<PAGE>

                                                                     Exhibit 4.1

              ====================================================






                            SMITH & NEPHEW GROUP PLC


                                       AND


                               SMITH & NEPHEW PLC


                                       AND


                              THE BANK OF NEW YORK

                                  As Depositary


                                       AND


               OWNERS AND HOLDERS OF AMERICAN DEPOSITARY RECEIPTS




                                Deposit Agreement

                          Dated as of November 16, 1999
                    Amended and Restated as of August 7, 2000
                  Amended and Restated as of ____________, 2003

              ====================================================

<PAGE>

                                DEPOSIT AGREEMENT

     DEPOSIT AGREEMENT dated as of November 16, 1999, as amended and restated as
of August 7, 2000, as amended and restated as of ___________, 2003 among SMITH &
NEPHEW GROUP PLC, incorporated under the laws of England and Wales (herein
called the Issuer), SMITH & NEPHEW PLC, incorporated under the laws of England
and Wales (herein called S&N), THE BANK OF NEW YORK, a New York banking
corporation (herein called the Depositary), and all Owners and holders from time
to time of American Depositary Receipts (as hereinafter defined) issued
hereunder.

                              W I T N E S S E T H :

     WHEREAS, S&N, The Bank of New York, as depositary, and all holders from
time to time entered into a deposit agreement dated as of November 16, 1999, as
amended and restated as of August 7, 2000 (the "Smith & Nephew plc Deposit
Agreement");

     WHEREAS, S&N is to be reorganized in accordance with a scheme of
arrangement under section 425 of the English Companies Act 1985 pursuant to
which the Issuer will become the holding company of S&N and all existing
ordinary shares of S&N will be cancelled and each S&N shareholder will receive
for each ordinary share of S&N one ordinary share of S&N Group plus a beneficial
interest in one common access share of S&N to be held in the Smith & Nephew
Common Access Trust established for the purpose of holding such common access
shares for the benefit of S&N Group shareholders;

     WHEREAS, S&N and Smith & Nephew Group plc desire to substitute and replace
Smith & Nephew Group PLC for S&N as the Issuer under the Smith & Nephew plc
Deposit Agreement;

     WHEREAS, the Issuer and S&N now desire to amend and restate the S&N Deposit
Agreement to provide for such substitution and, as hereinafter set forth in this
Deposit Agreement (as hereinafter defined), for the deposit of Shares (as
hereinafter defined) of the Issuer from time to time with the Depositary or with
the Custodian (as hereinafter defined) as agent of the Depositary for the
purposes set forth in this Deposit Agreement, for the creation of American
Depositary Shares representing the Shares so deposited and for the execution and
delivery of American Depositary Receipts evidencing the American Depositary
Shares; and

     WHEREAS, the American Depositary Receipts are to be substantially in the
form of Exhibit A annexed hereto, with appropriate insertions, modifications and
omissions, as hereinafter provided in this Deposit Agreement;

<PAGE>

     NOW, THEREFORE, in consideration of the premises, it is agreed by and
between the parties hereto as follows:

ARTICLE 1.     DEFINITIONS.

     The following definitions shall for all purposes, unless otherwise clearly
indicated, apply to the respective terms used in this Deposit Agreement:

     SECTION 1.1    American Depositary Shares.

          The term "American Depositary Shares" shall mean the securities
representing the interests in the Deposited Securities and evidenced by the
Receipts issued hereunder. Each American Depositary Share shall represent the
number of Shares specified in Exhibit A annexed hereto, until there shall occur
a distribution upon Deposited Securities covered by Section 4.3 or a change in
Deposited Securities covered by Section 4.8 with respect to which additional
Receipts are not executed and delivered, and thereafter American Depositary
Shares shall evidence the amount of Shares or Deposited Securities specified in
such Sections.

     SECTION 1.2    Article; Section.

          Wherever references are made in this Deposit Agreement to an "Article"
or "Articles" or to a "Section" or "Sections", such references shall mean an
article or articles or a section or sections of this Deposit Agreement, unless
otherwise required by the context.

     SECTION 1.3    Commission.

          The term "Commission" shall mean the Securities and Exchange
Commission of the United States or any successor governmental agency in the
United States.

     SECTION 1.4    Consultation.

          The term "Consultation" shall mean the good faith attempt by the
Depositary to discuss the relevant issue in a timely manner with a person
employed by the Issuer reasonably believed by the Depositary to be empowered by
the Issuer to engage in such discussion on behalf of the Issuer.

     SECTION 1.5    Custodians.

          The term "Custodians" shall mean the London, England office of The
Bank of New York, as agent of the Depositary for the purposes of this Deposit
Agreement, and any other firm or corporation which may hereafter be appointed by
the Depositary pursuant to the terms of Section 5.5, as substitute or additional
custodian or

<PAGE>

custodians hereunder, as the context shall require and shall also mean all of
them collectively.

     SECTION 1.6    Deposit Agreement.

          The term "Deposit Agreement" shall mean this amended and restated
deposit agreement, as the same may be amended from time to time in accordance
with the provisions hereof.

     SECTION 1.7    Depositary; Corporate Trust Office.

          The term "Depositary" shall mean The Bank of New York, a New York
banking corporation and any successor as depositary hereunder. The term
"Corporate Trust Office", when used with respect to the Depositary, shall mean
the office of the Depositary which at the date of this Agreement is 101 Barclay
Street, New York, New York, 10286. If the address of the Corporate Trust Office
changes after the date of this Deposit Agreement, notice shall be given 30 days
prior to such change by the Depositary to the Issuer of such new address. During
such 30 day notification period, the Issuer shall send all communications to the
Depositary's previous address.

     SECTION 1.8    Deposited Securities.

          The term "Deposited Securities" as of any time shall mean Shares at
such time deposited or deemed to be deposited under this Deposit Agreement and
any and all other securities, property and cash received by the Depositary or
the Custodian in respect thereof and at such time held hereunder, subject as to
cash to the provisions of Section 4.5.

     SECTION 1.9    Dollars; Pound; Pence.

          The term "Dollars" shall mean the lawful currency of the United
States. The terms "Pound" and "Pence" shall mean the lawful currency of the
United Kingdom.

     SECTION 1.10   Foreign Registrar.

          The term "Foreign Registrar" shall mean the entity that presently
carries out the duties of registrar for the Shares or any successor as registrar
for the Shares and any other appointed agent of the Issuer for the transfer and
registration of Shares.

     SECTION 1.11   Issuer.

          The term "Issuer" shall mean Smith & Nephew Group plc, incorporated
under the laws of England and Wales, and its successors.

<PAGE>

     SECTION 1.12   Owner.

          The term "Owner" shall mean the person in whose name a Receipt is
registered on the books of the Depositary maintained for such purpose.

     SECTION 1.13   Receipts.

          The term "Receipts" shall mean the American Depositary Receipts issued
hereunder evidencing American Depositary Shares.

     SECTION 1.14   Registrar.

          The term "Registrar" shall mean any bank or trust company having an
office in the Borough of Manhattan, The City of New York, which shall be
appointed to register Receipts and transfers of Receipts as herein provided and
shall include any co-registrar appointed by the Depositary after Consultation
with the Issuer.

     SECTION 1.15   Restricted Securities.

          The term "Restricted Securities" shall mean Shares, or Receipts
representing such Shares, which are acquired directly or indirectly from the
Issuer or its affiliates (as defined in Rule 144 under the Securities Act of
1933) in a transaction or chain of transactions not involving any public
offering or which are subject to resale limitations under Regulation D under
that Act or both, or which are held by an officer, director (or persons
performing similar functions) or other affiliate of the Issuer, or which are
subject to other restrictions on sale or deposit under the laws of the United
States or the United Kingdom, or under a shareholder agreement or the Articles
of Association and By-laws of the Issuer.

     SECTION 1.16   Securities Act of 1933.

          The term "Securities Act of 1933" shall mean the United States
Securities Act of 1933, as from time to time amended.

     SECTION 1.17   Shares.

          The term "Shares" shall mean ordinary shares in registered form of the
Issuer. Each Share includes a beneficial interest in a common access share of
S&N, which interest is indivisible from the ordinary share. The common access
shares are held for the benefit of holders of Shares by the Smith & Nephew
Common Access Trust which is registered under the laws of England and Wales.
Each Share is validly issued and outstanding and fully paid, nonassessable and
free of any pre-emptive rights of the holders of outstanding Shares or hereafter
validly issued and outstanding and fully paid, nonassessable and free of any
pre-emptive rights of the holders of outstanding Shares or

<PAGE>

interim certificates representing such Shares; provided, however, that if there
shall occur any change in nominal value, a split-up or consolidation or any
other reclassification or, upon the occurrence of an event described in Section
4.8, an exchange or conversion in respect of the Shares, the term "Shares" shall
thereafter represent the successor securities resulting from such change in
nominal value, split-up or consolidation or such other reclassification or such
exchange or conversion. Reference to Shares shall include evidence of rights to
receive Shares; provided that in no event shall the term "Shares" include
evidence of rights to receive Shares with respect to which the full purchase
price has not been paid.

ARTICLE 2.     FORM OF RECEIPTS, DEPOSIT OF SHARES, EXECUTION AND DELIVERY,
               TRANSFER AND SURRENDER OF RECEIPTS.

     SECTION 2.1    Form and Transferability of Receipts.

          Definitive Receipts shall be substantially in the form set forth in
Exhibit A annexed to this Deposit Agreement, with appropriate insertions,
modifications and omissions, as hereinafter provided. No Receipt shall be
entitled to any benefits under this Deposit Agreement or be valid or obligatory
for any purpose, unless such Receipt shall have been executed by the Depositary
by the manual or facsimile signature of a duly authorized signatory of the
Depositary and, if a Registrar for the Receipts shall have been appointed,
countersigned by the manual or facsimile signature of a duly authorized officer
of the Registrar. The Depositary shall maintain books on which each Receipt so
executed and delivered as hereinafter provided and the transfer of each such
Receipt shall be registered. Receipts bearing the manual or facsimile signature
of a duly authorized signatory of the Depositary who was at any time a proper
signatory of the Depositary shall bind the Depositary, notwithstanding that such
signatory has ceased to hold such office prior to the execution and delivery of
such Receipts by the Registrar or did not hold such office on the date of
issuance of such Receipts.

          The Receipts may be endorsed with or have incorporated in the text
thereof such legends or recitals or modifications not inconsistent with the
provisions of this Deposit Agreement as may be required by the Depositary or
required to comply with any applicable law or regulations thereunder or with the
rules and regulations of any securities exchange upon which American Depositary
Shares may be listed or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular
Receipts are subject by reason of the date of issuance of the underlying
Deposited Securities or otherwise.

          Title to a Receipt (and to the American Depositary Shares evidenced
thereby), when properly endorsed or accompanied by a proper instrument or
instruments of transfer, shall be transferable by delivery with the same effect
as in the case of a negotiable instrument; provided, however, that the Issuer
and the Depositary,

<PAGE>

notwithstanding any notice to the contrary, may treat the Owner thereof as the
absolute owner thereof for the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in this Deposit Agreement and for all other purposes, and neither the Depositary
nor the Issuer shall have any obligation or be subject to any liability under
this Deposit Agreement to any holder of a Receipt unless such holder is the
Owner thereof.

     SECTION 2.2    Deposit of Shares.

          Subject to the terms and conditions of this Deposit Agreement, Shares
or evidence of rights to receive Shares may be deposited by delivery thereof to
any Custodian hereunder, accompanied by any appropriate instrument or
instruments of transfer, or endorsement, in form reasonably satisfactory to the
Custodian, together with all such certifications as may be required from the
individual depositing the underlying Shares or any governmental agency, stock
exchange, etc. by the Depositary or such Custodian in accordance with the
provisions of this Deposit Agreement, and, if the Depositary requires, together
with a written order directing the Depositary to execute and deliver to, or upon
the written order of, the person or persons stated in such order, a Receipt or
Receipts for the number of American Depositary Shares representing such deposit.
No Share shall be accepted for deposit unless accompanied by evidence, if any is
required by the Depositary, that is reasonably satisfactory to the Depositary
that all conditions to such deposit have been satisfied by the person depositing
such Shares under the laws and regulations of the United Kingdom and any
necessary approval has been granted by any governmental body in the United
Kingdom, if any, which is then performing the function of the regulation of
currency exchange. If required by the Depositary, Shares presented for deposit
at any time, whether or not the transfer books of the Issuer or the Foreign
Registrar, if applicable, are closed, shall also be accompanied by an agreement
or assignment, or other instrument satisfactory to the Depositary, which will
provide for the prompt transfer to the Custodian of any dividend, or right to
subscribe for additional Shares or to receive other property which any person in
whose name the Shares are or have been recorded may thereafter receive upon or
in respect of such deposited Shares, or in lieu thereof, such agreement of
indemnity or other agreement as shall be satisfactory to the Depositary.

          At the request and risk and expense of any person proposing to deposit
Shares, and for the account of such person, the Depositary may receive
certificates for Shares to be deposited, together with the other instruments
herein specified, for the purpose of forwarding such Share certificates to the
Custodian for deposit hereunder.

          Upon each delivery to a Custodian of a certificate or certificates for
Shares to be deposited hereunder, together with the other documents above
specified, such Custodian shall, as soon as transfer and recordation can be
accomplished, present such certificate or certificates to the Issuer or the
Foreign Registrar, if applicable, for transfer

<PAGE>

and recordation of the Shares being deposited in the name of the Depositary or
its nominee or such Custodian or its nominee.

          Deposited Securities shall be held by the Depositary or by a Custodian
for the account and to the order of the Depositary or at such other place or
places as the Depositary shall determine.

     SECTION 2.3    Execution and Delivery of Receipts.

          Upon receipt by any Custodian of any deposit pursuant to Section 2.2
hereunder (and in addition, if the transfer books of the Issuer or the Foreign
Registrar, if applicable, are open, the Depositary may in its sole discretion
require a proper acknowledgment or other evidence from the Issuer that any
Deposited Securities have been recorded upon the books of the Issuer or the
Foreign Registrar, if applicable, in the name of the Depositary or its nominee
or such Custodian or its nominee), together with the other documents required as
above specified, such Custodian shall notify the Depositary of such deposit and
the person or persons to whom or upon whose written order a Receipt or Receipts
are deliverable in respect thereof and the number of American Depositary Shares
to be evidenced thereby. Such notification shall be made by letter or, at the
request, risk and expense of the person making the deposit, by cable, telex or
facsimile transmission. Upon receiving such notice from such Custodian, or upon
the receipt of Shares by the Depositary, the Depositary, subject to the terms
and conditions of this Deposit Agreement, shall execute and deliver at its
Corporate Trust Office, to or upon the order of the person or persons named in
the notice delivered to the Depositary, a Receipt or Receipts, registered in the
name or names and evidencing any authorized number of American Depositary Shares
requested by such person or persons, but only upon payment to the Depositary of
the fees of the Depositary for the execution and delivery of such Receipt or
Receipts as provided in Section 5.9, and of all taxes and governmental charges
and fees payable in connection with such deposit and the transfer of the
Deposited Securities.

          The Depositary shall execute and deliver Receipts only in accordance
with the provisions of this Deposit Agreement and the form of Receipt. The
Depositary shall not deliver Shares hereunder except upon the receipt and
cancellation of Receipts.

     SECTION 2.4    Transfer of Receipts; Combination and Split-up of Receipts.

          The Depositary, subject to the terms and conditions of this Deposit
Agreement, including payment of the fees of the Depositary as provided in
Section 5.9, shall, without unreasonable delay, register transfers of Receipts
on its transfer books from time to time, upon any surrender of a Receipt, by the
Owner in person or by a duly authorized attorney, properly endorsed or
accompanied by a proper instrument or instruments of transfer, and duly stamped
as may be required by the laws of the State of New York and of the United States
of America. Thereupon the Depositary shall execute

<PAGE>

a new Receipt or Receipts and deliver the same to or upon the order of the
person entitled thereto, but only upon payment to the Depositary of the fees of
the Depositary as provided in Section 5.9.

          The Depositary, subject to the terms and conditions of this Deposit
Agreement, shall upon surrender of a Receipt or Receipts for the purpose of
effecting a split-up or combination of such Receipt or Receipts, execute and
deliver a new Receipt or Receipts for any authorized number of American
Depositary Shares requested, evidencing the same aggregate number of American
Depositary Shares as the Receipt or Receipts surrendered.

          The Depositary may, after Consultation with the Issuer, appoint one or
more co-transfer agents for the purpose of effecting transfers, combinations and
split-ups of Receipts at designated transfer offices on behalf of the
Depositary. Each co-transfer agent appointed under this Section 2.4 shall give
notice in writing to the Issuer and the Depositary accepting such appointment
and agreeing to be bound by the applicable terms of this Deposit Agreement. In
carrying out its functions, a co-transfer agent may require evidence of
authority and compliance with applicable laws and other requirements by Owners
or persons entitled to Receipts and will be entitled to protection and indemnity
to the same extent as the Depositary.

     SECTION 2.5    Surrender of Receipts and Withdrawal of Shares.

          Upon surrender at the Corporate Trust Office of the Depositary of a
Receipt for the purpose of withdrawal of the Deposited Securities represented by
the American Depositary Shares evidenced by such Receipt, and upon payment of
the fee of the Depositary for the surrender of Receipts as provided in Section
5.9 and payment of all taxes and governmental charges payable in connection with
such surrender and withdrawal of the Deposited Securities, and subject to the
terms and conditions of this Deposit Agreement, the Owner of such Receipt shall
be entitled to delivery, to him or upon his order, of the amount of Deposited
Securities at the time represented by the American Depositary Shares evidenced
by such Receipt. Delivery of such Deposited Securities may be made by the
delivery of (a) certificates in the name of such Owner or as ordered by him or
by certificates properly endorsed or accompanied by a proper instrument or
instruments of transfer to such Owner or as ordered by him and (b) any other
securities, property and cash to which such Owner is then entitled in respect of
such Receipts to such Owner or as ordered by him. Such delivery shall be made,
as hereinafter provided, without unreasonable delay.

          A Receipt surrendered for such purposes may be required by the
Depositary to be properly endorsed in blank or accompanied by a proper
instrument or instruments of transfer in blank, and if the Depositary so
requires, the Owner thereof shall execute and deliver to the Depositary a
written order directing the Depositary to cause the

<PAGE>

Deposited Securities being withdrawn to be delivered to or upon the written
order of a person or persons designated in such order. Thereupon the Depositary
shall direct the Custodian to deliver at the London, England office of the
Custodian, subject to Sections 2.6, 3.1 and 3.2 and to the other terms and
conditions of this Deposit Agreement, to or upon the written order of the person
or persons designated in the order delivered to the Depositary as above
provided, the amount of Deposited Securities represented by the American
Depositary Shares evidenced by such Receipt, except that the Depositary may make
delivery to such person or persons at the Corporate Trust Office of the
Depositary of any dividends or distributions with respect to the Deposited
Securities represented by the American Depositary Shares evidenced by such
Receipt, or of any proceeds of sale of any dividends, distributions or rights,
which may at the time be held by the Depositary.

          At the request, risk and expense of any Owner so surrendering a
Receipt, and for the account of such Owner, the Depositary shall direct the
Custodian to forward any cash or other property (other than rights) comprising,
and forward a certificate or certificates and other proper documents of title
for, the Deposited Securities represented by the American Depositary Shares
evidenced by such Receipt to the Depositary for delivery at the Corporate Trust
Office of the Depositary. Such direction shall be given by letter or, at the
request, risk and expense of such Owner, by cable, telex or facsimile
transmission.

     SECTION 2.6    Limitations on Execution and Delivery, Transfer and
Surrender of Receipts.

          As a condition precedent to the execution and delivery, registration
of transfer, split-up, combination or surrender of any Receipt or withdrawal of
any Deposited Securities, the Depositary, Custodian or Registrar may require
payment from the depositor of Shares or the presentor of the Receipt of a sum
sufficient to reimburse it for any tax or other governmental charge and any
stock transfer or registration fee with respect thereto (including any such tax
or charge or fee with respect to the Shares being deposited or withdrawn) and
payment of any applicable fees as herein provided, may require the production of
proof satisfactory to it as to the identity and genuineness of any signature and
may also require compliance with any regulations the Depositary may establish
consistent with the provisions of this Deposit Agreement, including, without
limitation, this Section 2.6.

          The delivery of Receipts against deposits of Shares generally or
against deposits of particular Shares may be suspended, or the transfer of
Receipts in particular instances may be refused, or the registration of transfer
of outstanding Receipts generally may be suspended, during any period when the
transfer books of the Depositary or the Issuer or the Foreign Registrar, if
applicable, are closed, or if any such action is deemed necessary or advisable
by the Depositary or the Issuer at any time or from time to time because of any
requirement of law or of any government or governmental body or

<PAGE>

commission, or under any provision of this Deposit Agreement, or for any other
reason, subject to the provisions of Section 7.7 hereof. Notwithstanding any
other provision of this Deposit Agreement or the Receipts, the surrender of
outstanding Receipts and withdrawal of Deposited Securities may not be suspended
subject only to (i) temporary delays caused by closing the transfer books of the
Depositary or the Issuer or the deposit of Shares in connection with voting at a
shareholders' meeting, or the payment of dividends, (ii) the payment of fees,
taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or
governmental regulations relating to the Receipts or to the withdrawal of the
Deposited Securities. Without limitation of the foregoing, the Depositary shall
not knowingly accept for deposit under this Deposit Agreement any Shares
required to be registered under the provisions of the Securities Act of 1933,
unless a registration statement is in effect as to such Shares.

     SECTION 2.7    Mutilated, Destroyed, Lost or Stolen Receipts.

          In case any Receipt shall be mutilated, destroyed, lost or stolen, the
Depositary shall execute and deliver a new Receipt of like tenor in exchange and
substitution for such mutilated Receipt upon cancellation thereof, or in lieu of
and in substitution for such destroyed, lost or stolen Receipt. Before the
Depositary shall execute and deliver a new Receipt in substitution for a
destroyed, lost or stolen Receipt, the Owner thereof shall have (a) filed with
the Depositary (i) a request for such execution and delivery before the
Depositary has notice that the Receipt has been acquired by a bona fide
purchaser and (ii) a sufficient indemnity bond and (b) satisfied any other
reasonable requirements imposed by the Depositary.

     SECTION 2.8    Cancellation and Destruction of Surrendered Receipts.

          All Receipts surrendered to the Depositary shall be cancelled by the
Depositary. The Depositary is authorized to destroy Receipts so cancelled.

     SECTION 2.9    Pre-Release of Receipts.

          The Depositary may issue Receipts against the delivery by the Issuer
(or any agent of the Issuer recording Share ownership) of rights to receive
Shares from the Issuer (or any such agent). No such issue of Receipts will be
deemed a "Pre-Release" that is subject to the restrictions of the following
paragraph.

          Unless requested in writing by the Issuer to cease doing so, the
Depositary may, notwithstanding Section 2.3 hereof, execute and deliver Receipts
prior to the receipt of shares pursuant to Section 2.2 ("Pre-Release"). The
Depositary may, pursuant to Section 2.5, deliver Shares upon the receipt and
cancellation of Receipts which have been Pre-Released, whether or not such
cancellation is prior to the termination of such Pre-Release or the Depositary
knows that such Receipt has been Pre-Released. The Depositary may receive
Receipts in lieu of Shares in satisfaction of a Pre-Release. Each

<PAGE>

Pre-Release will be (a) preceded or accompanied by a written representation and
agreement from the person to whom Receipts are to be delivered (the
"Pre-Releasee") that the Pre-Releasee, or its customer, (i) owns the Shares or
Receipts to be remitted, as the case may be, (ii) assigns all beneficial rights,
title and interest in such Shares or Receipts, as the case may be, to the
Depositary in its capacity as such and for the benefit of the Owners, and (iii)
will not take any action with respect to such Shares or Receipts, as the case
may be, that is inconsistent with the transfer of beneficial ownership
(including, without the consent of the Depositary, disposing of such Shares or
Receipts, as the case may be), other than in satisfaction of such Pre-Release,
(b) at all times fully collateralized with cash, U.S. government securities or
such other collateral as the Depositary determines, in good faith, will provide
substantially similar liquidity and security, (c) terminable by the Depositary
on not more than five (5) business days notice, and (d) subject to such further
indemnities and credit regulations as the Depositary deems appropriate. The
number of Shares not deposited but represented by American Depositary Shares
outstanding at any time as a result of Pre-Releases will not normally exceed
thirty percent (30%) of the Shares deposited hereunder; provided, however, that
the Depositary reserves the right to disregard such limit from time to time as
it deems reasonably appropriate, and may, with the prior written consent of the
Issuer, change such limit for purposes of general application. The Depositary
will also set Dollar limits with respect to Pre-Release transactions to be
entered into hereunder with any particular Pre-Releasee on a case-by-case basis
as the Depositary deems appropriate. For purposes of enabling the Depositary to
fulfill its obligations to the Owners under the Deposit Agreement, the
collateral referred to in clause (b) above shall be held by the Depositary as
security for the performance of the Pre-Releasee's obligations to the Depositary
in connection with a Pre-Release transaction, including the Pre-Releasee's
obligation to deliver Shares or Receipts upon termination of a Pre-Release
transaction (and shall not, for the avoidance of doubt, constitute Deposited
Securities hereunder).

          The Depositary may retain for its own account any compensation
received by it in connection with the foregoing.

     SECTION 2.10   Maintenance of Records.

          The Depositary agrees to maintain records of all Receipts surrendered
and Deposited Securities withdrawn under Section 2.5, substitute Receipts
delivered under Section 2.7, and cancelled or destroyed Receipts under Section
2.8, in keeping with the procedures ordinarily followed by stock transfer agents
located in The City of New York or as required by applicable law, rule or
regulation.

<PAGE>

ARTICLE 3.     CERTAIN OBLIGATIONS OF OWNERS OF RECEIPTS.

     SECTION 3.1    Filing Proofs, Certificates and Other Information.

          Any person presenting Shares for deposit or any Owner of a Receipt may
be required from time to time to file with the Depositary or the Custodian such
proof of citizenship or residence, exchange control approval, proof of the
identity of any person legally or beneficially interested in the Receipt and the
nature of such interest or such information relating to the registration on the
books of the Issuer or the Foreign Registrar, if applicable, to execute such
certificates and to make such representations and warranties, as the Depositary
or the Issuer may deem necessary or proper. The Depositary may withhold the
delivery or registration of transfer of any Receipt or the distribution of any
dividend or sale or distribution of rights or of the proceeds thereof or the
delivery of any Deposited Securities until such proof or other information is
filed or such certificates are executed or such representations and warranties
made. Upon the request of the Issuer, the Depositary shall provide the Issuer
with copies of all such certificates and such written representations and
warranties provided to the Depositary under this Section 3.1. Each Owner agrees
to provide any information requested by the Issuer or the Depositary pursuant to
this paragraph.

     SECTION 3.2    Liability of Owner for Taxes.

          If any tax or other governmental charge shall become payable with
respect to any Receipt or any Deposited Securities represented by any Receipt,
such tax or other governmental charge shall be payable by the Owner of such
Receipt to the Depositary. The Depositary may refuse to effect any transfer of
such Receipt or any withdrawal of Deposited Securities represented by American
Depositary Shares evidenced by such Receipt until such payment is made, and may
withhold any dividends or other distributions, or may sell for the account of
the Owner thereof any part or all of the Deposited Securities represented by the
American Depositary Shares evidenced by such Receipt, and may apply such
dividends or other distributions or the proceeds of any such sale in payment of
such tax or other governmental charge and the Owner of such Receipt shall remain
liable for any deficiency.

     SECTION 3.3    Warranties on Deposit of Shares.

          Every person depositing Shares under this Deposit Agreement shall be
deemed thereby to represent and warrant that such Shares and each certificate
therefor are validly issued, fully paid, nonassessable and free of any
pre-emptive rights of the holders of outstanding Shares and that the person
making such deposit is duly authorized to do so. Every such person shall also be
deemed to represent that the deposit of such Shares or sale of Receipts
evidencing American Depositary Shares representing such Shares by that person is
not restricted under the Securities Act of 1933. Such representations and
warranties shall survive the deposit of such Shares and issuance of Receipts.

<PAGE>

     SECTION 3.4    Disclosure of Interests.

          The Issuer may from time to time request Owners to provide information
as to the capacity in which such Owners own or owned Receipts and regarding the
identity of any other persons then or previously interested in such Receipts and
the nature of such interest and various other matters. Each Owner agrees to
provide any information requested by the Issuer or the Depositary pursuant to
this Section 3.4. The Depositary agrees to comply with reasonable written
instructions received from the Issuer requesting that the Depositary forward any
such requests to the Owners and to forward to the Issuer any such responses to
such requests received by the Depositary.

     SECTION 3.5    Ownership Restrictions.

          Notwithstanding any other provision of this Deposit Agreement, each
Owner and Beneficial Owner agrees to be bound by and subject to the By-laws of
the Issuer and to any restrictions on Share ownership or transferability under
applicable local law (to the same extent as if such American Depositary Shares
evidenced by such Receipt were the Shares evidenced by such Receipt, provided,
however, that such provisions shall apply to such persons only to the extent
feasible).

          In addition, Owners and Beneficial Owners are subject to regulations
under the Securities Exchange Act of 1934, pursuant to which, inter alia,
acquisition or sale of American Depositary Shares representing Shares in excess
of prescribed limits must be notified to the Commission and to any securities
exchange on which the American Depositary Shares are listed.

ARTICLE 4.     THE DEPOSITED SECURITIES.

     SECTION 4.1    Cash Distributions.

          Whenever the Depositary shall receive any cash dividend or other cash
distribution on any Deposited Securities, the Depositary shall, subject to the
provisions of Section 4.5, convert such dividend or distribution into Dollars as
promptly as practicable and shall promptly distribute the amount thus received
(net of the fees of the Depositary as provided in Section 5.9 hereof, if
applicable) to the Owners entitled thereto, in proportion to the number of
American Depositary Shares representing such Deposited Securities held by such
Owners respectively without regard to any distinctions among holders on account
of exchange restrictions or the date of deliver of any Receipt or Receipts;
provided, however, that in the event that the Issuer or the Depositary shall be
required to withhold and does withhold from such cash dividend or such other
cash distribution an amount on account of taxes, or other governmental charges
the amount distributed to the Owner of the Receipts evidencing American
Depositary Shares representing such Deposited Securities shall be reduced
accordingly. The Depositary shall distribute only such amount, however, as can
be distributed without attributing to

<PAGE>

any Owner a fraction of one cent. Any such fractional amounts shall be rounded
to the nearest whole cent and so distributed to Owners entitled thereto. The
Issuer or its agent will remit to the appropriate governmental agency in the
United Kingdom all amounts withheld and owing to such agency. The Depositary
will forward to the Issuer or its agent such information from its records as the
Issuer may reasonably request to enable the Issuer or its agent to file
necessary reports with governmental agencies, and the Depositary or the Issuer
or its agent may file any such reports necessary to obtain benefits under the
applicable tax treaties, if any, for the Owners of Receipts.

          The beneficial interest in a common access share, which is included
with each Share, enables holders of Shares to receive dividends from S&N (which
is tax resident in the United Kingdom) rather than from the Issuer (which is tax
resident in Switzerland) in respect of their Shares. All Shares represented by
American Depositary Shares will be treated by the Issuer as having elected to
receive dividends from S&N, rather than the Issuer, which election cannot be
changed by Owners.

     SECTION 4.2    Distributions Other Than Cash, Shares or Rights.

          Subject to the provisions of Section 4.11 and Section 5.9, whenever
the Depositary shall receive any distribution other than a distribution
described in Sections 4.1, 4.3 or 4.4, the Depositary shall cause the securities
or property received by it to be distributed to the Owners entitled thereto, in
proportion to the number of American Depositary Shares representing such
Deposited Securities held by them respectively, in any manner that the
Depositary may deem equitable and practicable for accomplishing such
distribution; provided, however, that if in the opinion of the Depositary such
distribution cannot be made proportionately among the Owners entitled thereto,
or if for any other reason (including, but not limited to, any requirement that
the Issuer or the Depositary withhold an amount on account of taxes or other
governmental charges or that such securities must be registered under the
Securities Act of 1933 in order to be distributed to Owners or holders) the
Depositary deems such distribution not to be feasible, the Depositary may adopt,
after Consultation with the Issuer when reasonably practicable, such method as
it may deem equitable and practicable for the purpose of effecting such
distribution, including, but not limited to, the public or private sale of the
securities or property thus received, or any part thereof, and the net proceeds
of any such sale (net of the fees of the Depositary as provided in Section 5.9)
shall be distributed by the Depositary to the Owners entitled thereto as in the
case of a distribution received in cash.

     SECTION 4.3    Distributions in Shares.

          If any distribution upon any Deposited Securities consists of a
dividend in, or free distribution of, Shares, the Depositary may, and shall if
the Issuer shall so request, distribute to the Owners of outstanding Receipts
entitled thereto, in proportion to the

<PAGE>

number of American Depositary Shares representing such Deposited Securities held
by them respectively, additional Receipts evidencing an aggregate number of
American Depositary Shares representing the amount of Shares received as such
dividend or free distribution, subject to the terms and conditions of the
Deposit Agreement with respect to the deposit of Shares and the issuance of
American Depositary Shares evidenced by Receipts, including the withholding of
any tax or other governmental charge as provided in Section 4.11 and the payment
of fees of the Depositary as provided in Section 5.9. In lieu of delivering
Receipts for fractional American Depositary Shares in any such case, the
Depositary shall sell the amount of Shares represented by the aggregate of such
fractions and distribute the net proceeds, all in the manner and subject to the
conditions described in Section 4.1. If additional Receipts are not so
distributed, each American Depositary Share shall thenceforth also represent the
additional Shares distributed upon the Deposited Securities represented thereby.

     SECTION 4.4    Rights.

          In the event that the Issuer shall offer or cause to be offered to the
holders of any Deposited Securities any rights to subscribe for additional
Shares or any rights of any other nature, the Depositary, after Consultation
with the Issuer, shall have discretion as to the procedure to be followed in
making such rights available to any Owners or in disposing of such rights on
behalf of any Owners and making the net proceeds available to such Owners or, if
by the terms of such rights offering or for any other reason, the Depositary may
not either make such rights available to any Owners or dispose of such rights
and make the net proceeds available to such Owners, then the Depositary shall
allow the rights to lapse. If at the time of the offering of any rights the
Depositary determines in its discretion, after Consultation with the Issuer,
that it is lawful and feasible to make such rights available to all Owners or to
certain Owners but not to other Owners, the Depositary may distribute to any
Owner to whom it determines the distribution to be lawful and feasible, in
proportion to the number of American Depositary Shares held by such Owner,
warrants or other instruments therefor in such form as it deems appropriate.

          In circumstances in which rights would otherwise not be distributed,
if an Owner of Receipts requests the distribution of warrants or other
instruments in order to exercise the rights allocable to the American Depositary
Shares of such Owner hereunder, the Depositary will make such rights available
to such Owner upon written notice from the Issuer to the Depositary that (a) the
Issuer has elected in its sole discretion to permit such rights to be exercised
and (b) such Owner has executed such documents as the Issuer has determined in
its sole discretion are reasonably required under applicable law.

          If the Depositary has distributed warrants or other instruments for
rights to all or certain Owners, then upon instruction from such an Owner
pursuant to such warrants or other instruments to the Depositary from such Owner
to exercise such rights,

<PAGE>

upon payment by such Owner to the Depositary for the account of such Owner of an
amount equal to the purchase price of the Shares to be received upon the
exercise of the rights, and upon payment of the fees of the Depositary and any
other charges as set forth in such warrants or other instruments, the Depositary
shall, on behalf of such Owner, exercise the rights and purchase the Shares, and
the Issuer shall cause the Shares so purchased to be delivered to the Depositary
on behalf of such Owner. As agent for such Owner, the Depositary will cause the
Shares so purchased to be deposited pursuant to Section 2.2 of this Deposit
Agreement, and shall, pursuant to Section 2.3 of this Deposit Agreement, execute
and deliver Receipts to such Owner. In the case of a distribution pursuant to
the second paragraph of this section, such Receipts shall be legended in
accordance with applicable U.S. laws, and shall be subject to the appropriate
restrictions on sale, deposit, cancellation, and transfer under such laws.

          If the Depositary determines in its discretion, after Consultation
with the Issuer, that it is not lawful and feasible to make such rights
available to all or certain Owners, it may sell the rights, warrants or other
instruments in proportion to the number of American Depositary Shares held by
the Owners to whom it has determined it may not lawfully or feasibly make such
rights available, and allocate the net proceeds of such sales (net of the fees
of the Depositary as provided in Section 5.9 and all taxes and governmental
charges payable in connection with such rights and subject to the terms and
conditions of this Deposit Agreement) for the account of such Owners otherwise
entitled to such rights, warrants or other instruments, upon an averaged or
other practical basis without regard to any distinctions among such Owners
because of exchange restrictions or the date of delivery of any Receipt or
otherwise.

          The Depositary will not offer rights to Owners unless both the rights
and the securities to which such rights relate are either exempt from
registration under the Securities Act of 1933 with respect to a distribution to
Owners or are registered under the provisions of such Act. If an Owner of
Receipts requests distribution of warrants or other instruments, notwithstanding
that there has been no such registration under such Act, the Depositary shall
not effect such distribution unless it has received an opinion from recognized
counsel in the United States for the Issuer upon which the Depositary may rely
that such distribution to such Owner is exempt from such registration.

          The Depositary shall not be responsible for any failure to determine
that it may be lawful or feasible to make such rights available to Owners in
general or any Owner in particular.

          The Issuer shall be under no obligation to file any registration
statement under the Securities Act of 1933 to make available to Owners any
additional Shares, rights or other Distributions.

<PAGE>

     SECTION 4.5    Conversion of Foreign Currency.

          Subject to any restriction imposed by the laws of the United Kingdom,
regulations or applicable permits issued by any governmental body, whenever the
Depositary shall receive foreign currency, by way of dividends or other
distributions or the net proceeds from the sale of securities, property or
rights, and if at the time of the receipt thereof the foreign currency so
received can in the judgment of the Depositary be converted on a reasonable
basis into Dollars and the resulting Dollars transferred to the United States,
the Depositary shall convert or cause to be converted as promptly as
practicable, by sale or in any other manner that it may determine, such foreign
currency into Dollars, and such Dollars shall be distributed to the Owners
entitled thereto or, if the Depositary shall have distributed any warrants or
other instruments which entitle the holders thereof to such Dollars, then to the
holders of such warrants and/or instruments upon surrender thereof for
cancellation in whole or in part depending upon the terms of such warrants or
other instruments. Such distribution shall be made in proportion to the number
of American Depositary Shares representing Deposited Securities held
respectively by such Owners entitling them to such Dollars and may be made upon
an averaged or other practicable basis without regard to any distinctions among
Owners on account of exchange restrictions, the date of delivery of any Receipt
or otherwise and shall be net of any expenses of conversion into Dollars
incurred by the Depositary as provided in Section 5.9.

          If such conversion or distribution can be effected only with the
approval or license of any government or agency thereof, the Depositary shall
file such application for approval or license, if any, as it may deem desirable.

          If at any time the Depositary shall determine that in its judgment any
foreign currency received by the Depositary is not convertible on a reasonable
basis into Dollars transferable to the United States, or if any approval or
license of any government or agency thereof which is required for such
conversion is denied or in the opinion of the Depositary is not obtainable, or
if any such approval or license is not obtained within a reasonable period as
determined by the Depositary, the Depositary may, after Consultation with the
Issuer, distribute the foreign currency (or an appropriate document evidencing
the right to receive such foreign currency) received by the Depositary to, or in
its discretion may hold such foreign currency uninvested and without liability
for interest thereon for the respective accounts of, the Owners entitled to
receive the same.

          If any such conversion of foreign currency, in whole or in part,
cannot be effected for distribution to some of the Owners entitled thereto, the
Depositary may in its discretion make such conversion and distribution in
Dollars to the extent permissible to the Owners entitled thereto and may
distribute the balance of the foreign currency received by the Depositary to, or
hold such balance uninvested and without liability for interest thereon for the
respective accounts of, the Owners not entitled to receive Dollars.

<PAGE>

     SECTION 4.6    Fixing of Record Date.

          Whenever any cash dividend or other cash distribution shall become
payable or any distribution other than cash shall be made, or whenever rights
shall be issued with respect to the Deposited Securities, or whenever for any
reason the Depositary causes a change in the number of Shares that are
represented by each American Depositary Share, or whenever the Depositary shall
receive notice of any meeting of holders of Shares or other Deposited
Securities, the Depositary shall fix a record date, after Consultation with the
Issuer if such record date is different from the record date applicable to the
Deposited Securities (a) for the determination of the Owners who shall be (i)
entitled to receive such dividend, distribution or rights or the net proceeds of
the sale thereof or (ii) entitled to give instructions for the exercise of
voting rights at any such meeting, or (b) on or after which each American
Depositary Share will represent the changed number of Shares. Subject to the
provisions of Sections 4.1 through 4.5 and to the other terms and conditions of
this Deposit Agreement, the Owners on such record date shall be entitled, as the
case may be, to receive the amount distributable by the Depositary with respect
to such dividend or other distribution or such rights or the net proceeds of
sale thereof in proportion to the number of American Depositary Shares held by
them respectively and to give voting instructions, to exercise the rights of
Owners hereunder with respect to such changed number of Shares and to act in
respect of any other such matter. Any such record date fixed by the Depositary
will, to the extent practicable, be the same as the record date fixed by the
Issuer with respect to such dividend, distribution or meeting.

     SECTION 4.7    Voting of Deposited Securities.

          Upon receipt of notice of any meeting of holders of Shares or other
Deposited Securities, if requested in writing by the Issuer the Depositary
shall, as soon as practicable thereafter, mail to the Owners a notice, the form
of which notice shall be subject to the reasonable discretion of the Depositary,
which shall contain (a) such information as is contained in such notice of
meeting, received by the Depositary from the Issuer, (b) a statement that the
Owners as of the close of business on a specified record date will be entitled,
subject to any applicable provision of law in the United Kingdom and of the
Articles of Association of the Issuer and the provisions of the Deposited
Securities, to instruct the Depositary as to the exercise of the voting rights,
if any, pertaining to the amount of Shares or other Deposited Securities
represented by their respective American Depositary Shares, and (c) a statement
as to the manner in which such instructions may be given, including, when
applicable, an express indication that instructions may be given (or, if
applicable, deemed given in accordance with the second paragraph of this Section
4.7 if no instruction is received) to the Depositary to give a discretionary
proxy to a person designated by the Issuer. Upon the written request of an Owner
on such record date, received on or before the date established by the
Depositary for such purpose, the Depositary shall endeavor, insofar as
practicable and permitted

<PAGE>

under applicable laws and the provisions of the Articles of Association of the
Issuer and the provisions of the Deposited Securities, to vote or cause to be
voted the amount of Shares or other Deposited Securities represented by the
American Depositary Shares evidenced by such Receipt in accordance with any
non-discretionary instructions set forth in such request, including their
instruction to give a discretionary proxy to a person designated by the Issuer.
The Depositary shall not, and the Depositary shall ensure that each Custodian or
any of its nominees shall not, exercise any voting discretion over any Deposited
Securities.

          If after complying with the procedures set forth in this Section the
Depositary does not receive instructions from the Owner of a Receipt on or
before the date established by the Depositary for such purpose (the "Instruction
Date"), the Depositary, subject to applicable law, shall give a discretionary
proxy for the Shares evidenced by such Receipt to a person designated by the
Issuer.

          There can be no assurance that Owners generally or any Owner in
particular will receive the notice described in the preceding paragraph
sufficiently prior to the Instruction Date to ensure that the Depositary will
vote the Shares or Deposited Securities in accordance with the provisions set
forth in the preceding paragraph.

          Subject to the rules of any securities exchange on which the Deposited
Securities are listed the Depositary shall use its reasonable efforts to deliver
to the extent practicable, at least two business days prior to the date of such
meeting, to the Issuer voting instructions received (or deemed received) from
Owners.

     SECTION 4.8    Changes Affecting Deposited Securities.

          In circumstances where the provisions of Section 4.3 do not apply,
upon any change in nominal value, change in par value, split-up, consolidation
or any other reclassification of Deposited Securities, or upon any
recapitalization, reorganization, merger or consolidation or sale of assets
affecting the Issuer or to which it is a party, any securities which shall be
received by the Depositary or a Custodian in exchange for or in conversion of or
in respect of Deposited Securities, shall be treated as new Deposited Securities
under this Deposit Agreement, and American Depositary Shares shall thenceforth
represent the new Deposited Securities so received in exchange or conversion,
unless additional Receipts are delivered pursuant to the following sentence. In
any such case the Depositary may, after Consultation with the Issuer, and shall,
if the Issuer shall so request, execute and deliver additional Receipts as in
the case of a dividend in Shares, or call for the surrender of outstanding
Receipts to be exchanged for new Receipts specifically describing such new
Deposited Securities.

<PAGE>

     SECTION 4.9    Reports.

          The Depositary shall make available for inspection by Owners at its
Corporate Trust Office any reports and communications, including any proxy
soliciting material, received from the Issuer which are both (a) received by the
Depositary or the Custodian or the nominee of either as the holder of the
Deposited Securities and (b) made generally available to the holders of such
Deposited Securities by the Issuer. The Depositary shall also, upon written
request, send to the Owners copies of such reports furnished by the Issuer
pursuant to Section 5.6. Any such reports and communications, including any such
proxy soliciting material, furnished to the Depositary by the Issuer shall be
furnished in English.

     SECTION 4.10   Lists of Owners.

          Promptly after each request by the Issuer and, if requested by the
Issuer, once every month, the Depositary shall furnish to it a list, as of a
recent date, of the names, addresses and holdings of American Depositary Shares
by all persons in whose names Receipts are registered on the books of the
Depositary and the number of Pre-Releases outstanding as a percentage of the
Shares deposited hereunder.

     SECTION 4.11   Withholding.

          In the event that the Depositary determines that any distribution in
property (including Shares and rights to subscribe therefor) is subject to any
tax or other governmental charge which the Depositary is obligated to withhold,
the Depositary may by public or private sale dispose of all or a portion of such
property (including Shares and rights to subscribe therefor) in such amounts and
in such manner as the Depositary deems necessary and practicable to pay any such
taxes or charges, and the Depositary shall distribute the net proceeds of any
such sale after deduction of such taxes or charges to the Owners entitled
thereto in proportion to the number of American Depositary Shares held by them
respectively, and the Depositary shall distribute any unsold balance of such
property in accordance with the provisions of this Deposit Agreement. The Issuer
or its agent shall remit to appropriate governmental authorities and agencies in
the United Kingdom all amounts, if any, withheld and owing to such authorities
and agencies by the Issuer. The Depositary or its agent shall remit to
appropriate governmental authorities and agencies in the United States all
amounts, if any, withheld and owing to such authorities and agencies by the
Depositary.

          The Depositary shall forward to the Issuer or its agent such
information from its records as the Issuer may reasonably request to enable the
Issuer or its agent to file necessary reports with governmental agencies. The
Depositary shall use reasonable efforts to make and maintain arrangements
enabling Owners who are citizens or residents of the United States to receive
any tax credits or other benefits (pursuant to treaty or otherwise) relating to
dividend payments on the American Depositary Shares.

<PAGE>

ARTICLE 5.     THE DEPOSITARY, THE CUSTODIANS AND THE ISSUER.

     SECTION 5.1    Maintenance of Office and Transfer Books by the Depositary.

          Until termination of this Deposit Agreement in accordance with its
terms, the Depositary shall maintain in the Borough of Manhattan, The City of
New York, facilities for the execution and delivery, registration, registration
of transfers and surrender of Receipts in accordance with the provisions of this
Deposit Agreement.

          The Depositary shall keep books for the registration of Receipts and
transfers of Receipts which at all reasonable times shall be open for inspection
by the Owners, provided that such inspection shall not be for the purpose of
communicating with Owners in the interest of a business or object other than the
business of the Issuer or a matter related to this Deposit Agreement or the
Receipts.

          The Depositary may close the transfer books, at any time or from time
to time, when deemed expedient by it in connection with the performance of its
duties hereunder or at the written request of the Issuer.

          If any Receipts or the American Depositary Shares evidenced thereby
are listed on one or more stock exchanges in the United States, after
Consultation with the Issuer, the Depositary shall act as Registrar or appoint a
Registrar or one or more co-registrars for registry of such Receipts in
accordance with any requirements of such exchange or exchanges. Such Registrar
or co-registrars shall be removed only after Consultation with the Issuer. Each
Registrar and co-registrar appointed under this Section 5.1 shall give notice in
writing to the Issuer and the Depositary accepting such appointment and agreeing
to be bound by the applicable terms of this Deposit Agreement.

          The Issuer shall have the right, at all reasonable times, to inspect
transfer and registration records of the Depositary, the Registrar and any
co-transfer agents or co-registrars and to require such parties to supply copies
of such portions of their records as the Issuer may request.

     SECTION 5.2    Prevention or Delay in Performance by the Depositary or the
Issuer.

          Neither the Depositary nor the Issuer nor any of their directors,
employees, agents or affiliates shall incur any liability to any Owner or holder
of any Receipt, if by reason of any provision of any present or future law or
regulation of the United States, the United Kingdom or any other country, or of
any governmental or regulatory authority or stock exchange, or by reason of any
provision, present or future, of the Articles of Association of the Issuer, or
by reason of any provision of any securities issued or distributed by the
Issuer, or any offering or distribution thereof, or by reason of any act of God
or war or other circumstances beyond its control, the Depositary or the Issuer
or any

<PAGE>

of their directors, employees, agents or affiliates shall be prevented, delayed
or forbidden from, or be subject to any civil or criminal penalty on account of,
doing or performing any act or thing which by the terms of this Deposit
Agreement it is provided shall be done or performed; nor shall the Depositary or
the Issuer incur any liability to any Owner or holder of any Receipt by reason
of any non-performance or delay, caused as aforesaid, in the performance of any
act or thing which by the terms of this Deposit Agreement it is provided shall
or may be done or performed, or by reason of any exercise of, or failure to
exercise, any discretion provided for in this Deposit Agreement. Where, by the
terms of a distribution pursuant to Sections 4.1, 4.2, or 4.3 of the Deposit
Agreement, or an offering or distribution pursuant to Section 4.4 of the Deposit
Agreement, or for any other reason, such distribution or offering may not be
made available to Owners, and the Depositary may not dispose of such
distribution or offering on behalf of such Owners and make the net proceeds
available to such Owners, then the Depositary shall not make such distribution
or offering, and shall allow any rights, if applicable, to lapse.

     SECTION 5.3    Obligations of the Depositary, the Custodian and the Issuer.

          The Issuer assumes no obligation nor shall it be subject to any
liability under this Deposit Agreement to any Owner or holder of any Receipt,
except that it agrees to perform its obligations specifically set forth in this
Deposit Agreement without negligence and to act in good faith in the performance
of such duties.

          The Depositary assumes no obligation nor shall it be subject to any
liability under this Deposit Agreement to any Owner or holder of any Receipt
(including, without limitation, liability with respect to the validity or worth
of the Deposited Securities), except that it agrees to perform its obligations
specifically set forth in this Deposit Agreement without negligence and to act
in good faith in the performance of such duties.

          Neither the Depositary nor the Issuer shall be under any obligation to
appear in, prosecute or defend any action, suit or other proceeding in respect
of any Deposited Security or in respect of the Receipts, which in its opinion
may involve it in expense or liability, unless indemnity satisfactory to it
against all expense and liability shall be furnished as often as may be
required, and the Custodian shall not be under any obligation whatsoever with
respect to such proceedings, the responsibility of the Custodian being solely to
the Depositary.

          Neither the Depositary nor the Issuer shall be liable for any action
or nonaction by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Shares for deposit, any Owner or any
other person believed by it in good faith to be competent to give such advice or
information including, but not limited to, any such action or nonaction based
upon any written notice, request,

<PAGE>

direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties.

          The Depositary shall not be liable for any acts or omissions made by a
successor depositary whether in connection with a previous act or omission of
the Depositary or in connection with any matter arising wholly after the removal
or resignation of the Depositary, provided that in connection with the issue out
of which such potential liability arises the Depositary performed its
obligations without negligence or bad faith while it acted as Depositary.

          The Depositary shall not be responsible for any failure to carry out
any instructions to vote any of the Deposited Securities, or for the manner in
which any such vote is cast or the effect of any such vote, provided that any
such action or nonaction is in good faith.

          No disclaimer of liability under the Securities Act of 1933 is
intended by any provision of this Deposit Agreement.

     SECTION 5.4    Resignation and Removal of the Depositary.

          The Depositary may at any time resign as Depositary hereunder by
written notice of its election to do so delivered to the Issuer, effective upon
the appointment of a successor depositary and such successor depositary's
acceptance of such appointment as hereinafter provided.

          The Depositary may at any time be removed by the Issuer by written
notice of such removal effective upon the appointment of a successor depositary
and such successor depositary's acceptance of such appointment as hereinafter
provided.

          In case at any time the Depositary acting hereunder shall resign or be
removed, the Issuer shall use its best efforts to appoint a successor
depositary, which shall be a bank or trust company having an office in the
Borough of Manhattan, The City of New York. Every successor depositary shall
execute and deliver to its predecessor and to the Issuer an instrument in
writing accepting its appointment hereunder, and thereupon such successor
depositary, without any further act or deed, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor; but such
predecessor, nevertheless, upon payment of all sums due it and on the written
request of the Issuer shall execute and deliver an instrument transferring to
such successor all rights and powers of such predecessor hereunder, shall duly
assign, transfer and deliver all right, title and interest in the Deposited
Securities to such successor, and shall deliver to such successor a list of the
Owners of all outstanding Receipts. Any such successor depositary shall promptly
mail notice of its appointment to the Owners.

<PAGE>

          Any corporation into or with which the Depositary may be merged or
consolidated shall be the successor of the Depositary without the execution or
filing of any document or any further act.

     SECTION 5.5    The Custodians.

          The Depositary, after Consultation with the Issuer, may appoint from
time to time one or more agents, as permitted by United Kingdom law and any
other applicable laws or regulations, to act for it as Custodian hereunder. Any
such Custodian shall be subject at all times and in all respects to the
directions of the Depositary and shall be responsible solely to it. Any
Custodian may resign and be discharged from its duties hereunder by notice of
such resignation delivered to the Depositary at least 30 days prior to the date
on which such resignation is to become effective. If upon such resignation there
shall be no Custodian acting hereunder, the Depositary shall, promptly after
receiving such notice, and after Consultation with the Issuer, appoint a
substitute custodian or custodians, each of which shall thereafter be a
Custodian hereunder. Whenever the Depositary in its discretion determines that
it is in the best interest of the Owners to do so, it may appoint substitute or
additional custodian or custodians, which shall thereafter be one of the
Custodians hereunder. Upon demand of the Depositary any Custodian shall deliver
such of the Deposited Securities held by it as are requested of it to any other
Custodian or such substitute or additional custodian or custodians. Each such
substitute or additional custodian shall deliver to the Depositary and the
Issuer, forthwith upon its appointment, an acceptance of such appointment
satisfactory in form and substance to the Depositary and the Issuer.

          Upon the appointment of any successor depositary hereunder, each
Custodian then acting hereunder shall forthwith become, without any further act
or writing, the agent hereunder of such successor depositary and the appointment
of such successor depositary shall in no way impair the authority of each
Custodian hereunder; but the successor depositary so appointed shall,
nevertheless, on the written request of any Custodian, execute and deliver to
such Custodian all such instruments as may be proper to give to such Custodian
full and complete power and authority as agent hereunder of such successor
depositary.

     SECTION 5.6    Notices and Reports.

          On or before the first date on which the Issuer gives notice, by
publication or otherwise, of any meeting of holders of Shares or other Deposited
Securities, or of any adjourned meeting of such holders, or of the taking of any
action in respect of any cash or other distributions or the offering of any
rights, the Issuer agrees to transmit to the Depositary and the Custodian a copy
of the notice thereof in the form given or to be given to holders of Shares or
other Deposited Securities.

<PAGE>

          The Issuer will arrange for the translation into English and the
prompt transmittal by the Issuer to the Depositary and the Custodian of such
notices and any other reports and communications which are made generally
available by the Issuer to holders of its Shares. If requested in writing by the
Issuer, the Depositary will promptly arrange for the mailing, at the Issuer's
expense, of copies of such notices, reports and communications to all Owners.
The Issuer will timely provide the Depositary with the quantity of such notices,
reports, and communications, as requested by the Depositary from time to time,
in order for the Depositary to effect such mailings.

     SECTION 5.7    Distribution of Additional Shares, Rights, etc.

          The Issuer agrees that in the event of any issuance or distribution of
(1) additional Shares, (2) rights to subscribe for Shares, (3) securities
convertible into or exchangeable for Shares, or (4) rights to subscribe for any
such securities, (each a "Distribution") the Issuer will promptly furnish to the
Depositary a written opinion from U.S. counsel for the Issuer, which counsel
shall be reasonably satisfactory to the Depositary, stating whether or not the
Distribution requires a registration statement under the Securities Act of 1933
to be in effect prior to making such Distribution available to Owners entitled
thereto. If in the opinion of such counsel a registration statement under the
Securities Act of 1933 is required, such counsel shall furnish to the Depositary
a written opinion as to whether or not there is a registration statement in
effect which will cover such Distribution.

          In the event that such registration under the Securities Act of 1933
would be required in connection with any such Distribution, the Issuer shall
have no obligation to effect such registration.

          In the event of any issuance of additional securities, the Issuer
shall have no obligation to register such additional securities under the
Securities Act of 1933 and, to the extent the Issuer in its discretion deems it
necessary or advisable in order to avoid any requirement to register such
additional securities under the Securities Act of 1933, may prevent Owners in
the United States from purchasing any such additional securities (whether
pursuant to pre-emptive rights or otherwise) and direct the Depositary not to
accept any Shares for deposit for such period of time following the issuance of
such additional securities and to adopt such other specific measures as the
Issuer may reasonably request in writing.

          The Issuer agrees with the Depositary that neither the Issuer nor any
person (as such term is defined in the Securities Act of 1933) controlled by,
controlling or under common control with the Issuer will at any time deposit any
Shares, either originally issued or previously issued and reacquired by the
Issuer or any person under its control, unless a registration statement is in
effect as to such Shares under the Securities Act of 1933. The Depositary will
comply with the written instructions of the Issuer not to

<PAGE>

accept knowingly for deposit hereunder any Shares identified in such
instructions at such times and under such circumstances as may be specified in
such instructions in order to facilitate the Issuer's compliance with the
securities laws of the United States, the United Kingdom and any other
jurisdictions specified therein.

     SECTION 5.8    Indemnification.

          The Issuer agrees to indemnify the Depositary, its directors,
employees, agents and affiliates and any Custodian against, and hold each of
them harmless from, any liability or expense (including, but not limited to, the
reasonable fees and expenses of counsel) which may arise out of acts performed
or omitted, in accordance with the provisions of this Deposit Agreement and of
the Receipts, as the same may be amended, modified or supplemented from time to
time, (i) by either the Depositary or any Custodian or their respective
directors, employees, agents and affiliates, except for any liability or expense
arising out of the negligence of any of them or the failure of any of them to
act in good faith, or (ii) by the Issuer or any of its directors, employees,
agents and affiliates.

          The indemnities contained in the preceding paragraph shall not extend
to any liability or expense which arises solely and exclusively out of a
Pre-Release (as defined in Section 2.9) of a Receipt or Receipts in accordance
with Section 2.9 and which would not otherwise have arisen had such Receipt or
Receipts not been the subject of a Pre-Release pursuant to Section 2.9;
provided, however, that the indemnities provided in the preceding paragraph
shall apply to any such liability or expense (i) to the extent that such
liability or expense would have arisen had a Receipt or Receipts not be the
subject of a Pre-Release, or (ii) which may arise out of any misstatement or
alleged misstatement or omission or alleged omission in any registration
statement, proxy statement, prospectus (or placement memorandum), or preliminary
prospectus (or preliminary placement memorandum) relating to the offer or sale
of American Depositary Shares, except to the extent any such liability or
expense arises out of (i) information relating to the Depositary or any
Custodian (other than the Issuer), as applicable, furnished in writing and not
materially changed or altered by the Issuer expressly for use in any of the
foregoing documents, or, (ii) if such information is provided, the failure to
state a material fact necessary to make the information provided not misleading.

          The Depositary agrees to indemnify the Issuer, its directors,
employees, agents and affiliates against and hold each of them harmless from any
liability or expense (including, but not limited to, the reasonable fees and
expenses of counsel) which may arise out of acts performed or omitted by the
Depositary or any Custodian or their respective directors, employees, agents and
affiliates due to their negligence or failure to act in good faith.

<PAGE>

          If an action, proceeding (including, but not limited to, any
governmental investigation), claim or dispute (collectively, a "Proceeding") in
respect of which indemnity may be sought by either party is brought or asserted
against the other party, the party seeking indemnification (the "Indemnitee")
shall promptly (and in no event more than ten (10) days after receipt of notice
of such Proceeding) notify the party obligated to provide such indemnification
(the "Indemnitor") of such Proceeding. The failure of the Indemnitee to so
notify the Indemnitor shall not impair the Indemnitee's ability to seek
indemnification from the Indemnitor (but only for costs, expenses and
liabilities incurred after such notice) unless such failure adversely affects
the Indemnitor's ability to adequately oppose or defend such Proceeding. Upon
receipt of such notice from the Indemnitee, the Indemnitor shall be entitled to
participate in such Proceeding and, to the extent that it shall so desire and
provided no conflict of interest exists as specified in subparagraph (b) below
or there are no other defenses available to Indemnitee as specified in
subparagraph (d) below, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnitee (in which case all attorney's fees and expenses
shall be borne by the Indemnitor and the Indemnitor shall in good faith defend
the Indemnitee). The Indemnitee shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be borne by the Indemnitee unless (a) the
Indemnitor agrees in writing to pay such fees and expenses, (b) the Indemnitee
shall have reasonably and in good faith concluded that there is a conflict of
interest between the Indemnitor and the Indemnitee in the conduct of the defense
of such action, (c) the Indemnitor fails to assume, at least ten (10) days prior
to the date the first response or appearance is required to be made in such
Proceeding, the defense of such Proceeding with counsel reasonably satisfactory
to the Indemnitee or (d) there are legal defenses available to the Indemnitee
that are different from or are in addition to those available to the Indemnitor.
No compromise or settlement of such Proceeding may be effected by either party
without the other party's consent unless (i) there is no finding or admission of
any violation of law and no effect on any other claims that may be made against
such other party and (ii) the sole relief provided is monetary damages that are
paid in full by the party seeking the settlement. Neither party shall have any
liability with respect to any compromise or settlement effected without its
consent, which shall not be unreasonably withheld. The Indemnitor shall have no
obligation to indemnify and hold harmless the Indemnitee from any loss, expense
or liability incurred by the Indemnitee as a result of a default judgment
entered against the Indemnitee unless such judgment was entered after the
Indemnitor agreed, in writing, to assume the defense of such Proceeding.

     SECTION 5.9    Charges of Depositary.

          The Issuer agrees to pay certain fees, reasonable expenses and
out-of-pocket charges of the Depositary and those of any Registrar only in
accordance with agreements in writing entered into between the Depositary and
the Issuer from time to time. The Depositary shall present its statement for
such charges and expenses to the

<PAGE>

Issuer once every three months. The charges and expenses of the Custodian are
for the sole account of the Depositary.

          The following charges shall be incurred by any party depositing or
withdrawing Shares or by any party surrendering Receipts or to whom Receipts are
issued (including, without limitation, issuance pursuant to a stock dividend or
stock split declared by the Issuer or an exchange regarding the Receipts or
Deposited Securities or a distribution of Receipts pursuant to Section 4.3),
whichever applicable: (1) taxes and other governmental charges, (2) such
registration fees as may from time to time be in effect for the registration of
transfers of Shares generally on the Share register of the Issuer or Foreign
Registrar and applicable to transfers of Shares to the name of the Depositary or
its nominee or the Custodian or its nominee on the making of deposits or
withdrawals hereunder, (3) such cable, telex and facsimile transmission expenses
as are expressly provided in this Deposit Agreement, (4) such expenses as are
incurred by the Depositary in the conversion of foreign currency pursuant to
Section 4.5 (5) a fee of $5.00 or less per 100 American Depositary Shares (or
portion thereof) for the execution and delivery of Receipts pursuant to Section
2.3, 4.3 or 4.4, and the surrender of Receipts pursuant to Section 2.5 or 6.2,
(6) a fee of $.02 or less per American Depositary Share (or portion thereof) for
any cash distribution made pursuant to the Deposit Agreement including, but not
limited to, Sections 4.1 through 4.4 hereof, except for distributions of cash
dividends, and (7) a fee for the distribution of proceeds of sales of securities
or rights pursuant to Section 4.2 or 4.4, respectively, such fee being (i) in an
amount equal to the fee for the issuance of American Depositary Shares referred
to above which would have been charged as a result of the deposit by Owners of
securities (for purposes of this clause (7) treating all such securities as if
they were Shares) or Shares received in exercise of rights distributed to them
pursuant to Section 4.2 or 4.4, respectively, but which securities or rights are
instead sold by the Depositary and the net proceeds distributed and (ii) payable
from such proceeds of sales of securities or rights.

          The Depositary, subject to Section 2.9 hereof, may own and deal in any
class of securities of the Issuer and its affiliates and in Receipts.

     SECTION 5.10   Retention of Depositary Documents.

          Except as otherwise explicitly provided herein, the Depositary is
authorized to destroy those documents, records, bills and other data compiled
during the term of this Deposit Agreement at the times permitted by the laws or
regulations governing the Depositary unless the Issuer requests that such papers
be retained for a different period or turned over to the Issuer or to a
successor depositary.

<PAGE>

     SECTION 5.11   Exclusivity.

          The Issuer agrees not to appoint any other depositary for issuance of
American Depositary Receipts so long as The Bank of New York is acting as
Depositary hereunder.

ARTICLE 6.     AMENDMENT AND TERMINATION.

     SECTION 6.1    Amendment.

          The form of the Receipts and any provision of this Deposit Agreement
may at any time and from time to time be amended by agreement between the Issuer
and the Depositary in any respect which they may deem necessary or desirable.
Any amendment which shall impose or increase any fee or charge (other than taxes
and other governmental charges, registration fees, cable, telex or facsimile
transmission costs, delivery costs or other such expenses), or which shall
otherwise prejudice any substantial existing right of Owners, shall, however,
not become effective as to outstanding Receipts until the expiration of a thirty
day period following notification pursuant to Section 7.5 hereof of any such
amendment to the Owners of outstanding Receipts. Every Owner at the time any
amendment becomes effective shall be deemed, by continuing to hold such Receipt,
to consent and agree to such amendment and to be bound by the Deposit Agreement
as amended thereby. In no event shall any amendment impair the right of the
Owner of any Receipt to surrender such Receipt and receive therefor the
Deposited Securities represented thereby, except in order to comply with
mandatory provisions of applicable law.

     SECTION 6.2    Termination.

          The Depositary shall at any time at the direction of the Issuer
terminate this Deposit Agreement by mailing notice of such termination to the
Owners of all Receipts then outstanding at least 30 days prior to the date fixed
in such notice for such termination. The Depositary may likewise terminate this
Deposit Agreement by mailing notice of such termination to the Issuer and the
Owners of all Receipts then outstanding if at any time 90 days shall have
expired after the Depositary shall have delivered to the Issuer a written notice
of its election to resign and a successor depositary shall not have been
appointed and accepted its appointment as provided in Section 5.4. On and after
the date of termination, the Owner of a Receipt will, upon (a) surrender of such
Receipt at the Corporate Trust Office of the Depositary, (b) payment of the fee
of the Depositary for the surrender of Receipts referred to in Section 2.5, and
(c) payment of any applicable taxes or governmental charges, be entitled to
delivery, to him or as ordered by him, of the amount of Deposited Securities
represented by the American Depositary Shares evidenced by such Receipt. If any
Receipts shall remain outstanding after the date of termination, the Depositary
thereafter shall discontinue the registration of transfers of Receipts, shall
suspend the distribution of dividends to the Owners thereof, and shall not

<PAGE>

give any further notices or perform any further acts under this Deposit
Agreement, except that the Depositary shall continue to collect dividends and
other distributions pertaining to Deposited Securities, shall sell property and
rights as provided in this Deposit Agreement, and shall continue to deliver
Deposited Securities, together with any dividends or other distributions
received with respect thereto and the net proceeds of the sale of any rights or
other property, in exchange for Receipts surrendered to the Depositary (after
deducting, in each case, the fee of the Depositary for the surrender of a
Receipt, any expenses for the account of the Owner of such Receipt in accordance
with the terms and conditions of this Deposit Agreement, and any applicable
taxes or governmental charges). At any time after the expiration of one year
from the date of termination, the Depositary may sell the Deposited Securities
then held hereunder and may thereafter hold uninvested the net proceeds of any
such sale, together with any other cash then held by it hereunder, unsegregated
and without liability for interest, for the pro rata benefit of the Owners of
Receipts which have not theretofore been surrendered, such Owners thereupon
becoming general creditors of the Depositary with respect to such net proceeds.
After making such sale, the Depositary shall be discharged from all obligations
under this Deposit Agreement, except to account for such net proceeds and other
cash (after deducting, in each case, the fee of the Depositary for the surrender
of a Receipt, any expenses for the account of the Owner of such Receipt in
accordance with the terms and conditions of this Deposit Agreement, and any
applicable taxes or governmental charges). Upon the termination of this Deposit
Agreement, the Issuer shall be discharged from all obligations under this
Deposit Agreement except for its obligations to the Depositary under Sections
5.8 and 5.9 hereof. The obligations of the Depositary under Section 5.8 shall
survive the termination of this Deposit Agreement.

ARTICLE 7.     MISCELLANEOUS.

     SECTION 7.1    Counterparts.

          This Deposit Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and all of such counterparts shall
constitute one and the same instrument. Copies of this Deposit Agreement shall
be retained by the Depositary and filed with the Depositary and the Custodians
and shall be open to inspection by any holder or Owner of a Receipt at the
Corporate Trust Office of the Depositary and the principal corporate office of
the Custodian designated by the Custodian during business hours.

     SECTION 7.2    No Third Party Beneficiaries.

          This Deposit Agreement is for the exclusive benefit of the parties
hereto and shall not be deemed to give any legal or equitable right, remedy or
claim whatsoever to any other person.

<PAGE>

     SECTION 7.3    Severability.

          In case any one or more of the provisions contained in this Deposit
Agreement or in the Receipts should be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein or therein shall in no way be affected,
prejudiced or disturbed thereby.

     SECTION 7.4    Holders and Owners as Parties; Binding Effect.

          The holders and Owners of Receipts from time to time shall be parties
to this Deposit Agreement and shall be bound by all of the terms and conditions
hereof and of the Receipts by acceptance thereof.

     SECTION 7.5    Notices.

          Any and all notices to be given to the Issuer shall be deemed to have
been duly given if personally delivered or sent by mail or cable, telex or
facsimile transmission confirmed by letter, addressed to Smith & Nephew Group
plc, Heron House, 15 Adam Street, London WC2N 6LA, England, Attention: Company
Secretary; Tel: (011) 44 207 401 7646; Fax: (011) 44 207 960 2357, or any other
place to which the Issuer may have transferred its principal office.

          Any and all notices to be given to the Depositary shall be deemed to
have been duly given if in English and personally delivered or sent by mail or
cable, telex or facsimile transmission confirmed by letter, addressed to The
Bank of New York, 101 Barclay Street, New York, New York 10286, Attention:
American Depositary Receipt Administration, telephone number (212) 815-2206,
facsimile number (212) 571-3050 or any other place to which the Depositary may
have transferred its Corporate Trust Office.

          Any and all notices to be given to any Owner shall be deemed to have
been duly given if personally delivered or sent by mail or cable, telex or
facsimile transmission confirmed by letter, addressed to such Owner at the
address of such Owner as it appears on the transfer books for Receipts of the
Depositary, or, if such Owner shall have filed with the Depositary a written
request that notices intended for such Owner be mailed to some other address, at
the address designated in such request.

          Delivery of a notice sent by mail or cable, telex or facsimile
transmission shall be deemed to be effected at the time when a duly addressed
letter containing the same (or a confirmation thereof in the case of a cable,
telex or facsimile transmission) is deposited, postage prepaid, in a post-office
letter box. The Depositary or the Issuer may, however, act upon any cable, telex
or facsimile transmission received by it, notwithstanding that such cable, telex
or facsimile transmission shall not subsequently be confirmed by letter as
aforesaid.

<PAGE>

     SECTION 7.6    Governing Law.

          This Deposit Agreement and the Receipts shall be interpreted and all
rights hereunder and thereunder and provisions hereof and thereof shall be
governed by the laws of the State of New York.

     SECTION 7.7    Compliance with U.S. Securities Laws.

          Notwithstanding anything in this Deposit Agreement to the contrary,
the Issuer and the Depositary each agrees that it will not exercise any rights
it has under this Deposit Agreement to prevent the withdrawal or delivery of
Deposited Securities in a manner which would violate the U.S. securities laws,
including, but not limited to, Section I.A.(1) of the General Instructions to
the Form F-6 Registration Statement, as amended from time to time, under the
Securities Act of 1933.

     SECTION 7.8    Assignment.

          This Deposit Agreement may not be assigned by either the Issuer or the
Depositary.

     SECTION 7.9    Effective Date.

          The effective date of this Deposit Agreement, as amended and restated
as of ___________, 2003, shall be ____________, 2003 (the "Effective Date").

     SECTION 7.10   Smith & Nephew plc as a Party to the Deposit Agreement.

          Upon the Effective Date of this Deposit Agreement as provided in
Section 7.9, Smith & Nephew plc shall cease to be a party to this Deposit
Agreement.

<PAGE>

     IN WITNESS WHEREOF, SMITH & NEPHEW GROUP PLC, SMITH & NEPHEW PLC and THE
BANK OF NEW YORK have duly executed this amended and restated agreement as of
the day and year first set forth above and all Owners shall become parties
hereto in accordance with Section 6.1 and upon acceptance by them of Receipts
issued in accordance with the terms hereof.

                                            SMITH & NEPHEW GROUP PLC


                                            By: ___________________________
                                                Name:
                                                Title:


                                            SMITH & NEPHEW PLC


                                            By: ___________________________
                                                Name:
                                                Title:


                                            THE BANK OF NEW YORK,
                                              as Depositary


                                            By: ___________________________
                                                Name:
                                                Title:

<PAGE>

                         Exhibit A to Deposit Agreement

No.

                                       --------------------------
                                       AMERICAN DEPOSITARY SHARES
                                       (Each American Depositary Share
                                       represents ten (10) deposited Shares)

                              THE BANK OF NEW YORK
                           AMERICAN DEPOSITARY RECEIPT
                              FOR ORDINARY SHARES,
                         NOMINAL VALUE 12 1/2 PENCE EACH
          (INCLUDING A BENEFICIAL INTEREST IN A COMMON ACCESS SHARE OF
                              SMITH & NEPHEW PLC),
                                       OF
                            SMITH & NEPHEW GROUP PLC
               (INCORPORATED UNDER THE LAWS OF ENGLAND AND WALES)

     The Bank of New York as depositary (hereinafter called the "Depositary"),
hereby certifies that ________________________, or registered assigns IS THE
OWNER OF

                           AMERICAN DEPOSITARY SHARES

representing deposited ordinary shares, nominal value 12 1/2 pence each, of
Smith & Nephew Group plc (herein called "Shares"), incorporated under the laws
of England and Wales (herein called the "Issuer"), which Shares include a
beneficial interest in common access shares of Smith & Nephew plc (herein called
"S&N"), which are held for the benefit of the holders of Shares by the Smith &
Nephew Common Access Trust. At the date hereof, each American Depositary Share
represents ten (10) Shares which are either deposited or subject to deposit
under the deposit agreement at The Bank of New York's London office (herein
called the "Custodian"). The Depositary's Corporate Trust Office is located at a
different address than its principal executive office. Its Corporate Trust
Office is located at 101 Barclay Street, New York, N.Y. 10286, and its principal
executive office is located at One Wall Street, New York, N.Y. 10286.

               THE DEPOSITARY'S CORPORATE TRUST OFFICE ADDRESS IS
                    101 BARCLAY STREET, NEW YORK, N.Y. 10286

<PAGE>

1.   THE DEPOSIT AGREEMENT.

     This American Depositary Receipt is one of an issue (herein called
"Receipts"), all issued and to be issued upon the terms and conditions set forth
in the deposit agreement, dated as of November 16, 1999, as amended and restated
as of August 7, 2000, and as further amended and restated as of ___________,
2003 (herein called the "Deposit Agreement"), by and among the Issuer, the
Depositary, and all Owners and holders from time to time of Receipts issued
thereunder, each of whom by accepting a Receipt agrees to become a party thereto
and become bound by all the terms and conditions thereof. The Deposit Agreement
sets forth the rights of Owners and holders of the Receipts and the rights and
duties of the Depositary in respect of the Shares deposited thereunder and any
and all other securities, property and cash from time to time received in
respect of such Shares and held thereunder (such Shares, securities, property,
and cash are herein called "Deposited Securities"). Copies of the Deposit
Agreement are on file at the Depositary's Corporate Trust Office in New York
City and at the office of the Custodian.

     The statements made on the face and reverse of this Receipt are summaries
of certain provisions of the Deposit Agreement and are qualified by and subject
to the detailed provisions of the Deposit Agreement, to which reference is
hereby made. Capitalized terms not defined herein shall have the meanings set
forth in the Deposit Agreement.

2.   SURRENDER OF RECEIPTS AND WITHDRAWAL OF SHARES.

     Upon surrender of this Receipt at the Corporate Trust Office of the
Depositary of this Receipt, and upon payment of the fee of the Depositary
provided in this Receipt, and subject to the terms and conditions of the Deposit
Agreement, the Owner hereof is entitled to delivery, to him or upon his order,
of the amount of Deposited Securities at the time represented by the American
Depositary Shares for which this Receipt is issued. Delivery of such Deposited
Securities may be made by the delivery of (a) certificates in the name of the
Owner hereof or as ordered by him or by the delivery of certificates properly
endorsed or accompanied by a proper instrument or instruments of transfer and
(b) any other securities, property and cash to which such Owner is then entitled
in respect of this Receipt. Such delivery will be made at the option of the
Owner hereof, either at the office of the Custodian or at the Corporate Trust
Office of the Depositary, provided that the forwarding of certificates for
Shares or other Deposited Securities for such delivery at the Corporate Trust
Office of the Depositary shall be at the risk and expense of the Owner hereof.
Notwithstanding any other provision of the Deposit Agreement or the Receipts,
the surrender of outstanding Receipts and withdrawal of Deposited Securities may
be suspended only for (i) temporary delays caused by closing the transfer books
of the Depositary or the Issuer or the deposit of Shares in connection with
voting at a shareholders' meeting, or the payment of dividends, (ii) the payment
of fees, taxes and

                                       -2-

<PAGE>

similar charges, and (iii) compliance with any U.S. or foreign laws or
governmental regulations relating to the Receipts or to the withdrawal of the
Deposited Securities.

3.   TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS.

     The transfer of this Receipt is registrable on the books of the Depositary
at its Corporate Trust Office by the Owner hereof in person or by a duly
authorized attorney, without unreasonable delay, upon surrender of this Receipt
properly endorsed for transfer or accompanied by a proper instrument or
instruments of transfer and funds sufficient to pay any applicable transfer
taxes and the fees and expenses of the Depositary and upon compliance with such
regulations, if any, as the Depositary may establish for such purpose. This
Receipt may be split into other such Receipts, or may be combined with other
such Receipts into one Receipt, evidencing the same aggregate number of American
Depositary Shares as the Receipt or Receipts surrendered. As a condition
precedent to the execution and delivery, registration of transfer, split-up,
combination, or surrender of any Receipt or withdrawal of any Deposited
Securities, the Depositary, the Custodian, or Registrar may require payment from
the depositor of Shares or the presentor of the Receipt of a sum sufficient to
reimburse it for any tax or other governmental charge and any stock transfer or
registration fee with respect thereto (including any such tax or charge or fee
with respect to the Shares being deposited or withdrawn) and payment of any
applicable fees as provided in the Deposit Agreement or this Receipt, may
require the production of proof satisfactory to it as to the identity and
genuineness of any signature and may also require compliance with any
regulations the Depositary may establish consistent with the provisions of the
Deposit Agreement or this Receipt.

     The delivery of Receipts against deposits of Shares generally or against
deposits of particular Shares may be suspended, or the transfer of Receipts in
particular instances may be refused, or the registration of transfer of
outstanding Receipts generally may be suspended, during any period when the
transfer books of the Depositary or the Issuer or the Foreign Registrar, if
applicable, are closed, or if any such action is deemed necessary or advisable
by the Depositary or the Issuer at any time or from time to time because of any
requirement of law or of any government or governmental body or commission, or
under any provision of the Deposit Agreement or this Receipt, or for any other
reason, subject to Article (22) hereof. Without limitation of the foregoing, the
Depositary shall not knowingly accept for deposit under the Deposit Agreement
any Shares required to be registered under the provisions of the Securities Act
of 1933, unless a registration statement is in effect as to such Shares.

4.   LIABILITY OF OWNER FOR TAXES.

     If any tax or other governmental charge shall become payable with respect
to any Receipt or any Deposited Securities represented hereby, such tax or other
governmental charge shall be payable by the Owner hereof to the Depositary. The
Depositary may refuse to effect any transfer of this Receipt or any withdrawal
of Deposited Securities

                                       -3-

<PAGE>

represented by American Depositary Shares evidenced by such Receipt until such
payment is made, and may withhold any dividends or other distributions, or may
sell for the account of the Owner hereof any part or all of the Deposited
Securities represented by the American Depositary Shares evidenced by this
Receipt, and may apply such dividends or other distributions or the proceeds of
any such sale in payment of such tax or other governmental charge and the Owner
hereof shall remain liable for any deficiency.

5.   WARRANTIES OF DEPOSITORS.

     Every person depositing Shares under the Deposit Agreement shall be deemed
thereby to represent and warrant that such Shares and each certificate therefor
are validly issued, fully paid, nonassessable, and free of any pre-emptive
rights of the holders of outstanding Shares and that the person making such
deposit is duly authorized to do so. Every such person shall also be deemed to
represent that the deposit of such Shares or sale of Receipts evidencing
American Depositary Shares representing such Shares by that person is not
restricted under the Securities Act of 1933. Such representations and warranties
shall survive the deposit of Shares and issuance of Receipts.

6.   FILING PROOFS, CERTIFICATES, AND OTHER INFORMATION.

     Any person presenting Shares for deposit or any Owner of a Receipt may be
required from time to time to file with the Depositary or the Custodian such
proof of citizenship or residence, exchange control approval, proof of the
identity of any person legally or beneficially interested in the Receipt and the
nature of such interest or such information relating to the registration on the
books of the Issuer or the Foreign Registrar, if applicable, to execute such
certificates and to make such representations and warranties, as the Depositary
or the Issuer may deem necessary or proper. The Depositary may withhold the
delivery or registration of transfer of any Receipt or the distribution of any
dividend or sale or distribution of rights or of the proceeds thereof or the
delivery of any Deposited Securities until such proof or other information is
filed or such certificates are executed or such representations and warranties
made. Upon the request of the Issuer, the Depositary shall provide the Issuer
with copies of all such certificates and such written representations and
warranties provided to the Depositary under this Article (6) and Section 3.1 of
the Deposit Agreement. Each Owner agrees to provide any information requested by
the Issuer or the Depositary pursuant to this paragraph. No Share shall be
accepted for deposit unless accompanied by evidence, if any is required by the
Depositary, that is reasonably satisfactory to the Depositary that all
conditions to such deposit have been satisfied by the person depositing such
Shares under the laws of the United Kingdom and regulations and any necessary
approval has been granted by any governmental body in the United Kingdom, if
any, which is then performing the function of the regulation of currency
exchange.

                                       -4-

<PAGE>

7.   CHARGES OF DEPOSITARY.

     The Issuer agrees to pay certain fees and reasonable expenses and
out-of-pocket charges of the Depositary and those of any Registrar only in
accordance with agreements in writing entered into between the Depositary and
the Issuer from time to time. The Depositary shall present its statement for
such charges and expenses to the Issuer once every three months. The charges and
expenses of the Custodian are for the sole account of the Depositary.

     The following charges shall be incurred by any party depositing or
withdrawing Shares or by any party surrendering Receipts or to whom Receipts are
issued (including, without limitation, issuance pursuant to a stock dividend or
stock split declared by the Issuer or an exchange of stock regarding the
Receipts or Deposited Securities or a distribution of Receipts pursuant to
Section 4.3 of the Deposit Agreement), whichever applicable: (1) taxes and other
governmental charges, (2) such registration fees as may from time to time be in
effect for the registration of transfers of Shares generally on the Share
register of the Issuer or Foreign Registrar and applicable to transfers of
Shares to the name of the Depositary or its nominee or the Custodian or its
nominee on the making of deposits or withdrawals under the Deposit Agreement,
(3) such cable, telex and facsimile transmission expenses as are expressly
provided in the Deposit Agreement, (4) such expenses as are incurred by the
Depositary in the conversion of foreign currency pursuant to Section 4.5 of the
Deposit Agreement, (5) a fee of $5.00 or less per 100 American Depositary Shares
(or portion thereof) for the execution and delivery of Receipts pursuant to
Section 2.3, 4.3 or 4.4 of the Deposit Agreement, and the surrender of Receipts
pursuant to Section 2.5 or 6.2 of the Deposit Agreement, (6) a fee of $.02 or
less per American Depositary Share (or portion thereof) for any cash
distribution made pursuant to the Deposit Agreement including, but not limited
to, Sections 4.1 through 4.4 of the Deposit Agreement, except for distributions
of cash dividends, and (7) a fee for the distribution of proceeds of sales of
securities or rights pursuant to Section 4.2 or 4.4 of the Deposit Agreement,
respectively, such fee being (i) in an amount equal to the fee for the issuance
of American Depositary Shares referred to above which would have been charged as
a result of the deposit by Owners of securities (for purposes of this clause (7)
treating all such securities as if they were Shares) or Shares received in
exercise of rights distributed to them pursuant to Section 4.2 or 4.4 of the
Deposit Agreement, respectively, but which securities or rights are instead sold
by the Depositary and the net proceeds distributed and (ii) payable from such
proceeds of sales of securities or rights.

     The Depositary, subject to Article (8) hereof, may own and deal in any
class of securities of the Issuer and its affiliates and in Receipts.

                                       -5-

<PAGE>

8.   PRE-RELEASE OF RECEIPTS.

     The Depositary may issue Receipts against the delivery by the Issuer (or
any agent of the Issuer recording Share ownership) of rights to receive Shares
from the Issuer (or any such agent). No such issue of Receipts will be deemed a
"Pre-Release" that is subject to the restrictions of the following paragraph.

     Unless requested in writing by the Issuer to cease doing so, the Depositary
may, notwithstanding Section 2.3 of the Deposit Agreement, execute and deliver
Receipts prior to the receipt of shares pursuant to Section 2.2 of the Deposit
Agreement ("Pre-Release"). The Depositary may, pursuant to Section 2.5 of the
Deposit Agreement, deliver Shares upon the receipt and cancellation of Receipts
which have been Pre-Released, whether or not such cancellation is prior to the
termination of such Pre-Release or the Depositary knows that such Receipt has
been Pre-Released. The Depositary may receive Receipts in lieu of Shares in
satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or
accompanied by a written representation and agreement from the person to whom
Receipts are to be delivered (the "Pre-Releasee") that the Pre-Releasee, or its
customer, (i) owns the Shares or Receipts to be remitted, as the case may be,
(ii) assigns all beneficial rights, title and interest in such Shares or
Receipts, as the case may be, to the Depositary in its capacity as such and for
the benefit of the Owners, and (iii) will not take any action with respect to
such Shares or Receipts, as the case may be, that is inconsistent with the
transfer of beneficial ownership (including, without the consent of the
Depositary, disposing of such Shares or Receipts, as the case may be), other
than in satisfaction of such Pre-Release, (b) at all times fully collateralized
with cash, U.S. government securities or such other collateral as the Depositary
determines, in good faith, will provide substantially similar liquidity and
security, (c) terminable by the Depositary on not more than five (5) business
days notice, and (d) subject to such further indemnities and credit regulations
as the Depositary deems appropriate. The number of Shares not deposited but
represented by American Depositary Shares outstanding at any time as a result of
Pre-Releases will not normally exceed thirty percent (30%) of the Shares
deposited under the Deposit Agreement; provided, however, that the Depositary
reserves the right to exceed such limit from time to time as it deems reasonably
appropriate, and may, with the prior written consent of the Issuer, change such
limit for purposes of general application. The Depositary will also set Dollar
limits with respect to Pre-Release transactions to be entered into under the
Deposit Agreement with any particular Pre-Releasee on a case-by-case basis as
the Depositary deems appropriate. For purposes of enabling the Depositary to
fulfill its obligations to the Owners under the Deposit Agreement, the
collateral referred to in clause (b) above shall be held by the Depositary as
security for the performance of the Pre-Releasee's obligations to the Depositary
in connection with a Pre-Release transaction, including the Pre-Releasee's
obligation to deliver Shares or Receipts upon termination of a Pre-Release
transaction (and shall not, for the avoidance of doubt, constitute Deposited
Securities under the Deposit Agreement).

                                       -6-

<PAGE>

     The Depositary may retain for its own account any compensation received by
it in connection with the foregoing.

9.   TITLE TO RECEIPTS.

     It is a condition of this Receipt and every successive holder and Owner of
this Receipt by accepting or holding the same consents and agrees, that title to
this Receipt when properly endorsed or accompanied by a proper instrument or
instruments of transfer, is transferable by delivery with the same effect as in
the case of a negotiable instrument, provided, however, that the Issuer and the
Depositary, notwithstanding any notice to the contrary, may treat the person in
whose name this Receipt is registered on the books of the Depositary as the
absolute owner hereof for the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in the Deposit Agreement or for all other purposes and neither the Depositary
nor the Issuer shall have any obligation or be subject to any liability under
the Deposit Agreement to any holder of a Receipt unless such holder is the Owner
thereof.

10.  VALIDITY OF RECEIPT.

     This Receipt shall not be entitled to any benefits under the Deposit
Agreement or be valid or obligatory for any purpose, unless this Receipt shall
have been executed by the Depositary by the manual or facsimile signature of a
duly authorized signatory of the Depositary and, if a Registrar for the Receipts
shall have been appointed, countersigned by the manual or facsimile signature of
a duly authorized officer of the Registrar.

11.  REPORTS; INSPECTION OF TRANSFER BOOKS.

     The Issuer is subject to the periodic reporting requirements of the
Securities Exchange Act of 1934 and, accordingly, files certain reports with the
Securities and Exchange Commission (hereinafter called the "Commission").

     The Depositary will make available for inspection by Owners of Receipts at
its Corporate Trust Office any reports and communications, including any proxy
soliciting material, received from the Issuer which are both (a) received by the
Depositary or the Custodian or the nominee of either as the holder of the
Deposited Securities and (b) made generally available to the holders of such
Deposited Securities by the Issuer. The Depositary will also, upon written
request, send to Owners of Receipts copies of such reports when furnished by the
Issuer pursuant to the Deposit Agreement. Any such reports and communications,
including any such proxy soliciting material, furnished to the Depositary by the
Issuer shall be furnished in English.

     The Depositary shall keep books for the registration of Receipts and
transfers of Receipts which at all reasonable times shall be open for inspection
by the Owners of Receipts provided that such inspection shall not be for the
purpose of communicating

                                       -7-

<PAGE>

with Owners of Receipts in the interest of a business or object other than the
business of the Issuer or a matter related to the Deposit Agreement or the
Receipts.

12.  DIVIDENDS AND DISTRIBUTIONS.

          Whenever the Depositary receives any cash dividend or other cash
distribution on any Deposited Securities, the Depositary will, if at the time of
receipt thereof any amounts received in a foreign currency can in the judgment
of the Depositary be converted on a reasonable basis into United States Dollars
transferable to the United States, and subject to the Deposit Agreement, convert
such dividend or distribution into Dollars and will promptly distribute the
amount thus received (net of the fees of the Depositary as provided in Section
5.9 of the Deposit Agreement) to the Owners of Receipts entitled thereto,
provided, however, that in the event that the Issuer or the Depositary is
required to withhold and does withhold from any cash dividend or other cash
distribution in respect of any Deposited Securities an amount on account of
taxes or other governmental charges, the amount distributed to the Owners of the
Receipts evidencing American Depositary Shares representing such Deposited
Securities shall be reduced accordingly. The beneficial interest in a common
access share, which is included with each Share, enables holders of Shares to
receive dividends from S&N (which is tax resident in the United Kingdom) rather
than from the Issuer (which is tax resident in Switzerland) in respect of their
Shares. All Shares represented by American Depositary Shares will be treated by
the Issuer as having elected to receive dividends from S&N, rather than the
Issuer, which election cannot be changed by Owners

     Subject to the provisions of Sections 4.11 and 5.9 of the Deposit
Agreement, whenever the Depositary receives any distribution other than a
distribution described in Sections 4.1, 4.3 or 4.4 of the Deposit Agreement, the
Depositary will cause the securities or property received by it to be
distributed to the Owners of Receipts entitled thereto, in any manner that the
Depositary may deem equitable and practicable for accomplishing such
distribution; provided, however, that if in the opinion of the Depositary such
distribution cannot be made proportionately among the Owners of Receipts
entitled thereto, or if for any other reason the Depositary deems such
distribution not to be feasible, the Depositary may adopt such method as it may
deem equitable and practicable for the purpose of effecting such distribution,
including, but not limited to, the public or private sale of the securities or
property thus received, or any part thereof, and the net proceeds of any such
sale (net of the fees of the Depositary as provided in Section 5.9 of the
Deposit Agreement) shall be distributed by the Depositary to the Owners of
Receipts entitled thereto as in the case of a distribution received in cash.

     If any distribution consists of a dividend in, or free distribution of,
Shares, the Depositary may and shall if the Issuer shall so request, distribute
to the Owners of outstanding Receipts entitled thereto, additional Receipts
evidencing an aggregate number of American Depositary Shares representing the
amount of Shares received as such dividend or free distribution subject to the
terms and conditions of the Deposit

                                       -8-

<PAGE>

Agreement with respect to the deposit of Shares and the issuance of American
Depositary Shares evidenced by Receipts, including the withholding of any tax or
other governmental charge as provided in Section 4.11 of the Deposit Agreement
and the payment of the fees of the Depositary as provided in Section 5.9 of the
Deposit Agreement. In lieu of delivering Receipts for fractional American
Depositary Shares in any such case, the Depositary will sell the amount of
Shares represented by the aggregate of such fractions and distribute the net
proceeds, all in the manner and subject to the conditions set forth in the
Deposit Agreement. If additional Receipts are not so distributed, each American
Depositary Share shall thenceforth also represent the additional Shares
distributed upon the Deposited Securities represented thereby.

     In the event that the Depositary determines that any distribution in
property (including Shares and rights to subscribe therefor) is subject to any
tax or other governmental charge which the Depositary is obligated to withhold,
the Depositary may by public or private sale dispose of all or a portion of such
property (including Shares and rights to subscribe therefor) in such amounts and
in such manner as the Depositary deems necessary and practicable to pay any such
taxes or charges, and the Depositary shall distribute the net proceeds of any
such sale after deduction of such taxes or charges to the Owners of Receipts
entitled thereto and the Depositary shall distribute any unsold balance of such
property in accordance with the provisions of the Deposit Agreement. The Issuer
or its agent shall remit to appropriate governmental authorities and agencies in
the United Kingdom all amounts, if any, withheld and owing to such authorities
and agencies by the Issuer. The Depositary or its agent shall remit to
appropriate governmental authorities and agencies in the United States all
amounts, if any, withheld and owing to such authorities and agencies by the
Depositary.

     The Depositary shall forward to the Issuer or its agent such information
from its records as the Issuer may reasonably request to enable the Issuer or
its agent to file necessary reports with governmental agencies. The Depositary
shall use reasonable efforts to make and maintain arrangements enabling Owners
who are citizens or residents of the United States to receive any tax credits or
other benefits (pursuant to treaty or otherwise) relating to dividend payments
on the American Depositary Shares.

13.  CONVERSION OF FOREIGN CURRENCY.

     Subject to any restriction imposed by the laws of the United Kingdom,
regulations or applicable permits issued by any governmental body, whenever the
Depositary shall receive foreign currency, by way of dividends or other
distributions or the net proceeds from the sale of securities, property or
rights, and if at the time of the receipt thereof the foreign currency so
received can in the judgment of the Depositary be converted on a reasonable
basis into Dollars and the resulting Dollars transferred to the United States,
the Depositary shall convert or cause to be converted as promptly as
practicable, by sale or in any other manner that it may determine, such foreign
currency into Dollars, and such Dollars shall be distributed to the Owners
entitled thereto or, if the Depositary shall have

                                       -9-

<PAGE>

distributed any warrants or other instruments which entitle the holders thereof
to such Dollars, then to the holders of such warrants and/or instruments upon
surrender thereof for cancellation in whole or in part, depending upon the terms
of such warrants or other instruments. Such distribution shall be made in
proportion to the number of American Depositary Shares representing Deposited
Securities held respectively by such Owners entitling them to such Dollars and
may be made upon an averaged or other practicable basis without regard to any
distinctions among Owners on account of exchange restrictions, the date of
delivery of any Receipt or otherwise and shall be net of any expenses of
conversion into Dollars incurred by the Depositary as provided in Section 5.9 of
the Deposit Agreement.

     If such conversion or distribution can be effected only with the approval
or license of any government or agency thereof, the Depositary shall file such
application for approval or license, if any, as it may deem desirable.

     If at any time the Depositary shall determine that in its judgment any
foreign currency received by the Depositary is not convertible on a reasonable
basis into Dollars transferable to the United States, or if any approval or
license of any government or agency thereof which is required for such
conversion is denied or in the opinion of the Depositary is not obtainable, or
if any such approval or license is not obtained within a reasonable period as
determined by the Depositary, the Depositary may, after Consultation with the
Issuer, distribute the foreign currency (or an appropriate document evidencing
the right to receive such foreign currency) received by the Depositary to, or in
its discretion may hold such foreign currency uninvested and without liability
for interest thereon for the respective accounts of, the Owners entitled to
receive the same.

     If any such conversion of foreign currency, in whole or in part, cannot be
effected for distribution to some of the Owners entitled thereto, the Depositary
may in its discretion make such conversion and distribution in Dollars to the
extent permissible to the Owners entitled thereto and may distribute the balance
of the foreign currency received by the Depositary to, or hold such balance
uninvested and without liability for interest thereon for the respective
accounts of, the Owners not entitled to receive Dollars.

14.  RIGHTS.

     In the event that the Issuer shall offer or cause to be offered to the
holders of any Deposited Securities any rights to subscribe for additional
Shares or any rights of any other nature, the Depositary, after Consultation
with the Issuer, shall have discretion as to the procedure to be followed in
making such rights available to any Owners or in disposing of such rights on
behalf of any Owners and making the net proceeds available in Dollars to such
Owners or, if by the terms of such rights offering or, for any other reason, the
Depositary may not either make such rights available to any Owners or dispose of
such rights and make the net proceeds available to such Owners, then the
Depositary shall allow the rights to lapse. If at the time of the offering of
any rights the

                                      -10-

<PAGE>

Depositary determines in its discretion, after Consultation with the Issuer,
that it is lawful and feasible to make such rights available to all Owners or to
certain Owners but not to other Owners, the Depositary may distribute, to any
Owner to whom it determines the distribution to be lawful and feasible, in
proportion to the number of American Depositary Shares held by such Owner,
warrants or other instruments therefor in such form as it deems appropriate.

     In circumstances in which rights would otherwise not be distributed, if an
Owner of Receipts requests the distribution of warrants or other instruments in
order to exercise the rights allocable to the American Depositary Shares of such
Owner under the Deposit Agreement, the Depositary will make such rights
available to such Owner upon written notice from the Issuer to the Depositary
that (a) the Issuer has elected in its sole discretion to permit such rights to
be exercised and (b) such Owner has executed such documents as the Issuer has
determined in its sole discretion are reasonably required under applicable law.

     If the Depositary has distributed warrants or other instruments for rights
to all or certain Owners, then upon instruction from such an Owner pursuant to
such warrants or other instruments to the Depositary from such Owner to exercise
such rights, upon payment by such Owner to the Depositary for the account of
such Owner of an amount equal to the purchase price of the Shares to be received
upon the exercise of the rights, and upon payment of the fees of the Depositary
and any other charges as set forth in such warrants or other instruments, the
Depositary shall, on behalf of such Owner, exercise the rights and purchase the
Shares, and the Issuer shall cause the Shares so purchased to be delivered to
the Depositary on behalf of such Owner. As agent for such Owner, the Depositary
will cause the Shares so purchased to be deposited pursuant to Section 2.2 of
the Deposit Agreement, and shall, pursuant to Section 2.3 of the Deposit
Agreement, execute and deliver Receipts to such Owner. In the case of a
distribution pursuant to the second paragraph of this Article (14), such
Receipts shall be legended in accordance with applicable U.S. laws, and shall be
subject to the appropriate restrictions on sale, deposit, cancellation, and
transfer under such laws.

     If the Depositary determines in its discretion, after Consultation with the
Issuer, that it is not lawful and feasible to make such rights available to all
or certain Owners, it may sell the rights, warrants or other instruments in
proportion to the number of American Depositary Shares held by the Owners to
whom it has determined it may not lawfully or feasibly make such rights
available, and allocate the net proceeds of such sales (net of the fees of the
Depositary as provided in Section 5.9 of the Deposit Agreement and all taxes and
governmental charges payable in connection with such rights and subject to the
terms and conditions of the Deposit Agreement) for the account of such Owners
otherwise entitled to such rights, warrants or other instruments, upon an
averaged or other practical basis without regard to any distinctions among such
Owners because of exchange restrictions or the date of delivery of any Receipt
or otherwise.

                                      -11-

<PAGE>

     The Depositary will not offer rights to Owners unless both the rights and
the securities to which such rights relate are either exempt from registration
under the Securities Act of 1933 with respect to a distribution to Owners or are
registered under the provisions of such Act. If an Owner of Receipts requests
distribution of warrants or other instruments, notwithstanding that there has
been no such registration under such Act, the Depositary shall not effect such
distribution unless it has received an opinion from recognized counsel in the
United States for the Issuer upon which the Depositary may rely that such
distribution to such Owner is exempt from such registration.

     The Depositary shall not be responsible for any failure to determine that
it may be lawful or feasible to make such rights available to Owners in general
or any Owner in particular.

     The Issuer shall be under no obligation to file any registration statement
under the Securities Act of 1933 to make available to Owners any additional
Shares, rights or other Distributions.

15.  RECORD DATES.

     Whenever any cash dividend or other cash distribution shall become payable
or any distribution other than cash shall be made, or whenever rights shall be
issued with respect to the Deposited Securities, or whenever for any reason the
Depositary causes a change in the number of Shares that are represented by each
American Depositary Share, or whenever the Depositary shall receive notice of
any meeting of holders of Shares or other Deposited Securities, the Depositary
shall fix a record date, after Consultation with the Issuer if such record date
is different from the record date applicable to the Deposited Securities (a) for
the determination of the Owners of Receipts who shall be (i) entitled to receive
such dividend, distribution or rights or the net proceeds of the sale thereof or
(ii) entitled to give instructions for the exercise of voting rights at any such
meeting, or (b) on or after which each American Depositary Share will represent
the changed number of Shares, subject to the provisions of the Deposit
Agreement. The Owners on such record date shall be entitled, subject to the
applicable provisions of the Deposit Agreement, as the case may be, to receive
the amount distributable by the Depositary with respect to such dividend or
other distribution or such rights or the net proceeds or sale thereof in
proportion to the number of American Depositary Shares held by them
respectively, and to give voting instructions to exercise the rights of Owners
under the Deposit Agreement with respect to such changed number of Shares and to
act in respect of any other such matter. Any such record date fixed by the
Depositary will, to the extent practicable, be the same as the record date fixed
by the Issuer with respect to such dividend, distribution or meeting.

                                      -12-

<PAGE>

16.  VOTING OF DEPOSITED SECURITIES.

     Upon receipt of notice of any meeting of holders of Shares or other
Deposited Securities, if requested in writing by the Issuer, the Depositary
shall, as soon as practicable thereafter, mail to the Owners of Receipts a
notice, the form of which notice shall be subject to the reasonable discretion
of the Depositary, which shall contain (a) such information as is contained in
such notice of meeting, received by the Depositary from the Issuer and (b) a
statement that the Owners of Receipts as of the close of business on a specified
record date will be entitled, subject to any applicable provision of law and of
the Articles of Association of the Issuer and the provisions of the Deposited
Securities, to instruct the Depositary as to the exercise of the voting rights,
if any, pertaining to the amount of Shares or other Deposited Securities
represented by their respective American Depositary Shares and (c) a statement
as to the manner in which such instructions may be given, including, when
applicable, an express indication that instructions may be given (or, if
applicable, deemed given in accordance with the second paragraph of Section 4.7
of the Deposit Agreement if no instruction is received) to the Depositary to
give a discretionary proxy to a person designated by the Issuer. Upon the
written request of an Owner of a Receipt on such record date, received on or
before the date established by the Depositary for such purpose, the Depositary
shall endeavor insofar as practicable and permitted under applicable laws and
the provisions of the Articles of Association of the Issuer and the provisions
of the Deposited Securities to vote or cause to be voted the amount of Shares or
other Deposited Securities represented by such American Depositary Shares
evidenced by such Receipt in accordance with any nondiscretionary instructions
set forth in such request including their instruction to give a discretionary
proxy to a person designated by the Issuer and the Depositary shall not, and the
Depositary shall ensure that each Custodian or any of its nominees shall not,
exercise any voting discretion over any Deposited Securities. Upon the written
request of an Owner of a Receipt on such record date, received on or before the
date established by the Depositary for such purpose, the Depositary shall
endeavor in so far as practicable to vote or cause to be voted the amount of
Shares or other Deposited Securities represented by such American Depositary
Shares evidenced by such Receipt in accordance with the instructions set forth
in such request. The Depositary shall not vote or attempt to exercise the right
to vote that attaches to the Shares or other Deposited Securities, other than in
accordance with such instructions.

     If after complying with the procedures set forth in this Article (16), the
Depositary does not receive instructions from the Owner of a Receipt on or
before the date established by the Depositary for such purpose, the Depositary
shall, subject to applicable law, give a discretionary proxy for the Shares
evidenced by such Receipt to a person designated by the Issuer.

     There can be no assurance that Owners generally or any Owner in particular
will receive the notice described in the preceding paragraph sufficiently prior
to the

                                      -13-

<PAGE>

Instruction Date to ensure that the Depositary will vote the Shares or Deposited
Securities in accordance with the provisions set forth in the preceding
paragraph.

     Subject to the rules of any securities exchange on which the Deposited
Securities are listed the Depositary shall use its reasonable efforts to deliver
to the extent practicable, at least two business days prior to the date of such
meeting, to the Issuer voting instructions received (or deemed received) from
Owners.

17.  CHANGES AFFECTING DEPOSITED SECURITIES.

     In circumstances where the provisions of Section 4.3 of the Deposit
Agreement do not apply, upon any change in nominal value, change in par value,
split-up, consolidation, or any other reclassification of Deposited Securities,
or upon any recapitalization, reorganization, merger or consolidation, or sale
of assets affecting the Issuer or to which it is a party, any securities which
shall be received by the Depositary or a Custodian in exchange for or in
conversion of or in respect of Deposited Securities shall be treated as new
Deposited Securities under the Deposit Agreement, and American Depositary Shares
shall thenceforth represent the new Deposited Securities so received in exchange
or conversion, unless additional Receipts are delivered pursuant to the
following sentence. In any such case the Depositary may, after Consultation with
the Issuer, and shall, if the Issuer shall so request, execute and deliver
additional Receipts as in the case of a dividend on the Shares, or call for the
surrender of outstanding Receipts to be exchanged for new Receipts specifically
describing such new Deposited Securities.

18.  LIABILITY OF THE ISSUER AND DEPOSITARY.

     Neither the Depositary nor the Issuer nor any of their directors,
employees, agents or affiliates shall incur any liability to any Owner or holder
of any Receipt, if by reason of any provision of any present or future law or
regulation of the United States, England and Wales or any other country, or of
any other governmental or regulatory authority or stock exchange, or by reason
of any provision, present or future, of the Articles of Association of the
Issuer, or by reason of any provision of any securities issued or distributed by
the Issuer, or any offering or distribution thereof, or by reason of any act of
God or war or other circumstances beyond its control, the Depositary or the
Issuer or any of their directors, employees, agents or affiliates shall be
prevented, delayed or forbidden from or be subject to any civil or criminal
penalty on account of doing or performing any act or thing which by the terms of
the Deposit Agreement it is provided shall be done or performed; nor shall the
Depositary or the Issuer incur any liability to any Owner or holder of a Receipt
by reason of any non-performance or delay, caused as aforesaid, in the
performance of any act or thing which by the terms of the Deposit Agreement it
is provided shall or may be done or performed, or by reason of any exercise of,
or failure to exercise, any discretion provided for in the Deposit Agreement.
Where, by the terms of a distribution pursuant to Sections 4.1, 4.2, or 4.3 of
the Deposit Agreement, or an offering or distribution pursuant to Section 4.4 of
the Deposit Agreement, such distribution or

                                      -14-

<PAGE>

offering may not be made available to Owners of Receipts, and the Depositary may
not dispose of such distribution or offering on behalf of such Owners and make
the net proceeds available to such Owners, then the Depositary shall not make
such distribution or offering, and shall allow any rights, if applicable, to
lapse. Neither the Issuer nor the Depositary assumes any obligation or shall be
subject to any liability under the Deposit Agreement to any Owner or holder of
any Receipts, except that they agree to perform their obligations specifically
set forth in the Deposit Agreement without negligence and to act in good faith
in the performance of such duties. The Depositary shall not be subject to any
liability with respect to the validity or worth of the Deposited Security.
Neither the Depositary nor the Issuer shall be under any obligation to appear
in, prosecute or defend any action, suit, or other proceeding in respect of any
Deposited Security or in respect of the Receipts, which in its opinion may
involve it in expense or liability, unless indemnity satisfactory to it against
all expense and liability shall be furnished as often as may be required, and
the Custodian shall not be under any obligation whatsoever with respect to such
proceedings, the responsibility of the Custodian being solely to the Depositary.
Neither the Depositary nor the Issuer shall be liable for any action or
nonaction by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Shares for deposit, any Owner or
holder of a Receipt, or any other person believed by it in good faith to be
competent to give such advice or information including, but not limited to, any
such action or nonaction based upon any written notice, request, direction or
other document believed by it to be genuine and to have been signed or presented
by the proper party or parties. The Depositary shall not be responsible for any
failure to carry out any instructions to vote any of the Deposited Securities,
or for the manner in which any such vote is cast or the effect of any such vote,
provided that any such action or nonaction is in good faith. The Depositary
shall not be liable for any acts or omissions made by a successor depositary
whether in connection with a previous act or omission of the Depositary or in
connection with a matter arising wholly after the removal or resignation of the
Depositary, provided that in connection with the issue out of which such
potential liability arises the Depositary performed its obligations without
negligence or bad faith while it acted as Depositary. The Issuer agrees to
indemnify the Depositary, its directors, employees, agents and affiliates and
any Custodian against, and hold each of them harmless from, any liability or
expense (including, but not limited to, the reasonable fees and expenses of
counsel) which may arise out of acts performed or omitted, in accordance with
the provisions of the Deposit Agreement and of the Receipts, as the same may be
amended, modified, or supplemented from time to time, (i) by either the
Depositary or any Custodian or their respective directors, employees, agents and
affiliates, except for any liability or expense arising out of the negligence or
bad faith of any of them, or (ii) by the Issuer or any of its directors,
employees, agents and affiliates. No disclaimer of liability under the
Securities Act of 1933 is intended by any provision of the Deposit Agreement.

                                      -15-

<PAGE>

19.  RESIGNATION AND REMOVAL OF THE DEPOSITARY.

     The Depositary may at any time resign as Depositary under the Deposit
Agreement by written notice of its election to do so delivered to the Issuer,
effective upon the appointment of a successor depositary and such successor
depositary's acceptance of such appointment as provided in the Deposit
Agreement. The Depositary may at any time be removed by the Issuer by written
notice of such removal, effective upon the appointment of a successor depositary
and such successor depositary's acceptance of such appointment as provided in
the Deposit Agreement. Whenever the Depositary in its discretion determines that
it is in the best interest of the Owners of Receipts to do so, it may appoint a
substitute or additional custodian or custodians.

20.  AMENDMENT.

     The form of Receipts and any provision of the Deposit Agreement may at any
time and from time to time be amended by agreement between the Issuer and the
Depositary in any respect which they may deem necessary or desirable. Any
amendment which shall impose or increase any fee or charge (other than taxes and
other governmental charges, registration fees, cable, telex or facsimile
transmission costs, delivery costs or other such expenses), or which shall
otherwise prejudice any substantial existing right of Owners of Receipts, shall,
however, not become effective as to outstanding Receipts until the expiration of
a thirty day period following notification pursuant to Section 7.5 of the
Deposit Agreement after notice of any such amendment shall have been given to
the Owners of outstanding Receipts. Every Owner of a Receipt at the time any
amendment becomes effective shall be deemed, by continuing to hold such Receipt,
to consent and agree to such amendment and to be bound by the Deposit Agreement
as amended thereby. In no event shall any amendment impair the right of the
Owner of any Receipt to surrender such Receipt and receive therefor the
Deposited Securities represented thereby except in order to comply with
mandatory provisions of applicable law.

21.  TERMINATION OF DEPOSIT AGREEMENT.

     The Depositary shall at any time at the direction of the Issuer terminate
the Deposit Agreement by mailing notice of such termination to the Owners of all
Receipts then outstanding at least 30 days prior to the date fixed in such
notice for such termination. The Depositary may likewise terminate the Deposit
Agreement by mailing notice of such termination to the Issuer and the Owners of
all Receipts then outstanding if at any time 90 days shall have expired after
the Depositary shall have delivered to the Issuer a written notice of its
election to resign and a successor depositary shall not have been appointed and
accepted its appointment as provided in Section 5.4 of the Deposit Agreement. On
and after the date of termination, the Owner of a Receipt, will upon (a)
surrender of such Receipt at the Corporate Trust Office of the Depositary, (b)
payment of the fee of the Depositary for the surrender of Receipts referred to
in Section 2.5 of the

                                      -16-

<PAGE>

Deposit Agreement, and (c) payment of any applicable taxes or governmental
charges, will be entitled to delivery, to him or as ordered by him, of the
amount of Deposited Securities represented by the American Depositary Shares
evidenced by such Receipt. If any Receipts shall remain outstanding after the
date of termination, the Depositary thereafter shall discontinue the
registration of transfers of Receipts, shall suspend the distribution of
dividends to the Owners thereof, and shall not give any further notices or
perform any further acts under the Deposit Agreement, except that the Depositary
shall continue to collect dividends and other distributions pertaining to
Deposited Securities, shall sell property and rights as provided in the Deposit
Agreement, and shall continue to deliver Deposited Securities, together with any
dividends or other distributions received with respect thereto and the net
proceeds of the sale of any rights or other property, in exchange for Receipts
surrendered to the Depositary (after deducting, in each case, the fee of the
Depositary for the surrender of a Receipt, any expenses for the account of the
Owner of such Receipt in accordance with the terms and conditions of the Deposit
Agreement, and any applicable taxes or governmental charges). At any time after
the expiration of one year from the date of termination, the Depositary may sell
the Deposited Securities then held under the Deposit Agreement and may
thereafter hold uninvested the net proceeds of any such sale, together with any
other cash then held by it thereunder, unsegregated and without liability for
interest, for the pro rata benefit of the Owners of Receipts which have not
theretofore been surrendered, such Owners thereupon becoming general creditors
of the Depositary with respect to such net proceeds. After making such sale, the
Depositary shall be discharged from all obligations under the Deposit Agreement,
except to account for such net proceeds and other cash (after deducting, in each
case, the fee of the Depositary for the surrender of a Receipt, any expenses for
the account of the Owner of such Receipt in accordance with the terms and
conditions of the Deposit Agreement, and any applicable taxes or governmental
charges). Upon the termination of the Deposit Agreement, the Issuer shall be
discharged from all obligations under the Deposit Agreement except for its
obligations to the Depositary with respect to indemnification, charges, and
expenses. The obligations of the Depositary under Section 5.8 of the Deposit
Agreement shall survive the termination of the Deposit Agreement.

22.  COMPLIANCE WITH U.S. SECURITIES LAWS.

     Notwithstanding anything in the Deposit Agreement or this Receipt to the
contrary, the Issuer and the Depositary each agrees that it will not exercise
any rights it has under the Deposit Agreement to prevent the withdrawal or
delivery of Deposited Securities in a manner which would violate the U.S.
securities laws, including, but not limited to, Section I.A.(1) of the General
Instructions to the Form F-6 Registration Statement, as amended from time to
time, under the Securities Act of 1933.

23.  DISCLOSURE OF INTERESTS.

     The Issuer may from time to time request Owners to provide information as
to the capacity in which such Owners own or owned Receipts and regarding the
identity of any

                                      -17-

<PAGE>

other persons then or previously interested in such Receipts and the nature of
such interest and various other matters. Each Owner agrees to provide any
information requested by the Issuer or the Depositary pursuant to this Article
(23). The Depositary agrees to comply with reasonable written instructions
received from the Issuer requesting that the Depositary forward any such
requests to the Owners and to forward to the Issuer any such responses to such
requests received by the Depositary.

24.  OWNERSHIP RESTRICTIONS.

     Notwithstanding any other provision of the Deposit Agreement, each Owner
and Beneficial Owner agrees to be bound by and subject to the By-laws of the
Issuer and to any restrictions on Share ownership or transferability under
applicable English law (to the same extent as if such American Depositary Shares
evidenced by this Receipt were the Shares evidenced by this Receipt, provided,
however, that such provisions shall apply to such persons only to the extent
feasible).

     In addition, Owners and Beneficial Owners are subject to regulations under
the Securities Exchange Act of 1934, pursuant to which, inter alia, acquisition
or sale of American Depositary Shares representing Shares in excess of
prescribed limits must be notified to the Commission and to any securities
exchange on which the American Depositary Shares are listed.

                                      -18-