islands). (iii) The power, authority and legal right of all parties under all relevant laws and regulations (other than, with respect to the Issuer, the laws of the Cayman Islands) to enter into, execute and perform their respective obligations under the Agreements or to buy, hold or sell the Notes. (iv) The choice of the laws of New York as the governing law of the Agreements and the Notes has been made by all parties in good faith and would be regarded as a valid and binding selection which will be upheld by the courts of New York as a matter of the laws of New York and by all other courts under all other relevant laws (other than the laws of the Cayman Islands). (v) Copy documents or drafts of documents provided to us are true and complete copies of, or in the final forms of, the originals. (vi) The genuineness of all signatures, seals and initials. (vii) All conditions precedent contained in the Agreements have been satisfied or duly waived and there has been no breach of the terms of the Agreements at the date hereof. (viii) The Notes will be issued in accordance with the provisions of the Indenture. (ix) There is no contractual or other prohibition (other than as may arise by virtue of the laws of the Cayman Islands) binding on the Issuer or on any other party D-2 prohibiting it from entering into and performing its obligations under the Agreements or the Notes. (x) The Issuer is not a sovereign entity of any State and is not a subsidiary, direct or indirect of any sovereign entity or State. (xi) No invitation has been or will be made by or on behalf of the Issuer to the public in the Cayman Islands to subscribe for any of the Notes. The following opinions are given only as to matters of Cayman Islands law and we have assumed that there is nothing under any other law that would affect or vary the following opinions. Specifically we have made no investigation of the laws of New York and we offer no opinion in relation thereto. Based upon the foregoing and subject to the qualifications set out below and having regard to such legal considerations as we deem relevant, we are of the opinion that: (i) The Issuer has been duly incorporated as an exempted company with limited liability for an unlimited duration and is validly existing under the laws of the Cayman Islands with full corporate power and authority to own its property and assets and to carry on its business in accordance with its memorandum and articles of association and to enter into and execute and perform its obligations under the Agreements and the Notes including the issue and offer of the Notes and the allotment and issue of the Preference Shares. The Amended and Restated Memorandum and Articles of Association of the Issuer dated [ ] August, 2001 have been validly adopted. (ii) The execution and delivery of the Agreements and the issue and offer of the Notes by the Issuer and the issue and allotment of the Preference Shares and the performance of its obligations thereunder have been duly authorised and approved by all necessary corporate action of the Issuer and do not violate, conflict with or result in a breach of any of the terms or provisions of its memorandum and articles of association or any law, public rule or regulation applicable to the Issuer in the Cayman Islands currently in force and do not violate, conflict with or result in a breach of any existing order or decree of any governmental authority or agency or any official body in the Cayman Islands. (iii) Each of the Agreements has been duly executed and delivered for and on behalf of the Issuer and constitutes a legal, valid and binding obligation of the Issuer enforceable in accordance with its terms except and in so far as such enforcement may be limited as hereinafter set forth. The Notes, when paid for, registered and issued in accordance with the Indenture, will constitute the legal, valid and binding obligations of the Issuer and, to the extent so enforceable as a matter of the proper governing law thereof, enforceable in accordance with their respective terms except and insofar as such enforcement may be limited as hereinafter set forth. D-3 (iv) Assuming the same to be the case as a matter of its governing law (which we have assumed is New York law) (i) the payment obligations under the Notes will constitute unsecured and unsubordinated obligations of the Issuer; and (ii) claims in respect of the Notes shall rank pari passu and without any preference among themselves with all other present and future unsecured and unsubordinated obligations of the Issuer, except for those obligations of the Issuer which are mandatorily preferred by law. (v) No authorisations, consents, orders, permissions or approvals are required from any governmental authorities or agencies or other official bodies in the Cayman Islands and no notice to or other filing with or action by any Cayman Islands governmental authority or regulatory body is required in connection with: (1) the issue of the Offering Circular; (2) the execution and delivery of the Agreements; (3) the execution, authentication, issue or delivery of the Notes; (4) the performance of any obligation under the Notes or the Agreements; (5) the payment of the principal, premium (if any), interest or any additional amount payable under the Notes; or (6) the allotment and issue of the Preference Shares. (vi) It is not necessary to ensure the legality, validity, enforceability or admissibility in evidence of the Agreements or the Notes that any document be filed, recorded or enrolled with any governmental department, agency or other authority in the Cayman Islands. There is no requirement of Cayman Islands law that the Offering Circular should be filed, recorded or enrolled with any governmental department, agency or other authority in the Cayman Islands. (vii) No stamp duties or other similar taxes or charges are payable under the laws of the Cayman Islands in respect of the execution or delivery of the Agreements or the Notes or the performance or enforcement of any of them, unless they are executed in or thereafter brought within the jurisdiction of the Cayman Islands (e.g. for the purposes of enforcement) in which case stamp duty of (i) CI$2.00 (US$3) for each of the Agreements other than the Indenture and CI$100 (US$122) for the Indenture and (ii) 0.25% of the principal amount specified on the face of each Note up to a maximum of CI$250.00 (US$305) unless CI$500.00 (US$610) has been paid in respect of the entire issue of Notes, may be payable. An instrument of transfer in respect of a Note if executed in or brought within the jurisdiction of the Cayman Islands will be subject to a Cayman Islands stamp duty of CI$100.00 (US$122). Subject as aforesaid, a holder of a Note will not incur or become liable for any transfer or other similar taxes or charges under the laws of the Cayman Islands by reason of the acquisition, ownership, conversion or disposal of the D-4 Notes. No stamp duties or other similar taxes or charges are payable under the laws of the Cayman Islands in respect of the allotment or issue of the Preference Shares or the exchange thereof in accordance with the Articles of Association of the Issuer. Nominal Cayman Islands stamp duty will be payable in respect of any instrument of transfer of the Preference Shares if executed or brought within the Cayman Islands. (viii) There are currently no taxes or other charges or deductions payable (by withholding or otherwise) to the Cayman Islands Government or any taxing authority thereof either (i) on or by virtue of the execution, delivery, authentication (if appropriate) or enforcement of the Agreements or the Notes or (ii) on any payment of any nature to be made by the Issuer under any of the Agreements or the Notes. The Cayman Islands currently have no income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax. There are currently no Cayman Islands taxes or other charges or deductions of any nature on gains realised on a sale, exchange, conversion, transfer or redemption of a Note. (ix) The choice of the laws of New York to govern the Agreements and the Notes will be upheld as a valid choice of law under the laws of the Cayman Islands and the courts of the Cayman Islands would uphold such choice of law in a suit on the Agreements or the Notes brought in the courts of the Cayman Islands, assuming it is so pleaded. An action against the Issuer in the Cayman Islands under the Agreements or the Notes could be instituted in the Grand Court, which has jurisdiction over the Issuer, without first having to obtain a judgment in respect of the Agreements or the Notes in a court of New York for any other relevant jurisdiction. In the event of any proceedings being brought in the Cayman Islands courts in respect of a monetary obligation expressed to be payable in a currency other than Cayman Islands dollars, a Cayman Islands court would give judgment expressed as an order to pay such currency or its Cayman Islands dollar equivalent at the time of payment or enforcement of the judgment. (x) The submission to the jurisdiction of the courts of New York, and the appointment of an agent to accept service of process in such jurisdiction, is legal, valid and binding on the Issuer. (xi) Although there is no statutory enforcement in the Cayman Islands of judgments obtained in New York courts, the courts of the Cayman Islands will recognise and enforce a judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided that such judgment is final and conclusive, for a liquidated sum, not in respect of taxes or a fine or penalty, is not inconsistent with a Cayman Islands judgment in respect of the same matter, and was not obtained in a manner and is not of a kind the enforcement of which is contrary to the public policy of the Cayman Islands. A Cayman Islands court may stay proceedings if concurrent proceedings are being brought elsewhere. A foreign judgment may be final and conclusive even if subject to appeal. However, if appealable, a Cayman Islands court may stay enforcement until such appeal has been heard. A judgment D-5 with respect to a debt (including interest) which is lawfully due is not normally of a kind the enforcement of which the Cayman Islands courts would consider to be contrary to the public policy of the Cayman Islands. (xii) Based on our review of the Register of Writs and other Originating Process for the period since incorporation, there are no actions pending against the Issuer in the Grand Court of the Cayman Islands on [ ] August, 2001. A search at the Companies Registry in the Cayman Islands would not reveal any order or resolution for the winding up of the Issuer because under Cayman Islands law the records kept by the Registrar of Companies are not documents of public record. The enquiries referred to above which we have made at the Grand Court of the Cayman Islands have revealed no record of the presentation of any winding up petition in respect of the Issuer. We assume that there has been no change in this position since the date on which the enquiries were made. (xiii) None of the Purchasers, the Trustee or the holders of Notes or the Preference Shares will be treated as resident, domiciled or carrying on or transacting business or subject to taxation in the Cayman Islands or in violation of any law thereof solely by reason of the negotiation, preparation or execution of the Agreements or the issue of the Notes or the Preference Shares or the entering into of or the exercise of their rights or the performance of their obligations under the Agreements, the Notes or the Preference Shares. (xiv) None of the Purchasers, the Trustee or the holders of Notes will be required to be licensed, qualified, or otherwise entitled to carry on business in the Cayman Islands in order to enforce their respective rights under, or as a consequence of the execution, delivery and performance of the Agreements or the issue of the Notes. (xv) There is no exchange control legislation under Cayman Islands law and accordingly there are no exchange control regulations imposed under Cayman Islands law. (xvi) The taxation section in the Offering Circular under the heading "Cayman Islands Tax Considerations", so far as it relates to taxation within and from the Cayman Islands, is correct in all material respects. (xvii) In any legal proceedings taken in the Cayman Islands in relation to the Agreements or the Notes, the Issuer will not be entitled to claim for itself or any of its assets immunity from suit, execution, attachment or other legal process. This opinion is subject to the following qualifications and limitations: (5) The term "enforceable" as used above means that the obligations assumed by the Issuer under the relevant instrument are of a type which the courts of the Cayman Islands enforce. D-6 It does not mean that those obligations will necessarily be enforced in all circumstances in accordance with their terms. In particular: (f) enforcement may be limited by bankruptcy, insolvency, liquidation, reorganisation, readjustment of debts or moratorium or other laws of general application relating to or affecting the rights of creditors; (g) enforcement may be limited by general principles of equity - for example, equitable remedies such as specific performance may not be available, inter alia, where damages are considered to be an adequate remedy; (h) claims may become barred under the statutes of limitation or may be or become subject to defences of set-off, counterclaim, estoppel and similar defences; (i) where obligations are to be performed in a jurisdiction outside the Cayman Islands, they may not be enforceable in the Cayman Islands to the extent that performance would be illegal under the laws of that jurisdiction; (j) provisions, for example, for the payment of additional interest in certain circumstances, may be unenforceable to the extent a court of the Cayman Islands determines such a provision to be a penalty; and (k) enforcement may be limited by the principle of forum non conveniens or analogous principles notwithstanding any purported waiver of such principle by any of the parties. (6) With respect to winding up proceedings, Cayman Islands law may require that all claims or debts of the Issuer are converted into its functional currency of account at the exchange rate ruling at the date of commencement of the winding up. (7) A certificate, determination, calculation or designation of any party to the Agreements as to any matter provided in any of the Notes or any of the Agreements might be held by a Cayman Islands court not to be conclusive, final and binding if, for example, it could be shown to have an unreasonable or arbitrary basis or in the event of manifest error. (8) Pursuant to the Grand Court Rules, 1995, Order 62, rule 2, the Grand Court of the Cayman Islands will award costs in litigation in accordance with contractual provisions in this regard but we have reservations as to the way this rule of court will apply in practice. While it is clear that the legal fees and expenses incurred before judgment in enforcing a contract can be recovered in accordance with the terms of that contract, it is likely that any legal fees and expenses incurred after judgment will be recoverable, if at all, in accordance with the rules laid down in the Grand Court (Taxation of Costs) Rules, 1995. D-7 (9) We have reservations as to the ability of a party to obtain a judgment for payment of interest at default rates (as against prescribed court rates) after judgment in the courts of the Cayman Islands. (10) If any provision of a document is held to be illegal, invalid or unenforceable, severance of such provision will be subject to the discretion of the Cayman Islands courts notwithstanding any express contractual provisions in this regard. (11) Any term of the Agreements may be amended orally by the parties thereto notwithstanding provisions to the contrary contained therein. (12) Any obligations of the Issuer under the Agreements and the Notes to any person or body connected with, resident in, incorporated in or constituted under the laws of any country (an "Affected Country" presently including Afghanistan, Angola, Ethiopia, Eritrea, Federal Republic of Yugoslavia, Haiti, Iraq, Liberia, Libya, Rwanda, Serbia and Montenegro, Sierra Leone and Somalia); or exercising public functions in any Affected Country or any person or body controlled by any of the foregoing or any person acting on behalf of any of the foregoing may be subject to restrictions or limitations. (13) In certain circumstances provisions in the Agreements or the Notes that (i) the election of a particular remedy does not preclude recourse to one or more others, or (ii) delay or failure to exercise a right or remedy will not operate as a waiver of any such right or remedy, may not be enforceable. (14) Based on principles of privity of contract, any indemnity or other provision of the Agreements or the Notes (not being in the form of a deed) which is expressed to be in favour of persons who are not parties to the Agreements or holders of Notes may not be enforceable by such persons in the absence of a trust in their favour. (15) Whilst parties to an agreement may agree inter se that respective rights and obligations take effect "as of" a date prior to the date of execution and delivery, the rights of third parties, to the extent that the same may be available thereunder, only take effect from the date of actual execution and delivery. (16) Entries must be made in the register of mortgages and charges of the Issuer in respect of all mortgages and charges created by the Issuer under any of the Agreements in order to comply with the requirements of the Companies Law (2001 Second Revision) of the Cayman Islands. Failure by the Issuer to comply with this requirement does not operate to invalidate any mortgage or charge, though it may be in the interests of the secured parties that the Issuer should comply with the statutory requirements. (17) A Cayman Islands court may set aside transactions which are not entered into on behalf of a company bona fide and in its interests and where another party to the transaction exhibits the requisite bad faith. In circumstances where the court finds that the directors of a D-8 company have acted in breach of their fiduciary duties to the company, the court may find such directors liable in damages for loss sustained by the company or its creditors as a result. (14) The irrevocable appointment of an agent for service of process may, as between the appointor and the agent, be revoked by the appointor unless given to secure (i) a proprietary interest of the agent or (ii) the performance of an obligation owed to the agent. (15) Currency indemnity provisions, so far as we are aware, have not been tested in the Cayman Islands courts and may not be effective in all circumstances. (16) We express no opinion in the event that the Issuer owns the Notes. Except as specifically stated herein, we make no comment with respect to any representations and warranties which may be made by or with respect to the Issuer in any of the Agreements, the Offering Circular or otherwise with respect to the commercial terms of the transactions the subject of this opinion. D-9 ANNEX II Pursuant to Section 7(f) of the Purchase Agreement, Ernst & Young, accountants to Shire, shall furnish letters to the Purchasers to the effect that: [to come] EX-4.8 7 shirepsga.txt PREFERENCE SHARES GUARANTEE AGREEMENT EXECUTION COPY -------------------------------------------------------------------------------- PREFERENCE SHARES GUARANTEE AGREEMENT SHIRE FINANCE LIMITED SHIRE PHARMACEUTICALS GROUP PLC GUARANTOR THE BANK OF NEW YORK GUARANTEE TRUSTEE ------------------------------ Dated as of August 21, 2001 -------------------------------------------------------------------------------- CROSS-REFERENCE TABLE(1) Section of Trust Indenture Act Section of of 1939, as amended Guarantee 310(a) ................................................... 4.01(a) 310(b) .................................................... 2.09, 4.01(c) 310(c) .................................................... Inapplicable 311(a) .................................................... 2.02(b) 311(b) .................................................... 2.02(b) 311(c) .................................................... Inapplicable 312(a) .................................................... 2.02(a) 312(b) .................................................... 2.02(b) 313 ....................................................... 2.03 314(a) .................................................... 2.04 314(b) .................................................... Inapplicable 314(c) .................................................... 2.05 314(d) .................................................... Inapplicable 314(f) .................................................... Inapplicable 315(a) .................................................... 3.01(c), 3.01(d) 315(b) .................................................... 2.07 315(c) .................................................... 3.01(c) 315(d) .................................................... 3.01(d) 316(a) .................................................... 2.08 ---------- 1 This Cross-Reference Table does not constitute part of the Guarantee and shall not affect the interpretation of any of its terms or provisions. TABLE OF CONTENTS PAGE ARTICLE 1 DEFINITIONS AND INTERPRETATION SECTION 1.01. Definitions and Interpretation.................................1 ARTICLE 2 TRUST INDENTURE ACT SECTION 2.01. Trust Indenture Act; Application..........................4 SECTION 2.02. Lists of Holders of Securities............................4 SECTION 2.03. Reports by the Guarantee Trustee..........................5 SECTION 2.04. Periodic Reports to Guarantee Trustee.....................5 SECTION 2.05. Evidence of Compliance with Conditions Precedent..........5 SECTION 2.06. Events of Default; Waiver.................................5 SECTION 2.07. Event of Default; Notice..................................5 SECTION 2.08. Rights of Holders.........................................6 SECTION 2.09. Conflicting Interests.....................................6 ARTICLE 3 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE SECTION 3.01. Powers, Duties and Rights of Guarantee Trustee.................6 SECTION 3.02. Certain Rights of Guarantee Trustee............................8 SECTION 3.03. Not Responsible for Recitals or Issuance of Guarantee.........10 ARTICLE 4 GUARANTEE TRUSTEE SECTION 4.01. Guarantee Trustee; Eligibility................................10 SECTION 4.02. Appointment, Removal and Resignation of Guarantee Trustee....................................................11 ARTICLE 5 GUARANTEE SECTION 5.01. Guarantee.....................................................11 SECTION 5.02. Waiver of Notice and Demand...................................12 SECTION 5.03. Obligations Not Affected......................................12 SECTION 5.04. Action Against Guarantor......................................13 SECTION 5.05. Independent Obligations.......................................13 SECTION 5.06. Subrogation...................................................13 i ARTICLE 6 RANKING SECTION 6.01. Ranking.......................................................14 ARTICLE 7 REPRESENTATIONS AND WARRANTIES; AGREEMENTS OF THE GUARANTOR SECTION 7.01 Representations and Warranties of the Guarantor................14 SECTION 7.02. Agreements of the Guarantor...................................14 ARTICLE 8 TERMINATION SECTION 8.01. Termination...................................................17 ARTICLE 9 INDEMNIFICATION SECTION 9.01. Exculpation...................................................17 SECTION 9.02. Indemnification...............................................17 ARTICLE 10 MISCELLANEOUS SECTION 10.01. Successors and Assigns.......................................18 SECTION 10.02. Amendments...................................................18 SECTION 10.03. Judgment Currency Indemnity..................................18 SECTION 10.04. Assignment of the Guarantor..................................19 SECTION 10.05. Notices......................................................19 SECTION 10.06. Governing Law................................................20 SECTION 10.07. Jurisdiction and Service of Process..........................20 ii This PREFERENCE SHARES GUARANTEE AGREEMENT (the "Guarantee") dated as of August 21, 2001, is executed and delivered by Shire Pharmaceuticals Group plc, a public limited company organized under the laws of England (the "Guarantor" or the "Company"), and The Bank of New York, a New York banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of any Holders (as defined herein) from time to time of the Preference Shares (as defined herein) of Shire Finance Limited, an exempted limited company duly organized and existing under the laws of the Cayman Islands (the "Issuer"). WHEREAS, pursuant to an Indenture dated as of August 21, 2001 among the Issuer, the Company and The Bank of New York, as trustee (the "Indenture"), the Issuer is issuing on the date hereof 2.0% Guaranteed Convertible Senior Notes Due 2011 (the "Securities") convertible into Exchangeable Redeemable Preference Shares with a nominal value of $1 each (the "Preference Shares") in the capital of the Issuer; WHEREAS, as incentive for the initial purchasers to purchase the Securities, the Guarantor desires irrevocably and unconditionally to agree, to the extent set forth herein, to pay to any subsequent Holders from time to time of the Preference Shares the Guarantee Payments (as defined herein), to make certain other payments and to give certain covenants, on the terms and conditions set forth herein; NOW, THEREFORE, in consideration of the purchase by the initial purchasers and any subsequent holder from time to time of Securities, which purchase the Guarantor hereby agrees shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee for the benefit of any and all Holders and subsequent Holders from time to time of the Preference Shares. ARTICLE 1 DEFINITIONS AND INTERPRETATION SECTION 1.01. Definitions and Interpretation. In this Guarantee, unless the context otherwise requires: (a) capitalized terms used in this Guarantee but not defined in the preamble above have the respective meanings assigned to them in this Section 1.01; (b) Capitalized terms used in this Guarantee but not defined in the preamble above or in this Section 1.01 have the respective meanings assigned to them in the Indenture; (c) a term defined anywhere in this Guarantee has the same meaning throughout; (d) all references to "the Guarantee" or "this Guarantee" are to this Guarantee as modified, supplemented or amended from time to time; 1 (e) all references in this Guarantee to Articles and Sections are to Articles and Sections of this Guarantee, unless otherwise specified; and (f) a reference to the singular includes the plural and vice versa. "ADR Depositary" means any depositary for the deposit of Ordinary Shares against the issuance of ADRs evidencing ADSs representing such Ordinary Shares. "ADRs" has the meaning set forth in Section 7.02(d). "ADSs" means American depositary shares, each initially representing three Ordinary Shares. "Affiliate" means, with respect to any specified person, any other person that directly or indirectly controls or is controlled by, or is under common control with, such specified person. "Articles" means the Amended and Restated Memorandum and Articles of Association of the Issuer, as may be further amended and restated from time to time. "Authorized Officer" of a Person means any Person that is authorized to bind such Person. "Business Day" has the meaning set forth for such terms in the Indenture. "Company" has the meaning set forth in the first paragraph of this Guarantee. "Conversion and Exchange Rights" means the right of each holder of Securities to convert Securities into Preference Shares which shall be exchanged, pursuant and subject to the Indenture, the terms of the Securities, the Articles of the Issuer and this Guarantee, into Ordinary Shares or, at the option of the Holder, ADSs, at any time up to and including August 14, 2011. "Corporate Trust Office" means the principal trust office of the Guarantee Trustee at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at 101 Barclay Street, Floor 21 West, New York, NY 10286, Attention: Corporate Trust Administration. "Covered Person" means any Holder or beneficial owner of Preference Shares. "Dividend Payment Date" has the meaning specified for such term in the Articles. "Dividend Period" has the meaning specified for such term in the Articles. "Dividend Rate" means a fixed rate per annum of 2,000% of the nominal value of each Preference Share. "Dividends" means cash income dividends and other distributions with respect to the Preference Shares. 2 "Event of Default" means a default by the Guarantor on any of its payment or other obligations under this Guarantee. "Guarantee Payments" has the meaning set forth in Section 5.01. "Guarantee Trustee" means The Bank of New York, a New York banking corporation, until a Successor Guarantee Trustee has been appointed and has accepted such appointment pursuant to the terms of this Guarantee by executing a counterpart hereof and becoming a party hereto and thereafter means each such Successor Guarantee Trustee. "Guarantor" has the meaning set forth in the first paragraph of this Guarantee. "Holder" means a Person in whose name a Preference Share is registered on the books and records of the Issuer; provided that solely for the purposes of determining whether the Holders of the requisite liquidation preference of Preference Share have given any request, notice, consent or waiver with respect to any matter provided for in this Agreement, "Holder" shall not include the Guarantor or any Affiliate of the Guarantor. "Indemnified Person" means the Guarantee Trustee, any Affiliate of the Guarantee Trustee, or any officer, director, shareholder, member, partner, employee, representative, nominee, custodian or agent of the Guarantee Trustee. "Indenture" has the meaning set forth in the first recital to this Guarantee. "Investment Company Act" means the U.S. Investment Company Act of 1940, as amended from time to time, or any successor legislation. "Issuer" has the meaning set forth in the first paragraph of this Guarantee. "Majority" means, except as provided by the Trust Indenture Act, a vote by Holder(s) of Preference Shares, voting separately as a class, of more than 50% of the liquidation preference of all Preference Shares. "Officers' Certificate" means, with respect to any Person, a certificate signed by two Authorized Officers of such Person. "Ordinary Shares" means the ordinary shares, nominal value U.K. five pence per share, of the Company at the date of this instrument as originally executed. Shares issuable on conversion of Preference Shares shall include only Ordinary Shares or shares of any class or classes of ordinary shares resulting from any reclassification or reclassifications thereof; provided, however, that if at any time there shall be more than one such resulting class, the shares so issuable on conversion of Preference Shares shall include shares of all such classes, and the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications. "Preference Shares" has the meaning set forth in the first recital to this Guarantee. 3 "Person" means a legal person, including any individual, corporation, estate, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated association, or government or any agency or political subdivision thereof or any other entity of whatever nature. "Redemption Price" has the meaning set forth in Section 5.01(ii). "Register" has the meaning set forth in Section 2.02. "Responsible Officer" means, with respect to the Guarantee Trustee, any officer within the Corporate Trust Office of the Guarantee Trustee, including any vice president, any assistant vice president, any secretary, any assistant secretary, the treasurer, any assistant treasurer or other officer of the Guarantee Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of that officer's knowledge of and familiarity with the particular subject. "Securities Act" means the U.S. Securities Act of 1933, as amended from time to time, or any successor legislation. "Successor Guarantee Trustee" means a successor Guarantee Trustee possessing the qualifications to act as Guarantee Trustee under Section 4.01. "Trust Indenture Act" means the U.S. Trust Indenture Act of 1939, as amended from time to time, or any successor legislation. ARTICLE 2 TRUST INDENTURE ACT SECTION 2.01. Trust Indenture Act; Application. (a) This Guarantee is subject to the provisions of the Trust Indenture Act that are required to be part of this Guarantee and shall, to the extent applicable, be governed by such provisions. A term defined in the Trust Indenture Act has the same meaning when used in this Guarantee, unless otherwise defined in this Guarantee or unless the context otherwise requires. (b) If and to the extent that any provision of this Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall control. SECTION 2.02. Lists of Holders of Securities. (a) The Guarantee Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders of Preference Shares (the "Register") and shall at all times keep the Register outside the United Kingdom. If the Guarantee Trustee is not the keeper of the Register, the Guarantor shall furnish to the Guarantee Trustee (i) within 14 days after each record date for payment of Dividends and (ii) at any other time within 30 days of receipt by the Guarantor of a 4 written request, a list, in such form and as of such date as the Guarantee Trustee may reasonably require, containing all the information in the possession or control of the keeper of the Register, the Guarantor or any of its paying agents other than the Guarantee Trustee as to the names and addresses of Holders of Preference Shares. (b) The Guarantee Trustee shall comply with its obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act. SECTION 2.03. Reports by the Guarantee Trustee. Within 60 days after May 15 of each year, the Guarantee Trustee shall provide to the Holders of the Preference Shares such reports as are required by Section 313 of the Trust Indenture Act, if any, in the form and in the manner provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall also comply with the requirements of Section 313(d) of the Trust Indenture Act. SECTION 2.04. Periodic Reports to Guarantee Trustee. The Guarantor shall provide to the Guarantee Trustee such documents, reports and information as required by Section 314 (if any) and the compliance certificate required by Section 314 of the Trust Indenture Act in the form, in the manner and at the times required by Section 314 of the Trust Indenture Act. Delivery of such reports, information and documents to the Guarantee Trustee is for informational purposes only and the Guarantee Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Guarantor's compliance with any of its covenants hereunder (as to which the Guarantee Trustee is entitled to rely exclusively on Officers' Certificates). SECTION 2.05. Evidence of Compliance with Conditions Precedent. The Guarantor shall provide to the Guarantee Trustee such evidence of compliance with any conditions precedent, if any, provided for in this Guarantee that relate to any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion required to be given by an officer pursuant to Section 314(c)(1) may be given in the form of an Officers' Certificate and shall include: (a) a statement that each officer signing the Officers' Certificate has read the covenant or condition and the definition relating thereto; (b) a brief statement of the nature and scope of the examination or investigation undertaken by each officer in rendering the Officers' Certificate; (c) a statement that each such officer has made such examination or investigation as, in such officer's opinion, is necessary to enable such officer to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of each such officer, such condition or covenant has been complied with. 5 SECTION 2.06. Events of Default; Waiver. The Holders of a Majority of the Preference Shares may, by vote, on behalf of the Holders of all of the Preference Shares, waive any past Event of Default and its consequences except an Event of Default in respect of a covenant or provision hereof which cannot be modified or amended without the consent of each Holder of Preference Shares. Upon such waiver, any such Event of Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Guarantee, but no such waiver shall extend to any subsequent or other default or Event of Default or impair any right consequent thereon. SECTION 2.07. Event of Default; Notice. (a) The Guarantee Trustee shall, within 90 days after the occurrence of an Event of Default, transmit by mail, first class postage prepaid, to the Holders of the Preference Shares, notices of all Events of Default actually known to a Responsible Officer of the Guarantee Trustee, unless such defaults have been cured before the giving of such notice, provided, that, the Guarantee Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or a Responsible Officer of the Guarantee Trustee in good faith determines that the withholding of such notice is in the interests of the Holders of the Preference Shares. (b) The Guarantee Trustee shall not be deemed to have knowledge of any Event of Default unless a Responsible Officer of the Guarantee Trustee shall have received written notice, or a Responsible Officer of the Guarantee Trustee charged with the administration of the Guarantee shall have obtained actual knowledge, of such Event of Default. SECTION 2.08. Rights of Holders. (a) The Holders of a Majority of the Preference Shares have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee in respect of this Guarantee or exercising any trust or power conferred upon the Guarantee Trustee under this Guarantee. (b) If the Guarantee Trustee fails to enforce its rights under the Guarantee after a Holder of Preference Shares has made a written request, such Holder of Preference Shares may institute a legal proceeding directly against the Guarantor to enforce the Guarantee Trustee's rights under Article 5 or Article 7 of this Guarantee, without first instituting a legal proceeding against the Issuer, the Guarantee Trustee or any other person or entity. Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee Payment, a Holder of Preference Shares may directly institute a proceeding in such Holder's own name against the Guarantor for enforcement of Article 5 of this Guarantee for such payment. (c) For so long as any Preference Shares remain outstanding, a Holder of Preference Shares may exercise directly any right or power of a Holder of Preference Shares under this Section 2.08. (d) The guarantee herein is a guarantee of payment under the Preference Shares. As a result, in no event shall the rights to take remedial action under this Guarantee result in any Holder of Preference Shares receiving any amount in excess of the amounts due to such Holder in accordance with the terms of the Articles and the Preference Shares, or receiving any amount due and payable to such Holder as a Holder of Preference Shares sooner than the time at which 6 such Holder is entitled to receive such amounts in accordance with the terms of the Indenture, the Securities, the Articles and the Preference Shares. SECTION 2.09. Conflicting Interests. The Articles shall be deemed to be specifically described in this Guarantee for the purposes of clause (i) of the first proviso contained in Section 310(b) of the Trust Indenture Act. ARTICLE 3 POWERS, DUTIES AND RIGHTS OF GUARANTEE TRUSTEE SECTION 3.01. Powers, Duties and Rights of Guarantee Trustee. (a) This Guarantee shall be held by the Guarantee Trustee for the benefit of the Holders of the Preference Shares, and the Guarantee Trustee shall not transfer this Guarantee to any Person except a Holder of Preference Shares exercising his or her rights pursuant to Section 2.08(b) or to a Successor Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its appointment to act as Successor Guarantee Trustee. The right, title and interest of the Guarantee Trustee shall automatically vest in any Successor Guarantee Trustee, and such vesting and cessation of title shall be effective whether or not conveyancing documents have been executed and delivered pursuant to the appointment of such Successor Guarantee Trustee. (b) If an Event of Default actually known to a Responsible Officer of the Guarantee Trustee has occurred and is continuing, the Guarantee Trustee shall enforce this Guarantee for the benefit of the Holders of the Preference Shares. (c) The Guarantee Trustee, before the occurrence of any Event of Default and after the curing or waiver of all Events of Default that may have occurred, shall undertake to perform only such duties as are specifically set forth in this Guarantee, and no implied covenants shall be read into this Guarantee against the Guarantee Trustee. In case an Event of Default has occurred (that has not been cured or waived pursuant to Section 2.06 and is actually known to a Responsible Officer of the Guarantee Trustee), the Guarantee Trustee shall exercise such of the rights and powers vested in it by this Guarantee, and use the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. (d) No provision of this Guarantee shall be construed to relieve the Guarantee Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) Prior to the occurrence of any Event of Default and after the curing or waiving of all such Events of Default that may have occurred: (A) the duties and obligations of the Guarantee Trustee shall be determined solely by the express provisions of this Guarantee, and the Guarantee Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Guarantee, and no implied 7 covenants or obligations shall be read into this Guarantee against the Guarantee Trustee; and (B) in the absence of bad faith on the part of the Guarantee Trustee, the Guarantee Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Guarantee Trustee and conforming to the requirements of this Guarantee; but in the case of any such certificates or opinions that by any provision hereof are specifically required to be furnished to the Guarantee Trustee, the Guarantee Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Guarantee (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein); (ii) The Guarantee Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Guarantee Trustee, unless it shall be proved that the Guarantee Trustee was negligent in ascertaining the pertinent facts upon which such judgment was made; (iii) The Guarantee Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of a Majority of the Preference Shares relating to the time, method and place of conducting any proceeding for any remedy available to the Guarantee Trustee, or the exercise of any trust or power conferred upon the Guarantee Trustee under this Guarantee; and (iv) No provision of this Guarantee shall require the Guarantee Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if the Guarantee Trustee shall have reasonable grounds for believing that the repayment of such funds or liability, or indemnity, satisfactory to the Guarantee Trustee, against such expense, risk or liability, is not assured to it under the terms of this Guarantee. SECTION 3.02. Certain Rights of Guarantee Trustee. (a) Subject to the provisions of Section 3.01: (i) The Guarantee Trustee may conclusively rely, and shall be fully protected in acting or refraining from acting upon, any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed, sent or presented by the proper party or parties. (ii) Any direction or act of the Guarantor contemplated by this Guarantee shall be sufficiently evidenced by an Officers' Certificate. 8 (iii) Whenever, in the administration of this Guarantee, the Guarantee Trustee shall deem it desirable that a matter be proved or established before taking, suffering or omitting any action hereunder, the Guarantee Trustee (unless other evidence is herein specifically prescribed) may, in the absence of bad faith on its part, request and conclusively rely upon an Officers' Certificate which, upon receipt of such request, shall be promptly delivered by the Guarantor. (iv) The Guarantee Trustee shall have no duty to see to any recording, filing or registration of any instrument (or any rerecording, refiling or registration thereof). (v) The Guarantee Trustee may consult with counsel of its selection, and the advice or opinion of such counsel with respect to legal matters shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with such advice or opinion. Such counsel may be counsel to the Guarantor or any of its Affiliates and may include any of its employees. The Guarantee Trustee shall have the right at any time to seek instructions concerning the administration of this Guarantee from any court of competent jurisdiction. (vi) The Guarantee Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Guarantee at the request or direction of any Holder, unless such Holder shall have provided to the Guarantee Trustee such security and indemnity, satisfactory to the Guarantee Trustee, against the costs, expenses (including attorneys' fees and expenses and the expenses of the Guarantee Trustee's agents, nominees or custodians) and liabilities that might be incurred by it in complying with such request or direction, including such reasonable advances as may be requested by the Guarantee Trustee; provided, however, that nothing contained in this Section 3.02(a)(vi) shall be taken to relieve the Guarantee Trustee, upon the occurrence of an Event of Default, of its obligation to exercise the rights and powers vested in it by this Guarantee. (vii) The Guarantee Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Guarantee Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit but shall incur no liability or additional liability of any kind by reason of such inquiry or investigation. (viii) The Guarantee Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, nominees, custodians or attorneys, and the Guarantee Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. (ix) Any action taken by the Guarantee Trustee or its agents hereunder shall bind the Holders of the Preference Shares, and the signature of the Guarantee Trustee or its agents alone shall be sufficient and effective to perform any such action. No third 9 party shall be required to inquire as to the authority of the Guarantee Trustee to so act or as to its compliance with any of the terms and provisions of this Guarantee, both of which shall be conclusively evidenced by the Guarantee Trustee or its agent taking such action. (x) Whenever in the administration of this Guarantee the Guarantee Trustee shall deem it desirable to receive instructions with respect to enforcing any remedy or right or taking any other action hereunder, the Guarantee Trustee (i) may request written instructions from the Holders of a Majority of the Preference Shares, (ii) may refrain from enforcing such remedy or right or taking such other action until such written instructions are received and (iii) shall be protected in conclusively relying on or acting in accordance with such written instructions. (xi) The Guarantee Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith, without negligence, and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Guarantee. (b) No provision of this Guarantee shall be deemed to impose any duty or obligation on the Guarantee Trustee to perform any act or acts or exercise any right, power, duty or obligation conferred or imposed on it in any jurisdiction in which it shall be illegal, or in which the Guarantee Trustee shall be unqualified or incompetent in accordance with applicable law, to perform any such act or acts or to exercise any such right, power, duty or obligation. No permissive power or authority available to the Guarantee Trustee shall be construed to be a duty. SECTION 3.03. Not Responsible for Recitals or Issuance of Guarantee. The recitals contained in this Guarantee shall be taken as the statements of the Guarantor, and the Guarantee Trustee does not assume any responsibility for their correctness. The Guarantee Trustee makes no representation as to the validity or sufficiency of this Guarantee. ARTICLE 4 GUARANTEE TRUSTEE SECTION 4.01. Guarantee Trustee; Eligibility. (a) There shall at all times be a Guarantee Trustee which shall: (i) not be an Affiliate of the Guarantor; and (ii) be a corporation organized and doing business under the laws of the United States of America or any State thereof or of the District of Columbia, or a corporation or Person permitted by the Securities and Exchange Commission to act as an institutional trustee under the Trust Indenture Act, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least 50 million U.S. dollars ($50,000,000), and subject to supervision or examination by U.S. federal or State authority, in good standing and having an office or agent in the Borough of Manhattan, The City of New York. If such corporation publishes reports of condition at least 10 annually, pursuant to law or to the requirements of the supervising or examining authority referred to above, then, for the purposes of this Section 4.01(a)(ii), the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. (b)If at any time the Guarantee Trustee shall cease to be eligible to so act under Section 4.01(a), the Guarantee Trustee shall immediately resign in the manner and with the effect set out in Section 4.02(c). (c) If the Guarantee Trustee has or shall acquire any "conflicting interest" within the meaning of Section 310(b) of the Trust Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply with the provisions of Section 310(b) of the Trust Indenture Act. (d) The Guarantee Trustee represents and warrants that: (i) the Guarantee Trustee is a New York banking corporation with trust powers, duly organized, validly existing and in good standing under the laws of the State of New York, with trust power and authority to execute and deliver, and to carry out and perform its obligations under, this Guarantee; and (ii) the execution, delivery and performance by the Guarantee Trustee of this Guarantee has been duly authorized by all necessary corporate action on the part of the Guarantee Trustee. This Guarantee has been duly executed and delivered by the Guarantee Trustee. SECTION 4.02. Appointment, Removal and Resignation of Guarantee Trustee. (a) Subject to Section 4.02(b), the Guarantee Trustee may be appointed or removed without cause at any time by the Guarantor (i) except during an Event of Default and (ii) so long as the Issuer shall not be in default in the payment of amounts due and payable under the Preference Shares. (b) The Guarantee Trustee shall not be removed in accordance with Section 4.02(a) until a Successor Guarantee Trustee has been appointed and has accepted such appointment by written instrument executed by such Successor Guarantee Trustee and delivered to the Guarantor. (c) The Guarantee Trustee appointed to office shall hold office until a Successor Guarantee Trustee shall have been appointed or until its removal or resignation. The Guarantee Trustee may resign from office (without need for prior or subsequent accounting) by an instrument in writing executed by the Guarantee Trustee and delivered to the Guarantor, which resignation shall not take effect until a Successor Guarantee Trustee has been appointed and has accepted such appointment by instrument in writing executed by such Successor Guarantee Trustee and delivered to the Guarantor and the resigning Guarantee Trustee. (d) If no Successor Guarantee Trustee shall have been appointed and accepted appointment as provided in this Section 4.02 within 60 days after delivery of an instrument of removal or resignation, the Guarantee Trustee resigning or being removed may petition, at the 11 expense of the Guarantor, any court of competent jurisdiction for appointment of a Successor Guarantee Trustee. Such court may thereupon, after prescribing such notice, if any, as it may deem proper, appoint a Successor Guarantee Trustee. (e) No Guarantee Trustee shall be liable for the acts or omissions to act of any Successor Guarantee Trustee. (f) Upon termination of this Guarantee or removal or resignation of the Guarantee Trustee pursuant to this Section 4.02, and before the appointment of any Successor Guarantee Trustee, the Guarantor shall pay to the Guarantee Trustee all amounts to which it is entitled to the date of such termination, removal or resignation. ARTICLE 5 GUARANTEE SECTION 5.01. Guarantee. (a) The Guarantor irrevocably and unconditionally agrees, subject to the limitations set forth in this Guarantee, the full and punctual payment to each Holder from time to time, whether such rights under this Guarantee are asserted by the Guarantee Trustee or directly by any such Holder (without duplication of amounts theretofore paid by the Issuer or the Guarantor), if, as and when due, regardless of any defense, right of setoff or counterclaim that the Issuer may have or assert (other than the defense of payment) of the following: (i) any due but unpaid Dividends on any Preference Shares held by such Holder; (ii) any amounts due in respect of a Preference Share (in accordance with the terms of the Articles) but unpaid upon exercise by a Holder of its right to require redemption of such Preference Share or in respect of a Preference Share otherwise due for redemption (the "Redemption Price"); and (iii) the amount payable to a Holder in respect of a Preference Share upon any dissolution, liquidation or winding up of the Issuer; (collectively, the "Guarantee Payments"). (b) The guarantee under this Section 5.1 shall extend equally to all Dividends, redemption monies, liquidation payments and other amounts expressed to be payable in respect of any Preference Share that shall not have been issued as required by the terms of the Securities and of the Indenture but which would have been payable on such Preference Share had the same been issued when so required. (c) The Guarantee Payments are payable hereunder whether or not the Issuer had legally available funds for the making of a Dividend, a redemption payment or a liquidation payment, as applicable. 12 (d) All Guarantee Payments shall include interest accrued on such Guarantee Payments, at a rate of 2.00 per annum, from the date of the claim asserted under this Guarantee relating to such Guarantee Payments through the date of payment of or the date full payment is offered on such claim. (e) The Guarantor's obligation to make any of the payments listed in (i) through (iii) in Section 5.01(a) above may be satisfied by direct payment of the required amounts by the Guarantor to the Holders or by causing the Issuer to pay such amounts to the Holders. SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby waives notice of acceptance of this Guarantee and of any liability to which it applies or may apply, presentment, demand for payment, any right to require a proceeding first against the Issuer or any other Person before proceeding against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice of redemption and all other notices and demands (in each case in respect of Guarantee Payments only). SECTION 5.03. Obligations Not Affected. The obligations, covenants, agreements and duties of the Guarantor under this Guarantee shall in no way be affected or impaired by reason of the happening from time to time of any of the following: (a) the release or waiver, by operation of law or otherwise, of the performance or observance by the Issuer of any express or implied agreement, covenant, term or condition relating to the Preference Shares to be performed or observed by the Issuer; (b) the extension of time for the payment by the Issuer of all or any portion of the Dividends, Redemption Price, liquidation preference or any other sums payable under the terms of the Preference Shares or the extension of time for the performance of any other obligation under, arising out of; or in connection with, the Preference Shares; provided that nothing in this Guarantee shall affect or impair any valid extension; (c) any failure, omission, delay or lack of diligence on the part of the Holders to enforce, assert or exercise any right, privilege, power or remedy conferred on the Holders pursuant to the terms of the Preference Shares, or any action on the part of the Issuer granting indulgence or extension of any kind; (d) the voluntary or involuntary liquidation, dissolution, sale of any collateral, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of debt of, or other similar proceedings affecting, the Issuer or any of the assets of the Issuer; (e) any invalidity of, or defect or deficiency in, the Preference Shares or any failure by or on behalf of the Issuer or by the Issuer in general meeting to declare or approve Dividend, redemption or liquidation payments or other amounts expressed to be payable in respect of the Preference Shares; 13 (f) the settlement or compromise of any obligation guaranteed hereby or hereby incurred; (g) the unavailability to the Issuer under Cayman Islands law of legally available funds to make payments due on the Preference Shares or any other prohibition under applicable law of payments on the Preference Shares; or (h) any other circumstance whatsoever that might otherwise constitute a legal or equitable discharge or defense of a guarantor, it being the intent of this Section 5.03 that the obligations of the Guarantor under this Article 5 shall be absolute and unconditional under any and all circumstances. There shall be no obligation of the Holders to give notice to, or obtain consent of, the Guarantor with respect to the happening of any of the foregoing. SECTION 5.04. Action Against Guarantor. In respect of Guarantee Payments only, the Guarantor waives any right or remedy to require that any action be brought first against the Issuer or any other person or entity before proceeding directly against the Guarantor. SECTION 5.05. Independent Obligations. The Guarantor acknowledges that its obligations hereunder are independent of the obligations of the Issuer with respect to the Preference Shares, and that the Guarantor shall be liable as principal and as debtor hereunder to make Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the occurrence of any event referred to in subsections (a) through (h), inclusive, of Section 5.03 hereof. SECTION 5.06. Subrogation. Upon making any payment pursuant to Section 5.01, the Guarantor shall be subrogated to the rights of the payee against the Issuer with respect to such payment; provided, however, that the Guarantor shall not enforce any payment by way of subrogation if any Preference Shares are outstanding. ARTICLE 6 RANKING SECTION 6.01. Ranking. The guarantee under Section 5.1 constitutes a direct, unconditional and unsecured obligation of the Guarantor and will rank at least equally with all other unsecured and unsubordinated obligations of the Guarantor (including unsecured and unsubordinated guarantees by the Guarantor of indebtedness of others), subject in the event of insolvency, to laws of general applicability relating to or affecting creditors' rights ARTICLE 7 REPRESENTATIONS AND WARRANTIES; AGREEMENTS OF THE GUARANTOR SECTION 7.01 Representations and Warranties of the Guarantor. The Guarantor represents and warrants that: 14 (a) The Guarantor is duly organized and validly existing under the laws of England and Wales, with power and authority to execute and deliver, and to carry out and perform its obligations under, this Guarantee; and (b) The execution, delivery and performance by the Guarantor of this Guarantee has been duly authorized by all necessary corporate action on the part of the Guarantor. This Guarantee has been duly executed and delivered by the Guarantor. SECTION 7.02. Agreements of the Guarantor. (a) The Guarantor hereby agrees: (i) that, in the event of failure of the Issuer to perform any of its obligations or to enforce when due any of the rights of the Issuer in respect of the exercise of any Conversion and Exchange Rights, the issue of any Preference Shares on any such exercise and the exchange of Preference Shares for Ordinary Shares or ADSs pursuant to the exercise of Conversion and Exchange Rights, in each case in accordance with the Articles and as referred to in the terms of the Securities and the Indenture, the Guarantor will procure the performance by the Issuer of all such obligations and the enforcement by the Issuer of all such rights: (ii) not to alter its obligation pursuant to a bilateral contract between the Issuer and the Guarantor to issue Ordinary Shares or ADSs to holders of Preference Shares in order that the Issuer might meet its exchange obligations in respect of the Preference Shares in accordance with the Articles; and (iii) that, while any Security remains Outstanding, it will not consent to, and will procure that the Issuer will not make, any amendment to Article 9 of the Articles which would vary, abrogate or modify the rights attaching to the Preference Shares save with (a) the consent of the Trustee or (b) (1) the written consent of the holders of not less than a majority in principal amount of the Outstanding Securities by the Act of said holders delivered to the Issuer, the Guarantor and the Trustee; or (2) by the adoption of a resolution, at a meeting of holders of the Outstanding Securities at which a quorum is present, by the holders of a majority in principal amount of the Outstanding Securities represented at such meeting, provided, however, that the consent or affirmative vote of the holder of each Outstanding Security adversely affected shall be required before any amendment is made to Article 9 of the Articles which is adverse to the holders of the Securities, and provided further that no consent of the Trustee nor consent or affirmative vote of any holder of Securities shall be required in relation to any amendment which (i) does not adversely affect the interests of any holder of Securities or (ii) is to cure any ambiguity, omission or defect or to correct or supplement any provision of Article 9 of the Articles which may be inconsistent with any other provision of the Articles or which is otherwise defective, or to make any other provisions with respect to matters arising under the Articles as the Issuer, the Guarantor and the Trustee may deem necessary or desirable, in each case which does not adversely affect the interests of the holders of the Securities. 15 (b) The Guarantor, for so long as any Securities remain outstanding shall use its reasonable efforts to ensure that the Issuer will not be an "investment company" within the meaning of the Investment Company Act or a Passive Foreign Investment Company ("PFIC") within the meaning of Section 1297 of the United States Internal Revenue Code of 1986, as amended. (c) The Guarantor agrees to use all reasonable efforts to ensure that all corporate steps, including obtaining shareholder approvals if necessary, have been taken for the allotment and issue of the Ordinary Shares or ADSs, free of pre-emptive rights upon the exercise of Conversion and Exchange Rights; (d) The Guarantor agrees to pay all stamp, stamp duty reserve or other issuance or documentary taxes or duties payable in the Cayman Islands, the United Kingdom or the United States in connection with (A) the issuance of Ordinary Shares upon any Conversion and Exchange and (B) their deposit with the ADR Depositary against issuance of American depositary receipts (the "ADRs") evidencing American depositary shares representing the Ordinary Shares, provided, however, that the Guarantor shall not be required to pay any tax or duty which may be payable in respect of any transfer involved in the issue and delivery of Preference Shares, Ordinary Shares or ADSs in a name other than that of the Holder of the Security or Securities to be converted, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Issuer or the Guarantor the amount of any such tax or duty, or has established to the satisfaction of the Issuer and the Guarantor that such tax or duty has been paid. The Guarantor will not be obligated to pay, and each relevant Holder of Preference Shares must pay, all other taxes arising in connection with such exchange. (e) The Guarantor agrees that it will, at all times while Securities are outstanding, save with either (i) the written consent of the Holders of not less than a majority in principal amount of the Outstanding Securities, by Act of said Holders delivered to the Issuer, the Company and the Trustee; (ii) the adoption of a resolution, at a meeting of Holders of the Outstanding Securities at which a quorum is present, by the Holders of a majority in principal amount of the Outstanding Securities represented at such meeting; or (iii) the consent of the Trustee where, in the opinion of the Trustee, it is not materially prejudicial to the interests of the Holders of the Securities to give such approval: (A) at all times keep available for issue free from pre-emptive rights out of its authorized but unissued capital such number of Ordinary Shares as would enable the obligation of the Issuer to procure that Preference Shares issued upon conversion of the Securities be exchanged for Ordinary Shares in accordance with the Memorandum and Articles of Association of the Issuer to be satisfied in full; (B) not in any way modify the rights attaching to the Ordinary Shares with respect to voting, dividends or liquidation nor issue any other class of equity share capital carrying any rights which are more favorable than such rights except that this nothing in this clause (B) shall prevent (1) the issue of equity share capital to employees (including directors and executive officers) of the Company or any of its Subsidiaries or associated 16 undertakings pursuant to any employees' share plan or option plan; (2) any consolidation or subdivision of the Ordinary Shares; (3) any modification of such rights which is not materially prejudicial to the interests of the Holders of the Securities; (4) any alteration to the Articles made in connection with any matters referred to in this clause (B) or supplemental or incidental thereto; (5) any issue of Ordinary Shares in connection with and upon (x) exchange of the exchangeable shares of Shire Acquisition Inc. or the remaining outstanding shares of Roberts Pharmaceutical Corporation or (y) the conversion of the unsecured convertible zero coupon loan note due to Arenol Corporation; or (6) any issue of equity share capital where the issue of such equity share capital results (or would, but for the fact that the adjustment would be less than one percent of the Exchange Ratio or that the relevant issue were at less than 95% of the current market price per Ordinary Share on the relevant Trading Day, result) in an adjustment to the Exchange Ratio; and (C) not reduce its issued share capital, share premium account or capital redemption reserve or any uncalled liability in respect thereof except (1) pursuant to the terms of issue of the relevant share capital; (2) by means of a purchase or redemption; (3) as permitted by Section 130(2) of the Companies Act 1985; (4) where the reduction does not involve any distribution of assets; (5) where the reduction results in (or would, but for the fact that the adjustment would be less than one percent of the Exchange Ratio then in effect, result in) an adjustment to the Exchange Ratio; or (6) solely in relation to a change in the currency in which the nominal value of the Ordinary Shares is expressed. ARTICLE 8 TERMINATION SECTION 8.01. Termination. This Guarantee shall terminate upon, and be of no further force and effect from the earlier of (i) full payment of the Redemption Price (in accordance with the Articles) for all Preference Shares issued or issuable upon conversion of any outstanding Securities not previously converted, or purchase and cancellation of all such Preference Shares, (ii) if any such Preference Shares are no longer outstanding but clause (i) is not satisfied, the full payment of the Redemption Price for all such Preference Shares or purchase and cancellation of all such Preference Shares, (iii) full payment of the $1,000 liquidation preference per security for all such Preference Shares, plus any accrued and unpaid Dividends thereon, or (iv) if any such Preference Shares are no longer outstanding but clause (i) is not satisfied, full payment of the $1,000 liquidation preference per security for all such Preference Shares, plus any accumulated and unpaid Dividends thereon, provided, however, that this Guarantee will continue to be effective (x) for so long as any Securities remain outstanding and (y) until such times as all Holders of any Preference Shares issued or issuable upon conversion of any outstanding Securities not previously converted have received Ordinary Shares or ADSs or, at the Company's option, cash in exchange for such Preference Shares in accordance with the Articles and provided further that this Guarantee will continue to be effective or will be reinstated, as the case may be, if at any time payment of any sums paid under the Preference Shares or this Guarantee must be restored by a Holder thereof for any reason whatsoever. 17 ARTICLE 9 INDEMNIFICATION SECTION 9.01. Exculpation. (a) No Indemnified Person shall be liable, responsible or accountable in damages or otherwise to the Guarantor or any Covered Person for any loss, liability, expense, damage or claim incurred by reason of any act or omission performed or omitted by such Indemnified Person in good faith in accordance with this Guarantee and in a manner that such Indemnified Person reasonably believed to be within the scope of the authority conferred on such Indemnified Person by this Guarantee or by law, except that an Indemnified Person shall be liable for any such loss, liability, expense, damage or claim incurred by reason of such Indemnified Person's negligence or wilful misconduct with respect to such acts or omissions. (b) An Indemnified Person shall be fully protected in relying in good faith upon the records of the Guarantor and upon such information, opinions, reports or statements presented to the Guarantor by any Person as to matters the Indemnified Person reasonably believes are within such other Person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Guarantor, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, profits, losses, or any other facts pertinent to the existence and amount of assets from which Dividends to Holders of Preference Shares might properly be paid. SECTION 9.02. Indemnification. The Guarantor agrees to indemnify each Indemnified Person for, and to hold each Indemnified Person harmless against, any and all loss, liability, damage, claim or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses (including reasonable legal fees and expenses) of defending itself against, or investigating, any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The obligation to indemnify as set forth in this Section 9.02 shall survive the termination of this Guarantee or the earlier resignation or removal of the Guarantee Trustee. ARTICLE 10 MISCELLANEOUS SECTION 10.01. Successors and Assigns. All guarantees and agreements contained in this Guarantee shall bind the successors, assigns, receivers, trustees and representatives of the Guarantor and shall inure to the benefit of the Holders of the Preference Shares then outstanding. SECTION 10.02. Amendments. Except for those changes provided for in the two penultimate sentences of this paragraph, this Guarantee may be modified by the Guarantor and the Guarantee Trustee only with the prior approval of the Holders of not less than a majority in liquidation preference of the Preference Shares in issue at the relevant time (excluding any Preference Shares beneficially owned at that time by the Guarantor or any of its Affiliates) other than Preference Shares purchased or acquired by the Guarantor or its Affiliates in connection 18 with transactions effected by or for the account of customers of the Guarantor or any of its Affiliates in connection with the distribution or trading of or market-making in connection with such securities and except that persons (other than Affiliates of the Guarantor) to whom the Guarantor or any of its subsidiaries have pledged Preference Shares may vote or convert with respect to such pledged securities pursuant to the terms of such pledge). This Guarantee may be amended without the consent of the Holders of the Preference Shares to (i) cure any ambiguity, (ii) correct or supplement any provision in this Guarantee that may be defective or inconsistent with any other provision of this Guarantee, (iii) add to the covenants, restrictions or obligations of the Guarantor, (iv) conform to any change in the Investment Company Act or the rules or regulations thereunder and (v) modify, eliminate and add to any provision of this Guarantee to such extent as may be necessary or desirable; provided that no such amendment shall have a material adverse effect on the rights, preferences or privileges of the Holders of the Preference Shares. Neither Section 5.01 nor Section 7.02 nor Section 10.02 may be amended without the prior approval of each Holder of the Preference Shares. Any amendment hereof in accordance with this Section 10.02 shall be binding on all Holders. SECTION 10.03. Judgment Currency Indemnity. (a) If, for the purposes of obtaining judgment in any court, it is necessary to convert an amount due from the Guarantor under any provision of this Guarantee to a currency other than the U.S. dollar, the parties agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which, in accordance with normal banking procedures, The Bank of New York could purchase such other currency with U.S. dollars at its New York office on the second Business Day preceding the day on which final judgment is given. (b) The obligations of the Guarantor in respect of any amount due to the Guarantee Trustee or any Holders under this Agreement shall, notwithstanding any judgment in a currency other than the U.S dollar, be discharged only to the extent that on the Business Day following receipt by the Guarantee Trustee or such Holders, as the case may be, of any amount adjudged to be so due in such other currency, the Guarantee Trustee or such Holders, as the case may be, may in accordance with normal banking procedures purchase U.S. dollars with such other currency. (c) If the amount of U.S. dollars so purchased is less than the amount originally due to the Guarantee Trustee or such Holders, as the case may be, in U.S. dollars, the Guarantor agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify the Guarantee Trustee or such Holders, as the case may be, against such loss. (d) If the amount of U.S. dollars so purchased exceeds the amount originally due to the Guarantee Trustee or such Holders, as the case may be, the Guarantee Trustee or such Holders, as the case may be, agree to remit any remaining amount to the Guarantor in pounds sterling. SECTION 10.04. Assignment of the Guarantor. The Guarantor will not assign its obligations under the Guarantee, except in the case of a merger, consolidation or a sale or contribution of substantially all of its assets, where the Guarantor is not the surviving entity. 19 SECTION 10.05. Notices. All notices provided for in this Guarantee shall be in writing, duly signed by the party giving such notice, and shall be delivered, telecopied or mailed by first class mail, as follows: (a) If given to the Guarantee Trustee, at the Guarantee Trustee's mailing address set forth below: The Bank of New York 101 Barclay Street Floor 2l West New York, NY 10286 Attention: Corporate Trust Administration-- Sunjeeve Patel Facsimile: 212-815-5915 (b) If given to the Guarantor, at the Guarantor's mailing address set forth below (or such other address as the Guarantor may give notice of to the Holders of the Preference Shares): Hampshire International Business Park Chineham, Basingstoke Hampshire RG24 8EP England Attention: Company Secretary (c) If given to any Holder of Preference Shares, at the address set forth in the Register. All such notices shall be deemed to have been given when received in person, telecopied with receipt confirmed, or mailed by first class mail, postage prepaid except that if a notice or other document is refused delivery or cannot be delivered because of a changed address of which no notice was given, such notice or other document shall be deemed to have been delivered on the date of such refusal or inability to deliver. SECTION 10.06. Governing Law. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF, EXCEPT FOR SECTION 6.01 HEREOF, WHICH SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF ENGLAND AND WALES, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF. THE PARTIES HERETO EACH HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION RELATED HERETO. 20 SECTION 10.07. Jurisdiction and Service of Process. (a) Any claim or proceeding brought by the Guarantee Trustee on behalf of Holders or a Holder to enforce the obligations of the Guarantor hereunder, including, without limitation, any claims, counter-claims and cross-claims asserted against the Guarantee Trustee in connection therewith, shall be brought in a court of competent jurisdiction in England and Wales or the State of New York. (b) The Guarantor irrevocably consents to the jurisdiction of any court of the State of New York or any United States federal court sitting in the Borough of Manhattan, New York City, New York, United States, and any appellate court from any thereof, and waives any immunity from the jurisdiction of such courts over any suit, action or proceeding that may be brought in connection with this Guarantee. The Guarantor irrevocably waives, to the fullest extent permitted by law, any objection to any suit, action, or proceeding that may be brought in connection with this Guarantee in such courts whether on the grounds of venue, residence or domicile or on the ground that any such suit, action or proceeding has been brought in an inconvenient forum. The Guarantor agrees that final judgment in any such suit, action or proceeding brought in such court shall be conclusive and binding upon the Guarantor and may be enforced in any court to the jurisdiction of which the Guarantor is subject by a suit upon such judgment; provided that service of process is effected upon the Guarantor in the manner provided herein. Notwithstanding the foregoing, any suit, action or proceeding brought in connection with this Guarantee may be instituted in any competent court in England and Wales. (c) The Guarantor agrees that service of all writs, process and summonses in any suit, action or proceeding brought in connection with this Guarantee against the Guarantor in any court of the State of New York or any United States federal court sitting in the Borough of Manhattan, New York City may be made upon CT Corporation System at 111 8th Avenue, 13th Floor, New York, New York 10011, whom the Guarantor irrevocably appoints as its authorized agent for service of process. The Guarantor represents and warrants that CT Corporation System has agreed to act as the agent for service of process for the Guarantor. The Guarantor agrees that such appointment shall be irrevocable so long as any of the Securities or Preference Shares remain outstanding or until the irrevocable appointment by the Guarantor of a successor in The City of New York as its authorized agent for such purpose and the acceptance of such appointment by such successor. The Guarantor further 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 in full force and effect as aforesaid. If CT Corporation System shall cease to act as the agent for service of process for the Guarantor, the Guarantor shall appoint without delay another such agent and provide prompt written notice to the Guarantee Trustee of such appointment. With respect to any such action in any court of the State of New York or any United States federal court in the Borough of Manhattan, New York City, service of process upon CT Corporation System, as the authorized agent of the Guarantor for service of process, and written notice of such service to the Guarantor shall be deemed, in every respect, effective service of process upon the Guarantor. (d) Nothing in this Section shall affect the right of any party to serve legal process in any other manner permitted by law. 21 THIS GUARANTEE is executed as of the day and year first above written. SHIRE PHARMACEUTICALS GROUP PLC, as Guarantor By: ------------------------------------ Name: Title: THE BANK OF NEW YORK, as Guarantee Trustee By: ----------------------------------------- Name: Title: EX-4.9 8 shireformof.txt GUARANTEE GUARANTEE For value received, SHIRE PHARMACEUTICALS GROUP PLC, a public limited company organized and existing under the laws of England and Wales (herein called the "Guarantor", which term includes any successor Person under the Indenture referred to in the Security upon which this Guarantee is endorsed), hereby irrevocably and unconditionally guarantees to the Holder of the Security upon which this Guarantee is endorsed, and to the Trustee on behalf of each such Holder, the due and punctual payment of the principal of (and premium, if any, on) and interest, if any, on such Security when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, in accordance with the terms of said Security and of the Indenture. In case of the failure of the Issuer punctually to make any such payment of principal (or premium, if any) or interest, if any, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Issuer. The Guarantor hereby agrees that it shall make all payments in respect of principal of (and premium, if any, on) and interest (including interest on amounts in default), if any, on the Securities or the payment of any other sums due on the Securities pursuant to this Guarantee without deduction or withholding for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied upon or as a result of such payments by or on behalf of any taxing authority of the United Kingdom, unless deduction or withholding of such taxes, duties, assessments or governmental charges is required by law. The Guarantor hereby agrees that its obligations hereunder shall be as if it were principal debtor and not merely surety, and shall be absolute and unconditional, irrespective of the validity, regularity or enforceability of said Security or the Indenture, the absence of any action to enforce the same, any waiver or consent by the Holder of said Security or by the Trustee or the Paying Agent with respect to any provisions thereof or of the Indenture, the recovery of any judgment against the Issuer or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the Issuer, protest or notice with respect to said Security or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by complete performance of its obligations contained in the Indenture, said Security and this Guarantee. The Holder of the Security on which this Guarantee is endorsed is entitled to the further benefits relating thereto set forth in the Security and the Indenture. No reference herein to the Indenture and no provision of this Guarantee, said Security or the Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of (and premium, if any, on) and interest, if any, the Security upon which this Guarantee is endorsed. The Indenture, the Securities and this Guarantee are governed by and will be construed in accordance with the laws of the State of New York, without regard to the applicable principles of conflicts of laws to the extent that the application of the laws of another jurisdiction would be required thereby. REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS GUARANTEE SET FORTH IN SAID SECURITY AND IN THE INDENTURE, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE. Terms used in this Guarantee and not defined herein shall have the meaning assigned to them in the Indenture. This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the within Security has been executed by the Trustee, directly or through an Authenticating Agent, by manual or facsimile signature of an authorized signatory. 2 IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed. Dated: [CORPORATE SEAL] SHIRE PHARMACEUTICALS GROUP PLC By: ---------------------------------------- Name: Title: Attest: ------------------------------------ Name: Title: 3 EX-5.2 9 shireex52.txt November 6, 2001 Shire Pharmaceuticals Group plc Hampshire International Business Park Chineham Basingstoke RG24 8EP Shire Finance Limited c/o Maples and Calder Ugland House South Church Street P.O. Box 304 George Town Grand Cayman Re: 2% Senior Guaranteed Convertible Notes due 2001 ----------------------------------------------- Ladies and Gentlemen: We have acted as special New York counsel to Shire Pharmaceuticals Group plc, a public limited liability company organized under the laws of England and Wales ("Shire"), and Shire Finance Limited, an exempted limited company organized under the laws of the Cayman Islands (the "Company"), in connection with the Registration Statement on Form S-3 (the "Registration Statement") filed by Shire and the Company with the Securities and Exchange Commission (the "SEC") for the registration under the Securities Act of 1933, as amended (the "Act"), of the Company's 2% Senior Guaranteed Convertible Notes due 2011 (the "Notes"). The Notes are convertible into exchangeable redeemable preference shares of the Company (the "Preference Shares") which will be immediately exchanged (unless redeemed at the Company's option for cash) into Shire's ordinary shares, nominal value (pound)0.05 per share (the "Ordinary Shares") or American depositary shares representing the Ordinary Shares. -2- The Notes were issued under an Indenture dated as of August 21, 2001 (the "Indenture") by and among the Company, Shire and The Bank of New York ("BONY"), as trustee. The Notes and the Preference Shares are unconditionally guaranteed by Shire pursuant to the Indenture and the Preference Shares Guarantee Agreement dated as of August 21, 2001 between Shire and BONY, as trustee, respectively (collectively, the "Guarantees"). In connection with this opinion, we have examined such records of Shire and the Company as we have deemed necessary. We have also examined certificates of public officials and directors and officers of Shire and the Company, as to such factual matters as we have deemed necessary or appropriate for the purpose of this opinion, but have made no independent investigation regarding such factual matters. In our examination, we have assumed (a) the due organization and valid existence of Shire and the Company, (b) the due authorization, execution, authentication and delivery by all persons of each of the Indenture, the Notes and the Guarantees, (c) that each of such parties has the legal power to act in the respective capacity or capacities in which it is to act thereunder, (d) the authenticity of all documents submitted to us as originals, (e) the conformity to the original documents of all documents submitted to us as copies and (f) the genuineness of all signatures on all documents submitted to us. Based upon the foregoing, we are of the opinion that: 1. Insofar as the laws of the State of New York are applicable thereto, the Indenture constitutes a valid and legally binding agreement of each of Shire and the Company, enforceable against each of Shire and the Company in accordance with its terms, except that (a) the enforceability thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to or affecting creditors' rights or remedies generally and (ii) general principles of equity and to the discretion of the court before which any proceedings therefor may be brought (regardless of whether enforcement is sought in a proceeding at law or in equity) and (b) the enforceability of provisions imposing liquidated damages, penalties or an increase in interest rate upon the occurrence of certain events may be limited in certain circumstances. 2. Insofar as the laws of the State of New York are applicable thereto, the Notes constitute valid and legally binding obligations of the Company, entitled to the benefits of the Indenture and enforceable against the Company in accordance with their terms, except that (a) the enforceability thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to or affecting -3- creditors' rights or remedies generally and (ii) general principles of equity and to the discretion of the court before which any proceedings therefor may be brought (regardless of whether enforcement is sought in a proceeding at law or in equity) and (b) the enforceability of provisions imposing liquidated damages, penalties or an increase in interest rate upon the occurrence of certain events may be limited in certain circumstances. 3. Insofar as the laws of the State of New York are applicable thereto, the Guarantees constitute valid and legally binding obligations of Shire, enforceable against Shire in accordance with their terms, except that (a) the enforceability thereof may be subject to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other similar laws now or hereafter in effect relating to or affecting creditors' rights or remedies generally and (ii) general principles of equity and to the discretion of the court before which any proceedings therefor may be brought (regardless of whether enforcement is sought in a proceeding at law or in equity) and (b) the enforceability of provisions imposing liquidated damages, penalties or an increase in interest rate upon the occurrence of certain events may be limited in certain circumstances. We are admitted to practice law only in the State of New York and, in rendering the opinions set forth above, we express no opinion as to the laws of any jurisdiction other than the laws of the State of New York. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the Registration Statement. In giving this consent, we do not admit that we are "experts" within the meaning of Section 11 of the Act. Our consent does not constitute a consent under Section 7 of the Act, as we have not certified any part of such Registration Statement and do not otherwise come within the categories of persons whose consent is required under Section 7 of the Act or under the rules and regulations of the SEC thereunder. Very truly yours, /s/ Cahill Gordon & Reindel EX-5.3 10 shireltr2.txt The Directors RCS/SJYC Shire Pharmaceuticals Group plc Hampshire International Business Park Chineham Basingstoke RG24 8EP The Directors Shire Finance Limited c/o Maples and Calder Ugland House South Church Street PO Box 304 George Town Grand Cayman Cayman Islands 6th November, 2001 Dear Sirs, Introduction 1. This letter is addressed to you in connection with the Registration Statement on Form S-3 of even date with this letter (the "Form S-3") relating to the US$400,000,000 2 per cent senior guaranteed notes due 2011 (the "Notes") issued by Shire Finance Limited (the "Issuer"). The Notes are convertible into exchangeable redeemable preference shares (the "Preference Shares") in the capital of the Issuer which may be exchanged for ordinary shares (the "Shares") in the capital of Shire Pharmaceutical Group plc (the "Company") or ADSs representing Shares (the "ADSs"). The Company has entered into guarantees in respect of the Notes and the Preference Shares pursuant to an indenture and a preference shares guarantee agreement, each dated 21st August, 2001 (the "Guarantees"). For the purposes of this opinion, "Shares" includes the Shares to be represented by ADSs to be issued to Morgan Guaranty Trust Company of New York, as depositary under the deposit agreement dated as of 20th March, 1998 entered into by the Company, and such other depositary as the Company may appoint from time to time. 2 6th November, 2001 2. This letter may be relied upon only by you and may be used only in connection with the Notes. Neither its contents nor its existence may be disclosed to any other person unless we have given our prior written consent or as set out in paragraph 9 below. Scope 3. This letter sets out our opinion on certain matters of English law as at today's date. We have not made any investigation of, and do not express any opinion on, any other law. This letter is governed by and is to be construed in accordance with English law. To the extent that the laws of the United States of America and/or the Cayman Islands may be relevant, we have made no independent investigation thereof and our opinion is subject to the effect of such laws. 4. We have examined copies of the documents mentioned herein and such other documents as we have considered necessary. We have not undertaken any exercise which is not described in this letter. Documents examined 5. For the purposes of this opinion we have examined and relied upon the following documents:- (i) a copy of the Form S-3; (ii) a copy of the Memorandum and Articles of Association of the Company; (iii) a copy of the preference shares guarantee agreement dated 21st August 2001 between the Company and The Bank of New York, as guarantee trustee (the "Preference Shares Guarantee Agreement"); (iv) a copy of the indenture dated 21st August, 2001 between the Issuer, the Company and The Bank of New York, as trustee (the "Indenture"); (v) a copy of the minutes of a meeting of the Board of Directors of the Company held on 20th July, 2001 and of a committee of the Board of Directors of the Company held on 15th August, 2001 (together the "Board Minutes"); (vi) a copy of a notice of an Annual General Meeting of the Company dated 5th June, 2000 and a copy of a notice of an Extraordinary General Meeting of the Company dated 1st March, 2001; (vii) the entries shown on the CH Direct print out obtained by us from the Companies House database on 6th November, 2001 of the file of the Company maintained at Companies House (the "Company Search"); and 3 6th November, 2001 (viii) such other documents and records as we have considered necessary or appropriate for the purposes of this opinion. The Preference Shares Guarantee Agreement and the Indenture are hereinafter described as the "Agreements". Assumptions 6. In giving this opinion, we have assumed:- (A) that all signatures purporting to be on behalf of any parties to the Agreements are those of persons authorised by the relevant resolutions to execute the Agreements on behalf of such parties; (B) the capacity, power and authority of each of the parties to the Agreements (other than the Company) to execute, deliver and perform the terms thereof; (C) that each of the Agreements has been duly executed and delivered by each of the parties thereto (other than the Company) in accordance with all applicable laws; (D) that each of the parties to the Agreements (other than the Company) is duly incorporated and validly existing under the laws of its country of incorporation; (E) that the Agreements constitute valid and binding obligations of each of the parties thereto under New York law (by which they are expressed to be governed); (F) that no law of any jurisdiction outside England and Wales would render the execution or delivery of the Agreements or the issue of the Shares illegal or effective and that, insofar as any obligation under the Agreements is performed in, or is otherwise subject to, any jurisdiction other than England and Wales, its performance will not be illegal or ineffective by virtue of the laws of that jurisdiction; (G) (i) that the Board Minutes truly record the proceedings of duly convened, constituted and conducted meetings of the Board of Directors and a duly authorised committee of the Board of Directors of the Company and that the directors of the Company present at the meetings recorded in the Board Minutes were acting in the interests and for a proper purpose of the Company; and (ii) that the resolutions passed and authorisations recorded in the Board Minutes have not subsequently been amended, revoked or superseded; (H) the authenticity, completeness and conformity to original documents of all copy documents examined by us; 4 6th November, 2001 (I) (i) that the Agreements were entered into by the Company in good faith and in furtherance of its objects under its Memorandum of Association; and (ii) that the Agreements are in the best interests and to the advantage of the Company; (J) that the annual general meeting of the Company held on 7th July, 2000 was duly convened and held and that resolution number 16 set out in the notice of such meeting was duly passed (without any amendment thereto whatsoever) and the extraordinary general meeting of the Company held on 29th March, 2001 was duly convened and held and the special resolution set out in the notice of such meeting was duly passed as a special resolution (without any amendment thereto whatsoever) and that each of the foregoing resolutions was filed in accordance with Section 380 of the Companies Act 1985 (as amended) and remains in full force and effect; (K) that the Shares will be issued pursuant to and in accordance with the provisions of the Memorandum and Articles of Association of the Company and within the scope of the authority conferred by the resolutions referred to in paragraph (J) above; (L) that there are no agreements or arrangements in existence which affect the issue of the Shares; (M) that the entering into of the Agreements did not cause the Company or its directors to be in default under article 102 (Borrowing Powers) of the Company's Articles of Association and such borrowing limits have not been exceeded by any other agreement entered into by the Company or its subsidiaries; (N) that the copy of the Articles examined by us is complete, accurate and up-to-date and would, if issued today, comply with Section 380 of the Companies Act 1985 (as amended); (O) (i) that the information disclosed by the Company Search and by our telephone search on 5th November, 2001 at the Central Registry of Winding-Up Petitions in relation to the Company was then accurate and has not since then been altered or added to; and (ii) that those searches did not fail to disclose any information relevant for the purposes of this opinion; (P) that, where a document has been examined by us in draft form, it has been or will be given final approval in the form of that draft; 5 6th November, 2001 (Q) that the directors of the Company have acted in good faith in the interests of the Company and in accordance with their duties under all applicable laws and the Memorandum and Articles of Association of the Company; (R) that words and phrases used in the Form S-3 and the Agreements have the same meaning and effect as they would if those documents were governed by English law and there is no provision of any law (other than English law) which would affect anything in this opinion letter; and (S) that no other event occurs after the date hereof which would affect the opinions herein stated. Opinion 7. We are of the opinion that, relying on the assumptions listed in paragraph 6 above and subject to the reservations described in paragraph 8 below:- (A) the Company has been duly incorporated and is validly existing as a public limited company under the laws of England and Wales; (B) the Company has the requisite corporate power to issue the Shares and all shareholder resolutions necessary to authorise such issue have been passed. The Shares to be issued by the Company will, when so issued, have been validly authorised, allotted and issued as fully paid and non-assessable. On this basis, the Shares will be issued free of any pre-emptive rights and no personal liability by way of call will attach to the holders of the Shares as such holders under English law; (C) the execution, delivery and performance by the Company of the Agreements has been duly authorised by all necessary action by the Company; and (D) assuming that the Agreements create valid and binding obligations of the parties under New York law, the obligations of the Company under the Guarantees are valid and binding and no provision of English law prevents them being enforceable against the Company in accordance with their respective terms, except that enforcement (i) may be limited by bankruptcy, insolvency, reorganisation, moratorium or other similar laws relating to or affecting the enforcement of creditors' rights generally and (ii) is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or law). Reservations 8. Our opinion is qualified by the following reservations and by any matter of fact not disclosed to us:- 6 6th November, 2001 (A) English law, the Articles of Association of the Company and the Listing Rules of the United Kingdom Listing Authority contain restrictions on the transfer of shares and voting rights in certain limited circumstances including the following:- (i) transfers of shares may be avoided under the provisions of insolvency law, or where any criminal or illegal activity is involved, or where the transferor or transferee does not have the requisite legal capacity or authority, or where the transferee is subject to restrictions or constraints; (ii) the registration of a transfer of shares by a particular shareholder may be restricted if that shareholder has failed to disclose his interest in shares in the Company after having been served with a notice by the Company requesting such disclosure pursuant to Section 212 of the Companies Act 1985; (iii) save in the case of depositary schemes or clearance services, no transfer will be registered unless the appropriate stamp duty has been paid at the rate of 0.5 per cent. (rounded up if necessary to the nearest multiple of five pounds sterling ((pound)5)) of the stated consideration or if the stock transfer form is otherwise not in order; (iv) any holder of shares who is a director of the Company is bound by the Model Code for Dealing in Securities promulgated by the United Kingdom Listing Authority which imposes restrictions on the ability of directors to transfer shares in the two months prior to the announcement of interim and final results and at other times when directors are in possession of unpublished price sensitive information; (v) under the Companies Act 1985, and subject to the Uncertificated Securities Regulations 1995, the Company can close its register of members from time to time for periods not exceeding 30 days in aggregate in any calendar year and during any such period no transfer of shares may be registered; (vi) no share may be transferred after the passing of a resolution for the winding-up of the Company; (vii) a company or the Court may impose restrictions on the transferability and other rights of shares held by persons who do not comply with that company's proper enquiries, under the Companies Act 1985 or that company's articles of association (if they so provide), considering the ownership of shares; and (viii) there may be circumstances in which a holder of shares becomes obliged to transfer those shares under the provisions of the Companies Act 1985, for example following the implementation of a takeover where minority 7 6th November, 2001 shareholders are compulsorily bought out or following the implementation of a scheme of arrangement. Once a holder of shares becomes obliged to make such a transfer he may not transfer to any other person; (B) shareholders can make arrangements outside the Company's constitutional documents in respect of restrictions on transfer or pre-emptive rights relating to shares, about which we express no opinion; (C) laws relating to liquidation or administration or other laws or procedures affecting generally the enforcement of creditors' rights may affect the obligations of the Company under the Agreements and in respect of the Shares and the remedies available; (D) the English courts may stay proceedings or decline jurisdiction, notably if concurrent proceedings are being brought elsewhere; and (E) if an English court assumes jurisdiction: (ix) it would not apply New York law (by which the Agreements are expressed to be governed) if: (a) New York law were not pleaded and proved; or (b) to do so would be contrary to English public policy or mandatory rules of English law; (x) it may have to have regard to the law of the place of performance of any obligation under the Agreements which is to be performed outside England and Wales. It may refer to that law in relation to the manner of performance and the steps to be taken in the event of defective performance; and (xi) any enforcement of the obligations of the Company under the Agreements in proceedings before the English courts would be by way of grant of a remedy in the event of a breach of those obligations. The nature and availability of the remedies provided by the English courts would depend on the circumstances. These remedies, including an order by the court requiring the payment of damages or the payment of a sum due, would be available subject to principles of law, equity and procedure of general application. Some remedies, including an order by the court requiring specific performance of an obligation or the issue of an injunction, would be entirely within the discretion of the court. The possibility of obtaining any remedy would be lost if proceedings were not to be commenced within certain time limits. The English courts have power to stay proceedings, notably if concurrent proceedings are being brought elsewhere. 8 6th November, 2001 Accordingly, enforcement of the obligations of the Company under the Agreements would not be certain in every circumstance. Consent 9. We hereby consent to the disclosure of this opinion letter as an exhibit to the Form S-3 and its consequent filing with the SEC. Yours faithfully, EX-8.2 11 shireex82.txt (LETTERHEAD OF CAHILL GORDON & REINDEL) November 6, 2001 (212) 701-3000 Shire Pharmaceuticals Group plc East Anton Andover Hampshire SP10 5RG England Ladies and Gentlemen: Reference is made to the Registration Statement on Form S-3 (the "Registration Statement"), which includes the Prospectus of Shire Pharmaceuticals Group plc, a public limited company incorporated under the laws of England and Wales ("Shire"), and Shire Finance Limited, an exempted limited company organized under the laws of the Cayman Islands and a wholly-owned subsidiary of Shire (the "Issuer"), filed by Shire and the Issuer with the Securities and Exchange Commission (the "SEC") in connection with the registration under the Securities Act of 1933, as amended (the "Act"), of the Issuer's 2% Senior Guaranteed Convertible Notes due 2011, guaranteed by Shire (the "Notes"), and Shire's Ordinary Shares, par value (pound)0.05 per share (the "Ordinary Shares" and, together with the Notes, the "Securities"). The Securities are being registered on behalf of certain existing holders of the Securities. The Notes are convertible into exchangeable redeemable preference shares of the Issuer which will be immediately exchanged (unless redeemed at the Company's option for cash) into the Ordinary Shares or American depositary shares representing the Ordinary Shares ("ADSs"). On the basis and subject to the accuracy of the statements contained in the Registration Statement and such other documents as we -2- have considered necessary or appropriate for purposes of this opinion, we hereby confirm that the discussion set forth under the caption "Certain Cayman Islands, U.K. and U.S. Tax Considerations - Material U.S. Federal Income Tax Considerations" in the Registration Statement, insofar as it relates to U.S. law, describes the material U.S. federal income tax consequences relevant to the purchasers of the Notes, and of the Ordinary Shares and the ADSs for which the preference shares issued upon conversion of the Notes may be exchanged. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of our name in the Registration Statement. In giving this consent, we do not admit that we are "experts" within the meaning of section 11 of the Act. Our consent does not constitute a consent under Section 7 of the Act, as we have not certified any part of such Registration Statement and do not otherwise come within the categories of persons whose consent is required under Section 7 of the Act or under the rules and regulations of the SEC thereunder. Very truly yours, /s/ Cahill Gordon & Reindel EX-8.3 12 shireltr.txt The Directors, AYB/GZM Shire Pharmaceuticals Group plc, 020 7710 5035 Hampshire International Business Park, Chineham, Basingstoke, RG24 8EP, 6th November, 2001 Dear Sirs, Introduction 1. We have acted as English legal advisers to you (the "Company") in connection with the Registration Statement on Form S-3 of even date with this letter (the "Form S-3") relating to the US$400,000,000 2 per cent. senior guaranteed notes due 2011 (the "Notes") issued by Shire Finance Limited. 2. This letter may be relied upon only by you and may be used only in connection with the Notes. Neither its contents not its existence may be disclosed to any other person unless we have given our prior written consent or as set out in paragraph 8 below. Scope 3. This opinion is confined to matters of United Kingdom law and Inland Revenue practice as at the date hereof. Accordingly, we have not made any investigation of, and do not express any opinion on, the tax law of any jurisdiction other than the United Kingdom. In particular, we express no opinion on European Community law as it affects any jurisdiction other than the United Kingdom. 4. We have examined copies of the documents mentioned herein. We have not undertaken any exercise which is not described in this letter. The Directors, 2 6th November, 2001 Documents examined 5. For the purposes of this opinion we have examined and relied upon the following documents:- (i) a copy of the Form S-3; and (ii) a copy of the indenture dated 21st August, 2001 among the Company, Shire Finance Limited and The Bank of New York (the "Indenture"). Assumptions 6. In giving this opinion, we have assumed:- (A) that the statements contained in the Form S-3 and the Indenture (other than the discussion set forth under the heading "UK Tax Considerations" in the Form S-3) are complete and accurate as at the date of this opinion; (B) that words and phrases used in the Form S-3 and the Indenture have the same meaning and effect as they would if those documents were governed by English law and there is no provision of any law (other than English law) which would affect anything in this opinion letter; (C) that the forms of the final Form S-3 and the Indenture provided to us are true copies; (D) that Shire Finance Limited is not incorporated in the United Kingdom and that no register of either the Notes or the preference shares issued upon conversion of the Notes, is kept in the United Kingdom; (E) that Shire Finance Limited and the Company are resident in the United Kingdom for United Kingdom tax purposes; (F) the authenticity, completeness and conformity to original documents of all copy documents examined by us; (G) that, where a document has been examined by us in draft form, it has been or will be signed and/or given final approval in the form of that draft; and (H) that no other event occurs after the date hereof which would affect the opinions herein stated. The Directors, 3 5th November, 2001 Opinion 7. We are of the opinion that, relying on the assumptions listed in paragraph 6, the discussion set forth under the heading "UK Tax Considerations" in the Form S-3, insofar as it relates to United Kingdom law and Inland Revenue practice, is a fair reflection of the material United Kingdom tax laws and Inland Revenue practice referred to therein. Consent 8. We hereby consent to the disclosure of this opinion letter as an exhibit to the Form S-3 and its consequent filing with the SEC. Yours faithfully, /s/ Slaughter and May EX-12.1 13 shireex121.txt Exhibit 12.1
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES Fiscal Year Ended December 31, Six Months Ended June 30, 2001 2000 1999 1998 1997 1996 ----------- ------------ ----------- ----------- ------------ ----------- (dollars in thousands) Income from continuing operations before income taxes and minority interest 161,308 259,391 (13,590) 91,812 (24,957) (23,320) Plus fixed charges: Interest expensed and 8,388 16,413 11,644 6,648 1,334 7,848 capitalized Capitalized expenses related 2,841 576 2,145 325 -- -- to indebtedness Total fixed charges 11,229 16,989 13,789 6,973 1,334 7,848 Adjusted earnings 172,537 276,380 199 98,785 (23,623) (15,472) Ratio of earnings to fixed 15.3653 16.26817 0.014432 14.16679 (17.7084) (1.97146) charges
EX-23.1 14 shireex231.txt Exhibit 23.1 CONSENT OF ARTHUR ANDERSEN, INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in this Shire Pharmaceuticals Group plc Registration Statement on Form S-3 of our report included in the Shire Pharmaceuticals Group plc current report on Form 8-K dated August 15 2001 on our audits of the financial statements of Shire Pharmaceuticals Group plc as of December 31, 2000, 1999 and 1998 and for the periods then ended. /s/ Arthur Andersen ARTHUR ANDERSEN November 6, 2001 EX-23.2 15 shireex232.txt Exhibit 23.2 Consent of Independent Auditors We consent to the reference to our firm under the caption "Independent Auditors" in the Registration Statement on Form S-3 and related Prospectus of Shire Finance Limited and Shire Pharmaceuticals Group plc for the registration of $400,000,000 aggregate principal amount of 2% Senior Guaranteed Convertible Notes due 2011, and the incorporation by reference therein of our report dated February 16, 1999, included in the Shire Pharmaceuticals Group plc Current Report on Form 8-K, filed with the Securities and Exchange Commission on August 15, 2001, with respect to the consolidated financial statements of Roberts Pharmaceutical Corporation, as amended, included in the Annual Report on Form 10-K/A of Roberts Pharmaceutical Corporation for the year ended December 31, 1998. /s/ Ernst & Young LLP MetroPark, New Jersey November 2, 2001 EX-23.3 16 shireex233.txt Exhibit 23.3 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Shire Pharmaceuticals Group plc Registration Statement on Form S-3 of our report dated January 25, 2001 included in the current report on Form 8-K of Shire Pharmaceuticals Group plc filed August 15, 2001, on our audits of the consolidated financial statements of BioChem Pharma Inc., prepared in United States of America dollars and in accordance with generally accepted accounting principles in the United States of America as of December 31, 2000 and 1999 and for the years ended December 31, 2000, 1999 and 1998. /s/ Raymond Chabot Grant Thornton Chartered Accountants General Partnership Montreal, Canada November 6, 2001 EX-23.4 17 shire3x234.txt Exhibit 23.4 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Registration Statement of Shire Pharmaceuticals Group PLC on Form S-3 of our report dated January 26, 2000, on our audits of the consolidated financial statements of BioChem Pharma Inc. ("BioChem") prepared in Canadian dollars and in accordance with generally accepted accounting principles in Canada, as of December 31, 1999 and 1998 and for the years ended December 31, 1999, and 1998 and 1997, which report is incorporated by reference herein from BioChem's Annual Report on Form 20-F for the year ended December 31, 1999. /s/ Raymond Chabot Grant Thornton Chartered Accountants General Partnership Montreal, Canada November 6, 2001 EX-25.1 18 shiret1.txt FORM T-1 = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = FORM T-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) |__| --------------------------- THE BANK OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-5160382 (State of incorporation (I.R.S. employer if not a U.S. national bank) identification no.) One Wall Street, New York, N.Y. 10286 (Address of principal executive offices) (Zip code) --------------------------- SHIRE FINANCE LIMITED (Exact name of obligor as specified in its charter) Cayman Islands Applied For (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification no.) Hampshire International Business Park Chineham, Basingstoke Hampshire RG24 8EP England (Address of principal executive offices) (Zip code) 2% Senior Guaranteed Convertible Notes due 2011 (Title of the indenture securities) = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = 1. General information. Furnish the following information as to the Trustee: (a) Name and address of each examining or supervising authority to which it is subject. -------------------------------------------------------------------------------- Name Address -------------------------------------------------------------------------------- Superintendent of Banks of the State 2 Rector Street, New York, N.Y. 10006, of New York and Albany, N.Y. 12203 Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045 Federal Deposit Insurance Corporation Washington, D.C. 20429 New York Clearing House Association New York, New York 10005 (b) Whether it is authorized to exercise corporate trust powers. Yes. 2. Affiliations with Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. 16. List of Exhibits. Exhibits identified in parentheses below, on file with the Commission, are incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d). 1. A copy of the Organization Certificate of The Bank of New York (formerly Irving Trust Company) as now in effect, which contains the authority to commence business and a grant of powers to exercise corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed with Registration Statement No. 33-29637.) 4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1 filed with Registration Statement No. 33-31019.) 6. The consent of the Trustee required by Section 321(b) of the Act. (Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.) 7. A copy of the latest report of condition of the Trustee published pursuant to law or to the requirements of its supervising or examining authority. -2- SIGNATURE Pursuant to the requirements of the Act, the Trustee, The Bank of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in The City of New York, and State of New York, on the 18th day of October, 2001. THE BANK OF NEW YORK By: /S/ STACEY POINDEXTER -------------------------------------------- Name: STACEY POINDEXTER Title: ASSISTANT TREASURER EX-99.1 19 shireex991.txt August 17, 2001 Dear Mr. Brecher: Re: Purchase Agreement by Shire Finance Limited dated as of August 15, 2001 guaranteed by Shire Pharmaceuticals Group plc, Indenture among Shire Finance Limited (the "Issuer:), Shire Pharmaceuticals Group plc (the "Guarantor") to the Bank of New York ("Trustee") dated as of August 21, 2001 and the Preference Shares Guarantee Agreement by Shire Finance Limited, Shire Pharmaceuticals Group plc (the "Guarantor") and The Bank of New York ("Guarantee Trustee") dated July __, 2001 in respect of the 2% Senior Guaranteed Convertible Notes Due 2011. CT Corporation System, located at 111 Eighth Avenue, New York New York 10011, hereby accepts its appointments as agent for service of process for each of Shire Finance Limited and Shire Pharmaceuticals Group plc in connection with the referenced Agreements. Any process by us shall be forwarded to: Shire Pharmaceuticals Group plc Hampshire International Business Park Chineham, Basingstoke, Hampshire United Kingdom RG24 8EP Attention: Secretary Tel # (011)44 1256 894 000 We acknowledge receiving $600 in payment of our charge for the first year of these two appointments. Each of Shire Finance Limited and Shire Pharmaceuticals Group plc will be bulled annually at our then-current renewal rate so long as such bills continue to be paid, or until we are advised in writing to discontinue our representation. Our continued representation is contingent upon our receipt of timely payment of our charges for this service. Very truly yours, /s/ Frieda Dawson Customer Specialist Ord. #0074737467 -2- Stephen Brecher Cahill Gordon & Reindel 80 Pine Street New York, N.Y. 10005