<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 12 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 26, 1999
Roberts Pharmaceutical Corporation
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
New Jersey 1-1-432 22-2429994
- --------------------------- ---------------- ------------------
(State or Other Juris- (Commission File (IRS Employer
diction of Incorporation) Number) Identification No.)
Meridian Center II, 4 Industrial Way West, Eatontown, New Jersey 07724
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (732) 676-1200
______________________________________________________________________________
(Former Name or Former Address, if Changed Since Last Report)
Page 1 of 6 Pages
(Exhibit Index appears on page 6)
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Item 5. Other Events.
On July 26, 1999, Roberts Pharmaceutical Corporation, a New Jersey
corporation (the "Company"), entered into an Agreement and Plan of Merger (the
"Merger Agreement"), by and among Shire Pharmaceuticals Group plc, a public
limited company organized under the laws of England and Wales ("Parent"), Ruby
Acquisition Sub Inc., a New Jersey corporation ("Acquisition Sub") and a direct
wholly-owned subsidiary of Parent, and the Company.
Following the satisfaction of the conditions to the consummation of the
Merger (as hereinafter defined), Acquisition Sub will be merged with and into
the Company, with the Company to continue as the surviving corporation in the
Merger (the "Surviving Corporation"). In the Merger, each issued and
outstanding share of the Company's Common Stock, par value $.01 per share
("Common Stock"), together with the associated Right (as provided pursuant to
the Company's Rights Agreement), will be converted into the right to receive
from Parent American Depositary Shares ("ADSs") of Parent (represented by
American Depositary Receipts ("ADRs") of Parent), each of which represents three
Ordinary Shares of Parent ("Parent Ordinary Shares"). The merger consideration
is calculated in terms of Parent Ordinary Shares, the value of which is
determined by multiplying the price of the ADSs by one-third. The number of
Parent Ordinary Shares to which holders of Common Stock will be entitled to
receive for each share of Common Stock held (the "Exchange Ratio") will be
determined as set forth below:
(a) if the value of one Parent Ordinary Share (i.e., one-third of the
average daily closing price per share of Parent's ADSs for the fifteen
consecutive trading days ending on the third trading day immediately
preceding the date on which the Company's shareholders will vote to approve
the Merger ("Parent Share Value")) is equal to or greater than $7.91, or
$23.73 per ADS, and equal to or less than $9.67, or $29.01 per ADS, the
Exchange Ratio will be 3.4122, thereby resulting in the shareholders
receiving between $26.99 and $33.00 per share of Common Stock;
(b) if the Parent Share Value is equal to or greater than $7.03, or
$21.09 per ADS, and less than $7.91, or $23.73 per ADS, the Exchange Ratio
shall be determined by dividing $27.00 by the Parent Share Value, thereby
resulting in the shareholders receiving $27.00 per share of Common Stock;
(c) if the Parent Share Value is less than $7.03, or $21.09 per ADS,
the Exchange Ratio shall be 3.8407, thereby resulting in the shareholders
receiving less than $27.00 per share of Common Stock;
(d) if the Parent Share Value is greater than $9.67, or $29.01 per
ADS, and less than or equal to $10.55, or $31.65 per ADS, the Exchange
Ratio shall be determined by dividing $33.00 by the Parent Share Value,
thereby resulting in the shareholders receiving $33.00 per share of Common
Stock; and
(e) if the Parent Share Value is greater than $10.55, or $31.65 per
ADS, the Exchange Ratio shall be 3.1280, thereby resulting in the
shareholders receiving more than $33.00 per share of Common Stock.
2
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The Merger is conditioned, among other things, upon the approval of the
holders of at least two-thirds of the Common Stock voting at a meeting of the
Company's shareholders, and upon the approval of the holders of a majority of
Parent Ordinary Shares outstanding present and voting at a meeting of Parent's
shareholders. The Merger Agreement also includes a provision for a $30 million
termination fee (the "Termination Fee") that is payable either by the Company or
Parent if the transaction is not completed under certain circumstances.
Concurrently with the execution of the Merger Agreement and as a condition
and inducement for Parent and Acquisition Sub to enter into the Merger
Agreement, the Company and Parent entered into an Option Agreement, dated as of
July 26, 1999 (the "Option Agreement"), pursuant to which the Company has
granted to Parent an irrevocable option to acquire authorized but unissued
shares of Common Stock representing 19.9% of the outstanding shares of Common
Stock, which option shall be exercisable upon the occurrence of any event that
would entitle Parent to a termination fee under Section 9.2(b) of the Merger
Agreement. In the event the option is exercised, the aggregate compensation
that Parent may receive from the Termination Fee and any consideration from the
sale of Common Stock acquired from the exercise of the option is $32 million.
Furthermore, certain of the Company's shareholders (each, a "Certain
Shareholder"), entered into Shareholder Agreements, each dated as of July 26,
1999 with Parent (collectively, the "Parent Shareholder Agreements"), pursuant
to which, among other things, the Certain Shareholders have agreed to vote the
shares of Common Stock owned by them for the approval and the adoption of the
Merger Agreement and the transactions contemplated thereby. As an inducement
for the Company to enter into the Merger Agreement, certain shareholders of
Parent entered into similar shareholder agreements with the Company
(collectively with the Parent Shareholder Agreements, the "Shareholder
Agreements").
In addition, on July 26, 1999 the Company entered into an Amendment to
Rights Agreement (the "Rights Amendment"), by and between the Company and
Continental Stock Transfer & Trust Company, as Rights Agent (the "Rights
Agent"), which amends the Company's Rights Agreement, dated as of December 16,
1996 (the "Rights Agreement"), by and between the Company and the Rights Agent.
The Rights Amendment provides for (a) the exemption of the events and
transactions contemplated by the Merger Agreement from the Rights Agreement and
(b) the change of the threshold of share ownership from 15% to 10% in
determining whether a holder of Common Stock shall be deemed an "Acquiring
Person" under the Rights Agreement.
The Merger Agreement, the Option Agreement, the Rights Amendment and the
Shareholder Agreements are attached hereto as Exhibits 2.1, 4.1, 4.2 and 10.1
through 10.6, respectively, and are incorporated herein by reference. The
foregoing descriptions of such agreements are qualified in their entirety by
reference to those documents filed hereto as exhibits.
3
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
2.1 Agreement and Plan of Merger, dated as of July 26, 1999, by and among
Shire Pharmaceuticals Group plc, Ruby Acquisition Sub Inc. and Roberts
Pharmaceutical Corporation.
4.1 Option Agreement, dated as of July 26, 1999, by and between Roberts
Pharmaceutical Corporation and Shire Pharmaceuticals Group plc.
4.2 Amendment to Rights Agreement, dated as of July 26, 1999, by and
between Roberts Pharmaceutical Corporation and Continental Stock
Transfer & Trust Company.
10.1 Shareholder Agreement, dated as of July 26, 1999, by and between
Robert A. Vukovich and Shire Pharmaceuticals Group plc.
10.2 Shareholder Agreement, dated as of July 26, 1999, by and between
Yamanouchi Group Holdings Inc. and Shire Pharmaceuticals Group plc.
10.3 Shareholder Agreement, dated as of July 26, 1999, by and between
HealthCare Ventures II, L.P. and Roberts Pharmaceutical Corporation.
10.4 Shareholder Agreement, dated as of July 26, 1999, by and between
HealthCare Ventures III, L.P. and Roberts Pharmaceutical Corporation.
10.5 Shareholder Agreement, dated as of July 26, 1999, by and between
HealthCare Ventures IV, L.P. and Roberts Pharmaceutical Corporation.
10.6 Shareholder Agreement, dated as of July 26, 1999, by and between
HealthCare Ventures V, L.P. and Roberts Pharmaceutical Corporation.
99.1 Joint Press Release of Shire Pharmaceuticals Group plc and Roberts
Pharmaceutical Corporation issued July 26, 1999.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ROBERTS PHARMACEUTICAL
CORPORATION
Date: July 26,1999 By: \s\Anthony A. Rascio
-----------------------------
Name: Anthony A. Rascio
Title: President and Chief Executive Officer
5
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ROBERTS PHARMACEUTICAL CORPORATION
EXHIBIT INDEX TO CURRENT REPORT ON FORM 8-K
Exhibit No. Description
- ----------- -----------
2.1 Agreement and Plan of Merger, dated as of July 26, 1999, by and among
Shire Pharmaceuticals Group plc Ruby Acquisition Sub Inc. and Roberts
Pharmaceutical Corporation.
4.1 Option Agreement, dated as of July 26, 1999, by and between Roberts
Pharmaceutical Corporation and Shire Pharmaceuticals Group plc.
4.2 Amendment to Rights Agreement, dated as of July 26, 1999, by and
between Roberts Pharmaceutical Corporation and Continental Stock
Transfer & Trust Company.
10.1 Shareholder Agreement, dated as of July 26, 1999, by and between
Robert A. Vukovich and Shire Pharmaceuticals Group plc.
10.2 Shareholder Agreement, dated as of July 26, 1999, by and between
Yamanouchi Group Holdings Inc. and Shire Pharmaceuticals Group plc.
10.3 Shareholder Agreement, dated as of July 26, 1999, by and between
HealthCare Ventures II, L.P. and Roberts Pharmaceutical Corporation.
10.4 Shareholder Agreement, dated as of July 26, 1999, by and between
HealthCare Ventures III, L.P. and Roberts Pharmaceutical Corporation.
10.5 Shareholder Agreement, dated as of July 26, 1999, by and between
HealthCare Ventures IV, L.P. and Roberts Pharmaceutical Corporation.
10.6 Shareholder Agreement, dated as of July 26, 1999, by and between
HealthCare Ventures V, L.P. and Roberts Pharmaceutical Corporation.
99.1 Joint Press Release by Shire Pharmaceuticals Group plc and Roberts
Pharmaceutical Corporation issued on July 26, 1999.
6
<PAGE>
Exhibit 2.1
___________________
AGREEMENT AND PLAN OF MERGER
AMONG
SHIRE PHARMACEUTICALS GROUP plc,
RUBY ACQUISITION SUB INC.
AND
ROBERTS PHARMACEUTICAL CORPORATION
DATED AS OF JULY 26, 1999
___________________
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
1.1. Definitions......................................................... 2
ARTICLE II
THE MERGER; CONVERSION AND EXCHANGE OF STOCK
2.1. Merger.............................................................. 10
2.2. Effective Time...................................................... 11
2.3. Effects of the Merger............................................... 11
2.4. Further Assurances.................................................. 12
2.5. Merger Consideration................................................ 12
2.6. Exchange Provisions................................................. 14
2.7. Consideration for Ordinary Shares................................... 16
2.8. Tax-Free Reorganization............................................. 16
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of Roberts.......................... 16
(a) Organization; Standing and Power........................... 16
(b) Subsidiaries and Investments................................. 17
(c) Capitalization............................................... 17
(d) Authority.................................................... 18
(e) Noncontravention............................................. 19
(f) Government Approval; Consents................................ 19
(g) SEC Documents................................................ 20
(h) Information Supplied......................................... 20
(i) Absence of Certain Changes or Events....................... 21
(j) Compliance with Law.......................................... 22
(k) Affiliate Arrangements....................................... 22
(l) Transaction Fees............................................. 23
(m) Litigation................................................... 23
(n) Taxes and Tax Returns........................................ 23
(o) Real Property................................................ 25
(p) Licenses, Permits and Authorizations....................... 25
(q) ERISA and Employee Matters................................... 26
(r) Labor Relations.............................................. 28
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(s) Intellectual Property Rights................................. 28
(t) Insurance.................................................... 29
(u) Books and Records............................................ 30
(v) Undisclosed Liabilities...................................... 30
(w) FDA, DEA Matters............................................. 30
(x) Environmental Matters........................................ 33
(y) Products..................................................... 35
(z) Marketing Practices.......................................... 36
(aa) Affiliates................................................... 36
(bb) Pooling...................................................... 36
(cc) Business Combination......................................... 36
3.2. Representations and Warranties of Shire............................ 36
(a) Organization; Standing and Power........................... 37
(b) Subsidiaries and Investments................................. 37
(c) Capitalization............................................... 38
(d) Authority.................................................... 38
(e) Noncontravention............................................. 39
(f) Government Approval; Consents................................ 40
(g) Reports and Financial Statements........................... 40
(h) Information Supplied......................................... 41
(i) Absence of Certain Changes or Events....................... 41
(j) Compliance with Law.......................................... 42
(k) Affiliate Arrangements....................................... 43
(l) Transaction Fees............................................. 43
(m) Litigation................................................... 43
(n) Taxes and Tax Returns........................................ 43
(o) Real Property................................................ 44
(p) Licenses, Permits and Authorizations....................... 45
(q) ERISA and Employee Matters................................... 45
(r) Labor Relations.............................................. 47
(s) Intellectual Property Rights................................. 48
(t) Insurance.................................................... 49
(u) Books and Records............................................ 49
(v) Undisclosed Liabilities...................................... 50
(w) FDA, DEA Matters............................................. 50
(x) Environmental Matters........................................ 52
(y) Products..................................................... 54
(z) Marketing Practices.......................................... 55
(aa) Ordinary Shares.............................................. 55
(bb) Pooling...................................................... 55
(cc) Merger Consideration......................................... 56
(dd) Active Trade or Business..................................... 56
(ee) Asset Acquisitions........................................... 56
(ff) Ownership of Roberts Shares.................................. 56
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<PAGE>
ARTICLE IV
COVENANTS OF ROBERTS
4.1. Regular Course of Business......................................... 57
4.2. Certain Prohibited Activities...................................... 57
4.3. Notice of Certain Events........................................... 59
4.4. Access............................................................. 59
4.5. Approvals.......................................................... 59
4.6. No Solicitation.................................................... 59
4.7. Pooling of Interests............................................... 61
4.8. ISRA............................................................... 61
ARTICLE V
COVENANTS OF SHIRE AND ACQUISITION SUB
5.1. Regular Course of Business......................................... 61
5.2. Certain Prohibited Activities...................................... 61
5.3. Notice of Certain Events........................................... 63
5.4. Access............................................................. 63
5.5. Approvals.......................................................... 64
5.6. No Solicitation.................................................... 64
5.7. Pooling of Interests............................................... 65
5.8. Indemnification.................................................... 65
ARTICLE VI
AGREEMENTS REGARDING OPTIONS
AND OTHER BENEFITS
6.1. Stock Option Plans.................................................. 66
6.2. Continuation of Benefits........................................... 68
6.3. Severance Policy and Other Agreements............................... 68
6.4. 1999 Bonus......................................................... 68
6.5. Waiver of Preexisting Conditions; Credit for Deductibles;
Service Credit..................................................... 68
ARTICLE VII
CONDITIONS PRECEDENT
7.1. Conditions to the Obligations of Each Party to Effect the Merger... 69
(a) Shareholder Approvals........................................ 69
(b) Certain Approvals............................................ 69
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<PAGE>
(c) No Proceeding or Litigation.................................. 69
(d) Securities Laws.............................................. 70
7.2. Additional Conditions to the Obligations of Roberts................ 70
(a) Agreements................................................... 70
(b) Representations and Warranties............................. 70
(c) Officer's Certificate........................................ 70
(d) Consents from Third Parties.................................. 70
(e) Listing...................................................... 70
(f) Tax Opinions................................................. 71
(g) Pooling Letter............................................... 71
(h) Nasdaq....................................................... 71
7.3. Additional Conditions to the Obligations of Shire and
Acquisition Sub.................................................... 71
(a) Agreements................................................... 72
(b) Representations and Warranties............................. 72
(c) Roberts Officer's Certificate................................ 72
(d) Pooling Letter............................................... 72
ARTICLE VIII
OTHER AGREEMENTS
8.1. Preparation of Form F-4, Form F-6, the Proxy Statement and the UK
Disclosure Document.............................................. 72
8.2. Roberts Shareholders Meeting....................................... 73
8.3. Shire Shareholders Meeting......................................... 73
8.4. Acquisition Sub Actions............................................ 74
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1. Termination........................................................ 74
9.2. Effect of Termination.............................................. 76
9.3. Amendment.......................................................... 78
9.4. Waiver............................................................. 79
ARTICLE X
GENERAL PROVISIONS
10.1. Public Statements.................................................. 79
10.2. Notices............................................................ 79
10.3. Interpretation..................................................... 80
10.4. Counterparts....................................................... 81
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<PAGE>
10.5. Entire Agreement................................................... 81
10.6. Governing Law...................................................... 81
10.7. Validity........................................................... 81
10.8. Assignment......................................................... 81
10.9. Expenses........................................................... 82
10.10. Enforcement........................................................ 82
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<PAGE>
EXHIBITS
Exhibit 1 Option Agreement
Exhibit 2-A Shareholder Agreement - Roberts Shareholders
Exhibit 2-B Shareholder Agreement - Shire Shareholders
Exhibit 3 Section 145 Letter
SCHEDULES
Schedule 1 Entities Required to Execute the Shareholder Agreement
Schedule 2 Knowledge Officers
Schedule 3 Officers and Directors of Surviving Corporation
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<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of July 26,
---------
1999, among Shire Pharmaceuticals Group plc, a public limited company organized
under the laws of England and Wales ("Shire"), Ruby Acquisition Sub Inc., a New
-----
Jersey corporation ("Acquisition Sub") and a direct wholly owned Subsidiary of
---------------
Shire, and Roberts Pharmaceutical Corporation, a New Jersey corporation
("Roberts").
- ---------
WHEREAS, the parties hereto desire to consummate a merger (the
"Merger") whereby Acquisition Sub will be merged with and into Roberts and
------
Roberts will be the surviving corporation in the Merger, all upon the terms and
conditions set forth herein and in accordance with the New Jersey Business
Corporation Act ("New Jersey Law");
--------------
WHEREAS, the respective Boards of Directors (or a duly authorized
committee thereof) of each of Shire, Acquisition Sub and Roberts have approved
this Agreement, the Merger and the other transactions contemplated hereby;
WHEREAS, the Merger is intended to be treated as a tax-free
reorganization pursuant to the provisions of Section 368(a)(1)(A) and Section
368(a)(2)(E) of the Internal Revenue Code of 1986, as amended (the "Code");
----
WHEREAS, concurrently with the execution of this Agreement and as a
condition and inducement to Shire and Acquisition Sub to enter into this
Agreement Roberts has granted to Shire an irrevocable option to acquire
authorized but unissued shares of common stock, par value $.01 per share of
Roberts (the "Common Stock") representing 19.9% of the outstanding shares of
Common Stock as provided in an Option Agreement in the form attached hereto as
Exhibit 1; and
WHEREAS, concurrently with the execution of this Agreement and as a
condition and inducement to the parties to enter into this Agreement, the
persons listed on Schedule 1-A hereto have committed to vote in favor of
approving this Agreement as provided in a Shareholder Agreement in the form
attached hereto as Exhibit 2-A and the entity listed on Schedule 1-B hereto has
committed to vote in favor of approving this Agreement as provided in a
Shareholder Agreement in the form attached hereto as Exhibit 2-B.
<PAGE>
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NOW, THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties hereby
agree as follows:
ARTICLE I
DEFINITIONS
1.1. Definitions. For all purposes of this Agreement, except as
-----------
otherwise expressly provided or unless the context otherwise requires, the terms
defined in this Article have the meanings assigned to them in this Article:
"Acquisition Sub" has the meaning set forth in the preamble hereto.
---------------
"Agreement" has the meaning set forth in the preamble hereto.
---------
"Business Day" means a day other than a Saturday, a Sunday or a day on
------------
which banks in New York, New York or London, England are permitted or
required by law to close.
"Cash Equivalents" means (a) cash, (b) marketable direct obligations
----------------
issued by the United States government or any agency thereof and backed by
the full faith and credit of the United States, in each case maturing
within three months from the date of acquisition thereof, and (c)
investments in money market funds which invest substantially all of their
assets in assets of the types described in clauses (a) and (b) of this
definition.
"CERCLA" has the meaning set forth in Section 3.1(x)(v).
------
"Certificate of Merger" has the meaning set forth in Section 2.2.
---------------------
"Closing" has the meaning set forth in Section 2.2.
-------
"Closing Date" has the meaning set forth in Section 2.2.
------------
<PAGE>
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"Code" has the meaning set forth in the preamble hereto.
----
"Common Stock" has the meaning set forth in the preamble hereto.
------------
"Constituent Corporations" has the meaning set forth in Section 2.1.
------------------------
"DEA" has the meaning set forth in Section 3.1(w).
---
"Depositary" has the meaning set forth in Section 2.5(f).
----------
"DOJ" has the meaning set forth in Section 3.1(w)
---
"Effective Time" has the meaning set forth in Section 2.2.
--------------
"Employment Obligations" has the meaning set forth in Section 3.1(q).
----------------------
"Environmental Law" means CERCLA, the Resource Conservation and
-----------------
Recovery Act of 1976, as amended, the New Jersey Industrial Site Recovery
Act ("ISRA"), the Illinois Responsible Property Transfer Act ("RPTA"), the
---- ----
Toxic Substances Control Act, as amended, and any other applicable federal,
state, local or foreign statute, rule, regulation, order, judgment,
directive, decree or the common law regulating, relating to, or imposing
liability or standards of conduct concerning air emissions, water
discharges, noise emissions, or exposure to or the release or threatened
release or discharge of any Hazardous Material into the environment, the
generation, handling, use, treatment, storage, transport, disposal or
remediation of any Hazardous Material, or otherwise concerning pollution or
the protection of the outdoor or indoor environment, (including, without
limitation, ambient or indoor air, surface water, groundwater, soil,
subsurface strata and natural resources, including, without limitation,
wetlands, flora and fauna, or public or employee health or safety, or the
experimental use of animals or disposal of animal carcasses).
"Environmental Permit" means any permit, license, approval, consent or
--------------------
other authorization by a federal,
<PAGE>
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state, local or non-U.S. government or regulatory entity pursuant to any
Environmental Law.
"Equity Equivalent" has the meaning set forth in Section 3.1(c).
-----------------
"ERISA" has the meaning set forth in Section 3.1(q).
-----
"Exchange Act" means the U.S. Securities Exchange Act of 1934, as
------------
amended.
"Exchange Agent" has the meaning set forth in Section 2.6(b).
--------------
"Exchange Ratio" has the meaning set forth in Section 2.5(a).
--------------
"FDA" has the meaning set forth in Section 3.1(w).
---
"Filed SEC Documents" has the meaning set forth in Section 3.1(i).
-------------------
"Form F-4" has the meaning set forth in Section 3.1(h).
--------
"Form F-6" has the meaning set forth in Section 8.1.
--------
"FSA" means The Financial Services Act 1986 of the United Kingdom.
---
"Hazardous Material" means any pollutant, contaminant, or hazardous,
------------------
toxic, medical, biohazardous, infectious or dangerous waste, substance,
constituent or material, any asbestos, any petroleum, oil (including crude
oil or any fraction thereof), any radioactive substance, animal carcass,
any toxin, chemical, virus, infectious disease or disease-causing agent, or
any other substance, waste, constituent, chemical or material that can give
rise to liability under any Environmental Law.
"Holders" means the holders of record of certificates of Common Stock
-------
as of the Effective Time.
"Indebtedness" means with respect to any entity (a) all obligations
------------
for borrowed money, (b) all obligations evidenced by bonds, debentures,
notes or other similar
<PAGE>
-5-
instruments, (c) all obligations for the reimbursement of any obligor on
any letter of credit, banker's acceptance or similar credit transaction,
(d) all obligations secured by a Lien on property or assets of such entity,
(e) financing leases which would be treated as debt under either US GAAP or
UK GAAP and (f) guarantees and other contingent obligations in respect of
Indebtedness referred to in clauses (a) through (e) above.
"Intellectual Property" has the meaning set forth in Section
---------------------
3.1(s)(i).
"knowledge" will be deemed to be present as to Roberts when the matter
---------
in question was actually known by an officer of Roberts identified on
Schedule 2-A attached hereto and will be deemed to be present as to Shire
------------
when the matter in question was actually known by an officer of Shire
identified on Schedule 2-B attached hereto.
------------
"Lien" means any lien, claim, pledge, assignment, hypothecation,
----
conditional sale, retention of title, mortgage, deed of trust, pledge,
security interest, charge or encumbrance of any kind other than a
mechanic's, warehousemen's or similar statutory lien or any agreement to
provide any of the foregoing.
"LSE" means The London Stock Exchange.
---
"MCA" has the meaning set forth in Section 3.1(w).
---
"Merger" has the meaning set forth in the preamble hereto.
------
"Merger Consideration" has the meaning set forth in Section 2.5(a).
--------------------
"New Jersey Law" has the meaning set forth in the preamble hereto.
--------------
"Option" means a right and option to purchase one share of Common
------
Stock which was granted pursuant to either of the Roberts Option Plans.
"Optionee" has the meaning set forth in Section 6.1.
--------
<PAGE>
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"Ordinary Shares" means validly issued, fully paid and nonassessable
---------------
ordinary shares, with a nominal value of U.K. five pence each, of Shire.
"Permits" means all approvals, authorizations, qualifications,
-------
consents, licenses, franchises, orders and other permits of all
governmental or regulatory agencies or bodies, whether federal, state,
local or non-U.S.
"Permitted Lien" means (i) any Lien for Taxes not yet due or
--------------
delinquent or being contested in good faith by appropriate proceedings for
which adequate reserves have been established in accordance with US GAAP or
UK GAAP, as the case may be, (ii) any statutory Lien arising in the
ordinary course of business by operation of law with respect to a liability
that is not yet due or delinquent and (iii) any minor imperfection of title
or similar Lien which individually or in the aggregate with other such
Liens does not materially impair the value of the property subject to such
Lien or the use of such property in the conduct of the business of Roberts
or Shire, as the case may be, or any of its Subsidiaries.
"Proxy Statement" means a proxy statement relating to the approval by
---------------
the shareholders of Roberts of this Agreement (as amended or supplemented
from time to time).
"Public UK Documents" has the meaning set forth in Section 3.2(i).
-------------------
"Rights" means the Rights issued pursuant to the Rights Agreement.
------
"Rights Agreement" means the Rights Agreement, dated as of December
----------------
16, 1996, between Roberts and Continental Stock Transfer and Trust Company,
as amended through the date hereof.
"Roberts" has the meaning set forth in the preamble hereto.
-------
"Roberts Acquisition Transaction" has the meaning set forth in Section
-------------------------------
4.6(a).
"Roberts Disclosure Schedule" has the meaning set forth in Section
---------------------------
3.1.
<PAGE>
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"Roberts Governmental Approvals" has the meaning set forth in Section
------------------------------
3.1(f).
"Roberts Insurance Policies" has the meaning set forth in Section
--------------------------
3.1(t).
"Roberts Intellectual Property" has the meaning set forth in Section
-----------------------------
3.1(s)(i).
"Roberts Material Adverse Effect" means any condition, change or
-------------------------------
effect that is materially adverse to the business, results of operations or
financial condition of Roberts and its Subsidiaries taken as a whole, but
excluding conditions, changes or effects that (a) are caused by general
economic conditions or conditions affecting the pharmaceutical industry as
a whole, whether in the United States or internationally, which conditions
do not affect Roberts and its Subsidiaries in a disproportional manner or
(b) are related to or result from any action or inaction on the part of
Shire or any of its affiliates.
"Roberts Option Plans" means Roberts' Incentive Stock Option Plan,
--------------------
Equity Incentive Plan, Restricted Stock Option Plan and Employee Stock
Purchase Plan.
"Roberts Product Sites" has the meaning set forth in Section
---------------------
3.1(x)(v).
"Roberts Shareholder Approval" has the meaning set forth in Section
----------------------------
3.1(d).
"Roberts Shareholders Meeting" has the meaning set forth in Section
----------------------------
8.2.
"Roberts Superior Proposal" has the meaning set forth in Section
-------------------------
4.6(b).
"Roberts Third Party Approvals" has the meaning set forth in Section
-----------------------------
3.1(f).
"Roberts Third Party Site" has the meaning set forth in Section
------------------------
3.1(x)(vi)."SARs" has the meaning set forth in Section 3.1(c).
----
"SEC" means the Securities and Exchange Commission.
---
<PAGE>
-8-
"SEC Documents" has the meaning set forth in Section 3.1(g).
-------------
"Securities Act" means the U.S. Securities Act of 1933, as amended.
--------------
"Shareholder Protection Act" means Chapter 10A of the New Jersey Law.
--------------------------
"Shire" has the meaning set forth in the preamble hereto.
-----
"Shire Acquisition Transaction" has meaning set forth in Section 5.6.
-----------------------------
"Shire ADRs" means the American Depositary Receipts representing the
----------
Shire ADSs issued pursuant to a Deposit Agreement, dated as of April 1,
1998, between Shire and the Depositary.
"Shire ADSs" means American Depositary Shares, each representing three
----------
Ordinary Shares, of Shire.
"Shire Disclosure Schedule" has the meaning set forth in Section 3.2.
-------------------------
"Shire Governmental Approvals" has the meaning set forth in Section
----------------------------
3.2(f).
"Shire Insurance Policies" has the meaning set forth in Section
------------------------
3.2(t).
"Shire Intellectual Property" has the meaning set forth in Section
---------------------------
3.2(s)(i).
"Shire Material Adverse Effect" means any condition, change or effect
-----------------------------
that is materially adverse to the business, results of operations or
financial condition of Shire and its Subsidiaries taken as a whole, but
excluding conditions, changes or effects that (a) are caused by general
economic conditions or conditions affecting the pharmaceutical industry as
a whole, whether in the United Kingdom or internationally, which conditions
do not affect Shire and its Subsidiaries in a disproportionate manner or
(b) are related to or result from any action or inaction on the part of
Roberts or any of its affiliates.
<PAGE>
-9-
"Shire Option Plans" means Shire's SHL Scheme, SPC Scheme, Executive
------------------
Scheme (Part A and Part B), Sharesave Scheme, Employee Stock Purchase Plan,
Pharmavene Stock Option Plan and Richwood Stock Option Plan, collectively.
"Shire Product Sites" has the meaning set forth in Section 3.2(x)(v).
-------------------
"Shire Share Value" means one-third of the average of the last
-----------------
reported sale price per Shire ADR on the Nasdaq National Market over the
fifteen consecutive trading days ending on the third trading day
immediately preceding the Closing Date.
"Shire Shareholder Approval" has the meaning set forth in Section
--------------------------
3.2(d).
"Shire Shareholders Meeting" has the meaning set forth in Section 8.3.
--------------------------
"Shire Superior Proposal" has the meaning set forth in Section 5.6(b).
-----------------------
"Shire Third Party Approvals" has the meaning set forth in Section
---------------------------
3.2(f).
"Shire Third Party Site" has the meaning set forth in Section
----------------------
3.2(x)(vi).
"Subsidiary" of any person means (i) any corporation of which the
----------
outstanding capital stock having at least a majority of the votes entitled
to be cast in the election of directors under ordinary circumstances shall
at the time be owned, directly or indirectly, by such person or (ii) any
other person of which at least a majority of the voting interest under
ordinary circumstances is at the time, directly or indirectly, owned by
such person.
"Surviving Corporation" has the meaning set forth in Section 2.1.
---------------------
"Tax" or "Taxes" means (i) all federal, state, local or non-U.S.
--- -----
taxes, charges, fees, imposts, levies or other assessments, including,
without limitation, all net income, alternative minimum, gross receipts,
capital, sales, use, ad valorem, value added, transfer, franchise,
<PAGE>
-10-
profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp,
occupation, property and estimated taxes, customs duties, fees, assessments
and charges of any kind whatsoever, (ii) all interest, penalties, fines,
additions to tax or other additional amounts imposed by any taxing
authority in connection with any item described in clause (i) and (iii) all
transferee, successor, several or contractual liability in respect of any
items described in clause (i) or (ii).
"Tax Returns" means all returns, declarations, reports, estimates,
-----------
information returns and statements required to be filed in respect of any
Taxes.
"UK Disclosure Documents" means the documentation necessary for the
-----------------------
implementation of this Agreement including a circular to Shire's
shareholders containing (i) a notice convening an extraordinary general
meeting of Shire at which a resolution will be proposed to approve the
allotment of share capital necessary to give effect to this Agreement, and
(ii) such other information as required by applicable law, together with a
U.K. prospectus and forms of proxy.
"UK GAAP" has the meaning set forth in Section 3.2(g).
-------
"UK Prospectus" means a prospectus prepared in accordance with the FSA
-------------
with respect to the Ordinary Shares.
"US GAAP" has the meaning set forth in Section 3.1(g).
-------
ARTICLE II
THE MERGER; CONVERSION AND EXCHANGE OF STOCK
2.1. Merger. At the Effective Time, in accordance with and subject
------
to the terms and conditions of this Agreement and New Jersey Law, Acquisition
Sub shall be merged with and into Roberts and Roberts shall continue its
corporate existence under New Jersey Law as the surviving corporation
(Acquisition Sub and Roberts are sometimes referred to herein collectively as
<PAGE>
-11-
the "Constituent Corporations," and Roberts, as the surviving corporation in the
------------------------
Merger, is sometimes referred to herein as the "Surviving Corporation").
---------------------
2.2. Effective Time. Subject to the provisions of this Agreement,
--------------
the parties agree to cause to be duly executed a Certificate of Merger (the
"Certificate of Merger"), which shall be duly delivered to the Secretary of
- ----------------------
State for the State of New Jersey for filing as provided by New Jersey Law. The
Merger shall become effective upon the filing of the Certificate of Merger with
the Secretary of State for the State of New Jersey (the "Effective Time").
--------------
Prior to such filings of the Certificate of Merger, a closing (the "Closing")
-------
will be held at the offices of Cahill Gordon & Reindel, 80 Pine Street, New
York, New York 10005, which shall be on the second Business Day after the
satisfaction or waiver of the conditions set forth in Article VII hereof, unless
another time, date or place is agreed by the parties hereto or unless this
Agreement has been terminated in accordance with its terms. The date of the
Closing shall be referred to herein as the "Closing Date." The parties agree
------------
that the Effective Time shall occur on the Closing Date.
2.3. Effects of the Merger. At the Effective Time, (a) the effects
---------------------
of the Merger shall be as provided under all applicable provisions of New Jersey
Law, (b) the Certificate of Incorporation of Roberts as in effect immediately
prior to the Effective Time shall be the Certificate of Incorporation of the
Surviving Corporation until thereafter amended as provided therein and in
accordance with New Jersey Law, (c) the By-Laws of Roberts as in effect
immediately prior to the Effective Time shall be the By-Laws of the Surviving
Corporation until thereafter amended as provided therein and in accordance with
New Jersey Law, (d) the individuals listed on Schedule 3-A shall be the officers
------------
of the Surviving Corporation until the earlier of their resignation or removal
or until their successors have been duly elected and qualified in accordance
with the Certificate of Incorporation and By-Laws of the Surviving Corporation,
and (e) the individuals listed on Schedule 3-B shall be the directors of the
------------
Surviving Corporation until the earlier of their resignation or removal or until
their successors have been duly elected and qualified in accordance with the
Certificate of Incorporation and By-Laws of the Surviving Corporation.
<PAGE>
-12-
2.4. Further Assurances. If, at any time after the Effective Time,
------------------
the Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, obligation, title or interest in, to or under any of the
rights, properties or assets of either of the Constituent Corporations as a
result of, or in connection with, the Merger or otherwise to carry out this
Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of each of the
Constituent Corporations or otherwise, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of the Constituent Corporations or otherwise, all such other actions and things
as may be necessary or desirable to vest, perfect or confirm any and all right,
obligation, title and interest in, to and under such rights, properties or
assets in the Surviving Corporation or otherwise to carry out this Agreement so
long as such actions and things are consistent with the terms of this Agreement
and the Certificate of Merger.
2.5. Merger Consideration. (a) At the Effective Time, by virtue
--------------------
of the Merger and without any action on the part of the Holders, each issued and
outstanding share of Common Stock (other than shares canceled in accordance with
Section 2.5(d)) together with the associated Right shall be converted into the
right to receive from Shire a number of Ordinary Shares (the "Merger
------
Consideration") determined as set forth below (the "Exchange Ratio"):
- ------------- --------------
(i) If the Shire Share Value is equal to or greater than $7.91 and
equal to or less than $9.67, the Exchange Ratio shall be 3.4122;
(ii) If the Shire Share Value is equal to or greater than $7.03 and
less than $7.91, the Exchange Ratio shall be determined by dividing $27.00
by the Shire Share Value;
(iii) If the Shire Share Value is less than $7.03, the Exchange
Ratio shall be 3.8407;
(iv) If the Shire Share Value is greater than $9.67 and less than
or equal to $10.55, the Exchange Ratio shall be determined by dividing
$33.00 by the Shire Share Value; and
<PAGE>
-13-
(v) If the Shire Share Value is greater than $10.55, the Exchange
Ratio shall be 3.1280.
(b) Each issued and outstanding share of capital stock of Acquisition
Sub shall be canceled.
(c) In consideration of the cancellation of shares of capital stock
of Acquisition Sub pursuant to Section 2.5(b) and the issuance of Ordinary
Shares pursuant to Section 2.5(a), the Surviving Corporation shall issue one
fully paid and nonassessable share of its common stock, par value $.01 per
share, to Shire for each share canceled pursuant to Section 2.5(b).
(d) Each share of Common Stock (and associated Rights) that is owned
by Roberts or any Subsidiary of Roberts, or Shire or any Subsidiary of Shire,
shall automatically be canceled and retired and shall cease to exist, and no
Ordinary Shares or other consideration shall be delivered in exchange therefor.
(e) The parties acknowledge that listing of the Ordinary Shares
comprising the Merger Consideration on the London Stock Exchange will not be
permitted unless and until this Agreement is unconditional in all respects,
including the filings of the Certificate of Merger having taken place as
provided for in Section 2.2. The parties therefore agree that, without
prejudice to Articles VII, VIII and IX of this Agreement, once the Ordinary
Shares have been allotted, they shall use their respective best efforts to
procure that filings of the Certificate of Merger takes place immediately before
9:30 a.m. (New York time) on the Closing Date, and that the Ordinary Shares to
be issued pursuant to this Agreement are admitted to the Official List of the
London Stock Exchange at 2:30 p.m. (London time).
(f) Notwithstanding Section 2.5(a), unless the Holders otherwise
elect, Shire will provide Holders with one-third of a Shire ADS (represented by
Shire ADRs) for each Ordinary Share such Holder would be entitled to receive
pursuant to Section 2.5(a). Holders must irrevocably elect to receive all or
any portion of their Ordinary Shares as Ordinary Shares in lieu of such Shire
ADSs at the time they surrender their certificates representing shares of Common
Stock in accordance with the provisions described in Section 2.6. The receipt
of Shire ADSs will be deemed for all purposes of this Agreement as the receipt
of the underlying Ordinary Shares and such Shire ADSs
<PAGE>
-14-
will be deemed for all purposes of this Agreement to constitute Merger
Consideration. Shire will pay all fees and expenses associated with the issuance
of the Ordinary Shares constituting Shire ADSs to Morgan Guaranty Trust Company
of New York, as depositary (the "Depositary"), for the issuance by the
----------
Depositary of the associated Shire ADRs.
(g) Shire shall not be required to pay any fractional Ordinary Shares
or Shire ADSs pursuant to this Section 2.5. In lieu of receiving a fractional
Ordinary Share or Shire ADS, each Holder otherwise entitled to (i) a fractional
Ordinary Share shall receive cash (without interest) in an amount equal to (a)
the latest closing mid-market price of the Ordinary Shares on the London Stock
Exchange on the day immediately following the Closing Date divided by (b) the
fractional interest of an Ordinary Share that would otherwise be payable and
(ii) a fractional Shire ADS shall receive cash (without interest) in an amount
equal to (a) the last reported sale price of Shire ADRs on the Nasdaq National
Market for the day immediately following the Closing Date divided by (b) the
fractional interest of a Shire ADS that would otherwise be payable.
2.6. Exchange Provisions. (a) At the Effective Time, all shares
-------------------
of Common Stock (and associated Rights), by virtue of the Merger and without any
action on the part of the Holders, shall no longer be outstanding and shall be
canceled and retired and shall cease to exist, and each Holder of a certificate
representing any such share of Common Stock shall thereafter cease to have any
rights with respect to such share of Common Stock (and associated Right) except
the right to receive the Merger Consideration for such share of Common Stock
(and associated Right) specified in Section 2.5.
(b) Prior to the Effective Time, Shire shall designate a bank or
trust company reasonably satisfactory to Roberts to act as Exchange Agent
hereunder (the "Exchange Agent"). At the Effective Time, Shire shall (i) issue
--------------
to and deposit with the Depositary, for the benefit of the holders of shares of
Common Stock converted into Shire ADSs in accordance with Sections 2.5(a) and
(f), Ordinary Shares in an amount sufficient to permit the Depositary to issue
Shire ADSs representing the number of Shire ADSs issuable pursuant to Sections
2.5(a) and (f) and (ii) deposit, in trust, with the Exchange Agent for the
benefit of the Holders, Ordinary Shares constituting the Merger Consideration.
As soon as practicable after the Effective
<PAGE>
-15-
Time, the Surviving Corporation shall cause the Exchange Agent to mail to each
Holder (i) a form of letter of transmittal specifying that delivery shall be
effected, and risk of loss and title to certificates of Common Stock shall pass,
only upon proper delivery of such certificates to the Exchange Agent and (ii)
instructions for use in surrendering such certificates in exchange for the
Merger Consideration set forth in Section 2.5. Such letter of transmittal shall
also indicate that Holders have an irrevocable right to elect to receive all or
any portion of their Ordinary Shares as Ordinary Shares in lieu of Shire ADSs as
set forth in Section 2.5(f). Upon surrender of any such certificate for
cancellation to the Exchange Agent, together with such letter of transmittal,
duly executed, the holder of such certificate shall be entitled to receive in
exchange therefor the Merger Consideration. Shire shall cause the Depositary to
issue Shire ADRs through and upon the instructions of the Exchange Agent, for
the benefit of the holders of shares of Common Stock who have not elected to
receive Ordinary Shares pursuant to Section 2.5(f). Neither the Exchange Agent
nor any party hereto shall be liable to any Holder for any amount paid to a
public official pursuant to any applicable abandoned property, escheat or
similar law. Shire and the Exchange Agent shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement to
any Holder such amounts as the Surviving Corporation or the Exchange Agent is
required to deduct and withhold under the Code or any provision of national,
state or local law, with respect to the making of such payment. To the extent
such amounts are so withheld, such withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the Holder in respect of whom
such deduction and withholding was made. Any Merger Consideration payable to
Holders pursuant to Section 2.5 which remains undistributed to the Holders for a
period of six months after the Closing Date shall be delivered to the Surviving
Corporation upon its request, and any Holders who have not surrendered to the
Exchange Agent certificates for Common Stock or complied with the instructions
in the letter of transmittal, as the case may be, shall thereafter look only to
the Surviving Corporation for payment of such Merger Consideration. The
Surviving Corporation shall instruct the Exchange Agent to invest all cash held
by it in Cash Equivalents. Interest earned on such Cash Equivalents shall be
paid to the Surviving Corporation.
<PAGE>
-16-
(c) Until so surrendered, each certificate representing Common Stock
shall represent, after the Effective Time, solely the right to receive the
Merger Consideration specified in Section 2.5. The Merger Consideration issued
upon the surrender of Common Stock in accordance with the terms hereof shall be
deemed to have been issued in full satisfaction of all rights pertaining to such
Common Stock (and associated Rights).
2.7. Consideration for Ordinary Shares. The consideration for the
---------------------------------
allotment by Shire of Ordinary Shares constituting the Merger Consideration
shall be the cancellation of all shares of Common Stock pursuant to Section
2.6(a).
2.8. Tax-Free Reorganization. For U.S. income tax purposes, the
-----------------------
parties intend that the Merger be treated as a tax-free reorganization pursuant
to the provisions of Section 368(a)(1)(A) and Section 368(a)(2)(E) of the Code.
Each party hereto agrees not to take any position inconsistent with the
foregoing on any Tax Return, unless required by law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of Roberts. Roberts represents
-----------------------------------------
and warrants to Shire and Acquisition Sub that, except (A) as set forth in the
Roberts Disclosure Schedule delivered by Roberts to Shire at or prior to the
execution of this Agreement (the "Roberts Disclosure Schedule") (each section of
---------------------------
which qualifies the correspondingly numbered representation and warranty) and
(B) with respect to paragraphs (j), (m), (o), (p), (q), (r), (t), (w), (x) and
(y) of this Section 3.1, as does not have, or could not reasonably be expected
to have, individually or in the aggregate, a Roberts Material Adverse Effect,
the following is true and correct:
(a) Organization; Standing and Power. Roberts is a corporation duly
--------------------------------
organized, validly existing and in good standing under the laws of the
State of New Jersey. Roberts has all requisite corporate power and
authority to own, lease and operate its assets and to carry on its business
as now being conducted. Roberts is duly qualified as a foreign corporation
to do business, and is in good standing, in each jurisdiction where the
character of
<PAGE>
-17-
its assets owned or leased or the nature of its activities makes such
qualification necessary (such jurisdictions being specified in Section
3.1(a) of the Roberts Disclosure Schedule) except where the failure to be
so qualified would not have a Roberts Material Adverse Effect. Copies of
the Certificate of Incorporation and By-Laws of Roberts as in effect on the
date hereof have been previously delivered to Shire.
(b) Subsidiaries and Investments. Section 3.1(b) of the Roberts
----------------------------
Disclosure Schedule lists each Subsidiary of Roberts. Each such Subsidiary
is a corporation duly organized, validly existing and (in applicable
jurisdictions) in good standing under the laws of its jurisdiction of
incorporation. Each such Subsidiary has all requisite corporate power and
authority to own, lease and operate its assets and to carry on its business
as now being conducted. All such Subsidiaries are duly qualified as
foreign corporations to do business, and (in applicable jurisdictions) are
in good standing, in each jurisdiction where the character of their
respective assets owned or leased or the nature of their respective
activities makes such qualification necessary, except where the failure to
be so qualified or in good standing would not have a Roberts Material
Adverse Effect. All the outstanding shares of capital stock of each such
Subsidiary have been validly issued and are fully paid (and in applicable
jurisdictions, nonassessable) and are owned by Roberts, by another
Subsidiary of Roberts or by Roberts and another such Subsidiary, free and
clear of all Liens, other than Liens which (individually or in the
aggregate) would not have a Roberts Material Adverse Effect. Except for
the capital stock of its Subsidiaries, Roberts does not own any stock,
partnership or other equity interest in, or any debt or equity securities
of, any person or entity.
(c) Capitalization. The authorized capital stock of Roberts
--------------
consists of 110,000,000 shares of capital stock, including 10,000,000
shares of Class B Preferred Stock par value $.10 per share (of which
5,500,000 shares have been designated as Series B 5% Convertible Preferred
Stock, all of which have been converted into Common Stock), 500,000 shares
of Series A Junior Participating Preferred Stock par value $.10 per share
and 100,000,000 shares of Common Stock. At the close of business on July
21, 1999
<PAGE>
-18-
(i) 31,889,077 shares of Common Stock were issued and outstanding,
(ii) 387,594 shares of Common Stock were held by Roberts in its treasury,
(iii) 3,353,188 shares of Common Stock were reserved for issuance on
exercise of outstanding options under the Roberts Option Plans, (iv) 150
shares of Common Stock were reserved for issuance upon the exercise of the
warrant issued to A.B. Laffer, V.A. Canto & Associates and (v) 500,000
shares of Series A Junior Participating Preferred Stock were reserved for
issuance under the Rights Agreement and no other shares of capital stock
were issued, reserved for issuance or outstanding. All outstanding shares
of capital stock of Roberts are, and all shares which are reserved for
issuance will be, when issued in accordance with the Roberts Option Plans,
duly authorized, validly issued, fully paid and nonassessable and not
subject to preemptive rights. Except as set forth above, as of the date of
this Agreement, there are not any securities convertible into or
exchangeable or exercisable for capital stock ("Equity Equivalent") of any
-----------------
of Roberts or any of its Subsidiaries (including, without limitation, any
option, warrant, right to subscribe, call or commitment of any kind or
character whatsoever requiring the issuance, sale or transfer by Roberts or
any of its Subsidiaries of any shares of their capital stock or any
securities convertible into or exchangeable or exercisable for such capital
stock). As of the date of this Agreement, there are not any outstanding
contractual obligations of Roberts or any of its Subsidiaries to
repurchase, redeem or otherwise acquire any shares of capital stock of
Roberts or any of its Subsidiaries. Roberts has delivered to Shire a
complete and correct copy of the Rights Agreement as amended and
supplemented to the date of this Agreement. There are no outstanding stock
appreciation, phantom stock, profit participation or similar rights
(collectively, "SARs") with respect to Roberts. Roberts has delivered to
----
Shire a complete list of all outstanding Indebtedness of Roberts and its
Subsidiaries.
(d) Authority. Roberts has the requisite corporate power and
---------
authority to execute and deliver this Agreement and, subject to Roberts
Shareholder Approval (as defined below) and the receipt of the consents and
waivers set forth in Section 3.1(d) of the Roberts Disclosure Schedule, to
consummate the transactions contemplated by this Agreement to be
consummated by Roberts. The execution and
<PAGE>
-19-
delivery of this Agreement by Roberts and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Roberts, subject to the approval of this
Agreement and the transactions contemplated hereby by the affirmative vote
of holders of at least two-thirds of the shares of Common Stock voted at a
meeting (the "Roberts Shareholder Approval"). This Agreement has been
----------------------------
duly executed and delivered by Roberts and constitutes a valid and binding
obligation of Roberts, enforceable against Roberts in accordance with its
terms, subject to applicable bankruptcy, insolvency moratorium or other
similar laws relating to creditors' rights and general principles of
equity.
(e) Noncontravention. Neither the execution and delivery of this
----------------
Agreement by Roberts nor the consummation of the transactions contemplated
hereby nor compliance by Roberts with any of the provisions hereof will (i)
violate, conflict with or result in a breach of any provision of, or
constitute a default (or an event which, with notice or lapse of time or
both, could constitute a default) under, or result in the termination,
modification or suspension of, or accelerate the performance required by,
or result in a right of termination or acceleration under, or result in the
creation of any Lien upon, right to acquire or obligation to dispose of any
of the properties, assets or rights of Roberts or any of its Subsidiaries
under, any of the terms, conditions or provisions of (x) the Certificate of
Incorporation or By-Laws of Roberts or any of its Subsidiaries or (y) any
note, bond, mortgage, credit agreement, indenture, deed of trust, license,
Permit, authorization, lease, agreement or instrument or obligation to
which Roberts or any of its Subsidiaries is party or by which they are
bound or to which they or any of their assets may be subject, or (ii)
violate any judgment, ruling, order, writ, injunction, decree, statute,
rule or regulation applicable to Roberts or any of its Subsidiaries, their
operations or any of their assets, except for such violations, conflicts or
breaches referred to in clauses (i)(y) and (ii) which would not,
individually or in the aggregate, have a Roberts Material Adverse Effect.
(f) Government Approval; Consents. No consents and approvals are
-----------------------------
required to be obtained by Roberts from non-governmental third parties
("Roberts Third Party Approvals")
-------------------------------
<PAGE>
-20-
in order to lawfully and contractually permit it to perform its obligations
under this Agreement and consummate the transactions contemplated hereby.
No notice to, filing with, or authorization, consent or approval of, any
federal, state, local or non-U.S. public body or authority is necessary for
the execution, delivery or performance of this Agreement by Roberts or the
consummation of the transactions contemplated hereby ("Roberts Governmental
--------------------
Approvals").
---------
(g) SEC Documents. (i) Roberts has filed all required reports,
-------------
schedules, forms, statements and other documents with the SEC since January
1, 1998 (the "SEC Documents"). As of their respective dates, the SEC
-------------
Documents complied in all material respects with the requirements of the
Securities Act or the Exchange Act, as the case may be, and the rules and
regulations of the SEC promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. The
financial statements of Roberts included in the SEC Documents comply as to
form in all material respects with applicable accounting requirements and
the published rules and regulations of the SEC with respect thereto, have
been prepared in accordance with accounting principles generally accepted
in the United States ("US GAAP") (except, in the case of unaudited
-------
statements, as permitted by Form 10-Q of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated in the notes
thereto) and fairly present the consolidated financial position of Roberts
and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-
end audit adjustments).
(ii) Roberts is eligible to use Form S-3 for the filing of a
registration statement with the SEC under the Securities Act.
(h) Information Supplied. None of the information supplied or to be
--------------------
supplied by Roberts for inclusion or
<PAGE>
-21-
incorporation by reference in (i) the registration statement on Form F-4 to
be filed with the SEC by Shire in connection with the issuance of Ordinary
Shares and Shire ADSs in the Merger (the "Form F-4") will, at the time the
Form F-4 is filed with the SEC, at any time it is amended or
--------
supplemented or at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the UK Disclosure Documents will,
on the date the UK Disclosure Documents are first mailed to the
shareholders of Shire or at the time of the Shire shareholders meeting,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
are made, not misleading or (iii) the Proxy Statement will, at the date it
is first mailed to Roberts shareholders or at the time of the Roberts
Shareholders Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they are made, not misleading. The Proxy Statement will comply
as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations thereunder, except that no representation
is made by Roberts with respect to statements made or incorporated by
reference therein based on information supplied by Shire.
(i) Absence of Certain Changes or Events. Except as disclosed in
------------------------------------
the SEC Documents filed and publicly available prior to the date of this
Agreement (the "Filed SEC Documents"), since December 31, 1998 there has
-------------------
not been (i) any material adverse change in the business, financial
condition or results of operations of Roberts and its Subsidiaries, taken
as a whole, (ii) any destruction or loss of (whether or not covered by
insurance) any property, asset or right that has had or is likely to have a
Roberts Material Adverse Effect, (iii) any authorization or issuance by
Roberts of any of its capital stock or the issuance of any debt security or
other evidence of Indebtedness of Roberts or any of its Subsidiaries, (iv)
any redemption or other acquisition by Roberts of any of its capital stock
or by Roberts or any of its Subsidiaries of
<PAGE>
-22-
any of their debt securities or other evidences of Indebtedness, or any
payment made with respect to any of the foregoing (other than any regular,
periodic payment of interest made with respect to a debt security or other
evidence of Indebtedness), (v) any declaration, setting aside or payment of
any dividend or other distribution or payment (whether in cash, capital
stock or otherwise) in respect of any capital stock of Roberts, (vi) any
disposal or lapse of any Roberts Intellectual Property, (vii) any Lien
(other than a Permitted Lien) incurred on any material property, assets or
rights of Roberts or any of its Subsidiaries, (viii) any incurrence by
Roberts or any of its Subsidiaries of any liability which has had or is
likely to have a Roberts Material Adverse Effect, (ix) any incurrence of
Indebtedness or any guarantee by Roberts or any of its Subsidiaries of any
liability of any other person or entity outside of the ordinary course of
business, (x) to the knowledge of Roberts, any development with respect to
regulatory approval of any products of Roberts or any of its Subsidiaries
which has had or is likely to have a Roberts Material Adverse Effect, (xi)
to the knowledge of Roberts, any development with respect to relationships
with any contract manufacturer or contract research organization with which
Roberts or any of its Subsidiaries has a business relationship which has
had or is likely to have a Roberts Material Adverse Effect or (xii) any
change in Roberts' Tax accounting methods, any new election made with
respect to Taxes, any modification or revocation of any existing election
made with respect to Taxes, or any settlement or other disposition of any
Tax matter.
(j) Compliance with Law. Neither Roberts nor any of its
-------------------
Subsidiaries is in violation or noncompliance in any material respect with
any statute, law, ordinance, regulation, rule, order or other legal
requirement of any government, authority or any other governmental
department or agency applicable to its business or operations, or any
judgment, decree or order of any court to which it is a party.
(k) Affiliate Arrangements . Neither Roberts nor any of its
----------------------
Subsidiaries is a party to any contract, agreement, arrangement,
understanding or other commitment with any director, officer or
securityholder of Roberts or any
<PAGE>
-23-
of its Subsidiaries or, to the knowledge of Roberts, any person or entity
controlled by any such person.
(l) Transaction Fees. Roberts has not retained any broker, finder,
----------------
financial adviser, investment banker or other person or entity which is
entitled to any brokerage, finder's or similar fee or commission in
connection with this Agreement or the transactions contemplated hereby.
(m) Litigation. There is no claim, action, suit or proceeding
----------
pending or, to the knowledge of Roberts, threatened against Roberts or any
of its Subsidiaries or any of their respective properties, assets or rights
before any court or governmental or regulatory authority or body.
(n) Taxes and Tax Returns. (i) Roberts has duly and timely filed
---------------------
all federal, state, local and non-U.S. Tax Returns required to be filed by
it and its Subsidiaries, and each such Tax Return is complete and accurate
in all material respects, (ii) Roberts has timely paid all Taxes due and
payable by it and its Subsidiaries and has made adequate provision (through
a current accrual on its most recent financial statements) for any Taxes
that are not yet due and payable and (iii) Roberts has withheld and paid in
a timely manner all Taxes required to have been withheld and paid in
connection with amounts paid or owing to any employee, independent
contractor, creditor, stockholder or other third party, including amounts
of or the value of awards and prizes paid to Roberts' employees. Any
deficiencies or assessments asserted in writing by any taxing authority
have been paid or fully settled and no issue raised by any such taxing
authority reasonably could be expected to result in a proposed deficiency
for any prior, parallel or subsequent period (including periods subsequent
to the Effective Time). There are no claims or assessments pending (or, to
the best knowledge of Roberts, threatened) against Roberts or any of its
Subsidiaries for any alleged federal, state, local or non-U.S. Tax
deficiency and no issue has been raised in writing by any federal, state,
local or non-U.S. taxing authority or representative thereof. No consent
has been filed relating to Roberts pursuant to Section 341 of the Code. No
claim has ever been made by an authority in a jurisdiction where Roberts
does not file Tax Returns that it is or may be
<PAGE>
-24-
subject to taxation by that jurisdiction. Section 3.1(n) of the Roberts
Disclosure Schedule lists all federal, state, local and non-U.S.
jurisdictions in which Roberts files Tax Returns, and indicates those Tax
Returns that have been audited and those that currently are the subject of
audit. Roberts has not consented to an extension of the statute of
limitations with respect to any Tax period. Roberts is not a party to any
Tax allocation or sharing agreement. Roberts (i) has never been a member of
an "affiliated group" (within the meaning of Section 1504 of the Code) and
has never been a member of any combined, consolidated, affiliated or
unitary group for any state, local or non-U.S. Tax purposes and (ii) has no
liability for the Taxes of any person under Treas. Reg. (S) 1.1502-6 (or
any similar provision of state, local or non-U.S. law), as a transferee or
successor, by contract, or otherwise. Roberts has never had any
"undistributed personal holding company income" (as defined in Section 545
of the Code). Roberts is not required to make any adjustment pursuant to
Section 481 of the Code (or any comparable provision of state, local or
non-U.S. law) by reason of a change in accounting method or otherwise.
Roberts has never requested a ruling from, or entered into a closing
agreement with, the Internal Revenue Service or any other taxing authority.
None of Roberts' assets is "tax-exempt use property" (as defined in Section
168(h)(1) of the Code) or may be treated as owned by any other person
pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954 (as in
effect immediately prior to the enactment of the Tax Reform Act of 1986).
Roberts is not a party to any agreement or arrangement that provides for
the payment of any amount that could constitute a "parachute payment"
within the meaning of Section 280G of the Code. Roberts is not, and has
never been, a "United States real property holding corporation" within the
meaning of Section 897 of the Code. Roberts has not made any elections
under Section 108, 168, 338, 441, 472, 1017, 1033 or 4977 of the Code (or
any predecessor provisions thereof). Roberts has previously delivered to
Shire true and complete copies of (i) all federal, state, local and non-
U.S. income or franchise Tax Returns for each of the last three taxable
years ending prior to the date of this Agreement (except for those Tax
Returns that have not yet been filed) and (ii) any audit reports issued
within the last three years
<PAGE>
-25-
by the Internal Revenue Service or any other taxing authority.
(o) Real Property. Section 3.1(o) of the Roberts Disclosure
-------------
Schedule sets forth a complete and accurate list of all material real
property owned or leased by Roberts or any of its Subsidiaries, including
(i) with respect to owned real property, the date of its acquisition, any
Liens on or with respect to such real property (other than Permitted
Liens), the name of the holder of any such Lien and the amount and nature
of any obligation secured by any such Lien and (ii) with respect to leased
real property, the name of the lessor of such real property, a list of all
instruments and documents governing the terms of such leasehold interest,
any Lien on or with respect to such leasehold interest (other than
Permitted Liens), the name of the holder of any such Lien and the amount
and nature of any obligation secured by any such Lien. Roberts is not a
lessor with respect to any material real property owned by it or any of its
Subsidiaries and has not granted any sublease of any leasehold interest in
any material real property leased by it or any of its Subsidiaries. With
respect to such material real property, (i) there are no eminent domain
proceedings pending or threatened against it, (ii) such properties and the
improvements thereon (including the roof and structural portions of each
building) are in good operating order and condition, subject to ordinary
wear and tear, and (iii) the use thereof does not violate any zoning or
similar land use laws or other government regulations other than such
violations which, individually or in the aggregate, would not adversely
affect the ability of the Surviving Corporation to use, operate or occupy
any of such properties following the Effective Time. The real property
owned or leased by Roberts and its Subsidiaries is sufficient for the
conduct of its business.
(p) Licenses, Permits and Authorizations. Section 3.1(p) of the
------------------------------------
Roberts Disclosure Schedule sets forth a complete and accurate list of all
material Permits held by or on behalf of Roberts and its Subsidiaries,
including (i) the agency or body issuing such Permit, (ii) the person or
entity to whom such Permit was issued and (iii) the date such Permit
expires or is required to be renewed. Each such Permit is, to the
knowledge of Roberts, in full
<PAGE>
-26-
force and effect and Roberts, or the person or entity who holds such Permit
on Roberts' behalf, is in compliance in all material respects with all of
its obligations with respect thereto, and, to the knowledge of Roberts, no
event has occurred or condition exists which permits or, upon the giving of
notice or lapse of time or both, would permit revocation, nonrenewal,
modification, suspension or termination of any such Permit.
(q) ERISA and Employee Matters. Section 3.1(q) of the Roberts
--------------------------
Disclosure Schedule sets forth a complete and accurate list of all
employment and consultancy agreements, all employee benefit plans (within
the meaning of Section 3(3) of ERISA) or retirement benefits scheme (within
the meaning of Section 611 of the Income and Corporation Taxes Act 1988)
and all other written plans, arrangements or policies relating to stock
options, stock purchases, compensation, deferred compensation, supplemental
retirement arrangements, other incentive programs, severance, fringe
benefits or other employee benefits (collectively "Employment Obligations")
----------------------
covering all present and former officers, directors, employees, consultants
and agents of Roberts and its Subsidiaries and any of their spouses or
dependents. Roberts has made available to Shire true, complete and correct
copies of (i) each such Employment Obligation, (ii) the most recent annual
report on Form 5500 as filed with the Internal Revenue Service with respect
to each applicable Employment Obligation, (iii) the most recent summary
plan description (or similar document) with respect to each applicable
Employment Obligation, (iv) each trust agreement and insurance or annuity
contract relating to any Employment Obligation and (v) the most recent
actuarial valuation report for each applicable Employment Obligation. (i)
Roberts and its Subsidiaries are in compliance in all material respects
with all applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and the Code with respect to each
-----
Employment Obligation, (ii) except for PBGC premiums, all of which that are
due have been paid, neither Roberts nor any of its Subsidiaries has
material liability under Title IV of ERISA, (iii) neither Roberts nor any
of its Subsidiaries has engaged in a prohibited transaction or breach of
fiduciary duty that would subject it to a material tax imposed under
Section 4975 of the Code or material liability
<PAGE>
-27-
pursuant to Section 409 or 502 of ERISA, (iv) neither Roberts nor any of
its Subsidiaries has been a party to or contributed to any "multiemployer
plan" as defined in Section 4001(a) of ERISA, (v) no pension plan covering
any present or former officers, directors or employees of Roberts or any of
its Subsidiaries is or has been subject to Title IV of ERISA, (vi) except
for liability for contributions and benefits pursuant to the Employment
Obligations, neither Roberts nor any of its Subsidiaries has incurred any
material liability under or pursuant to Title I or IV of ERISA or the
penalty, excise tax or joint and several liability provisions of the Code
relating to employee benefit plans and (vii) except claims for benefits
payable in the normal operation of such Employment Obligations, there are
no investigations by any governmental agency, termination proceedings or
other claims, suits or proceedings against or involving any such Employment
Obligation or asserting any rights to or claims for benefits under any such
Employment Obligation. In respect of any Employment Obligations benefiting
Roberts UK employees, (i) the only benefits provided are defined
contribution benefits and no promise, assurance or undertaking has been
given to any of the employees (whether legally binding or not) as to the
provision of retirement, death or disability benefits at a particular
level, (ii) there are not in respect of any retirement benefits scheme or
the benefits under it any actions, suits or claims pending or threatened
(other than routine claims or benefits) against the trustees or
administrators of that scheme or against Shire. Each Employment Obligation
of Roberts and its Subsidiaries (if any) that is intended to be a tax-
qualified plan has been the subject of a determination letter from the
Internal Revenue Service to the effect that such Employment Obligation and
each related trust is qualified and exempt from Federal income taxes under
Sections 401(a) and 501(a), as applicable, respectively, of the Code, no
such determination letter has been revoked, and revocation has not been
threatened and no event has occurred and no circumstances exist that would
reasonably be expected to adversely affect the tax qualification of such
Employment Obligation. Each of the Employment Obligations with respect to
employees or former employees employed by Roberts or any of its
Subsidiaries outside of the United States are in compliance in all material
respects with all applicable law (including, where applicable, Article 141
of the Treaty of
<PAGE>
-28-
Rome) and, to the extent not mandated by the laws of the applicable
jurisdiction, copies of the applicable written plan document have been made
available to Shire.
(r) Labor Relations. (i) There is no unfair labor practice
---------------
complaint pending against Roberts or any of its Subsidiaries or, to the
knowledge of Roberts, threatened against them, before the National Labor
Relations Board or any other U.S. or non-U.S. governmental or regulatory
authority, and, to the knowledge of Roberts, no grievance or arbitration
proceeding arising out of or under any of their Employment Obligations is
so pending against Roberts or any of its Subsidiaries or threatened against
them; (ii) to the knowledge of Roberts, there is no basis for an unfair
labor practice finding against Roberts or any of its Subsidiaries; (iii) no
strike, labor dispute, slowdown or stoppage is pending or, to the knowledge
of Roberts, threatened against Roberts or any of its Subsidiaries; and (iv)
no union has ever represented any employee of Roberts or any of its
Subsidiaries.
(s) Intellectual Property Rights. (i) Section 3.1(s) of the
----------------------------
Roberts Disclosure Schedule sets forth a complete and accurate list
(including registration numbers and dates of filing, renewal and
termination, where applicable, for each jurisdiction where filed) of all
patents, patent applications, trademarks, trademark registrations and
applications, copyrights, copyright applications, service marks, service
mark registrations and applications and trade names (whether or not
registered or registrable) ("Intellectual Property") owned by Roberts or
---------------------
any of its Subsidiaries which is material to Roberts and its Subsidiaries,
taken as a whole ("Roberts Intellectual Property"), including any Liens
-----------------------------
thereon, the name of the holder of any such Lien and the amount and nature
of any obligation secured by any such Lien. All Roberts Intellectual
Property is owned by Roberts or its Subsidiaries free and clear of all
Liens, no Roberts Intellectual Property has been canceled, abandoned or
otherwise terminated and all patent applications, trademark applications
and copyright applications included in Roberts Intellectual Property have
been duly filed and are recorded on the public record in the name of
Roberts or one of its Subsidiaries and all renewal fees have been duly paid
other than where such action would not have a Roberts Material Adverse
Effect.
<PAGE>
-29-
Neither Roberts nor any of its Subsidiaries has granted any license or
other rights with respect to any Roberts Intellectual Property to any other
person or entity.
(ii) Roberts has no knowledge that any of its or its Subsidiaries'
granted patents are invalid; to the knowledge of Roberts, no Roberts
Intellectual Property is being infringed by any third party in any material
respect; and, to the knowledge of Roberts, its current operations do not
infringe a granted patent of a third party in any material respect.
(iii) Neither Roberts nor any of its Subsidiaries has any license
or other rights with respect to any Intellectual Property owned by any
other person or entity.
(iv) All technology, processes, techniques and methods of
manufacture used in or necessary to the manufacturing or research
operations of Roberts and its Subsidiaries, except to the extent the same
are in the public domain, are subject to valid and effective
confidentiality agreements between Roberts and its employees, have been
memorialized to the extent required by good manufacturing practice and, to
the knowledge of Roberts, are the subject of no claim, whether or not
asserted, that their use or employment by Roberts or any of its
Subsidiaries violates the rights of any person.
(t) Insurance. Section 3.1(t) of the Roberts Disclosure Schedule
---------
sets forth (i) a complete and accurate list of all policies of insurance of
Roberts and its Subsidiaries currently in force, including surety bonds or
other credit support therefor (the "Roberts Insurance Policies"), the
--------------------------
current annual premiums for each Roberts Insurance Policy, the types of
risk covered and limits of coverage and (ii) a description of claims
experience of Roberts (x) in the twelve months immediately preceding the
date hereof with respect to all matters and (y) since its incorporation
with respect to product liability matters, matters arising by reason of
clinical trials, environmental matters and workmen's compensation. All
Roberts Insurance Policies are in full force and effect and all premiums
due thereon have been paid. Roberts has complied in all material respects
with the terms and provisions of the Roberts Insurance Policies. Roberts
has never applied
<PAGE>
-30-
for and been refused or denied any policy of insurance with respect to
product liability matters, matters arising by reason of clinical trials,
environmental matters and workmen's compensation. Roberts' insurance
coverage is adequate in kind and amount based on current industry practice.
(u) Books and Records. (i) The books of account and other
-----------------
financial records of Roberts and its Subsidiaries that have been made
available to Shire prior to the date hereof or are made available
thereafter are or will be true, complete and correct in all material
respects and do not and will not contain any omissions which, in light of
the circumstances in which they are made, are materially misleading.
(ii) The minute books and other records of Roberts and its
Subsidiaries that have been made available to Shire prior to the date
hereof or are made available thereafter contain records of all meetings of
Roberts and its Subsidiaries prior to the date hereof and prior to the
Effective Time, respectively, are or will be accurate in all material
respects and reflect accurately in all material respects all other
corporate action of the shareholders and directors and any committees of
the Board of Directors of Roberts and its Subsidiaries.
(v) Undisclosed Liabilities. Except as set forth in the Filed SEC
-----------------------
Documents and except for liabilities and obligations incurred in the
ordinary course of business consistent with past practice and U.S. GAAP,
neither Roberts nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or
otherwise) required by US GAAP to be set forth on a consolidated balance
sheet of Roberts and its consolidated Subsidiaries or in the notes thereto
and which, individually or in the aggregate, could reasonably be expected
to have a Roberts Material Adverse Effect.
(w) FDA, DEA Matters. Section 3.1(w) of the Roberts Disclosure
----------------
Schedule sets forth a complete and accurate list of (i) each
investigational new drug filing made by Roberts or any of its Subsidiaries
with the U.S. Food and Drug Administration (the "FDA") or any non-U.S.
---
equivalent (including, without limitation, the U.K. Medicines Control
<PAGE>
-31-
Agency (the "MCA") and Health Protection Branch of the Ministry of Health
---
of Canada), (ii) each clinical trial protocol submitted by Roberts or any
of its Subsidiaries to the FDA or any non-U.S. equivalents, (iii) each new
drug application and abbreviated or supplemental new drug application filed
by Roberts or any of its Subsidiaries pursuant to the Federal Food, Drug
and Cosmetic Act, as amended, or any non-U.S. equivalents, (iv) each
product license application filed by Roberts or any of its Subsidiaries
pursuant to the Public Health Service Act, as amended, or any non-U.S.
equivalents and (v) each establishment license application filed with
respect to any product of Roberts or any of its Subsidiaries under the
Public Health Service Act, as amended, or any non-U.S. equivalents. (i)
There are no lawsuits, arbitrations, legal or administrative or regulatory
proceedings, charges, complaints or investigations by the FDA, the U.S.
Drug Enforcement Agency (the "DEA"), the U.S. Department of Justice (the
---
"DOJ") or any state or non-U.S. regulatory agency pending or, to the best
----
knowledge of Roberts, threatened against or relating to Roberts, any of its
Subsidiaries or any of their products, (ii) there have been no product
recalls or similar actions by Roberts or any of its Subsidiaries, (iii)
each clinical trial with respect to products of Roberts and its
Subsidiaries has been conducted in accordance with its clinical trial
protocol and applicable regulations and Roberts or one of its Subsidiaries
has filed all required notices (and made available to Shire copies thereof)
of adverse drug experiences, injuries or deaths relating to clinical trials
of such products, and Roberts or one of its Subsidiaries has filed all
required notices of any such occurrence, (iv) to the best knowledge of
Roberts, all clinical trials have been and are being conducted in
substantial compliance with all applicable good clinical practice
regulations, (v) neither Roberts nor any of its Subsidiaries nor, to the
best knowledge of Roberts, any of their respective officers, employees or
agents has made an untrue statement of material fact or fraudulent
statement to the FDA, the MCA, the DEA or other regulatory agencies, failed
to disclose a material fact required to be disclosed to any of them or
committed an act, made a statement or failed to make a statement that could
reasonably be expected to provide a basis for any of them to invoke the
policy respecting "Fraud, Untrue Statements of Material Facts, Bribery and
<PAGE>
-32-
Illegal Gratuities" set forth in 56 Fed. Reg. 46191 (September 10, 1991) or
equivalent regulations, (vi) there are no unresolved reports, warning
letters or other documents received from or issued by the FDA, the MCA, the
DEA or other regulating agencies that indicate or suggest material lack of
compliance with applicable regulatory requirements by Roberts, any of its
Subsidiaries or persons providing services for the benefit of any of them,
(vii) to the best knowledge of Roberts, no person has filed a claim for
loss or potential loss under any indemnity covering participants in
clinical trials of products of Roberts and its Subsidiaries, (viii) to
Roberts' knowledge, no material modifications to the process by which
products of Roberts or any of its Subsidiaries that have been or are being
used in clinical trials are manufactured will be necessary in order to
manufacture commercial quantities of such products, (ix) as to each drug of
Roberts or any of its Subsidiaries for which a new drug application or
abbreviated new drug application has been approved by the FDA or other
regulating agencies, the applicant and all persons performing operations
covered by the application are in substantial compliance with 21 U.S.C.
Section 355 or 357, 21 C.F.R. Part 314 or 430 et seq. (or non-U.S.
------
equivalents), respectively, and all terms and conditions of the
application, (x) Roberts and its Subsidiaries are in compliance with all
applicable registration and listing requirements set forth in 21 U.S.C.
Section 360 and 21 C.F.R. Part 207 and, to the extent required, Roberts or
one of its Subsidiaries has obtained licenses from the DEA and is in
compliance with all such licenses and all applicable regulations
promulgated by the DEA, (xi) all manufacturing operations conducted by or,
to the knowledge of Roberts, for the benefit of Roberts and its
Subsidiaries have been and are being conducted in compliance with
applicable good manufacturing practice regulations including those set
forth in 21 C.F.R. Parts 210 and 211, (xii) neither Roberts nor any of its
Subsidiaries has received any written notice that the FDA, the MCA, the DEA
or other regulating agencies has commenced, or threatened to initiate, any
action to withdraw its approval or request the recall of any product of
Roberts or its Subsidiaries or withdraw advertising or sales promotion
materials or commenced, or threatened to initiate, any action to enjoin
production at any facility owned or used by Roberts or any of its
Subsidiaries or any of their manufacturing
<PAGE>
-33-
locations, (xiii) as to each article of drug or consumer product currently
manufactured and/or distributed by or on behalf of Roberts or its
Subsidiaries, such article is not adulterated or misbranded within the
meaning of the FDCA, 21 U.S.C. Sections 301 et seq., and all advertising
------
and sales promotional materials of Roberts or its Subsidiaries are
otherwise in conformance with applicable regulations and (xiv) neither
Roberts nor any of its Subsidiaries nor, to the knowledge of Roberts, any
of their respective officers, employees, agents or affiliates has been
convicted of any crime or engaged in any conduct for which debarment is
mandated by 21 U.S.C. Section 335(a) or authorized by 21 U.S.C. Section
335a(b). To the knowledge of Roberts, Roberts' contractors are in
compliance with all applicable law and regulations and in respect of the
FDA and DEA have secured all licenses, renewals and quotas necessary to
their operation.
Roberts has made available to Shire copies of all written
communications to or from the FDA and the DEA relating specifically to
Roberts, its Subsidiaries and their respective operations or business.
(x) Environmental Matters. (i) Each of Roberts and its
---------------------
Subsidiaries possesses all Environmental Permits required under applicable
Environmental Laws to conduct its business as currently conducted and to
own and operate its assets, and is in compliance in all material respects
with the terms and conditions of such Environmental Permits.
(ii) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not affect
the validity or require the transfer of any Environmental Permits held by
Roberts or its Subsidiaries, and will not require any notification,
disclosure, registration, reporting, filing, investigation or remediation
under any Environmental Law.
(iii) Each of Roberts and its Subsidiaries is in compliance in all
material respects with all applicable Environmental Laws and has no
material liability under any Environmental Law.
(iv) There is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, proceeding, notice or demand
letter, or request for
<PAGE>
-34-
information pending or, to the knowledge of Roberts threatened, under any
Environmental Law (x) against Roberts or its Subsidiaries or (y) to the
knowledge of Roberts against any person or entity in connection with which
liability could reasonably be expected to be imputed or attributed by law
or contract to Roberts or its Subsidiaries.
(v) No property or facility presently or formerly owned, leased or
operated by Roberts or its Subsidiaries, and no property or facility at
which Hazardous Materials of Roberts or its Subsidiaries have been stored,
treated or disposed of or at which any Hazardous Materials have been
manufactured, handled, tested, formulated, prepared, encapsulated,
packaged, bottled or stored for Roberts or its Subsidiaries ("Roberts
-------
Product Sites") is listed or proposed for listing on the National
-------------
Priorities List or the Comprehensive Environmental Response, Compensation
and Liability Information System, both promulgated under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), or on any comparable list established under any Environmental
------
Law.
(vi) There has been no disposal, spill, discharge, emission or
release of any Hazardous Material by Roberts or its Subsidiaries on, at,
under or from any property presently or formerly owned, leased or operated
by Roberts or its Subsidiaries and there are no Hazardous Materials located
in, at, on or under any such facility or property, or, to the knowledge of
Roberts, at any Roberts Product Site or other location where Hazardous
Materials of Roberts or any of its Subsidiaries have been stored, treated
or disposed of (a "Roberts Third Party Site"), in each case that could
------------------------
reasonably be expected to result in the incurrence of any material
liability, by Roberts or its Subsidiaries under any Environmental Law.
(vii) There are no underground storage tanks or other underground
storage receptacles or related piping, or any impoundments containing
Hazardous Materials located on any facility or property owned, leased or
operated by Roberts or any of its Subsidiaries.
(viii) No Lien has been recorded against any properties, assets or
facilities owned, leased or operated by
<PAGE>
-35-
Roberts or any of its Subsidiaries under any Environmental Law.
(ix) Neither Roberts nor any of its Subsidiaries is obligated to
perform any investigation or other action under any Environmental Law
pursuant to any order, decree, judgment or agreement by which it is bound,
or has assumed by contract or agreement any obligation or liability under
any Environmental Law.
Roberts has made available to Shire all material records and files,
including, but not limited to, all assessments, reports, studies, audits,
analyses, tests and data, in possession, custody or control of Roberts or
its Subsidiaries concerning compliance by Roberts and its Subsidiaries
with, or liability under, any Environmental Law, including, without
limitation, those concerning the existence of Hazardous Materials at
facilities or properties currently or formerly owned, operated or leased by
Roberts or its Subsidiaries or at any Roberts Product Site or Roberts Third
Party Site.
(y) Products. Each of the products produced or sold by Roberts and
--------
its Subsidiaries: (i) is, and at all times up to and including the date
hereof has been, in compliance in all material respects with all applicable
federal, state, local and non-U.S. laws and regulations; (ii) is, and at
all relevant times has been, fit for the ordinary purposes for which it is
intended to be used and conforms in all material respects to any promises
or affirmations of fact made on the container, label or promotional
materials for such product or in connection with its sale; and (iii)
contains no design or manufacturing defect. Neither Roberts nor any of its
Subsidiaries has received notice of any product warranty claims. Neither
Roberts nor any of its Subsidiaries is aware of any facts which are
reasonably likely to cause (i) the withdrawal or recall of any product sold
or intended to be sold by Roberts or its Subsidiaries, (ii) a change in the
marketing classification, labeling or promotional materials of any such
products, or (iii) a termination or suspension of marketing of any such
products. There are no material claims pending or, to the knowledge of
Roberts, threatened against Roberts or its Subsidiaries with respect to the
quality of or absence of defects in such products nor are there any facts
known to
<PAGE>
-36-
Roberts relating to the quality of or absence of defects in such products
which, if known by a potential claimant or governmental authority, could
reasonably be expected to give rise to a claim or proceeding. To the
knowledge of Roberts, no supplier of a raw material required for the
manufacture of a material product of Roberts and its Subsidiaries for which
there is not a permissible replacement obtainable under commercially
reasonable terms has indicated that it will not continue to supply such raw
material on terms consistent with those on the date hereof.
(z) Marketing Practices. Roberts' operations and commercial conduct
-------------------
and those of its Subsidiaries have at all times conformed in all material
respects to the Code of Marketing Practices of the Pharmaceutical Research
Industry Association.
(aa) Affiliates. Roberts has delivered to Shire a letter
----------
identifying all persons who, as of the date hereof, may be deemed to be
affiliates of Roberts for purposes of Rule 145 under the Securities Act
("Affiliates") and the written agreement of each such person in the form of
------------
Exhibit 3 hereto.
(bb) Pooling. Neither Roberts nor any of its Affiliates has taken
-------
or agreed to take any action or failed to take any action that would
prevent the Merger from being treated for financial accounting purposes as
a "pooling of interests" in accordance with US GAAP and the regulations and
interpretations of the SEC.
(cc) Business Combination. Neither the execution and delivery of
--------------------
this Agreement, the Option Agreement, the Shareholder Agreements nor the
consummation of the transactions contemplated hereby or thereby, as the
case may be, will (i) violate the Shareholder Protection Act or (ii) cause,
directly or indirectly, a Triggering Event, as that term is defined in the
Rights Agreement.
3.2. Representations and Warranties of Shire. Shire represents and
---------------------------------------
warrants to Roberts that, except (A) as set forth in the Shire Disclosure
Schedule delivered by Shire to Roberts at or prior to the execution of this
Agreement (the "Shire Disclosure Schedule") (each section of which qualifies the
-------------------------
correspondingly numbered representation and warranty), and (B) with respect to
paragraphs (j), (m), (o), (p), (q), (r),
<PAGE>
-37-
(t), (w), (x) and (y) of this Section 3.2, as does not have, or could not
reasonably be expected to have, individually or in the aggregate, a Shire
Material Adverse Effect, the following is true and correct:
(a) Organization; Standing and Power. Shire is a corporation duly
--------------------------------
organized and validly existing under the laws of the United Kingdom. Shire
has all requisite corporate power and authority to own, lease and operate
its assets and to carry on its business as now being conducted. Shire is
duly qualified as a foreign corporation to do business in each jurisdiction
where the character of its assets owned or leased or the nature of its
activities makes such qualification necessary (such jurisdictions being
specified in Section 3.2(a) of the Shire Disclosure Schedule) except where
the failure to be so qualified would not have a Shire Material Adverse
Effect. Copies of the Memorandum and Articles of Association of Shire as
in effect on the date hereof have been previously delivered to Roberts.
Acquisition Sub is a corporation duly organized, validly existing and in
good standing under the laws of the State of New Jersey. Acquisition Sub
has not conducted any activities other than in connection with its
organization, the negotiation and execution of this Agreement and the
consummation of the transactions contemplated hereby.
(b) Subsidiaries and Investments. Section 3.2(b) of the Shire
----------------------------
Disclosure Schedule lists each Subsidiary of Shire. Each such Subsidiary
is a corporation duly organized, validly existing and (in applicable
jurisdictions) in good standing under the laws of its jurisdiction of
incorporation. Each such Subsidiary has all requisite corporate power and
authority to own, lease and operate its assets and to carry on its business
as now being conducted. All such Subsidiaries are duly qualified as
foreign corporations to do business, and (in applicable jurisdictions) are
in good standing, in each jurisdiction where the character of their
respective assets owned or leased or the nature of their respective
activities makes such qualification necessary, except where the failure to
be so qualified or in good standing would not have a Shire Material Adverse
Effect. All the outstanding shares of capital stock of each such
Subsidiary have been validly issued and are fully paid (and in applicable
<PAGE>
-38-
jurisdictions, nonassessable) and are owned by Shire, by another Subsidiary
of Shire or by Shire and another such Subsidiary, free and clear of all
Liens, other than Liens which (individually or in the aggregate) would not
have a Shire Material Adverse Effect. Except for the capital stock of its
Subsidiaries, Shire does not own any stock, partnership or other equity
interest in, or any debt or equity securities of, any person or entity.
(c) Capitalization. The authorized share capital of Shire as of the
--------------
date of this Agreement is (Pounds)10,000,000 divided into 200,000,000
Ordinary Shares. At the close of business on July 20, 1999 (i) 143,509,230
Ordinary Shares were issued and (ii) the board of directors of Shire were
generally and unconditionally authorized to allot relevant securities up to
a nominal amount of (Pounds)2,361,070 and no other share capital was issued
or reserved for issuance. All such Ordinary Shares of Shire are, and all
Ordinary Shares reserved for issuance will be, when issued, duly
authorized, validly issued and fully paid and not subject to preemptive
rights other than as required by law or the LSE rules. The Ordinary Shares
to be issued in the Merger will not be subject to preemption from existing
shareholders of Shire. Except as set forth above, as of the date of this
Agreement, there are not any Equity Equivalents of any of Shire or any of
its Subsidiaries (including, without limitation, any option, warrant, right
to subscribe, call or commitment of any kind or character whatsoever
requiring the issuance, sale or transfer by Shire or any of its
Subsidiaries of any shares of their capital stock or any securities
convertible into or exchangeable or exercisable for such capital stock).
As of the date of this Agreement, there are not any outstanding contractual
obligations of Shire or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of capital stock of Shire or any of its
Subsidiaries. There are no outstanding SARs with respect to Shire. Shire
has delivered to Roberts a complete list of all outstanding indebtedness of
Shire and its Subsidiaries.
(d) Authority. Each of Shire and Acquisition Sub has the requisite
---------
corporate power and authority to execute and deliver this Agreement and,
subject to Shire Shareholder Approval (as defined below), to perform its
respective obligations hereunder. The execution and delivery of
<PAGE>
-39-
this Agreement by each of Shire and Acquisition Sub and the consummation of
the transactions contemplated hereby have been duly authorized by the Board
of Directors, or a duly authorized committee thereof, of each of Shire and
Acquisition Sub. No other corporate proceedings on the part of Shire (other
than the approval of this Agreement and the transactions contemplated
hereby by the holders of not less than a majority of the Ordinary Shares
present and voting or on a poll (the "Shire Shareholder Approval"))
--------------------------
or Acquisition Sub are necessary to authorize the performance of this
Agreement and the consummation of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by each of Shire and
Acquisition Sub, and constitutes a valid and binding obligation of each of
Shire and Acquisition Sub, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, moratorium or other similar
laws relating to creditors' rights and general principles of equity.
(e) Noncontravention. Neither the execution and delivery of this
----------------
Agreement by Shire or Acquisition Sub nor the consummation of the
transactions contemplated hereby nor compliance by Shire or Acquisition Sub
with any of the provisions hereof will (i) violate, conflict with or result
in a breach of any provision of, or constitute a default (or an event
which, with notice or lapse of time or both, could constitute a default)
under, or result in the termination, modification or suspension of, or
accelerate the performance required by, or result in a right of termination
or acceleration under, or result in the creation of any Lien upon, right to
acquire or obligation to dispose of any of the properties, assets or rights
of Shire or any of its Subsidiaries under, any of the terms, conditions or
provisions of (x) the Memorandum and Articles of Association of Shire or
equivalent charter documents of any of its Subsidiaries or (y) any note,
bond, mortgage, credit agreement, indenture, deed of trust, license,
Permit, authorization, lease, agreement or instrument or obligation to
which Shire or any of its Subsidiaries is party or by which they are bound
or to which they or any of their assets may be subject, or (ii) violate any
judgment, ruling, order, writ, injunction, decree, statute, rule or
regulation applicable to Shire or any of its Subsidiaries, their operations
or any of their assets, except
<PAGE>
-40-
for such violations, conflicts or breaches referred to in clauses (i)(y)
and (ii) which would not, individually or in the aggregate, have a Shire
Material Adverse Effect.
(f) Government Approval; Consents. No consents and approvals are
-----------------------------
required to be obtained by Shire or Acquisition Sub from non-governmental
third parties ("Shire Third Party Approvals") in order to lawfully and
---------------------------
contractually permit it to perform its obligations under this Agreement and
consummate the transactions contemplated hereby. No notice to, filing
with, or authorization, consent or approval of, any U.K. or non-U.K. public
body or authority is necessary for the execution, delivery or performance
of this Agreement by Shire or Acquisition Sub or the consummation of the
transactions contemplated hereby ("Shire Governmental Approvals").
----------------------------
(g) Reports and Financial Statements. (i) Shire has delivered to
--------------------------------
Roberts (A) its annual report for its fiscal year ended December 31, 1998,
(B) all documents distributed to Shire's shareholders relating to meetings
of the shareholders of Shire since January 1, 1998, and (C) all of its
other reports and statements distributed to Shire shareholders together
with copies of all prospectuses and listing particulars issued by Shire or
any of its Subsidiaries since January 1, 1998 (the "Shire Documents"). As
---------------
of the date of its distribution to shareholders, each such report or
statement distributed to shareholders did not contain any untrue statement
of material fact or omit a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The audited consolidated
financial statements of Shire included in the Shire Documents were prepared
in accordance with accounting principles generally accepted in the United
Kingdom ("UK GAAP") (except in the case of unaudited statements) applied on
-------
a consistent basis during the periods involved (except as may be indicated
in the notes thereto), and present a true and fair view of the consolidated
financial position of Shire and its consolidated Subsidiaries as of the
dates of approval of such financial statements by the board of directors of
Shire and the consolidated results of their operations and cash flows for
the periods set forth therein.
<PAGE>
-41-
(h) Information Supplied. None of the information supplied or to be
--------------------
supplied by Shire for inclusion or incorporation by reference in (i) the
Form F-4 will, at the time the Form F-4 is filed with the SEC, at any time
it is amended or supplemented or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) the UK Disclosure Documents
will, on the date the UK Disclosure Documents are first mailed to the
shareholders of Shire, or at the time of the Shire shareholders meeting
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they
are made, not misleading or (iii) the Proxy Statement will, at the date it
is first mailed to Roberts shareholders or at the time of the Roberts
Shareholders Meeting contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they are made, not misleading. The UK Disclosure Documents
will contain all particulars relating to Shire and Roberts required to
comply in all material respects with all United Kingdom statutory and other
legal provisions (including, without limitation, the Companies Act, the FSA
and the rules and regulations made thereunder and the rules and
requirements of the LSE) and all such information contained in such
documents will be substantially in accordance with the facts and will not
omit anything material likely to affect the import of such information.
The Form F-4 will comply as to form in all material respects with the
requirements of the Securities Act and the rules and regulations
thereunder, except that no representation is made by Shire with respect to
statements made or incorporated by reference therein based on information
supplied by Roberts.
(i) Absence of Certain Changes or Events. Except as disclosed in
------------------------------------
the Shire Documents filed and publicly available, or as disclosed in
announcements made by Shire in compliance with the continuing obligations
of the LSE prior to the date of this Agreement (the "Public UK Documents"),
-------------------
since December 31, 1998 there has not been (i)
<PAGE>
-42-
any material adverse change in the business, assets, financial condition or
results of operations of Shire and its Subsidiaries, taken as a whole, (ii)
any destruction or loss of (whether or not covered by insurance) any
property, asset or right that has had or is likely to have a Shire Material
Adverse Effect, (iii) any authorization or issuance by Shire of any of its
capital stock or the issuance of any debt security or other evidence of
Indebtedness of Shire or any of its Subsidiaries, (iv) any redemption or
other acquisition by Shire of any of its capital stock or by Shire or any
of its Subsidiaries of any debt securities or other evidences of
Indebtedness, or any payment made with respect to any of the foregoing
(other than any regular, periodic payment of interest made with respect to
a debt security or other evidence of Indebtedness), (v) any declaration,
setting aside or payment of any dividend or other distribution or payment
(whether in cash, capital stock or otherwise) in respect of any capital
stock of Shire, (vi) any disposal or lapse of any Shire Intellectual
Property or Shire Intellectual Property License, (vii) any Lien (other than
a Permitted Lien) incurred on any material property, assets or rights of
Shire or any of its Subsidiaries, (viii) any incurrence by Shire or any of
its Subsidiaries of any liability which has had or is likely to have a
Shire Material Adverse Effect, (ix) any incurrence of Indebtedness or any
guarantee by Shire or any of its Subsidiaries of any liability of any other
person or entity outside of the ordinary course of business, (x) to the
knowledge of Shire, any development with respect to regulatory approval of
any products of Shire or any of its Subsidiaries which has had or is likely
to have a Shire Material Adverse Effect, (xi) to the knowledge of Shire,
any development with respect to relationships with any contract
manufacturer or contract research organization with which Shire or any of
its Subsidiaries has a business relationship which has had or is likely to
have a Shire Material Adverse Effect or (xii) any change in Shire's Tax
accounting methods, any new election made with respect to Taxes, any
modification or revocation of any existing election made with respect to
Taxes, or any settlement or other disposition of any Tax matter.
(j) Compliance with Law. Neither Shire nor any of its Subsidiaries
-------------------
is in violation or non-compliance in any material respect with any statute,
law, ordinance,
<PAGE>
-43-
regulation, rule, order or other legal requirement of any government,
authority or any other governmental department or agency applicable to its
business or operations, or any judgment, decree or order of any court to
which it is a party.
(k) Affiliate Arrangements . Neither Shire nor any of its
----------------------
Subsidiaries is a party to any contract, agreement, arrangement,
understanding or other commitment with any director, officer or
securityholder of Shire or any of its Subsidiaries or, to the knowledge of
Shire, any person or entity controlled by any such person.
(l) Transaction Fees. Shire has not retained any broker, finder,
----------------
financial adviser, investment banker or other person or entity which is
entitled to any brokerage, finder's or similar fee or commission in
connection with this Agreement or the transactions contemplated hereby.
(m) Litigation. There is no claim, action, suit or proceeding
----------
pending or, to the knowledge of Shire, threatened against Shire or any of
its Subsidiaries or any of their respective properties, assets or rights
before any court or governmental or regulatory authority or body.
(n) Taxes and Tax Returns. (i) Shire has duly and timely filed all
---------------------
U.K. and non-U.K. Tax Returns required to be filed by it and its
Subsidiaries, and each such Tax Return is complete and accurate in all
material respects, (ii) Shire has timely paid all Taxes due and payable by
it and its Subsidiaries and has made adequate provision (through a current
accrual on its most recent financial statements) for any Taxes that are not
yet due and payable and (iii) Shire has withheld and paid in a timely
manner all Taxes required to have been withheld and paid in connection with
amounts paid or owing to any employee, independent contractor, creditor,
stockholder or other third party, including amounts of or the value of
awards and prizes paid to Shire's employees. Any deficiencies or
assessments asserted in writing by any taxing authority have been paid or
fully settled and no issue raised by any such taxing authority reasonably
could be expected to result in a proposed deficiency for any prior,
parallel or subsequent period (including periods subsequent to the
Effective Time). There are no claims or assessments pending
<PAGE>
-44-
(or, to the best knowledge of Shire, threatened) against Shire or any of
its Subsidiaries for any alleged U.K. or non-U.K. Tax deficiency and no
issue has been raised in writing by any U.K. or non-U.K. taxing authority
or representative thereof. No claim has ever been made by an authority in a
jurisdiction where Shire does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. Section 3.2(n) of the Shire
Disclosure Schedule lists all U.K. and non-U.K. jurisdictions in which
Shire files Tax Returns, and indicates those Tax Returns that have been
audited and those that currently are the subject of audit. Shire has not
consented to an extension of the statute of limitations with respect to any
Tax period. Shire is not a party to any Tax allocation or sharing
agreement. Shire (i) has never been a member of any combined, consolidated,
affiliated or unitary group for any U.K. or non-U.K. Tax purposes and (ii)
has no liability for the Taxes of any person as a transferee or successor,
by contract, or otherwise. Shire has never requested a ruling from, or
entered into a closing agreement with any taxing authority. Shire has
previously delivered to Roberts true and complete copies of (i) all U.K.
and non-U.K. income or franchise Tax Returns for each of the last three
taxable years ending prior to the date of this Agreement (except for those
Tax Returns that have not yet been filed) and (ii) any audit reports issued
within the last three years by any taxing authority.
(o) Real Property. Section 3.2(o) of the Shire Disclosure Schedule
-------------
sets forth a complete and accurate list of all material real property owned
or leased by Shire or any of its Subsidiaries, including (i) with respect
to owned real property, the date of its acquisition, any Liens on or with
respect to such real property (other than Permitted Liens), the name of the
holder of any such Lien and the amount and nature of any obligation secured
by any such Lien and (ii) with respect to leased real property, the name of
the lessor of such real property, a list of all instruments and documents
governing the terms of such leasehold interest, any Lien on or with respect
to such leasehold interest (other than Permitted Liens), the name of the
holder of any such Lien and the amount and nature of any obligation secured
by any such Lien. Shire is not a lessor with respect to any material real
property owned by it or any of its Subsidiaries and has not granted any
<PAGE>
-45-
sublease of any leasehold interest in any material real property leased by
it or any of its Subsidiaries. With respect to such material real
property, (i) there are no eminent domain proceedings pending or threatened
against it, (ii) such properties and the improvements thereon (including
the roof and structural portions of each building) are in good operating
order and condition, subject to ordinary wear and tear, and (iii) the use
thereof does not violate any zoning or similar land use laws or other
government regulations other than such violations which, individually or in
the aggregate, would not adversely affect the ability of Shire and its
Subsidiaries to use, operate or occupy any of such properties following the
Effective Time. The real property owned or leased by Shire and its
Subsidiaries is sufficient for the conduct of their business.
(p) Licenses, Permits and Authorizations. Section 3.2(p) of the
------------------------------------
Shire Disclosure Schedule sets forth a complete and accurate list of all
material Permits held by or on behalf of Shire and its Subsidiaries,
including (i) the agency or body issuing such Permit, (ii) the person or
entity to whom such Permit was issued and (iii) the date such Permit
expires or is required to be renewed. Each such Permit is, to the
knowledge of Shire, in full force and effect and Shire, or the person or
entity who holds such Permit on Shire's behalf, is in compliance in all
material respects with all of its obligations with respect thereto, and, to
the knowledge of Shire, no event has occurred or condition exists which
permits or, upon the giving of notice or lapse of time or both, would
permit revocation, nonrenewal, modification, suspension or termination of
any such Permit.
(q) ERISA and Employee Matters. Section 3.2(q) of the Shire
--------------------------
Disclosure Schedule sets forth a complete and accurate list of all
employment and consultancy agreements, all employee benefit plans (within
the meaning of Section 3(3) of ERISA) or retirement benefits scheme (within
the meaning of Section 611 of the Income and Corporation Taxes Act 1988)
and all other written plans, arrangements or policies relating to stock
options, stock purchases, compensation, deferred compensation, supplemental
retirement arrangements, other incentive programs, severance, fringe
benefits or other employee benefits
<PAGE>
-46-
(collectively "Shire Employment Obligations") covering all present and
----------------------------
former officers, directors, employees, consultants and agents of Shire and
its Subsidiaries and any of their spouses or dependents. Shire has made
available to Roberts true, complete and correct copies of (i) each Shire
Employment Obligation, (ii) the most recent annual report on Form 5500 as
filed with the Internal Revenue Service with respect to each applicable
Shire Employment Obligation, (iii) the most recent summary plan description
(or similar document) with respect to each applicable Shire Employment
Obligation, (iv) each trust agreement and insurance or annuity contract
relating to any Shire Employment Obligation and (v) the most recent
actuarial valuation report for each applicable Shire Employment Obligation.
With respect to all Shire Employment Obligations benefiting Shire's U.S.
employees, (i) Shire and its Subsidiaries are in compliance in all material
respects with all applicable provisions of ERISA and the Code with respect
to each Shire Employment Obligation, (ii) except for PBGC premiums, all of
which that are due have been paid, neither Shire nor any of its
Subsidiaries has any material liability under Title IV of ERISA, (iii)
neither Shire nor any of its Subsidiaries has engaged in a prohibited
transaction or breach of fiduciary duty that would subject it to a material
tax imposed under Section 4975 of the Code or material liability pursuant
to Section 409 or 502 of ERISA, (iv) neither Shire nor any of its
Subsidiaries has been a party to or contributed to any "multiemployer plan"
as defined in Section 4001(a) of ERISA, (v) no pension plan covering any
present or former officers, directors or employees of Shire or any of its
Subsidiaries is or has been subject to Title IV of ERISA, (vi) except for
liability for contributions and benefits pursuant to such Shire Employment
Obligations, neither Shire nor any of its Subsidiaries has incurred any
material liability under or pursuant to Title I or IV of ERISA or the
penalty, excise tax or joint and several liability provisions of the Code
relating to employee benefit plans and (vii) except claims for benefits
payable in the normal operation of such Shire Employment Obligations, there
are no investigations by any governmental agency, termination proceedings
or other claims, suits or proceedings against or involving any such Shire
Employment Obligation or asserting any rights to or claims for benefits
under any such Shire Employment Obligation. In respect of any Shire
<PAGE>
-47-
Employment Obligations benefiting Shire UK employees, (i) the only benefits
provided are defined contribution benefits and no promise, assurance or
undertaking has been given to any of the employees (whether legally binding
or not) as to the provision of retirement, death or disability benefits at
a particular level and (ii) there are not in respect of any retirement
benefits scheme or the benefits under it any actions, suits or claims
pending or threatened (other than routine claims or benefits) against the
trustees or administrators of that scheme or against Shire. Each Shire
Employment Obligation of Shire and its Subsidiaries (if any) that is
intended to be a tax-qualified plan has been the subject of a determination
letter from the Internal Revenue Service to the effect that such Shire
Employment Obligation and each related trust is qualified and exempt from
Federal income taxes under Sections 401(a) and 501(a), as applicable,
respectively, of the Code, no such determination letter has been revoked,
and revocation has not been threatened and no event has occurred and no
circumstances exist that would reasonably be expected to adversely affect
the tax qualification of such Shire Employment Obligation. Each of the
Shire Employment Obligations with respect to employees or former employees
employed by Shire or any of its Subsidiaries outside of the United States
are in compliance in all material respects with all applicable law
(including, where applicable, Article 141 of the Treaty of Rome) and, to
the extent the benefits provided thereunder are not mandated by the laws of
the applicable jurisdiction, copies of the applicable written plan document
have been made available to Roberts.
(r) Labor Relations. (i) There is no unfair labor practice
---------------
complaint pending against Shire or any of its Subsidiaries or, to the
knowledge of Shire, threatened against them before the National Labor
Relations Board or any other U.S. or non-U.S. governmental or regulatory
authority, and, to the knowledge of Shire, no grievance or arbitration
proceeding arising out of or under any of their Shire Employment
Obligations is so pending against Shire or any of its Subsidiaries or
threatened against them; (ii) to the knowledge of Shire, there is no basis
for an unfair labor practice finding against Shire or any of its
Subsidiaries; (iii) no strike, labor dispute, slowdown or stoppage is
pending or, to the knowledge of Shire,
<PAGE>
-48-
threatened against Shire or any of its Subsidiaries; and (iv) no union has
ever represented any employee of Shire or any of its Subsidiaries.
(s) Intellectual Property Rights. (i) Section 3.2(s)(i) of the
----------------------------
Shire Disclosure Schedule sets forth a complete and accurate list
(including registration numbers and dates of filing, renewal and
termination, where applicable, for each jurisdiction where filed) of all
Intellectual Property owned by Shire and its Subsidiaries which is material
to Shire and its Subsidiaries, taken as a whole ("Shire Intellectual
------------------
Property"), including any Liens thereon, the name of the holder of any such
--------
Lien and the amount and nature of any obligation secured by any such Lien.
All Shire Intellectual Property is owned by Shire or its Subsidiaries free
and clear of all Liens, no Shire Intellectual Property has been canceled,
abandoned or otherwise terminated and all patent applications, trademark
applications and copyright applications included in Shire Intellectual
Property have been duly filed and are recorded on the public record in the
name of Shire or one of its Subsidiaries and all renewal fees have been
duly paid other than where such action would not have a Shire Material
Adverse Effect. Neither Shire nor any of its Subsidiaries has granted any
license or other rights with respect to any Shire Intellectual Property to
any other person or entity.
(ii) Shire has no knowledge that any of its or its Subsidiaries'
granted patents are invalid; to the knowledge of Shire, no Shire
Intellectual Property is being infringed by any third party in any material
respect; and, to the knowledge of Shire, its current operations do not
infringe a granted patent of a third party in any material respect.
(iii) Neither Shire nor any of its Subsidiaries has any license or
other rights with respect to any Intellectual Property owned by any other
person or entity.
(iv) All technology, processes, techniques and methods of
manufacture used in or necessary to the manufacturing or research
operations of Shire and its Subsidiaries, except to the extent the same are
in the public domain, are subject to valid and effective confidentiality
<PAGE>
-49-
agreements between Shire and its employees, have been memorialized to the
extent required by good manufacturing practice and, to the knowledge of
Shire, are the subject of no claim, whether or not asserted, that their use
or employment by Shire or any of its Subsidiaries violates the rights of
any person.
(t) Insurance. Section 3.2(t) of the Shire Disclosure Schedule sets
---------
forth (i) a complete and accurate list of all policies of insurance of
Shire and its Subsidiaries currently in force, including surety bonds or
other credit support therefor (the "Shire Insurance Policies"), the current
------------------------
annual premiums for each Shire Insurance Policy, the types of risk covered
and limits of coverage and (ii) a description of claims experience of Shire
(x) in the twelve months immediately preceding the date hereof with respect
to all matters and (y) since its incorporation with respect to product
liability matters, matters arising by reason of clinical trials,
environmental matters and workmen's compensation. All Shire Insurance
Policies are in full force and effect and all premiums due thereon have
been paid. Shire has complied in all material respects with the terms and
provisions of the Shire Insurance Policies. Shire has never applied for
and been refused or denied any policy of insurance with respect to product
liability matters, matters arising by reason of clinical trials,
environmental matters and workmen's compensation. Shire's insurance
coverage is adequate in kind and amount based on current industry practice.
(u) Books and Records. (i) The books of account and other
-----------------
financial records of Shire and its Subsidiaries that have been made
available to Roberts prior to the date hereof or are made available
thereafter are or will be true, complete and correct in all material
respects and do not, and will not, contain any omissions which, in light of
the circumstances in which they are made, are materially misleading.
(ii) The minute books and other records of Shire and its
Subsidiaries that have been or will be made available to Roberts contain
records of all meetings of Shire and its Subsidiaries prior to the date
hereof and prior to the Effective Time, respectively, are or will be
accurate in all material respects and reflect accurately in all material
<PAGE>
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respects all other corporate action of the shareholders and directors and
any committees of the Board of Directors of Shire and its Subsidiaries.
(v) Undisclosed Liabilities. Except as set forth in the Public UK
-----------------------
Documents and except for liabilities and obligations incurred in the
ordinary course of business consistent with past practice and UK GAAP
neither Shire nor any of its Subsidiaries has any liabilities or
obligations of any nature (whether accrued, absolute, contingent or
otherwise) required by UK GAAP to be set forth on a consolidated balance
sheet of Shire and its consolidated Subsidiaries or in the notes thereto
and which, individually or in the aggregate, could reasonably be expected
to have a Shire Material Adverse Effect.
(w) FDA, DEA Matters. Section 3.2(w) of the Shire Disclosure
----------------
Schedule sets forth a complete and accurate list of (i) each
investigational new drug filing made by Shire or any of its Subsidiaries
with the FDA or any non-U.S. equivalents (including, without limitation,
the MCA), (ii) each clinical trial protocol submitted by Shire or any of
its Subsidiaries to the FDA or any non-U.S. equivalents, (iii) each new
drug application and abbreviated or supplemental new drug application filed
by Shire or any of its Subsidiaries pursuant to the Federal Food, Drug and
Cosmetic Act, as amended, or any non-U.S. equivalents (iv) each product
license application filed by Shire or any of its Subsidiaries pursuant to
the Public Health Service Act, as amended, or any non-U.S. equivalents and
(v) each establishment license application filed with respect to any
product of Shire or any of its Subsidiaries under the Public Health Service
Act, as amended or any non-U.S. equivalents. (i) There are no lawsuits,
arbitrations, legal or administrative or regulatory proceedings, charges,
complaints or investigations by the FDA, the DEA, the DOJ or any state or
non-U.S. regulatory agency pending or, to the best knowledge of Shire,
threatened against or relating to Shire, any of its Subsidiaries or any of
their respective products, (ii) there have been no product recalls or
similar actions by Shire or any of its Subsidiaries, (iii) each clinical
trial with respect to products of Shire and its Subsidiaries has been
conducted in accordance with its clinical trial protocol and applicable
regulations and Shire or one of its Subsidiaries has filed
<PAGE>
-51-
all required notices (and made available to Roberts copies thereof) of
adverse drug experiences, injuries or deaths relating to clinical trials of
such products, and Shire or one of its Subsidiaries has filed all required
notices of any such occurrence, (iv) to the best knowledge of Shire, all
clinical trials have been and are being conducted in substantial compliance
with all applicable good clinical practice regulations, (v) neither Shire
nor any of its Subsidiaries nor, to the best knowledge of Shire, any of
their respective officers, employees or agents has made an untrue statement
of material fact or fraudulent statement to the FDA, the MCA, the DEA or
other regulatory agencies, failed to disclose a material fact required to
be disclosed to any of them or committed an act, made a statement or failed
to make a statement that could reasonably be expected to provide a basis
for any of them to invoke the policy respecting "Fraud, Untrue Statements
of Material Facts, Bribery and Illegal Gratuities" set forth in 56 Fed.
Reg. 46191 (September 10, 1991) or equivalent regulations, (vi) there are
no unresolved reports, warning letters or other documents received from or
issued by the FDA, the MCA, the DEA or other regulatory agencies that
indicate or suggest material lack of compliance with FDA or DEA regulatory
requirements by Shire, any of its Subsidiaries or persons providing
services for the benefit of any of them, (vii) to the best knowledge of
Shire, no person has filed a claim for loss or potential loss under any
indemnity covering participants in clinical trials of products of Shire and
its Subsidiaries, (viii) to Shire's knowledge, no material modifications to
the process by which products of Shire or any of its Subsidiaries that have
been or are being used in clinical trials are manufactured will be
necessary in order to manufacture commercial quantities of such products,
(ix) as to each drug of Shire or one of its Subsidiaries for which a new
drug application or abbreviated new drug application has been approved by
the FDA or other regulatory agencies, the applicant and all persons
performing operations covered by the application are in substantial
compliance with 21 U.S.C. Section 355 or 357, 21 C.F.R. Part 314 or 430
et seq. (or any non-U.S. equivalents), respectively, and all terms and
-- ---
conditions of the application, (x) Shire and its Subsidiaries are in
compliance with all applicable registration and listing requirements set
forth in 21 U.S.C. Section 360 and 21 C.F.R. Part 207 and, to the extent
required,
<PAGE>
-52-
Shire and its Subsidiaries have obtained licenses from the DEA and are in
compliance with all such licenses and all applicable regulations
promulgated by the DEA, (xi) all manufacturing operations conducted by or,
to the knowledge of Shire, for the benefit of Shire and its Subsidiaries
have been and are being conducted in compliance with applicable good
manufacturing practice regulations including those set forth in 21 C.F.R.
Parts 210 and 211, (xii) neither Shire nor any of its Subsidiaries has
received any written notice that the FDA, the MCA, the DEA or other
regulatory agencies has commenced, or threatened to initiate, any action to
withdraw its approval or request the recall of any product of Shire or its
Subsidiaries or withdraw advertising or sales promotion materials or
commenced, or threatened to initiate, any action to enjoin production at
any facility owned or used by Shire or any of its Subsidiaries or any of
their manufacturing locations, (xiii) as to each article of drug or
consumer product currently manufactured and/or distributed by or on behalf
of Shire or its Subsidiaries, such article is not adulterated or misbranded
within the meaning of the FDCA, 21 U.S.C. Sections 301 et seq., and all
-- ---
advertising and sales promotional materials of Shire or its Subsidiaries
are otherwise in conformance with applicable regulations and (iv) neither
Shire nor any of its Subsidiaries nor, to the knowledge of Shire, any of
their respective officers, employees, agents or affiliates has been
convicted of any crime or engaged in any conduct for which debarment is
mandated by 21 U.S.C. Section 335(a) or authorized by 21 U.S.C. Section
335a(b). To the knowledge of Shire, Shire's contractors are in compliance
with all applicable law and regulations and in respect of the FDA and DEA
have secured all licenses, renewals and quotas necessary to their
operation.
Shire has made available to Roberts copies of all written
communications to or from the FDA and the DEA relating specifically to
Shire, its Subsidiaries and their respective operations or business.
(x) Environmental Matters. (i) Each of Shire and its Subsidiaries
---------------------
possesses all Environmental Permits required under applicable Environmental
Laws to conduct its business as currently conducted and to own and operate
its
<PAGE>
-53-
assets, and is in compliance in all material respects with the terms
and conditions of such Environmental Permits.
(ii) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby will not affect
the validity or require the transfer of any Environmental Permits held by
Shire or its Subsidiaries, and will not require any notification,
disclosure, registration, reporting, filing, investigation or redemption
under any Environmental Law.
(iii) Each of Shire and its Subsidiaries is in compliance in all
material respects with all applicable Environmental Laws and has no
material liability under any Environmental Law.
(iv) There is no civil, criminal or administrative action, suit,
demand, claim, hearing, notice of violation, proceeding, notice or demand
letter, or request for information pending or, to the knowledge of Shire
threatened, under any Environmental Law (x) against Shire or its
Subsidiaries or (y) to the knowledge of Shire against any person or entity
in connection with which liability could reasonably be expected to be
imputed or attributed by law or contract to Shire or its Subsidiaries.
(v) No property or facility presently or formerly owned, leased or
operated by Shire or its Subsidiaries, and no property or facility at which
Hazardous Materials of Shire or its Subsidiaries have been stored, treated
or disposed of or at which any Hazardous Materials have been manufactured,
handled, tested, formulated, prepared, encapsulated, packaged, bottled, or
stored for Shire or its Subsidiaries ("Shire Product Sites") is listed or
-------------------
proposed for listing on the National Priorities List or the Comprehensive
Environmental Response, Compensation and Liability Information System, both
promulgated under CERCLA, or on any comparable list established under any
Environmental Law.
(vi) There has been no disposal, spill, discharge, emission or
release of any Hazardous Material by Shire or its Subsidiaries on, at,
under or from any property presently or formerly owned, leased or operated
by Shire or its Subsidiaries and there are no Hazardous Materials located
in, at, on or under any such facility or property,
<PAGE>
-54-
or, to the knowledge of Roberts, at any Shire Product Site or other
location where Hazardous Materials of Shire or any of its Subsidiaries have
been stored, treated or disposed of (a "Shire Third Party Site"), in each
----------------------
case that could reasonably be expected to result in the incurrence of any
material liability, by Shire or its Subsidiaries under any Environmental
Law.
(vii) There are no underground storage tank or other underground
storage receptacles or related piping, or any impoundments containing
Hazardous Materials located on any facility or property owned, leased or
operated by Shire or any of its Subsidiaries.
(viii) No Lien has been recorded against any properties, assets or
facilities owned, leased or operated by Shire or any of its Subsidiaries
under any Environmental Law.
(ix) Neither Shire nor any of its Subsidiaries is obligated to
perform any investigation or other action under any Environmental Law
pursuant to any order, decree, judgment or agreement by which it is bound,
or has assumed by contract or agreement any obligation or liability under
any Environmental Law.
Shire has made available to Roberts all material records and files,
including, but not limited to, all assessments, reports, studies, audits,
analyses, tests and data, in possession, custody or control of Shire or its
Subsidiaries concerning compliance by Shire and its Subsidiaries with, or
liability under, any Environmental Law, including, without limitation,
those concerning the existence of Hazardous Materials at facilities or
properties currently or formerly owned, operated or leased by Shire or its
Subsidiaries or at any Shire Product Site or Shire Third Party Site.
(y) Products. Each of the products produced or sold by Shire and
--------
its Subsidiaries: (i) is, and at all times up to and including the date
hereof has been, in compliance in all material respects with all applicable
U.K. and non-U.K. laws and regulations; (ii) is, and at all relevant times
has been, fit for the ordinary purposes for which it is intended to be used
and conforms in all material respects to any promises or affirmations of
fact made
<PAGE>
-55-
on the container, label or promotional materials for such product or in
connection with its sale; and (iii) contains no design or manufacturing
defect. Neither Shire nor any of its Subsidiaries has received notice of
any product warranty claims. Neither Shire nor any of its Subsidiaries is
aware of any facts which are reasonably likely to cause (i) the withdrawal
or recall of any product sold or intended to be sold by Shire or its
Subsidiaries, (ii) a change in the marketing classification, labeling or
promotional materials of any such products, or (iii) a termination or
suspension of marketing of any such products. There are no material claims
pending or, to the knowledge of Shire, threatened against Shire or its
Subsidiaries with respect to the quality of or absence of defects in such
products nor are there any facts known to Shire relating to the quality of
or absence of defects in such products which, if known by a potential
claimant or governmental authority, could reasonably be expected to give
rise to a claim or proceeding. To the knowledge of Shire, no supplier of a
raw material required for a material product of Shire and the Subsidiaries
for which there is not a permissible replacement obtainable under
commercially reasonable terms, has indicated that it will not continue to
supply such raw materials on terms consistent with those on the date
hereof.
(z) Marketing Practices. Shire's operations and commercial conduct
-------------------
and those of its Subsidiaries have at all times conformed in all material
respects to the Code of Marketing Practices of the Pharmaceutical Research
Industry Association.
(aa) Ordinary Shares. As of the Effective Time, the Ordinary Shares
---------------
comprising the Merger Consideration (including Ordinary Shares delivered to
the Depositary underlying the Shire ADSs constituting Merger Consideration)
will have been duly authorized for issuance and, when issued and delivered
in accordance with the terms of this Agreement, will be validly issued and
fully paid.
(bb) Pooling. Neither Shire nor any of its Affiliates has taken or
-------
agreed to take any action or failed to take any action that would prevent
the Merger from being treated for financial accounting purposes as a
"pooling of
<PAGE>
-56-
interests" in accordance with US GAAP and the regulations and
interpretations of the SEC.
(cc) Merger Consideration. As of the Effective Time, the Shire ADSs
--------------------
and Ordinary Shares received by the Holders as Merger Consideration will
represent less than fifty percent of both the total voting power and the
total value of the outstanding stock of Shire within the contemplation of
Treas. Reg. (S) 1.367(a)-3(c)(1)(i).
(dd) Active Trade or Business. Shire, a "qualified subsidiary" (as
------------------------
defined in Treas. Reg. (S) 1.367(a)-3(c)(5)(vii)) of Shire or a "qualified
partnership" (as defined in Treas. Reg. (S) 1.367(a)-3(c)(5)(viii)) of
which Shire is a partner will, as of the Effective Time, have been engaged
in an active trade or business outside the United States for the entire 36-
month period immediately before the Effective Time, within the meaning of
and as contemplated by Treas. Reg. (S) 1.367(a)-3(c)(3). None of Shire,
any qualified subsidiary of Shire or any qualified partnership of which
Shire is a partner has, nor will have as of the Effective Time, any
intention to dispose of or discontinue any trade or business referred to in
the previous sentence if doing so would cause the active trade or business
test of Treas. Reg. (S) 1.367(a)-3(c)(3) not to be satisfied.
(ee) Asset Acquisitions. As of the Effective Time, none of Shire,
------------------
any qualified subsidiary of Shire or any qualified partnership of which
Shire is a partner (each as defined above in Section 3.2(dd)) will own any
assets acquired outside the ordinary course of business within the
preceding 36-month period that would cause Shire to fail to satisfy the
"substantiality test" set forth in Treas. Reg. (S) 1.367(a)-3(c)(3)(iii).
(ff) Ownership of Roberts Shares. Except as contemplated in this
---------------------------
Agreement and the Option Agreement as of the date hereof and the Effective
Time, none of Shire, any of its Subsidiaries or, to Shire's knowledge, any
of its "affiliates" or "associates" (as such terms are defined in the
Shareholder Protection Act), (i) owns, or during the five-year period prior
to the date hereof owned, or has any rights to acquire or vote any shares
of Common Stock or (ii) has any agreement, arrangement or understanding
<PAGE>
-57-
for the purpose of acquiring, holding, voting or disposing of Common Stock
with any other person that beneficially owns, or whose affiliates or
associates beneficially own, Common Stock.
ARTICLE IV
COVENANTS OF ROBERTS
4.1. Regular Course of Business. Except in connection with the
--------------------------
performance by Roberts of its obligations under the Agreement, until the
Effective Time, Roberts shall conduct its and its Subsidiaries' business only in
the ordinary course and shall use reasonable efforts to maintain and preserve
its business organization, assets, employees and business relationships and to
maintain all of its material properties and assets in useful and good condition,
ordinary wear and tear excepted.
4.2. Certain Prohibited Activities. Until the Effective Time,
-----------------------------
except as contemplated by this Agreement or as set forth on Section 4.2 of the
Roberts Disclosure Schedule, Roberts shall not, and shall not permit any of its
Subsidiaries to, without the prior written consent of Shire: (a) cease to be a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, or in good standing as a foreign
corporation in any jurisdiction where the character of its assets or nature of
its business makes such qualification necessary; (b) authorize or issue any
additional shares of its capital stock, any Equity Equivalents, any debt
securities or other evidence of its indebtedness or any SARs; (c) repay any of
its Indebtedness prior to scheduled maturity (other than in the ordinary course
of business) or redeem or otherwise acquire any of its capital stock or any
Equity Equivalents or make any payment with respect to any of the foregoing
(other than regular, periodic payments of interest made with respect to any
Indebtedness); (d) split, combine or reclassify any of its capital stock or
declare, set aside or pay any dividend or other distribution in respect of any
of its capital stock; (e) acquire any stock, partnership or other equity
interest in or any equity or debt security of any other person or entity; (f)
amend its Certificate of Incorporation or By-Laws (or equivalent charter
documents); (g) violate or fail to comply in any material respect with any
statute,
<PAGE>
-58-
law, ordinance, regulation, rule, order or other legal requirement of
any government, authority or any other governmental department or agency, or any
judgment, decree or order of any court or governmental body or agency applicable
to its business or operations (other than any violations or failures to comply
which could not reasonably be expected, individually or in the aggregate, to
have a Roberts Material Adverse Effect); (h) enter into any contract, agreement
or other commitment with any present or former director, officer or
securityholder of Roberts or any person or entity controlled by any such person
other than in the ordinary course of business and where the amount involved is
not in excess of $500,000; (i) acquire or dispose of any material real property
or any material leasehold interest in real property, or create or suffer to
exist any Lien on any material assets owned or leased by it; (j) fail to comply
in all material respects with all of its obligations with respect to all
material Permits or voluntarily take or omit to take any action which could
reasonably be expected to result in the revocation, nonrenewal, modification,
suspension or termination of any such Permit (other than any violations or
failures to comply which could not reasonably be expected, individually or in
the aggregate, to have a Roberts Material Adverse Effect); (k) (i) grant to any
officer of Roberts or any of its Subsidiaries any increase in compensation, (ii)
grant to any employee of Roberts or any of its Subsidiaries any increase in
severance or termination pay, (iii) enter into any employment, severance or
termination agreement with any employee of Roberts or any of its Subsidiaries or
(iv) enter into any Employment Obligation, or permit the modification or
termination of any existing Employment Obligation; (l) dispose of, permit to
lapse, modify, terminate, grant any interest to any person or entity in, or
create or suffer to exist any Lien on or with respect to, any Roberts
Intellectual Property; (m) take any action that would cause it to fail to
maintain in full force and effect, comply in all material respects with all of
the terms and provisions of or pay all premiums due on any Insurance Policy; (n)
enter into any material agreement or permit the modification or termination of
any material agreement outside the ordinary course of business; (o) merge or
consolidate with any other person or entity or acquire control of or purchase
all or substantially all of the assets of any other person or entity; (p)
voluntarily incur or permit the incurrence of any liability not in the ordinary
course of business and in excess of $1,000,000; (q) adopt a plan of complete or
partial liquidation;
<PAGE>
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or (r) undertake any action which would jeopardize accounting for the Merger as
a pooling of interests.
4.3. Notice of Certain Events. Roberts will give notice to Shire,
------------------------
promptly after obtaining knowledge thereof, of (i) any representation or
warranty made by it contained in this Agreement that is qualified as to
materiality becoming untrue or inaccurate in any respect or any such
representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement.
4.4. Access. Roberts shall afford the officers, employees and
------
representatives of Shire, and its counsel and auditors, reasonable access during
normal business hours prior to the Effective Time to its facilities, properties,
equipment, files, accounts, books and records so that Shire may have full
opportunity to make such investigations as it may desire to make of the affairs
of Roberts. Shire will hold, and will cause its respective officers, employees,
accountants, counsel, financial advisers and other representatives and
affiliates to hold, any confidential information in accordance with the terms of
that certain Confidentiality Agreement dated as of June 1, 1999, between Shire
and Roberts.
4.5. Approvals. Roberts shall use all reasonable efforts to take
---------
or cause to be taken all action, and to do or cause to be done all things
reasonably necessary, proper or advisable in order to fulfill and perform its
obligations under this Agreement or otherwise consummate and make effective the
transactions contemplated hereby. Roberts shall use all commercially reasonable
efforts to obtain or cause to be obtained all Roberts Governmental Approvals and
Roberts Third Party Approvals.
4.6. No Solicitation. (a) Prior to the Effective Time, Roberts
---------------
agrees that neither it, any of its Subsidiaries, nor any of their respective
directors, officers, employees, agents or representatives of the foregoing,
will, directly or indirectly, (i) solicit or initiate (including by way of
furnishing or disclosing non-public information) any inquiries or the making of
any proposal with respect to any merger, consolidation or other business
combination involving Roberts or the
<PAGE>
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acquisition of all or any significant part of the assets or capital stock of
Roberts (a "Roberts Acquisition Transaction") or (ii) negotiate, explore or
-------------------------------
otherwise engage in discussions with any person (other than Shire and its
representatives) with respect to any Roberts Acquisition Transaction, or which
may reasonably be expected to lead to a proposal for a Roberts Acquisition
Transaction or enter into any agreement, arrangement or understanding with
respect to any such Roberts Acquisition Transaction or which would require it to
abandon, terminate or fail to consummate the Merger or any other transaction
contemplated by this Agreement; provided, however, that Roberts may, in response
-------- -------
to an unsolicited written proposal from a third party regarding a Roberts
Superior Proposal (as hereinafter defined), furnish information to, negotiate or
otherwise engage in discussions with such third party, if the Board of Directors
of Roberts determines in good faith, after consultation with its financial
advisors and based upon advice of outside counsel that such action is required
for the Board of Directors to comply with its fiduciary duties under applicable
law.
(b) Except as may be required pursuant to the fiduciary duties of
Roberts' Board of Directors under applicable law, Roberts agrees that, as of the
date hereof, it and its Subsidiaries, and the respective directors, officers,
employees, agents and representatives of the foregoing, shall immediately cease
and cause to be terminated any existing activities, discussions or negotiations
with any person (other than Shire and its representatives) conducted heretofore
with respect to any Roberts Acquisition Transaction. Roberts agrees to promptly
advise Shire of any inquiries or proposals received by, any such information
requested from, or any negotiations or discussions sought to be initiated or
continued with, Roberts or its Subsidiaries, or any of the respective directors,
officers, employees, agents or representatives of the foregoing, in each case
from a person (other than Shire and its representatives) with respect to a
Roberts Acquisition Transaction, and the terms hereof, including the identity of
such third party and the general terms of any financing arrangement or
commitment in connection with such Roberts Acquisition Transaction, and, except
as may otherwise be required pursuant to the fiduciary duties of Roberts' Board
of Directors under applicable law, to update on an ongoing basis or upon Shire's
reasonable request, the status thereof, as well as any actions taken or other
developments pursuant to this Section 4.6. As used herein, "Roberts Superior
----------------
Proposal" means a bona fide, written
- --------
<PAGE>
-61-
and unsolicited proposal or offer made by any persons (or group) (other than
Shire or any of its Subsidiaries) with respect to a Roberts Acquisition
Transaction (i) on terms which the Board of Directors of Roberts determines in
good faith, and in the exercise of reasonable judgment (based on the advice of
independent financial advisors and legal counsel), to be more favorable to
Roberts and its shareholders than the transactions contemplated hereby
(including taking into account the financing thereof.)
4.7. Pooling of Interests. Roberts shall use all reasonable
--------------------
efforts to cause the Merger to be accounted for as a "pooling of interests" in
accordance with US GAAP, Accounting Principles Board Opinion 16 and applicable
SEC rules, regulations and policies and shall take no action that would cause
such accounting treatment not to be obtained.
4.8. ISRA. Roberts shall obtain from the New Jersey Department of
----
Environmental Protection either (i) a declaration of non-applicability of the
New Jersey Industrial Site Recovery Act ("ISRA") to the Merger or any other
----
transactions contemplated thereby, or (ii) approval of a negative declaration or
other action required to comply with ISRA, in each case which is reasonably
acceptable to Shire.
ARTICLE V
COVENANTS OF SHIRE AND ACQUISITION SUB
5.1. Regular Course of Business. Except in connection with the
--------------------------
performance by Shire and Acquisition Sub of their respective obligations under
this Agreement, until the Effective Time, Shire shall conduct its and its
Subsidiaries' business only in the ordinary course and shall use reasonable
efforts to maintain and preserve its business organization, assets, employees
and business relationships and to maintain all of its material properties and
assets in useful and good condition, ordinary wear and tear excepted.
5.2. Certain Prohibited Activities. Until the Effective Time,
-----------------------------
except as contemplated by this Agreement or as set forth on Section 5.2 of the
Shire Disclosure Schedule, Shire shall not, and shall not permit any of its
Subsidiaries to, without the prior written consent of Roberts: (a) cease to
<PAGE>
-62-
be a corporation duly organized, validly existing and, where applicable, in good
standing under its jurisdiction of incorporation, or in good standing as a
foreign corporation in any applicable jurisdiction where the character of its
assets or nature of its business makes such qualification necessary; (b)
authorize or issue any additional shares of its capital stock, any Equity
Equivalents, any debt securities or other evidence of its indebtedness or any
SARs; (c) repay any of its Indebtedness prior to scheduled maturity (other than
in the ordinary course of business) or redeem or otherwise acquire any of its
capital stock or any Equity Equivalents or make any payment with respect to any
of the foregoing (other than regular, periodic payments of interest made with
respect to any Indebtedness); (d) split, combine or reclassify any of its
capital stock or declare, set aside or pay any dividend or other distribution in
respect of any of its capital stock; (e) acquire any stock, partnership or other
equity interest in or any equity or debt security of any other person or entity;
(f) amend its Memorandum and Articles of Association (or equivalent charter
documents); (g) violate or fail to comply in any material respect with any
statute, law, ordinance, regulation, rule, order or other legal requirement of
any government, authority or any other governmental department or agency, or any
judgment, decree or order of any court or governmental body or agency applicable
to its business or operations (other than any violations or failures to comply
which could not reasonably be expected, individually or in the aggregate, to
have a Shire Material Adverse Effect); (h) enter into any contract, agreement or
other commitment with any present or former director, officer or securityholder
of Shire or any person or entity controlled by any such person other than in the
ordinary course of business and where the amount involved is not in excess of
$500,000; (i) fail to comply in all material respects with all of its
obligations with respect to all material Permits or voluntarily take or omit to
take any action which could reasonably be expected to result in the revocation,
nonrenewal, modification, suspension or termination of any such Permit (other
than any violations or failures to comply which could not reasonably be
expected, individually or in the aggregate, to have a Shire Material Adverse
Effect); (j) (i) grant to any officer of Shire or any of its Subsidiaries any
increase in compensation, (ii) grant to any employee of Shire or any of its
Subsidiaries any increase in severance or termination pay, (iii) enter into any
employment, severance or termination agreement with any employee of Shire or any
of its Subsidiaries or (iv) enter into
<PAGE>
-63-
any Employment Obligation or permit the modification or termination of any
existing Employment Obligation; (k) dispose of, permit to lapse, modify,
terminate, grant any interest to any person or entity in, or create or suffer to
exist any Lien with respect to, any Shire Intellectual Property; (l) take any
action that would cause it to fail to maintain in full force and effect, comply
in all material respects with all of the terms and provisions of or pay all
premiums due on any Insurance Policy; (m) enter into any material agreement or
permit the modification of any material agreement outside the ordinary course of
business; (n) merge or consolidate with any other person or entity or acquire
control of or purchase all or substantially all of the assets of any other
person or entity; (o) voluntarily incur or permit the incurrence of any
liability not in the ordinary course of business and in excess of $1,000,000;
(p) adopt a plan of complete or partial liquidation; or (q) undertake any
actions which would jeopardize accounting for the Merger as a pooling of
interests.
5.3. Notice of Certain Events. Each of Shire and Acquisition Sub
------------------------
will give notice to Roberts promptly after obtaining knowledge thereof, of (i)
any representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement.
5.4. Access. Shire and Acquisition Sub shall afford the officers,
------
employees and representatives of Roberts, and its counsel and auditors,
reasonable access during normal business hours during the period prior to the
Effective Time to their respective facilities, properties, equipment, files,
accounts, books and records so that Roberts may have full opportunity to make
such investigations as it may desire to make of the affairs of Shire and
Acquisition Sub. Roberts will hold, and will cause its respective officers,
employees, accountants, counsel, financial advisers, and other representatives
and affiliates to hold, any confidential information in accordance with the
terms of that certain Confidentiality Agreement dated as of June 1, 1999,
between Shire and Roberts.
<PAGE>
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5.5. Approvals. Each of Shire and Acquisition Sub shall use all
---------
reasonable efforts to take or cause to be taken all actions, and to do or cause
to be done all things, reasonably necessary, proper or advisable in order to
fulfill and perform its obligations under this Agreement or otherwise consummate
or make effective the transactions contemplated hereby. Each of Shire and
Acquisition Sub shall use all commercially reasonable efforts to obtain all
Shire Governmental Approvals and Shire Third Party Approvals.
5.6. No Solicitation. (a) Prior to the Effective Time, Shire
---------------
agrees that neither it, any of its Subsidiaries, nor any of their respective
directors, officers, employees, agents or representatives of the foregoing,
will, directly or indirectly, (i) solicit or initiate (including by way of
furnishing or disclosing non-public information) any inquiries or the making of
any proposal with respect to any merger, consolidation or other business
combination involving Shire or the acquisition of all or any significant part of
the assets or capital stock of Shire (a "Shire Acquisition Transaction") or (ii)
-----------------------------
negotiate, explore or otherwise engage in discussions with any person (other
than Roberts and its representatives) with respect to any Shire Acquisition
Transaction, or which may reasonably be expected to lead to a proposal for a
Shire Acquisition Transaction or enter into any agreement, arrangement or
understanding with respect to any such Shire Acquisition Transaction or which
would require it to abandon, terminate or fail to consummate the Merger or any
other transaction contemplated by this Agreement; provided, however, that Shire
-------- -------
may, in response to an unsolicited written proposal from a third party regarding
a Shire Superior Proposal (as hereinafter defined), furnish information to,
negotiate or otherwise engage in discussions with such third party, if the Board
of Directors of Shire determines in good faith, after consultation with its
financial advisors and based upon advice of outside counsel that such action is
required for the Board of Directors to comply with its fiduciary duties under
applicable law.
(b) Except as may be required pursuant to the fiduciary duties of
Shire's Board of Directors under applicable law, Shire agrees that, as of the
date hereof, it and its Subsidiaries, and the respective directors, officers,
employees, agents and representatives of the foregoing, shall immediately cease
and cause to be terminated any existing activities, discussions or negotiations
with any person (other than Roberts
<PAGE>
-65-
and its representatives) conducted heretofore with respect to any Shire
Acquisition Transaction. Shire agrees to promptly advise Roberts of any
inquiries or proposals received by, any such information requested from, or any
negotiations or discussions sought to be initiated or continued with, Shire or
its Subsidiaries, or any of the respective directors, officers, employees,
agents or representatives of the foregoing, in each case from a person (other
than Shire and its representatives) with respect to a Shire Acquisition
Transaction, and the terms hereof, including the identity of such third party
and the general terms of any financing arrangement or commitment in connection
with such Shire Acquisition Transaction, and, except as may otherwise be
required pursuant to the fiduciary duties of Shire's Board of Directors under
applicable law, to update on an ongoing basis or upon Roberts' reasonable
request, the status thereof, as well as any actions taken or other developments
pursuant to this Section 5.6. As used herein, "Shire Superior Proposal" means a
-----------------------
bona fide, written and unsolicited proposal or offer made by any persons (or
group) (other than Roberts or any of its Subsidiaries) with respect to a Shire
Acquisition Transaction (i) on terms which the Board of Directors of Shire
determines in good faith, and in the exercise of reasonable judgment (based on
the advice of independent financial advisors and legal counsel), to be more
favorable to Shire and its shareholders than the transactions contemplated
hereby (including taking into account the financing thereof.)
5.7. Pooling of Interests. Shire shall use all reasonable efforts
--------------------
to cause the Merger to be accounted for as a "pooling of interests" in
accordance with US GAAP, Accounting Principles Board Opinion 16 and applicable
SEC rules, regulations and policies and shall take no action that would cause
such accounting treatment not to be obtained.
5.8. Indemnification. (a) From and after the Effective Time and
---------------
until the sixth anniversary of the Effective Time and for so long thereafter as
any claim for indemnification asserted on or prior to such date has not been
fully adjudicated, Shire and the Surviving Corporation shall indemnify, defend
and hold harmless each individual who is now, or has been at any time prior to
the date hereof or who becomes prior to the Effective Time, a director or
officer of Roberts or any of its Subsidiaries against all losses, claims,
damages, costs, expenses (including attorneys' fees) or liabilities (including
attorneys' fees) arising out of actions or omissions or alleged
<PAGE>
-66-
actions or omissions occurred at or prior to the Effective Time to the same
extent and on the same terms and conditions (including with respect to
advancement of expenses) permitted or required under applicable law and Roberts'
Certificate of Incorporation and By-Laws in effect at the date hereof.
(b) For a period of six years after the Effective Time, Shire and the
Surviving Corporation shall cause to be maintained in effect the current
policies of directors' and officers' liability insurance maintained by Roberts
(provided that the Surviving Corporation may substitute therefor policies of at
least the same coverage and amounts containing terms and conditions which are no
less advantageous to the insured parties) with respect to claims arising from
facts or events which occurred on or before the Effective Time; provided,
--------
however, that if the premiums with respect to such insurance exceed 150% of the
- -------
annual premiums paid as of the date hereof by Roberts for such insurance, Shire
and the Surviving Corporation shall be obligated to purchase directors' and
officers' liability insurance with the maximum coverage as can be obtained at an
annual premium equal to 150% of the annual premiums paid by Roberts as of the
date hereof.
(c) The provisions of this Section are intended to be for the benefit
of, and shall be enforceable by, each indemnified party and each party entitled
to insurance coverage under paragraph (b) above, respectively, and his or her
heirs and legal representatives, and shall be in addition to any other rights an
indemnified party may have under the certificates or articles of incorporation
or by-laws of the Surviving Corporation or any of its Subsidiaries, under the
New Jersey Law or otherwise.
ARTICLE VI
AGREEMENTS REGARDING OPTIONS
AND OTHER BENEFITS
6.1. Stock Option Plans. (a) At the Effective Time, Roberts shall,
------------------
if necessary, have amended (and Shire and the Surviving Corporation shall have
approved and adopted, respectively) each of the Roberts Option Plans to provide
that each of the Options shall be assumed by Shire (or the Surviving
Corporation) and made applicable to the purchase of Ordinary
<PAGE>
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Shares as provided in this Section 6.1. Shire shall assume or replace such
Options (or fraction thereof) so that each holder of an Option (an "Optionee")
--------
shall have such Optionee's Option apply to that number of Ordinary Shares
(adjusted to the nearest whole share) equal to the product of (i) the number of
all Options of such Optionee immediately prior to the Effective Time and (ii)
the Exchange Ratio. The exercise price per share for each Optionee's Options
(adjusted to the nearest pence) assumed or replaced will equal the old exercise
price per share of Common Stock divided by the Exchange Ratio; provided,
--------
however, that in the case of any Option to which Section 421 of the Code
- -------
continues to apply by reason of its qualification under Section 422 of the Code
("incentive stock options"), the option price, the number of shares purchasable
-----------------------
pursuant to such option and the terms and conditions of exercise of such option
shall be determined in order to comply with Section 424(a) of the Code and the
regulations promulgated thereunder. Without limiting the foregoing, the duration
and other terms of each assumed or replaced Option immediately after the
Effective Time (unless otherwise agreed in writing by the Optionee with respect
to a particular Option) shall be the same as the corresponding Options that were
in effect immediately before the Effective Time, except that all references to
Roberts in the Roberts Option Plans (and the corresponding references in each
option agreement documenting each such Option) shall be deemed to be references
to Shire or the Surviving Corporation, as applicable; provided, however, that
-------- -------
the exercise price with respect to each Ordinary Share shall not be less than
the nominal value of (Pounds)0.05 thereof. Roberts will terminate its Employee
Stock Purchase Plan prior to the closing and extinguish all rights thereunder.
(b) As soon as practicable after the Effective Time, Shire shall
deliver to each Optionee appropriate notices setting forth such Optionee's
rights pursuant to the Shire Option Plans and the agreements evidencing the
grants of such Options shall continue in effect on the same terms and
conditions.
(c) Shire shall take all corporate action necessary to reserve for
issuance a sufficient number of Ordinary shares for delivery upon exercise of
Options. As soon as practicable after the Effective Time, Shire shall file a
registration statement on Form F-3, Form S-8, or another appropriate form, as
the case may be (or any successor form), with respect to the Ordinary Shares
subject to such options and shall use its
<PAGE>
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reasonable best efforts to maintain the effectiveness of such registration
statement or registration statements (and maintain the current status of the
prospectus or prospectuses contained therein) for so long as such options remain
outstanding.
6.2. Continuation of Benefits. During the period from the
------------------------
Effective Time until December 31, 2001, Shire shall maintain or cause to be
maintained wages, compensation levels, employee pension and welfare plans for
the benefit of employees and former employees of Roberts and its Subsidiaries,
which are, in the aggregate, equal or greater in value than those wages,
compensation levels and other benefits provided under Roberts' Employment
Obligations that are in effect on the date hereof. Nothing in this Agreement
shall be construed as limiting in any way the right of Shire after the Effective
Time to terminate the employment of or lay-off any employee of Roberts.
6.3. Severance Policy and Other Agreements. Shire shall honor or
-------------------------------------
cause to be honored all severance agreements and employment agreements with
Roberts' directors, officers and employees.
6.4. 1999 Bonus. Shire will pay, or cause to be paid, bonuses for
----------
calendar year 1999 to Roberts' employees participating in Roberts' RPC Incentive
Compensation Program in amounts equal to each such Roberts employee's bonus for
the year, on a basis consistent with past practice, within the target range
established for each employee (but, in the aggregate, not in excess of
U.S.$1,500,000) as determined by the chief executive of Roberts immediately
prior to the Closing Date (all in accordance with the RPC Incentive Compensation
Program set forth in Schedule 6.4 of the Roberts Disclosure Schedule). Annual
bonus for 1999 for the four senior officers of Roberts who do not participate in
the RPC Incentive Compensation Program shall be as determined by the
Compensation Committee of Roberts' Board of Directors immediately prior to the
Closing Date in a manner which is consistent with past practice based upon
performance, and shall be in an aggregate amount not greater than
U.S.$1,000,000.
6.5. Waiver of Preexisting Conditions; Credit for Deductibles;
---------------------------------------------------------
Service Credit. Shire will, or will cause the Surviving Corporation to, (i)
- --------------
waive all limitations as to preexisting conditions with respect to participation
and coverage requirements applicable to the employees and former employees
<PAGE>
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of Roberts and its Subsidiaries under any welfare plan that such employees or
former employees may be eligible to participate in after the Effective Time,
(ii) provide each employee of Roberts and its Subsidiaries with credit for any
co-payments and deductibles paid during the applicable plan year prior to the
Effective Time in satisfying any applicable deductible or out-of-pocket
requirements under any welfare plans that such employees are eligible to
participate in after the Effective Time, and (iii) provide each employee of
Roberts and its Subsidiaries with credit for all service with Roberts and its
affiliates for purposes of vesting and eligibility to participate under each
employee benefit plan, program, or arrangement of the Purchaser or its
affiliates in which such employees are eligible to participate.
ARTICLE VII
CONDITIONS PRECEDENT
7.1. Conditions to the Obligations of Each Party to Effect the Merger
----------------------------------------------------------------
. The respective obligations of each of the parties to effect the Merger shall
be subject to the satisfaction or waiver of each of the following conditions at
or prior to the Closing:
(a) Shareholder Approvals. The Roberts Shareholder Approval and
---------------------
Shire Shareholder Approval shall have been obtained.
(b) Certain Approvals. All Roberts Governmental Approvals and Shire
-----------------
Governmental Approvals shall have been obtained, satisfied, waived or
expired, as applicable.
(c) No Proceeding or Litigation. No order, injunction, decree or
---------------------------
judgment of any court or governmental body or agency shall be in effect
which materially restrains or prohibits the transactions contemplated
hereby, and no suit, action, investigation, inquiry or proceeding by any
governmental body or agency or legal or administrative proceeding by any
governmental body or agency shall have been instituted, or threatened in
writing, which questions the validity or legality of the transactions
contemplated hereby.
<PAGE>
-70-
(d) Securities Laws. The Form F-4 filed by Shire and the Form F-6
---------------
filed by the Depositary shall have become effective under the Securities
Act and Exchange Act, as applicable, and shall not be the subject of any
stop order or proceedings seeking a stop order, and Shire shall have
received all state securities or "blue sky" authorizations necessary to
issue Shire ADRs and Ordinary Shares pursuant to this Agreement.
7.2. Additional Conditions to the Obligations of Roberts. The
---------------------------------------------------
obligation of Roberts to effect the Merger is also subject to the satisfaction
or waiver of each of the following conditions at or prior to Closing:
(a) Agreements. Each of Shire and Acquisition Sub shall have
----------
performed or complied in all material respects with each covenant,
agreement and obligation to be performed or complied with by it hereunder
on or prior to the Closing Date.
(b) Representations and Warranties. The representations and
------------------------------
warranties of Shire and Acquisition Sub set forth in this Agreement shall
be true and correct in all material respects (except that where any
statement in a representation or warranty expressly includes a standard of
materiality, such statement shall be true and correct in all respects
giving effect to such standard) at and as of the Closing Date as if made at
and as of such time or, if made as of a specified date, as of such date.
(c) Officer's Certificate. Roberts shall have received a
---------------------
certificate, dated the Closing Date, of the President or a Vice President
of Acquisition Sub and of a director of Shire to the effect that the
conditions specified in paragraphs (a) and (b) above have been fulfilled.
(d) Consents from Third Parties. All Shire Third Party Approvals
---------------------------
shall have been obtained.
(e) Listing. The London Stock Exchange shall have granted admission
-------
of the Ordinary Shares comprising the Merger Consideration to the Official
List, subject only to allotment; and the allotment of the Ordinary Shares
comprising the Merger Consideration shall have occurred, subject only to
admission becoming effective in accordance with paragraph 7.1 of the
Listing Rules of LSE.
<PAGE>
-71-
(f) Tax Opinions. Roberts shall have received an opinion, relying
------------
on appropriate representations, of either Milbank, Tweed, Hadley & McCloy
LLP, counsel to Roberts, or Cahill Gordon & Reindel, counsel to Shire to
the effect that the Merger will constitute a reorganization described in
Code Section 368(a)(1)(A) and Code Section 368(a)(2)(E) and no gain or loss
will be recognized by Roberts or any Holder except that (i) a Holder who
receives cash in lieu of fractional Ordinary Shares or Shire ADSs will
recognize capital gain or capital loss equal to the difference between the
cash received and the basis of the Holder's shares of Common Stock
allocated to the fractional interest and (ii) any Holder required to enter
into a "gain recognition agreement" within the meaning of Treas. Reg. (S)
1.367(a)-3(c)(1)(iii)(B) must do so in order to avoid immediate gain
recognition and may be required to recognize gain at the time and in the
amount specified in the gain recognition agreement, which opinion shall be
dated on or about the date that is two business days prior to the date the
Proxy Statement is first mailed to stockholders of Roberts, shall not have
been withdrawn or modified in any material respect.
(g) Pooling Letter. There shall have been delivered to Roberts a
--------------
letter from its independent auditors, dated as of the Closing Date and
addressed to Roberts, reasonably satisfactory in form and substance to
Roberts, setting forth the concurrence of Roberts' independent auditors
with the conclusion of Roberts' management that it will be appropriate to
account for the Merger as a "pooling of interests" under US GAAP,
Accounting Principles Board Opinion No. 16 and all rules, regulations and
policies of the SEC, if the Merger is consummated in accordance with this
Agreement.
(h) Nasdaq. The Shire ADSs to be issued in the Merger and under the
------
Roberts Option Plans after the Merger in accordance with this Agreement
shall have been approved for listing on the Nasdaq National Market.
7.3. Additional Conditions to the Obligations of Shire and
-----------------------------------------------------
Acquisition Sub. The obligations of Shire and Acquisition Sub to effect the
- ---------------
Merger are also subject to the satisfaction or waiver of each of the following
conditions at or prior to the Closing:
<PAGE>
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(a) Agreements. Roberts shall have performed each covenant,
----------
agreement and obligation to be performed or complied with by it hereunder
on or prior to the Closing Date.
(b) Representations and Warranties. The representations and
------------------------------
warranties of Roberts set forth in this Agreement shall be true and correct
in all material respects (except that where any statement in a
representation or warranty expressly includes a standard of materiality,
such statement shall be true and correct in all respects giving effect to
such standard) at and as of the Closing Date as if made at and as of such
time or, if made as of a specified date, as of such date.
(c) Roberts Officer's Certificate. Shire shall have received a
-----------------------------
certificate, dated the date of the Closing, of the President or Vice
President of Roberts to the effect that the conditions specified in
paragraphs (a) and (b) above have been fulfilled.
(d) Pooling Letter. There shall have been delivered to Shire a
--------------
letter from its independent auditors, dated as of the Closing Date and
addressed to Shire, reasonably satisfactory in form and substance to Shire,
setting forth the concurrence of Shire's independent auditors with the
conclusion of Shire's management that it will be appropriate to account for
the Merger as a "pooling of interests" under US GAAP, Accounting Principles
Board Opinion No. 16 and all rules, regulations and policies of the SEC, if
the Merger is consummated in accordance with this Agreement.
ARTICLE VIII
OTHER AGREEMENTS
8.1. Preparation of Form F-4, Form F-6, the Proxy Statement and the
--------------------------------------------------------------
UK Disclosure Document. As soon as practicable following the date of this
- ----------------------
Agreement, Roberts shall, in cooperation with Shire, prepare and file with the
SEC the Proxy Statement and Shire shall, in cooperation with Roberts, prepare
and file with the SEC the Form F-4, in which the Proxy Statement will be
included as a prospectus. Each of Roberts and Shire shall use its best efforts
to have the Form F-4 declared
<PAGE>
-73-
effective under the Securities Act as promptly as practicable after such filing.
Shire shall also, as promptly as practicable, use its best efforts to cause the
Depositary to file with the SEC a registration statement on Form F-6 (the "Form
----
F-6") with respect to Shire ADRs under the Securities Act and use its best
- ---
efforts to have the Form F-6 declared effective as soon as practicable. Shire
shall also take any action (other than qualifying to do business in any
jurisdiction in which it is not now so qualified) required to be taken under any
applicable United States state securities laws in connection with the issuance
of Shire ADRs and Ordinary Shares in the Merger and Shire Ordinary Shares under
the Roberts Stock Plans and Roberts shall furnish all information concerning
Roberts and the holders of Common Stock as may be reasonably requested in
connection with any such action.
8.2. Roberts Shareholders Meeting. Roberts shall, as soon as
----------------------------
practicable following the date of this Agreement, duly call, give notice of,
convene and hold a meeting of its shareholders (the "Roberts Shareholders
--------------------
Meeting") for the purpose of obtaining the Roberts Shareholder Approval. Except
- -------
as required to comply with the fiduciary duties of the Board of Directors as
advised by outside counsel, Roberts will, through its Board of Directors,
recommend to its shareholders approval of all matters required to be so
approved. Roberts shall use its best efforts to cause the Proxy Statement to be
mailed to Roberts' shareholders as promptly as practicable after the Form F-4 is
declared effective under the Securities Act and, if necessary, after the Proxy
Statement shall have been so mailed, promptly circulate amended, supplemental or
supplemented proxy materials and, if required in connection therewith, resolicit
proxies, it being understood that Roberts shall not be required to hold more
than one meeting of shareholders.
8.3. Shire Shareholders Meeting. Shire will, as soon as
--------------------------
practicable following the date of this Agreement, duly call, give notice of,
convene and hold an extraordinary general meeting of its ordinary shareholders
(the "Shire Shareholders Meeting") for the purpose of obtaining the Shire
--------------------------
Shareholder Approval. Except as required to comply with the fiduciary duties of
the Board of Directors as advised by outside counsel, Shire will, through its
Board of Directors, recommend to its shareholders approval of all such matters
required to be so approved. In connection with the Shire Shareholders Meeting
(i) Shire will, as soon as practicable after the date of this
<PAGE>
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Agreement, prepare and file with the LSE, and will use its best efforts to have
cleared by the LSE and will thereafter mail to its shareholders the UK
Disclosure Documents, which will comply with all legal requirements applicable
to the Shire Shareholders Meeting and (ii) if necessary, after the UK Disclosure
Documents have been so posted, promptly circulate amended, supplemental or
supplemented materials and, if required in connection therewith, resolicit
votes, it being understood that Shire shall not be obligated to hold more than
one meeting of shareholders.
8.4. Acquisition Sub Actions. Shire will take all action within
-----------------------
its control which is necessary or appropriate to cause Acquisition Sub to
perform its obligations under this Agreement and to consummate the transactions
contemplated hereby.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1. Termination. This Agreement may be terminated at any time
-----------
prior to the Effective Time, whether before or after the Roberts Shareholder
Approval or the Shire Shareholder Approval:
(a) by mutual written consent of Shire and Roberts;
(b) by either Shire or Roberts upon notice thereof given in writing
to the other party if (i) any governmental entity shall have issued an
order, decree or ruling or taken any other action permanently enjoining,
restraining or otherwise prohibiting the consummation of the Merger and
such order, decree or ruling or other action shall have become final and
nonappealable (a "Final Order") or (ii) the Effective Time has not occurred
-----------
on or before December 31, 1999 unless a later date is established by mutual
written consent of Shire and Roberts or unless the failure to consummate
the Merger is the result of a breach of a covenant set forth in this
Agreement or a misrepresentation or breach of any warranty set forth in
this Agreement by the party seeking to terminate this Agreement;
<PAGE>
-75-
(c) by the Board of Directors of Shire or Roberts, if (x) the Shire
Shareholder Approval shall fail to be obtained upon a vote therefor taken
at the Shire Shareholders Meeting or (y) Roberts Shareholder Approval shall
fail to be obtained upon a vote therefor taken at the Roberts Shareholders
Meeting, unless due to delay or default on the part of Roberts, in the case
of the Roberts Shareholder Approval, or due to delay or default on the part
of Shire or Acquisition Sub, in the case of the Shire Shareholder Approval;
(d) by action of the Board of Directors of Shire and notice thereof
given in writing to Roberts if (i) there has been a breach in any material
respect (except that where any statement in a representation or warranty
includes a standard of materiality, such statement shall be true and
correct in all respects giving effect to such standard) of any
representation, warranty, covenant or agreement on the part of Roberts set
forth in this Agreement which breach is not curable on or prior to December
31, 1999 or (ii) the Board of Directors of Roberts (x) fails to recommend
the approval of this Agreement and the Merger to Roberts' shareholders in
accordance with Section 8.2 hereof, or (y) withdraws or amends or modifies
in a manner adverse to Shire its recommendation or approval in respect of
this Agreement or the Merger or fails to reconfirm such recommendation
within 5 business days of a reasonable written request for such
confirmation by Shire;
(e) by the Board of Directors of Shire if they shall reasonably
determine that a proposal for a Shire Acquisition Transaction constitutes a
Shire Superior Proposal; provided, however, that Shire may not terminate
-------- -------
this Agreement pursuant to this clause (e) unless (i) 5 business days shall
have elapsed after delivery to Roberts of a written notice of such
determination by such Board of Directors and, during such 5-business-day
period, Shire shall have informed Roberts of the material terms and
conditions and financing arrangements of such proposal for a Shire
Acquisition Transaction and the identity of the person or group making such
proposal for a Shire Acquisition Transaction and (ii) at the end of such 5-
business-day period, such Board of Directors shall continue reasonably to
believe that such proposal for a Shire Acquisition Transaction constitutes
a Shire Superior Proposal and promptly
<PAGE>
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thereafter Shire shall enter into a definitive acquisition, merger or
similar agreement to effect such Shire Superior Proposal;
(f) by action of the Board of Directors of Roberts and notice thereof
given in writing to Shire if (i) there is a breach in any material respect
(except that where any statement in a representation or warranty includes a
standard of materiality, such statement shall be true and correct in all
respects giving effect to such standard) of any representation, warranty,
covenant or agreement on the part of Shire or Acquisition Sub set forth in
this Agreement which breach is not curable on or prior to December 31, 1999
or (ii) the Board of Directors of Shire (x) fails to recommend the approval
of this Agreement and the Merger to Shire's shareholders in accordance with
Section 8.3 hereof, or (y) withdraws or amends or modifies in a manner
adverse to Roberts its recommendation or approval in respect of this
Agreement or the Merger or fails to reconfirm such recommendation within 5
business days of a reasonable written request for such confirmation by
Roberts; or
(g) by the Board of Directors of Roberts if they shall reasonably
determine that a proposal for a Roberts Acquisition Transaction constitutes
a Roberts Superior Proposal; provided, however, that Roberts may not
-------- -------
terminate this Agreement pursuant to this clause (g) unless (i) 5 business
days shall have elapsed after delivery to Shire of a written notice of such
determination by such Board of Directors and, during such 5-business-day
period, Roberts shall have informed Shire of the material terms and
conditions and financing arrangements of such proposal for a Roberts
Acquisition Transaction and the identity of the person or group making such
proposal for a Roberts Acquisition Transaction and (ii) at the end of such
5-day-business period, such Board of Directors shall continue reasonably to
believe that such proposal for a Roberts Acquisition Transaction
constitutes a Roberts Superior Proposal and promptly thereafter Roberts
shall enter into a definitive acquisition, merger or similar agreement to
effect such Roberts Superior Proposal.
9.2. Effect of Termination. In the event of termination of this
---------------------
Agreement as provided in Section 9.1, this
<PAGE>
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Agreement shall forthwith become void and have no effect and there shall be no
liability or obligation on the part of Shire, Roberts, Acquisition Sub or any
their respective officers or directors other than provisions of the last
sentence of Section 4.4, the last sentence of Section 5.4, Section 10.9, Section
10.10 and this Section 9.2, which will survive termination and except to the
extent that such termination results from the willful and material breach by a
party of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
(b) If (x) Shire shall have terminated this Agreement pursuant to
Section 9.1(d)(ii) or (y) Roberts shall have terminated this Agreement pursuant
to Section 9.1(g), or (z) Shire or Roberts shall have terminated this Agreement
pursuant to Sections 9.1(b)(ii) or (c)(y) following the public announcement
(other than by Shire or any of its affiliates) of a proposal for a Roberts
Acquisition Transaction by any person (other than the transactions contemplated
by this Agreement) and such termination was not solely the result of any action
or inaction by Shire which resulted in the failure of the conditions in Section
7.1(a), (b) or (c) or Section 7.2, and, prior to or within six months after any
termination described in this clause (z), Roberts (or any of its Subsidiaries)
shall have entered into a definitive agreement for, or shall have consummated, a
Roberts Acquisition Transaction, in which the consideration received by Roberts
or its shareholders is equal to or greater than the value of the Merger
Consideration on the date of this Agreement then, in any of such cases, Roberts
shall pay Shire a termination fee of $30.0 million, provided, however, no fee
-------- -------
shall be payable pursuant to this Section 9.2(b) if at the time of termination
of this Agreement pursuant to Section 7.1(a) either (aa) the waiting period
under the HSR Act (including any voluntary extension or such period) shall not
have expired or (bb) any governmental entity is asserting an objection under
applicable antitrust laws to the transactions contemplated by this Agreement or
(cc) a Final Order has been issued and remains outstanding. Any fee payable
under this Section 9.2(b) shall be paid in same day funds (A) contemporaneous
with a termination described in either clause (x) or (y) of this Section 9.2(b),
and no notice of termination pursuant to such sections shall be effective and
this Agreement shall not terminate, until such termination fee is received by
Shire, or (B) concurrently with or prior to the entering into of the definitive
agreement for, or the consummation of, such Roberts
<PAGE>
-78-
Acquisition Transaction, in the case of a termination described in clause (z) of
this Section 9.2(b).
(c) If (x) Roberts shall have terminated this Agreement pursuant to
Section 9.1(f)(ii) or (y) Shire shall have terminated this Agreement pursuant to
Section 9.1(e), or (z) Shire or Roberts shall have terminated this Agreement
pursuant to Sections 9.1(b)(ii) or (c)(x) following the public announcement
(other than by Roberts or any of its affiliates) of a proposal for a Shire
Acquisition Transaction by any person (other than the transactions contemplated
by this Agreement) and such termination was not solely the result of any action
or inaction by Roberts which resulted in the failure of the conditions in
Section 7.1(a), (b) or (c) or Section 7.3, and, prior to or within six months
after any termination described in this clause (z), Shire (or any of its
Subsidiaries) shall have entered into a definitive agreement for, or shall have
consummated, a Shire Acquisition Transaction, then, in any of such cases, Shire
shall pay Roberts a termination fee of $30.0 million, provided, however, no fee
-------- -------
shall be payable pursuant to this Section 9.2(c) if at the time of termination
of this Agreement pursuant to Section 7.1(a) either (aa) the waiting period
under the HSR Act (including any voluntary extension or such period) shall not
have expired or (bb) any governmental entity is asserting an objection under
applicable antitrust laws to the transactions contemplated by this Agreement or
(cc) a Final Order has been issued and remains outstanding. Any fee payable
under this Section 9.2(c) shall be paid in same day funds (A) contemporaneous
with a termination described in either clause (x) or (y) of this Section 9.2(c),
and no notice of termination pursuant to such sections shall be effective and
this Agreement shall not terminate, until such termination fee is received by
Roberts, or (B) concurrently with or prior to the entering into of the
definitive agreement for, or the consummation of, such Shire Acquisition
Transaction, in the case of a termination described in clause (z) of this
Section 9.2(c).
9.3. Amendment. This Agreement may be amended by the parties
---------
hereto at any time before or after any required approval of matters presented in
connection with the Merger by the shareholders of Roberts or the shareholders of
Shire; provided, however, that after any such approval, there shall be made no
-------- -------
amendment that by law requires further approval by such shareholders without the
further approval of such shareholders.
<PAGE>
-79-
This Agreement may be amended by an instrument in writing signed on behalf of
each of the parties hereto.
9.4. Waiver. At any time prior to the Closing, any party may (a)
------
extend the time for the performance of any of the obligations or other acts of
any other party hereto, (b) waive any inaccuracies in the representations and
warranties contained in this Agreement or in any document delivered pursuant to
this Agreement or (c) subject to the proviso of Section 9.3, waive compliance
with any of the agreements of any other party or with any conditions to its own
obligations. Except as otherwise required by law, (x) any agreement on the part
of a party hereto to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by or on behalf of such party by a duly
authorized signatory and (y) the failure of any party to this Agreement to
assert any of its rights under this Agreement or otherwise shall not constitute
a waiver of those rights.
ARTICLE X
GENERAL PROVISIONS
10.1. Public Statements. Each of Shire and Acquisition Sub, on the
-----------------
one hand, and Roberts, on the other hand, agree that neither they nor their
respective directors, officers, employees or agents shall disclose to any third
party (other than to their professional advisers) or publicly issue any press
release or other statement to the press or any third party with respect to this
Agreement or transactions contemplated hereby, except as may be required by law
or the rules of the American Stock Exchange or LSE rule, without the consent of
the other parties hereto.
10.2. Notices. All notices and other communications hereunder
-------
shall be in writing (including telex or similar writing) and shall be deemed
given if delivered in person or by messenger, cable, telegram or telex or
facsimile transmission or by a reputable overnight delivery service which
provides for evidence of receipt to the parties at the following addresses or
telecopier numbers (or at such other address or telecopy number for a party as
shall be specified by like notice):
<PAGE>
-80-
(a) if to Shire or Acquisition Sub, to:
Shire Pharmaceuticals Group plc
East Anton
Andover, Hants SP10 5RG
United Kingdom
Telecopy: 011 44 1 264 334 658
Attention: Rolf Stahel, Chief Executive
with a copy to:
John P. Mitchell, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, New York 10005
USA
Telephone: (212) 701-3000
Telecopy: (212) 269-5420
(b) if to Roberts, to:
Roberts Pharmaceutical Corporation
Meridian Center II
4 Industrial Way West
Eatontown, NJ 07724
Telecopy: (732) 676-1300
Attention: General Counsel
with a copy to:
Lawrence Lederman, Esq.
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York 10005
USA
Telecopy: (212) 530-5219
10.3. Interpretation. When reference is made in this Agreement to
--------------
a Subsection, Section, Exhibit or Schedule, such reference is to a Subsection or
Section of or an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the words "include", "includes" and
"including" are used in this Agreement, they are deemed to be followed by the
words "without
<PAGE>
-81-
limitation". For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) the terms defined include
the plural as well as the singular, (ii) all accounting terms not otherwise
defined herein have the meanings assigned under United States generally accepted
accounting principles, and (ii) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as a whole and not to any
particular Article, Section, Subsection or other subdivision.
10.4. Counterparts. This Agreement may be executed in one or more
------------
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
10.5. Entire Agreement. This Agreement (including the Exhibits and
----------------
Schedules hereto) constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof; provided that the Confidentiality
Agreements referred to in Sections 4.4 and 5.4 hereof shall survive the
termination of this Agreement in accordance with their terms.
10.6. Governing Law. Except where by its terms New Jersey Law is
-------------
governing, this Agreement shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the principles of conflicts
of law of such state.
10.7. Validity. The invalidity or unenforceability of any
--------
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect.
10.8. Assignment. Neither this Agreement nor any of the rights,
----------
interests or obligations hereunder shall be assigned by any party hereto,
whether by operation of law or otherwise, without the express prior written
consent of each of the other parties hereto. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors.
<PAGE>
-82-
10.9. Expenses. Except as otherwise expressly provided herein,
--------
each party shall bear its own expenses incurred in connection with the
transactions contemplated by this Agreement.
10.10. Enforcement. The parties agree that irreparable damage
-----------
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
The parties accordingly agree that the parties will be entitled to an injunction
or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of New York, Borough of Manhattan, or in New York state
court located in the Borough of Manhattan, this being in addition to any other
remedy to which they are entitled at law or in equity. In addition, each of the
parties hereto (i) consents to submit itself to the personal jurisdiction of any
Federal court located in the State of New York, Borough of Manhattan, or any New
York state court located in the Borough of Manhattan if any dispute arises out
of the Agreement or any of the transactions contemplated by this Agreement, (ii)
agrees that it will not attempt to deny or defeat such personal jurisdiction by
motion or other request for leave from any such court and (iii) agrees that it
will not bring any action relating to this Agreement in any court other than
such a Federal or state court sitting in the State of New York located in the
Borough of Manhattan.
<PAGE>
-83-
IN WITNESS WHEREOF, Shire, Acquisition Sub and Roberts have caused
this Agreement to be executed and delivered by their respective duly authorized
officers, all as of the date first above written.
SHIRE PHARMACEUTICALS GROUP PLC
By: \s\ Rolf Stahel
--------------------
Name: Rolf Stahel
Title: Chief Executive
RUBY ACQUISITION SUB INC.
By: \s\ Rolf Stahel
--------------------
Name: Rolf Stahel
Title: President
ROBERTS PHARMACEUTICAL CORPORATION
By: \s\ John T. Spitznagel
------------------------
Name: John T. Spitznagel
Title: President and Chief
Executive Officer
<PAGE>
EXHIBIT 4.1
OPTION AGREEMENT
----------------
OPTION AGREEMENT (this "Agreement"), dated as of July 26, 1999 by and
between Roberts Pharmaceutical Corporation, a New Jersey corporation
("Roberts"), and Shire Pharmaceuticals Group plc, a public limited company
organized under the laws of England and Wales ("Shire").
WHEREAS, concurrently herewith, Shire, Roberts and Ruby Acquisition
Sub, a New Jersey corporation ("Acquisition Sub"), are entering into an
Agreement and Plan of Merger of even date herewith (the "Merger Agreement"),
pursuant to which Acquisition Sub will merge with and into Roberts (the
"Merger"); and
WHEREAS, as a condition and inducement to Shire and Acquisition Sub to
enter into the Merger Agreement, Shire has required that Roberts agree, and
Roberts has agreed, to grant to Shire an option to purchase certain newly issued
shares of common stock, par value $.01 per share (the "Common Stock") of
Roberts, upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Option to Purchase.
------------------
1.1 Grant of Option. Roberts hereby grants to Shire an irrevocable
---------------
option (the "Option") to purchase up to 6,345,926 shares of Common Stock (the
"Shares") on the terms and subject to the conditions set forth herein. The
Option is exercisable upon the occurrence of any event causing the payment set
forth in Section 9.2(b) of the Merger Agreement to become due and payable.
1.2 Exercise of Option. Subject to Section 1.1, at any time prior to
------------------
the termination of this Agreement, Shire may exercise the Option, in whole or in
part, by sending a written notice of such exercise (the "Exercise Notice") to
Roberts specifying the number of Shares to be purchased and a date (not less
than two business days nor more than ten days from the later of (i) the date
such Exercise Notice is given and (ii)
<PAGE>
-2-
the expiration or termination of any waiting period, and any extensions thereof,
under the HSR Act (as hereinafter defined)) (the "Option Closing Date") for the
closing of such purchase (the "Closing"). The Option may only be exercised on
one occasion. The Closing shall take place at the offices of Cahill Gordon &
Reindel, 80 Pine Street, New York, New York, at 11:00 a.m., local time, on the
day specified in such notice or at such other place, and at such other time or
date, as the parties hereto may agree. At the Closing, Roberts shall deliver to
Shire certificates in definitive form representing the number of Shares
specified in the Exercise Notice registered in the name of Shire or its
designee, against payment therefor as specified in Section 1.3. All applicable
transfer and documentary taxes and other fees shall be paid by Roberts.
1.3 Purchase Price. The purchase and sale of the shares of Common
--------------
Stock pursuant to Section 1.1 of this Agreement shall be at a purchase price per
share equal to $30.00 in cash (the "Purchase Price"). At the Closing, Shire
shall pay to Roberts in immediately available funds by wire transfer payable to
the order of Roberts an amount equal to the product of the Purchase Price
multiplied by the number of Shares sold pursuant to this Section 1.
1.4 Adjustments. If at any time the outstanding shares of Common
-----------
Stock are changed into a different number of shares or a different class by
reason of any reclassification, recapitalization, split-up, combination,
exchange of shares or readjustment or if a stock dividend thereon is declared
with a record date prior to the termination of this Agreement, then the number
of shares of Common Stock subject to the Option and the applicable per share
consideration to be paid by Shire upon exercise of the Option (but not the total
purchase price) shall be appropriately and equitably adjusted so that Shire
shall receive upon exercise of the Option the number and class of shares or
other securities or property that Shire would have received in respect of the
Shares that Shire would have been entitled to purchase upon exercise of the
Option if the Option had been exercised immediately prior to such event. The
rights of Shire under this Section 1.4 shall be in addition to, and shall in no
way limit, its rights against Roberts for breach by Roberts of the Merger
Agreement.
1.5 Aggregate Limits. (a) Notwithstanding any other provision of
----------------
this Agreement or the Merger Agreement, in
<PAGE>
-3-
no event shall Shire's Total Profit (as hereinafter defined) exceed in the
aggregate $32.0 million and, if it otherwise would exceed such amount Shire, in
its sole discretion, shall either (i) reduce the number of shares of Common
Stock subject to the Option, (ii) pay cash to Roberts, (iii) reduce the fee set
forth in Section 9.2(b) of the Merger Agreement or (iv) any combination thereof,
so that Shire's actually realized Total Profit shall not exceed in the aggregate
$32.0 million after taking into account the foregoing actions.
(b) Notwithstanding any other provision of this Agreement, this
Option may not be exercised for a number of Shares as would, as of the date the
Exercise Notice is given, result in a Notional Total Profit (as defined below)
of more than $32.0 million and, if exercise of the Option otherwise would exceed
such amount, Shire, at its discretion, may increase the Purchase Price for that
number of Shares set forth in the Exercise Notice so that the Notional Total
Profit shall not exceed $32.0 million.
(c) As used herein, the term "Total Profit" shall mean the sum of
(i)(x) the amount (before taxes but net of reasonable and customary commissions
paid or payable in connection with such transaction) received by Shire pursuant
to the sale or other disposition of the Shares less (y) the exercise price for
such Shares, (ii) any amounts (before taxes but net of reasonable and customary
commissions paid or payable in connection with such transaction) received by
Shire on the transfer of the Option (or any portion thereof) to any unaffiliated
Person(s) (if permitted hereunder) or to Roberts and (iii) the amount received
by Shire pursuant to Section 9.2(b) of the Merger Agreement.
(d) As used herein, the term "Notional Total Profit" with respect to
any number of Shares as to which Shire may propose to exercise this Option shall
be the Total Profit determined as of the date the Exercise Notice is given
assuming that this Option were exercised on such date for such number of Shares
and assuming that such Shares, were sold for cash at the closing market price
for the Common Stock as of the close of business on the preceding trading day
(less customary brokerage commissions).
<PAGE>
-4-
2. Representations and Warranties of Roberts. Roberts represents and warrants
-----------------------------------------
to Shire as follows:
2.1 Shares of Common Stock. Roberts has taken all action necessary
----------------------
to authorize and reserve for issuance and to permit it to issue, upon exercise
of the Option, and at all times from the date hereof through the expiration of
the Option will have reserved, that number of unissued Shares that are subject
to the Option, all of which, upon their issuance and delivery in accordance with
the terms of this Agreement, will be validly issued, fully paid and
nonassessable. Upon delivery of the Shares to Shire upon the exercise of the
Option, Shire will acquire the Shares, free of all liens, encumbrances,
restrictions and claims of every kind other than restrictions on transfer under
applicable Federal and State securities laws.
2.2 Authority; Binding Agreement. Roberts has the full legal right,
----------------------------
power and authority to enter into and perform all of its obligations under this
Agreement. The execution and delivery of this Agreement by Roberts will not
violate its Certificate of Incorporation or By-laws. This Agreement has been
duly executed and delivered by Roberts and constitutes a legal, valid and
binding agreement of Roberts, enforceable in accordance with its terms, except
as the enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and similar laws, now or hereafter in effect
affecting creditors' rights and remedies generally or general principles of
equity. Neither the execution and delivery of this Agreement nor the
consummation by Roberts of the transactions contemplated hereby will (i)
violate, or require any consent, approval or notice under, any provision of any
judgment, order, decree, statute, law, rule or regulation applicable to Roberts
or the Shares, except for the filings required under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), or (ii)
constitute a violation of, conflict with or constitute a default under, any
material contract, commitment, agreement, understanding, arrangement or other
restriction of any kind to which Roberts and its subsidiaries are a party or by
which any of them are bound.
2.3 No Consent. The execution and delivery of this Agreement by
----------
Roberts does not, and the performance of this Agreement by Roberts will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any non-governmental entity or other third party.
<PAGE>
-5-
2.4 Reliance on Agreement. Roberts understands and acknowledges that
---------------------
Shire is entering into the Merger Agreement in reliance upon Roberts' execution
and delivery of this Agreement. Roberts acknowledges that the irrevocable stock
option set forth in Section 1 is granted in consideration for the execution and
delivery of the Merger Agreement by Shire.
3. Representations and Warranties of Shire. Shire represents and warrants to
---------------------------------------
Roberts as follows:
3.1 Authority; Binding Agreement. Shire has full legal right, power
----------------------------
and authority to enter into and perform all of its obligations under this
Agreement. This Agreement has been duly executed and delivered by Shire and
constitutes a legal, valid and binding agreement of Shire, enforceable in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws, now or
hereafter in effect, affecting creditors rights and remedies generally or
general principles of equity. Neither the execution and delivery of this
Agreement nor the consummation by Shire of the transactions contemplated hereby
will (i) violate, or require any consent, approval or notice under, any
provision of any judgment, order, decree, statute, law, rule or regulation
applicable to Shire or the Shares, except for the filings under the HSR Act or
(ii) constitute a violation of, conflict with or constitute a default under, any
contract, commitment, agreement, understanding, arrangement or other restriction
of any kind to which Shire is a party or by which it is bound.
3.2 Private Purchase. Shire is acquiring the Option and will acquire
----------------
the shares of Common Stock upon the exercise of the Option for its own account
and not with a view to the distribution or resale thereof in any manner not in
accordance with applicable law.
4. Certain Covenants of Roberts.
----------------------------
4.1 HSR Act. If prior notification to or approval of any regulatory
-------
or antitrust agency is required in connection with the acquisition of the Shares
by Shire hereunder, Roberts shall promptly make any required filing, and shall
expeditiously respond to any requests and make any subsequent filings necessary
to obtain clearance to consummate the purchase of the
<PAGE>
-6-
Shares by Shire. Notwithstanding Section 1, the time periods specified therein
shall run instead from the date on which any required notification periods have
expired or been terminated or such approvals have been obtained and any
requisite waiting period or periods shall have passed.
5. Certain Covenants of Shire.
--------------------------
5.1 Voting. Subject to payment by Roberts of all amounts due Shire
------
under Section 9.2(b) of the Merger Agreement (subject to the limitations
contained in Section 1.5 hereof), Shire will vote any Shares then held by it in
favor of the first Roberts Acquisition Transaction (as defined in the Merger
Agreement) recommended by Roberts' Board of Directors subsequent to Shire's
exercise of the Option, provided that such, recommendation has not been
withdrawn, amended or modified. Shire will be present in person or represented
by proxy at each shareholder meeting of which it receives notice, provided such
notice is given in compliance with Roberts' Certificate of Incorporation and By-
Laws and New Jersey law or Shire waives such notice.
5.2 Standstill.
----------
Shire agrees that for a period of two years from the date of the first
exercise of the Option, neither it nor any of its affiliates will, without the
prior written consent of Roberts or its Board of Directors:
(a) acquire, offer to acquire, or agree to acquire, by purchase or
otherwise, voting securities or direct or indirect rights to acquire
any voting securities of Roberts, or of any successor to or person in
control of Roberts representing in excess of 20% of the then
outstanding voting equity of such entity, or any material portion of
the assets of Roberts or any subsidiary or division thereof or of any
such successor or controlling person;
(b) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are used in the
rules of the Securities and Exchange Commission), or seek to advise or
influence any person with respect to the voting of
<PAGE>
-7-
any voting securities of the Roberts which Shire does not then own;
(c) make any public announcement with respect to, or submit a proposal
for, or offer of (with or without conditions) any Roberts Acquisition
Transaction; or
(d) form, join or in any way participate in a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or enter into discussions with any person other
than Roberts, in connection with any of the foregoing.
Notwithstanding the foregoing, paragraphs (a) through (d) above shall
not be binding on Shire if, without the appraisal of the Roberts board of
directors, (A) any person or group of person (other than any person specified in
Rule 13d-1(b)(1)(i) and (ii) under the Exchange Act or Shire and its affiliates)
acquires beneficial ownership of Common Stock, or any securities convertible
into or exchangeable for any Common Stock (or any combination of Common Stock
and such securities), representing 10% or more of the then total outstanding
shares of Common Stock; or (B) it has been publicly announced or otherwise
publicly disclosed that any person or group of persons, other than Shire or any
of its affiliates, proposes to effect or has effected (1) a merger,
consolidation or other business combination transaction with Roberts, (2) any
sale, lease, exchange, transfer or other disposition of all or substantially all
of the assets of Roberts and its subsidiaries, taken as a whole, (3) a tender
offer or exchange offer for more than 10% of the outstanding shares of Common
Stock, or (4) any solicitation of proxies with respect to shares of Common Stock
by any person or group of persons (other than Shire or any of its affiliates)
with respect to either the election of the directors or relating to any
transaction of the kind referred to in this paragraph.
5.3 Transfer Restrictions. For so long as Shire owns Shares
---------------------
representing at least 5% of the outstanding shares of Common Stock, Shire agrees
that it will not sell, transfer any beneficial interest in, pledge, hypothecate
or otherwise dispose of any Shares at any time except as follows:
(i) pursuant to a Roberts Acquisition Transaction approved by the
board of directors of Roberts; or
<PAGE>
-8-
(ii) in compliance with Rule 144 (or any successor provision) under
the Securities Act of 1933, as amended.
6. Termination. This Agreement, to the extent an Exercise Notice has not
-----------
previously been given after the occurrence of the event described in Section 1.1
hereof, shall terminate on the earlier of (i) the Effective Time (as defined in
the Merger Agreement) or (ii) the termination of the Merger Agreement in
accordance with its terms unless a fee is payable or could be payable under
Section 9.2(b) of the Merger Agreement (in which case this Agreement shall
terminate one business day after any amount due under such Section 9.2(b) has
been received by Shire or a fee could no longer be payable under the terms of
such Section 9.2(b)).
7. Restrictive Legends. Each certificate representing Shares issued to Shire
-------------------
hereunder shall, to the extent applicable, include a legend in substantially the
following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY BE
REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE. THESE SECURITIES ARE SUBJECT TO CERTAIN
RESTRICTIONS CONTAINED IN AN OPTION AGREEMENT DATED AS OF JULY 23, 1999.
8. Conditions to Closing. The obligations of the parties to close hereunder
---------------------
shall be subject to the conditions that (i) there shall be no preliminary or
permanent injunction or other order issued by any court of competent
jurisdiction in effect which prohibits the issuance of the Shares and (ii) all
applicable waiting periods, and any extensions thereof, under the HSR Act shall
have expired or been terminated. Roberts agrees not to seek any such injunction
or order and agrees that it will oppose and will seek the immediate lifting of
any such injunction or order.
<PAGE>
-9-
9. Miscellaneous.
-------------
9.1 Survival of Representations and Warranties. All representations,
------------------------------------------
warranties, covenants and agreements made by Roberts and Shire in this Agreement
shall survive any Closing hereunder and any investigation at any time made by or
on behalf of any party.
9.2 Notices. All notices, requests, claims, demands and other
-------
communications under this Agreement shall be in writing and shall be delivered
personally or by next-day courier or telecopied with confirmation of receipt, to
the parties at the addresses specified below (or at such other address for a
party as shall be specified by like notice; provided that notices of a change of
--------
address shall be effective only upon receipt thereof). Any such notice shall be
effective upon receipt, if personally delivered or telecopied or one day after
delivery to a courier for next-day delivery.
If to Shire:
Shire Pharmaceuticals Group plc
East Anton
Andover, Hants SP 10 5RG
United Kingdom
Telecopy: 011 44 1 264 334 658
Attention: Rolf Stahel, Chief Executive Officer
with copies to:
John P. Mitchell, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Telephone: (212) 701-3000
Telecopy: (212) 269-5420
If to Roberts:
Roberts Pharmaceutical Corporation
Four Industrial Way West
Eatontown, New Jersey 07724-2274
<PAGE>
-10-
with a copy to:
Lawrence Lederman, Esq.
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, NY 10005
Telephone: (212) 530-5000
Telecopy: (212) 530-5219
9.3 Entire Agreement. This Agreement, together with the documents
----------------
expressly referred to herein, constitute the entire agreement and supersede all
other prior agreements and understandings, both written and oral, between the
parties, with respect to the subject matter contained herein.
9.4 Amendments. This Agreement may not be modified, amended, altered
----------
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
9.5 Assignment. This Agreement shall be binding upon and inure to
----------
the benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other party.
9.6 Expenses. Each party hereto will pay all of its expenses in
--------
connection with the transactions contemplated by this Agreement, including,
without limitation, the fees and expenses of its counsel and other advisers.
9.7 Governing Law. This Agreement, and all matters relating hereto,
-------------
shall be governed by, and construed in accordance with the laws of the State of
New York without giving effect to the principles of conflicts of laws thereof.
9.8 Injunctive Relief; Jurisdiction. Roberts agrees that irreparable
-------------------------------
damage would occur and that Shire would not have any adequate remedy at law in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that Shire shall be entitled to an injunction or injunctions
to prevent breaches by Roberts of this Agreement and to enforce specifically the
terms and provisions of this Agreement in any court of the United States located
in the State of New York, Borough of Manhattan, or in New York
<PAGE>
-11-
state court located in the Borough of Manhattan, this being in addition to any
other remedy to which they are entitled at law or in equity. In addition, each
of the parties hereto (i) consents to submit such party to the personal
jurisdiction of any Federal court located in the State of New York, Borough of
Manhattan or in New York State Court located in the Borough of Manhattan in the
event any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (ii) agrees that such party will not attempt to deny or
defeat such party to the personal jurisdiction by motion or other request for
leave from any such court and (iii) agrees that such party will not bring any
action relating to this Agreement or any of the transactions contemplated hereby
in any court other than a Federal or state court sitting in the State of New
York, located in the Borough of Manhattan.
9.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
9.10 Descriptive Headings. The descriptive headings used herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
9.11 Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
9.12 Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
9.13 Third-Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable
<PAGE>
-12-
right, remedy or claim under or by reason of this Agreement or any provision
contained herein.
<PAGE>
-13-
IN WITNESS WHEREOF, Shire and Roberts have caused this Agreement to be
executed by their duly authorized officers, as of the date and year first above
written.
SHIRE PHARMACEUTICALS GROUP PLC
By: /s/ Rolf Stahel
--------------------
Name: Rolf Stahel
Title: Chief Executive
ROBERTS PHARMACEUTICAL CORPORATION
By: /s/ John T. Spitznagel
------------------------
Name: John T. Spitznagel
Title: President and Chief
Executive Officer
<PAGE>
EXHIBIT 4.2
AMENDMENT TO RIGHTS AGREEMENT
This Amendment to Rights Agreement dated as of July 26, 1999 (the
"Amendment"), is by and between Roberts Pharmaceutical Corporation, a New Jersey
- ----------
corporation (the "Company"), and Continental Stock Transfer & Trust Company, a
-------
New Jersey corporation, as Rights Agent (the "Rights Agent").
------------
WHEREAS, the Company and the Rights Agent are parties to a Rights
Agreement dated as of December 16, 1996 (the "Rights Agreement"); and
----------------
WHEREAS, pursuant to Section 27 of the Rights Agreement, the Company
and the Rights Agent desire to amend the Rights Agreement as set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Amendments to Section 1.
-----------------------
(a) The definition of "Acquiring Person" in Section 1(a) of the Rights
Agreement is hereby amended by replacing each of (i) the first reference to
"15%" in the first sentence thereof and (ii) the reference to "15%" in the
second sentence thereof with "10%".
(b) The definitions of "Beneficial Owner" and "beneficially own" in Section
1(d) of the Rights Agreement are hereby amended by adding the following at
the end thereof:
"Notwithstanding anything contained in this Agreement to the contrary,
neither Parent, Sub, nor any of their Affiliates or Associates shall be
deemed to be the Beneficial Owner of, nor to beneficially own, any shares
of Common Stock (i) solely by virtue of the approval, execution or delivery
of the Merger Agreement, the Option Agreement or the Parent Shareholder
Agreements or the consummation of the transactions contemplated thereby or
(ii) solely as a result of the granting of or the exercise of voting rights
under the Parent Shareholder Agreements; provided that Parent shall be
--------
deemed to be the Beneficial Owner of, and to beneficially own, shares of
Common Stock purchased under the Option Agreement if the total number of
shares of Common Stock beneficially owned by Parent, Sub and their
Affiliates and Associates at any time (including such shares) exceeds 20%
of the shares of Common Stock outstanding.".
(c) The definition of "15% Shareholder" in Section 1(n) of the Rights Agreement
is hereby deleted in its entirety and Section 1(n) shall read in its
entirety as follows:
"(n) [Reserved]".
<PAGE>
2
(d) The following definitions are hereby added to the end of Section
1 of the Rights Agreement to read as follows:
"(mm) '10% Shareholder' shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 10% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or established
by the Company for or pursuant to the terms of any such plan or (ii) any
Acquiring Person.
(nn) 'Merger' shall mean the merger of Sub with and into the Company
in accordance with the New Jersey Business Corporation Act upon the terms
and subject to the conditions set forth in the Merger Agreement.
(oo) 'Merger Agreement' shall mean the Agreement and Plan of Merger,
dated as of July 26, 1999, by and among Parent, Sub and the Company, as
the same shall be amended from time to time in accordance with the Merger
Agreement.
(pp) 'Option Agreement' shall mean the Option Agreement, dated as of
July 26, 1999, by and between the Company and Parent, as the same shall be
amended from time to time in accordance with the Option Agreement.
(qq) 'Parent' shall mean Shire Pharmaceuticals Group plc, a public
limited company organized under the laws of England and Wales.
(rr) 'Parent Shareholder Agreements' shall mean the Shareholder
Agreements, dated as of July 26, 1999, by and between Parent and each of
Robert A. Vukovich and Yamanouchi Group Holdings Inc., as the same shall
be amended from time to time in accordance with the Parent Shareholder
Agreements.
(ss) 'Sub' shall mean Ruby Acquisition Sub Inc., a New Jersey
corporation.".
Section 2. References to "15% Shareholder".
-------------------------------
Except for Section 1(n) of the Rights Agreement (which shall be
amended in accordance with Section 1(c) of this Amendment), each reference to
"15% Shareholder" in the Rights Agreement is hereby amended to read "10%
Shareholder".
Section 3. Expiration Date.
---------------
Section 7(a) of the Rights Agreement is hereby amended by:
(a) removing the word "or" immediately after "(i) the close of business
on the Final Expiration Date,";
<PAGE>
3
(b) inserting immediately after "as provided in Section 23 hereof" the
following: "and (iii) immediately prior to the Effective Time (as defined
in the Merger Agreement)"; and
(c) replacing the word "and" immediately preceding the symbol "(ii)"
contained in the last parenthetical therein with "," and inserting "and
(iii)" immediately after the symbol "(ii)" in the same parenthetical.
Section 4. Amendment to Section 11(a)(ii).
------------------------------
Section 11(a)(ii) of the Rights Agreement is hereby amended by adding
to the end thereof the following:
"Notwithstanding anything contained in this Section 11(a)(ii) to the
contrary, the approval, execution and delivery of the Merger Agreement, the
Option Agreement and the Parent Shareholder Agreements and the consummation
of the transactions contemplated thereby shall be excluded and exempt from
the operation of and will not trigger the provisions of this Section
11(a)(ii).".
Section 5. Amendment to Section 13.
-----------------------
Section 13 of the Rights Agreement is hereby amended by adding to the
end thereof the following:
"Notwithstanding anything contained in this Section 13 to the contrary, the
approval, execution, and delivery of the Merger Agreement, the Option
Agreement and the Parent Shareholder Agreements and the consummation of the
transactions contemplated thereby shall be excluded and exempt from the
operation of and will not trigger the provisions of this Section 13.".
Section 6. Amendment to Section 27.
-----------------------
The reference to "15% thresholds" in the second sentence of Section 27 of the
Rights Agreement is hereby amended to read "10% thresholds".
Section 7. New Section 35.
--------------
The following is added as a new Section 35 to the Rights Agreement:
"Section 35. The Merger, etc.
---------------
Notwithstanding anything contained in this Agreement to the contrary,
neither (a) the approval, execution and delivery of the Merger Agreement,
the Option Agreement and the Parent Shareholder Agreements and the
consummation of the transactions contemplated thereby, (b) the giving of an
Exercise Notice (as defined in the Option
<PAGE>
4
Agreement) nor (c) the exercise of voting rights granted under the Parent
Shareholder Agreements shall cause (i) Parent or Sub or any of their
Affiliates or Associates to be an Acquiring Person, (ii) a Stock
Acquisition Date to occur or (iii) a Distribution Date to occur.".
Section 8. Severability. If any term, provision, covenant or
------------
restriction of this Amendment is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Amendment shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 9. Governing Law. This Amendment shall be deemed to be a
-------------
contract made under the laws of the State of New Jersey and for all purposes
shall be governed by and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within such State.
Section 10. Counterparts. This Amendment may be executed in any
------------
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 11. Effect of Amendment. Except as expressly modified
-------------------
herein, the Rights Agreement shall remain in full force and effect.
<PAGE>
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed all as of the day and year first above written.
ROBERTS PHARMACEUTICAL CORPORATION
By: \s\ John T. Spitznagel
------------------------
Name: John T. Spitznagel
Title: President and Chief
Executive Officer
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY
By: \s\ Steven Nelson
----------------------------
Name: Steven Nelson
Title: Chief Executive Officer
<PAGE>
EXHIBIT 10.1
SHAREHOLDER AGREEMENT
---------------------
SHAREHOLDER AGREEMENT (this "Agreement"), dated as of July 26, 1999 by
and between Robert A. Vukovich ("Shareholder"), and Shire Pharmaceuticals Group
plc, a public limited company organized under the laws of England and Wales
("Shire").
WHEREAS, concurrently herewith, Ruby Acquisition Sub Inc., Shire and
Roberts Pharmaceutical Corporation, a New Jersey corporation ("Roberts"), are
entering into an Agreement and Plan of Merger of even date herewith (such
Agreement in the form attached hereto as Exhibit A as it may be subsequently
amended or modified (other than a reduction in the Merger Consideration (as
defined therein)) being the "Merger Agreement"), pursuant to which a newly
formed, wholly owned subsidiary of Shire will merge with and into Roberts (the
"Merger"); and
WHEREAS, Shareholder owns, as of the date hereof, 1,733,671 shares of
common stock, $.01 par value per share (the "Common Stock") of Roberts (the
"Existing Shares", together with any shares of Common Stock acquired after the
date hereof and prior to the termination hereof, hereinafter collectively
referred to as the "Shares"); and
WHEREAS, Shire has entered into the Merger Agreement in reliance on
Shareholder's representations, warranties, covenants and agreements set forth
herein and Shareholder has entered into the Agreement in reliance on Shire's
representations, warranties, covenants and agreements set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Voting Agreement. Shareholder agrees to vote and otherwise act (including
----------------
pursuant to written consent) with respect to all of the Shares, for the approval
and the adoption of the Merger Agreement, all agreements related to the Merger
and any actions required to be approved by shareholders related thereto, and
against any proposal or transaction which could prevent or delay the
consummation of the transactions contemplated by the Merger Agreement, at any
meeting or meetings of
<PAGE>
-2-
the shareholders of Roberts, and at any adjournment, postponement or
continuation thereof, at which the Merger Agreement and other related agreements
(or any amended version or versions thereof), or such other actions are
submitted for the consideration and vote of the shareholders of Roberts. The
foregoing shall remain in effect with respect to the Shares, until the
termination of this Section as set forth in Section 7. Shareholder agrees to
attend or cause a duly authorized representative of Shareholder to attend any
meeting or meetings of the shareholders to which this Section 1 applies, either
in person or by proxy, and to vote the Shares in accordance with the terms
hereof.
2. Representations and Warranties of Shareholder. Shareholder represents and
---------------------------------------------
warrants to Shire as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares are
-------------------
all of the Shares currently beneficially owned by Shareholder. On the Closing
Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Shareholder. Shareholder has no rights to acquire any
additional shares of Common Stock other than pursuant to currently outstanding
stock options.
2.2 Authority; Binding Agreement. Shareholder has the full legal
----------------------------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by
Shareholder will not violate any other agreement to which Shareholder is a party
including, without limitation, any voting agreement, shareholders agreement or
voting trust. This Agreement has been duly executed and delivered by
Shareholder and constitutes a legal, valid and binding agreement of Shareholder,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws, now or hereafter in effect affecting creditors' rights and remedies
generally or general principles of equity. Neither the execution and delivery
of this Agreement nor the consummation by Shareholder of the transactions
contemplated hereby will (i) violate, or require any consent, approval or notice
under, any provision of any judgment, order, decree, statute, law, rule or
regulation applicable to Shareholder or the Shares, (ii) constitute a violation
of, conflict with or constitute a default under, any material contract,
commitment, agreement, understanding, arrangement or other
<PAGE>
-3-
restriction of any kind to which Shareholder is a party or by which Shareholder
is bound.
2.3 Reliance on Agreement. Shareholder understands and acknowledges
---------------------
that Shire is entering into the Merger Agreement in reliance upon Shareholder's
execution and delivery of this Agreement.
3. Certain Covenants of Shareholder. Except in accordance with the provisions
--------------------------------
of this Agreement, Shareholder agrees with, and covenants to, Shire as follows:
3.1 Actions Inconsistent with this Agreement. For so long as
----------------------------------------
Shareholder is obligated to vote in favor of the Merger set forth in Section 1,
Shareholder shall not (i) transfer (which term shall include, without
limitation, for the purposes of this Agreement, any sale, gift, pledge (other
than a pledge or collateral assignment effected in connection with any contract
or other agreement relating to the Shares, including, without limitation,
contracts commonly known as "cashless collar agreements" or "liquidity
contracts" or other derivative arrangements so long as the parties thereto other
than the Shareholder cannot exercise any voting rights with respect to such
Shares until May 15, 2000), assignment, encumbrance or other disposition), or
consent to any transfer of, any or all of the Shares or any interest therein,
except pursuant to the Merger or (ii) enter into any contract, option or other
agreement or understanding with respect to any transfer of any or all such
Shares or any interest therein unless, in either case, (x) the transferee of
such Shares is an affiliate of such Shareholder, including without limitation,
any trust or similar arrangement pursuant to which the Shareholder retains the
power to vote the Shares as trustee or otherwise, or is otherwise reasonably
acceptable to Shire and such transferee agrees, in a writing reasonably
acceptable to Shire, to vote such Shares in accordance with the terms of Section
1 as if such transferee were the Shareholder and (y) such transaction does not
occur within 30 days as of the Effective Time. In addition, until Section 1 has
terminated in accordance with paragraph 7, Shareholder shall not grant any
proxy, power-of-attorney or other authorizations in or with respect to such
Shares or deposit such Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Shares in any way inconsistent with
the terms of this Agreement.
<PAGE>
-4-
3.2 Solicitation. Until consummation of the Merger, Shareholder
------------
shall not, and shall direct their investment bankers, attorneys or other
advisers or representatives not to, directly or indirectly, (i) solicit or
initiate (including by way of furnishing or disclosing non-public information)
any inquiries or the making of any proposal with respect to a Roberts
Acquisition Transaction (as defined in the Merger Agreement) or (ii) negotiate,
explore or otherwise engage in discussions with any person (other than Shire and
its representatives) with respect to any Roberts Acquisition Transaction, or
which may reasonably be expected to lead to a proposal for a Roberts Acquisition
Transaction or enter into any agreement, arrangement or understanding with
respect to any such Roberts Acquisition Transaction or which would require it to
abandon, terminate or fail to consummate the Merger or any other transaction
contemplated by this Agreement; provided, however, that Shareholder may, in
-------- -------
response to an unsolicited written proposal from a third party regarding a
Roberts Superior Proposal (as defined in the Merger Agreement), furnish
information to, negotiate or otherwise engage in discussions with such third
party, if the Board of Directors of Roberts determines in good faith, after
consultation with its financial advisors and based upon advice of outside
counsel that such action is required for the Board of Directors to comply with
its fiduciary duties under applicable law.
3.3 Holdback Agreement. Unless the managing underwriter otherwise
------------------
agrees, Shareholder agrees to use his reasonable best efforts to cause his
affiliates to agree, in connection with any underwritten registration of Shire
ordinary shares, nominal value five pence (the "Ordinary Shares"), not to effect
any public sale or private offer or distribution of any Ordinary Shares, or
American Depositary Shares representing three Ordinary Shares (the "Shire ADSs")
during the ten business days prior to the effectiveness under the Securities Act
of any underwritten registration and during the 90 days following the
effectiveness under the Securities Act of 1933, as amended (the "Securities
Act") of any underwritten registration (except, if applicable, as part of such
underwritten registration).
3.4 Shareholder shall not reduce its risk relative to any Ordinary
Shares or Shire ADSs (each as defined in the Merger Agreement) received in the
Merger as a result of its ownership of the Shares prior to the publication of
not less
<PAGE>
-5-
than 30 days of financial results covering the post-Merger combined operations
of Shire and Roberts. Shire will cause such results to be published as soon as
reasonably practicable after the Effective Time under the Merger Agreement.
4. Representations and Warranties of Shire. Shire represents and warrants to
---------------------------------------
Shareholder as follows:
Shire has full legal right, power and authority to enter into and
perform all of its obligations under this Agreement. The execution and delivery
of this Agreement by Shire will not violate any other agreement to which Shire
is a party. This Agreement has been duly executed and delivered by Shire and
constitutes a legal, valid and binding agreement of Shire, enforceable in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws, now or
hereafter in effect, affecting creditors rights and remedies generally or
general principles of equity. Neither the execution and delivery of this
Agreement nor the consummation by Shire of the transactions contemplated hereby
will (i) violate, or require any consent, approval or notice under, any
provision of any judgment, order, decree, statute, law, rule or regulation
applicable to Shire or the Shares, except for the action contemplated by Section
5.2, or (ii) constitute a violation of, conflict with or constitute a default
under, any contract, commitment, agreement, understanding, arrangement or other
restriction of any kind to which Shire is a party or by which it is bound.
5. Certain Covenants of Shire. Shire represents and warrants to Shareholder as
--------------------------
follows:
5.1 [Intentionally omitted.]
5.2 Registration Rights of Shareholder.
(a) Shelf Registration. Promptly following the Effective Time (as
------------------
defined in the Merger Agreement), Shire shall commence the registration of
Shareholder's Shire ADSs received in the Merger (collectively the "Registrable
Securities") on Form S-3 for an offering pursuant to Rule 415 promulgated by the
Securities and Exchange Commission (the "SEC"). Such registration statement may
include Shire ADSs received by other
<PAGE>
-6-
Roberts shareholders in the Merger. Any such shelf registration shall cover the
disposition of all Registrable Securities and such other Shire ADSs in one or
more underwritten offerings, block transactions, broker transactions, at-market
transactions and in such other manner or manners as may be specified by the
Shareholder. Shire shall use its reasonable best efforts to cause such
registration statement to become effective within 180 days of the Effective Time
and keep such registration continuously effective until the second anniversary
of the Closing Date. In furtherance of such obligation, Shire shall supplement
or amend such registration statement if, as and when required by the rules,
regulations and instructions applicable to the form used by Shire for such
registration or by the Securities Act or by any other rules and regulations
thereunder applicable to shelf registrations. Notwithstanding the foregoing, it
shall not be deemed a violation of this paragraph if pending a material
corporate transaction, Shire issues a notice that the registration statement, or
the prospectus contained therein, is unusable (as not being current as to
disclosure), or such notice is required under applicable securities laws to be
issued by Shire, and the aggregate number of days in any consecutive twelve
month period for which the registration statement, or the prospectus contained
therein, is unusable pursuant to all such notices has not exceeded 90 days in
the aggregate.
(b) Issuer Registration. If Shire shall determine to register any
-------------------
Shire ADSs either for its own account or the account of a security holder or
holders other than a registration relating solely with respect to employee
benefit plans, or a registration relating to paragraph (a) above, a registration
on any registration form which does not permit secondary sales, Shire will:
(i) promptly give to the Shareholder written notice thereof; and
(ii) include in such registration statement all Registrable
Securities specified in a written request made by the Shareholder within
ten (10) days after receipt of the written notice from Shire described in
clause (i) above, except as set forth in paragraph (c) below. Such written
request may specify all or part of the Shareholder's Registrable
Securities.
<PAGE>
-7-
The right of the Shareholder to registration pursuant to this
paragraph (b) shall be conditioned upon the Shareholder's providing all
information required of a selling shareholder under the Securities Act. The
Shareholder shall, if he proposes to distribute its Registrable Securities
through such underwriting, enter into an underwritten offering in customary form
with the representative of the underwriter or underwriters selected by Shire.
(c) Priority. Notwithstanding the provisions of Section 5.2(b), if
--------
the representative of the underwriters advises Shire in writing that marketing
factors require a limitation or elimination on the number of shares to be
included in the offering covered by Section 5.2(b), the representative may
(subject to the allocation priority set forth below) limit the number of
Registrable Securities to be included in the registration statement. Shire
shall so advise all holders of securities requesting registration, and the
number of Shire ADSs that are entitled to be included in the registration
statement shall be allocated first to Shire for securities being sold for its
own account, and thereafter the number of Shire ADSs that may be included in the
registration statement shall be allocated among the Shareholder and other
shareholders of Shire in proportion, as nearly as practicable, to the respective
amounts of Shire ADSs which they had requested to be included in such
registration at the time of filing the registration statement. If the
Shareholder or any other shareholder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to Shire and
the underwriter.
(d) Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with any registration pursuant to this Section 5.2 shall be borne by
Shire and all Selling Expenses shall be borne by the holders of the securities
so registered pro rata on the basis of the number of their shares sold.
"Registration Expenses" shall mean all expenses incurred by Shire in connection
- ----------------------
with the registration rights granted hereunder, including, without limitation,
all registration and filing fees, printing expenses, fees and disbursements of
counsel and the expenses of any special audits incident to or required by any
such registration. "Selling Expenses" shall mean all underwriting discounts and
----------------
commissions together with all expenses of the shareholder(s).
<PAGE>
-8-
(e) Registration Procedures. In the case of each registration
-----------------------
effected by Shire pursuant to this Section 5.2, Shire will keep the Shareholder
advised in writing as to the initiation of each registration and as to the
completion thereof. At its expense, Shire will:
(i) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(ii) Furnish such number of prospectuses and other documents
incident thereto, including any amendment of or supplement to the
prospectus, as the Shareholder from time to time may reasonably request;
and
(iii) Notify the Shareholder at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of
the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading or incomplete in the light of the circumstances then existing,
and at the request of any such seller, prepare and furnish to the
Shareholder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or incomplete in the light of the circumstances then
existing.
(f) Cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by Shire are then listed.
6. Indemnification.
---------------
<PAGE>
-9-
6.1 Shire will indemnify Shareholder and each Person who controls
Shareholder within the meaning of the Securities Act and the rules and
regulations thereunder with respect to which registration has been effected
pursuant to Section 5.2, against all claims, losses, damages and liabilities (or
actions, proceedings or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any prospectus (including any related registration statement)
incident to any such registration, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by
Shire of the Securities Act or the Exchange Act or any rule or regulation
thereunder applicable to Shire and relating to action or inaction required of
Shire in connection with any such registration, and will reimburse Shareholder
and each Person controlling Shareholder for any legal and any other expenses
reasonably incurred in connection with investigating and defending or settling
any such claim, loss, damage, liability or action, provided that Shire will not
be liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission based upon written information furnished to Shire by Shareholder and
stated to be specifically for use therein, or in the case of a non-underwritten
public offering, the failure of Shareholder to deliver prospectuses as required
by the Securities Act.
6.2 Shareholder will, if Registrable Securities held by it are
included in the securities as to which such registration is being effected,
indemnify Shire, each of its officers, directors and employees, and each Person
who controls Shire within the meaning of the Securities Act and the rules and
regulations thereunder, against all claims, losses, damages and liabilities (or
actions, proceedings or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement or prospectus, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by Shareholder of the Securities Act or the Exchange Act or any
rule or regulation thereunder applicable to Shareholder and relating to action
or inaction required of Shareholder in connection with any such registration,
and will reimburse Shire, each of its
<PAGE>
-10-
officers, directors and employees, and each Person who controls Shire, for any
legal or any other expenses reasonably incurred in connection with investigating
and defending or settling any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
registration statement or prospectus in reliance upon and in conformity with
written information furnished to Shire by Shareholder and stated to be
specifically for use therein; provided, however, that the obligations of
Shareholder hereunder shall be limited to an amount equal to the proceeds to
Shareholder of securities sold as contemplated herein.
6.3 Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
-----------------
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
------------------
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 6. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. Each Indemnified Party
shall furnish such information regarding itself or the claim in question as an
Indemnifying Party may require in connection with defense of such claim and
litigation resulting therefrom.
7. Termination. Subject to the rights of the parties to pursue any claims
-----------
arising out of breaches of representations, warranties, covenants and agreements
that occur prior to such termination, this Agreement shall terminate on the
earlier of (i) the termination of the Merger Agreement in accordance with its
<PAGE>
-11-
terms, (ii) the second anniversary of the Closing Date (as defined in the Merger
Agreement), (iii) if the Merger Agreement is amended to decrease the Merger
Consideration (as defined in the Merger Agreement) per share and (iv) December
31, 1999 if the Effective Time has not occurred by such date. Section 1 hereof
will terminate upon the earlier of the termination of this Agreement in
accordance with the previous sentence or the Effective Time.
8. Miscellaneous.
-------------
8.1 Survival of Representations and Warranties. All representations,
------------------------------------------
warranties, covenants and agreements made in this Agreement shall survive the
date hereof and any investigation at any time made by or on behalf of any party.
8.2 Notices. All notices, requests, claims, demands and other
-------
communications under this Agreement shall be in writing and shall be delivered
personally or by next-day courier or telecopied with confirmation of receipt, to
the parties at the addresses specified below (or at such other address for a
party as shall be specified by like notice; provided that notices of a change of
--------
address shall be effective only upon receipt thereof). Any such notice shall be
effective upon receipt, if personally delivered or telecopied or one day after
delivery to a courier for next-day delivery.
If to Shire:
Shire Pharmaceuticals Group plc
East Anton
Andover, Hants SP 10 5RG
United Kingdom
Telecopy: 011 44 1 264 334 658
Attention: Rolf Stahel, Chief Executive
with copies to:
John P. Mitchell, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Telephone: (212) 701-3000
Telecopy: (212) 269-5420
<PAGE>
-12-
If to Shareholder:
Dr. Robert A. Vukovich
7 Taylor Run
Holmdel, N.J. 07733
with a copy to:
John A. Aiello, Esq.
Giordano, Halleran & Ciesla P.C.
125 Half Mile Road
Middleton, N.J. 07748
Fax: 732-224-6599
8.3 Entire Agreement. This Agreement, together with the documents
----------------
expressly referred to herein, constitute the entire agreement and supersede all
other prior agreements and understandings, both written and oral, between the
parties, with respect to the subject matter contained herein.
8.4 Amendments. This Agreement may not be modified, amended, altered
----------
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
8.5 Assignment. This Agreement shall be binding upon and inure to
----------
the benefit of the parties hereto and their respective successors, assigns and
personal representatives, but, other than as contemplated by Section 3.1,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto without the prior written consent
of the other parties.
8.6 Public Announcements. Each of Shire and Shareholder agrees that
--------------------
it will not issue any press release or otherwise make any public statement with
respect to this Agreement, the Merger Agreement or the transactions contemplated
hereby or thereby without the prior consent of the other party, which consent
shall not be unreasonably withheld or delayed.
8.7 Governing Law. This Agreement, and all matters relating hereto,
-------------
shall be governed by, and construed in accordance with the laws of the State of
New York without giving effect to the principles of conflicts of laws thereof.
8.8 Injunctive Relief; Jurisdiction. Shareholder agrees that
-------------------------------
irreparable damage would occur and that Shire would
<PAGE>
-13-
not have any adequate remedy at law in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that Shire shall be entitled
to an injunction or injunctions to prevent breaches by Shareholder of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in any court of the United States located in the State of New York, Borough of
Manhattan, or in New York state court located in the Borough of Manhattan, this
being in addition to any other remedy to which they are entitled at law or in
equity. In addition, each of the parties hereto (i) consents to submit such
party to the personal jurisdiction of any Federal court located in the State of
New York, Borough of Manhattan or in New York State Court located in the Borough
of Manhattan in the event any dispute arises out of this Agreement or any of the
transactions contemplated hereby, (ii) agrees that such party will not attempt
to deny or defeat such party to the personal jurisdiction by motion or other
request for leave from any such court and (iii) agrees that such party will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a Federal or state court sitting in
the State of New York, located in the Borough of Manhattan.
8.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
8.10 Descriptive Headings. The descriptive headings used herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
8.11 Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
<PAGE>
-14-
8.12 Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
8.13 Third-Party Beneficiaries. Otherwise than as contemplated by
-------------------------
Section 3.1, nothing in this Agreement, expressed or implied, shall be construed
to give any person other than the parties hereto any legal or equitable right,
remedy or claim under or by reason of this Agreement or any provision contained
herein.
<PAGE>
-15-
IN WITNESS WHEREOF, Shire and Shareholder have caused this Agreement
to be executed by their duly authorized officers, as of the date and year first
above written.
SHIRE PHARMACEUTICALS GROUP PLC
By: /s/ Rolf Stahel
--------------------
Name: Rolf Stahel
Title: Chief Executive
ROBERT A. VUKOVICH
/s/ Robert A. Vukovich
--------------------------
Robert A. Vukovich
<PAGE>
Exhibit 10.2
SHAREHOLDER AGREEMENT
---------------------
SHAREHOLDER AGREEMENT (this "Agreement"), dated as of July 26, 1999 by
and between Yamanouchi Group Holdings Inc. ("Shareholder"), and Shire
Pharmaceuticals Group plc, a public limited company organized under the laws of
England and Wales ("Shire").
WHEREAS, concurrently herewith, Ruby Acquisition Sub Inc., Shire and
Roberts Pharmaceutical Corporation, a New Jersey corporation ("Roberts"), are
entering into an Agreement and Plan of Merger of even date herewith (such
Agreement in the form attached hereto as Exhibit A as it may be subsequently
amended or modified (other than a reduction in the Merger Consideration (as
defined therein)) being the "Merger Agreement"), pursuant to which a newly
formed, wholly owned subsidiary of Shire will merge with and into Roberts (the
"Merger"); and
WHEREAS, Shareholder owns, as of the date hereof, 5,048,500 shares of
common stock, $.01 par value per share (the "Common Stock") of Roberts (the
"Existing Shares", together with any shares of Common Stock acquired after the
date hereof and prior to the termination hereof, hereinafter collectively
referred to as the "Shares"); and
WHEREAS, Shire has entered into the Merger Agreement in reliance on
Shareholder's representations, warranties, covenants and agreements set forth
herein and Shareholder has entered into the Agreement in reliance on Shire's
representations, warranties, covenants and agreements set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Voting Agreement. Shareholder agrees to vote and otherwise act (including
----------------
pursuant to written consent) with respect to all of the Shares, for the approval
and the adoption of the Merger Agreement, all agreements related to the Merger
and any actions required to be approved by shareholders related thereto, and
against any proposal or transaction which could prevent or delay the
consummation of the transactions contemplated by the Merger Agreement, at any
meeting or meetings of
<PAGE>
-2-
the shareholders of Roberts, and at any adjournment, postponement or
continuation thereof, at which the Merger Agreement and other related agreements
(or any amended version or versions thereof), or such other actions are
submitted for the consideration and vote of the shareholders of Roberts. The
foregoing shall remain in effect with respect to the Shares, until the
termination of this Section as set forth in Section 7. Shareholder agrees to
cause a duly authorized representative of Shareholder to attend any meeting or
meetings of the shareholders to which this Section 1 applies, either in person
or by proxy, and to vote the Shares in accordance with the terms hereof.
2. Representations and Warranties of Shareholder. Shareholder represents and
---------------------------------------------
warrants to Shire as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares are
-------------------
all of the Shares currently beneficially owned by Shareholder. On the Closing
Date, the Shares will constitute all of the shares of Common Stock owned
beneficially by Shareholder. Shareholder has no rights to acquire any
additional shares of Common Stock other than under the terms of the Stock
Purchase Agreement between the Shareholder and Roberts, dated as of January 22,
1992 and other than for the Shareholder's right of first refusal granted under
its agreement with Robert Vukovich.
2.2 Authority; Binding Agreement. Shareholder has the full legal
----------------------------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by
Shareholder will not violate any other agreement to which Shareholder is a party
including, without limitation, any voting agreement, shareholders agreement or
voting trust. This Agreement has been duly executed and delivered by
Shareholder and constitutes a legal, valid and binding agreement of Shareholder,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws, now or hereafter in effect affecting creditors' rights and remedies
generally or general principles of equity. Neither the execution and delivery
of this Agreement nor the consummation by Shareholder of the transactions
contemplated hereby will (i) violate, or require any consent, approval or notice
under, any provision of any judgment, order, decree, statute, law, rule or
regulation applicable to Shareholder
<PAGE>
-3-
or the Shares, (ii) constitute a violation of, conflict with or constitute a
default under, any material contract, commitment, agreement, understanding,
arrangement or other restriction of any kind to which Shareholder is a party or
by which Shareholder is bound.
2.3 Reliance on Agreement. Shareholder understands and acknowledges
---------------------
that Shire is entering into the Merger Agreement in reliance upon Shareholder's
execution and delivery of this Agreement.
3. Certain Covenants of Shareholder. Except in accordance with the provisions
--------------------------------
of this Agreement, Shareholder agrees with, and covenants to, Shire as follows:
3.1 Actions Inconsistent with this Agreement. For so long as
----------------------------------------
Shareholder is obligated to vote in favor of the Merger set forth in Section 1,
Shareholder shall not (i) transfer (which term shall include, without
limitation, for the purposes of this Agreement, any sale, gift, pledge,
assignment, encumbrance or other disposition), or consent to any transfer of,
any or all of the Shares or any interest therein, except pursuant to the Merger
or (ii) enter into any contract, option or other agreement or understanding with
respect to any transfer of any or all such Shares or any interest therein
unless, in either case, (x) the transferee of such Shares is an affiliate of
such Shareholder or is otherwise reasonably acceptable to Shire and such
transferee agrees, in a writing reasonably acceptable to Shire, to vote such
Shares in accordance with the terms of Section 1 as if such transferee were the
Shareholder and (y) such transaction does not occur within 30 days as of the
Effective Time. In addition, until Section 1 has terminated in accordance with
paragraph 7, Shareholder shall not grant any proxy, power-of-attorney or other
authorizations in or with respect to such Shares or deposit such Shares into a
voting trust or enter into a voting agreement or arrangement with respect to the
Shares in any way inconsistent with the terms of this Agreement.
3.2 Solicitation. Until consummation of the Merger, Shareholder
------------
shall not, and shall direct their investment bankers, attorneys or other
advisers or representatives not to, directly or indirectly, (i) solicit or
initiate (including by way of furnishing or disclosing non-public information)
any inquiries or the making of any proposal with respect to a Roberts
<PAGE>
-4-
Acquisition Transaction (as defined in the Merger Agreement) or (ii) negotiate,
explore or otherwise engage in discussions with any person (other than Shire and
its representatives) with respect to any Roberts Acquisition Transaction, or
which may reasonably be expected to lead to a proposal for a Roberts Acquisition
Transaction or enter into any agreement, arrangement or understanding with
respect to any such Roberts Acquisition Transaction or which would require it to
abandon, terminate or fail to consummate the Merger or any other transaction
contemplated by this Agreement; provided, however, that Shareholder may, in
-------- -------
response to an unsolicited written proposal from a third party regarding a
Roberts Superior Proposal (as defined in the Merger Agreement), furnish
information to, negotiate or otherwise engage in discussions with such third
party, if the Board of Directors of Roberts determines in good faith, after
consultation with its financial advisors and based upon advice of outside
counsel that such action is required for the Board of Directors to comply with
its fiduciary duties under applicable law.
3.3 Holdback Agreement. Unless the managing underwriter otherwise
------------------
agrees, Shareholder agrees to use its reasonable best efforts to cause its
affiliates to agree, in connection with any underwritten registration of Shire
ordinary shares, nominal value five pence (the "Ordinary Shares"), not to effect
any public sale or private offer or distribution of any Ordinary Shares, or
American Depositary Shares representing three Ordinary Shares (the "Shire ADSs")
during the ten business days prior to the effectiveness under the Securities Act
of any underwritten registration and during the 90 days following the
effectiveness under the Securities Act of 1933, as amended (the "Securities
Act") of any underwritten registration (except, if applicable, as part of such
underwritten registration).
3.4 Shareholder shall not reduce its risk relative to any Ordinary
Shares or Shire ADSs (each as defined in the Merger Agreement) received in the
Merger as a result of its ownership of the Shares prior to the publication of
not less than 30 days of financial results covering the post-Merger combined
operations of Shire and Roberts. Shire will cause such results to be published
as soon as reasonably practicable after the Effective Time under the Merger
Agreement.
<PAGE>
-5-
4. Representations and Warranties of Shire. Shire represents and warrants to
---------------------------------------
Shareholder as follows:
Shire has full legal right, power and authority to enter into and
perform all of its obligations under this Agreement. The execution and delivery
of this Agreement by Shire will not violate any other agreement to which Shire
is a party. This Agreement has been duly executed and delivered by Shire and
constitutes a legal, valid and binding agreement of Shire, enforceable in
accordance with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium and similar laws, now or
hereafter in effect, affecting creditors rights and remedies generally or
general principles of equity. Neither the execution and delivery of this
Agreement nor the consummation by Shire of the transactions contemplated hereby
will (i) violate, or require any consent, approval or notice under, any
provision of any judgment, order, decree, statute, law, rule or regulation
applicable to Shire or the Shares, except for the action contemplated by Section
5.2, or (ii) constitute a violation of, conflict with or constitute a default
under, any contract, commitment, agreement, understanding, arrangement or other
restriction of any kind to which Shire is a party or by which it is bound.
5. Certain Covenants of Shire. Shire represents and warrants to Shareholder as
--------------------------
follows:
5.1 Without the consent of Shareholder, Shire will not, prior to the
second anniversary of the Closing Date (as defined in the Merger Agreement), (i)
dispose of any of its stock in the Surviving Corporation or (ii) permit the
Surviving Corporation to dispose of substantially all of its assets.
Thereafter, until the fifth anniversary of the Closing Date, to the extent
permitted by applicable law, Shire will give Shareholder not less than 60 days
written notice of its intention to engage in a transaction described in clause
(i) or (ii) of the preceding sentence.
5.2 Registration Rights of Shareholder.
(a) Shelf Registration. Promptly following the Effective Time (as
------------------
defined in the Merger Agreement), Shire shall commence the registration of
Shareholder's Shire ADSs received in the Merger (collectively the "Registrable
Securities") on
<PAGE>
-6-
Form S-3 for an offering pursuant to Rule 415 promulgated by the Securities and
Exchange Commission (the "SEC"). Such registration statement may include Shire
ADSs received by other Roberts shareholders in the Merger. Any such shelf
registration shall cover the disposition of all Registrable Securities and such
other Shire ADSs in one or more underwritten offerings, block transactions,
broker transactions, at-market transactions and in such other manner or manners
as may be specified by the Shareholder. Shire shall use its reasonable best
efforts to cause such registration statement to become effective within 180 days
of the Effective Time and keep such registration continuously effective until
the second anniversary of the Closing Date. In furtherance of such obligation,
Shire shall supplement or amend such registration statement if, as and when
required by the rules, regulations and instructions applicable to the form used
by Shire for such registration or by the Securities Act or by any other rules
and regulations thereunder applicable to shelf registrations. Notwithstanding
the foregoing, it shall not be deemed a violation of this paragraph if pending a
material corporate transaction, Shire issues a notice that the registration
statement, or the prospectus contained therein, is unusable (as not being
current as to disclosure), or such notice is required under applicable
securities laws to be issued by Shire, and the aggregate number of days in any
consecutive twelve month period for which the registration statement, or the
prospectus contained therein, is unusable pursuant to all such notices has not
exceeded 90 days in the aggregate.
(b) Issuer Registration. If Shire shall determine to register any
-------------------
Shire ADSs either for its own account or the account of a security holder or
holders other than a registration relating solely with respect to employee
benefit plans, or a registration relating to paragraph (a) above, a registration
on any registration form which does not permit secondary sales, Shire will:
(i) promptly give to the Shareholder written notice thereof; and
(ii) include in such registration statement all Registrable
Securities specified in a written request made by the Shareholder within
ten (10) days after receipt of the written notice from Shire described in
clause (i) above, except as set forth in paragraph (c) below. Such written
<PAGE>
-7-
request may specify all or part of the Shareholder's Registrable
Securities.
The right of the Shareholder to registration pursuant to this
paragraph (b) shall be conditioned upon the Shareholder's providing all
information required of a selling shareholder under the Securities Act. The
Shareholder shall, if it proposes to distribute its Registrable Securities
through such underwriting, enter into an underwritten offering in customary form
with the representative of the underwriter or underwriters selected by Shire.
(c) Priority. Notwithstanding the provisions of Section 5.2(b), if
--------
the representative of the underwriters advises Shire in writing that marketing
factors require a limitation or elimination on the number of shares to be
included in the offering covered by Section 5.2(b), the representative may
(subject to the allocation priority set forth below) limit the number of
Registrable Securities to be included in the registration statement. Shire
shall so advise all holders of securities requesting registration, and the
number of Shire ADSs that are entitled to be included in the registration
statement shall be allocated first to Shire for securities being sold for its
own account, and thereafter the number of Shire ADSs that may be included in the
registration statement shall be allocated among the Shareholder and other
shareholders of Shire in proportion, as nearly as practicable, to the respective
amounts of Shire ADSs which they had requested to be included in such
registration at the time of filing the registration statement. If the
Shareholder or any other shareholder disapproves of the terms of any such
underwriting, he may elect to withdraw therefrom by written notice to Shire and
the underwriter. Notwithstanding this clause (c), in any underwritten primary
offering for cash, Shire will ensure that Shareholder will be allowed to
participate in the offering to the extent of not less than 20% of the aggregate
number of Shire ADSs to be offered.
(d) Expenses of Registration. All Registration Expenses incurred in
------------------------
connection with any registration pursuant to this Section 5.2 shall be borne by
Shire and all Selling Expenses shall be borne by the holders of the securities
so registered pro rata on the basis of the number of their shares sold.
"Registration Expenses" shall mean all expenses incurred by Shire in connection
- ----------------------
with the registration rights granted hereunder, including, without limitation,
all registration and
<PAGE>
-8-
filing fees, printing expenses, fees and disbursements of counsel and the
expenses of any special audits incident to or required by any such registration.
"Selling Expenses" shall mean all underwriting discounts and commissions
----------------
together with all expenses of the shareholder(s).
(e) Registration Procedures. In the case of each registration
-----------------------
effected by Shire pursuant to this Section 5.2, Shire will keep the Shareholder
advised in writing as to the initiation of each registration and as to the
completion thereof. At its expense, Shire will:
(i) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with
such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;
(ii) Furnish such number of prospectuses and other documents
incident thereto, including any amendment of or supplement to the
prospectus, as the Shareholder from time to time may reasonably request;
and
(iii) Notify the Shareholder at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of
the happening of any event as a result of which the prospectus included in
such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading or incomplete in the light of the circumstances then existing,
and at the request of any such seller, prepare and furnish to the
Shareholder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or incomplete in the light of the circumstances then
existing.
<PAGE>
-9-
(f) Cause all such Registrable Securities to be listed on each
securities exchange on which similar securities issued by Shire are then listed.
6. Indemnification.
---------------
6.1 Shire will indemnify Shareholder, each of its officers, directors
and employees, and each Person who controls Shareholder within the meaning of
the Securities Act and the rules and regulations thereunder, with respect to
which registration has been effected pursuant to Section 5.2, against all
claims, losses, damages and liabilities (or actions, proceedings or settlements
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus (including any
related registration statement) incident to any such registration, or based on
any omission (or alleged omission) to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading, or
any violation by Shire of the Securities Act or the Exchange Act or any rule or
regulation thereunder applicable to Shire and relating to action or inaction
required of Shire in connection with any such registration, and will reimburse
Shareholder, each of its officers, directors and employees, and each Person
controlling Shareholder, for any legal and any other expenses reasonably
incurred in connection with investigating and defending or settling any such
claim, loss, damage, liability or action, provided that Shire will not be liable
in any such case to the extent that any such claim, loss, damage, liability or
expense arises out of or is based on any untrue statement or omission based upon
written information furnished to Shire by Shareholder and stated to be
specifically for use therein, or in the case of a non-underwritten public
offering, the failure of Shareholder to deliver prospectuses as required by the
Securities Act.
6.2 Shareholder will, if Registrable Securities held by it are
included in the securities as to which such registration is being effected,
indemnify Shire, each of its officers, directors and employees, and each Person
who controls Shire within the meaning of the Securities Act and the rules and
regulations thereunder, against all claims, losses, damages and liabilities (or
actions, proceedings or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any
<PAGE>
-10-
such registration statement or prospectus, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by
Shareholder of the Securities Act or the Exchange Act or any rule or regulation
thereunder applicable to Shareholder and relating to action or inaction required
of Shareholder in connection with any such registration, and will reimburse
Shire, each of its officers, directors and employees, and each Person who
controls Shire, for any legal or any other expenses reasonably incurred in
connection with investigating and defending or settling any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement or prospectus in reliance upon
and in conformity with written information furnished to Shire by Shareholder and
stated to be specifically for use therein; provided, however, that the
obligations of Shareholder hereunder shall be limited to an amount equal to the
proceeds to Shareholder of securities sold as contemplated herein.
6.3 Each party entitled to indemnification under this Section 6 (the
"Indemnified Party") shall give notice to the party required to provide
-----------------
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
------------------
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 6. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. Each Indemnified Party
shall furnish such information regarding itself or the claim in question as an
Indemnifying
<PAGE>
-11-
Party may require in connection with defense of such claim and
litigation resulting therefrom.
7. Termination. Subject to the rights of the parties to pursue any claims
-----------
arising out of breaches of representations, warranties, covenants and agreements
that occur prior to such termination, this Agreement shall terminate on the
earlier of (i) the termination of the Merger Agreement in accordance with its
terms, (ii) the second anniversary of the Closing Date (as defined in the Merger
Agreement), (iii) if the Merger Agreement is amended to decrease the Merger
Consideration (as defined in the Merger Agreement) per share and (iv) December
31, 1999 if the Effective Time has not occurred by such date. Section 1 hereof
will terminate upon the earlier of the termination of this Agreement in
accordance with the previous sentence or the Effective Time.
8. Miscellaneous.
-------------
8.1 Survival of Representations and Warranties. All representations,
------------------------------------------
warranties, covenants and agreements made in this Agreement shall survive the
date hereof and any investigation at any time made by or on behalf of any party.
8.2 Notices. All notices, requests, claims, demands and other
-------
communications under this Agreement shall be in writing and shall be delivered
personally or by next-day courier or telecopied with confirmation of receipt, to
the parties at the addresses specified below (or at such other address for a
party as shall be specified by like notice; provided that notices of a change of
--------
address shall be effective only upon receipt thereof). Any such notice shall be
effective upon receipt, if personally delivered or telecopied or one day after
delivery to a courier for next-day delivery.
If to Shire:
Shire Pharmaceuticals Group plc
East Anton
Andover, Hants SP 10 5RG
United Kingdom
Telecopy: 011 44 1 264 334 658
Attention: Rolf Stahel, Chief Executive
<PAGE>
-12-
with copies to:
John P. Mitchell, Esq.
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Telephone: (212) 701-3000
Telecopy: (212) 269-5420
If to Shareholder:
Kaoru Kimura
c/o Yamanouchi Pharmaceutical Co. Ltd.
3-11, Nihonbashi - Honcho 2 - Chome
Chuo-ku, Tokyo 103 Japan
with a copy to:
Richard W. Canady, Esq.
Howard, Rice, et al
Three Embarcadero Center, 7th Floor
San Francisco, CA 94111
Telephone: (415) 434-1600
Telecopy: (415) 217-5910
8.3 Entire Agreement. This Agreement, together with the documents
----------------
expressly referred to herein, constitute the entire agreement and supersede all
other prior agreements and understandings, both written and oral, between the
parties, with respect to the subject matter contained herein.
8.4 Amendments. This Agreement may not be modified, amended, altered
----------
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
8.5 Assignment. This Agreement shall be binding upon and inure to
----------
the benefit of the parties hereto and their respective successors, assigns and
personal representatives, but, other than as contemplated by Section 3.1,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto without the prior written consent
of the other parties.
8.6 Public Announcements. Each of Shire and Shareholder agrees that
--------------------
it will not issue any press release or otherwise make any public statement with
respect to this Agreement,
<PAGE>
-13-
the Merger Agreement or the transactions contemplated hereby or thereby without
the prior consent of the other party, which consent shall not be unreasonably
withheld or delayed.
8.7 Governing Law. This Agreement, and all matters relating hereto,
-------------
shall be governed by, and construed in accordance with the laws of the State of
New York without giving effect to the principles of conflicts of laws thereof.
8.8 Injunctive Relief; Jurisdiction. Shareholder agrees that
-------------------------------
irreparable damage would occur and that Shire would not have any adequate remedy
at law in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that Shire shall be entitled to an injunction or
injunctions to prevent breaches by Shareholder of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States located in the State of New York, Borough of Manhattan, or in New
York state court located in the Borough of Manhattan, this being in addition to
any other remedy to which they are entitled at law or in equity. In addition,
each of the parties hereto (i) consents to submit such party to the personal
jurisdiction of any Federal court located in the State of New York, Borough of
Manhattan or in New York State Court located in the Borough of Manhattan in the
event any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (ii) agrees that such party will not attempt to deny or
defeat such party to the personal jurisdiction by motion or other request for
leave from any such court and (iii) agrees that such party will not bring any
action relating to this Agreement or any of the transactions contemplated hereby
in any court other than a Federal or state court sitting in the State of New
York, located in the Borough of Manhattan.
8.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
8.10 Descriptive Headings. The descriptive headings used herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
<PAGE>
-14-
8.11 Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
8.12 Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
8.13 Third-Party Beneficiaries. Otherwise than as contemplated by
-------------------------
Section 3.1, nothing in this Agreement, expressed or implied, shall be construed
to give any person other than the parties hereto any legal or equitable right,
remedy or claim under or by reason of this Agreement or any provision contained
herein.
<PAGE>
-15-
IN WITNESS WHEREOF, Shire and Shareholder have caused this Agreement
to be executed by their duly authorized officers, as of the date and year first
above written.
SHIRE PHARMACEUTICALS GROUP PLC
By: \s\ Rolf Stahel
--------------------
Name: Rolf Stahel
Title: Chief Executive
YAMANOUCHI GROUP HOLDINGS INC.
By: \s\ Akihiko Matsubara
-------------------------
Name: Akihiko Matsubara
Title: Manager
<PAGE>
Exhibit 10.3
SHAREHOLDER AGREEMENT
---------------------
SHAREHOLDER AGREEMENT (this "Agreement"), dated as of July 26, 1999 by
and between HealthCare Ventures II, L.P. ("Shareholder"), and Roberts
Pharmaceutical Corporation, a New Jersey corporation ("Roberts").
WHEREAS, concurrently herewith, Ruby Acquisition Sub Inc., Roberts and
Shire Pharmaceuticals Group plc, a public limited company organized under the
laws of England and Wales ("Shire"), are entering into an Agreement and Plan of
Merger of even date herewith (such Agreement in the form attached hereto as
Exhibit A as it may be subsequently amended or modified (other than a reduction
in the Merger Consideration (as defined therein)) being the "Merger Agreement"),
pursuant to which a newly formed, wholly owned subsidiary of Sapphire will merge
with and into Roberts (the "Merger"); and
WHEREAS, Shareholder owns, as of the date hereof, 3,554,720 ordinary
shares, nominal value five pence per share (the "Ordinary Shares"), of Shire
(the "Existing Shares", together with any Ordinary Shares acquired after the
date hereof and prior to the termination hereof, hereinafter collectively
referred to as the "Shares"); and
WHEREAS, Roberts has entered into the Merger Agreement in reliance on
Shareholder's representations, warranties, covenants and agreements set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Voting Agreement. Shareholder agrees to vote (or cause to be voted) and
----------------
otherwise act (including pursuant to written consent) with respect to all of the
Shares, for the approval and the adoption of the Merger Agreement, all
agreements related to the Merger and any actions required to be approved by
shareholders related thereto, and against any proposal or transaction which
could prevent or delay the consummation of the transactions contemplated by this
Agreement or the Merger Agreement, at any meeting or meetings of the
shareholders of Shire, and at any adjournment, postponement or continuation
<PAGE>
-2-
thereof, at which the Merger Agreement and other related agreements (or any
amended version or versions thereof), or such other actions are submitted for
the consideration and vote of the Shareholders of Shire. The foregoing shall
remain in effect with respect to the Shares, until the termination of this
Agreement. Shareholder agrees to cause the Shares to be represented, in person
or by proxy, at any meeting or meetings of the shareholders to which this
Section 1 applies, and to vote the Shares in accordance with the terms hereof.
2. Representations and Warranties of Shareholder. Shareholder represents and
---------------------------------------------
warrants to Roberts as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares are
-------------------
all of the Ordinary Shares currently beneficially owned by Shareholder. On the
Closing Date, the Shares will constitute all of the Ordinary shares of owned
beneficially by Shareholder. Shareholder has no rights to acquire any
additional Ordinary Shares.
2.2 Authority; Binding Agreement. Shareholder has the full legal
----------------------------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by
Shareholder will not violate any other agreement to which Shareholder is a party
including, without limitation, any voting agreement, shareholders agreement or
voting trust. This Agreement has been duly executed and delivered by
Shareholder and constitutes a legal, valid and binding agreement of Shareholder,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws, now or hereafter in effect affecting creditors' rights and remedies
generally or general principles of equity. Neither the execution and delivery
of this Agreement nor the consummation by Shareholder of the transactions
contemplated hereby will (i) violate, or require any consent, approval or notice
under, any provision of any judgment, order, decree, statute, law, rule or
regulation applicable to Shareholder or the Shares, (ii) constitute a violation
of, conflict with or constitute a default under, any material contract,
commitment, agreement, understanding, arrangement or other restriction of any
kind to which Shareholder is a party or by which Shareholder is bound.
<PAGE>
-3-
2.3 Reliance on Agreement. Shareholder understands and acknowledges
---------------------
that Roberts is entering into the Merger Agreement in reliance upon
Shareholder's execution and delivery of this Agreement.
3. Certain Covenants of Shareholder. Except in accordance with the provisions
--------------------------------
of this Agreement, Shareholder agrees with, and covenants to, Roberts as
follows:
3.1 Actions Inconsistent with this Agreement. Shareholder shall not
----------------------------------------
(i) transfer (which term shall include, without limitation, for the purposes of
this Agreement, any sale, gift, pledge, assignment, encumbrance or other
disposition) or consent to any transfer of, any or all of the Shares or any
interest therein, except pursuant to the Merger, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all such Shares or any interest therein, (iii) grant any proxy, power-of-
attorney or other authorizations in or with respect to such Shares or (iv)
deposit such Shares into a voting trust or enter into a voting agreement or
arrangement with respect to the Shares.
3.2 Solicitation. Until consummation of the Merger, Shareholder
------------
shall not, and shall direct their investment bankers, attorneys or other
advisers or representatives not to, directly or indirectly, (i) solicit or
initiate (including by way of furnishing or disclosing non-public information)
any inquires or the making of any proposal with respect to a Shire Acquisition
Transaction (as defined in the Merger Agreement) or (ii) negotiate, explore or
otherwise engage in discussions with any person (other than Roberts and its
representatives) with respect to any Shire Acquisition Transaction, or which may
reasonably be expected to lead to a proposal for a Shire Acquisition Transaction
or enter into any agreement, arrangement or understanding with respect to any
such Shire Acquisition Transaction or which would require it to abandon,
terminate or fail to consummate the Merger or any other transaction contemplated
by this Agreement; provided, however, that Shareholder may, in response to an
-------- -------
unsolicited written proposal from a third party regarding a Shire Superior
Proposal (as defined in the Merger Agreement), furnish information to, negotiate
or otherwise engage in discussions with such third party, if the Board of
Directors of Shire determines in good faith, after consultation with its
financial advisors and based upon advice of outside
<PAGE>
-4-
counsel that such action is required for the Board of Directors to comply with
its fiduciary duties under applicable law.
4. Termination. This Agreement shall terminate on the earlier of (i) the
-----------
termination of the Merger Agreement in accordance with its terms, (ii) if the
Merger Agreement is amended to increase the Merger Consideration (as defined in
the Merger Agreement) per share, (iii) the Effective Time or (iv) December 31,
1999.
5. Miscellaneous.
-------------
5.1 Survival of Representations and Warranties. All representations,
------------------------------------------
warranties, covenants and agreements made by Shareholder in this Agreement shall
survive the date hereof and any investigation at any time made by or on behalf
of any party.
5.2 Notices. All notices, requests, claims, demands and other
-------
communications under this Agreement shall be in writing and shall be delivered
personally or by next-day courier or telecopied with confirmation of receipt, to
the parties at the addresses specified below (or at such other address for a
party as shall be specified by like notice; provided that notices of a change of
--------
address shall be effective only upon receipt thereof). Any such notice shall be
effective upon receipt, if personally delivered or telecopied or one day after
delivery to a courier for next-day delivery.
If to Roberts:
Meridian Center II
4 Industrial Way West
Eatontown, NJ 07724
Telecopy: (732) 676-1300
Attention: General Counsel
with copies to:
Lawrence Lederman, Esq.
Milbank, Tweed Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York
<PAGE>
-5-
Telephone: (212) 530-5000
Telecopy: (212) 530-5219
If to Shareholder:
HealthCare Ventures II, L.P.
Twin Towers at Metro Park
379 Thornall Street
Edison, NJ 08837
5.3 Entire Agreement. This Agreement, together with the documents
----------------
expressly referred to herein, constitute the entire agreement and supersede all
other prior agreements and understandings, both written and oral, between the
parties, with respect to the subject matter contained herein.
5.4 Amendments. This Agreement may not be modified, amended, altered
----------
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
5.5 Assignment. This Agreement shall be binding upon and inure to
----------
the benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties.
5.6 Public Announcements. Each of Shire and Shareholder agrees that
--------------------
it will not issue any press release or otherwise make any public statement with
respect to this Agreement, the Merger Agreement or the transactions contemplated
hereby or thereby without the prior consent of the other party, which consent
shall not be unreasonably withheld or delayed.
5.7 Governing Law. This Agreement, and all matters relating hereto,
-------------
shall be governed by, and construed in accordance with the laws of the State of
New York without giving effect to the principles of conflicts of laws thereof.
5.8 Injunctive Relief; Jurisdiction. Shareholder agrees that
-------------------------------
irreparable damage would occur and that Roberts would not have any adequate
remedy at law in the event that any of the provisions of this Agreement were not
performed in accordance
<PAGE>
-6-
with their specific terms or were otherwise breached. It is accordingly agreed
that Roberts shall be entitled to an injunction or injunctions to prevent
breaches by Shareholder of this Agreement and to enforce specifically the terms
and provisions of this Agreement in any court of the United States located in
the State of New York, Borough of Manhattan, or in New York state court located
in the Borough of Manhattan, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the parties hereto
(i) consents to submit such party to the personal jurisdiction of any Federal
court located in the State of New York, Borough of Manhattan or in New York
State Court located in the Borough of Manhattan in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (ii)
agrees that such party will not attempt to deny or defeat such party to the
personal jurisdiction by motion or other request for leave from any such court
and (iii) agrees that such party will not bring any action relating to this
Agreement or any of the transactions contemplated hereby in any court other than
a Federal or state court sitting in the State of New York, located in the
Borough of Manhattan.
5.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
5.10 Descriptive Headings. The descriptive headings used herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
5.11 Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
5.12 Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary
<PAGE>
-7-
or desirable to consummate the transactions contemplated by this Agreement.
5.13 Third-Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
<PAGE>
-8-
IN WITNESS WHEREOF, Roberts and Shareholder have caused this Agreement
to be executed by their duly authorized officers, as of the date and year first
above written.
ROBERTS PHARMACEUTICAL CORPORATION
By: \s\ John T. Spitznagel
------------------------
Name: John T. Spitznagel
Title: President and Chief
Executive Officer
HEALTHCARE VENTURES II, L.P.
By: \s\ James Cavanaugh
-----------------------
Name: James Cavanaugh
Title: General Partner
<PAGE>
Exhibit 10.4
SHAREHOLDER AGREEMENT
---------------------
SHAREHOLDER AGREEMENT (this "Agreement"), dated as of July 26, 1999 by
and between HealthCare Ventures III, L.P. ("Shareholder"), and Roberts
Pharmaceutical Corporation, a New Jersey corporation ("Roberts").
WHEREAS, concurrently herewith, Ruby Acquisition Sub Inc., Roberts and
Shire Pharmaceuticals Group plc, a public limited company organized under the
laws of England and Wales ("Shire"), are entering into an Agreement and Plan of
Merger of even date herewith (such Agreement in the form attached hereto as
Exhibit A as it may be subsequently amended or modified (other than a reduction
in the Merger Consideration (as defined therein)) being the "Merger Agreement"),
pursuant to which a newly formed, wholly owned subsidiary of Sapphire will merge
with and into Roberts (the "Merger"); and
WHEREAS, Shareholder owns, as of the date hereof, 5,508,032 ordinary
shares, nominal value five pence per share (the "Ordinary Shares"), of Shire
(the "Existing Shares", together with any Ordinary Shares acquired after the
date hereof and prior to the termination hereof, hereinafter collectively
referred to as the "Shares"); and
WHEREAS, Roberts has entered into the Merger Agreement in reliance on
Shareholder's representations, warranties, covenants and agreements set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Voting Agreement. Shareholder agrees to vote (or cause to be voted) and
----------------
otherwise act (including pursuant to written consent) with respect to all of the
Shares, for the approval and the adoption of the Merger Agreement, all
agreements related to the Merger and any actions required to be approved by
shareholders related thereto, and against any proposal or transaction which
could prevent or delay the consummation of the transactions contemplated by this
Agreement or the Merger Agreement, at any meeting or meetings of the
shareholders of Shire, and at any adjournment, postponement or continuation
<PAGE>
-2-
thereof, at which the Merger Agreement and other related agreements (or any
amended version or versions thereof), or such other actions are submitted for
the consideration and vote of the Shareholders of Shire. The foregoing shall
remain in effect with respect to the Shares, until the termination of this
Agreement. Shareholder agrees to cause the Shares to be represented, in person
or by proxy, at any meeting or meetings of the shareholders to which this
Section 1 applies, and to vote the Shares in accordance with the terms hereof.
2. Representations and Warranties of Shareholder. Shareholder represents and
---------------------------------------------
warrants to Roberts as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares are
-------------------
all of the Ordinary Shares currently beneficially owned by Shareholder. On the
Closing Date, the Shares will constitute all of the Ordinary shares of owned
beneficially by Shareholder. Shareholder has no rights to acquire any
additional Ordinary Shares.
2.2 Authority; Binding Agreement. Shareholder has the full legal
----------------------------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by
Shareholder will not violate any other agreement to which Shareholder is a party
including, without limitation, any voting agreement, shareholders agreement or
voting trust. This Agreement has been duly executed and delivered by
Shareholder and constitutes a legal, valid and binding agreement of Shareholder,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws, now or hereafter in effect affecting creditors' rights and remedies
generally or general principles of equity. Neither the execution and delivery
of this Agreement nor the consummation by Shareholder of the transactions
contemplated hereby will (i) violate, or require any consent, approval or notice
under, any provision of any judgment, order, decree, statute, law, rule or
regulation applicable to Shareholder or the Shares, (ii) constitute a violation
of, conflict with or constitute a default under, any material contract,
commitment, agreement, understanding, arrangement or other restriction of any
kind to which Shareholder is a party or by which Shareholder is bound.
<PAGE>
-3-
2.3 Reliance on Agreement. Shareholder understands and acknowledges
---------------------
that Roberts is entering into the Merger Agreement in reliance upon
Shareholder's execution and delivery of this Agreement.
3. Certain Covenants of Shareholder. Except in accordance with the provisions
--------------------------------
of this Agreement, Shareholder agrees with, and covenants to, Roberts as
follows:
3.1 Actions Inconsistent with this Agreement. Shareholder shall not
----------------------------------------
(i) transfer (which term shall include, without limitation, for the purposes of
this Agreement, any sale, gift, pledge, assignment, encumbrance or other
disposition) or consent to any transfer of, any or all of the Shares or any
interest therein, except pursuant to the Merger, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all such Shares or any interest therein, (iii) grant any proxy, power-of-
attorney or other authorizations in or with respect to such Shares or (iv)
deposit such Shares into a voting trust or enter into a voting agreement or
arrangement with respect to the Shares.
3.2 Solicitation. Until consummation of the Merger, Shareholder
------------
shall not, and shall direct their investment bankers, attorneys or other
advisers or representatives not to, directly or indirectly, (i) solicit or
initiate (including by way of furnishing or disclosing non-public information)
any inquires or the making of any proposal with respect to a Shire Acquisition
Transaction (as defined in the Merger Agreement) or (ii) negotiate, explore or
otherwise engage in discussions with any person (other than Roberts and its
representatives) with respect to any Shire Acquisition Transaction, or which may
reasonably be expected to lead to a proposal for a Shire Acquisition Transaction
or enter into any agreement, arrangement or understanding with respect to any
such Shire Acquisition Transaction or which would require it to abandon,
terminate or fail to consummate the Merger or any other transaction contemplated
by this Agreement; provided, however, that Shareholder may, in response to an
-------- -------
unsolicited written proposal from a third party regarding a Shire Superior
Proposal (as defined in the Merger Agreement), furnish information to, negotiate
or otherwise engage in discussions with such third party, if the Board of
Directors of Shire determines in good faith, after consultation with its
financial advisors and based upon advice of outside
<PAGE>
-4-
counsel that such action is required for the Board of Directors to comply with
its fiduciary duties under applicable law.
4. Termination. This Agreement shall terminate on the earlier of (i) the
-----------
termination of the Merger Agreement in accordance with its terms, (ii) if the
Merger Agreement is amended to increase the Merger Consideration (as defined in
the Merger Agreement) per share, (iii) the Effective Time or (iv) December 31,
1999.
5. Miscellaneous.
-------------
5.1 Survival of Representations and Warranties. All representations,
------------------------------------------
warranties, covenants and agreements made by Shareholder in this Agreement shall
survive the date hereof and any investigation at any time made by or on behalf
of any party.
5.2 Notices. All notices, requests, claims, demands and other
-------
communications under this Agreement shall be in writing and shall be delivered
personally or by next-day courier or telecopied with confirmation of receipt, to
the parties at the addresses specified below (or at such other address for a
party as shall be specified by like notice; provided that notices of a change of
--------
address shall be effective only upon receipt thereof). Any such notice shall be
effective upon receipt, if personally delivered or telecopied or one day after
delivery to a courier for next-day delivery.
If to Roberts:
Meridian Center II
4 Industrial Way West
Eatontown, NJ 07724
Telecopy: (732) 676-1300
Attention: General Counsel
with copies to:
Lawrence Lederman, Esq.
Milbank, Tweed Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York
<PAGE>
-5-
Telephone: (212) 530-5000
Telecopy: (212) 530-5219
If to Shareholder:
HealthCare Ventures III, L.P.
Twin Towers at Metro Park
379 Thornall Street
Edison, NJ 08837
5.3 Entire Agreement. This Agreement, together with the documents
----------------
expressly referred to herein, constitute the entire agreement and supersede all
other prior agreements and understandings, both written and oral, between the
parties, with respect to the subject matter contained herein.
5.4 Amendments. This Agreement may not be modified, amended, altered
----------
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
5.5 Assignment. This Agreement shall be binding upon and inure to
----------
the benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties.
5.6 Public Announcements. Each of Shire and Shareholder agrees that
--------------------
it will not issue any press release or otherwise make any public statement with
respect to this Agreement, the Merger Agreement or the transactions contemplated
hereby or thereby without the prior consent of the other party, which consent
shall not be unreasonably withheld or delayed.
5.7 Governing Law. This Agreement, and all matters relating hereto,
-------------
shall be governed by, and construed in accordance with the laws of the State of
New York without giving effect to the principles of conflicts of laws thereof.
5.8 Injunctive Relief; Jurisdiction. Shareholder agrees that
-------------------------------
irreparable damage would occur and that Roberts would not have any adequate
remedy at law in the event that any of the provisions of this Agreement were not
performed in accordance
<PAGE>
-6-
with their specific terms or were otherwise breached. It is accordingly agreed
that Roberts shall be entitled to an injunction or injunctions to prevent
breaches by Shareholder of this Agreement and to enforce specifically the terms
and provisions of this Agreement in any court of the United States located in
the State of New York, Borough of Manhattan, or in New York state court located
in the Borough of Manhattan, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the parties hereto
(i) consents to submit such party to the personal jurisdiction of any Federal
court located in the State of New York, Borough of Manhattan or in New York
State Court located in the Borough of Manhattan in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (ii)
agrees that such party will not attempt to deny or defeat such party to the
personal jurisdiction by motion or other request for leave from any such court
and (iii) agrees that such party will not bring any action relating to this
Agreement or any of the transactions contemplated hereby in any court other than
a Federal or state court sitting in the State of New York, located in the
Borough of Manhattan.
5.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
5.10 Descriptive Headings. The descriptive headings used herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
5.11 Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
5.12 Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary
<PAGE>
-7-
or desirable to consummate the transactions contemplated by this Agreement.
5.13 Third-Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
<PAGE>
-8-
IN WITNESS WHEREOF, Roberts and Shareholder have caused this Agreement
to be executed by their duly authorized officers, as of the date and year first
above written.
ROBERTS PHARMACEUTICAL CORPORATION
By: \s\ John T. Spitznagel
------------------------
Name: John T. Spitznagel
Title: President and Chief
Executive Officer
HEALTHCARE VENTURES III, L.P.
By: \s\ James Cavanaugh
-----------------------
Name: James Cavanaugh
Title: General Partner
<PAGE>
EXHIBIT 10.5
SHAREHOLDER AGREEMENT
---------------------
SHAREHOLDER AGREEMENT (this "Agreement"), dated as of July 26, 1999 by
and between HealthCare Ventures IV, L.P. ("Shareholder"), and Roberts
Pharmaceutical Corporation, a New Jersey corporation ("Roberts").
WHEREAS, concurrently herewith, Ruby Acquisition Sub Inc., Roberts and
Shire Pharmaceuticals Group plc, a public limited company organized under the
laws of England and Wales ("Shire"), are entering into an Agreement and Plan of
Merger of even date herewith (such Agreement in the form attached hereto as
Exhibit A as it may be subsequently amended or modified (other than a reduction
in the Merger Consideration (as defined therein)) being the "Merger Agreement"),
pursuant to which a newly formed, wholly owned subsidiary of Sapphire will merge
with and into Roberts (the "Merger"); and
WHEREAS, Shareholder owns, as of the date hereof, 1,617,528 ordinary
shares, nominal value five pence per share (the "Ordinary Shares"), of Shire
(the "Existing Shares", together with any Ordinary Shares acquired after the
date hereof and prior to the termination hereof, hereinafter collectively
referred to as the "Shares"); and
WHEREAS, Roberts has entered into the Merger Agreement in reliance on
Shareholder's representations, warranties, covenants and agreements set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Voting Agreement. Shareholder agrees to vote (or cause to be voted) and
----------------
otherwise act (including pursuant to written consent) with respect to all of the
Shares, for the approval and the adoption of the Merger Agreement, all
agreements related to the Merger and any actions required to be approved by
shareholders related thereto, and against any proposal or transaction which
could prevent or delay the consummation of the transactions contemplated by this
Agreement or the Merger Agreement, at any meeting or meetings of the
shareholders of Shire, and at any adjournment, postponement or continuation
<PAGE>
-2-
thereof, at which the Merger Agreement and other related agreements (or any
amended version or versions thereof), or such other actions are submitted for
the consideration and vote of the Shareholders of Shire. The foregoing shall
remain in effect with respect to the Shares, until the termination of this
Agreement. Shareholder agrees to cause the Shares to be represented, in person
or by proxy, at any meeting or meetings of the shareholders to which this
Section 1 applies, and to vote the Shares in accordance with the terms hereof.
2. Representations and Warranties of Shareholder. Shareholder represents and
---------------------------------------------
warrants to Roberts as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares are
-------------------
all of the Ordinary Shares currently beneficially owned by Shareholder. On the
Closing Date, the Shares will constitute all of the Ordinary shares of owned
beneficially by Shareholder. Shareholder has no rights to acquire any
additional Ordinary Shares.
2.2 Authority; Binding Agreement. Shareholder has the full legal
----------------------------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by
Shareholder will not violate any other agreement to which Shareholder is a party
including, without limitation, any voting agreement, shareholders agreement or
voting trust. This Agreement has been duly executed and delivered by
Shareholder and constitutes a legal, valid and binding agreement of Shareholder,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws, now or hereafter in effect affecting creditors' rights and remedies
generally or general principles of equity. Neither the execution and delivery
of this Agreement nor the consummation by Shareholder of the transactions
contemplated hereby will (i) violate, or require any consent, approval or notice
under, any provision of any judgment, order, decree, statute, law, rule or
regulation applicable to Shareholder or the Shares, (ii) constitute a violation
of, conflict with or constitute a default under, any material contract,
commitment, agreement, understanding, arrangement or other restriction of any
kind to which Shareholder is a party or by which Shareholder is bound.
<PAGE>
-3-
2.3 Reliance on Agreement. Shareholder understands and acknowledges
---------------------
that Roberts is entering into the Merger Agreement in reliance upon
Shareholder's execution and delivery of this Agreement.
3. Certain Covenants of Shareholder. Except in accordance with the provisions
--------------------------------
of this Agreement, Shareholder agrees with, and covenants to, Roberts as
follows:
3.1 Actions Inconsistent with this Agreement. Shareholder shall not
----------------------------------------
(i) transfer (which term shall include, without limitation, for the purposes of
this Agreement, any sale, gift, pledge, assignment, encumbrance or other
disposition) or consent to any transfer of, any or all of the Shares or any
interest therein, except pursuant to the Merger, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all such Shares or any interest therein, (iii) grant any proxy, power-of-
attorney or other authorizations in or with respect to such Shares or (iv)
deposit such Shares into a voting trust or enter into a voting agreement or
arrangement with respect to the Shares.
3.2 Solicitation. Until consummation of the Merger, Shareholder
------------
shall not, and shall direct their investment bankers, attorneys or other
advisers or representatives not to, directly or indirectly, (i) solicit or
initiate (including by way of furnishing or disclosing non-public information)
any inquires or the making of any proposal with respect to a Shire Acquisition
Transaction (as defined in the Merger Agreement) or (ii) negotiate, explore or
otherwise engage in discussions with any person (other than Roberts and its
representatives) with respect to any Shire Acquisition Transaction, or which may
reasonably be expected to lead to a proposal for a Shire Acquisition Transaction
or enter into any agreement, arrangement or understanding with respect to any
such Shire Acquisition Transaction or which would require it to abandon,
terminate or fail to consummate the Merger or any other transaction contemplated
by this Agreement; provided, however, that Shareholder may, in response to an
-------- -------
unsolicited written proposal from a third party regarding a Shire Superior
Proposal (as defined in the Merger Agreement), furnish information to, negotiate
or otherwise engage in discussions with such third party, if the Board of
Directors of Shire determines in good faith, after consultation with its
financial advisors and based upon advice of outside
<PAGE>
-4-
counsel that such action is required for the Board of Directors to comply with
its fiduciary duties under applicable law.
4. Termination. This Agreement shall terminate on the earlier of (i) the
-----------
termination of the Merger Agreement in accordance with its terms, (ii) if the
Merger Agreement is amended to increase the Merger Consideration (as defined in
the Merger Agreement) per share, (iii) the Effective Time or (iv) December 31,
1999.
5. Miscellaneous.
-------------
5.1 Survival of Representations and Warranties. All representations,
------------------------------------------
warranties, covenants and agreements made by Shareholder in this Agreement shall
survive the date hereof and any investigation at any time made by or on behalf
of any party.
5.2 Notices. All notices, requests, claims, demands and other
-------
communications under this Agreement shall be in writing and shall be delivered
personally or by next-day courier or telecopied with confirmation of receipt, to
the parties at the addresses specified below (or at such other address for a
party as shall be specified by like notice; provided that notices of a change of
--------
address shall be effective only upon receipt thereof). Any such notice shall be
effective upon receipt, if personally delivered or telecopied or one day after
delivery to a courier for next-day delivery.
If to Roberts:
Meridian Center II
4 Industrial Way West
Eatontown, NJ 07724
Telecopy: (732) 676-1300
Attention: General Counsel
with copies to:
Lawrence Lederman, Esq.
Milbank, Tweed Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York
<PAGE>
-5-
Telephone: (212) 530-5000
Telecopy: (212) 530-5219
If to Shareholder:
HealthCare Ventures IV, L.P.
Twin Towers at Metro Park
379 Thornall Street
Edison, NJ 08837
5.3 Entire Agreement. This Agreement, together with the documents
----------------
expressly referred to herein, constitute the entire agreement and supersede all
other prior agreements and understandings, both written and oral, between the
parties, with respect to the subject matter contained herein.
5.4 Amendments. This Agreement may not be modified, amended, altered
----------
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
5.5 Assignment. This Agreement shall be binding upon and inure to
----------
the benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties.
5.6 Public Announcements. Each of Shire and Shareholder agrees that
--------------------
it will not issue any press release or otherwise make any public statement with
respect to this Agreement, the Merger Agreement or the transactions contemplated
hereby or thereby without the prior consent of the other party, which consent
shall not be unreasonably withheld or delayed.
5.7 Governing Law. This Agreement, and all matters relating hereto,
-------------
shall be governed by, and construed in accordance with the laws of the State of
New York without giving effect to the principles of conflicts of laws thereof.
5.8 Injunctive Relief; Jurisdiction. Shareholder agrees that
-------------------------------
irreparable damage would occur and that Roberts would not have any adequate
remedy at law in the event that any of the provisions of this Agreement were not
performed in
<PAGE>
-6-
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that Roberts shall be entitled to an injunction or
injunctions to prevent breaches by Shareholder of this Agreement and to enforce
specifically the terms and provisions of this Agreement in any court of the
United States located in the State of New York, Borough of Manhattan, or in New
York state court located in the Borough of Manhattan, this being in addition to
any other remedy to which they are entitled at law or in equity. In addition,
each of the parties hereto (i) consents to submit such party to the personal
jurisdiction of any Federal court located in the State of New York, Borough of
Manhattan or in New York State Court located in the Borough of Manhattan in the
event any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (ii) agrees that such party will not attempt to deny or
defeat such party to the personal jurisdiction by motion or other request for
leave from any such court and (iii) agrees that such party will not bring any
action relating to this Agreement or any of the transactions contemplated hereby
in any court other than a Federal or state court sitting in the State of New
York, located in the Borough of Manhattan.
5.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
5.10 Descriptive Headings. The descriptive headings used herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
5.11 Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
5.12 Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be
<PAGE>
-7-
necessary or desirable to consummate the transactions contemplated by this
Agreement.
5.13 Third-Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
<PAGE>
-8-
IN WITNESS WHEREOF, Roberts and Shareholder have caused this Agreement
to be executed by their duly authorized officers, as of the date and year first
above written.
ROBERTS PHARMACEUTICAL CORPORATION
By: /s/ John T. Spitznagel
------------------------
Name: John T. Spitznagel
Title: President and Chief
Executive Officer
HEALTHCARE VENTURES IV, L.P.
By: /s/ James Cavanaugh
-----------------------
Name: James Cavanaugh
Title: General Partner
<PAGE>
Exhibit 10.6
SHAREHOLDER AGREEMENT
---------------------
SHAREHOLDER AGREEMENT (this "Agreement"), dated as of July 26, 1999 by
and between HealthCare Ventures V, L.P. ("Shareholder"), and Roberts
Pharmaceutical Corporation, a New Jersey corporation ("Roberts").
WHEREAS, concurrently herewith, Ruby Acquisition Sub Inc., Roberts and
Shire Pharmaceuticals Group plc, a public limited company organized under the
laws of England and Wales ("Shire"), are entering into an Agreement and Plan of
Merger of even date herewith (such Agreement in the form attached hereto as
Exhibit A as it may be subsequently amended or modified (other than a reduction
in the Merger Consideration (as defined therein)) being the "Merger Agreement"),
pursuant to which a newly formed, wholly owned subsidiary of Sapphire will merge
with and into Roberts (the "Merger"); and
WHEREAS, Shareholder owns, as of the date hereof, 1,534,530 ordinary
shares, nominal value five pence per share (the "Ordinary Shares"), of Shire and
10,000 American Depositary Shares of Shire (the "ADSs" and together with the
Ordinary Shares, the "Existing Shares", together with any Ordinary Shares
acquired after the date hereof and prior to the termination hereof, hereinafter
collectively referred to as the "Shares"); and
WHEREAS, Roberts has entered into the Merger Agreement in reliance on
Shareholder's representations, warranties, covenants and agreements set forth
herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, and
intending to be legally bound hereby, it is agreed as follows:
1. Voting Agreement. Shareholder agrees to vote (or cause to be voted) and
----------------
otherwise act (including pursuant to written consent) with respect to all of the
Shares, for the approval and the adoption of the Merger Agreement, all
agreements related to the Merger and any actions required to be approved by
shareholders related thereto, and against any proposal or transaction which
could prevent or delay the consummation of the transactions contemplated by this
Agreement or the Merger
<PAGE>
-2-
Agreement, at any meeting or meetings of the shareholders of Shire, and at any
adjournment, postponement or continuation thereof, at which the Merger Agreement
and other related agreements (or any amended version or versions thereof), or
such other actions are submitted for the consideration and vote of the
Shareholders of Shire. The foregoing shall remain in effect with respect to the
Shares, until the termination of this Agreement. Shareholder agrees to cause the
Shares to be represented, in person or by proxy, at any meeting or meetings of
the shareholders to which this Section 1 applies, and to vote the Shares in
accordance with the terms hereof.
2. Representations and Warranties of Shareholder. Shareholder represents and
---------------------------------------------
warrants to Roberts as follows:
2.1 Ownership of Shares. On the date hereof the Existing Shares are
-------------------
all of the Ordinary Shares currently beneficially owned by Shareholder. On the
Closing Date, the Shares will constitute all of the Ordinary shares of owned
beneficially by Shareholder. Shareholder has no rights to acquire any
additional Ordinary Shares.
2.2 Authority; Binding Agreement. Shareholder has the full legal
----------------------------
right, power and authority to enter into and perform all of its obligations
under this Agreement. The execution and delivery of this Agreement by
Shareholder will not violate any other agreement to which Shareholder is a party
including, without limitation, any voting agreement, shareholders agreement or
voting trust. This Agreement has been duly executed and delivered by
Shareholder and constitutes a legal, valid and binding agreement of Shareholder,
enforceable in accordance with its terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency, reorganization, moratorium and similar
laws, now or hereafter in effect affecting creditors' rights and remedies
generally or general principles of equity. Neither the execution and delivery
of this Agreement nor the consummation by Shareholder of the transactions
contemplated hereby will (i) violate, or require any consent, approval or notice
under, any provision of any judgment, order, decree, statute, law, rule or
regulation applicable to Shareholder or the Shares, (ii) constitute a violation
of, conflict with or constitute a default under, any material contract,
commitment, agreement, understanding, arrangement or other restriction of any
kind to which Shareholder is a party or by which Shareholder is bound.
<PAGE>
-3-
2.3 Reliance on Agreement. Shareholder understands and acknowledges
---------------------
that Roberts is entering into the Merger Agreement in reliance upon
Shareholder's execution and delivery of this Agreement.
3. Certain Covenants of Shareholder. Except in accordance with the provisions
--------------------------------
of this Agreement, Shareholder agrees with, and covenants to, Roberts as
follows:
3.1 Actions Inconsistent with this Agreement. Shareholder shall not
----------------------------------------
(i) transfer (which term shall include, without limitation, for the purposes of
this Agreement, any sale, gift, pledge, assignment, encumbrance or other
disposition) or consent to any transfer of, any or all of the Shares or any
interest therein, except pursuant to the Merger, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all such Shares or any interest therein, (iii) grant any proxy, power-of-
attorney or other authorizations in or with respect to such Shares or (iv)
deposit such Shares into a voting trust or enter into a voting agreement or
arrangement with respect to the Shares.
3.2 Solicitation. Until consummation of the Merger, Shareholder
------------
shall not, and shall direct their investment bankers, attorneys or other
advisers or representatives not to, directly or indirectly, (i) solicit or
initiate (including by way of furnishing or disclosing non-public information)
any inquires or the making of any proposal with respect to a Shire Acquisition
Transaction (as defined in the Merger Agreement) or (ii) negotiate, explore or
otherwise engage in discussions with any person (other than Roberts and its
representatives) with respect to any Shire Acquisition Transaction, or which may
reasonably be expected to lead to a proposal for a Shire Acquisition Transaction
or enter into any agreement, arrangement or understanding with respect to any
such Shire Acquisition Transaction or which would require it to abandon,
terminate or fail to consummate the Merger or any other transaction contemplated
by this Agreement; provided, however, that Shareholder may, in response to an
-------- -------
unsolicited written proposal from a third party regarding a Shire Superior
Proposal (as defined in the Merger Agreement), furnish information to, negotiate
or otherwise engage in discussions with such third party, if the Board of
Directors of Shire determines in good faith, after consultation with its
financial advisors and based upon advice of outside
<PAGE>
-4-
counsel that such action is required for the Board of Directors to comply with
its fiduciary duties under applicable law.
4. Termination. This Agreement shall terminate on the earlier of (i) the
-----------
termination of the Merger Agreement in accordance with its terms, (ii) if the
Merger Agreement is amended to increase the Merger Consideration (as defined in
the Merger Agreement) per share, (iii) the Effective Time or (iv) December 31,
1999.
5. Miscellaneous.
-------------
5.1 Survival of Representations and Warranties. All representations,
------------------------------------------
warranties, covenants and agreements made by Shareholder in this Agreement shall
survive the date hereof and any investigation at any time made by or on behalf
of any party.
5.2 Notices. All notices, requests, claims, demands and other
-------
communications under this Agreement shall be in writing and shall be delivered
personally or by next-day courier or telecopied with confirmation of receipt, to
the parties at the addresses specified below (or at such other address for a
party as shall be specified by like notice; provided that notices of a change of
--------
address shall be effective only upon receipt thereof). Any such notice shall be
effective upon receipt, if personally delivered or telecopied or one day after
delivery to a courier for next-day delivery.
If to Roberts:
Meridian Center II
4 Industrial Way West
Eatontown, NJ 07724
Telecopy: (732) 676-1300
Attention: General Counsel
with copies to:
Lawrence Lederman, Esq.
Milbank, Tweed Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, New York
<PAGE>
-5-
Telephone: (212) 530-5000
Telecopy: (212) 530-5219
If to Shareholder:
HealthCare Ventures V, L.P.
Twin Towers at Metro Park
379 Thornall Street
Edison, NJ 08837
5.3 Entire Agreement. This Agreement, together with the documents
----------------
expressly referred to herein, constitute the entire agreement and supersede all
other prior agreements and understandings, both written and oral, between the
parties, with respect to the subject matter contained herein.
5.4 Amendments. This Agreement may not be modified, amended, altered
----------
or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
5.5 Assignment. This Agreement shall be binding upon and inure to
----------
the benefit of the parties hereto and their respective successors, assigns and
personal representatives, but neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto without the prior written consent of the other parties.
5.6 Public Announcements. Each of Shire and Shareholder agrees that
--------------------
it will not issue any press release or otherwise make any public statement with
respect to this Agreement, the Merger Agreement or the transactions contemplated
hereby or thereby without the prior consent of the other party, which consent
shall not be unreasonably withheld or delayed.
5.7 Governing Law. This Agreement, and all matters relating hereto,
-------------
shall be governed by, and construed in accordance with the laws of the State of
New York without giving effect to the principles of conflicts of laws thereof.
5.8 Injunctive Relief; Jurisdiction. Shareholder agrees that
-------------------------------
irreparable damage would occur and that Roberts
<PAGE>
-6-
would not have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that Roberts
shall be entitled to an injunction or injunctions to prevent breaches by
Shareholder of this Agreement and to enforce specifically the terms and
provisions of this Agreement in any court of the United States located in the
State of New York, Borough of Manhattan, or in New York state court located in
the Borough of Manhattan, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the parties hereto
(i) consents to submit such party to the personal jurisdiction of any Federal
court located in the State of New York, Borough of Manhattan or in New York
State Court located in the Borough of Manhattan in the event any dispute arises
out of this Agreement or any of the transactions contemplated hereby, (ii)
agrees that such party will not attempt to deny or defeat such party to the
personal jurisdiction by motion or other request for leave from any such court
and (iii) agrees that such party will not bring any action relating to this
Agreement or any of the transactions contemplated hereby in any court other than
a Federal or state court sitting in the State of New York, located in the
Borough of Manhattan.
5.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
5.10 Descriptive Headings. The descriptive headings used herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
5.11 Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, such provision shall be
interpreted to be only so broad as is enforceable.
<PAGE>
-7-
5.12 Further Assurances. Each party hereto shall execute and deliver
------------------
such additional documents as may be necessary or desirable to consummate the
transactions contemplated by this Agreement.
5.13 Third-Party Beneficiaries. Nothing in this Agreement, expressed
-------------------------
or implied, shall be construed to give any person other than the parties hereto
any legal or equitable right, remedy or claim under or by reason of this
Agreement or any provision contained herein.
<PAGE>
-8-
IN WITNESS WHEREOF, Roberts and Shareholder have caused this Agreement
to be executed by their duly authorized officers, as of the date and year first
above written.
ROBERTS PHARMACEUTICAL CORPORATION
By: \s\ John T. Spitznagel
------------------------
Name: John T. Spitznagel
Title: President and Chief
Executive Officer
HEALTHCARE VENTURES V, L.P.
By: \s\ James Cavanaugh
----------------------
Name: James Cavanaugh
Title: General Partner
<PAGE>
Exhibit 99.1
EMBARGOED UNTIL 10:00 PM EST, 7/25/99 / 3:00 AM LONDON TIME 7/26/99
- -------------------------------------------------------------------
SHIRE PHARMACEUTICALS GROUP PLC TO MERGE WITH
ROBERTS PHARMACEUTICAL CORPORATION
Stock transaction valued at $1 billion
Merger brings together two of the fastest growing publicly traded
specialty pharmaceutical companies
ANDOVER, UK and EATONTOWN, NJ, USA - July 25, 1999 - Shire Pharmaceuticals Group
plc (LSE: SHP.L; NASDAQ: SHPGY) and Roberts Pharmaceutical Corporation (AMEX:
RPC) today announced they have entered into a definitive merger agreement under
which Shire will merge with Roberts in a tax-free exchange of Shire shares.
In the transaction, Shire will exchange not less than 1.0427 Shire ADSs (each of
which represents three ordinary shares) nor more than 1.2802 Shire ADSs for
each share of Roberts. Based on the July 23, 1999 closing price of Shire ADSs
of $27.00, each Roberts share would be exchanged for 1.1374 Shire ADSs, implying
a per share value of $30.71 and a total transaction equity value of
approximately $1 billion ((Pounds)650 million). Based upon the July 23, 1999
closing price of Shire ADSs, the pro forma market capitalization of the combined
companies is approximately $2.4 billion ((Pounds)1.5 billion).
The merger offer represents a premium of 23% over the July 23, 1999 closing
price of $25.00 per Roberts share and a premium of 32% over the average closing
price of Roberts' shares for the last 20 business days. Based on the closing
price of Shire ADSs on July 23, 1999, Shire shareholders will hold approximately
56% and Roberts shareholders approximately 44% of the combined company. On a
combined basis, the companies had aggregated sales for the first six months of
1999 of $191 million.
Commenting on today's announcement, Rolf Stahel, Chief Executive of Shire said,
"This transaction is an important step toward Shire's goal of exceeding $1
billion in revenues by 2005. We see significant benefits from combining these
two companies. The merger will significantly broaden and diversify our revenue
base, adding a solid portfolio of existing products and promising pipeline
products. It also expands the Company's areas of therapeutic focus, strengthens
our presence in the US and UK and adds Canadian sales, marketing, distribution
and manufacturing capabilities. In addition, the transaction will combine
complementary R&D and sales & marketing infrastructures, facilitating the
development and distribution of pipeline products, as well as providing the
enlarged group with greater negotiating leverage and financial resources in
pursuing in-licensing of products. We look forward to working with Roberts'
management team to integrate the companies and continue to build for the
future."
John Spitznagel, Chief Executive Officer of Roberts, added, "Joining forces with
Shire, a company which enjoys a reputation for building shareholder value, is an
excellent strategic move for Roberts which I believe will bring significant
benefits to our shareholders, employees and customers. The companies share a
similar strategic vision of promoting specialty pharmaceuticals to defined,
niche markets and focusing on key therapeutic categories, and together have a
very attractive drug pipeline. Both companies also enjoy experienced and
professional salesforces. By combining two of the fastest growing specialty
pharmaceutical companies, we feel we will create a thoroughbred in this
industry."
The Boards of Directors of Shire and Roberts have given unanimous approval to
the merger. Yamanouchi Pharmaceutical Company Ltd., owner of 16% of Roberts, and
Dr. Robert Vukovich, owner of 6% of Roberts, have both undertaken to vote their
respective shares in favor of the merger. HealthCare Ventures, owner of 8% of
Shire, has also agreed to vote in favor of the merger. The merger is expected
to close in the fourth quarter of 1999, subject to approval of Shire and Roberts
shareholders, review under the Hart-Scott-Rodino Act and other customary terms
and conditions. Bear, Stearns & Co. Inc. served as financial advisor to Shire
and PaineWebber Incorporated served as financial advisor to Roberts in this
transaction.
<PAGE>
Contacts:
Shire Pharmaceuticals Group plc
Rolf Stahel, Chief Executive Today: (606) 282-2100
Stephen Stamp, Group Finance Director
Wilson Totten, Group R&D Director
Emmanuelle Thiney, Edelman Financial Tel: (212) 704-8239
Roberts Pharmaceutical Corporation
John Spitznagel, Chief Executive Officer Today: (732) 676-1200
Stuart Levine, Vice President - Investor Relations
Peter Duda, BSMG Worldwide Tel: (212) 445-8222
This release contains forward-looking statements which are based on assumptions
and external factors, including assumptions relating to, but not limited to,
regulatory action, product pricing, competitive market conditions, unaudited
financial data, new product development and other risks or uncertainties
detailed from time to time in filings with the Securities and Exchange
Commission. These forward-looking statements represent the companies' judgment
as of the date of this release and any changes in the assumptions or external
factors could produce significantly different results.
<PAGE>
SUMMARY OF THE TRANSACTION
Shire Pharmaceuticals Group plc (NASDAQ: SHPGY; LSE: SHP.L) and Roberts
Pharmaceutical Corporation (AMEX: RPC) announced today that they have entered
into a definitive merger agreement to be effected by way of a share-for-share
exchange of Shire shares for Roberts shares. Based on the July 23, 1999 closing
price of Shire ADSs of $27.00, each Roberts share would be exchanged for 1.1374
Shire ADSs, implying a per share value of $30.71 and a total transaction equity
value of approximately $1 billion ((Pounds)650 million). Based upon the July
23, 1999 closing price of Shire ADSs, the pro forma market capitalization of the
combined companies is approximately $2.4 billion ((Pounds)1.5 billion).
Terms of the Merger
Summary terms of the merger are as follows:
. The merger will be effected by way of a share-for-share exchange which is
expected to be tax-free to US and UK shareholders.
. Based upon the closing price of Shire ADSs on July 23, 1999, the merger offer
will be made on the basis of 1.1374 Shire ADSs (or 3.4122 ordinary shares)
for each Roberts share. Each Shire ADS represents three Shire ordinary
shares. Roberts shareholders may elect to receive ordinary shares as
consideration.
. Based upon the closing price of Shire ADSs on July 23, 1999, the merger offer
represents a premium of 23% over the closing price of $25.00 per Roberts
share on July 23, 1999 and a premium of 32% over the average closing price of
Roberts shares for the last 20 business days.
. A "cap and collar" mechanism in the merger agreement provides for a maximum
and minimum exchange ratio of between 3.8407 and 3.1280 ordinary shares per
Roberts share, depending upon the average Shire ADS price before closing.
. Based upon the closing price of Shire ADSs on July 23, 1999, Shire
shareholders will own approximately 56% and Roberts shareholders
approximately 44% of the combined company. Management estimates that
approximately 70% of the combined company's shares will be held in the US
with the majority of the remainder held in the UK.
. Yamanouchi Pharmaceutical Company Ltd., owner of 16% of Roberts, and Dr.
Robert Vukovich, owner of 6% of Roberts, have both undertaken to vote their
respective shares in favor of the merger. HealthCare Ventures, owner of 8% of
Shire, has also agreed to vote in favor of the merger.
. Upon the termination of the merger agreement by one party, under certain
circumstances, a termination fee of $30 million is payable by that party to
the other party. In addition, Roberts has granted to Shire an option to
purchase for cash newly issued Roberts shares equivalent to 19.9% of Roberts
existing issued shares.
. The merger is contingent upon, among other conditions, the approval of Shire
and Roberts shareholders. The Directors of Shire, who have been advised by
Bear, Stearns & Co. Inc., unanimously recommend Shire shareholders to vote in
favor of the merger. The Directors of Roberts, who have been advised by
PaineWebber Incorporated, unanimously recommend Roberts shareholders to vote
in favor of the merger.
Reasons for the Merger
Management believes that the merger brings together two of the fastest growing
publicly traded specialty pharmaceutical companies, which share a common
strategic vision. Both companies have built effective sales and marketing
organisations to promote specialty products to defined customer groups. In
addition, through selective in-licensing of development compounds, both
companies seek to build long term shareholder value by taking these compounds
through the development and registration process. The principal benefits of the
merger are expected to be:
<PAGE>
. A broader product portfolio. In Adderall, Pentasa, Carbatrol, Agrylin and
ProAmatine, the combined company's five key products could each have
significant sales potential. The additional resources and sales force
coverage that the enlarged group is able to bring to bear are expected to
enhance the sales potential of these products. The combined company will have
combined sales forces of 269, 92 and 25 in the US, the UK and Canada,
respectively.
. An enriched product pipeline. The combined company's key development projects
will include Reminyl (galantamine) for Alzheimer's disease, Dirame (propiram)
for analgesia, Emitasol (nasal metoclopramide) for nausea, Lambda (lanthanum
phosphate) for hyperphosphatemia and RL0903 (GnRH implant) for prostatic
cancer. The combined company will have one product in registration and a
further five products in Phase III.
. Greater financial resources to pursue further growth opportunities. The
aggregated indebtedness of the combined company at June 30, 1999 was
approximately $130 million. The aggregated cash and investments of the
combined company at the same date was approximately $126 million. The
combined company intends to expand its direct marketing capability into
Continental Europe, through an expected combination of product and company
acquisitions. In its chosen therapeutic areas, the combined company's aim
will be to become a "licensee of choice" for biotech and other companies that
do not possess their own sales and marketing capabilities.
. Increased investor profile and liquidity. Management believes the combined
company will benefit from a wider shareholder base and greater liquidity.
Financial Information
In recognition of its likely ownership profile, the combined company intends to
report primarily under US GAAP. Shareholders may elect to receive full UK GAAP
accounts in addition to US GAAP accounts. It is intended that the merger will
be accounted for as a "pooling-of-interests" under US GAAP. Under UK GAAP, the
merger will be accounted for as a purchase.
Under US GAAP, the unaudited aggregation of the profit and loss accounts of
Shire and Roberts for the year ended December 31, 1998 and the six months ended
June 30, 1999 are as follows:
<TABLE>
<CAPTION>
Year ended 12/31/98 ($m) Six months ended 6/30/99 ($m)
Shire Roberts Combined Shire Roberts Combined
<S> <C> <C> <C> <C> <C> <C>
Revenues 133 175 309 96 95 191
Cost of sales (29) (66) (95) (15) (28) (43)
R&D (48) (12) (60) (25) (7) (32)
SG&A (60) (70) (130) (46) (37) (83)
Operating profit (4) 27 24 10 23 33
</TABLE>
Note: Figures above derived from Shire and Roberts financial statements prepared
under US GAAP. No adjustments have been made to reflect any consequences of the
merger or to conform accounting policies between Shire and Roberts. For Shire,
the line item SG&A includes adjustments to reconcile Shire's UK GAAP results to
US GAAP results as follows: i) incremental goodwill charges of $11.1 million and
$5.4 million for the year ended 12/31/98 and six months ended 6/30/99,
respectively and ii) incremental charges related to the treatment of incentive
stock options of $5.5 million and $7.6 million for the year ended 12/31/98 and
six months ended 6/30/99, respectively. Shire amounts have been converted
solely for the convenience of the reader at $1.66:(Pounds)1.00 and
$1.62:(Pounds)1.00 for the year ended December 31, 1998 and the six months ended
June 30, 1999, respectively, based on the average exchange rate for each period.
No adjustment has been made for any potential synergies. The transaction is
assumed to be accounted for as a pooling-of-interests under US GAAP.
The financial information relating to Shire contained in this document does not
constitute Shire's statutory accounts within the meaning of Section 240,
Companies Act 1985. Statutory accounts for the year ended December 31, 1998
have been
<PAGE>
delivered to the Registrar of Companies of England and Wales. Arthur Andersen,
Shire's auditors, have made a report on them under Section 235 and such report
was not qualified and contained no statement under section 237 (2) or (3).
Management expects to realize annual synergies of approximately $20 million and,
accordingly, expects the merger should be earnings enhancing under US GAAP for
Shire shareholders in 2000. However, a substantial one-time restructuring
charge is expected in the fourth quarter of 1999.
Board of Directors
The newly combined Board of Directors of Shire will be comprised of eleven
members, six from Shire's current board and five from Roberts' current board:
Dr. James Cavanaugh Non-executive Chairman
Rolf Stahel Chief Executive
Stephen Stamp Group Finance Director
Dr. Wilson Totten Group R&D Director
Dr. Bernard Canavan Non-executive
Dr. Zola Horovitz Non-executive
Ronald Nordmann Non-executive
Dr. Barry Price Non-executive
Joseph Smith Non-executive
John Spitznagel Non-executive
Dr. Robert Vukovich Non-executive
Information on Roberts
Roberts was founded in 1983 by Dr. Robert Vukovich, the current non-executive
chairman, and is headquartered in Eatontown, New Jersey, US. Initially the
company pursued a strategy of acquiring late-stage development compounds. This
was later augmented by the acquisition of specialty products with in-market
sales. This facilitated the building of a sales and marketing infrastructure,
allowing the company to capitalise on opportunities within its own pipeline. In
1997, Roberts reached important milestones with the launches of its first two
development products, ProAmatine, for the treatment of orthostatic hypotension,
and Agrylin, for treating essential thrombocythemia. In 1998, Pentasa, for the
treatment of ulcerative colitis, was acquired from Hoechst Marrion Roussel.
Principal development products include Dirame, a synthetic opioid analgesic, in
Phase III for the treatment of moderate to moderately severe pain; Emitasol, an
intranasal form of metoclopramide for preventing post chemotherapy nausea and
vomiting, and RL0903, a GnRH analogue implant for prostate cancer. Under US
GAAP, for the six months ended June 30, 1999, Roberts recorded revenues of $95
million and profit before tax of $19.4 million. Diluted earnings per share
increased from $0.18 for the six months ended June 30, 1998 to $0.39 for the six
months ended June 30, 1999.
Information on Shire
Founded in 1986, Shire is a specialty pharmaceutical company with turnover in
1998 of (Pounds)80.3 million. It is headquartered in Andover, United Kingdom.
Historically the majority of products have been in-licensed and Shire continues
to actively seek such opportunities. However, Shire has increasingly sought to
develop its own products for marketing. Products currently marketed in the US
are Adderall and DextroStat, for Attention
<PAGE>
Deficit Hyperactivity Disorder (ADHD), and Carbatrol, for the treatment of
epilepsy. The key UK marketed products are the Calcichew range used as adjuncts
in the treatment of osteoporosis. In addition, Shire has out-licensed two oral
Hormone Replacement Therapy (HRT) ranges, the ClimaRange and BetaRange, to
various multinational companies principally for marketing in Europe and Central
and South America.
Shire invests significant sums in R&D spending. The company's lead development
products are galantamine (Reminyl), for the treatment of Alzheimer's disease,
and Lambda, for the treatment of hyperphosphataemia, in patients with chronic
kidney failure. The first European application for marketing of galantamine was
submitted in March 1999; subsequently, various other applications have been
made. The US New Drug Application (NDA) is planned to be submitted, by Janssen,
before the end of 1999. Lambda is currently in Phase III trials in Europe, in
Phase II in USA and Phase I in Japan. Shire also has a wide range of drug
delivery technologies that may be applied to its own products or to those of
third parties. Under UK GAAP, in the six months ended June 30, 1999 Shire
recorded a profit before tax of (Pounds)16.0 million on a turnover of
(Pounds)59.5 million. Diluted earnings per share under UK GAAP increased from
2.3 pence for the six months ended June 30, 1998 to 8.1 pence for the six months
ended June 30, 1999.
Detailed Terms of the Merger
Under the terms of the agreement, Shire will acquire all of Roberts' outstanding
stock in stock-for-stock exchange which is expected to be tax-free to US and UK
shareholders. For each share of Roberts stock, Roberts' shareholders will
receive (i) a fixed exchange ratio of 3.4122 ordinary shares of Shire if the
average closing price of Shire's ADSs for the 15 consecutive trading days ending
the third trading day prior to closing is between $23.73 and $29.01; (ii) a
floating exchange ratio between 3.4122 and 3.1280 if the average closing price
is between $29.01 and $31.65 (equivalent to $33.00 per Roberts share); (iii) a
floating exchange ratio between 3.8407 and 3.4122 if the average closing price
is between $21.09 and $23.73 (equivalent to $27.00 per Roberts share); (iv) a
fixed exchange ratio of 3.8407 if the average closing price is below $21.09; and
(v) a fixed exchange ratio of 3.1280 if the average closing price is greater
than $31.65. Unless a holder otherwise elects, Shire will provide each Roberts
shareholder with one-third of a Shire ADS for each ordinary share such holder
would be entitled to receive.
