AGREEMENT AND PLAN OF MERGER

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THIS AGREEMENT AND PLAN OF MERGER (this " Agreement "), dated as of January 5, 2009, is by and among Endo Pharmaceuticals Holdings Inc., a Delaware corporation (" Parent "), BTB Purchaser Inc., a Delaware corporation and a direct, wholly-owned Subsidiary of Parent (" Merger Sub "), and Indevus Pharmaceuticals, Inc., a Delaware corporation (the " Company ").

WHEREAS, the Board of Directors of Merger Sub has approved and declared it advisable for Merger Sub to enter into this Agreement providing for the Offer and the Merger, upon the terms and subject to the conditions set forth herein;

WHEREAS, concurrently with the execution and delivery of this Agreement, Parent and Merger Sub have entered into an agreement with each of Glenn L. Cooper, M.D., Michael W. Rogers, Noah D. Beerman, Mark S. Butler, Bobby W. Sandage, Jr. Ph.D, Malcolm Morville, Ph.D, and Sanders Morris Harris, pursuant to which each of them has irrevocably agreed to tender the shares of Company Common Stock beneficially owned by such executive officer or director in the Offer (constituting, in the aggregate, approximately 4.7% of the outstanding shares of Company Common Stock (collectively, the " Stockholder Tender Agreements ,") and together with (i) the Nebido Contingent Cash Consideration Payment Agreement and the Octreotide Contingent Cash Consideration Agreement and (ii) this Agreement, collectively referred to as the " Transaction Agreements ");

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements contained in this Agreement and intending to be legally bound hereby, the parties hereto agree as follows:

(a)             Subject to the conditions of this Agreement, as promptly as practicable (but in no event later than five business days) after the date of this Agreement, Merger Sub shall, and Parent shall cause Merger Sub to, commence, within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (together with the rules and regulations promulgated thereunder, the " Exchange Act "), the Offer to purchase all of the outstanding shares of Company Common Stock; provided , that the Company agrees that no shares of Company Common Stock owned by the Company or any Company Subsidiary will be tendered pursuant to the Offer. The obligations of Merger Sub to, and of Parent to cause Merger Sub to, accept for payment, and pay for, any shares of Company Common Stock tendered pursuant to the Offer are subject only to the conditions set forth in Exhibit A (as they may be amended in accordance with this Agreement, the " Offer Conditions ").

(i)             The initial expiration date of the Offer shall be midnight, New York City time, on the 45 ^th  calendar day following the commencement of the Offer (determined pursuant to Rule 14d-1(g)(3) under the Exchange Act). Merger Sub expressly reserves the right, at any time, to, in its sole discretion, waive, in whole or in part, any Offer Condition or modify the terms of the Offer; provided, however, that, without the prior written consent of the Company, Merger Sub shall not (i) reduce the number of shares of Company Common Stock subject to the Offer, (ii) reduce the Offer Price or change the form of consideration payable in the Offer, (iii) change, modify or waive the Minimum Tender Condition (as defined in Exhibit A), (iv) add to the Offer Conditions, or (v) otherwise amend the Offer in any manner adverse to the holders of Company Common Stock.

(ii)             Notwithstanding anything in this Agreement to the contrary, and without limiting Parent's or Merger Sub's obligations under this Section 1.1(a)(ii), Merger Sub (A) may, in its sole discretion, without consent of the Company, extend the Offer on one or more occasions for any period, if on any then-scheduled expiration date of the Offer any of the Offer Conditions shall not be satisfied or, in Merger Sub's sole discretion, waived, until such time as such condition or conditions are satisfied or waived and (B) shall extend the Offer for any period required by any rule, regulation, interpretation or position of the United States Securities and Exchange Commission (the " SEC "), the staff thereof or the Nasdaq Stock Market (the " Nasdaq ") applicable to the Offer, and until any waiting period (and any extension thereof) applicable to the consummation of the Offer under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the " HSR Act ") and any other applicable foreign antitrust, competition or similar Law shall have expired or been terminated; provided , however , that in no event shall Merger Sub be required to extend the Offer (1) beyond the Outside Date (as defined in Section 8.1(b)(i)) or (2) at any time that Parent or Merger Sub is permitted to terminate this Agreement pursuant to ARTICLE VIII.

(iii)             Parent and Merger Sub agree that if on any scheduled expiration date of the Offer, the Minimum Tender Condition is not satisfied but all of the other Offer Conditions set forth in Exhibit A are satisfied or, in Merger Sub's sole discretion, waived, then Merger Sub shall, and Parent shall cause Merger Sub to, extend the Offer for a ten calendar day period; provided , however , that this provision shall not require Merger Sub to extend the expiration of the Offer more than one time, and in no event shall Merger Sub be required to extend the Offer (1) beyond the Outside Date or (2) at any time that Parent or Merger Sub is permitted to terminate this Agreement pursuant to ARTICLE VIII.

(iv)             On the terms and subject to the conditions of this Agreement, Merger Sub shall, and Parent shall cause Merger Sub to, accept and pay for (subject to any withholding of tax pursuant to Section 1.1(d)) all shares of Company Common Stock validly tendered and not validly withdrawn pursuant to the Offer as soon as practicable after the expiration date of the Offer (as it may be extended and re-extended in accordance with this Section 1.1(a)). Acceptance for payment of shares of Company Common Stock pursuant to and subject to the conditions of the Offer upon the expiration of the Offer is referred to in this Agreement as the " Offer Closing ", and the date on which the Offer Closing occurs is referred to in this Agreement as the " Offer Closing Date ". Merger Sub expressly reserves the right to, in its sole discretion, following the Offer Closing, extend the Offer for a "subsequent offering period" in accordance with Rule 14d-11 under the Exchange Act, and the Offer Documents (as defined below) may, in Merger Sub's sole discretion, provide for such a reservation of right. Nothing contained in this Section 1.1(a) shall affect any termination rights in ARTICLE VIII.

(b)             On the date of commencement of the Offer, Parent and Merger Sub shall file with the SEC a Tender Offer Statement on Schedule TO with respect to the Offer (together with all amendments and supplements thereto and including exhibits thereto, the " Schedule TO "), which shall contain an offer to purchase and a related letter of transmittal and summary advertisement and other appropriate ancillary offer documents (such Schedule TO and the documents included therein pursuant to which the Offer will be made, together with any supplements or amendments thereto, the " Offer Documents "), and cause the Offer Documents to be disseminated to the stockholders of the Company as and to the extent required by Federal securities laws. Each of Parent, Merger Sub and the Company shall promptly correct any information supplied by it for inclusion or incorporation by reference in the Offer Documents if and to the extent that such information shall have become false or misleading in any material respect, and each of Parent and Merger Sub shall take all steps necessary to amend or supplement the Offer Documents and to cause the Offer Documents as so amended or supplemented to be filed with the SEC and disseminated to the stockholders of the Company, in each case as soon as reasonably practicable and as and to the extent required by applicable Federal securities laws. Parent and Merger Sub shall promptly notify the Company upon the receipt of any comments from the SEC, or any request from the SEC for amendments or supplements, to the Offer Documents, and shall promptly provide the Company with copies of all correspondence and summaries of all material oral communications between them and their representatives, on the one hand, and the SEC, on the other hand. Prior to the filing of the Offer Documents (including any amendment or supplement thereto) with the SEC or dissemination thereof to the stockholders of the Company, or responding to any comments of the SEC with respect to the Offer Documents, Parent and Merger Sub shall provide the Company and its counsel a reasonable opportunity to review and comment on such Offer Documents or response, and Parent and Merger Sub shall give reasonable consideration to any such comments. In the event that Parent or Merger Sub receives any comments from the SEC or its staff with respect to the Offer Documents, each shall use its reasonable best efforts to (i) respond promptly to such comments and (ii) take all other actions necessary to resolve the issues raised therein.

(c)             Parent shall provide or cause to be provided to Merger Sub on a timely basis the consideration necessary to pay for any shares of Company Common Stock that Merger Sub becomes obligated to accept for payment, and pay for, pursuant to the Offer and shall cause Merger Sub to fulfill all of Merger Sub's obligations under this Agreement.

(d)             Parent, Merger Sub or the paying agent for the Offer (the "Paying Agent") shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to the Offer to any holder of shares of Company Common Stock such amounts as Parent, Merger Sub or the Paying Agent is required to deduct and withhold with respect to the making of such payment under the Internal Revenue Code of 1986, as amended, and applicable Treasury Regulations issued pursuant thereto (the " Code "), or any provision of state, local or foreign Tax law. To the extent that amounts are so withheld and paid over by Parent, Merger Sub or the Paying Agent to the appropriate taxing authority, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the shares of Company Common Stock in respect of which such deduction and withholding was made by Parent, Merger Sub or the Paying Agent.

(a)             The Company hereby approves and consents to the Offer, the Merger and the other transactions contemplated by this Agreement and the Contingent Cash Consideration Agreements and represents that the Board of Directors, at a meeting duly called and held has unanimously

(i)             determined that the Offer, the Merger, this Agreement, Contingent Cash Consideration Agreements and the transactions contemplated hereby and thereby are advisable, fair to and in the best interests of the Company and its stockholders;

(ii)            adopted this Agreement and approved the transactions hereby;

(iii)            resolved to recommend acceptance of the Offer and, if required, approval of the Merger by its stockholders; and

(iv)           taken all other actions necessary to exempt the Offer, the Merger, this Agreement, the Contingent Cash Consideration Agreements and the transactions contemplated hereby and thereby from any "fair price", "moratorium", "control share acquisition", "interested stockholder", "business combination" or other similar statute or regulation (" Takeover Statute ").

(b)             On the date the Offer Documents are filed with the SEC, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the Offer (such Schedule 14D-9, together with any supplements or amendments thereto, the " Schedule 14D-9 ") containing, subject to Section 6.5(b), the recommendation described in Section 1.2(a)(iii) and shall mail the Schedule 14D-9 to the stockholders of the Company as required by Rule 14d-9 under the Exchange Act.  Each of the Company, Parent and Merger Sub shall promptly correct any information supplied by it for inclusion or incorporation by reference in the Schedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect, and the Company shall take all steps necessary to amend or supplement the Schedule 14D-9 and to cause the Schedule 14D-9 as so amended or supplemented to be filed with the SEC and disseminated to the stockholders of the Company, in each case as soon as reasonably practicable and as and to the extent required by applicable Federal securities laws. The Company shall promptly notify Parent upon the receipt of any comments from the SEC, or any request from the SEC for amendments or supplements, to the Schedule 14D-9, and shall promptly provide Parent with copies of all correspondence and summaries of all material oral communications between the Company and its representatives, on the one hand, and the SEC, on the other hand. Prior to the filing of the Schedule 14D-9 (including any amendment or supplement thereto) with the SEC or mailing thereof to the stockholders of the Company, or responding to any comments of the SEC with respect to the Schedule 14D-9, the Company shall provide Parent and its counsel a reasonable opportunity to review and comment on such Schedule 14D-9 or response, and the Company shall give reasonable and good faith consideration to any comments made by Parent, Merger Sub and their counsel. The Company hereby consents to the inclusion in the Offer Documents of the recommendation of the Board of Directors of the Company contained in the Schedule 14D-9.  In the event that the Company receives any comments from the SEC or its staff with respect to the Schedule 14D-9, it shall use its reasonable best efforts to (i) respond promptly to such comments and (ii) take all other actions necessary to resolve the issues raised therein.

(c)             In connection with the Offer and the Merger, the Company shall cause its transfer agent to furnish Parent and Merger Sub promptly (and no later than the date hereof) with mailing labels containing the names and addresses of the record holders of Company Common Stock as of the latest practicable date and of those persons becoming record holders subsequent to such date, together with copies of all lists of stockholders, security position listings and computer files and all other information in the Company's possession or control regarding the beneficial owners of Company Common Stock, and shall furnish to Parent and Merger Sub such information and assistance (including periodically updated lists of stockholders, security position listings and computer files) as Parent may reasonably request in communicating the Offer to holders of Company Common Stock.

(a)             Effective upon the Offer Closing and from time to time thereafter, Parent shall be entitled to designate the number of directors, rounded up to the next whole number, on the Board of Directors that equals the product of (i) the total number of directors on the Board of Directors (giving effect to the election of any additional directors pursuant to this Section 1.3) and (ii) the percentage that the number of shares of Company Common Stock beneficially owned by Parent and/or Merger Sub (including shares accepted for payment) bears to the total number of shares outstanding, and the Company shall cause Parent's designees to be elected or appointed to the Board of Directors, including by increasing the number of directors and seeking and accepting resignations of incumbent directors. At such time, the Company shall also cause individuals designated by Parent to constitute the number of members, rounded up to the next whole number, on (A) each committee of the Board of Directors and (B) as requested by Parent, each board of directors of each Subsidiary of the Company (and each committee thereof) that represents the same percentage as such individuals represent on the Board of Directors.

(b)             The Company's obligations to appoint Parent's designees to the Board of Directors shall be subject to Section 14(f) of the 1934 Act and Rule 14f-1 promulgated thereunder. The Company shall promptly take all actions necessary to effect the appointment of Parent's designees, including mailing to its stockholders information with respect to the Company and its officers and directors, as Section 14(f) and Rule 14f-1 require in order to fulfill its obligations under this Section 1.3(b), which, unless Parent otherwise elects, shall be mailed together with the Schedule 14D-9. Parent shall supply to the Company in writing and be solely responsible for any information with respect to itself and its nominees, officers, directors and affiliates required by Section 14(f) and Rule 14f-1 and the Company's obligations under Section 1.3(a) hereof shall be subject to the receipt of such information.

(c)             Following the election or appointment of Parent's designees pursuant to Section 1.3(a) and until the Effective Time (as defined in Section 2.2(b) hereof), the approval of a majority of the directors of the Company then in office who were not designated by Parent (the " Independent Directors ") shall be required to authorize (and such authorization shall constitute the authorization of the Board of Directors and no other action on the part of the Company, including any action by any other director of the Company, shall be required to authorize) any

termination of this Agreement by the Company, any amendment of this Agreement requiring action by the Board of Directors, any extension of time for performance of any obligation or action hereunder by Parent or Merger Sub and any waiver of compliance with any of the agreements or conditions contained herein for the benefit of the Company.

(a)             The Company grants to Merger Sub an irrevocable option, for so long as this Agreement has not been terminated pursuant to the provisions hereof (the " Top-Up Option "), to purchase from the Company up to the number of authorized and unissued shares of Company Common Stock (including as authorized and unissued shares, for purposes of this Section 1.4, any shares of Company Common Stock held in the treasury of the Company) equal to the number of shares that, when added to the number of shares owned by Merger Sub at the time of exercise of the Top-Up Option, constitutes one share more than the number of shares (the " Requisite Short-Form Merger Shares ") entitled to cast 90% of all the votes entitled to be cast by the holders of the Company Common Stock on the Merger after the issuance of all shares to be issued upon exercise of the Top-Up Option, calculated on a fully-diluted basis or, as may be elected by Parent, on a primary basis as of immediately prior to the issuance of such shares (such shares to be issued upon exercise of the Top-Up Option, the " Top-Up Shares ").

(b)             The Top-Up Option may be exercised by Merger Sub, in whole or in part at any time following the Offer Closing and prior to the earlier to occur of (i) the Effective Time and (ii) the termination of this Agreement in accordance with its terms, provided that Merger Sub shall own as of such time less than the Requisite Short-Form Merger Shares. Notwithstanding anything in this Agreement to the contrary, the Top-Up Option shall not be exercisable to the extent (i) the issuance of the Top-Up Shares would require approval of the Company's stockholders under Nasdaq Rule 4350, (ii) the number of shares of Company Common Stock issuable upon exercise of the Top-Up Option would exceed the number of authorized but unissued shares of Company Common Stock that are not already reserved for issuance or (iii) any other provision of applicable laws or judgment, injunction, order or decree shall prohibit the exercise of the Top-Up Option or the delivery of the Top-Up Shares. The aggregate purchase price payable for the Top-Up Shares being purchased by Merger Sub pursuant to the Top-Up Option shall be determined by multiplying the number of such shares by the Offer Price, without interest.  Such aggregate purchase price may be paid by Merger Sub, at its election, either in the same form of consideration as the Offer Price or by executing and delivering to the Company a promissory note having a principal amount equal to such purchase price.

(c)             The parties shall cooperate to ensure that the issuance and delivery of the Top-Up Shares comply with all applicable laws, including compliance with an applicable exemption from registration of the Top-Up Shares under the Securities Act of 1933 (the " Securities Act ").  In the event Merger Sub wishes to exercise the Top-Up Option, Merger Sub shall give the Company at least three business days prior written notice, specifying (i) the number of Top-Up Shares that Merger Sub intends to purchase pursuant to the Top-Up Option; (ii) the manner in which Merger Sub intends to pay the applicable purchase price; and (iii) the place and time for the closing of such purchase. At the closing of the purchase of the Top-Up Shares, Parent and Merger Sub shall cause to be delivered to the Company the consideration required to be delivered in exchange for the Top-Up Shares, and the Company shall cause to be issued to Merger Sub a certificate representing the Top-Up Shares.

(d)             Parent and Merger Sub acknowledge that the Top-Up Shares that Merger Sub may acquire upon exercise of the Top-Up Option will not be registered under the Securities Act, and will be issued in reliance upon an exemption thereunder for transactions not involving a public offering. Merger Sub agrees that the Top-Up Option and the Top-Up Shares to be acquired upon exercise of the Top-Up Option are being and will be acquired by Merger Sub for the purpose of investment and not with a view to, or for resale in connection with, any distribution thereof in violation of the Securities Act. Any certificates evidencing the Top-Up Shares shall include any legends required by applicable securities laws.

(a)             The closing of the Merger (the " Closing ") shall take place at 10:00 a.m., New York City time, on a date to be specified by the parties, which shall be no later than the third business day after the satisfaction or waiver of all of the conditions set forth in Article VII hereof (other than those conditions that by their nature are to be satisfied at the Closing, it being understood that the occurrence of the Closing shall remain subject to the satisfaction or waiver of such conditions at the Closing), at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, Four Times Square, New York, New York 10036, unless another time, date or place is agreed to in writing by the parties hereto.  The date on which the Closing occurs is referred to herein as the " Closing Date ."

(b)             Upon the terms and subject to the conditions of this Agreement, as soon as practicable on the Closing Date, the parties shall cause the Merger to be consummated by filing a certificate of merger (the " Certificate of Merger ") with the Secretary of State of the State of Delaware and by making all other filings or recordings required under the DGCL.  The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Secretary of State of the State of Delaware, or at such subsequent date or time as Parent and the Company shall agree and specify in the Certificate of Merger.  The time at which the Merger becomes effective is referred to herein as the " Effective Time ."

(a)             Conversion of Company Common Stock .  Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (including without limitation all vested and unvested shares of restricted stock issued in connection with restricted stock awards granted to the executive officers of the Company (the transfer restrictions on which shares shall terminate immediately prior to the Effective Time) but not including shares to be canceled pursuant to Section 3.1(c) hereof and Dissenting Shares) shall be converted into the right to receive cash and Contingent Cash Consideration Payments equal in form and amount to the Offer Price paid in the Offer (the " Merger Consideration "). As of the Effective Time, all such shares of Company Common Stock shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each holder of any Company Common Stock shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration, to be issued or paid in consideration therefor in accordance with Section 3.2, without interest.

(b)             Conversion of Merger Sub Common Stock .  Each share of common stock, par value $0.01 per share, of Merger Sub (the " Merger Sub Common Stock ") that is issued and outstanding immediately prior to the Effective Time shall be converted into one validly issued, fully paid and nonassessable share of common stock, $0.001 par value per share, of the Surviving Corporation, and the shares of the Surviving Corporation into which the shares of Merger Sub Common Stock are so converted shall be the only shares of the

Surviving Corporation that are issued and outstanding immediately after the Effective Time.  Following the Effective Time, each certificate evidencing ownership of shares of Merger Sub Common Stock shall evidence ownership of such shares of the Surviving Corporation.

(c)             Cancellation of Certain Shares .  Each share, if any, of Company Common Stock that is held by the Company as treasury shares and each share of Company Common Stock which is owned by the Company or Parent or by any direct or indirect wholly-owned subsidiary of the Company or Parent shall be canceled without any conversion, and no consideration shall be delivered in respect thereof.

(d)             Company Options .  Effective not later than the Closing, the Company shall take all actions required to provide that, effective as of the Closing, the Company Stock Plans (as defined in Section 4.2(a) hereof) and all Company Options (as defined in Section 4.2(a) hereof) outstanding immediately before the Closing shall be cancelled and of no further force or effect, and in consideration for such cancellation of Company Options outstanding under the Company Stock Plans immediately before the Closing, the holders thereof (whether or not such Company Options shall otherwise be exercisable at the Effective Time) shall automatically (and without any further action being required on the part of the holders thereof) receive, at the earliest Valuation Point (as defined in Section 9.14(ff)), if any, at which then applicable Per Share Paid Value (as defined in Section 9.14(y)) exceeds the per-share exercise price under such Company Option:

(i)             an amount in cash equal to (A) the number of shares of Company Common Stock subject to each such Company Option held by such holder multiplied by the excess, of (I) then applicable Per Share Paid Value over (II) the per-share exercise price under such Company Option (with such payments to be subject to any applicable Tax withholding in accordance with Section 3.1(h)); and

(ii)           the right to receive, in respect of each share of Company Common Stock subject to each such Company Option held by such holder, each Contingent Cash Consideration Payment that, as of such Valuation Point, has not yet become payable pursuant to the terms of the Contingent Cash Consideration Agreements .

(e)             Other Equity Awards . Each other award outstanding immediately before the Effective Time under the Company Stock Plans other than the Company Options (including, without limitation, any performance share awards (each, a " Performace Share Award ", deferred stock units, and rights under the 2008 Employee Stock Purchase Plan of the Company (the " 2008 ESPP ") shall be cancelled and of no further force or effect as of the Effective Time.  In exchange for the cancellation of each such award, to the extent vested as of immediately before the Effective Time  in accordance with the terms of the such award (including any vesting that occurs under the terms of the applicable award as a result of the consummation of this Agreement) and except as set forth in Section 3.1(f) below with respect to certain Performance Share Awards or in Section 3.1(g) below with repsect to the 2008 ESPP, the holder of such awards shall receive the per share Merger Consideration for each share of Company Common

Stock underlying such award (with such payment to be subject to any applicable Tax withholding in accordance with Section 3.1(h)).  Prior to the Effective Time, the Company shall take all actions necessary such that no Person has any rights to acquire Company Common Stock or common stock of the Parent or any of its subsidiaries (including the Surviving Corporation) pursuant to any Company Benefit Plan or Company Benefit Agreement following the Effective Time.

(f)             2008 Employee Stock Purchase Plan .  Each participant in the 2008 ESPP, in exchange for the cancellation of their rights under the 2008 ESPP as set forth in Section 3.1(e) above, shall receive the per share Merger Consideration  (with such payment to be subject to any applicable Tax withholding in accordance with Section 3.1(h) for a number of shares equal to the shares of Company Common Stock that would have been issued under the terms of the 2008 ESPP with respect to such participant's payroll deductions accumulated as of the Effective Time assuming the 2008 ESPP had been approved by the stockholders of the Company prior to the Effective Time and assuming that the purchase date under the 2008 ESPP was the Closing Date.   The Company shall not commence any new purchase periods under the 2008 ESPP after the date hereof.

(g)             Withholding . Parent, the Surviving Corporation of the Exchange Agent shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to any holder of Company Common Stock or Company Options such amounts as Parent, the Surviving Corporation or the Exchange Agent is or may be reasonably required to deduct and withhold with respect to the making of such payment under applicable Law. To the extent that amounts are so withheld and paid over to the appropriate taxing authority by Parent, the Surviving Corporation or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Company Common Stock or Company Options in respect of which such deduction and withholding was made by Parent, the Surviving Corporation or the Paying Agent.

(a)             Exchange Agent .  At or prior to the Effective Time, Parent shall engage a nationally-recognized financial institution reasonably satisfactory to the Company to act as

exchange agent in connection with the Merger (the " Exchange Agent ").  At the Effective Time, Parent shall deposit with the Exchange Agent, in trust for the benefit of the holders of shares of Company Common Stock immediately prior to the Effective Time, the cash portion of the Merger Consideration to be paid in respect of the Company Common Stock.  All cash deposited with the Exchange Agent shall hereinafter be referred to as the " Exchange Fund ."

(b)             Exchange Procedures .  Promptly after the Effective Time, Parent shall cause the Exchange Agent to mail to each holder of record of (i) a certificate or certificates which immediately prior to the Effective Time represented outstanding shares of Company Common Stock (the " Certificates ") or (ii) uncertificated shares of Company Common Stock (the " Uncertificated Shares "), in each case, which at the Effective Time were converted into the right to receive the Merger Consideration pursuant to Section 3.1 hereof, (i) a letter of transmittal (which, in the case of Certificates, shall specify that delivery shall be effected, and risk of loss and title to the Certificates shall pass, only upon delivery of the Certificates to the Exchange Agent and shall be in such form and have such other provisions as Parent may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates or Uncertificated Shares in exchange for the Merger Consideration.  Upon (i) surrender of Certificates for cancellation to the Exchange Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto or (ii) or receipt of an " agent's message" by the Exchange Agent (or such other evidence, if any, of transfer as the Exchange Agent may reasonably request) in the case of a book-entry transfer of Uncertificated Shares, and such other documents as may reasonably be required by the Exchange Agent, the holder of such Certificates or Uncertificated Shares shall be entitled to receive in exchange the portion of the Merger Consideration to which such holder is entitled pursuant to Section 3.1, and any Certificates so surrendered shall forthwith be cancelled.  If any portion of the Merger Consideration is to be paid to a Person  (as defined in Section 9.14(dd)) other than the Person in whose name the surrendered Certificate or the transferred Uncertificated Share is registered, it shall be a condition to such payment that (i) either such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer or such Uncertificated Share shall be properly transferred and (ii) the Person requesting such payment shall pay to the Exchange Agent any transfer or other Taxes required as a result of such payment to a Person other than the registered holder of such Certificate or Uncertificated Share or establish to the satisfaction of Parent that such Tax has been paid or is not payable.  Until surrendered as contemplated by this Section 3.2(b), each Certificate or Uncertificated Share shall be deemed at any time after the Effective Time to represent only the right to receive the Merger Consideration upon such surrender.

(c)             No Further Ownership Rights in Company Common Stock .  All Merger Consideration issued and paid upon the surrender for exchange of Certificates or Uncertificated Shares in accordance with the terms of this Article III shall be deemed to have been issued and paid in full satisfaction of all rights pertaining to the shares of Company Common Stock previously represented by such Certificates or Uncertificated Shares.  At the Effective Time, the stock transfer books of the Company shall be closed and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock which were outstanding immediately prior to the Effective Time.  If, after the Effective Time, Certificates or Uncertificated Shares are presented to the Surviving Corporation

or the Exchange Agent for any reason, they shall be cancelled and exchanged as provided in this Article III.

(d)             Termination of Exchange Fund .  Any portion of the Exchange Fund which remains undistributed to the holders of Company Common Stock six months after the Effective Time shall be delivered to Parent, upon demand, and any holders of Company Common Stock who have not theretofore complied with this Article III shall thereafter look only to Parent for payment of their claim for the Merger Consideration.

(e)             No Liability .  None of Parent, Merger Sub, the Company or the Exchange Agent or any of their respective directors, officers, employees and agents shall be liable to any Person in respect of Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar law.  If any Certificate or Uncertificated Share shall not have been surrendered prior to three years after the Effective Time, or immediately prior to such earlier date on which any cash or Contingent Cash Consideration Payments would otherwise escheat to or become the property of any Governmental Entity (as defined in Section 4.5), any such cash or Contingent Consideration Cash Payments shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation, free and clear of all claims or interests of any Person previously entitled thereto.

(f)             Investment of Exchange Fund .  The Exchange Agent shall invest any cash included in the Exchange Fund as directed by Parent on a daily basis provided that no such investment or loss thereon shall affect the amounts payable to former stockholders of the Company after the Effective Time pursuant to this Article III.  Any interest and other income resulting from such investment shall become a part of the Exchange Fund, and any amounts in excess of the amounts payable pursuant to this Article III shall promptly be paid to Parent.

(g)             Withholding Rights .  Parent and the Exchange Agent shall be entitled to deduct and withhold from any consideration payable pursuant to this Agreement to any Person who was a holder of Company Common Stock immediately prior to the Effective Time such amounts as Parent or the Exchange Agent may be required to deduct and withhold with respect to the making of such payment under the Code or any other provision of federal, state, local or foreign tax law.  To the extent that amounts are so withheld by Parent or the Exchange Agent, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person to whom such consideration would otherwise have been paid.

(h)             Lost, Stolen or Destroyed Certificates .  In the event any Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, such portion of the Merger Consideration as may be required pursuant to Section 3.1(a); provided , however , that Parent may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed Certificates to deliver an agreement of indemnification in form reasonably satisfactory to Parent, or a bond in such sum as Parent may reasonably direct as indemnity, against any claim that may be made against Parent or the Exchange Agent in respect of the Certificates alleged to have been lost, stolen or destroyed.

The Company represents and warrants to Parent and Merger Sub as of the date hereof and as of the Closing Date (except for those representations and warranties made as of a specific date or time) as follows (except (i) as set forth in the written disclosure letter (which letter shall in each case specifically identify by reference to Sections of this Agreement any exceptions to each of the representations, warranties and covenants contained in this Agreement; provided , however , that any information set forth in one section of such disclosure letter shall be deemed to apply to each other section or subsection thereof or hereof to which its relevance is readily apparent on its face) delivered by the Company to Parent and Merger Sub in connection with the execution and delivery of this Agreement (the " Company Disclosure Letter ") or (ii) as disclosed in the Company SEC Reports (as defined in Section 4.7(a)) on or prior to the date hereof (and without regard to any amendment thereto filed after the date of this Agreement)):

(a)             The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and

authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as now being conducted, except where the failure to have such governmental approvals would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect (as defined in Section 9.14(hh)).  The Company is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature or conduct of its business or the ownership, leasing or operation of its properties requires it to be so qualified, licensed or in good standing, except for such jurisdictions where the failure to be so qualified, licensed or to be in good standing would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(b)             Each Company Subsidiary (as defined in Section 4.2(d)) is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization and has all requisite corporate (or similar) power and authority and all necessary governmental approvals to own, lease and operate its properties and to carry on its business as now being conducted, except where the failure to have such governmental approvals would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.  Each Company Subsidiary is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature or conduct of its business or the ownership, leasing or operation of its properties requires it to be so qualified, licensed or in good standing, except for such jurisdictions where the failure to be so qualified, licensed or to be in good standing would not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

(c)             The Company has furnished or made available to Parent true and complete copies of the Restated Certificate of Incorporation of the Company, as amended through the date of this Agreement (as so amended, the " Company Certificate of Incorporation "); the Bylaws of the Company, as amended through the date of this Agreement (as so amended, the " Company Bylaws " and together with the Company Certificate of Incorporation, " Company Organizational Documents "); and the comparable charter and organizational documents of each Company Subsidiary, in each case as amended through the date of this Agreement.  The Company Organizational Documents are in full force and effect and have not been amended or otherwise modified.  The Company is not in violation of any provision of the Company Organizational Documents, and no Company Subsidiary is in material violation of any provision of its certificate of incorporation, bylaws or equivalent organizational documents.  The Company has made available to Parent complete and correct copies of the minutes (or, in the case of minutes that have not yet been finalized, drafts thereof) of all meetings of the stockholders of the Company and each of the Company Subsidiaries (to the extent available), the boards of directors of the Company and each of the Company Subsidiaries (to the extent available) and the committees of each such board of directors, in each case held since January 1, 2006 and prior to the date hereof.

(a)             The authorized capital stock of the Company consists of (i) 200,000,000 shares of Company Common Stock, par value $0.001 per share, and (ii) 5,000,000 shares of preferred stock, par value $0.001 per share (" Company Preferred Stock ").  At the close of business on December 31, 2008, (i) 78,187,842 shares of Company Common Stock were issued

and outstanding, (including 540,230  shares of Company Common Stock that were outstanding as of the relevant time but were subject to vesting or other forfeiture restrictions or a right of repurchase by Company as of such time), (ii) zero shares of Company Common Stock were held by Company in its treasury, (iii) an aggregate 17,450,020 shares of Company Common Stock were reserved for issuance pursuant to outstanding awards and rights under the Company's 1994 Long-Term Incentive Plan, 1995 Employee Stock Purchase Plan, 1998 Employee Stock Option Plan, 2000 Stock Option Plan, 2004 Equity Incentive Plan and 2008 Employee Stock Purchase Plan (collectively, the " Company Stock Plans "), of which (A) 13,063,089 shares of Company Common Stock were subject to outstanding and unexercised options entitling the holder thereof to purchase a share of Company Common Stock (each, a " Company Option "), (B) up to 1,083,828 shares of Company Common Stock were issuable pursuant to outstanding performance share awards with service and market-based vesting criteria, (C) 100,000 shares of Company Common Stock were issuable pursuant to deferred stock units, (D) 1,500,000 shares were reserved under the Company's 2008 Employee Stock Purchase Plan and (E) 1,703,103 shares of Company Common Stock that are reserved but are not allocated to any specific outstanding rights or awards, (iv) 355,442 shares were reserved for issuance relating to outstanding obligations regarding CPEC LLC, and (v) 10,806,040 shares of Company Common Stock are reserved for issuance upon conversion of the 6.25% Convertible Senior Notes due 2009.  At the close of business on January 2, 2009, no shares of Company Preferred Stock were issued and outstanding.

(b)             Except as set forth in Section 4.2(a) above, at the close of business on January 2, 2009, no shares of capital stock or other voting securities of the Company were issued, reserved for issuance or outstanding.  From January 1, 2009, until the date of this Agreement, there have been no issuances by the Company of shares of capital stock of, or other equity or voting interests in, the Company, other than the issuance of shares of Company Common Stock pursuant to the exercise of Company Options outstanding as of January 1, 2009, in accordance with their terms.  Except as set forth in Section 4.2(a) above, as of the date hereof, there are no options, warrants, convertible or exchangeable securities, subscriptions, stock appreciation rights, phantom stock rights or stock equivalents or other rights, agreements, arrangements or commitments (contingent or otherwise) of any character issued or authorized by the Company or any Company Subsidiary (i) relating to any issued or unissued capital stock or equity interest of the Company or any Company Subsidiary, (ii) obligating the Company or any Company Subsidiary to issue, deliver or sell, or cause to be issued, delivered or sold, any shares of capital stock of, or options, warrants, convertible or exchangeable securities, subscriptions or other equity interests in the Company or any Company Subsidiary or (iii) that give any Person the right to receive any economic benefit or right similar to or derived from the economic benefits and rights accruing to holders of capital stock of the Company or any Company Subsidiary (each of (i), (ii) and (iii), collectively, the " Company Stock Rights "). All outstanding shares of Company Common Stock are, and all shares of Company Common Stock that may be issued prior to the Effective Time will be when issued, duly authorized, validly issued, fully paid and nonassessable.  There are no outstanding contractual obligations of the Company or any Company Subsidiary to repurchase, redeem or otherwise acquire any capital stock or equity interest of the Company (including any shares of Company Common Stock) or any Company Subsidiary or any Company Stock Rights or to pay any dividend or make any other distribution in respect thereof or to provide funds to, or make any investment (in the form of a loan, capital contribution or otherwise) in, any Person, other than pursuant to the Company Stock Plans.

(c)             Section 4.2(c) of the Company Disclosure Letter sets forth a true, complete and correct list, as of January 2, 2009, of (i) all Company Options, the number of shares of Company Common Stock subject thereto, the grant dates, expiration dates, the exercise or base prices and the names of the holders thereof, and (ii) all other outstanding awards under the Company Stock Plans, the number of shares of Company Common Stock subject thereto, the holders thereof and the vesting schedules thereof.  Each outstanding Company Option, restricted stock award, deferred stock unit, performance stock award and employee stock purchase plan right, may, be treated at the Effective Time as set forth in Section 3.1.

(d)             Exhibit 21 to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2008 includes all the Subsidiaries of the Company (each a " Company Subsidiary " and together, the " Company Subsidiaries ") in existence as of the date hereof.  All the outstanding shares of capital stock of, or other equity interests in, each such Company Subsidiary have been duly authorized and validly issued and are fully paid and nonassessable and are, except as set forth in such Exhibit 21, owned directly or indirectly by the Company, free and clear of all pledges, claims, liens, charges, encumbrances and security interests of any kind or nature whatsoever (collectively, " Liens ") and free of any other restriction (including any restriction on the right to vote, sell or otherwise dispose of such capital stock or other ownership interests), except for restrictions imposed by applicable securities laws.  Neither the Company nor any of the Company Subsidiaries directly or indirectly owns or has any right or obligation to subscribe for or otherwise acquire any equity or similar interest in, or any interest convertible into or exchangeable or exercisable for, any corporation, partnership, joint venture or other business association or entity (other than the Company Subsidiaries).

(a)             The Company has all necessary corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and, subject to obtaining the Company Stockholder Approval (as defined below) if required in connection with this Agreement, the Offer and the Merger, to consummate the Merger and the other transactions contemplated hereby.  The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the Offer and the Merger and the other transactions contemplated hereby, have been duly authorized by all necessary corporate action on the part of the Company and no other corporate proceedings on the part of the Company are necessary to authorize this Agreement or to consummate the Offer and the Merger or the other transactions contemplated hereby (other than obtaining the Company Stockholder Approval and the filing and recordation of appropriate merger documents as required by the DGCL).  This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by the other parties hereto, constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms subject, as to enforcement of remedies, to bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the rights and remedies of creditors generally and to the effect of general principles of equity.  If approval of the Company Stockholders is required pursuant to the DGCL, the affirmative vote of a majority of outstanding shares of Company Common Stock entitled to vote

accordance with the DGCL, the Company Certificate of Incorporation and the Company Bylaws (the " Company Stockholder Approval ") is the only vote of the holders of capital stock of the Company necessary to approve this Agreement, the Merger and the other transactions contemplated hereby.

(b)             The Company Board, at a meeting duly called and held, duly and unanimously adopted resolutions (i) approving this Agreement, the Offer, the Merger and the other transactions contemplated by this Agreement, (ii) determining that this Agreement is advisable and that the terms of the Offer, the Merger and the other transactions contemplated by this Agreement are fair to and in the best interests of the Company and its stockholders, and (iii) recommending that the Company's stockholders adopt this Agreement.  Such resolutions are sufficient to render the provisions of Section 203 of the DGCL inapplicable to this Agreement and the other Contingent Cash Consideration Agreements, the Offer, the Merger and the other transactions contemplated by this Agreement.  To the knowledge of the Company, no other state takeover statute or similar statute or regulation applies or purports to apply to the Company with respect to this Agreement, the Offer, the Merger or any other transaction contemplated by this Agreement or the Contingent Cash Consideration Agreements and the transactions contemplated thereby.

(c)             UBS Securities LLC has delivered to the Company Board its opinion to the effect that, as of the date of such opinion and based on the assumptions, qualifications and limitations contained therein, the consideration to be received by the holders of Company Common Stock (other than as set forth in such opinion) pursuant to the Offer and the Merger, taken together, is fair, from a financial point of view, to such holders.  The Company will make available to Parent a correct and complete copy of the form of such opinion solely for informational purposes after receipt thereof by the Company.

party or by which the Company or any of the Company Subsidiaries or any property or asset of any of them is bound or affected (including any Company Material Contract (as defined in Section 4.13) and any Company Permit (as defined in Section 4.6(b)), or (d) result in the loss of or otherwise impair the right, title or interest of the Company or any Company Subsidiaries in and to any of the material Company IP, except, in the case of clauses (a)(ii), (b) and (c) above, for any such conflicts, violations, breaches, defaults or other occurrences which have not had and are not reasonably expected to have, individually or in the aggregate, a Company Material Adverse Effect.

(b)             Each of the Company, the Company Subsidiaries and their respective employees and, to the knowledge of the Company, business partners, as applicable, has in effect all required filings, licenses, permits, certificates, exemptions, orders, consents, clearances, registrations, approvals and authorizations of all Governmental Entities (including all authorizations under the regulations of the Federal Food, Drug and Cosmetic Act of 1938, as amended (the " FDCA "), and the regulations of the FDA promulgated thereunder and any of the foregoing required by any other Regulatory Authority, including the EMEA and Health Canada) and third Persons necessary for the conduct of the Company's and the Company Subsidiaries' business and the use of their properties and assets (including the marketing and sale of the Products), as presently conducted and used (the " Company Permits "), and all Company Permits are valid and in full force and effect, except where such failure has not had, or is not reasonably expected to have, individually or in the aggregate, a Company Material Adverse Effect; and neither the Company nor any Company Subsidiary has received written notice from any Governmental Entity or third Person that any such Company Permit is subject to any adverse action which has had, or is reasonably expected to have, individually or in the aggregate, a Company Material Adverse Effect.

(a)             The Company has filed all forms, reports, statements and documents required to be filed with the SEC since October 1, 2006 (the " Company SEC Reports "), each of which has complied in all material respects with the applicable requirements of the Securities Act and the rules and regulations promulgated thereunder, the Exchange Act and the rules and regulations promulgated thereunder, and the Sarbanes-Oxley Act of 2002 (the " Sarbanes-Oxley Act ") and the rules and regulations promulgated thereunder, each as in effect on the date so filed, except to the extent updated, amended, restated or corrected by a subsequent Company SEC Report filed or furnished to the SEC by the Company, and in either case, publicly available prior to the date hereof (each, a " Company Filed SEC Report ").  None of the Company SEC Reports (including any financial statements or schedules included or incorporated by reference therein) contained when filed or currently contains, and any Company SEC Reports filed with the SEC subsequent to the date hereof will not contain, any untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except to the extent updated, amended, restated or corrected by a subsequent Company Filed SEC Report.

(b)             Except to the extent updated, amended, restated or corrected by a subsequent Company Filed SEC Report, all of the financial statements included in the Company SEC Reports, in each case, including any related notes thereto, as filed with the SEC (those filed with the SEC are collectively referred to as the " Company Financial Statements "), comply as to form in all material respects with applicable accounting requirements and the published rules of the SEC with respect thereto and have been prepared in accordance with U.S. generally accepted accounting principles (" GAAP ") applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of the unaudited statements, as may be permitted by Form 10-Q of the SEC and subject, in the case of the unaudited statements, to normal, recurring year-end audit adjustments).  The consolidated balance sheets (including the related notes) included in such Company Financial Statements (if applicable, as updated, amended, restated or corrected in a subsequent Company Filed SEC Report) fairly present, in all material respects, the consolidated financial position of the Company and the Company Subsidiaries at the respective dates thereof, and the consolidated statements of operations, stockholders' equity and cash flows (in each case, including the related notes) included in such Company Financial Statements (if applicable, as updated, amended, restated or corrected in a subsequent Company Filed SEC

Report) fairly present, in all material respects, the consolidated statements of operations, stockholders' equity and cash flows of the Company and the Company Subsidiaries for the periods indicated, subject, in the case of the unaudited statements, to normal, recurring year-end audit adjustments.

(c)             Neither the Company nor any Company Subsidiary has any material Liabilities (as defined below) except for (i) Liabilities that are reflected, or for which reserves were established, on the audited consolidated balance sheet of the Company and the Company Subsidiaries as of September 30, 2008, (ii) Liabilities incurred in the ordinary course of business and consistent with past practice since September 30, 2008, (iii) Liabilities that are disclosed in the Company SEC Reports and (iv) Liabilities incurred in connection with this Agreement and the transactions contemplated hereby.  As used in this Agreement, the term " Liability " means any and all debts, liabilities and obligations, whether accrued or fixed, absolute or contingent, known or unknown or matured or unmatured, including those arising under any Law and those arising under any Contract.

(d)             Each of the principal executive officer of the Company and the principal financial officer of the Company (or each former principal executive officer of Company and each former principal financial officer of the Company, as applicable) has made all applicable certifications required by Rule 13a-14 or 15d-14 under the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act with respect to the Company SEC Reports, and the statements contained in such certifications are true and accurate.  For purposes of this Agreement, "principal executive officer" and "principal financial officer" shall have the meanings given to such terms in the Sarbanes-Oxley Act.  Neither the Company nor any of the Company Subsidiaries has any outstanding, or has arranged any outstanding, "extensions of credit" to directors or executive officers within the meaning of Section 402 of the Sarbanes-Oxley Act.

(i)             The Company maintains a system of "internal control over financial reporting" (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) sufficient to provide reasonable assurance (A) that transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP, consistently applied, (B) that transactions are executed only in accordance with the authorization of management and (C) regarding prevention or timely detection of the unauthorized acquisition, use or disposition of the Company's assets.

(ii)             The Company's "disclosure controls and procedures" (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) are reasonably designed to ensure that all information (both financial and non-financial) required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such information is accumulated and communicated to the Company's management as appropriate to allow timely decisions regarding required disclosure and to make the

certifications of the chief executive officer and chief financial officer of the Company required under the Exchange Act with respect to such reports.

(iii)           Neither the Company nor any of the Company Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract (including any contract or arrangement relating to any transaction or relationship between or among the Company or any of the Company Subsidiaries, on the one hand, and any unconsolidated Affiliate, including any structured finance, special purpose or limited purpose entity or Person, on the other hand, or any "off-balance sheet arrangements" (as defined in Item 303(a) of Regulation S-K of the SEC), where the result, purpose or intended effect of such contract is to avoid disclosure of any material transaction involving, or material liabilities of, the Company or any of the Company Subsidiaries in the Company's or such Company Subsidiary's published financial statements or other Company SEC Reports.

(iv)           Since October 1, 2006, the Company has not received any oral or written notification of any (x) "significant deficiency" or (y) "material weakness" in the Company's internal control over financial reporting.  For purposes of this Agreement, the terms "significant deficiency" and "material weakness" shall have the meanings assigned to them by the Public Company Accounting Oversight Board in Auditing Standard No. 2, as in effect on the date hereof.

(e)             None of the Company Subsidiaries is, or has at any time since October 1, 2006 been, subject to the reporting requirements of Sections 13(a) and 15(d) of the Exchange Act.

(a)             Section 4.9 of the Company Disclosure Letter sets forth a true and complete list of all Regulatory Authorizations from the FDA, EMEA and all other Regulatory Authorities owned by the Company or the Company Subsidiaries or held by Company Partners (as defined in Section 4.9(b) hereof) and relating to the Core Products (as defined in Section 9.14(g)) and used in the conduct of the Company's business, and there are no other Regulatory

Authorizations required for the Company, the Company Subsidiaries or the Core Products in connection with the conduct of the Company's business as currently conducted.  All such Regulatory Authorizations owned by the Company or a Company Subsidiary are, and to the knowledge of the Company all other Regulatory Authorizations are, in all material respects, (i) in full force and effect, (ii) validly registered and on file with applicable Regulatory Authorities, (iii) in compliance with all formal filing and maintenance requirements, and (iv) in good standing, valid and enforceable.  The Company and the Company Subsidiaries have filed all required notices and responses to notices, supplemental applications, reports (including adverse experience reports) and other information with the FDA, EMEA and all other applicable Regulatory Authorities.

(b)             Without limiting the generality of any other representations and warranties made by the Company under this Agreement, to the knowledge of the Company, the conduct of the business of the Company and the Company Subsidiaries as currently conducted is in compliance in all material respects with (1) all written communications, requirements and applicable Laws and Orders of the FDA, EMEA and other Regulatory Authorities and (2) all Regulatory Authorizations, including all requirements of the FDA, the EMEA and all other Regulatory Authorities in warning letters, notices of adverse findings and Section 305 notices and similar letters or notices, and in connection with all product recalls, notifications and safety alerts, and any request from the FDA, the EMEA or any Regulatory Authority requesting the Company or any Company Subsidiary to cease to investigate, test or market any product, and all consent decrees (including plea agreements) issued with respect to the Company or any Company Subsidiary.  There are no, and have not been, any inspection reports, warning letters, notices of adverse findings, Section 305 notices or similar written documents received by the Company or, to the knowledge of the Company, by any Company Partner, that assert a lack of compliance with any applicable Laws, Orders, or regulatory requirements that have not been fully resolved to the satisfaction of the FDA, the EMEA or any other Regulatory Authorities, as applicable.  None of the Company or any of the Company Subsidiaries has knowledge (or has been notified by a third party) of any pending regulatory action, investigation or inquiry of any sort by the FDA, EMEA or any other Regulatory Authority (other than non-material routine or periodic inspections or reviews) against any of the Company, a Company Subsidiary, the Core Products or any Person that manufactures, develops or distributes the Core Products pursuant to a development, commercialization, manufacturing, supply or other collaboration arrangement with the Company or any Company Subsidiary (each, a " Company Partner "), and, to the knowledge of the Company, there is no basis for any adverse regulatory action.  Without limiting the foregoing, (i) to the knowledge of the Company, there have been no product recalls, warnings, notifications or safety alerts conducted or issued by the Company or Company Subsidiaries, the FDA, the EMEA or any other Regulatory Authorities with respect to the Company's and the Company Subsidiaries' Products, none of the foregoing has been requested or demanded by the FDA, the EMEA or any other Regulatory Authorities, and to the Company's knowledge, and there is no reasonable basis for any of the foregoing; (ii) none of the Company, the Company Subsidiaries or, to the knowledge of the Company, any of their respective agents or subcontractors, has been convicted of any crime or engaged in any conduct which would reasonably be expected to result in criminal liability, debarment or disqualification by the FDA, the EMEA or any other Regulatory Authority, and (iii) no criminal, injunctive, seizure or civil

penalty actions have at any time been commenced or threatened by any Regulatory Authority against the Company or any Company Subsidiary or, to the knowledge of the Company, any of their respective agents or subcontractors, and there are no consent decrees (including plea agreements) or similar actions to which the Company or any Company Subsidiary is bound or which relate to the Core Products. Neither the Company nor any Company Subsidiary is, to the knowledge of the Company, employing or utilizing the services of any individual who has been debarred, temporarily denied approval or suspended under any applicable Law or Order.  To the knowledge of the Company, neither the Company nor any Company Subsidiary has made any untrue statement of fact or fraudulent statement to the FDA, the EMEA or any other Regulatory Authority nor have they failed to disclose any fact required to be disclosed to the FDA, the EMEA or any other Regulatory Authority, and to the knowledge of the Company, no Company Partner (as defined below) has made any untrue statement of fact or fraudulent statement to the FDA, the EMEA or any other Regulatory Authority relating to the Products, nor to the knowledge of the Company, has any Company Partner failed to disclose any facts required to be disclosed to the FDA, the EMEA or any other Regulatory Authority relating to the Products.

(c)             The Company and the Company Subsidiaries have made available to Parent complete and accurate copies of all Regulatory Authorizations and regulatory dossiers relating thereto, all serious adverse event reports, periodic adverse event reports and other pharmacoviligence reports and data, and all other material Regulatory Authority communications, documents and other information submitted by the Company to or received by the Company from the FDA, the EMEA or any equivalent Regulatory Authority, including inspection reports, warning letters and similar documents, relating to the Company or any Company Subsidiary, the conduct of their business, or the Core Products.

(d)             All preclinical studies and clinical trials conducted or being conducted with respect to the Company's and the Company Subsidiaries' Products by or at the direction of the Company or any Company Subsidiary have been and are being conducted in material compliance with the applicable requirements of Good Laboratory Practices and Good Clinical Practices and applicable regulations and guidances that relate to the conduct of clinical studies, and, the Company (1) is not aware of any failure by any Company Partner to conduct clinical studies in compliance with such applicable requirements, regulations and guidances and (2) has not received any notifications from any institutional review board (IRB) raising any issues.  All results of studies, tests and trials related to the Core Products and conducted by or at the direction of the Company, and all other material information related to such studies, tests and trials, have been made available to Parent.

(e)             The manufacture of products by the Company and any Company Subsidiary is, or, in the case of any products manufactured by a Company Partner, to the knowledge of the Company is, being conducted in material compliance with the applicable requirements of Current Good Manufacturing Practices. In addition, the Company and each Company Subsidiary and, to the knowledge of the Company, their respective Company Partners, are in material compliance with all applicable registration and listing requirements, including, for example, those set forth in 21 U.S.C. Section 360 and 21 C.F.R. Parts 207 and 807 and all similar applicable Laws and Orders.  To the knowledge of the Company, no Product sold by the Company or held in inventory by the Company has been adulterated or misbranded.  All labeling is in compliance with FDA, EMEA and other Regulatory Authority requirements, and all advertising and promotional materials of the Company and each Company Subsidiary are in material compliance with FDA, EMEA and other applicable Regulatory Authority requirements.

(a)             Each of the Company and each Company Subsidiary has duly filed all Tax Returns required to be filed by it, and all such Tax Returns are true, complete and accurate, except to the extent that all such failures to file, taken together, have not had and are not reasonably expected to have a Company Material Adverse Effect.  The Company and each of the Company Subsidiaries have paid (or the Company has paid on its behalf) (i) all taxes shown as due on such Tax Returns and (ii) all material Taxes otherwise due and payable, except for those Taxes (x) being contested in good faith by appropriate proceedings and for which adequate reserves have been established in the financial statements included in the Company Filed SEC Reports in accordance with GAAP.  There are no Liens for any Taxes upon the assets of the Company or the Company Subsidiaries, other than (A) statutory Liens for Taxes not yet due and payable and (B) Liens for Taxes contested in good faith by appropriate proceedings.

(b)             There is no audit, examination, deficiency, refund litigation, proposed adjustment or matter in controversy currently in existence with respect to any Taxes or Tax Return of the Company or any of the Company Subsidiaries.  Neither the Company nor any of the Company Subsidiaries has received notice of any claim made by a Governmental Entity in a jurisdiction where the Company or any of the Company Subsidiaries, as applicable, does not file a Tax Return, that the Company or such Company Subsidiary is or may be subject to taxation by that jurisdiction.  There are no outstanding requests, agreements, consents or waivers to extend the statutory period of limitations applicable to the assessment of any Taxes or deficiencies against the Company or the Company Subsidiaries, and no power of attorney granted by either the Company or any of the Company Subsidiaries with respect to any Taxes is currently in force.

(c)             Neither the Company nor any of the Company Subsidiaries has constituted either a "distributing corporation" or a "controlled corporation" (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax-free treatment under Section 355 of the Code (i) in the two years prior to the date of this Agreement or (ii) in a distribution which could otherwise constitute part of a "plan" or "series of related transactions" (within the meaning of Section 355(e) of the Code) in conjunction with the Merger.

(d)             Neither the Company nor any of the Company Subsidiaries has participated, within the meaning of Treasury Regulation Sections 1.6011-4(c), or has been a "material advisor" or "promoter" (as those terms are defined in Section 6111 and 6112 of the Code) in (A) any "reportable transaction" within the meaning of Sections 6011, 6662A and 6707A of the Code, (B) any "confidential corporate tax shelter" within the meaning of Section 6111 of the Code or (C) any "potentially abusive tax shelter" within the meaning of Section 6112 of the Code.

(e)             The Company and the Company Subsidiaries have complied in all material respects with all applicable Laws relating to the payment and withholding of Taxes.

(f)             Neither the Company nor any of the Company Subsidiaries has any liability for any material amount of Taxes of any Person (other than the Company and the Company Subsidiaries) under Treasury Regulation § 1.1502-6 (or any similar provision of any state, local

or foreign law), as a transferee or successor, by contract or otherwise, that, individually or in the aggregate, has had or would reasonably be expected to have a Company Material Adverse Effect.

(g)             Neither the Company nor any of the Company Subsidiaries has since October 1, 2006 (A) changed an annual accounting period or changed any accounting method, (B) settled any material Tax claim or assessment, or (C) received a Tax ruling or entered into a closing agreement with any taxing authority.

(h)             As used in this Agreement (A) " Taxes " means any and all federal, state, local, foreign or other taxes of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Entity, including, without limitation, taxes or other similar charges on or with respect to income, franchises, windfall or other profits, gross receipts, property, capital, sales, use, transfer, inventory, license, capital stock, payroll, employment, unemployment, social security, workers' compensation, severance, stamp, occupation, premium or net worth, and taxes or other similar charges in the nature of excise, withholding, ad valorem, value added, estimated taxes, or custom duties and (B) " Tax Return " means any report, return, document, declaration or other information or filing required to be filed with respect to taxes (whether or not a payment is required to be made with respect to such filing), including information returns, any documents with respect to or accompanying payments of estimated taxes, or with respect to or accompanying requests for the extension of time in which to file any such report, return, document, declaration or other information.

(a)             Neither the execution and delivery of this Agreement, the Offer, the consummation of the Merger or the other transactions contemplated by this Agreement nor compliance with the terms hereof will (either alone or in conjunction with any other event), except as otherwise set forth in Section 4.11(a) of the Company Disclosure Letter, (i) entitle any current or former employee, officer, director or consultant of the Company or any Company Subsidiary (each, a " Company Participant ") to enhanced severance or termination pay, change in control or similar payments or benefits, (ii) result in, cause the accelerated vesting or delivery of, or increase the amount or value of, any payment or benefit to any Company Participant, (iii) trigger any payment or funding (through a grantor trust or otherwise) of any compensation or benefits under, increase the amount payable or trigger any other material obligation pursuant to, or increase the cost of, any Company Benefit Plan (as defined in Section 4.14(a)) or Company Benefit Agreement (as defined in Section 4.14(a)) or (iv) result in any breach or violation of, or a default under, any Company Benefit Plan or Company Benefit Agreement.  The total amount of all payments and the fair market value of all non-cash benefits (other than benefits pursuant to the Company Stock Options or any Company Common Stock held by any Company Participant that does not constitute restricted shares as of the date hereof) that may become payable or be provided to any Company Participant under the Company Benefit Plans and Company Benefit Agreements (assuming for such purpose that such individual's employment were terminated immediately following the Effective Time as if the Effective Time were the date hereof) will not exceed the amount set forth in Section 4.11(a) of the Company Disclosure Letter.

(b)             Other than payments that shall be made to Persons set forth on Section 4.11(b) of the Company Disclosure Letter (the " Primary Company Executives "), no amount or other entitlement that could be received (whether in cash or property or the vesting of property) as a result of the Offer, the Merger or any other transaction contemplated by this Agreement (alone or in combination with any other event) by any other Company Participant who is a "disqualified individual" (as such term is defined in Treasury Regulation Section 1.280G-1) under any Company Benefit Plan, Company Benefit Agreement or other compensation arrangement would be characterized as an "excess parachute payment" (as such term is defined in Section 280G(b)(1) of the Code), and no such other disqualified individual is entitled to receive any additional payment ( e.g. , any Tax gross up or other payment) from the Company, Parent or any other Person in the event that the excise Tax required by Section 4999(a) of the Code is imposed on such disqualified individual.  Section 4.11(b) of the Company Disclosure Letter sets forth (i) a complete and accurate list of the Company's reasonable, good faith estimate of the maximum amount that could be received (whether in cash or property or the vesting of property, and including the amount of any Tax gross up) by each Primary Company Executive as a result of the Offer, the Merger or any other transaction contemplated by this Agreement (alone or in combination with any other event) under all Company Benefit Agreements and Company Benefit Plans and (ii) the "base amount" (as defined in Section 280G(b)(3) of the Code) for each Primary Company Executive, estimated as of the date of Closing.