AGREEMENT OF MERGER

Agreement and Plan of Merger

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This Agreement and Plan of Merger involves

New River Pharmaceuticals Inc | Shuttle Corporation | Virginia Stock Corporation

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Title: AGREEMENT OF MERGER
Governing Law: New York Date: 2/23/2007
Law Firm: Skadden Arps;Davis Polk;Williams Mullen;Hunton Williams;Troutman Sanders

Exhibit 2.1

AGREEMENT OF MERGER

Dated as of February 20, 2007

among

SHIRE PLC,

SHUTTLE CORPORATION

and

NEW RIVER PHARMACEUTICALS INC.

TABLE OF CONTENTS


ARTICLE I THE OFFER		2

Section 1.1	The Offer.	2

Section 1.2	Company Action.	3

Section 1.3	Directors.	5

Section 1.4	Top-Up Option.	6

ARTICLE II THE MERGER		7

Section 2.1	The Merger	7

Section 2.2	Closing	7

Section 2.3	Effective Time	8

Section 2.4	Effects of the Merger	8

Section 2.5	Articles of Incorporation and Bylaws of the Surviving Corporation	8

Section 2.6	Directors and Officers of the Surviving Corporation	8

ARTICLE III EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES		9

Section 3.1	Effect on Capital Stock	9

Section 3.2	Exchange of Certificates	9

Section 3.3	Company Stock Options and Stock Appreciation Rights	12

Section 3.4	Dissenters’ Shares	12

Section 3.5	Adjustments	13

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY		13

Section 4.1	Organization, Standing and Corporate Power	13

Section 4.2	Capitalization	14

Section 4.3	Subsidiaries	17

Section 4.4	Authority; Noncontravention; Voting Requirements	17

Section 4.5	Governmental Approvals	19

Section 4.6	Company SEC Documents; Undisclosed Liabilities	19

Section 4.7	Absence of Certain Changes	22

Section 4.8	Legal Proceedings	22

Section 4.9	Compliance With Laws; Permits	22

Section 4.10	Information Supplied	22


Section 4.11	Taxes	23

Section 4.12	Employee Benefit Plans	25

Section 4.13	Labor Matters	27

Section 4.14	Environmental Matters	27

Section 4.15	Material Contracts	29

Section 4.16	Properties	30

Section 4.17	Intellectual Property	31

Section 4.18	Regulatory Matters	35

Section 4.19	Opinions of Financial Advisors	38

Section 4.20	Brokers and Other Advisors	38

Section 4.21	State Takeover Statutes	38

Section 4.22	Related Party Transactions.	38

Section 4.23	No Other Representations or Warranties	39

ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB		39

Section 5.1	Organization, Standing and Corporate Power	39

Section 5.2	Authority; Noncontravention	39

Section 5.3	Governmental Approvals	41

Section 5.4	Information Supplied	41

Section 5.5	Ownership and Operations of Merger Sub	42

Section 5.6	Financing	42

Section 5.7	Brokers and Other Advisors	42

Section 5.8	Parent Ownership of Company Common Stock	42

Section 5.9	No Other Representations or Warranties	43

ARTICLE VI ADDITIONAL COVENANTS AND AGREEMENTS		43

Section 6.1	Preparation of the Company Proxy Statement; Shareholders Meeting	43

Section 6.2	Parent Shareholder Meeting	44

Section 6.3	Conduct of Business	45

Section 6.4	No Solicitation	49

Section 6.5	Reasonable Best Efforts	53

Section 6.6	Certain Filings	55

Section 6.7	Public Announcements	55


Section 6.8	Access to Information; Confidentiality	55

Section 6.9	Notification of Certain Matters	56

Section 6.10	Indemnification and Insurance	56

Section 6.11	Fees and Expenses	59

Section 6.12	Employee Matters	59

Section 6.13	Voting of Shares of Parent Capital Stock	60

Section 6.14	Nasdaq De-listing; Exchange Act Deregistration	60

Section 6.15	Further Assurances	60

Section 6.16	Merger Without Meeting of Shareholders	60

Section 6.17	Undertaking by Parent	60

Section 6.18	Parent Financing	60

ARTICLE VII CONDITIONS TO THE MERGER		61

Section 7.1	Conditions to Each Party’s Obligation to Effect the Merger	61

ARTICLE VIII TERMINATION		62

Section 8.1	Termination	62

Section 8.2	Effect of Termination	64

Section 8.3	Termination Fees	65

ARTICLE IX MISCELLANEOUS		66

Section 9.1	No Survival of Representations and Warranties	66

Section 9.2	Amendment or Supplement	66

Section 9.3	Extension of Time, Waiver, Etc.	66

Section 9.4	Assignment	66

Section 9.5	Counterparts	66

Section 9.6	Entire Agreement; No Third-Party Beneficiaries	66

Section 9.7	Governing Law; Jurisdiction; WAIVER OF JURY TRIAL	67

Section 9.8	Company Disclosure Schedule References; Company SEC Documents	67

Section 9.9	Specific Enforcement	68

Section 9.10	Notices	68

Section 9.11	Severability	70

Section 9.12	Definitions	70

Section 9.13	Interpretation	74

iii


EXHIBIT A		Tender and Support Agreement

EXHIBIT B		Plan of Merger

Table of Defined Terms

The following terms are defined in the section of this Agreement set forth after such term below:


		Term

		Acceptance Date		Section 1.1(a)
		Act		Section 9.12(a)
		Affiliate		Section 9.12(b)
		Agreement		Recitals
		Antitrust Laws		Section 6.5(a)
		Articles of Merger		Section 2.3
		Bankruptcy and Equity Exception		Section 4.4(a)
		Business		Section 9.12(c)
		business day		Section 9.12(d)
		Certificate		Section 3.1(c)
		Change in Parent Recommendation		Section 6.2
		Closing		Section 2.2
		Closing Date		Section 2.2
		Code		Section 3.2(g)
		Collaboration Agreements		Section 9.12(e)
		Company		Recitals
		Company Adverse Recommendation Change		Section 6.4(a)
		Company Affiliates		Section 4.22(a)
		Company Common Stock		Recitals
		Company Confidential Information		Section 9.12(f)
		Company Copyrights		Section 9.12(g)
		Company Disclosure Documents		Section 4.10(a)
		Company Disclosure Schedule		ARTICLE IV
		Company Employee		Section 6.12
		Company Hedge Option		Section 4.2(a)
		Company Hedge Option Confirmations		Section 4.2(a)
		Company Material Adverse Effect		Section 4.1(a)
		Company Patents		Section 9.12(h)
		Company Payment Event		Section 8.3(a)
		Company Plans		Section 4.12(a)
		Company Preferred Stock		Section 4.2(a)
		Company Proxy Statement		Section 4.10(a)
		Company SEC Documents		Section 4.6(a)
		Company Securities		Section 4.2(a)
		Company Shareholder Approval		Section 4.4(e)
		Company Shareholders Meeting		Section 6.1(a)
		Company Stock Plan		Section 9.12(i)
		Company Technology		Section 9.12(j)
		Company Trademarks		Section 9.12(k)


		Term

		Company Trade Secrets		Section 9.12(l)
		Compensation Actions		Section 4.12(k)
		Compensation Committee		Section 1.2(c)
		Confidential Information		Section 9.12(m)
		Confidentiality Agreement		Section 6.4(b)
		Continuing Indemnitees		Section 6.10(c)
		Contract		Section 4.4(c)
		Convertible Notes		Section 4.2(a)
		Copyright		Section 9.12(n)
		Dissenters’ Shares		Section 3.4
		Drug Approval Application		Section 9.12(o)
		Effect		Section 4.1(a)
		Effective Time		Section 2.3
		Environmental Laws		Section 4.14(f)(i)
		ERISA		Section 4.12(a)
		ERISA Affiliate		Section 4.12(a)
		Exchange Act		Section 4.5
		Expiration Date		Annex I
		FDA		Section 9.12(p)
		FDA Requirements		Section 4.18(f)
		Financial Advisors		Section 4.19
		Forward Confirmation		Section 4.2(a)
		Forward Transaction		Section 4.2(a)
		fully-diluted basis		Annex I
		GAAP		Section 9.12(q)
		Governmental Authority		Section 9.12(r)
		Grant Date		Section 4.12(i)
		Hazardous Materials		Section 4.14(f)(ii)
		HSR Act		Section 9.12(s)
		IND		Section 9.12(t)
		Indemnitee		Section 6.10(a)
		Indenture		Section 4.2(a)
		IRS		Section 4.12(b)
		Key Product		Section 9.12(u)
		Know-How		Section 9.12(v)
		Knowledge		Section 9.12(w)
		Laws		Section 4.9
		Leased Real Property		Section 4.16(b)
		Lien		Section 9.12(x)
		Marketing Approval		Section 9.12(y)
		Material Contracts		Section 4.15(a)
		Merger		Recitals
		Merger Consideration		Section 3.1(c)
		Merger Recommendation		Section 4.4(b)


		Term

		Merger Sub		Recitals
		Merger Sub Common Stock		Section 3.1
		Merrill Warrants		Section 4.2(a)
		Nasdaq		Section 4.5
		NDA		Section 9.12(z)
		Non-Competition Agreements		Section 4.17(o)
		Offer		Recitals
		Offer Conditions		Section 1.1(a)
		Offer Documents		Section 1.1(b)
		Offer Price		Recitals
		Offer Recommendation		Section 4.4(b)
		Option		Section 3.3(a)
		Option Consideration		Section 3.3(a)
		Organizational Documents		Section 4.1(b)
		Parent		Recitals
		Parent Board Recommendation		Section 5.2(b)
		Parent Financing		Section 6.18
		Parent Material Adverse Effect		Section 5.1
		Parent Payment Event		Section 8.3(b)
		Parent Shareholder Approvals		Section 5.2(d)
		Parent Shareholder Circular		Section 5.4(a)
		Parent Shareholder Meeting		Section 6.2
		Parent Voting Proposals		Section 5.2(d)
		Paying Agent		Section 3.2(a)
		Patent		Section 9.12(aa)
		Permits		Section 4.9
		Permitted Liens		Section 9.12(bb)
		Person		Section 9.12(cc)
		Plan of Merger		Section 2.3
		Real Property Lease		Section 4.16(b)
		Release		Section 4.14(f)(iii)
		Representatives		Section 6.4(a)
		Restraints		Section 7.1(b)
		SAR		Section 3.3(b)
		SAR Consideration		Section 3.3(b)
		Sarbanes-Oxley Act		Section 9.12(dd)
		SCC		Section 2.3
		Schedule 14D-9		Section 1.2(b)
		Schedule TO		Section 1.1(b)
		SEC		Section 4.5
		Securities Act		Section 4.5
		Subsequent Offering Period		Section 1.1(a)
		sNDA		Section 9.12(ee)
		Specified Date		Section 1.2(c)

vii


		Term

		Subsidiary		Section 9.12(ff)
		Superior Proposal		Section 6.4(e)
		Surviving Corporation		Section 2.1
		Takeover Proposal		Section 6.4(e)
		Taxes		Section 4.11
		Tax Return		Section 4.11
		Technology		Section 9.12(gg)
		Technology Assignment Agreements		Section 4.17(t)
		Tender and Support Agreement		Recitals
		Third Party		Section 9.12(hh)
		Top-Up Notice		Section 1.4(c)
		Top-Up Option		Section 1.4(a)
		Top-Up Shares		Section 1.4(a)
		Trademark		Section 9.12(ii)
		Trade Secret		Section 9.12(jj)
		Transactions		Section 9.12(kk)
		VSCA		Recitals
		Walk-Away Date		Section 8.1(b)(i)
		Warrant Confirmations		Section 4.2(a)

viii

AGREEMENT OF MERGER

This AGREEMENT OF MERGER, dated as of February 20, 2007 (this “ Agreement ”), is among Shire plc, a public limited company incorporated under the laws of England and Wales (“ Parent ”), Shuttle Corporation, a Virginia corporation and an indirect wholly owned Subsidiary of Parent (“ Merger Sub ”), and New River Pharmaceuticals Inc., a Virginia corporation (the “ Company ”).

WHEREAS, the respective Boards of Directors of Parent, the Company and Merger Sub have approved the acquisition of the Company by Parent on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, it is proposed that pursuant to this Agreement, and subject to the terms and conditions set forth herein, Parent will cause Merger Sub to make a tender offer (as it may be amended from time to time as permitted by this Agreement, the “ Offer ”) to purchase all of the outstanding common stock, par value $0.001 per share, of the Company (the “ Company Common Stock ”) at a price per share of $64.00, net to the seller in cash (such amount, or any other amount per share of Company Common Stock paid pursuant to the Offer and this Agreement, the “ Offer Price ”), on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, following the consummation of the Offer, Merger Sub will merge (the “ Merger ”) with and into the Company in accordance with the Virginia Stock Corporation Act of the Commonwealth of Virginia (the “ VSCA ”), with the Company surviving the merger as an indirect wholly owned subsidiary of Parent, and each share of Company Common Stock outstanding immediately prior to the Effective Time (other than shares of Company Common Stock owned by Parent or Merger Sub or any direct or indirect wholly owned Subsidiary of Parent or the Company immediately prior to the Effective Time, which will be cancelled with no consideration issued in exchange therefor, and other than Dissenting Shares) will thereupon be cancelled and converted into the right to receive cash in an amount equal to the Offer Price, on the terms and subject to the conditions set forth herein;

WHEREAS, the Board of Directors of the Company by a unanimous vote of the directors present has (i) determined that this Agreement and the transactions contemplated hereby, including the Offer and the Merger are advisable and in the best interest of the Company and its shareholders, (ii) adopted and approved this Agreement and the transactions contemplated hereby, including the Offer and the Merger, in accordance the requirements of the VSCA and (iii) subject to the terms and conditions set forth herein, resolved to recommend acceptance of the Offer and approval and adoption of this Agreement and the Merger by its shareholders;

WHEREAS, the respective Boards of Directors of Parent and Merger Sub have adopted, approved and declared advisable, and Parent has caused the sole shareholder of Merger Sub to approve, this Agreement providing for the Offer and the Merger in accordance with the VSCA, upon the terms and subject to the conditions set forth herein; and

WHEREAS, as an inducement to and condition to Parent’s willingness to enter into this Agreement, certain shareholders of the Company are entering into a Tender and Support

Agreement with Parent simultaneously with the execution of this Agreement in substantially the form attached hereto as Exhibit A (the “ Tender and Support Agreement ”), whereby, among other things, such shareholders have agreed, upon the terms and subject to the conditions set forth therein, to tender the shares of Company Common Stock held by them in the Offer and support any and all corporate action necessary to consummate the Merger;

NOW, THEREFORE, in consideration of the representations, warranties, covenants and agreements contained in this Agreement, and intending to be legally bound hereby, Parent, Merger Sub and the Company hereby agree as follows:

ARTICLE I

THE OFFER

Section 1.1 The Offer .

(a) Provided that this Agreement shall not have been terminated in accordance with Section 8.1 and that none of the events set forth in Paragraph (2) of Annex I hereto shall exist or have occurred and be continuing, as promptly as practicable after the date hereof, but in no event later than March 2, 2007, Merger Sub shall, and Parent shall cause Merger Sub to, commence (within the meaning of Rule 14d-2 under the Exchange Act) the Offer to purchase any and all of the outstanding shares of Company Common Stock at the Offer Price. The obligations of Merger Sub to, and of Parent to cause Merger Sub to, accept for payment and pay for shares of Company Common Stock tendered pursuant to the Offer shall be subject only to the conditions set forth in Annex I hereto (the “ Offer Conditions ”). Merger Sub expressly reserves the right to waive any of the Offer Conditions and to make any change in the terms of the Offer, except that without the prior written consent of the Company, Merger Sub shall not (A) decrease the Offer Price or change the form of the consideration payable in the Offer, (B) decrease the number of shares of Company Common Stock sought pursuant to the Offer, (C) amend or waive the condition set forth in paragraph 1(a) of Annex I, (D) add to the conditions set forth on Annex I, (E) modify the conditions set forth in Annex I in a manner adverse to the holders of shares of Company Common Stock, (F) extend the Expiration Date (as defined in Annex I) except as required or permitted by this Section 1.1(a), or (G) make any other change in the terms or conditions of the Offer which is adverse to the holders of shares of Company Common Stock. The initial Expiration Date shall be the twentieth business day following (and including the day of) the commencement of the Offer. If any of the Offer Conditions is not satisfied or waived on any scheduled Expiration Date, if such Offer Condition(s) could reasonably be expected to be satisfied, Merger Sub shall extend the Offer from time to time until such Offer Condition(s) are satisfied or waived. Any individual extension of the Offer pursuant to the preceding sentence shall not exceed 10 business days and in no event shall the Offer extend beyond the Walk-Away Date without the mutual written consent of the Company and Parent. Notwithstanding the foregoing, without the consent of the Company, Merger Sub shall have the right to extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or the staff thereof applicable to the Offer or any period required by applicable Law. Following expiration of the Offer, Merger Sub may, in its sole discretion, provide a subsequent offering period (the “ Subsequent Offering Period ”) in

accordance with Rule 14d-11 of the Exchange Act. Subject to the foregoing, and to the satisfaction, or waiver by Merger Sub, of the Offer Conditions as of the time of any scheduled expiration of the Offer, Merger Sub shall, and Parent shall cause it to, accept for payment, as promptly as permitted under applicable securities laws, and pay for, as promptly as practicable after the date on which Merger Sub first accepts shares of Company Common Stock for payment pursuant to the Offer (the “ Acceptance Date ”), all shares of Company Common Stock (i) validly tendered and not withdrawn pursuant to the Offer and (ii) validly tendered in the Subsequent Offering Period. Parent shall provide or cause to be provided to Merger Sub on a timely basis funds necessary to purchase all shares of Company Common Stock that Merger Sub becomes obligated to purchase pursuant to the Offer and Merger Sub shall maintain such funds exclusively for such purpose.

(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 ”) that shall include the summary term sheet required thereby and, as exhibits, the Offer to Purchase and a form of letter of transmittal (and appropriate ancillary documents) and summary advertisement (collectively, together with any amendments or supplements thereto, the “ Offer Documents ”) and (ii) cause the appropriate Offer Documents to be disseminated to holders of shares of Company Common Stock. Each of Parent, Merger Sub and the Company agrees promptly to correct any information provided by it for inclusion in the Schedule TO and the Offer Documents if and to the extent that such information shall have become false or misleading in any material respect. Parent and Merger Sub agree to use reasonable best efforts to cause the Schedule TO as so corrected to be filed with the SEC and to be disseminated to holders of shares of Company Common Stock, in each case, as and to the extent required by applicable U.S. federal securities laws or the rules or regulations of Nasdaq. Without limiting the generality of the foregoing, the Company will furnish to Parent the information relating to the Company required by the Exchange Act to be set forth in the Offer Documents. The Company and its counsel shall be given a reasonable opportunity to review and comment on the Schedule TO and the Offer Documents each time before any such document is filed with the SEC, and Parent and Merger Sub shall give reasonable and good faith consideration to any comments made by the Company and its counsel. Parent and Merger Sub shall provide the Company and its counsel with (i) any comments or other communications, whether written or oral, that Parent, Merger Sub or their counsel may receive from time to time from the SEC or its staff with respect to the Schedule TO or Offer Documents promptly after receipt of those comments or other communications and (ii) a reasonable opportunity to participate in the response of Parent and Merger Sub to those comments and to provide comments on that response (to which reasonable and good faith consideration shall be given), including by participating with Parent and Merger Sub or their counsel in any discussions or meetings with the SEC.

Section 1.2 Company Action .

(a) The Company hereby consents to the Offer and represents that its Board of Directors, at a meeting duly called and held has unanimously (i) determined that this Agreement and the transactions contemplated hereby, including the Offer and the Merger, are fair to and in the best interests of the Company and its shareholders, (ii) adopted and approved

this Agreement and the transactions contemplated hereby, including the Offer and the Merger, in accordance with the requirements of the VSCA and (iii) subject to Section 6.4, resolved to recommend acceptance of the Offer and approval and adoption of this Agreement and the Merger by its shareholders. The Company has been advised that all of its directors and executive officers who own shares of Company Common Stock intend either to tender their shares of Company Common Stock pursuant to the Offer or to vote in favor of the Merger. The Company shall promptly furnish Parent with a list of its shareholders, mailing labels and any available listing or computer file containing the names and addresses of all record holders of shares of Company Common Stock and lists of securities positions of shares of Company Common Stock held in stock depositories, in each case true and correct as of the most recent practicable date, and shall provide to Parent such additional information (including updated lists of shareholders, mailing labels and lists of securities positions) and such other assistance as Parent may reasonably request in connection with disseminating the Offer Documents to the Company’s shareholders.

(b) As soon as practicable on the day that the Offer is commenced, the Company shall file with the SEC and disseminate to holders of shares of Company Common Stock, in each case as and to the extent required by applicable U.S. federal securities laws, a Solicitation/Recommendation Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the “ Schedule 14D-9 ”) that, subject to Section 6.4, shall reflect the recommendations of the Company’s Board of Directors referred to above. Each of the Company, Parent and Merger Sub agrees promptly to correct any information provided by it for use in the Schedule 14D-9 if and to the extent that it shall have become false or misleading in any material respect. The Company agrees to take all steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the SEC and to be disseminated to holders of shares of Company Common Stock, in each case as and to the extent required by applicable U.S. federal securities laws or the rules or regulations of Nasdaq. Parent and its counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 each time before it is filed with the SEC, and the Company shall give reasonable and good faith consideration to any comments made by Parent, Merger Sub and their counsel. The Company shall provide Parent, Merger Sub and their counsel with (i) any comments or other communications, whether written or oral, that Parent, Merger Sub or their counsel may receive from time to time from the SEC or its staff with respect to the Schedule 14D-9 promptly after receipt of those comments or other communications and (ii) a reasonable opportunity to participate in the Company’s response to those comments and to provide comments on that response (to which reasonable and good faith consideration shall be given), including by participating with the Company or its counsel in any discussions or meetings with the SEC.

(c) Prior to the Expiration Date, the Compensation Committee of the Company’s Board of Directors (the “ Compensation Committee ”) shall take all such actions as may be required to approve or ratify, as an “employment compensation, severance or other employee benefit arrangement” within the meaning of Rule 14d-10(d)(2) under the Exchange Act, any and all Compensation Actions taken since March 1, 2006 (such date, the “ Specified Date ”) and prior to the Expiration Date that have not already been so approved or ratified.

Section 1.3 Directors .

(a) Effective upon the purchase of shares of Company Common Stock pursuant to the Offer, Parent shall be entitled to designate the number of directors, rounded up to the next whole number, on the Company’s Board of Directors that equals the product of (i) the total number of directors on the Company’s Board of Directors (giving effect to the election of any additional directors pursuant to this Section 1.3(a)) and (ii) the percentage that the number of shares of Company Common Stock beneficially owned by Parent and/or Merger Sub (including shares of Company Common Stock purchased pursuant to the Offer) bears to the total number of shares of Company Common Stock then outstanding, and the Company shall use reasonable best efforts to cause Parent’s designees to be elected or appointed to the Company’s Board of Directors, including increasing the number of directors, and seeking and accepting resignations of incumbent directors. At such time, the Company shall also use its reasonable best efforts to cause individuals designated by Parent to constitute the number of members, rounded up to the next whole number, on (i) each committee of the Company’s Board of Directors and (ii) 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 Company’s Board of Directors. Notwithstanding the foregoing, until the Acceptance Date, the Company shall use its reasonable best efforts to ensure that all of the members of the Company’s Board of Directors and such committees and boards as of the date hereof who are not employees of the Company remain members of the Company’s Board of Directors and such committees and boards until the Effective Time.

(b) The Company’s obligations to appoint Parent’s designees to the Company’s Board of Directors shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly take all actions, and shall include in the Schedule 14D-9 such 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. 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.

(c) Following the election or appointment of Parent’s designees pursuant to Section 1.3(a) and until the Effective Time, the approval of a majority of the directors of the Company then in office who were not designated by Parent shall be required to authorize (and such authorization shall constitute the authorization of the Company’s 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, any extension of time for performance of any obligation or action hereunder by Parent or Merger Sub, any waiver of compliance with any of the agreements or conditions contained herein for the benefit of the Company, any exercise of the Company’s rights or remedies under this Agreement or any action seeking to enforce any obligation of Parent or Merger Sub under this Agreement.

Section 1.4 Top-Up Option .

(a) Subject to Section 1.4(b) and Section 1.4(c) hereof, the Company grants to Parent and 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 equal to the number of shares of Company Common Stock that, when added to the number of shares of Company Common Stock owned by Merger Sub and/or Parent at the time of exercise of the Top-Up Option, constitutes one share of Company Common Stock more than 90% of the then outstanding shares of Company Common Stock, that would be outstanding immediately after the issuance of all shares of Company Common Stock subject to the Top-Up Option (such shares of Company Common Stock subject to the Top-Up Option, the “ Top-Up Shares ”).

(b) The Top-Up Option may be exercised by Parent or Merger Sub, in whole or in part, only once, at any time during the 10 business day period following the Acceptance Date, or if the Subsequent Offering Period is made available, during the 10 business day period following the expiration date of the Subsequent Offering Period and only if Parent and/or Merger Sub shall own as of such time less than 90% of the outstanding shares of Company Common Stock on a fully diluted basis; provided , however , that notwithstanding anything in this Agreement to the contrary (i) the Top-Up Option shall not be exercisable to the extent that (A) the issuance of the shares of Company Common Stock upon exercise of the Top-Up Option would require approval of the Company’s shareholders under Nasdaq rules, (B) 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 or (C) any provision of applicable Laws or any judgment, injunction, order or decree of any Governmental Authority would prohibit, or require any action, consent, approval, authorization or permit of, action by, or filing with or notification to, any Governmental Authority or the Company’s shareholders in connection with the exercise of the Top-Up Option or the delivery of the Top-Up Shares in respect of such exercise, which action, consent, approval, authorization or permit, action, filing or notification has not theretofore been obtained or made, as applicable. The aggregate purchase price payable for the shares of Company Common Stock being purchased by Parent or Merger Sub pursuant to the Top-Up Option shall be determined by multiplying the number of such shares by the Offer Price. Such purchase price may be paid by Parent or Merger Sub, at its election, either entirely in cash or by paying in cash an amount equal to not less than the aggregate par value of such shares and by executing and delivering to the Company a promissory note having a principal amount equal to the balance of such purchase price. Any such promissory note shall bear interest at the rate of 3% per annum, shall mature on the first anniversary of the date of execution and delivery of such promissory note and may be prepaid without premium or penalty.

(c) In the event Parent or Merger Sub wishes to exercise the Top-Up Option, Parent or Merger Sub shall deliver to the Company a notice (the “ Top-Up Notice ”) setting forth (i) the number of Top-Up Shares that Parent or Merger Sub intends to purchase pursuant to the Top-Up Option, (ii) the manner in which Parent or Merger Sub intends to pay the

applicable exercise price and (iii) the place and time at which the closing of the purchase of such Top-Up Shares by Parent or Merger Sub is to take place. The Top-Up Notice shall also include an undertaking signed by Parent and Merger Sub that, as promptly as practicable following such exercise of the Top-Up Option, Merger Sub intends to (and Merger Sub shall, and Parent shall cause Merger Sub to, as promptly as practicable after such exercise) consummate the Merger in accordance with Article 12, Section 13.1-719 of the VSCA as contemplated by Section 6.16. At the closing of the purchase of the Top-Up Shares, Parent or 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 Parent or Merger Sub (as the case may be) a certificate representing the Top-Up Shares. The parties hereto agree to use their reasonable best efforts to cause the closing of the purchase of the Top-Up Shares to occur on the same day that the Top-Up Notice is deemed received by the Company pursuant to Section 9.10, and if not so consummated on such day, as promptly thereafter as possible. The parties further agree to use their reasonable best efforts to cause the Merger to be consummated in accordance with Article 12, Section 13.1-719 of the VSCA as contemplated by Section 6.16 as close in time as possible to (including, to the extent possible, on the same day as) the issuance of the Top-Up Shares.

(d) Parent and Merger Sub understand that the Top-Up Shares 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. Each of Parent and Merger Sub represents, warrants and agrees that the Top-Up Option is being, and the Top-Up Shares will be, acquired by Parent or Merger Sub for the purpose of investment and not with a view to or for resale in connection with any distribution thereof within the meaning of the Securities Act. Any certificates evidencing Top-Up Shares may include any legends required by applicable securities laws.

ARTICLE II

THE MERGER

Section 2.1 The Merger . Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the VSCA, at the Effective Time, Merger Sub shall be merged with and into the Company, and the separate corporate existence of Merger Sub shall thereupon cease. The Company shall be the surviving corporation in the Merger (the “ Surviving Corporation ”) and shall continue to be governed by the VSCA, and the separate corporate existence of the Company, with all of its rights, privileges, immunities, powers and franchises shall continue unaffected by the Merger except as otherwise provided herein.

Section 2.2 Closing . Subject to the provisions of ARTICLE VII, the closing of the Merger (the “ Closing ”) shall take place at 10:00 a.m. (New York City time) on the second business day (which term “business day” is defined herein) after satisfaction or (to the extent permitted by applicable Law) waiver of the conditions set forth in ARTICLE VII (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or (to the extent permitted by applicable Law) waiver of those conditions at such time), at the offices of Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, unless another time, date or place is agreed to in writing by the parties hereto. The date on which the Closing actually occurs is hereinafter referred to as the “ Closing Date .”

Section 2.3 Effective Time . Subject to the provisions of this Agreement, as soon as practicable on the Closing Date, the parties hereto shall (a) file articles of merger, in customary form (the “ Articles of Merger ”), together with the related plan of merger meeting the requirements of Section 13.1-716 of the VSCA (such plan of merger, the “ Plan of Merger ”), substantially in the form attached hereto as Exhibit B , with the State Corporation Commission of the Commonwealth of Virginia (the “ SCC ”) and (b) duly make all other filings and recordings required by the VSCA in order to effectuate the Merger. The Merger shall become effective upon the issuance of a certificate of merger by the SCC or at such later time as may be agreed to by Parent and the Company in writing and specified in the Articles of Merger (the date and time that the Merger becomes effective is referred to as the “ Effective Time ”).

Section 2.4 Effects of the Merger . The Merger shall have the effects set forth in this Agreement and Section 13.1-721 of the VSCA.

Section 2.5 Articles of Incorporation and Bylaws of the Surviving Corporation . At the Effective Time, the articles of incorporation of the Company shall be amended and restated so that they shall be identical to the articles of incorporation of Merger Sub as in effect as of immediately prior to the Effective Time (except that the name of the Surviving Corporation shall be “New River Pharmaceuticals Inc.”) and shall be the articles of incorporation of the Surviving Corporation until thereafter amended (subject to Section 6.10 hereof) as provided therein or by applicable Law. At the Effective Time, the bylaws of the Company shall be amended and restated to be identical to the bylaws of Merger Sub as in effect immediately prior to the Effective Time (except that the name of the Surviving Corporation shall be “New River Pharmaceuticals Inc.”) and shall be the bylaws of the Surviving Corporation until thereafter amended as provided therein or by applicable Law (and subject to Section 6.10 hereof).

Section 2.6 Directors and Officers of the Surviving Corporation .

(a) The directors of Merger Sub immediately prior to the Effective Time shall be the directors of the Surviving Corporation until their respective successors are duly elected or appointed and qualified or until their earlier death, resignation or removal in accordance with the articles of incorporation and bylaws of the Surviving Corporation.

(b) The officers of Merger Sub immediately prior to the Effective Time shall be the officers of the Surviving Corporation until their respective successors are duly appointed and qualified or until their earlier death, resignation or removal in accordance with the articles of incorporation and bylaws of the Surviving Corporation.

ARTICLE III

EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT

CORPORATIONS; EXCHANGE OF CERTIFICATES

Section 3.1 Effect on Capital Stock . At the Effective Time, by virtue of the Merger and without any action on the part of the Merger Sub, the Company or the holders of any shares of Company Common Stock or of any shares of common stock, no par value per share, of Merger Sub (the “ Merger Sub Common Stock ”):

(a) Capital Stock of Merger Sub . Each share of Merger Sub Common Stock issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, no par value per share, of the Surviving Corporation, and shall constitute the only outstanding shares of capital stock of the Surviving Corporation.

(b) Cancellation of Subsidiary-Owned and Parent-Owned Company Common Stock . Any shares of Company Common Stock owned by any wholly owned Subsidiary of the Company and any shares of Company Common Stock owned by Parent, Merger Sub or any wholly owned Subsidiary of Parent immediately prior to the Effective Time shall be automatically canceled and shall cease to exist and no consideration shall be delivered in exchange therefor.

(c) Conversion of Company Common Stock . Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than shares to be canceled in accordance with Section 3.1(b) and shares for which the holders thereof properly demanded appraisal as provided in Section 3.4) shall be converted into the right to receive the Offer Price in cash, without interest (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 a certificate (or, in the case of uncertificated shares, evidence of shares in book-entry form) which immediately prior to the Effective Time represented any such shares of Company Common Stock (each, a “ Certificate ”) shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration to be paid in consideration therefor upon surrender of such Certificate in accordance with Section 3.2(b), without interest.

Section 3.2 Exchange of Certificates .

(a) Paying Agent . Prior to the Effective Time, Parent shall designate a national bank or trust company (the “ Paying Agent ”) reasonably acceptable to the Company for the purpose of exchanging Certificates into the right to receive the Merger Consideration pursuant to Section 3.1(c). Parent shall deposit such aggregate Merger Consideration with the Paying Agent at or prior to the Effective Time. Such aggregate Merger Consideration deposited with the Paying Agent may, pending its disbursement to such holders, be invested by the Paying Agent as directed by Parent in (i) direct obligations of the United States of America, (ii) obligations for which the full faith and credit of the United States of America is pledged to provide for the payment of principal and interest, (iii) commercial paper rated the highest quality

by either Moody’s Investors Service, Inc. or Standard and Poor’s Ratings Services or (iv) money market funds investing solely in a combination of the foregoing. Any interest or income produced by such investments will be payable to the Surviving Corporation or Parent, as Parent directs. Any portion of the Merger Consideration made available to the Paying Agent pursuant to this Section 3.2(a) to pay for shares of Company Common Stock for which appraisal rights have been properly demanded shall be returned to Parent, upon demand.

(b) Payment Procedures . As soon as reasonably practicable after the Effective Time (but in no event more than five business days thereafter), the Surviving Corporation shall cause the Paying Agent to mail to each holder of record of a Certificate (i) a letter of transmittal (which 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 Paying Agent, and which shall be in such form and shall have such other customary provisions (including customary provisions with respect to delivery of an “agent’s message” with respect to shares held in book-entry form) as the Surviving Corporation or the Paying Agent may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for payment of the Merger Consideration. Upon surrender of a Certificate for cancellation to the Paying Agent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions (and such other customary documents as may reasonably be required by the Paying Agent), the holder of such Certificate shall be entitled to receive, and Parent shall cause the Paying Agent to promptly pay to such holder, in exchange therefor the Merger Consideration, without interest, for each share of Company Common Stock formerly represented by such Certificate and such Certificate so surrendered shall be forthwith cancelled. The Paying Agent shall accept such Certificates upon compliance with such reasonable terms and conditions as the Paying Agent may impose to effect an orderly exchange thereof in accordance with normal exchange practices. If payment of the Merger Consideration is to be made to a Person other than the Person in whose name the surrendered Certificate is registered, it shall be a condition of payment that (x) the Certificate so surrendered shall be properly endorsed or shall otherwise be in proper form for transfer and (y) the Person requesting such payment shall have paid any transfer and other taxes required by reason of the payment of the Merger Consideration to a Person other than the registered holder of such Certificate surrendered or shall have established to the reasonable satisfaction of the Surviving Corporation that such tax either has been paid or is not required to be paid. Until so surrendered or transferred, as the case may be, in accordance with this Section 3.2, each Certificate shall represent after the Effective Time for all purposes only the right to receive the Merger Consideration. No interest will be paid or accrued on any amount payable upon due surrender of the Certificates.

(c) Transfer Books . The Merger Consideration paid in respect of shares of Company Common Stock upon the surrender for exchange of Certificates in accordance with the terms of this ARTICLE III shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares of Company Common Stock previously represented by such Certificates, and from and after the Effective Time, the stock transfer books of the Company shall be closed and thereafter there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Company Common Stock that were outstanding immediately prior to the Effective Time. Subject to the last sentence of Section 3.2(e), if, at any time after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be exchanged for the Merger Consideration provided for in this ARTICLE III, subject to compliance with the procedures set forth herein.

(d) Lost, Stolen or Destroyed Certificates . If any Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such Person of a bond, in such reasonable amount as the Surviving Corporation may direct, as indemnity against any claim that may be made against Parent or the Surviving Corporation with respect to such Certificate, the Paying Agent will pay, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration to be paid in respect of the shares of Company Common Stock formerly represented by such Certificate, as contemplated by this ARTICLE III.

(e) Termination of Fund . Any portion of the Merger Consideration made available to the Paying Agent pursuant to Section 3.2(a) and any interest received with respect thereto that remains undistributed to the holders of Company Common Stock for nine months after the Effective Time shall be delivered to the Surviving Corporation, and thereafter any holders of Company Common Stock who have not complied with this Section 3.2 prior to the end of such nine-month period shall be entitled to look only to Parent or the Surviving Corporation (subject to abandoned property, escheat or other similar Laws) as general creditors thereof with respect to the payment of any Merger Consideration that may be payable upon surrender of any Certificates held by such holders, as determined pursuant to this Agreement, without any interest thereon. Any amounts remaining unclaimed by such holders at such time at which such amounts would otherwise escheat to or become property of any Governmental Authority shall become, to the extent permitted by applicable Law, the property of the Surviving Corporation, free and clear of all claims or interest of any Person previously entitled thereto.

(f) No Liability . Notwithstanding any provision of this Agreement to the contrary, none of the parties hereto, the Surviving Corporation, any of their respective Affiliates or the Paying Agent shall be liable to any Person for Merger Consideration delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

(g) Withholding Taxes . Each of Parent, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold (without duplication) from the consideration otherwise payable to a holder of shares of Company Common Stock pursuant to this Agreement such amounts as may be required to be deducted and withheld with respect to the making of such payment under the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder (the “ Code ”), or under any provision of state, local or foreign Tax Law, and Parent, the Surviving Corporation or the Paying Agent shall provide to the former holders of Company Common Stock written notice of the amounts so deducted or withheld. To the extent amounts are so withheld and paid over to the appropriate Governmental Authority, the withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which such deduction and withholding was made.

Section 3.3 Company Stock Options and Stock Appreciation Rights .

(a) Company Stock Options . At the Effective Time, all options to acquire shares of Company Common Stock outstanding immediately prior to the Effective Time granted by the Company under any Company Stock Plan (each, an “ Option ”), whether or not fully vested and exercisable, shall be cancelled and each holder of an Option shall be paid in full satisfaction of such Option, a cash amount equal to the Option Consideration for each share of Company Common Stock then subject to the Option, subject to applicable withholding Taxes. For purposes of this Agreement, “ Option Consideration ” means, with respect to any share of Company Common Stock issuable under a particular Option, an amount equal to the excess, if any, of (i) the Merger Consideration per share of Company Common Stock over (ii) the exercise price payable in respect of such share of Company Common Stock issuable under such Option. Promptly (and in no event more than three business days) after the Effective Time, Parent shall make or cause the Surviving Corporation to make the cash payments to be made to holders of Options pursuant to this Section 3.3(a). For purposes of this Agreement, an “Option” does not include the Merrill Warrants.

(b) Company Stock Appreciation Rights . At the Effective Time, all stock appreciation rights outstanding immediately prior to the Effective Time with respect to shares of Company Common Stock, whether or not granted under a Company Stock Plan (each, a “ SAR ”), and whether or not fully vested and exercisable, shall be cancelled and each holder of a SAR shall be paid in full satisfaction of such SAR, a cash amount equal to the SAR Consideration for each share of Company Common Stock then subject to the SAR, subject to applicable withholding Taxes. For purposes of this Agreement, “ SAR Consideration ” means, with respect to each share of Company Common Stock subject to a particular SAR, an amount equal to the excess, if any, of (i) the Merger Consideration per share of Company Common Stock over (ii) the strike price of such SAR in respect of such share of Company Common Stock related to such SAR. Promptly (and in no event more than three business days) after the Effective Time, Parent shall make or cause the Surviving Corporation to make the cash payments to be made to holders of SARs pursuant to this Section 3.3(b).

(c) If the Company, in consultation with Parent, determines that the transactions contemplated by this Section 3.3 require the consent of holders of Options or SARs or any amendments to the terms of any Company Stock Plan or related award documents, then prior to the Effective Time, the Company shall use reasonable best efforts to obtain any such consents or make any such amendments. Notwithstanding any provision of this Agreement to the contrary, payment pursuant to this Section 3.3 may be withheld in respect of any Option or SAR until any such consent so determined by the Company to be required has been obtained.

Section 3.4 Dissenters’ Shares . Notwithstanding any other provision of this Agreement to the contrary, shares of Company Common Stock that are outstanding immediately prior to the Effective Time and which are held by shareholders who shall not have voted or caused or permitted any of their shares to be voted in favor of the Merger and who shall have properly demanded appraisal for such shares in accordance with the VSCA to the extent entitled thereto (collectively, the “ Dissenters’ Shares ”) shall not be converted into or represent the right to receive the Merger Consideration, and such shareholders instead shall be entitled to receive payment of the appraised value of such shares held by them in accordance with the provisions of the VSCA; provided that all Dissenters’ Shares held by shareholders who shall have failed to

perfect or who effectively shall have withdrawn or otherwise lost their rights to appraisal of such shares under the VSCA shall thereupon be deemed to have been converted into and to have become exchangeable, as of the Effective Time, for the right to receive, without any interest thereon, the Merger Consideration upon surrender of the Certificates in the manner provided in Section 3.2 hereof that, immediately prior to the Effective Time, evidenced such shares.

Section 3.5 Adjustments . Notwithstanding any provision of this ARTICLE III to the contrary, if between the date of this Agreement and the Effective Time, the outstanding shares of Company Common Stock shall have been changed into a different number of shares or a different class or there is a change in the number of shares of Company Common Stock issuable upon conversion, exchange or exercise of securities or rights convertible or exchangeable or exercisable for shares of Company Common Stock by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination, exchange of shares or similar transaction, the cash payable pursuant to the Offer, the Merger Consideration, the Option Consideration and the SAR Consideration shall be appropriately adjusted to reflect such stock dividend, subdivision, reclassification, recapitalization, split, combination, exchange of shares or similar transaction.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Subject in all respects to Section 9.8, except as set forth in the disclosure schedule delivered by the Company to Parent (the “ Company Disclosure Schedule ”) simultaneously with the execution of this Agreement or as disclosed in the Company SEC Documents filed on or after December 31, 2005 and before the date of this Agreement, the Company represents and warrants to Parent and Merger Sub that:

Section 4.1 Organization, Standing and Corporate Power .

(a) Each of the Company and its Subsidiaries is duly organized, validly existing and in good standing (or equivalent status) under the Laws of the state of its incorporation or organization and has all requisite power and authority to own, lease and operate its properties and assets and to carry on its business as it is now being conducted. Each of the Company and its Subsidiaries is duly licensed or qualified to do business and is in good standing (or equivalent status) as a foreign corporation or other entity in each jurisdiction in which the nature of the business or activities conducted by it or the character or location of the properties and assets owned, leased or operated by it requires such license or qualification, except where the failure to be so licensed, qualified or in good standing (or equivalent status) has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. For purposes of this Agreement, “ Company Material Adverse Effect ” shall mean any change, event, violation, inaccuracy, development, circumstance or occurrence (each, an “ Effect ”) that, individually or when taken together with all other Effects, (x) has a material adverse effect on the results of operations, financial condition, business or assets of the Company and its Subsidiaries, taken as a whole, or (y) a material adverse effect on the Company’s ability to perform its obligations, or consummate the Transactions, in accordance with the terms of this

Agreement, provided, however, that in no event shall any of the following, either alone or in combination, be deemed to constitute, nor shall any of the following be taken into account in determining whether there has been or will be, a Company Material Adverse Effect: (1) changes in conditions in the United States or global economy or capital or financial markets generally, including changes in interest or exchange rates, (2) changes in general legal, regulatory, political, economic or business conditions or changes in GAAP or interpretations thereof that, in each case, generally affect industries in which the Company or its Subsidiaries conduct business, (3) any Effect proximately caused by the announcement, pendency or performance of this Agreement or the consummation of the Transactions or the identity of Parent, (4) any change in the trading prices or trading volume of the Company Common Stock (provided that the exception in this clause (4) shall not prevent or otherwise affect a determination that any Effect underlying such change has resulted in, or contributed to, a Company Material Adverse Effect), (5) acts of war, sabotage or terrorism, or any escalation or worsening of any such acts of war, sabotage or terrorism, (6) earthquakes, hurricanes, floods or other natural disasters, (7) any Effect consisting of or resulting from any action taken by the Company or its Subsidiaries contemplated by this Agreement or in accordance with either of the Collaboration Agreements or with Parent’s written consent, (8) shareholder litigation alleging a breach of fiduciary duty in connection with this Agreement or the Transactions taken by itself (provided that the exception in this clause (8) shall not prevent or otherwise affect a determination that any facts giving rise to such litigation has resulted in, or contributed to, a Company Material Adverse Effect), or (9) any change in the composition of the Board of Directors of the Company pursuant to Section 1.3(a); provided , however , that with respect to clauses (1), (2) and (5), such Effect does not have a materially disproportionate and adverse effect on the Company and its Subsidiaries, taken as a whole, relative to most other comparable companies and their respective subsidiaries, taken as a whole, in the industry in which the Company and its Subsidiaries operate.

(b) The Company has made available to Parent complete and correct copies of the articles of incorporation and bylaws of the Company and the organizational documents of each of its Subsidiaries, as amended to the date of this Agreement (collectively, the “ Organizational Documents ”). The Organizational Documents are in full force and effect, and neither the Company nor any of its Subsidiaries is in violation of its respective Organizational Documents.

(c) The Company has made available to Parent and its representatives complete and correct copies of the minutes of all meetings of shareholders of the Company, the Board of Directors of the Company and each committee of the Board of Directors of the Company held since December 31, 2001.

Section 4.2 Capitalization .

(a) As of February 19, 2007, the authorized capital stock of the Company consists of (i) 150,000,000 shares of Company Common Stock, of which 37,051,564 shares were issued and outstanding and (ii) 25,000,000 shares of preferred stock, par value $0.001 per share (the “ Company Preferred Stock ”), none of which were issued or outstanding. There are no other classes of capital stock of the Company authorized or outstanding. As of February 19, 2007, 3,240,000 shares of Company Common Stock were reserved for issuance

under the Company Stock Plans (of which 1,498,288 shares of Company Common Stock were issued upon exercise of Options and 805,086 shares of Company Common Stock are subject to outstanding Options). As of February 19, 2007, there were 2,449,500 SARs outstanding (of which 1,553,800 SARs were issued under the Company Stock Plans) and 628,350 shares of Company Common Stock were reserved for issuance upon the exercise of outstanding SARs. As of February 19, 2007, 4,005,811 shares of Company Common Stock were issuable upon conversion of the Company’s 3.50% Convertible Subordinated Notes Due 2013 (the “ Convertible Notes ”), pursuant to the Indenture, dated as of July 25, 2006, between the Company and Wilmington Trust Company, as Trustee (the “ Indenture ”), assuming the Convertible Notes were convertible entirely into shares of Company Common Stock on such date and which number of shares is subject to adjustment as a result of an adjustment in the conversion rate applicable to the Convertible Notes as provided in the Indenture, including pursuant to Section 4.01(j) of the Indenture. As of February 19, 2007, 4,005,811 shares of Company Common Stock were issuable upon exercise of the Company’s outstanding warrants, which were issued by the Company to Merrill Lynch International pursuant to the Confirmation of OTC Warrant Transaction dated as of July 19, 2006, the Confirmation of OTC Warrant Transaction dated as of July 25, 2006 and the Confirmation of OTC Warrant Transaction dated as of August 10, 2006, in each case, between the Company and Merrill Lynch International (collectively, the “ Warrant Confirmations ”) in connection with the issuance of the Convertible Notes, which number of shares underlying such warrants are subject to adjustment as provided for by the terms of the Warrant Confirmations (the “ Merrill Warrants ”). As of February 19, 2007, the Company held options granted to the Company by Merrill Lynch International pursuant to the Confirmation of OTC Convertible Note Hedge dated as of July 19, 2006, the Confirmation of OTC Convertible Note Hedge dated as of July 25, 2006 and the Confirmation of OTC Convertible Note Hedge dated as of August 10, 2006, in each case, between the Company and Merrill Lynch International (collectively, the “ Company Hedge Option Confirmations ”) to receive from Merrill Lynch International up to 4,005,811 shares of Company Common Stock, which number of shares underlying such option is subject to adjustment as provided by the terms of the Company Hedge Option Confirmations (the “ Company Hedge Option ”). All outstanding shares of the Company Common Stock have been, and all shares of the Company Common Stock that may be issued upon exercise or conversion of Options, SARs, the Convertible Notes and the Merrill Warrants will be when issued in accordance with the respective terms thereof, duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights. Except as described above or provided by the agreements referred to above, as of February 19, 2007: (A) there are no shares of capital stock of the Company authorized, issued, reserved for issuance or outstanding; (B) there are no outstanding options or other rights of any kind, which obligate the Company or any of its Subsidiaries to issue, deliver or dispose of any shares of capital stock, voting securities or other equity interests of the Company or any securities or obligations convertible into or exchangeable into or exercisable for any shares of capital stock, voting securities or other equity interests of the Company (collectively, “ Company Securities ”); (C) there are no restricted shares, stock appreciation rights, performance units, contingent clause rights, “phantom” equity or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities of or ownership interests in, the Company; (D) there are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Company Securities (other than (i) the delivery of shares of Company Common Stock to the Company in

connection with the forward transaction (the “ Forward Transaction ”) entered into pursuant to the Confirmation of Forward Stock Purchase Transaction dated as of July 19, 2006 (the “ Forward Confirmation ”) among the Company, Merrill Lynch International and Merrill, Lynch, Pierce, Fenner & Smith Incorporated or (ii) upon the exercise by the holders of Convertible Notes of their rights pursuant to Section 3.01(a) of the Indenture) or to file any registration statement with respect to any shares of capital stock of the Company; (E) there are no other options, calls, warrants, pre-emptive rights or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of the Company to which the Company or any of its Subsidiaries is a party; and (F) there are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders of the Company may vote. The Indenture and any instrument representing the Convertible Notes, in the case of the Convertible Notes, the Warrant Confirmations (including the master agreements referred to therein), in the case of the Merrill Warrants, the Company Hedge Option Confirmations (including the master agreements referred to therein), in the case of the Company Hedge Options, and the Forward Confirmation (including the master agreement referred to therein), in the case of the Forward Transaction, constitute all the Contracts creating, or governing the terms of, the Convertible Notes, the Merrill Warrants and the Company Hedge Options, respectively.

(b) Section 4.2(b) of the Company Disclosure Schedule contains a complete and correct list of all outstanding Options and SARs as of February 19, 2007, whether or not granted under a Company Stock Plan, including the holder, the name of the relevant Company Stock Plan, the date of grant and the exercise or base price and number of shares of Company Common Stock subject thereto.

(c) Each of the outstanding shares of capital stock, voting securities or other equity interests of each Subsidiary of the Company is duly authorized, validly issued, fully paid, nonassessable and free of any preemptive rights, and all such securities are owned by the Company or another wholly owned Subsidiary of the Company and are owned free and clear of all Liens. There are no (i) outstanding options or other rights of any kind, which obligate the Company or any of its Subsidiaries to issue or deliver any shares of capital stock, voting securities or other equity interests of any such Subsidiary or any securities or obligations convertible into or exchangeable into or exercisable for any shares of capital stock, voting securities or other equity interest of a Company Subsidiary, (ii) restricted shares, stock appreciation rights, performance units, contingent clause rights, “phantom” equity or similar securities or rights that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock of, or other voting securities of or ownership interests in, any Subsidiary of the Company, (iii) outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any securities or obligations convertible into or exchangeable into or exercisable for any shares of capital stock, voting securities or other equity interests of a Company Subsidiary or to provide funds to make any investment (in the form of a loan, capital contribution or otherwise) in any of the Company’s Subsidiaries or any other Person; or (iv) other options, calls, warrants, pre-emptive rights or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of any Subsidiary of the Company to which the Company or any of its Subsidiaries is a party. None of the Subsidiaries of the Company owns any Company Common Stock.

(d) Except for this Agreement, there are no shareholder agreements, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party relating to the voting of any shares of capital stock of the Company or granting to any Person the right to elect, or to designate or nominate for election, a director to the Board of Directors of the Company or any of its Subsidiaries. After giving effect to the transactions contemplated by Section 3.3, immediately following the consummation of the Merger, there will not be outstanding any rights, warrants, options or other securities entitling the holder thereof to purchase, acquire or otherwise receive any shares of the capital stock of the Company or any of its Subsidiaries (or any other securities exercisable for or convertible into such shares).

Section 4.3 Subsidiaries .

(a) Section 4.3 of the Company Disclosure Schedule sets forth the name, form of organization and jurisdiction of organization of each of the Company’s Subsidiaries. Each Subsidiary listed on Section 4.3 of the Company Disclosure Schedule is wholly owned by the Company. Other than the Company’s Subsidiaries, neither the Company nor any of its Subsidiaries own, directly or indirectly, any equity or other ownership interests in any Person.

Section 4.4 Authority; Noncontravention; Voting Requirements .

(a) The Company has all requisite corporate power and authority to execute and deliver this Agreement and, subject to obtaining the Company Shareholder Approval, to perform its obligations hereunder and to consummate the Transactions. The execution, delivery and performance by the Company of this Agreement and the consummation by it of the Transactions, have been duly authorized by all necessary corporate action on the part of the Company, and except for obtaining the Company Shareholder Approval, no other corporate action on the part of the Company is necessary to authorize the execution, delivery and performance by the Company of this Agreement or the consummation by it of the Transactions. This Agreement has been duly executed and delivered by the Company and, assuming due authorization, execution and delivery by the other parties hereto, constitutes legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except that such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and other similar Laws affecting creditors’ rights generally and by general principles of equity (the “ Bankruptcy and Equity Exception ”).

(b) As of the date hereof, the Company’s Board of Directors, at a meeting duly called and held at which all of the directors of the Company’s Board of Directors were present in person or by telephone in compliance with the applicable provisions of the VSCA, duly and unanimously adopted resolutions (i) adopting and approving this Agreement and the related Plan of Merger and approving the Transactions, (ii) declaring that this Agreement, the Offer, the Merger and the other Transactions are advisable, fair to, and in the best interests of the Company’s shareholders, (iii) taking all corporate action required to be taken by the Company Board of Directors to authorize and approve the consummation of the Transactions, (iv) recommending (subject to Section 6.4 hereof) that the shareholders of the Company accept the

Offer and tender their shares of Company Common Stock to Merger Sub pursuant to the Offer (together with the authorization by the Company’s Board of Directors of the grant of the Top-Up Option and the issuance of the Top-Up Shares upon exercise thereof, the “ Offer Recommendation ”), and that the holders of Company Common Stock approve and adopt this Agreement, the related Plan of Merger and the Merger (the “ Merger Recommendation ”), and (v) electing, to the extent permitted by applicable Laws, to make inapplicable all state takeover laws or similar Laws, including Article 14 (Affiliated Transactions) of the VSCA, to the extent they might otherwise apply to the execution, delivery, performance or consummation of this Agreement or the Tender and Support Agreement or the transactions (including, the Transactions) contemplated hereby or thereby, and none of the aforesaid actions by the Company’s Board of Directors has been amended, rescinded or modified as of the date hereof. No further corporate action is required by the Company’s Board of Directors in order for the Company to approve this Agreement or the Transactions, including the Merger and the Offer.

(c) None of the execution and delivery of this Agreement by the Company, the consummation by the Company of the Transactions or compliance by the Company with any of the terms or provisions hereof will (i) conflict with, or result in a violation or breach of, any provision of the articles of incorporation or bylaws of the Company or any organizational document of any Subsidiary of the Company, (ii) assuming that the authorizations, consents and approvals referred to in Section 4.5 and the Company Shareholder Approval are obtained and the filings referred to in Section 4.5 are timely made, violate any Law applicable to the Company or any of its Subsidiaries or their respective properties or assets, (iii) assuming that the authorizations, consents and approvals referred to in Section 4.5 and the filings referred to in Section 4.5 are timely made, conflict with, or result in any violation or breach of, or constitute (with or without notice or lapse of time, or both) a default (or give rise to a right of termination, cancellation or acceleration of any obligations or loss of any material benefit) under, require a consent or waiver under, require the payment of a penalty under, any terms, conditions or provisions of any loan or credit agreement, debenture, note, bond, mortgage, indenture, deed of trust, lease, contract, instrument or other agreement (each, a “ Contract ”) to which the Company or any of its Subsidiaries is a party or by which any of their properties or assets may be bound or any Permit affecting, or relating in any way to, the assets or business of the Company and its Subsidiaries, or (iv) result in the creation or imposition of any Lien on any asset of the Company or any of its Subsidiaries, except, in the case of clauses (ii), (iii) and (iv), for such conflicts, violations, breaches, Liens or defaults that, individually or in the aggregate, (A) have not had and would not reasonably be expected to have a Company Material Adverse Effect and (B) would not reasonably be expected to prevent or materially delay the consummation by the Company of any of the Transactions.

(d) The Company’s Board of Directors has duly and validly approved and taken all corporate action required to be taken by the Company’s Board of Directors to grant the Top-Up Option and to issue the Top-Up Shares upon the exercise thereof. None of the grant of the Top-Up Option by the Company, the exercise thereof by Parent or the issuance of the Top-Up Shares to Parent in respect of such exercise, in each case, in accordance with Section 1.4, will conflict with, or result in a violation of breach of, any provision of applicable Laws or any judgment, injunction, order or decree of any Governmental Authority, or require any action, consent, approval, authorization or permit of, action by, or filing with or notification to, any Governmental Authority or the Company’s shareholders.

(e) The affirmative vote (in person or by proxy) of a majority of the votes entitled to be cast by the holders of outstanding shares of Company Common Stock at the Company Shareholders Meeting, or any adjournment or postponement thereof, in favor of the approval and adoption of this Agreement and the related Plan of Merger (the “ Company Shareholder Approval ”) is (unless the Merger is consummated in accordance with Article 12, Section 13.1-719 of the VSCA as contemplated by Section 6.16) the only vote or approval of the holders of any class or series of capital stock of the Company or any of its Subsidiaries necessary to approve this Agreement, the related Plan of Merger and the Merger.

Section 4.5 Governmental Approvals . Except for (a) the filing with the Securities and Exchange Commission (the “ SEC ”) of the Company Proxy Statement and the Schedule 14D-9, and other filings required under, and compliance with other applicable requirements of, the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), and the Securities Act of 1933, as amended (the “ Securities Act ”), the rules and regulations promulgated under the Exchange Act and the Securities Act, the rules of the Nasdaq Stock Market (“ Nasdaq ”), and filings under state securities or “blue sky” laws, (b) the filing of the Articles of Merger with the SCC and the issuance of a certificate of merger by the SCC pursuant to the VSCA and (c) filings required under, and compliance with other applicable requirements of, the HSR Act, no consents or approvals of, or filings, declarations or registrations with, any Governmental Authority or any stock market or stock exchange on which shares of Company Common Stock are listed for trading are necessary for the execution and delivery of this Agreement by the Company or the consummation by the Company of the Transactions, other than such other consents, approvals, filings, declarations or registrations that, if not obtained, made or given, would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

Section 4.6 Company SEC Documents; Undisclosed Liabilities .

(a) The Company has timely filed all reports, forms, schedules, statements, prospectuses, registration statements and other documents required to be filed by it with the SEC since August 5, 2004 (collectively, and in each case including all exhibits and schedules thereto and documents incorporated by reference therein, the “ Company SEC Documents ”). No Subsidiary of the Company is required to file, or files, any form, report or other document with the SEC. Each Company SEC Document, as of its filing date or, if amended or supplemented prior to the date of this Agreement, as of the date of its last such amendment or supplement, complied as to form, and each such Company SEC Document filed subsequent to the date hereof will comply as to form, in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations promulgated thereunder, applicable to such Company SEC Documents. Each Company SEC Document, as of its filing date or, if amended or supplemented prior to the date of this Agreement, as of the date of its last such amendment or supplement, did not, and each such Company SEC Document filed subsequent to the date hereof will not, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.

(b) The consolidated financial statements (including the consolidated balance sheets and the related consolidated statements of income, consolidated statements of income and shareholders’ equity and consolidated statements of cash flows) of the Company included in the Company SEC Documents (i) have been prepared in accordance with GAAP (except as may be indicated in the notes thereto) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto) and (ii) fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited interim statements, to normal year-end audit adjustments).

(c) The Company has made available to Parent true and complete copies of all comment letters from the staff of the SEC relating to the Company SEC Documents and all written responses of the Company thereto through the date of this Agreement. As of the date of this Agreement, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to any SEC Documents.

(d) Neither the Company nor any of its Subsidiaries has any liabilities or obligations of any nature (whether accrued, absolute, contingent or otherwise) other than liabilities or obligations that (i) have been discharged or paid in full prior to the date of this Agreement in the ordinary course of business, (ii) are accrued or reserved against in the most recent financial statements included in the Company SEC Documents filed prior to the date hereof or are reflected in the notes thereto, or (iii) that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

(e) The Company is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act and the applicable listing and governance rules and regulations of Nasdaq.

(f) 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), as required by Rules 13a-15(a) and 15d-15(a) under the Exchange Act, that is designed to provide reasonable assurance to the Company and its Board of Directors regarding the reliability of the Company’s financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with GAAP. The Company’s management has evaluated the effectiveness of the Company’s internal control over financial reporting and, to the extent required by applicable Law, presented in any applicable Company SEC Document that is a report on Form 10-K or any amendment thereto its conclusions about the effectiveness of the internal control over financial reporting as of the end of the period covered by such report on Form 10-K or amendment thereto based on such evaluation. To the extent required by applicable Law, the Company has disclosed, in any applicable Company SEC Document that is a report on Form 10-K or Form 10-Q or any amendment thereto, any change in the Company’s internal control over financial reporting that occurred during the period covered by such report or amendment that has materially affected, or is reasonably likely to materially affect, the

Company’s internal control over financial reporting. Based on its most recent evaluation of its system of internal control over financial reporting, (i) to the Knowledge of the Company, the Company had no significant deficiencies or material weaknesses in the design or operation of its internal control over financial reporting that would reasonably be expected to adversely affect the Company’s ability to record, process, summarize and report financial information and (ii) the Company does not have Knowledge of any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting. Except as disclosed in the Company SEC Documents, the Company has not identified any material weaknesses in the design or operation of the Company’s internal control over financial reporting.

(g) The Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), as required by Rules 13a-15(a) and 15d-15(a) of the Exchange Act, are designed to ensure that all information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is made known to the chief executive officer and the chief financial officer of Company by others within the Company to allow timely decisions regarding required disclosure as required under the Exchange Act and is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. The Company has evaluated the effectiveness of the Company’s disclosure controls and procedures and, to the extent required by applicable Law, presented in any applicable Company SEC Document that is a report on Form 10-K or Form 10-Q or any amendment thereto its conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by such report or amendment based on such evaluation.

(h) To the Knowledge of the Company, as of the date of this Agreement, there are no SEC inquiries or investigations, other governmental inquiries or investigations or internal investigations pending or threatened, in each case regarding any accounting practices of the Company. Except as set forth in Company compliance reports made available to Parent, since August 5, 2004 through the date of this Agreement, there have been no internal investigations regarding accounting or revenue recognition discussed with, reviewed by or initiated at the direction of the chief executive officer, chief financial officer, general counsel or similar legal officer, the Company’s Board of Directors or any committee thereof.

(i) The Company has not had any material dispute with its independent public auditors regarding accounting matters or policies since August 5, 2004. Since August 5, 2004, neither the Company nor any of its Subsidiaries nor, to the Knowledge of the Company, any director, officer, employee, auditor, accountant or representative of the Company or any of its Subsidiaries has received any material, unresolved complaint, allegation, assertion or claim regarding accounting or auditing practices, procedures, methodologies or methods of the Company or any of its Subsidiaries or their respective internal accounting controls or any material inaccuracy in the Company’s financial statements. No attorney representing the Company or any of its Subsidiaries, whether or not employed by the Company or any Subsidiary of the Company, has reported to the Company’s Board of Directors or any committee thereof or, to the Knowledge of the Company, to any director or officer of the Company evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by the Company or any of its officers, directors, employees or agents.

Section 4.7 Absence of Certain Changes . Since October 1, 2006 through the date of this Agreement, the business of the Company and its Subsidiaries has been conducted in the ordinary course and there has not been (a) any event, occurrence, development or state of circumstances or facts that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or (b) any action taken by the Company or any of its Subsidiaries that, if taken during the period from the date of this Agreement through the Effective Time without Parent’s consent, would constitute a breach of Section 6.3; provided that, for the purposes of clause (b) of this Section 4.7, references to “the date hereof” in clauses (i) through (xxi) of Section 6.3(b) shall be deemed to refer to October 1, 2006.

Section 4.8 Legal Proceedings . There is no legal or administrative proceeding, claim, suit or action pending or, to the Knowledge of the Company, threatened, against or affecting, the Company, any of its Subsidiaries, any Company Plan, any present or former officer, director or employee of the Company or any of its Subsidiaries in their respective capacities as such before (or, in the case of threatened actions, suits, investigations or proceedings, would be before) any arbitrator or Governmental Authority, nor is there any injunction, order, judgment, ruling or decree of any arbitrator or Governmental Authority imposed upon or outstanding against the Company or any of its Subsidiaries, or, to the Knowledge of the Company, investigation by any Governmental Authority involving the Company or any of its Subsidiaries.

Section 4.9 Compliance With Laws; Permits . Each of the Company and its Subsidiaries has been since December 31, 2004, and is currently, in compliance in all material respects with all laws, injunctions, judgments, decrees, rulings, statutes, ordinances, codes, rules, regulations, decrees and orders of Governmental Authorities (collectively, “ Laws ”) applicable to it, its properties or other assets, its business or operations or employees. None of the Company or any of its Subsidiaries has received, since December 31, 2004, a written notice or other written communication alleging or relating to a possible violation by the Company or any of its Subsidiaries of any Laws applicable to its businesses or operations. The Company and each of its Subsidiaries hold all licenses, registrations, variances, exemptions, operating certificates, franchises, orders, permits, certificates, approvals, authorizations, concessions and similar rights from Governmental Authorities (collectively, “ Permits ”) necessary for the lawful conduct of their respective businesses, and there has occurred no violation of, default (with or without notice or lapse of time or both) under, or event giving to others any right of termination, amendment or cancellation of, with or without notice or lapse of time or both, any Permit except as has not had and would not reasonably be expected to have a Company Material Adverse Effect. The Company and its Subsidiaries are in compliance in all material respects with the terms of all Permits, and no event has occurred that, to the Knowledge of the Company, would reasonably be expected to result in the revocation, cancellation, non-renewal or adverse modification of any material Permit.

Section 4.10 Information Supplied .

(a) Each document required to be filed by the Company with the SEC or required to be distributed or otherwise disseminated to the Company’s shareholders in

connection with the Transactions (the “ Company Disclosure Documents ”), including the Schedule 14D-9, the proxy or information statement of the Company (the “ Company Proxy Statement ”), if any, to be filed with the SEC in connection with the Merger, and any amendments or supplements thereto, when filed, distributed or disseminated, as applicable, will comply as to form in all material respects with the applicable requirements of the Exchange Act. Notwithstanding the foregoing or the representations and warranties contained in Section 4.10(b), the Company makes no representation or warranty with respect to information supplied by or on behalf of Parent or Merger Sub for inclusion or incorporated by reference in any Company Disclosure Document.

(b) The (i) Company Proxy Statement (and any amendments thereof or supplements thereto), on the date it is first mailed to shareholders of the Company, at the time of the Company Shareholders Meeting and as of the time of any amendments thereof or supplements thereto, and (ii) any Company Disclosure Document (other than the Company Proxy Statement), at the time of the filing with the SEC of such Company Disclosure Document or any supplement or amendment thereto and at the time of any distribution or dissemination thereof, will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading.

(c) All of the information provided or to be provided by the Company specifically for inclusion or incorporation by reference in the Parent Shareholder Circular or in any notification to any regulatory information service approved by the UK Listing Authority supplemental to the Parent Shareholder Circular, at the time the Parent Shareholder Circular is first mailed to shareholders of Parent or at the time any such supplemental notification is made, respectively, and (in both cases) at the time such shareholders vote on the resolutions set forth in the Parent Shareholder Circular, will be in accordance with the facts and will not omit anything likely to affect the import of such information. The information with respect to the Company or any of its Subsidiaries that the Company furnishes to Parent specifically for use in the Schedule TO and the Offer Documents, at the time of the filing of the Schedule TO, at the time of any distribution or dissemination of the Offer Documents and at the time of the consummation of the Offer, will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

Section 4.11 Taxes . As used in this Agreement, the term “ Tax ” or “ Taxes ” shall mean (a) all taxes, charges, fees, duties, levies, imposts, rates or other assessments or governmental charges of any kind imposed by a federal, state, local or foreign Governmental Authority, including income, gross receipts, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, custom duties, property, sales, use, license, capital stock, transfer, franchise, registration, payroll, withholding, social security (or similar), unemployment, disability, value added, alternative or add-on minimum or other taxes, and including any interest, penalties or additions attributable thereto; (b) any liability for the payment of any amount of the type described in clause (a) above arising as a result of being (or having been) a member of any group or being (or having been) included or required to be included in any Tax Return related thereto; and (c) any liability for the payment of any amount of the type

described in clauses (a) and (b) above as a result of any implied obligation to indemnify or otherwise assume the liability of any other Person or as a transferee or successor. “ Tax Return ”, as used in this Agreement, shall mean any return, filing, report, questionnaire, information statement or other document required to be filed, including amended returns that may be filed, for any taxable period with any Governmental Authority relating to Taxes.

(a) The Company and its Subsidiaries have timely filed, or caused to be filed, (taking into account any valid extensions) all material Tax Returns required to be filed by them with the appropriate Governmental Authority and all such Tax Returns were true, complete and correct in all material respects.

(b) All material Taxes due and payable by the Company or any of its Subsidiaries have been duly and timely paid or are being contested in good faith and are adequately provided for in accordance with GAAP in the Company SEC Documents.

(c) There are no material Liens for Taxes upon the assets of the Company or any of its Subsidiaries except for Permitted Liens.

(d) All Tax withholding and deposit obligations imposed on or with respect to the Company and its Subsidiaries (including any withholding with respect to wages or other amounts paid to employees) have been satisfied in full in all material respects.

(e) Neither the Company nor any of its Subsidiaries has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency with respect to any taxable year or period which has not yet expired.

(f) Except as contemplated by this Agreement, neither the Company nor any of its Subsidiaries is a party or is bound by any material Tax sharing agreements (other than such an agreement between the Company and its Subsidiaries).

(g) Neither the Company nor any of its Subsidiaries has been a member of any affiliated group filing a consolidated federal income Tax Return (other than any such group the common parent of which was the Company).

(h) The Company is not a United States Real Property Holding Corporation within the meaning of Section 897 of the Code and was not a United States Real Property Holding Corporation on any “determination date” as defined in Treas. Regs. Section 1.897-2(c) in the five year period ending on the date hereof.

(i) There is no claim, action, suit, investigation, audit or proceeding, including any appeal or application for review, now pending or, to the Knowledge of the Company, threatened against or with respect to the Company or any Subsidiary in respect of any material Tax or material Tax asset of the Company or any Subsidiary.

(j) None of the Company or any Subsidiary is a party to any understanding or arrangement described in Section 6662(d)(2)(C)(ii) of the Code, or in a “reportable Transaction” within the meaning of Treasury Regulations Section 1.6011-4.

(k) Other than the Subsidiaries set forth in Section 4.3(a) of the Company Disclosure Schedule, the Company has no investment equal to or greater then 10% in a controlled foreign corporation as defined by Code Section 957(a) and Treas. Regs. Section 1.957-1(a)(1)-1(a)(2).

Section 4.12 Employee Benefit Plans .

(a) Section 4.12 of the Company Disclosure Schedule contains a true and complete list as of the date hereof of (i) each material deferred compensation, incentive compensation, equity compensation plan, and “welfare” plan, fund or program (within the meaning of § 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”)); (ii) each “pension” plan, fund or program (within the meaning of § 3(2) of ERISA); (iii) each material employment, consulting, termination or severance agreement; and (iv) each other material employee benefit plan, fund, program, policy, agreement, contract or arrangement, in each of clauses (i) through (iv), that is sponsored, maintained or contributed to or required to be contributed to by the Company or its Subsidiaries or by any trade or business, whether or not incorporated (an “ ERISA Affiliate ”), that together with the Company would be deemed a “single employer” within the meaning of § 4001(b) of ERISA, or to which the Company or an ERISA Affiliate is a party for the benefit of any current or former officer, employee, independent contractor or director of the Company or any of its Subsidiaries (collectively, whether or not material, the “ Company Plans ”).

(b) With respect to each material Company Plan, the Company has heretofore delivered or made available to Parent true and complete copies of each such Company Plan and any amendments thereto (or if the Company Plan is not a written plan, a description thereof), any related trust or other funding vehicle, the latest version of any reports or summaries required under applicable Law, including summary plan descriptions, summary material modifications or prospectuses, and the most recent determination letter received from the Internal Revenue Service (the “ IRS ”) with respect to each Company Plan intended to qualify under § 401 of the Code.

(c) Neither the Company nor any of its ERISA Affiliates nor any predecessor thereof sponsors, maintains or contributes to, has in the past six years sponsored, maintained or contributed to or is or has in the past been required to sponsor, maintain or contribute to, any plan subject to Title IV or § 302 of ERISA. Neither the Company nor any of its ERISA Affiliates nor any predecessor thereof contributes to, has in the past contributed to or is or has in the past six years been required to contribute to, any “multiemployer plan,” as defined in Section 3(37) of ERISA.

(d) Each Company Plan has been operated and administered in all material respects in accordance with its terms and in accordance with applicable Law, including ERISA and the Code. To the Knowledge of the Company, no events have occurred with respect to any Company Plan that would reasonably be expected to result in payment or assessment by or against the Company or any of its ERISA Affiliates of any material excise taxes under §§ 4972, 4975, 4976, 4977, 4979, 4980B, 4980D, 4980E or 5000 of the Code.

(e) Each Company Plan intended to be “qualified” within the meaning of § 401(a) of the Code has timely applied for or received a favorable IRS determination letter with respect to such qualification and the tax-exempt status of its related trust, and the Company is not aware of any reason why any such determination letter should be revoked or not be issued or reissued. Each trust forming a part of such a Company Plan is exempt from Tax pursuant to § 501(a) of the Code.

(f) There are no pending or, to the Knowledge of the Company, threatened material claims by or on behalf of any Company Plan, by any employee, beneficiary or alternate payee covered under any such Company Plan with respect to such Company Plan, or otherwise involving any such Company Plan (other than routine claims for benefits) against the Company.

(g) Neither the Company nor any of its Subsidiaries has any material liability in respect of post-retirement health, medical or life insurance benefits for retired, former or current officers, employees, independent contractors or directors of the Company or any of its Subsidiaries, except as required to comply with applicable Laws.

(h) No Company Plan provides for, as a result of the transactions contemplated by this Agreement (whether alone or in connection with other events), any payment of any material amount of money or other property to or the acceleration of or provision of any other rights or benefits to any current or former officer, employee, independent contractor or director of the Company or any of its Subsidiaries, whether or not such payment, right or benefit, or acceleration thereof, would constitute a parachute payment within the meaning of § 280G of the Code.

(i) Each grant of an Option or SAR was duly authorized no later than the date on which the grant of such Option or SAR was by its terms to be effective (the “ Grant Date ”) by all necessary corporate action, including, as applicable, approval by the Board of Directors of the Company (or a duly constituted and authorized committee thereof) and any required shareholder approval by the necessary number of votes or written consents, and the award agreement governing such grant (if any) was duly executed and delivered by each party thereto. Each such grant of an Option, and each such grant of a SAR was made in accordance with the terms of the applicable Company Stock Plan, the Nasdaq rules and all other applicable Laws. The per share exercise price of each Option and the per share strike price of each SAR were equal to the fair market value of a share of Company Common Stock on the applicable Grant Dates. Each such grant was properly accounted for in accordance with GAAP in the financial statements (including the related notes) of the Company and disclosed in the reports, forms and schedules required to be filed by the Company with the SEC.

(j) To the extent that any Company Plan constitutes a “non-qualified deferred compensation plan” within the meaning of § 409A of the Code, such Company Plan is in good faith compliance with § 409A of the Code.

(k) During the period commencing on the Specified Date through the date of this Agreement, the Company has not done any of the following except as has been approved or ratified, as an “employment compensation, severance or other employee benefit

arrangement” within the meaning of Rule 14d-10(d)(2) under the Exchange Act, by the Compensation Committee (and, to the extent any of the following was so approved or ratified during such period after the date of the first discussion of the transaction provided herein, the Compensation Committee was, at the time of each such approval or ratification, aware of the status of such transaction): (i) any granting by the Company to any of its present or former directors or officers of any increase in compensation or benefits in any form; (ii) any granting to any present or former director or officer of the right to receive any severance or termination compensation or benefit; or (iii) any entry by the Company into any employment, consulting, indemnification, termination, change of control or severance agreement or arrangement with any present or former director or officer or employee of the Company (the matters described in foregoing clauses (i), (ii) and (iii), collectively, “ Compensation Actions ”). All amounts payable to any holder of shares of Company Common Stock, Options or SARs pursuant to any Compensation Action (i) are being paid or granted as compensation for past services performed, future services to be performed, or future services to be refrained from performing, by such holder (and matters incidental thereto) and (ii) are not calculated based on the number of securities tendered or to be tendered in the Offer by such holder. The Company’s Board of Directors has determined that each of the members of the Compensation Committee are “independent directors” as defined in the Nasdaq Marketplace Rules.

Section 4.13 Labor Matters . Section 4.13 of the Company Disclosure Schedule sets forth all of the collective bargaining agreements to which the Company or any of its Subsidiaries is bound as of the date hereof. Except for instances that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect: (a) there is no labor strike, dispute, slowdown, stoppage or representation petition brought before the National Labor Relations Board pending, or, to the Knowledge of the Company, threatened, against the Company or any Subsidiary, (b) neither the Company nor any Subsidiary is engaged in any unfair labor practice and (c) there are currently no charges or complaints against the Company or any Subsidiary concerning current or former officers, employees or independent contractors of the Company or any Subsidiary alleging employment discrimination, violations of occupational safety and health requirements, employee misclassification, violations of employment termination-related Laws and other employment related matters, whether pending or, to the Knowledge of the Company, threatened before a court of competent jurisdiction, the U.S. Equal Employment Opportunity Commission or any other Governmental Authority. All officers and employees of the Company and its Subsidiaries are employed within the United States.

Section 4.14 Environmental Matters .

(a) The Company and each of its Subsidiaries are in material compliance with all applicable Environmental Laws and have all Permits required by Environmental Laws to conduct their respective businesses, as currently conducted, and are in material compliance with all such Permits.

(b) (i) There is no pending, or to the Knowledge of the Company, threatened claim, lawsuit, action, investigation or proceeding against the Company or any of its Subsidiaries under or pursuant to any Environmental Law that would reasonably be expected to

have a Company Material Adverse Effect, (ii) neither the Company nor any of its Subsidiaries is a subject of any administrative or judicial consent, order, penalty, request for information, demand, citations, summons, complaint or decree in connection with any Environmental Laws that would reasonably be expected to have a Company Material Adverse Effect, and (iii) neither the Company nor any of its Subsidiaries has received notice from any Person, including any Governmental Authority, alleging that the Company or any of its Subsidiaries is in violation of, or liable under, or potentially in violation of or liable under, any applicable Environmental Law, which violation or liability is unresolved and, would reasonably be expected to have a Company Material Adverse Effect.

(c) With respect to any real property or facility that was formerly or is currently owned, leased or operated by the Company or any of its Subsidiaries, to the Knowledge of the Company, there have been no Releases of any Hazardous Material on, at, to, from or underneath any of such real property or facility that would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

(d) There has been no written environmental investigation, study, audit, test, review or other analysis conducted in the possession or control of the Company or any of its Subsidiaries in relation to the current or prior business of the Company or any of its Subsidiaries or any property or facility now or previously owned, leased or operated by the Company or any of its Subsidiaries which has not been delivered to Parent at least five days prior to the date hereof.

(e) Neither the Company nor any Subsidiary owns, leases or operates any real property, or conducts any operations, in New Jersey or Connecticut.

(f) As used in this Agreement:

(i) “ Environmental Laws ” shall mean all federal, state, foreign and local Laws (including common law), treaties, rules and regulations, judgments or orders, governmental requirements or agreements with any Governmental Authority relating to the environment, pollution, contaminants or other hazardous substances, or protection of human health, including laws relating to Releases or threatened Releases of hazardous materials or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of hazardous materials, and all laws and regulations with regard to record keeping, notification, disclosure and reporting requirements regarding hazardous materials.

(ii) “ Hazardous Materials ” shall mean pollutants, contaminants, wastes (including infectious or biomedical wastes) or chemicals or any toxic, radioactive, ignitable, corrosive, reactive or otherwise hazardous substances, wastes or materials, or any substances, wastes or materials having any constituent elements displaying any of the foregoing characteristics, including any chemicals, materials or substances defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “hazardous constituents,” “restricted hazardous materials,” “extremely hazardous

substances,” “toxic substances,” “contaminants,” “pollutants,” “toxic pollutants,” or words of similar meaning and regulatory effect under any Environmental Law including petroleum its derivatives, byproducts and other hydrocarbons, toxic mold, asbestos, and asbestos-containing materials.

(iii) “ Release ” means any release, spill, emission, leaking, pumping, dumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the atmosphere, soil, surface water, groundwater or property.

Section 4.15 Material Contracts .

(a) As of the date hereof, except for this Agreement and the agreements filed as exhibits to the Company SEC Documents, none of the Company nor any of its Subsidiaries is a party to or bound by or has rights under any of the following Contracts to the extent currently in effect: (i) employment, severance, change in control, restricted stock, termination, personal services, consulting, or non-competition Contracts; (ii) any Contract in connection with which or pursuant to which the Company and its Subsidiaries is reasonably likely to spend or receive, in the aggregate, more than $250,000 during the current fiscal year or during the next fiscal year, (iii) Contracts pursuant to which the Company or any of its Subsidiaries has granted a right of first refusal, first negotiation, most favored nation pricing, preferred pricing, exclusive sales, distribution, marketing or other exclusive rights; (iv) partnership or joint venture agreements; (v) Contracts for the acquisition, sale or lease of material properties or assets of the Company or its Subsidiaries (by merger, purchase or sale of assets or stock or otherwise) entered into since August 5, 2004; (vi) loan or credit agreements, mortgages, promissory notes, indentures or other Contracts evidencing indebtedness for borrowed money by the Company or any of its Subsidiaries or, other than with respect to any SAR or Option, any Contracts with respect to any swap, forward, futures, warrant, option or other derivative transaction; (vii) Contracts providing for the indemnification of any Person (other than any Contract that is not material to the Company or any of its Subsidiaries or is entered into in the ordinary course of business consistent with past practice) by the Company or any of its Subsidiaries; (viii) Contracts that relate to the research, development, distribution, supply, license, co-promotion or manufacturing of any Key Product which, if terminated or not renewed, would reasonably be expected to have a material and adverse effect on any Key Product; (ix) Contracts between the Company or any of its Subsidiaries, on the one hand, and any current or former shareholder, director, officer or other Affiliate of the Company or any of its Subsidiaries, on the other hand; (x) Contracts that purport to limit, curtail or restrict the ability of the Company or any of its Subsidiaries to compete in any material respect in any geographic area or line of business, or to acquire, own, operate, sell, transfer, pledge or otherwise dispose of any assets or to hire or solicit for hire for employment of any individual or group; (xi) Contracts that would be required to be filed as an exhibit to an Annual Report on Form 10-K if such report were required to be filed by the Company with the SEC on the date hereof; (xii) confidentiality agreements with the Company that would prohibit the Company from complying with any of the terms of Section 6.4(b) or Section 6.4(c) if the counterparty to such confidentiality agreement were to make a Superior Proposal or Takeover Proposal (with the name of the counterparty thereof redacted to extent required by the terms of such confidentiality agreement); and (xiii) commitments and agreements to enter into any of the foregoing (such Contracts, and including the Contracts filed as exhibits to Company SEC Documents, the “ Material Contracts ”).

(b) The Company has heretofore made available to Parent true, correct and complete copies of the Material Contracts or, in the case of oral agreements, if any, written summaries thereof, to the extent copies of such Material Contracts are not accessible via the SEC’s EDGAR database. Each of the Material Contracts constitutes the valid and legally binding obligation of the Company or its Subsidiaries, enforceable in accordance with its terms (subject to the Bankruptcy and Equity Exception), and is in full force and effect, except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company and each of its Subsidiaries are not (and with the giving of notice or lapse of time would not be) in breach of, or default under, any Material Contract and, to the Knowledge of the Company, no other party thereto is in breach of, or default under, any Material Contract, except for breaches or defaults that have not or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

Section 4.16 Properties .

(a) Neither the Company nor any of its Subsidiaries has ever owned, nor currently owns, any real property.

(b) Section 4.16(b) of the Company Disclosure Schedule contains a true and complete list as of the date hereof of all real property leased, subleased, or otherwise occupied (whether as a tenant, subtenant or pursuant to other occupancy arrangements) by the Company or any of its Subsidiaries (collectively, including the improvements thereon, the “ Leased Real Property ”), and for each Leased Real Property. With respect to each Leased Real Property, Section 4.16(b) of the Company Disclosure Schedule also contains a true and complete list as of the date hereof of all agreements under which the Company or any Subsidiary is, as of the date hereof, the landlord, sublandlord, tenant, subtenant or occupant (each a “ Real Property Lease ”) that have not been terminated or expired as of the date hereof. The Company has heretofore made available to Parent true, correct and complete copies of the Real Property Lease s.

(c) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company and/or its Subsidiaries have valid leasehold estates in all Leased Real Property free and clear of all Liens, except Permitted Liens.

(d) Other than the Real Property Leases, as of the date hereof, none of the Leased Real Property is subject to any lease, sublease, license or other agreement pursuant to which the Company or any of its Subsidiaries has granted to any other Person any right to the use, occupancy or enjoyment of such Leased Real Property or any part thereof.

(e) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each Real Property Lease is in full force and effect and constitutes the valid and legally binding obligation of the Company

or its Subsidiaries, enforceable in accordance with its terms (subject to the Bankruptcy and Equity Exception), and there is no material default under any Real Property Lease either by the Company or its Subsidiaries party thereto or, to the Knowledge of the Company, by any other party thereto.

(f) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, to the Knowledge of the Company, there does not exist any pending or threatened condemnation or eminent domain proceedings that affect any Leased Real Property. Neither the Company nor any of its Subsidiaries has received any written notice of the intention of any Governmental Authority or other Person to take or use any Leased Real Property.

Section 4.17 Intellectual Property .

(a) There is no action or proceeding pending or, to the Knowledge of the Company or its Affiliates, threatened, with respect to any Company Technology or that alleges the Key Product violates or infringes the intellectual property rights of a third-party, nor have any such action or proceeding been brought, or to the Knowledge of the Company or its Affiliates, threatened, with respect to any Company Technology or that alleges the Key Product violates or infringes the intellectual property rights of a third-party during the past six (6) years, except for actions or proceedings that have been resolved without impairment of the Company’s or its Subsidiaries’ rights in and to any of the Company Technology or any Key Product. There are no material unsatisfied judgments or outstanding orders, injunctions, decrees, stipulations or awards (whether rendered by a court, an administrative agency or by an arbitrator) against the Company or its Affiliates with respect to any Key Product, including without limitation the conduct of any clinical trials, manufacturing activities or other activities prior to the Effective Time. Neither the Company nor any of its Affiliates has received any written notice from any other Person challenging or questioning the right of the Company or any of its Subsidiaries to use or license any of the Technology, except for challenges or questions that have been resolved without impairment of the Company’s or its Subsidiaries’ rights in and to any of the Company Technology or any Key Product. Neither the Company nor any of its Affiliates has received any written notice from any Person, nor to the Knowledge of the Company or its Affiliates, are there any threatened claims or assertions, that the use or practice of the Company Technology infringes, misappropriates, or dilutes the intellectual property rights of a Third Party, except for claims or assertions that have been resolved without impairment of the Company’s or its Subsidiaries’ rights in and to any of the Company Technology or any Key Product. To the Knowledge of the Company or its Affiliates, there is no unauthorized use, infringement, misappropriation or dilution of any of the Company Technology by any Person, including any current or former employee or consultant of the Company or any of its Subsidiaries. Neither the Company nor any of its Affiliates has entered into any Contract (i) granting any Person (other than Parent or its Affiliates) the right to bring infringement, misappropriation, or dilution actions with respect to, or otherwise to enforce rights with respect to, any of the Company Technology or any Key Product, or (ii) expressly agreeing to indemnify any Person (other than Parent or its Affiliates) against any charge of infringement, misappropriation, or dilution of any of the Technology or any Key Product. Neither the Company nor any of its Affiliates Subsidiaries is subject to any outstanding judgment, injunction, order, or decree concerning any Technology.

(b) To the Knowledge of the Company, there is no Technology, other than the Company Technology, that is necessary to conduct the business of the Company and its Subsidiaries as currently conducted, and all of such Company Technology will be transferred to Parent upon consummation of the Transactions. The consummation of the Transactions will not result in the loss or impairment of or payment of any additional amounts with respect to, nor require the consent of any other Person in respect of, the Company’s or any of its Subsidiary’s right to own or use any of the Company Technology.

(c) Section 4.17(c) of the Company Disclosure Schedule sets forth a true and complete list of all Company Patents and Company Trademarks in which the Company or any of its Subsidiaries has any right, title, or interest other than a license or sublicense. Section 4.17(c) of the Company Disclosure Schedule contains, where relevant, all application numbers and filing dates, registration numbers and dates, jurisdiction and the nature of the right title or interest. All applicable government requirements necessary to maintain in full force and effect all such Company Patents and Company Trademarks due within sixty (60) days after the Effective Time, including but not limited to responses to actions and the payment of maintenance fees, have been met.

(d) Section 4.17(d)(1) of the Company Disclosure Schedule sets forth a true and complete list of all Contracts in which the Company or its Subsidiaries is a party and pursuant to which the Company or any of its Subsidiaries is granted any rights in any Technology of any third party. Section 4.17(d)(2) sets forth a true and complete list of all Contracts pursuant to which the Company or its Subsidiaries have granted any third party any rights in any Company Technology.

(e) The Company owns all right, title and interest, including the right to bring actions for infringement or other violation thereof, in and to each of the Patents listed in Section 4.17(e) of the Company Disclosure Schedule, free and clear of any Liens. The Company has submitted all information known to the Company related to the subject matter of each such Patent to the United States Patent and Trademark Office required to be submitted in accordance with 37 C.F.R. 1.56, 1.97 and 1.98.

(f) The Company owns all right, title and interest in and to, or has a license, sublicense or otherwise permission to use, all of the Company Technology. There are no existing Contracts, options, commitments, or rights with, of or to any person to acquire or obtain any rights to, any of the Company Technology.

(g) Except for the Non-Competition Agreements, no employee of the Company or its Affiliates has entered into any Contract that restricts or limits in any way the scope or type of work in which the employee may be engaged or requires the employee to transfer, assign or disclose information concerning his or her work to anyone other than the Company or any of its Subsidiaries.

(h) The consummation of the Transactions will not alter, encumber, impair or extinguish in any respect any of the Technology used or held for use in the conduct of the Business, as currently conducted. To the Knowledge of the Company or its Affiliates none of the Company Technology is currently involved in any interference, inventorship dispute,

reissue, reexamination, opposition proceeding, or cancellation proceeding, and neither the Company nor any of its Affiliates has received any written notice from any Person regarding any such proceeding, and to the Knowledge of the Company or its Affiliates, there is no threatened proceeding of this nature.

(i) To the Knowledge of the Company or its Affiliates, inventorship of the Company Patents is properly identified on such Company Patents. Neither the Company nor any of its Affiliates has entered into any Contract granting any person the right to control the prosecution of any of the Company Patents or Company Trademarks.

(j) All current and former employees and consultants of the Company or any of its Affiliates who are or have been substantively involved in the design, review, evaluation or development of the Company Technology or any Key Product have executed written contracts or are otherwise obligated to protect the confidential status and value thereof and to vest in the Company exclusive ownership of the Company Technology. Neither the Company nor any of its Affiliates has entered into any Contract (i) granting any person the right to bring infringement actions with respect to, or otherwise to enforce rights with respect to, any of the Company Technology or any Key Product, or (ii) expressly agreeing to indemnify any Person against any charge of infringement of any of the Company Technology or any Key Product.

(k) The Company has made available to or provided Parent with copies of all material information and, as requested in writing by Parent, with copies of all books, records and data, in each case, with respect to all of the Company Patents and Company Trademarks.

(l) All official fees, maintenance fees and annuities for the Company Technology have been paid through the Effective Time. All of the Company Patents are currently in compliance with formal legal requirements (including payment of filing, examination, and maintenance fees and proofs of working or use). All of the issued Company Patents, registered Company Trademarks, and registered Company Copyrights are in full force and effect, are subsisting and, to the Knowledge of the Company and its Affiliates, are valid and enforceable. Any necessary registration, application, maintenance, user or renewal fees due within ninety (90) days of the Effective Time in connection with the Company Technology have been paid in a timely manner.

(m) With respect to each Company Trade Secret, the documentation relating to such Trade Secret is current, accurate, and sufficient in detail and content to identify and explain it and to allow its full and proper use. The Company and its Subsidiaries have taken all reasonable precautions to protect the secrecy, confidentiality and value of the Company Trade Secrets. The Company Trade Secrets are not part of the public knowledge or literature, and, have not been used, divulged, or appropriated either for the benefit of any Person (other than the Company) or to the detriment of the Business.

(n) Except as described in Section 4.17(n) of the Company Disclosure Schedule, neither the Company nor any of its Affiliates has any reason to believe that the Company, any of its Affiliates or any of their respective employees either is or was under any obligation of non-competition, secrecy, confidentiality or non-disclosure to any third party.

(o) The Company has heretofore delivered or made available to Parent true, correct and complete copies of each non-competition agreement between the Company, on the one hand, and the Persons set forth in Section 4.17(o) of the Company Disclosure Schedule, on the other hand, in each case, as in effect on the date hereof (collectively, the “ Non-Competition Agreements ”). The Non-Competition Agreements are in full force and effect, and none of the Non-Competition Agreements have been amended or modified in any respect from the Non-Competition Agreements as so delivered to Parent.

(p) There are no outstanding, or to the Knowledge of the Company, threatened disputes or disagreements with respect to any such Contracts relating to Confidential Information to which the Company or its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound.

(q) To the Knowledge of the Company, Section 4.17(q) of the Company Disclosure Schedule sets forth a true and complete list of all inventions, discoveries, creations, or works conceived or created on or before the date that is sixty (60) days prior to the date hereof by the Company, any of its Affiliates or any employees or consultants of either of the foregoing for which (i) an application for intellectual property protection would generally be filed in the U.S. by the Company in the ordinary course of business and (ii) by the date hereof, no application for intellectual property protection was filed in the U.S.

(r) To the Knowledge of the Company, none of the Company, any of its Affiliates or any of their respective employees or consultants is currently in default under any term of any agreement relating to any Confidential Information or any Contract or any restrictive covenant relating to Confidential Information, or the development or exploitation thereof.

(s) The Company is the owner of all right, title and interest in and to each item of the Company Confidential Information, or, in the case of licensed Company Confidential Information, has obtained all licenses necessary to use the Company Confidential Information necessary or useful in conducting the present business of the Company or any of its Subsidiaries. To knowledge of the Company, no Company Confidential Information is subject to any proceeding or outstanding order or stipulation restricting in any manner the use, transfer, or licensing thereof by the Company, or which may adversely affect the validity, use or enforceability of such Company Confidential Information.

(t) The Company has heretofore delivered or made available to Parent true, correct and complete copies of each agreement regarding the assignment to the Company of Company Technology arising from services performed for the Company by the Persons set forth on Section 4.17(t) of the Company Disclosure Schedule as in effect on the date hereof (collectively, the “ Technology Assignment Agreements ”). The Technology Assignment Agreements are in full force and effect, and none of the Technology Assignment Agreements have been amended or modified in any respect from the Technology Assignment Agreements as so delivered or made available to Parent.

Section 4.18 Regulatory Matters .

(a) Neither the Company nor any of its Affiliates has received any oral or written communication (including any warning letter, untitled letter, Form 483s or similar notices) from the FDA or any counterpart regulatory authorities in the European Union, and to the Knowledge of the Company and its Affiliates, there is no action or proceeding pending or threatened (including any prosecution, injunction, seizure, civil fine, suspension or recall), in each case alleging that the Company or any of its Subsidiaries is not currently in compliance with any and all applicable Laws implemented by the FDA, the Drug Enforcement Administration, any counterpart regulatory authorities in the European Union or any other country, except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. There are no pending voluntary or involuntary market withdrawals, field corrective actions (including recalls), destruction orders, seizures or other regulatory enforcement actions related to any product that have had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

(b) Neither the Company nor any of its Affiliates has received any correspondence from the FDA, or a counterpart regulatory authority in the European Union, regarding, and, to the Knowledge of the Company, there is no pending or threatened action or proceeding against, the Company or any of its Subsidiaries or any of their respective employees regarding any debarment action or investigation undertaken pursuant to the Generic Drug Enforcement Act of 1992 (21 U.S.C. Sections 335(a), (b) and (c)), or any similar regulation of the FDA or any similar regulation of any counterpart regulatory authority in the European Union, except for any action or proceeding that has not had or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

(c) No data generated by the Company or any of its Affiliates with respect to its products that has been provided to its customers or otherwise made public is the subject of any regulatory or other action, either pending or threatened, by the FDA or any other comparable Governmental Authority relating to the truthfulness or scientific adequacy of such data.

(d) Neither the Company nor any of its Subsidiaries is subject to any pending or, to the Knowledge of the Company, threatened, investigation by (i) the FDA pursuant to its Fraud, Untrue, Material Facts, Bribery, and Illegal Gratuities Final Policy, (ii) the Department of Health and Human Services Office of Inspector General or Department of Justice pursuant to the Federal Anti-Kickback Statute (42 U.S.C. Section 1320a-7(b)) or the Civil False Claims Act (31 U.S.C. Section 3729 et seq.) or (iii) any equivalent statute or policy of or in any country in the European Union.

(e) The Company has, prior to the execution of this Agreement, made available to Parent copies of any and all documents in its or its Subsidiaries’ possession that are material to assessing the Company’s or any of its Subsidiaries’ compliance with the Federal Food, Drug and Cosmetic Act or the International Standards Organization and their respective implementing regulations or any other similar regulations in any applicable jurisdiction.

(f) The Company and its Subsidiaries are in compliance in all material respects with all applicable requirements of the Act, the Public Health Service Act, and the regulations promulgated thereunder by the FDA (collectively, the “ FDA Requirements ”).

(g) Since January 1, 2002, neither the Company nor any of its Affiliates has received any notice or other communication from the FDA or any other Governmental Authority alleging any current violation of the FDA Requirements.

(h) All manufacturing, testing, research, and other scientific operations by the Company and its Subsidiaries have been conducted in all material respects in compliance with good manufacturing practices, good clinical practices and good laboratory practices as set forth by the FDA.

(i) The Company and its Subsidiaries have not filed any biologics license applications. None of the Company, any of its Subsidiaries or any of their respective officers or employees or, to the knowledge of the Company, agents has made an untrue statement of a material fact to the FDA or other Governmental Authority or failed to disclose a material fact required to be disclosed to the FDA or other Governmental Authority.

(j) None of the Company, any of its Subsidiaries or any of their

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