EXHIBIT 4.5
FORM OF VOTING AND EXCHANGE TRUST AGREEMENT
MEMORANDUM OF AGREEMENT MADE AS OF THE - DAY OF - , 2001.
AMONG:
SHIRE ACQUISITION INC., a corporation
existing under the laws of Canada
(hereinafter referred to as "EXCHANGECO");
-- and --
SHIRE PHARMACEUTICALS GROUP PLC, a company
registered in England under registry number
2883758 (hereinafter referred to as "SHIRE"
),
-- and --
GENERAL TRUST OF CANADA, a trust company
incorporated under the laws of Canada,
(hereinafter referred to as "TRUSTEE");
WHEREAS pursuant to a merger agreement (the "MERGER AGREEMENT") dated as of
December 10, 2000 by and among Shire, ExchangeCo and BioChem Pharma Inc.
("BIOCHEM"), ExchangeCo has agreed to issue exchangeable shares (the
"EXCHANGEABLE SHARES") to certain holders of common shares of BioChem pursuant
to the plan of arrangement (the "PLAN OF ARRANGEMENT") contemplated by the
Merger Agreement;
AND WHEREAS pursuant to the Merger Agreement, Shire and ExchangeCo have
agreed to execute a voting and exchange trust agreement substantially in the
form of this trust agreement;
AND WHEREAS the above recitals are made as statements of fact by ExchangeCo
and Shire, and not by the Trustee;
NOW THEREFORE in consideration of the respective covenants and agreements
provided in this trust agreement and for other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the parties
hereto covenant and agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this trust agreement, the following terms shall have the following
meanings:
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person. For
the purposes of this definition, "CONTROL" (including, with correlative
meanings, the terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH"), as
applied to any Person, means the possession by another Person, directly or
indirectly, of the power to direct or cause the direction of the management
and policies of that first mentioned Person, whether through the ownership
of voting securities, by contract or otherwise.
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"ARRANGEMENT" means the arrangement under Section 192 of the CBCA on the
terms and subject to the conditions set forth in the Merger Agreement and
the Plan of Arrangement and any amendments or variations to the Plan of
Arrangement made in accordance with Article 6 of the Plan of Arrangement or
made at the direction of the Court.
"ASSIGNEE" has the meaning ascribed to that term in Section 12.3.
"AUTHORIZED PERSON" has the meaning ascribed to that term in Section 6.17.
"AUTOMATIC EXCHANGE RIGHT" means the benefit of the obligation of Shire to
effect the automatic exchange of Shire Ordinary Shares for Exchangeable
Shares pursuant to Section 5.14.
"BENEFICIARIES" means the registered holders from time to time of
Exchangeable Shares, other than Shire and the Shire Affiliates.
"BENEFICIARY VOTES" has the meaning ascribed to that term in Section 4.2.
"BIOCHEM" means BioChem Pharma Inc., a corporation existing under the laws
of Canada.
"BOARD OF DIRECTORS" means the Board of Directors of ExchangeCo or Shire, as
the case may be.
"BUSINESS DAY" means any day on which banks are not required or authorized
to close in the City of Montreal, Canada, the City of London, England and
the City of New York, U.S.A.
"CALLCO" means 3829359 Canada Inc., a corporation existing under the laws of
Canada and being a wholly-owned Subsidiary of Shire.
"CANADIAN DOLLAR EQUIVALENT" means, in respect of an amount expressed in a
currency other than Canadian dollars (the "FOREIGN CURRENCY AMOUNT") at any
date, the product obtained by multiplying: (a) the Foreign Currency Amount,
by (b) the noon spot exchange rate on such date for such foreign currency
expressed in Canadian dollars as reported by the Bank of Canada or, in the
event such spot exchange rate is not available, such exchange rate on such
date for such foreign currency expressed in Canadian dollars as may be
deemed by the Board of Directors to be appropriate for such purpose.
"CBCA" means the CANADA BUSINESS CORPORATIONS ACT as now in effect and as
may be amended from time to time prior to the date upon which the Plan of
Arrangement becomes effective as set forth in the certificate of arrangement
giving effect to the Arrangement issued by the director pursuant to
subsection 192(7) of the CANADA BUSINESS CORPORATIONS ACT, including the
regulations made thereunder.
"COURT" means the Superior Court of Quebec.
"CURRENT MARKET PRICE" means, in respect of a Shire Ordinary Share on any
date, the Canadian Dollar Equivalent of the average of the closing prices of
Shire Ordinary Shares during a period of 20 consecutive trading days ending
not more than three trading days before such date on the LSE, or, if the
Shire Ordinary Shares are not then admitted to the official list of the UKLA
and to trading on the LSE, on such other stock exchange or automated
quotation system on which the Shire Ordinary Shares are listed or quoted, as
the case may be, as may be selected by the Board of Directors of Shire for
such purpose; provided, however, that if in the opinion of the Board of
Directors of Shire the public distribution or trading activity of Shire
Ordinary Shares during such period does not create a market which reflects
the fair market value of Shire Ordinary Shares, then the Current Market
Price of a Shire Ordinary Share shall be determined by the Board of
Directors of Shire, in good faith and in its sole discretion, and provided
further that any such selection, opinion or determination by the Board of
Directors of Shire shall be conclusive and binding.
"ENTITY" means any corporation (including any non-profit corporation),
general partnership, limited partnership, limited liability partnership,
joint venture, estate, trust, company (including any company
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limited by shares, limited liability company or joint share company), firm,
society or other enterprise, association, organization or entity.
"EXCHANGE RIGHT" has the meaning ascribed to that term in Section 5.1.
"EXCHANGEABLE SHARE" means a share in the class of non-voting exchangeable
shares in the capital of ExchangeCo having the rights, privileges,
restrictions and conditions set forth in the Exchangeable Share Provisions.
"EXCHANGEABLE SHARE PROVISIONS" means the rights, privileges, restrictions
and conditions attaching to the Exchangeable Shares as set forth in
Appendix 1 to the Plan of Arrangement.
"EXCHANGEABLE SHARE SUPPORT AGREEMENT" means the exchangeable share support
agreement made as of even date herewith among ExchangeCo, CallCo and Shire.
"EXCHANGECO" means Shire Acquisition Inc. (formerly 3829341 Canada Inc.), a
corporation existing under the laws of Canada and being a wholly-owned
subsidiary of Shire.
"GOVERNMENTAL BODY" means any: (a) nation, state, commonwealth, province,
territory, county, municipality, district or other jurisdiction of any
nature; (b) federal, state, provincial, local, municipal, foreign or other
government; or (c) governmental or quasi-governmental authority of any
nature (including any governmental division, department, agency, commission,
instrumentality, official, ministry, fund, foundation, center, organization,
unit, body or Entity and any court or other tribunal).
"INDEMNIFIED PARTIES" has the meaning ascribed to that term in Section 8.1.
"INSOLVENCY EVENT" means the institution by ExchangeCo of any proceeding to
be adjudicated a bankrupt or insolvent or to be wound up, or the consent of
ExchangeCo to the institution of bankruptcy, insolvency or winding-up
proceedings against ExchangeCo, or the filing of a petition, answer or
consent seeking dissolution or winding-up under any bankruptcy, insolvency
or analogous laws, including without limitation the COMPANIES CREDITORS'
ARRANGEMENT ACT (Canada) and the BANKRUPTCY AND INSOLVENCY ACT (Canada), and
the failure by ExchangeCo to contest in good faith any such proceedings
commenced in respect of ExchangeCo within 30 days of becoming aware thereof,
or the consent by ExchangeCo to the filing of any such petition or to the
appointment of a receiver, or the making by ExchangeCo of a general
assignment for the benefit of creditors, or the admission in writing by
ExchangeCo of its inability to pay its debts generally as they become due,
or ExchangeCo not being permitted, pursuant to solvency requirements of
applicable law, to redeem any Retracted Shares pursuant to Section 6.6 of
the Exchangeable Share Provisions.
"LETTER OF TRANSMITTAL AND ELECTION FORM" has the meaning ascribed to that
term in the Plan of Arrangement.
"LIQUIDATION CALL RIGHT" has the meaning ascribed to that term in the Plan
of Arrangement.
"LIQUIDATION EVENT" has the meaning ascribed to that term in
Section 5.14(b).
"LIQUIDATION EVENT EFFECTIVE DATE" has the meaning ascribed to that term in
Section 5.14(c).
"LIQUIDATION PURCHASE PRICE" has the meaning ascribed hereto in
Section 5.14(c).
"LIST" has the meaning ascribed to that term in Section 4.6.
"LSE" means the London Stock Exchange Plc.
"MERGER AGREEMENT" means the agreement made as of December 10, 2000 between
Shire, ExchangeCo and BioChem, as amended, supplemented and/or restated in
accordance therewith, providing for, among other things, the Arrangement.
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"OFFICER'S CERTIFICATE" means, with respect to Shire or ExchangeCo, as the
case may be, a certificate signed by any one of the authorized signatories
of Shire or ExchangeCo, as the case may be.
"PERSON" means any individual, Entity or Governmental Body.
"PLAN OF ARRANGEMENT" means the plan of arrangement appended to the Merger
Agreement.
"PURCHASE PRICE" has the meaning ascribed to that term in Section 5.5.
"REDEMPTION CALL RIGHT" has the meaning ascribed to that term in the Plan of
Arrangement.
"RETRACTED SHARES" has the meaning ascribed to that term in Section 5.8.
"RETRACTION CALL RIGHT" has the meaning ascribed to that term in the
Exchangeable Share Provisions.
"SHIRE" means Shire Pharmaceuticals Group Plc, a company registered in
England under registry number 2883758.
"SHIRE ADSS" has the meaning ascribed to that term in the Plan of
Arrangement.
"SHIRE AFFILIATES" means Affiliates of Shire.
"SHIRE CALL RIGHT" has the meaning ascribed to that term in the Plan of
Arrangement.
"SHIRE MEETING" has the meaning ascribed to that term in Section 4.2.
"SHIRE ORDINARY SHARES" means ordinary shares of five xxxxx each in the
capital of Shire, and any other security into which such share may be
changed.
"SHIRE SPECIAL VOTING SHARES" means the special voting shares of Shire which
entitle the holder of record of those shares to a number of votes at
meetings of holders of Shire Ordinary Shares equal to the number of
Exchangeable Shares outstanding from time to time multiplied by three (other
than Exchangeable Shares held by Shire and Shire Affiliates), which shares
are to be issued to, deposited with, and voted by, the Trustee as described
herein.
"SHIRE SUCCESSOR" has the meaning ascribed to that term in Section 10.1.
"STAMP TAXES" means all stamp, registration and transfer taxes and duties or
their equivalents in all jurisdictions where such taxes and duties are
payable as a result of any of the transactions contemplated by the Plan of
Arrangement including, without limitation, United Kingdom stamp duty and
stamp duty reserve tax.
"TOTAL LIQUIDATION PURCHASE PRICE" means the Liquidation Purchase Price
multiplied by the relevant number of Exchangeable Shares to which such
Liquidation Purchase Price applies in the circumstances.
"TOTAL PURCHASE PRICE" means the Purchase Price multiplied by the relevant
number of Exchangeable Shares to which such Purchase Price applies in the
circumstances.
"TRUST" means the trust created by this trust agreement under the laws of
the Province of Quebec.
"TRUST ESTATE" means the Shire Special Voting Shares, any other securities,
the Exchange Right, the Automatic Exchange Right and any money or other
property which may be held by the Trustee from time to time pursuant to this
trust agreement.
"TRUSTEE" means General Trust of Canada or such other trust company or other
Entity that Shire may, in its reasonable discretion, choose and, subject to
the provisions of Article 9, includes any successor trustee.
"UKLA" means the United Kingdom Listing Authority.
"VOTING RIGHTS" means the voting rights attached to the Shire Special Voting
Shares as set forth in Article 4.
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1.2 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this trust agreement into Articles, sections and other
portions and the insertion of headings are for convenience of reference only and
should not affect the construction or interpretation of this trust agreement.
Unless otherwise indicated, all references to an "ARTICLE" or "SECTION" followed
by a number and/or a letter refer to the specified Article or section of this
trust agreement. The terms "THIS TRUST AGREEMENT", "HEREOF", "HEREIN" and
"HEREUNDER" and similar expressions refer to this trust agreement and not to any
particular Article, section or other portion hereof and include any agreement or
instrument supplementary or ancillary hereto.
1.3 NUMBER, GENDER, ETC.
Words importing the singular number only shall include the plural and VICE
VERSA. Words importing any gender shall include all genders.
1.4 DATE FOR ANY ACTION
If any date on which any action is required to be taken under this trust
agreement is not a Business Day, such action shall be required to be taken on
the next succeeding Business Day.
ARTICLE 2
PURPOSE OF AGREEMENT
2.1 ESTABLISHMENT OF TRUST
The purpose of this trust agreement is to create the Trust for the benefit
of the Beneficiaries, as herein provided. The Trustee will hold the Shire
Special Voting Shares in order to enable the Trustee to execute the Voting
Rights and will hold the Exchange Right and the Automatic Exchange Right in
order to enable the Trustee to exercise such rights, in each case as trustee for
and on behalf of the Beneficiaries as provided in this trust agreement.
2.2 ADMINISTRATION OF THE PROPERTY OF OTHERS
Title VII of the Civil Code of Quebec, regarding the administration of the
property of others, shall not apply to the provisions of this trust agreement,
the Trustee, the Beneficiaries, Shire, ExchangeCo, the administrator of the
Trust, the Trust Estate or any other property held by the Trust; furthermore,
the obligations and duties of the Trustee shall be solely as set forth herein.
ARTICLE 3
SHIRE SPECIAL VOTING SHARES
3.1 ISSUE AND OWNERSHIP OF THE SHIRE SPECIAL VOTING SHARES
Shire hereby issues to and deposits with the Trustee, the Shire Special
Voting Shares to be hereafter held of record by the Trustee as trustee for and
on behalf of, and for the use and benefit of, the Beneficiaries and in
accordance with the provisions of this trust agreement. Shire hereby
acknowledges receipt from the Trustee as trustee for and on behalf of the
Beneficiaries of good and valuable consideration (and the adequacy thereof) for
the issuance of the Shire Special Voting Shares by Shire to the Trustee. During
the term of the Trust and subject to the terms and conditions of this trust
agreement, the Trustee shall possess and be vested with all rights in respect of
the Shire Special Voting Shares and
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shall be entitled to exercise all of the rights and powers of an owner with
respect to the Shire Special Voting Shares provided that the Trustee shall:
(a) hold the Shire Special Voting Shares and all the rights related thereto
as trustee solely for the use and benefit of the Beneficiaries in
accordance with the provisions of this trust agreement; and
(b) except as specifically authorized by this trust agreement, have no power
or authority to sell, transfer, vote or otherwise deal in or with the
Shire Special Voting Shares and the Shire Special Voting Shares shall not
be used or disposed of by the Trustee for any purpose other than the
purposes for which this Trust is created pursuant to this trust
agreement.
3.2 LEGENDED SHARE CERTIFICATES
ExchangeCo will cause each certificate representing Exchangeable Shares to
bear an appropriate legend notifying the Beneficiaries of their right to
instruct the Trustee with respect to the exercise of the Voting Rights in
respect of the Exchangeable Shares of the Beneficiaries.
3.3 SAFE KEEPING OF CERTIFICATE
The certificate representing the Shire Special Voting Shares shall at all
times be held in safe keeping by the Trustee or its duly authorized agent.
ARTICLE 4
EXERCISE OF VOTING RIGHTS
4.1 VOTING RIGHTS
The Trustee, as the holder of record of the Shire Special Voting Shares,
shall be entitled to all the Voting Rights and to vote in person or by proxy the
Shire Special Voting Shares on any matters, questions, proposals or propositions
whatsoever that may properly come before the shareholders of Shire at a Shire
Meeting. The Voting Rights shall be and remain vested in and exercised by the
Trustee. Subject to Section 6.15:
(a) the Trustee shall exercise the Voting Rights only on the basis of
instructions received in accordance with this Article 4 from
Beneficiaries entitled to instruct the Trustee as to the voting thereof
at the time at which the Shire Meeting is held; and
(b) to the extent that no instructions are received from a Beneficiary with
respect to the Voting Rights to which such Beneficiary is entitled, the
Trustee shall not exercise or permit the exercise of such Voting Rights.
4.2 NUMBER OF VOTES
With respect to all meetings of shareholders of Shire at which holders of
Shire Ordinary Shares are entitled to vote (each, a "SHIRE MEETING"), each
Beneficiary shall be entitled to instruct the Trustee to cast and exercise three
of the votes comprised in the Voting Rights for each Exchangeable Share owned of
record by such Beneficiary on the record date established by Shire or by
applicable law for such Shire Meeting (the "BENEFICIARY VOTES"), in respect of
each matter, question, proposal or proposition to be voted on at such Shire
Meeting.
4.3 MAILINGS TO SHAREHOLDERS
With respect to each Shire Meeting, the Trustee will mail or cause to be
mailed (or otherwise communicate in the same manner as Shire utilizes in
communications to holders of Shire Ordinary Shares or Shire ADSs subject to the
Trustee being advised in writing of that method and its ability to provide that
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method of communication) to each of the Beneficiaries named in the List referred
to in Section 4.6, the following materials (such mailing or communication to
commence on the same day as the mailing (or other communication) is commenced by
Shire to its shareholders or, if later, promptly after receipt by the Trustee of
such materials):
(a) a copy of the notice of such Shire Meeting, together with any related
materials, including, without limitation, any circular or information
statement or listing particulars, to be provided to shareholders of
Shire;
(b) a statement that such Beneficiary is entitled to instruct the Trustee as
to the exercise of the Beneficiary Votes with respect to such Shire
Meeting or, pursuant to Section 4.7, to attend such Shire Meeting and to
exercise personally the Beneficiary Votes thereat;
(c) a statement as to the manner in which such instructions may be given to
the Trustee, including an express indication that instructions may be
given to the Trustee to give:
(i) a proxy to such Beneficiary or his designee to exercise personally
the Beneficiary Votes; or
(ii) a proxy to a designated agent or other representative of the
management of Shire to exercise such Beneficiary Votes;
(d) a statement that if no such instructions are received from the
Beneficiary, the Beneficiary Votes to which such Beneficiary is entitled
will not be exercised;
(e) a form of direction whereby the Beneficiary may instruct the Trustee as
to voting and otherwise as contemplated herein; and
(f) a statement of the time and date by which such instructions must be
received by the Trustee in order to be binding upon it, which, in the
case of a Shire Meeting, shall be not later than the close of business on
the fourth Business Day prior to such meeting, and of the method for
revoking or amending such instructions.
For the purpose of determining Beneficiary Votes to which a Beneficiary is
entitled in respect of any Shire Meeting, the number of Exchangeable Shares
owned of record by the Beneficiary shall be determined at the close of business
on the record date established by Shire or by applicable law for purposes of
determining shareholders entitled to vote at such Shire Meeting. Shire will
notify the Trustee of any decision of the Board of Directors of Shire with
respect to the calling of any Shire Meeting and shall provide all necessary
information and materials to the Trustee in each case promptly and in any event
in sufficient time to enable the Trustee to perform its obligations contemplated
by this Section 4.3.
4.4 COPIES OF SHAREHOLDER INFORMATION
Shire will deliver to the Trustee copies of all proxy materials (including
notices of Shire Meetings but excluding proxies to vote Shire Ordinary Shares),
information statements, reports (including without limitation, all interim and
annual financial statements) and other written communications that, in each
case, are to be distributed from time to time to holders of Shire Ordinary
Shares or Shire ADSs in sufficient quantities and in sufficient time so as to
enable the Trustee to send those materials to each Beneficiary at the same time
as such materials are first sent to holders of Shire Ordinary Shares or Shire
ADSs. The Trustee will mail or otherwise send to each Beneficiary, at the
expense of Shire, copies of all such materials (and all materials specifically
directed to the Beneficiaries or to the Trustee for the benefit of the
Beneficiaries by Shire) received by the Trustee from Shire and will use its best
efforts to mail or otherwise send such materials contemporaneously with the
sending by Shire or its designee of such materials to holders of Shire Ordinary
Shares or Shire ADSs. The Trustee will also make available for inspection by any
Beneficiary at the Trustee's principal corporate trust office in the City of
Montreal during
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the regular business hours of the Trustee all proxy materials, information
statements, reports and other written communications that are:
(a) received by the Trustee as the registered holder of the Shire Special
Voting Shares and made available by Shire generally to the holders of
Shire Ordinary Shares or Shire ADSs; or
(b) specifically directed to the Beneficiaries or to the Trustee for the
benefit of the Beneficiaries by Shire.
4.5 OTHER MATERIALS
As soon as reasonably practicable after receipt by Shire or shareholders of
Shire (if such receipt is known by Shire) of any material sent or given by or on
behalf of a third party to holders of Shire Ordinary Shares or Shire ADSs
generally, including without limitation, dissident proxy and information
circulars (and related information and material) and tender and exchange offer
circulars (and related information and material), Shire shall use its reasonable
efforts to obtain and deliver to the Trustee copies thereof in sufficient
quantities so as to enable the Trustee to forward such material (unless the same
has been provided directly to Beneficiaries by such third party) to each
Beneficiary as soon as possible thereafter. As soon as reasonably practicable
after receipt thereof, the Trustee will mail or otherwise send to each
Beneficiary, at the expense of Shire, copies of all such materials received by
the Trustee from Shire. The Trustee will also make available for inspection by
any Beneficiary at the Trustee's principal corporate trust office in the City of
Montreal during the regular business hours of the Trustee copies of all such
materials.
4.6 LIST OF PERSONS ENTITLED TO VOTE
ExchangeCo shall, (a) prior to each annual general and special Shire Meeting
and (b) forthwith upon each request made at any time by the Trustee in writing,
prepare or cause to be prepared a list (a "LIST") of the names and addresses of
the Beneficiaries arranged in alphabetical order (and, if requested, arranged by
jurisdiction of residence) and showing the number of Exchangeable Shares held of
record by each such Beneficiary, in each case at the close of business on the
date specified by the Trustee in such request or, in the case of a List prepared
in connection with a Shire Meeting, at the close of business on the record date
established by Shire or pursuant to applicable law for determining the holders
of Shire Ordinary Shares entitled to receive notice of and/or to vote at such
Shire Meeting. Each such List shall be delivered to the Trustee promptly after
receipt by ExchangeCo of such request or the record date for such meeting or
seeking of consent, as the case may be, and in any event within sufficient time
to enable the Trustee to perform its obligations under this trust agreement.
Shire agrees to give ExchangeCo notice (with a copy to the Trustee) of the
calling of any Shire Meeting, together with the record dates therefor,
sufficiently prior to the date of the calling of such meeting or seeking of such
consent so as to enable ExchangeCo to perform its obligations under this
Section 4.6.
4.7 ENTITLEMENT TO DIRECT VOTES
Any Beneficiary named in a List prepared in connection with any Shire
Meeting will be entitled (a) to instruct the Trustee in the manner described in
Section 4.3 with respect to the exercise of the Beneficiary Votes to which such
Beneficiary is entitled or (b) to attend such meeting and personally exercise
thereat, as the proxy of the Trustee, the Beneficiary Votes to which such
Beneficiary is entitled.
4.8 VOTING BY TRUSTEE, AND ATTENDANCE OF TRUSTEE REPRESENTATIVE AT MEETING
(a) In connection with each Shire Meeting, the Trustee shall exercise,
either in person or by proxy, in accordance with the instructions
received from a Beneficiary pursuant to Section 4.3, the Beneficiary
Votes as to which such Beneficiary is entitled to direct the vote (or any
lesser number thereof as may be set forth in the instructions); provided,
however, that such written instructions are received by the Trustee from
the Beneficiary prior to the time and date fixed by the Trustee
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for receipt of such instruction in the notice given by the Trustee to the
Beneficiary pursuant to Section 4.3.
(b) Subject to the timely receipt of instructions as contemplated in
Section 4.3(f), the Trustee shall cause a representative who is empowered
by it to sign and deliver, on behalf of the Trustee, proxies for Voting
Rights to attend each Shire Meeting. Upon submission by a Beneficiary (or
its designee) of identification satisfactory to the Trustee's
representative, and at the Beneficiary's request, such representative
shall sign and deliver to such Beneficiary (or its designee) a proxy to
exercise personally the Beneficiary Votes as to which such Beneficiary is
otherwise entitled hereunder to direct the vote, if such Beneficiary
either (i) has not previously given the Trustee instructions pursuant to
Section 4.3 in respect of such meeting or (ii) submits to such
representative written revocation of any such previous instructions. At
such meeting, the Beneficiary exercising such Beneficiary Votes shall
have the same rights as the Trustee to speak at the meeting in favour of
any matter, question, proposal or proposition, to vote by way of ballot
at the meeting in respect of any matter, question, proposal or
proposition, and to vote at such meeting by way of a show of hands in
respect of any matter, question or proposition.
4.9 DISTRIBUTION OF WRITTEN MATERIALS
Any written materials distributed by the Trustee pursuant to this trust
agreement shall be sent by mail (or otherwise communicated in the same manner as
Shire utilizes in communications to holders of Shire Ordinary Shares or Shire
ADSs subject to the Trustee being advised in writing of that method of
communication and its ability to provide that method of communication) to each
Beneficiary at its address as shown on the books of ExchangeCo. ExchangeCo shall
provide or cause to be provided to the Trustee for this purpose, on a timely
basis and without charge or other expense:
(a) a current List; and
(b) upon the request of the Trustee, mailing labels to enable the Trustee to
carry out its duties under this trust agreement.
4.10 TERMINATION OF VOTING RIGHTS
All of the rights of a Beneficiary with respect to the Beneficiary Votes
exercisable in respect of the Exchangeable Shares held by such Beneficiary,
including the right to instruct the Trustee as to the voting of or to vote
personally such Beneficiary Votes, shall be deemed to be surrendered by the
Beneficiary to Shire or CallCo, as the case may be, and such Beneficiary Votes
and the Voting Rights represented thereby shall cease immediately upon the
delivery by such holder to the Trustee of the certificates representing such
Exchangeable Shares in connection with the exercise by the Beneficiary of the
Exchange Right or the occurrence of the automatic exchange of Exchangeable
Shares for Shire Ordinary Shares, as specified in Article 5 (unless, in either
case, Shire shall not have delivered the requisite Shire Ordinary Shares and/or
Shire ADSs, as the case may be, issuable in exchange for the Exchangeable Shares
to the Trustee for delivery to the Beneficiaries), or upon the redemption of
Exchangeable Shares pursuant to Article 6 or 7 of the Exchangeable Share
Provisions, or upon the effective date of the liquidation, dissolution or
winding-up of ExchangeCo pursuant to Article 5 of the Exchangeable Share
Provisions, or upon the purchase of Exchangeable Shares from the holder thereof
by CallCo pursuant to the exercise by CallCo of the Retraction Call Right, the
Redemption Call Right or the Liquidation Call Right, or upon the purchase of
Exchangeable Shares from the holder thereof by Shire or CallCo, as the case may
be, pursuant to the exercise by Shire of the Shire Call Right.
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ARTICLE 5
EXCHANGE RIGHT AND AUTOMATIC EXCHANGE
5.1 GRANT AND OWNERSHIP OF THE EXCHANGE RIGHT
Shire hereby grants to the Trustee as trustee for and on behalf of, and for
the use and benefit of, the Beneficiaries (i) the right (the "EXCHANGE RIGHT"),
exercisable upon the occurrence and during the continuance of an Insolvency
Event, to require Shire to purchase from each or any Beneficiary all or any part
of the Exchangeable Shares held by each or any such Beneficiary and (ii) the
Automatic Exchange Right, all in accordance with the provisions of this trust
agreement. Shire hereby acknowledges receipt from the Trustee as trustee for and
on behalf of the Beneficiaries of good and valuable consideration (and the
adequacy thereof) for the grant of the Exchange Right and the Automatic Exchange
Right by Shire to the Trustee. During the term of the Trust and subject to the
terms and conditions of this trust agreement, the Trustee shall be entitled to
exercise all of the rights and powers related to the Exchange Right and the
Automatic Exchange Right, provided that the Trustee shall:
(a) hold the Exchange Right and the Automatic Exchange Right as trustee
solely for the use and benefit of the Beneficiaries in accordance with
the provisions of this trust agreement; and
(b) except as specifically authorized by this trust agreement, have no power
or authority to exercise or otherwise deal in or with the Exchange Right
or the Automatic Exchange Right, and the Trustee shall not exercise any
such rights for any purpose other than the purposes for which the Trust
is created pursuant to this trust agreement.
5.2 OBLIGATIONS OF SHIRE
The obligations of Shire to deliver Shire Ordinary Shares and/or Shire ADSs,
as the case may be, pursuant to the Automatic Exchange Right or the Exchange
Right are subject to all applicable laws and regulatory or stock exchange
requirements.
5.3 LEGENDED SHARE CERTIFICATES
ExchangeCo will cause each certificate representing Exchangeable Shares to
bear an appropriate legend notifying the Beneficiaries of:
(a) their right to instruct the Trustee with respect to the exercise of the
Exchange Right in respect of the Exchangeable Shares held by a
Beneficiary; and
(b) the Automatic Exchange Right.
5.4 GENERAL EXERCISE OF EXCHANGE RIGHT
The Exchange Right shall be and remain vested in and exercisable by the
Trustee. Subject to Section 6.15, the Trustee shall exercise the Exchange Right
only on the basis of instructions received pursuant to this Article 5 from
Beneficiaries entitled to instruct the Trustee as to the exercise thereof. To
the extent that no instructions are received from a Beneficiary with respect to
the Exchange Right, the Trustee shall not exercise or permit the exercise of the
Exchange Right.
5.5 PURCHASE PRICE
The purchase price payable by Shire for each Exchangeable Share to be
purchased by Shire under the Exchange Right shall be an amount per share equal
to (a) the Current Market Price of a Shire Ordinary Share on the last Business
Day prior to the day of closing of the purchase and sale of such Exchangeable
Share under the Exchange Right multiplied by three, which shall be satisfied in
full by Shire causing to be sent to such holder three Shire Ordinary Shares
and/or one Shire ADS (at the option of the holder as
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indicated to the Trustee), plus (b) to the extent not paid by ExchangeCo, an
additional amount equivalent to the full amount of all declared and unpaid
dividends on each such Exchangeable Share held by such holder on any dividend
record date which occurred prior to the closing of the purchase and sale (the
"PURCHASE PRICE"). The purchase price for each such Exchangeable Share so
purchased may be satisfied only by Shire issuing and delivering or causing to be
delivered to the Trustee, on behalf of the relevant Beneficiary, three Shire
Ordinary Shares or one Shire ADS, as the case may be, and on the applicable
payment date a cheque for the balance, if any, of the purchase price without
interest (but less any amounts withheld pursuant to Section 5.15).
5.6 EXERCISE INSTRUCTIONS
Subject to the terms and conditions herein set forth, a Beneficiary shall be
entitled, upon the occurrence and during the continuance of an Insolvency Event,
to instruct the Trustee to exercise the Exchange Right with respect to all or
any part of the Exchangeable Shares registered in the name of such Beneficiary
on the books of ExchangeCo. To cause the exercise of the Exchange Right by the
Trustee, the Beneficiary shall deliver to the Trustee, in person or by certified
or registered mail, at its principal corporate trust office in Montreal, Quebec
or at such other places in Canada as the Trustee may from time to time designate
by written notice to the Beneficiaries, the certificates representing the
Exchangeable Shares which such Beneficiary desires Shire to purchase, duly
endorsed in blank for transfer, and accompanied by such other documents and
instruments as may be required to effect a transfer of Exchangeable Shares under
the CANADA BUSINESS CORPORATIONS ACT and the by-laws of ExchangeCo and such
additional documents and instruments as the Trustee, Shire or ExchangeCo may
reasonably require together with (a) a duly completed form of notice of exercise
of the Exchange Right, contained on the reverse of or attached to the
Exchangeable Share certificates, stating (i) that the Beneficiary thereby
instructs the Trustee to exercise the Exchange Right so as to require Shire to
purchase from the Beneficiary the number of Exchangeable Shares specified
therein, (ii) that such Beneficiary has good title to and owns all such
Exchangeable Shares to be acquired by Shire free and clear of all liens, claims,
security interests, adverse claims and encumbrances, (iii) the names in which
the certificates representing Shire Ordinary Shares and/or Shire ADSs, as the
case may be, issuable in connection with the exercise of the Exchange Right are
to be issued (or the necessary CREST or other electronic transfers effected) and
(iv) the names and addresses of the Persons to whom such new certificates, if
any, should be delivered and (b) payment (or evidence satisfactory to the
Trustee, ExchangeCo and Shire of payment) of the taxes (if any) payable as
contemplated by Section 5.9 of this trust agreement. If only a part of the
Exchangeable Shares represented by any certificate or certificates delivered to
the Trustee are to be purchased by Shire under the Exchange Right, a new
certificate for the balance of such Exchangeable Shares shall be issued to the
holder at the expense of ExchangeCo.
5.7 DELIVERY OF SHIRE ORDINARY SHARES AND SHIRE ADSS; EFFECT OF EXERCISE
Promptly after receipt of the certificates representing the Exchangeable
Shares which the Beneficiary desires Shire to purchase under the Exchange Right,
together with such documents and instruments of transfer and a duly completed
form of notice of exercise of the Exchange Right (and payment of taxes, if any,
payable as contemplated by Section 5.9 or evidence thereof), duly endorsed for
transfer to Shire, the Trustee shall notify Shire and ExchangeCo of its receipt
of the same, which notice to Shire and ExchangeCo shall constitute exercise of
the Exchange Right by the Trustee on behalf of the holder of such Exchangeable
Shares, and Shire shall promptly thereafter deliver or cause to be delivered to
the Trustee, for delivery to the Beneficiary of such Exchangeable Shares (or to
such other Persons, if any, properly designated by such Beneficiary) the number
of Shire Ordinary Shares and/or Shire ADSs, as the case may be, issuable in
connection with the exercise of the Exchange Right, and on the applicable
payment date cheques for the balance, if any, of the Total Purchase Price
therefor without interest (but less any amounts withheld pursuant to
Section 5.15); provided, however, that no such delivery shall be made unless and
until the Beneficiary requesting the same shall have paid (or provided evidence
satisfactory to the Trustee,
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ExchangeCo and Shire of the payment of) the taxes (if any) payable as
contemplated by Section 5.9 of this trust agreement. Immediately upon the giving
of notice by the Trustee to Shire and ExchangeCo of the exercise of the Exchange
Right as provided in this Section 5.7, the closing of the transaction of
purchase and sale contemplated by the Exchange Right shall be deemed to have
occurred and the holder of such Exchangeable Shares shall be deemed to have
transferred to Shire all of such holder's right, title and interest in and to
such Exchangeable Shares and the related interest in the Trust Estate and shall
cease to be a holder of such Exchangeable Shares and shall not be entitled to
exercise any of the rights of a holder in respect thereof, other than the right
to receive the Total Purchase Price for those Exchangeable Shares (together with
a cheque for the balance, if any, of the Total Purchase Price therefor without
interest (but less any amounts withheld pursuant to Section 5.15)), unless the
requisite number of Shire Ordinary Shares and/or Shire ADSs, as the case may be,
is not allotted, issued and delivered by Shire to the Trustee within five
Business Days of the date of the giving of such notice by the Trustee and cheque
for the balance, if any, of the Total Purchase Price for such Exchangeable
Shares is not issued and delivered to the Trustee on the applicable payment
date, in which case the rights of the Beneficiary shall remain unaffected until
such Shire Ordinary Shares and/or Shire ADSs, as the case may be, are so
allotted, issued and delivered by Shire and any such cheque is issued and
delivered by Shire. Upon delivery by Shire to the Trustee of such Shire Ordinary
Shares and/or Shire ADSs, as the case may be, the Trustee shall deliver such
Shire Ordinary Shares and/or Shire ADSs, as the case may be, to such Beneficiary
(or to such other Persons, if any, properly designated by such Beneficiary).
Concurrently with such Beneficiary ceasing to be a holder of Exchangeable
Shares, the Beneficiary shall be considered and deemed for all purposes to be
the holder of the Shire Ordinary Shares and/or Shire ADSs, as the case may be,
delivered to it pursuant to the Exchange Right.
5.8 EXERCISE OF EXCHANGE RIGHT SUBSEQUENT TO RETRACTION
In the event that a Beneficiary has exercised its right under Article 6 of
the Exchangeable Share Provisions to require ExchangeCo to redeem any or all of
the Exchangeable Shares held by the Beneficiary (the "RETRACTED SHARES") and is
notified by ExchangeCo pursuant to Section 6.6 of the Exchangeable Share
Provisions that ExchangeCo will not be permitted as a result of solvency
requirements of applicable law to redeem all such Retracted Shares, and provided
that CallCo shall not have exercised the Retraction Call Right with respect to
the Retracted Shares and that the Beneficiary has not revoked the retraction
request delivered by the Beneficiary to ExchangeCo pursuant to Section 6.1 of
the Exchangeable Share Provisions, the retraction request will constitute and
will be deemed to constitute notice from the Beneficiary to the Trustee
instructing the Trustee to exercise the Exchange Right with respect to those
Retracted Shares that ExchangeCo is unable to redeem. In any such event,
ExchangeCo hereby agrees with the Trustee and in favour of the Beneficiary to
immediately notify the Trustee of the prohibition against ExchangeCo redeeming
all of the Retracted Shares and to promptly forward or cause to be forwarded to
the Trustee all relevant materials delivered by the Beneficiary to ExchangeCo or
to the transfer agent of the Exchangeable Shares (including without limitation,
a copy of the retraction request delivered pursuant to Section 6.1 of the
Exchangeable Share Provisions) in connection with such proposed redemption of
the Retracted Shares and the Trustee will thereupon exercise the Exchange Right
with respect to the Retracted Shares that ExchangeCo is not permitted to redeem
and will require Shire to purchase such shares in accordance with the provisions
of this Article 5.
5.9 STAMP OR OTHER TRANSFER TAXES
(a) Upon any sale of Exchangeable Shares to Shire pursuant to the Exchange
Right or the Automatic Exchange Right, the share certificate or
certificates representing Shire Ordinary Shares and/or Shire ADSs, as the
case may be, to be delivered in connection with the payment of the Total
Purchase Price therefor shall be issued (or the necessary CREST or other
electronic transfers effected) in the name of the Beneficiary of the
Exchangeable Shares so sold or in such names as such Beneficiary may
otherwise direct in writing without charge to the holder of the
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Exchangeable Shares so sold; provided, however, that such Beneficiary
(a) shall pay (and none of Shire, ExchangeCo or the Trustee shall be
required to pay) any Stamp Taxes, documentary or other taxes that may be
payable in respect of any transfer involved in the issuance or delivery
of such shares to a Person other than such Beneficiary or (b) shall have
evidenced to the satisfaction of the Trustee, Shire and ExchangeCo that
such taxes, if any, have been paid.
(b) For the avoidance of doubt, Shire shall pay any United Kingdom stamp
duty that may be payable in respect of any transfer involved in the
issuance or delivery of Shire Ordinary Shares to a Beneficiary upon the
sale of Exchangeable Shares to Shire pursuant to the Exchange Right or
Automatic Exchange Right.
5.10 NOTICE OF INSOLVENCY EVENT
As soon as practicable following the occurrence of an Insolvency Event or
any event that with the giving of notice or the passage of time or both would be
an Insolvency Event, ExchangeCo and Shire shall give written notice thereof to
the Trustee. As soon as practicable following the receipt of notice from
ExchangeCo and Shire of the occurrence of an Insolvency Event, or upon the
Trustee becoming aware of an Insolvency Event, the Trustee will mail to each
Beneficiary, at the expense of Shire, a notice of such Insolvency Event, in the
form provided by Shire, which notice shall contain a brief statement of the
rights of the Beneficiaries with respect to the Exchange Right.
5.11 QUALIFICATION OF SHIRE ORDINARY SHARES OR SHIRE ADSS
Shire covenants that if any Shire Ordinary Shares or Shire ADSs to be issued
and delivered pursuant to the Exchange Right or the Automatic Exchange Right
require registration or qualification with or approval of or the filing of any
document, including any prospectus or similar document, or the taking of any
proceeding with or the obtaining of any order, ruling or consent from any
governmental or regulatory authority under any United Kingdom, Canadian or
United States federal, provincial or state law or regulation or pursuant to the
rules and regulations of any regulatory authority or the fulfilment of any other
United Kingdom, Canadian or United States federal, provincial or state legal
requirement before such shares may be issued and delivered by Shire to the
initial holder thereof or in order that such shares may be freely traded
thereafter (other than any restrictions of general application on transfer by
reason of a holder being a "CONTROL PERSON" of Shire for purposes of Canadian
provincial securities law or an "AFFILIATE" of Shire for purposes of United
States federal or state securities law), Shire will in good faith expeditiously
take all such reasonable actions and do all such reasonable things as are
necessary or desirable to cause such Shire Ordinary Shares or Shire ADSs, as the
case may be, to be and remain duly registered, qualified or approved. Shire will
in good faith expeditiously take all such reasonable actions and do all such
reasonable things as are necessary or desirable to cause all Shire Ordinary
Shares and/or Shire ADSs, as the case may be, to be delivered pursuant to the
Exchange Right or the Automatic Exchange Right to be listed, quoted or posted
for trading on all stock exchanges and quotation systems on which outstanding
Shire Ordinary Shares or Shire ADSs, as the case may be, have been listed by
Shire and remain listed and are quoted or posted for trading at such time.
5.12 SHIRE ORDINARY SHARES AND SHIRE ADSS
Shire hereby represents, warrants and covenants that the Shire Ordinary
Shares and Shire ADSs issuable as described herein will be duly authorized and
validly issued as fully paid and non-assessable and shall be free and clear of
any lien, claim or encumbrance.
5.13 PROHIBITION ON VOLUNTARY LIQUIDATION
Shire covenants that it shall not, and agrees to cause CallCo to not, take
any action relating to a voluntary liquidation, dissolution or winding-up of
ExchangeCo or its successors or CallCo or its
13
successors, as the case may be, prior to the Redemption Date (as defined in the
Exchangeable Share Provisions) unless prior to such liquidation, dissolution or
winding-up Shire shall have taken such actions to ensure that it is possible for
holders of Exchangeable Shares to extend through to the Redemption Date (subject
to the continuing effect of other provisions of this trust agreement which may
permit the redemption or other termination of the Exchangeable Shares prior to
the Redemption Date) the deferral of any gain incurred by such holders that
would otherwise have been recognized at the Effective Time as a result of the
consummation of the transactions contemplated by the Merger Agreement.
5.14 AUTOMATIC EXCHANGE ON LIQUIDATION OF SHIRE
(a) Shire will give the Trustee notice of each of the following events at
the time set forth below:
(i) in the event of any determination by the Board of Directors of Shire
to institute voluntary liquidation, dissolution or winding-up
proceedings with respect to Shire or to effect any other
distribution of assets of Shire among its shareholders for the
purpose of winding up its affairs, at least 60 days prior to the
proposed effective date of such liquidation, dissolution, winding-up
or other distribution; and
(ii) as soon as practicable following the earlier of (A) receipt by
Shire of notice of, and (B) Shire otherwise becoming aware of, any
threatened or instituted claim, suit, petition or other proceedings
with respect to the involuntary liquidation, dissolution or
winding-up of Shire or to effect any other distribution of assets
of Shire among its shareholders for the purpose of winding up its
affairs, in each case where Shire has failed to contest in good
faith any such proceeding commenced in respect of Shire within
30 days of becoming aware thereof.
(b) As soon as practicable following receipt by the Trustee from Shire of
notice of any event (a "LIQUIDATION EVENT") contemplated by
Section 5.14(a)(i) or 5.14(a)(ii) above, the Trustee will give notice
thereof to the Beneficiaries. Such notice shall include a brief
description of the automatic exchange of Exchangeable Shares for Shire
Ordinary Shares provided for in Section 5.14(c).
(c) In order that the Beneficiaries will be able to participate on a PRO
RATA basis with the holders of Shire Ordinary Shares in the distribution
of assets of Shire in connection with a Liquidation Event, on the fifth
Business Day prior to the effective date of a Liquidation Event (the
"LIQUIDATION EVENT EFFECTIVE DATE") all of the then outstanding
Exchangeable Shares shall be automatically exchanged for Shire Ordinary
Shares. To effect such automatic exchange, Shire shall purchase on the
fifth Business Day prior to the Liquidation Event Effective Date each
Exchangeable Share then outstanding and held by Beneficiaries, and each
Beneficiary shall sell the Exchangeable Shares held by it at such time,
for a purchase price per share equal to (a) the Current Market Price of a
Shire Ordinary Share on the fifth Business Day prior to the Liquidation
Event Effective Date multiplied by three, which shall be satisfied in
full by Shire causing to be delivered to the Beneficiary three Shire
Ordinary Shares, and (b) to the extent not paid by ExchangeCo, an
additional amount equivalent to the full amount of all declared and
unpaid dividends on each such Exchangeable Share held by such holder on
any dividend record date which occurred prior to the date of the exchange
("LIQUIDATION PURCHASE PRICE").
(d) On the fifth Business Day prior to the Liquidation Event Effective Date,
the closing of the transaction of purchase and sale contemplated by the
automatic exchange of Exchangeable Shares for Shire Ordinary Shares shall
be deemed to have occurred, and each Beneficiary shall be deemed to have
transferred to Shire all of the Beneficiary's right, title and interest
in and to such Beneficiary's Exchangeable Shares and the related interest
in the Trust Estate and shall cease to be a holder of such Exchangeable
Shares and Shire shall cause to be delivered to the Beneficiary the Shire
Ordinary Shares issuable upon the automatic exchange of Exchangeable
Shares for Shire Ordinary Shares and on the applicable payment date shall
deliver to the Trustee for delivery to the Beneficiary a cheque for the
balance, if any, of the Total Liquidation Purchase Price for
14
such Exchangeable Shares without interest but less any amounts withheld
pursuant to Section 5.15. Concurrently with such Beneficiary ceasing to
be a holder of Exchangeable Shares, the Beneficiary shall be considered
and deemed for all purposes to be the holder of the Shire Ordinary Shares
issued pursuant to the automatic exchange of Exchangeable Shares for
Shire Ordinary Shares and the certificates held by the Beneficiary
previously representing the Exchangeable Shares exchanged by the
Beneficiary with Shire pursuant to such automatic exchange shall
thereafter be deemed to represent Shire Ordinary Shares issued to the
Beneficiary by Shire pursuant to such automatic exchange. Upon the
request of a Beneficiary and the surrender by the Beneficiary of
Exchangeable Share certificates deemed to represent Shire Ordinary
Shares, duly endorsed in blank and accompanied by such instruments of
transfer as Shire may reasonably require, Shire shall deliver or cause to
be delivered to the Beneficiary certificates representing Shire Ordinary
Shares of which the Beneficiary is the holder (or effect the necessary
CREST or other electronic transfers).
5.15 WITHHOLDING RIGHTS
Shire, ExchangeCo and the Trustee shall be entitled to deduct and withhold
from any consideration otherwise payable under this trust agreement to any
holder of Exchangeable Shares, Shire Ordinary Shares or Shire ADSs such amounts
as Shire, ExchangeCo or the Trustee is required to deduct and withhold with
respect to such payment under the INCOME TAX ACT (Canada), the United States
INTERNAL REVENUE CODE OF 1986 or any provision of provincial, state, local or
foreign tax law, in each case as amended or succeeded. To the extent that
amounts are so withheld, such withheld amounts shall be treated for all purposes
as having been paid to the holder of the shares in respect of which such
deduction and withholding was made, provided that such withheld amounts are
actually remitted to the appropriate tax authority. To the extent that the
amount so required to be deducted or withheld from any payment to a holder
exceeds the cash portion of the consideration otherwise payable to the holder,
Shire, ExchangeCo and the Trustee are hereby authorized to sell or otherwise
dispose of such portion of the consideration as is necessary to provide
sufficient funds to Shire, ExchangeCo or the Trustee, as the case may be, to
enable it to comply with such deduction or withholding requirement and Shire,
ExchangeCo or the Trustee shall notify the holder thereof and remit to such
holder any unapplied balance of the net proceeds of such sale. Prior to making
any distribution to holders of Exchangeable Shares, Shire Ordinary Shares or
Shire ADSs, Shire or ExchangeCo, as the case may be, shall ensure that the
Trustee has access to sufficient funds (by directly providing, if necessary,
such funds to the Trustee) to enable the Trustee to comply with any applicable
withholding taxes in connection with such consideration. In carrying out its
duties under this Section 5.15, the Trustee may obtain the advice of and
assistance from such experts as the Trustee may reasonably consider necessary or
advisable. If requested by the Trustee, Shire shall retain such experts for
providing such advice or assistance to the Trustee. ExchangeCo shall not be
entitled to withhold amounts on dividends payable to the holders of Exchangeable
Shares pursuant to the United States INTERNAL REVENUE CODE OF 1986 unless it has
received an opinion from counsel stating that such withholding is required under
the INTERNAL REVENUE CODE OF 1986.
ARTICLE 6
CONCERNING THE TRUSTEE
6.1 POWERS AND DUTIES OF THE TRUSTEE
The rights, powers, duties and authorities of the Trustee under this trust
agreement, in its capacity as Trustee of the Trust, shall include:
(a) receipt and deposit of the Shire Special Voting Shares from Shire as
Trustee for and on behalf of the Beneficiaries in accordance with the
provisions of this trust agreement;
(b) granting proxies and distributing materials to Beneficiaries as provided
in this trust agreement;
15
(c) voting the Beneficiary Votes in accordance with the provisions of this
trust agreement;
(d) receiving the grant of the Exchange Right and the Automatic Exchange
Right from Shire as Trustee for and on behalf of the Beneficiaries in
accordance with the provisions of this trust agreement;
(e) exercising the Exchange Right and enforcing the benefit of the Automatic
Exchange Right, in each case in accordance with the provisions of this
trust agreement, and in connection therewith receiving from Beneficiaries
Exchangeable Shares and other requisite documents and causing to be
delivered to such Beneficiaries Shire Ordinary Shares and/or Shire ADSs,
as the case may be, and cheques, if any, to which such Beneficiaries are
entitled upon the exercise of the Exchange Right or pursuant to the
Automatic Exchange Right, as the case may be;
(f) holding title to the Trust Estate;
(g) investing any moneys forming, from time to time, a part of the Trust
Estate as provided in this trust agreement;
(h) taking action at the written direction of a Beneficiary or Beneficiaries
to enforce the obligations of Shire and ExchangeCo under this trust
agreement;
(i) taking such other actions and doing such other things as are
specifically provided in this trust agreement; and
(j) receiving, as Trustee for and on behalf of the Beneficiaries, such
opinions or such rulings issued by the Canada Customs and Revenue Agency
as may be required to be delivered by Shire as a condition of the
exercise by Shire of the Shire Call Right.
In the exercise of such rights, powers, duties and authorities the Trustee
shall have (and is granted) such incidental and additional rights, powers,
duties and authority not in conflict with any of the provisions of this trust
agreement as the Trustee, acting in good faith and in the reasonable exercise of
its discretion, may deem necessary, appropriate or desirable to effect the
purpose of the Trust. Any exercise of such discretionary rights, powers, duties
and authorities by the Trustee shall be final, conclusive and binding upon all
Persons.
The Trustee in exercising its rights, powers, duties and authorities
hereunder shall act honestly and in good faith and with a view to the best
interests of the Beneficiaries and shall exercise the care, diligence and skill
that a reasonably prudent trustee would exercise in comparable circumstances.
The duties and obligations of the Trustee shall be determined by the
provisions hereof and by the provisions of applicable law and accordingly, the
Trustee shall only be responsible for the performance of such duties and
obligations as it has undertaken herein or as required by applicable law. Where
the provision of documentation to the Trustee is contemplated by this trust
agreement, the Trustee shall retain the right not to act and shall be held not
to be liable for refusing to act unless it has received such documentation in a
clear and reasonable form that complies with the terms of this trust agreement.
Such documentation must not require the exercise of any discretion or
independent judgment on the part of the Trustee except as provided herein.
6.2 NO CONFLICT OF INTEREST
The Trustee represents to Shire and ExchangeCo that at the date of execution
and delivery of this trust agreement there exists no material conflict of
interest in the role of the Trustee as a fiduciary hereunder and the role of the
Trustee in any other capacity. The Trustee shall, within 90 days after it
becomes aware that such material conflict of interest exists, either eliminate
such material conflict of interest or resign in the manner and with the effect
specified in Article 9. If, notwithstanding the foregoing provisions of this
Section 6.2, the Trustee has such a material conflict of interest, the validity
and
16
enforceability of this trust agreement shall not be affected in any manner
whatsoever by reason only of the existence of such material conflict of
interest. If the Trustee contravenes the foregoing provisions of this
Section 6.2, any interested party may apply to the Court for an order that the
Trustee be replaced as Trustee hereunder.
6.3 DEALINGS WITH TRANSFER AGENTS, REGISTRARS, ETC.
Shire and ExchangeCo irrevocably authorize the Trustee, from time to time,
to:
(a) consult, communicate and otherwise deal with the respective registrars
and transfer agents, and with any such subsequent registrar or transfer
agent, of the Exchangeable Shares, Shire Ordinary Shares and Shire ADSs;
and
(b) requisition, from time to time, (i) from any such registrar or transfer
agent any information readily available from the records maintained by it
which the Trustee may reasonably require for the discharge of its duties
and responsibilities under this trust agreement and (ii) from the
transfer agent of Shire Ordinary Shares and Shire ADSs and any subsequent
transfer agent of such securities, the share certificates, if any,
issuable upon the exercise from time to time of the Exchange Right and
pursuant to the Automatic Exchange Right in the manner specified in
Article 5 hereof (or the necessary CREST or other electronic transfers).
Shire and ExchangeCo irrevocably authorize their respective registrars and
transfer agents to comply with all such requests. Shire covenants that it will
supply its transfer agent with duly executed share certificates (or effect the
necessary CREST or other electronic transfers) for the purpose of completing the
exercise from time to time of the Exchange Right and the Automatic Exchange
Right in each case pursuant to Article 5 hereof.
6.4 BOOKS AND RECORDS
The Trustee shall keep available for inspection by Shire and ExchangeCo at
the Trustee's principal corporate trust office in Montreal, Quebec correct and
complete books and records of account relating to the Trust created by this
trust agreement, including without limitation, all relevant data relating to
mailings and instructions to and from Beneficiaries and all transactions
pursuant to the Exchange Right and the Automatic Exchange Right. On or before
March 31, 2002, and on or before March 31 in every year thereafter, so long as
the Shire Special Voting Shares are on deposit with the Trustee, the Trustee
shall transmit to Shire and ExchangeCo a brief report, dated as of the preceding
December 31, with respect to:
(a) the property and funds comprising the Trust Estate as of that date;
(b) the number of exercises of the Exchange Right, if any, and the aggregate
number of Exchangeable Shares received by the Trustee on behalf of
Beneficiaries in consideration of the issuance by Shire of Shire Ordinary
Shares and/or Shire ADSs, as the case may be, in connection with the
Exchange Right, during the calendar year ended on such December 31; and
(c) any action taken by the Trustee in the performance of its duties under
this trust agreement which it had not previously reported.
6.5 INCOME TAX RETURNS AND REPORTS
The Trustee shall, to the extent necessary, prepare and file on behalf of
the Trust appropriate Canadian income tax returns and any other returns or
reports as may be required by applicable law or pursuant to the rules and
regulations of any securities exchange or other trading system through which the
Exchangeable Shares are traded and in connection therewith may obtain the advice
of and assistance from such experts as the Trustee may reasonably consider
necessary or advisable. If requested by the Trustee, Shire shall retain such
experts for providing such advice or assistance to the Trustee.
17
6.6 INDEMNIFICATION PRIOR TO CERTAIN ACTIONS BY TRUSTEE
The Trustee shall exercise any or all of the rights, duties, powers or
authorities vested in it by this trust agreement at the request, order or
direction of any Beneficiary upon such Beneficiary furnishing to the Trustee
reasonable security, funding or indemnity, satisfactory to the Trustee, acting
reasonably, against the costs, expenses and liabilities which may be incurred by
the Trustee therein or thereby, provided that no Beneficiary shall be obligated
to furnish to the Trustee any such security, funding or indemnity in connection
with the exercise by the Trustee of any of its rights, duties, powers and
authorities with respect to the Shire Special Voting Shares pursuant to
Article 4, subject to Section 6.15, and with respect to the Exchange Right
pursuant to Article 5, subject to Section 6.15, and with respect to the
Automatic Exchange Right pursuant to Article 5, subject to Section 6.15.
None of the provisions contained in this trust agreement shall require the
Trustee to expend or risk its own funds or otherwise incur financial liability
in the exercise of any of its rights, powers, duties, or authorities unless
funded, given security or indemnified as aforesaid.
6.7 ACTION OF BENEFICIARIES
No Beneficiary shall have the right to institute any action, suit or
proceeding or to exercise any other remedy authorized by this trust agreement
for the purpose of enforcing any of its rights or for the execution of any trust
or power hereunder unless the Beneficiary has requested the Trustee to take or
institute such action, suit or proceeding and furnished the Trustee with the
security, funding or indemnity referred to in Section 6.6 and the Trustee shall
have failed to act within a reasonable time thereafter. In such case, but not
otherwise, the Beneficiary shall be entitled to take proceedings in any court of
competent jurisdiction such as the Trustee might have taken; it being understood
and intended that no one or more Beneficiaries shall have any right in any
manner whatsoever to affect, disturb or prejudice the rights hereby created by
any such action, or to enforce any right hereunder or the Voting Rights, the
Exchange Rights or the Automatic Exchange Right except subject to the conditions
and in the manner herein provided, and that all powers and trusts hereunder
shall be exercised and all proceedings at law shall be instituted, had and
maintained by the Trustee, except only as herein provided, and in any event for
the equal benefit of all Beneficiaries.
6.8 RELIANCE UPON DECLARATIONS
The Trustee shall not be considered to be in contravention of any its
rights, powers, duties and authorities hereunder if, when required, it acts and
relies in good faith upon statutory declarations, certificates, opinions, lists,
mailing labels, or reports or other papers or documents furnished pursuant to
the provisions hereof or required by the Trustee to be furnished to it in the
exercise of its rights, powers, duties and authorities hereunder if such
statutory declarations, certificates, opinions, lists, mailing labels or reports
or other papers or documents comply with the provisions of Section 6.9, if
applicable, and with any other applicable provisions of this trust agreement.
6.9 EVIDENCE AND AUTHORITY TO TRUSTEE
Shire and/or ExchangeCo shall furnish to the Trustee evidence of compliance
with the conditions provided for in this trust agreement relating to any action
or step required or permitted to be taken by Shire and/or ExchangeCo or the
Trustee under this trust agreement or as a result of any obligation imposed
under this trust agreement, including, without limitation, in respect of the
Voting Rights or the Exchange Right or the Automatic Exchange Right and the
taking of any other action to be taken by the Trustee at the request of or on
the application of Shire and/or ExchangeCo promptly if and when:
(a) such evidence is required by any other section of this trust agreement
to be furnished to the Trustee in accordance with the terms of this
Section 6.9; or
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(b) the Trustee, in the exercise of its rights, powers, duties and
authorities under this trust agreement, gives Shire and/or ExchangeCo
written notice requiring it to furnish such evidence in relation to any
particular action or obligation specified in such notice.
Such evidence shall consist of an Officer's Certificate of Shire and/or
ExchangeCo or a statutory declaration or a certificate made by Persons entitled
to sign an Officer's Certificate stating that any such condition has been
complied with in accordance with the terms of this trust agreement.
Whenever such evidence relates to a matter other than the Voting Rights or
the Exchange Right or the Automatic Exchange Right or the taking of any other
action to be taken by the Trustee at the request or on the application of Shire
and/or ExchangeCo, and except as otherwise specifically provided herein, such
evidence may consist of a report or opinion of any solicitor, attorney, auditor,
accountant, appraiser, valuer, engineer or other expert or any other Person
whose qualifications give authority to a statement made by him, provided that if
such report or opinion is furnished by a director, officer or employee of Shire
and/or ExchangeCo it shall be in the form of an Officer's Certificate or a
statutory declaration.
Each statutory declaration, Officer's Certificate, opinion or report
furnished to the Trustee as evidence of compliance with a condition provided for
in this trust agreement shall include a statement by the Person giving the
evidence:
(a) declaring that he has read and understands the provisions of this trust
agreement relating to the condition in question;
(b) describing the nature and scope of the examination or investigation upon
which he based the statutory declaration, certificate, statement or
opinion; and
(c) declaring that he has made such examination or investigation as he
believes is necessary to enable him to make the statements or give the
opinions contained or expressed therein.
6.10 EXPERTS, ADVISERS AND AGENTS
The Trustee may:
(a) in relation to these presents act and rely on the opinion or advice of
or information obtained from any solicitor, attorney, auditor,
accountant, appraiser, valuer, engineer or other expert, whether retained
by the Trustee or by Shire and/or ExchangeCo or otherwise, and may employ
such assistants as may be necessary to the proper discharge of its powers
and duties and determination of its rights hereunder and may pay proper
and reasonable compensation for all such legal and other advice or
assistance as aforesaid; and
(b) employ such agents and other assistants as it may reasonably require for
the proper determination and discharge of its powers and duties
hereunder, and may pay reasonable remuneration for all services performed
for it (and shall be entitled to receive reasonable remuneration for all
services performed by it) in the discharge of the trusts hereof and
compensation for all disbursements, costs and expenses made or incurred
by it in the discharge of its duties hereunder and in the management of
the Trust.
6.11 INVESTMENT OF MONEYS HELD BY TRUSTEE
Unless otherwise provided in this trust agreement, any moneys held by or on
behalf of the Trustee which under the terms of this trust agreement may or ought
to be invested or which may be on deposit with the Trustee or which may be in
the hands of the Trustee may be invested and reinvested in the name or under the
control of the Trustee in securities in which, under the laws of the Province of
Quebec, trustees are authorized to invest trust moneys, provided that such
securities are stated to mature within two years after their purchase by the
Trustee, and the Trustee shall so invest such moneys on the written direction of
ExchangeCo. Pending the investment of any moneys as hereinbefore provided, such
moneys may be
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deposited in the name of the Trustee in any chartered bank in Canada or, with
the consent of ExchangeCo, in the deposit department of the Trustee or any other
loan or trust company authorized to accept deposits under the laws of Canada or
any province thereof at the rate of interest then current on similar deposits.
6.12 TRUSTEE NOT REQUIRED TO GIVE SECURITY
The Trustee shall not be required to give any bond or security in respect of
the execution of the trusts, rights, duties, powers and authorities of this
trust agreement or otherwise in respect of the premises.
6.13 TRUSTEE NOT BOUND TO ACT ON REQUEST
Except as in this trust agreement otherwise specifically provided, the
Trustee shall not be bound to act in accordance with any direction or request of
Shire and/or ExchangeCo or of the directors thereof until a duly authenticated
copy of the instrument or resolution containing such direction or request shall
have been delivered to the Trustee, and the Trustee shall be empowered to act
upon any such copy purporting to be authenticated and believed by the Trustee to
be genuine.
6.14 AUTHORITY TO CARRY ON BUSINESS
The Trustee represents to Shire and ExchangeCo that at the date of execution
and delivery by it of this trust agreement it is authorized to carry on the
business of a trust company in each of the Provinces of Canada but if,
notwithstanding the provisions of this Section 6.14, it ceases to be so
authorized to carry on business, the validity and enforceability of this trust
agreement and the Voting Rights, the Exchange Right and the Automatic Exchange
Right shall not be affected in any manner whatsoever by reason only of such
event but the Trustee shall, within 90 days after ceasing to be authorized to
carry on the business of a trust company in any Province of Canada, either
become so authorized or resign in the manner and with the effect specified in
Article 9.
6.15 CONFLICTING CLAIMS
If conflicting claims or demands are made or asserted with respect to any
interest of any Beneficiary in any Exchangeable Shares, including any
disagreement between the heirs, representatives, successors or assigns
succeeding to all or any part of the interest of any Beneficiary in any
Exchangeable Shares, resulting in conflicting claims or demands being made in
connection with such interest, then the Trustee shall be entitled, at its sole
discretion, to refuse to recognize or to comply with any such claims or demands.
In so refusing, the Trustee may elect not to exercise any Voting Rights,
Exchange Rights or Automatic Exchange Right subject to such conflicting claims
or demands and, in so doing, the Trustee shall not be or become liable to any
Person on account of such election or its failure or refusal to comply with any
such conflicting claims or demands. The Trustee shall be entitled to continue to
refrain from acting and to refuse to act until:
(a) the rights of all adverse claimants with respect to the Voting Rights,
Exchange Right or Automatic Exchange Right subject to such conflicting
claims or demands have been adjudicated by a final judgment of a court of
competent jurisdiction and all rights of appeal have expired; or
(b) all differences with respect to the Voting Rights, Exchange Right or
Automatic Exchange Right subject to such conflicting claims or demands
have been conclusively settled by a valid written agreement binding on
all such adverse claimants, and the Trustee shall have been furnished
with an executed copy of such agreement certified to be in full force and
effect.
If the Trustee elects to recognize any claim or comply with any demand made
by any such adverse claimant, it may in its discretion require such claimant to
furnish such surety bond or other security satisfactory to the Trustee as it
shall deem appropriate to fully indemnify it as between all conflicting claims
or demands.
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6.16 ACCEPTANCE OF TRUST
The Trustee hereby accepts the Trust created and provided for by and in this
trust agreement and agrees to perform the same upon the terms and conditions
herein set forth and to hold all rights, privileges and benefits conferred
hereby and by law in trust for the various Persons who shall from time to time
be Beneficiaries, subject to all the terms and conditions herein set forth.
6.17 INCUMBENCY CERTIFICATE
Each of Shire and ExchangeCo shall file with the Trustee a certificate of
incumbency setting forth the names of the individuals authorized to give
instructions, directions or other instruments to the Trustee (each an
"AUTHORIZED PERSON"), together with specimen signatures of such persons, and the
Trustee shall be entitled to rely on the latest certificate of incumbency filed
with it unless it receives notice, in accordance with Section 13.3 of this trust
agreement, of a change in the Authorized Persons with updated specimen
signatures.
ARTICLE 7
COMPENSATION
7.1 FEES AND EXPENSES OF THE TRUSTEE
Shire and ExchangeCo jointly and severally agree to pay the Trustee
reasonable compensation for all of the services rendered by it under this trust
agreement and will reimburse the Trustee for all reasonable expenses (including
taxes other than taxes based on the net income of the Trustee) and disbursements
(including reasonable travel expenses incurred by the Trustee in connection with
its duties hereunder and reasonable compensation and reasonable remuneration
paid by the Trustee in connection with the retainer or employment of experts,
advisors and agents under Sections 5.15, 6.5 and 6.10), including the cost and
expense of any suit or litigation of any character and any proceedings before
any governmental agency reasonably incurred by the Trustee in connection with
its duties under this trust agreement; provided that Shire and ExchangeCo shall
have no obligation to reimburse the Trustee for any expenses or disbursements
paid, incurred or suffered by the Trustee in any suit or litigation in which the
Trustee is determined to have acted in bad faith or with negligence,
recklessness or wilful misconduct. Invoices for services rendered by the Trustee
hereunder shall be provided to Shire, on behalf of Shire and ExchangeCo, at the
address of the Shire set forth in Section 13.3 of this trust agreement. Any
amount owing or unpaid after 30 days from the invoice date will bear interest at
a rate per annum, from the expiration of such 30 day period, equal to the then
current rate charged by the Trustee and shall be payable on demand. The
obligation of Shire and ExchangeCo under this Section 7.1 shall survive the
resignation or removal of the Trustee.
ARTICLE 8
INDEMNIFICATION AND LIMITATION OF LIABILITY
8.1 INDEMNIFICATION OF THE TRUSTEE
Shire and ExchangeCo jointly and severally agree to indemnify and hold
harmless the Trustee and each of its directors, officers and agents appointed
and acting in accordance with this trust agreement (collectively, the
"INDEMNIFIED PARTIES") against all claims, losses, damages, reasonable costs,
penalties, fines and reasonable expenses (including reasonable expenses of the
Trustee's legal counsel) which, without fraud, negligence, recklessness, wilful
misconduct or bad faith on the part of such Indemnified Party, may be paid,
incurred or suffered by the Indemnified Party by reason or as a result of the
Trustee's acceptance or administration of the Trust, its compliance with its
duties set forth in this trust agreement, or any written or oral instruction
delivered to the Trustee by Shire or ExchangeCo pursuant hereto.
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In no case shall Shire or ExchangeCo be liable under this indemnity for any
claim against any of the Indemnified Parties unless Shire and ExchangeCo shall
be notified by the Trustee of the written assertion of a claim or of any action
commenced against the Indemnified Parties, promptly after any of the Indemnified
Parties shall have received any such written assertion of a claim or shall have
been served with a summons or other first legal process giving information as to
the nature and basis of the claim. Subject to (ii) below, Shire and ExchangeCo
shall be entitled to participate at their own expense in the defence and, if
Shire and ExchangeCo so elect at any time after receipt of such notice, either
of them may assume the defence of any suit brought to enforce any such claim.
The Trustee shall have the right to employ separate counsel in any such suit and
participate, in the defence thereof but the fees and expenses of such counsel
shall be at the expense of the Trustee unless: (i) the employment of such
counsel has been authorized by Shire or ExchangeCo; or (ii) the named parties to
any such suit include both the Trustee and Shire or ExchangeCo and the Trustee
shall have been advised by counsel acceptable to Shire or ExchangeCo that there
may be one or more legal defences available to the Trustee that are different
from or in addition to those available to Shire or ExchangeCo and that, in the
judgment of such counsel, would present a conflict of interest were a joint
representation to be undertaken (in which case Shire and ExchangeCo shall not
have the right to assume the defence of such suit on behalf of the Trustee but
shall be liable to pay the reasonable fees and expenses of counsel for the
Trustee).
For certainty, the indemnity provided for in this Section 8.1 shall survive
the termination of the trust agreement.
8.2 LIMITATION OF LIABILITY
The Trustee shall not be held liable for any loss which may occur by reason
of depreciation of the value of any part of the Trust Estate or any loss
incurred on any investment of funds pursuant to this trust agreement, except to
the extent that such loss is attributable to the fraud, negligence,
recklessness, wilful misconduct or bad faith on the part of the Trustee.
ARTICLE 9
CHANGE OF TRUSTEE
9.1 RESIGNATION
The Trustee, or any trustee hereafter appointed, may at any time resign by
giving written notice of such resignation to Shire and ExchangeCo specifying the
date on which it desires to resign, provided that such notice shall not be given
less than one month before such desired resignation date unless Shire and
ExchangeCo otherwise agree and provided further that such resignation shall not
take effect until the date of the appointment of a successor trustee and the
acceptance of such appointment by the successor trustee. Upon receiving such
notice of resignation, Shire and ExchangeCo shall promptly appoint a successor
trustee by written instrument in duplicate, one copy of which shall be delivered
to the resigning trustee and one copy to the successor trustee. Failing
acceptance by a successor trustee of such appointment, a successor trustee may
be appointed by an order of a court of competent jurisdiction upon application
of one or more of the parties hereto, at the expense of Shire and ExchangeCo.
9.2 REMOVAL
The Trustee, or any trustee hereafter appointed, may (provided a successor
trustee is appointed) be removed at any time on not less than 30 days' prior
notice by written instrument executed by Shire and ExchangeCo, in duplicate, one
copy of which shall be delivered to the trustee so removed and one copy to the
successor trustee.
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9.3 SUCCESSOR TRUSTEE
Any successor trustee appointed as provided under this trust agreement shall
execute, acknowledge and deliver to Shire and ExchangeCo and to its predecessor
trustee an instrument accepting such appointment. Thereupon the resignation or
removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and obligations of its predecessor under this
trust agreement, with the like effect as if originally named as trustee in this
trust agreement. However, on the written request of Shire and ExchangeCo or of
the successor trustee, the trustee ceasing to act shall, upon payment of any
amounts then due to it pursuant to the provisions of this trust agreement,
execute and deliver an instrument transferring to such successor trustee all the
rights and powers of the trustee so ceasing to act. Upon the request of any such
successor trustee, Shire, ExchangeCo and such predecessor trustee shall execute
any and all instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers.
9.4 NOTICE OF SUCCESSOR TRUSTEE
Upon acceptance of appointment by a successor trustee as provided herein,
Shire and ExchangeCo shall cause to be mailed notice of the succession of such
trustee hereunder to each Beneficiary specified in a List. If Shire or
ExchangeCo shall fail to cause such notice to be mailed within 10 days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be mailed at the expense of Shire and ExchangeCo.
ARTICLE 10
SHIRE SUCCESSORS
10.1 CERTAIN REQUIREMENTS IN RESPECT OF COMBINATION, ETC.
Shire shall not consummate any transaction (whether by way of
reconstruction, reorganization, consolidation, merger, transfer, sale, lease or
otherwise) whereby all or substantially all of its undertaking, property and
assets would become the property of any other Person or, in the case of a
merger, of the continuing corporation resulting therefrom unless such other
Person or continuing corporation (herein called the "SHIRE SUCCESSOR"), by
operation of law, becomes, without more, bound by the terms and provisions of
this trust agreement or, if not so bound, executes, prior to or
contemporaneously with the consummation of such transaction, a trust agreement
supplemental hereto to evidence the assumption by the Shire Successor of
liability for all moneys payable and property deliverable hereunder and the
covenant of such Shire Successor to pay and deliver or cause to be delivered the
same and its agreement to observe and perform all the covenants and obligations
of Shire under this trust agreement.
10.2 VESTING OF POWERS IN SUCCESSOR
Whenever the conditions of Section 10.1 have been duly observed and
performed, the Trustee and, if required by Section 10.1, Shire Successor and
ExchangeCo shall execute and deliver the supplemental trust agreement provided
for in Article 11 and thereupon Shire Successor shall possess and from time to
time may exercise each and every right and power of Shire under this trust
agreement in the name of Shire or otherwise and any act or proceeding by any
provision of this trust agreement required to be done or performed by the Board
of Directors of Shire or any officers of Shire may be done and performed with
like force and effect by the directors or officers of such Shire Successor.
10.3 WHOLLY-OWNED SUBSIDIARIES
Nothing herein shall be construed as preventing the amalgamation or merger
of any wholly-owned direct or indirect subsidiary of Shire with or into Shire or
the winding-up, liquidation or dissolution of any
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wholly-owned subsidiary of Shire provided that all of the assets of such
subsidiary are transferred to Shire or another wholly-owned direct or indirect
subsidiary of Shire and any such transactions are expressly permitted by this
Article 10.
ARTICLE 11
AMENDMENTS AND SUPPLEMENTAL TRUST AGREEMENTS
11.1 AMENDMENTS, MODIFICATIONS, ETC.
This trust agreement may not be amended or modified except by an agreement
in writing executed by Shire, ExchangeCo and the Trustee and approved by the
Beneficiaries in accordance with Section 9.2 of the Exchangeable Share
Provisions.
11.2 MINISTERIAL AMENDMENTS
Notwithstanding the provisions of Section 11.1, the parties to this trust
agreement may in writing, at any time and from time to time, without the
approval of the Beneficiaries, amend or modify this trust agreement for the
purposes of:
(a) adding to the covenants of any or all parties hereto for the protection
of the Beneficiaries hereunder provided that the Board of Directors of
each of ExchangeCo and Shire shall be of the good faith opinion that such
additions will not be prejudicial to the rights or interests of the
Beneficiaries;
(b) making such amendments or modifications not inconsistent with this trust
agreement as may be necessary or desirable with respect to matters or
questions which, in the good faith opinion of the Board of Directors of
each of Shire and ExchangeCo and in the opinion of the Trustee (which
may, for this purpose, rely on the opinion of counsel), having in mind
the best interests of the Beneficiaries, it may be expedient to make,
provided that such Boards of Directors and the Trustee shall be of the
opinion that such amendments and modifications will not be prejudicial to
the interests of the Beneficiaries; or
(c) making such changes or corrections which, on the advice of counsel to
Shire, ExchangeCo and the Trustee, are required for the purpose of curing
or correcting any ambiguity or defect or inconsistent provision or
clerical omission or mistake or manifest error, provided that in the
opinion of the Trustee (which may, for this purpose, rely on the opinion
of counsel) and the Board of Directors of each of Shire and ExchangeCo
such changes or corrections will not be prejudicial to the rights and
interests of the Beneficiaries.
11.3 MEETING TO CONSIDER AMENDMENTS
ExchangeCo, at the request of Shire, shall call a meeting or meetings of the
Beneficiaries for the purpose of considering any proposed amendment or
modification requiring approval pursuant hereto. Any such meeting or meetings
shall be called and held in accordance with the by-laws of ExchangeCo, the
Exchangeable Share Provisions and all applicable laws.
11.4 CHANGES IN CAPITAL OF SHIRE AND EXCHANGECO
At all times after the occurrence of any event contemplated pursuant to
Section 2.7 or 2.8 of the Exchangeable Share Support Agreement or otherwise, as
a result of which either Shire Ordinary Shares or the Exchangeable Shares or
both are in any way changed, this trust agreement shall forthwith be amended and
modified as necessary in order that it shall apply with full force and effect,
MUTATIS MUTANDIS, to all new securities into which Shire Ordinary Shares or the
Exchangeable Shares or both are so changed and the
24
parties hereto shall execute and deliver a supplemental trust agreement giving
effect to and evidencing such necessary amendments and modifications.
11.5 EXECUTION OF SUPPLEMENTAL TRUST AGREEMENTS
No amendment to or modification or waiver of any of the provisions of this
trust agreement otherwise permitted hereunder shall be effective unless made in
writing and signed by all of the parties hereto. From time to time ExchangeCo
(when authorized by a resolution of its Board of Directors), Shire (when
authorized by a resolution of its Board of Directors) and the Trustee may,
subject to the provisions of these presents, and they shall, when so directed by
these presents, execute and deliver by their proper officers, trust agreements
or other instruments supplemental hereto, which thereafter shall form part
hereof, for any one or more of the following purposes:
(a) evidencing the succession of Shire Successors and the covenants of and
obligations assumed by each such Shire Successor in accordance with the
provisions of Article 10 and any successor trustee in accordance with the
provisions of Article 9 and Section 12.3;
(b) making any additions to, deletions from or alterations of the provisions
of this trust agreement or the Voting Rights, the Exchange Right or the
Automatic Exchange Right which, in the opinion of the Trustee (which may,
for this purpose, rely on the opinion of counsel), will not be
prejudicial to the interests of the Beneficiaries or are, in the opinion
of counsel to the Trustee, necessary or advisable in order to
incorporate, reflect or comply with any legislation the provisions of
which apply to Shire, ExchangeCo, the Trustee or this trust agreement;
and
(c) for any other purposes not inconsistent with the provisions of this
trust agreement, including without limitation, to make or evidence any
amendment or modification to this trust agreement as contemplated hereby,
provided that, in the opinion of the Trustee (which may, for this
purpose, rely on the opinion of counsel), the rights of the Trustee and
Beneficiaries will not be prejudiced thereby.
ARTICLE 12
TERMINATION AND ASSIGNMENT
12.1 TERM
The Trust created by this trust agreement shall continue until the earliest
to occur of the following events:
(a) no outstanding Exchangeable Shares are held by a Beneficiary (other than
Shire and the Shire Affiliates);
(b) each of Shire and ExchangeCo elects in writing to terminate the Trust
and such termination is approved by the Beneficiaries in accordance with
Section 9.2 of the Exchangeable Share Provisions; and
(c) 21 years from the date of this trust agreement.
12.2 SURVIVAL OF AGREEMENT
This trust agreement shall survive any termination of the Trust and shall
continue until there are no Exchangeable Shares outstanding held by a
Beneficiary; provided, however, that the provisions of Articles 7 and 8 shall
survive any such termination of this trust agreement.
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12.3 ASSIGNMENT BY TRUSTEE
This trust agreement may not be assigned by the Trustee without the prior
written consent of Shire and ExchangeCo, not to be unreasonably withheld;
provided, however, that this trust agreement may be assigned by the Trustee to
an Affiliate (the "ASSIGNEE") if (a) the Assignee executes, acknowledges and
delivers to Shire and ExchangeCo a trust agreement or other instrument(s)
supplemental hereto as provided in Article 11 to evidence the appointment of it
as successor trustee and the acceptance by it of such appointment and the
assumption by it of all the duties and obligations of the predecessor trustee
hereunder without further amendment hereto, and (b) Shire and ExchangeCo are
provided with a certificate of a senior officer of the Assignee in form
satisfactory to them, acting reasonably, certifying that the Assignee is
authorized to carry on the business of a trust company in each of the Provinces
of Canada and is free of any material conflict of interest in its role as
fiduciary under this trust agreement and in its role in any other capacity.
ARTICLE 13
GENERAL
13.1 SEVERABILITY
If any provision of this trust agreement is held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remainder of this
trust agreement shall not in any way be affected or impaired thereby and the
agreement shall be carried out as nearly as possible in accordance with its
original terms and conditions.
13.2 ENUREMENT
This trust agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors and permitted assigns and to the
benefit of the Beneficiaries.
13.3 NOTICES TO PARTIES
All notices and other communications required or permitted to be delivered
to a party under this Agreement shall be in writing and shall be deemed to have
been properly delivered, given or received upon receipt when delivered by hand
or two Business Days after being sent by registered mail or by courier or by
express delivery service or by facsimile, provided that in each case the notice
or communication is sent to the address or a facsimile telephone number set
forth beneath the name of such party below:
(a) if to ExchangeCo:
Shire Acquisition Inc.
c/o Shire Pharmaceuticals Group Plc
Xxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx
Xxxxxxx XX00 0XX
Fax: 000 00 000 000
Attention: Xxxx Xxxxxx
(b) if to Shire:
Shire Pharmaceuticals Group Plc
Xxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx
Xxxxxxx XX00 0XX
Fax: 000 00 000 000
Attention: Xxxx Xxxxxx
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(c) if to the Trustee:
General Trust of Canada
0000, Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxx (Xxxxxx)
X0X 0X0
Fax: (000) 000-0000
Attention: Stock Transfer Services
Any notice or other communication given personally shall be deemed to have been
given and received upon delivery thereof and if given by telecopy shall be
deemed to have been given and received on the date of receipt thereof unless
such day is not a Business Day in which case it shall be deemed to have been
given and received upon the immediately following Business Day.
13.4 NOTICE TO BENEFICIARIES
Any and all notices to be given and any documents to be sent to any
Beneficiaries may be given or sent to the address of such Beneficiary shown on
the register of holders of Exchangeable Shares in any manner permitted by the
by-laws of ExchangeCo from time to time in force in respect of notices to
shareholders and shall be deemed to be received (if given or sent in such
manner) at the time specified in such by-laws, the provisions of which by-laws
shall apply MUTATIS MUTANDIS to notices or documents as aforesaid sent to such
Beneficiaries.
13.5 RISK OF PAYMENTS BY POST
Whenever payments are to be made or documents are to be sent to any
Beneficiary by the Trustee or by Beneficiary to the Trustee, the making of such
payment or sending of such document sent through the post shall be at risk of
the Shire and ExchangeCo, in the case of payments made or documents sent by the
Trustee, and at the risk of the Beneficiary, in the case of payments made or
documents sent by the Beneficiary.
13.6 COUNTERPARTS
This trust agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one and the
same instrument.
13.7 JURISDICTION
This trust agreement shall be construed and enforced in accordance with the
laws of the Province of Quebec and the laws of Canada applicable therein.
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IN WITNESS WHEREOF the parties hereto have caused this trust agreement to be
duly executed as of the date first above written.
SHIRE ACQUISITION INC.
Per: _______________________________
Name:
Title:
SHIRE PHARMACEUTICALS GROUP PLC
Per: _______________________________
Name:
Title:
GENERAL TRUST OF CANADA
Per: _______________________________
Name:
Title:
By: ________________________________
Name:
Title:
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