AGREEMENT AND PLAN OF MERGER

BY AND AMONG

GILEAD SCIENCES, INC.,

MUSTANG MERGER SUB, INC.

AND

MYOGEN, INC.

OCTOBER 1, 2006

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this ''Agreement'') is made and entered into as of October 1, 2006, by and among Gilead Sciences, Inc., a Delaware corporation (''Parent''), Mustang Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (''Purchaser''), and Myogen, Inc., a Delaware corporation (the ''Company''). All capitalized terms used in this Agreement shall have the respective meanings ascribed thereto in Article I hereof.

W I T N E S S E T H:

WHEREAS, the respective boards of directors of Parent, Purchaser and the Company have determined that it is in the best interests of their respective stockholders for Parent to acquire the Company on the terms and subject to the conditions set forth in this Agreement;

WHEREAS, in furtherance of the acquisition of the Company by Parent, it is proposed that Purchaser commence a tender offer (the ''Offer'') to acquire all of the outstanding shares (the ''Company Shares'') of common stock, par value $0.001 per share, of the Company (''Company Common Stock''), at a price of Fifty-Two Dollars and fifty cents ($52.50) per Company Share, net to the holder thereof in cash (such amount, or any different amount per Company Share that may be paid pursuant to the Offer in accordance with the terms hereof, being hereinafter referred to as the ''Offer Price''), on the terms and subject to the conditions set forth herein;

WHEREAS, following the consummation of the Offer, Purchaser will merge with and into the Company, with the Company as the surviving corporation in the merger (the ''Merger''), and each Company Share that is not tendered and accepted pursuant to the Offer 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; and

WHEREAS, the respective boards of directors of Parent, Purchaser and the Company have (i) determined that this Agreement and the transactions contemplated hereby, including the Offer and the Merger, are advisable, fair to and in the best interests of their respective stockholders, and (ii) approved this Agreement and the transactions contemplated hereby, including the Offer and the Merger, on the terms and subject to the conditions set forth herein; and

NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties, covenants and agreements set forth herein, as well as other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, Parent, Purchaser and the Company hereby agree as follows:

ARTICLE I
DEFINITIONS & INTERPRETATIONS

1.1 Certain Definitions. For all purposes of and under this Agreement, the following capitalized terms shall have the following respective meanings:

(a) ''Abbott Ambrisentan Agreement'' shall mean the License Agreement between Abbott Deutschland Holding GmbH and the Company dated October 8, 2001, and any amendment thereto.

(b) ''Abbott Darusentan Agreement'' shall mean the License Agreement between Abbott Laboratories and the Company dated June 30, 2003, and any amendment thereto.

(c) ''Acquisition Inquiry'' shall mean an inquiry, indication of interest or request for information (other than an inquiry, indication of interest or request for information made or submitted by Parent or Purchaser) that would reasonably be expected to lead to an Acquisition Proposal.

(d) ''Acquisition Proposal'' shall mean any offer or proposal (other than an offer or proposal made or submitted by Parent or Purchaser) relating to a possible Acquisition Transaction.

(e) ''Acquisition Transaction'' shall mean any transaction or series of related transactions (other than the transactions contemplated by this Agreement) involving or resulting in: (i) any acquisition or purchase from the Company by any Person or ''group'' (as defined in or under Section 13(d) of the Exchange Act), directly or indirectly, of more than fifteen percent (15%) of the total outstanding voting securities of the Company, or any tender offer or exchange offer that, if consummated, would result in the Person or ''group'' (as defined in or under Section 13(d) of the Exchange Act) making such offer beneficially owning fifteen percent (15%) or more of the total outstanding voting securities of the Company; (ii) any merger, consolidation, share exchange, business combination, issuance of securities, acquisition of securities, recapitalization, tender offer, exchange offer or other similar transaction involving the Company pursuant to which the stockholders of the Company immediately prior to the consummation of such transaction would hold less than eighty-five percent (85%) of the equity interests in the surviving or resulting entity of such transaction immediately after consummation thereof; (iii) any sale, lease, exchange, transfer, license, acquisition or disposition of more than fifteen percent (15%) of the assets of the Company (measured by either book or fair market value thereof) or the net revenues or net income of the Company; or (iv) any liquidation, dissolution, recapitalization or other significant corporate reorganization of the Company.

(f) ''Adjusted Outstanding Share Number'' shall mean the sum of (i) the aggregate number of shares of Company Common Stock outstanding immediately prior to the acceptance of shares of Company Common Stock pursuant to the Offer, plus (ii) at the election of Parent, an additional number of shares up to but not exceeding the aggregate number of shares of Company Common Stock issuable upon the exercise of (A) all Company Options that are outstanding immediately prior to the acceptance of shares of Company Common Stock for payment pursuant to the Offer and that are vested or that will be vested immediately after the acceptance of such shares for payment, (B) all Company Warrants that are outstanding immediately prior to the acceptance of shares of Company Common Stock for payment pursuant to the Offer, and (C) all other rights to acquire Company Capital Stock upon exercise or conversion thereof that are outstanding immediately prior to the acceptance of shares of Company Common Stock for payment pursuant to the Offer (including Purchase Rights outstanding under the Company ESPP) and that are vested or that will be vested immediately after the acceptance of such shares for payment.

(g) ''Affiliate'' shall mean, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with such Person. For purposes of the immediately preceding sentence, the term ''control'' (including, with correlative meanings, the terms ''controlling,'' ''controlled by'' and ''under common control with''), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through ownership of voting securities, by Contract or otherwise.

(h) ''Associate'' shall have the meaning ascribed to such term in Rule 12b-2 promulgated under the Exchange Act.

(i) ''Business Day'' shall mean any day, other than a Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in New York are authorized or required by law or other governmental action to close.

(j) ''Code'' shall mean the Internal Revenue Code of 1986, as amended.

(k) ''Company Board'' shall mean the board of directors of the Company.

(l) ''Company Capital Stock'' shall mean the Company Common Stock and the Company Preferred Stock.

(m) ''Company ESPP'' shall mean the Companys 2003 Employee Stock Purchase Plan, as amended.

(n) ''Company Material Adverse Effect'' shall mean any fact, circumstance, change or effect that, individually or when taken together with all other such facts, circumstances, changes or effects that exist at the date of determination of the occurrence of the Company Material Adverse Effect, has had or is reasonably expected to have a material adverse effect on (a) the business (taken as a whole), financial condition, capitalization (taken as a whole), assets (taken as a whole) or Liabilities (taken as a whole) of the Company, or (b) the ability of the Company to consummate the Merger or any of the other transactions contemplated by this Agreement; provided, however, that no facts, circumstances, changes or effects resulting primarily from or arising primarily out of the following shall be deemed to be or constitute a Company Material Adverse Effect, and no facts, circumstances, changes or effects resulting primarily from or arising primarily out of the following shall be taken into account when determining whether a Company Material Adverse Effect has occurred: (i) general economic or political conditions in the countries in which the Company does business (except to the extent that the Company is adversely affected disproportionately relative to other businesses in such countries); (ii) general market or economic conditions in the pharmaceutical or biotechnology industries (except to the extent that the Company is adversely affected disproportionately relative to the other participants in such industries); (iii) the condition of the financial or securities markets in the countries in which the Company does business; (iv) any change in the stock price or trading volume of the Company Common Stock in and of itself (it being understood that the facts or occurrences giving rise to such change in stock price or trading volume may be taken into account in determining whether there has been a Company Material Adverse Effect); (v) the announcement or pendency of this Agreement or any of the transactions contemplated hereby, including the Offer and the Merger; (vi) any unreasonable refusal by Parent to grant its consent (pursuant to Section 6.2 hereof) to the taking of any action described in Section 6.2(m)(iii) or Section 6.2(n) hereof that the Company reasonably proposes to take and to which the Company requests in writing Parents consent; (vii) any refusal by Parent to grant its consent to the darusentan DAR-312 clinical trial as currently proposed to be conducted by the Company; (viii) the failure of the Company to meet published projections of earnings, revenues or any other financial measure (regardless of whether such projections were made by the Company or independent third parties), in and of itself (it being understood that the facts or occurrences giving rise to such failure may be taken into account in determining whether there has been a Company Material Adverse Effect); (ix) changes in GAAP that take effect after the date of this Agreement (but not changes in the Companys interpretation of GAAP); (x) changes in any Legal Requirements that take effect after the date of this Agreement and are of general applicability and not specific to the Company or its business; (xi) any adverse changes, developments, circumstances, events or occurrences relating to ambrisentan or darusentan to the extent directly resulting from an action by Parent or any of its Affiliates; (xii) the determination by, or the delay of a determination by, the FDA or its European equivalent, or any panel or advisory body empowered or appointed thereby, with respect to the approval, non-approval or disapproval of any products (of Persons other than the Company) similar to or competitive with the Companys material products and product candidates; (xiii) the results of any clinical trial of one or more products or product candidates of any Person other than the Company; or (xiv) the entry or threatened entry into the market of a generic version of Flolan.

(o) ''Company Option Plan'' shall mean the Companys 2003 Equity Incentive Plan and any predecessor thereto.

(p) ''Company Options'' shall mean any options to purchase shares of Company Common Stock outstanding under the Company Option Plan.

(q) ''Company Preferred Stock'' shall mean the preferred stock, par value $0.001 per share, of the Company.

(r) ''Continuing Employees'' shall mean all employees of the Company who are offered and timely accept employment by Parent or any Subsidiary of Parent (including, after the Acceptance Time, the Company) or who continue their employment with the Company at or after the Acceptance Time.

(s) ''Contract'' shall mean any contract, subcontract, agreement, commitment, note, bond, mortgage, indenture, lease, license, sublicense, franchise or other instrument, obligation or binding arrangement or understanding of any kind or character, whether express or implied and whether oral or in writing, including any of the foregoing, to the extent previously terminated, with respect to which there are continuing rights, liabilities or obligations.

(t) ''Delaware Law'' shall mean the DGCL and any other applicable law of the State of Delaware.

(u) ''DGCL'' shall mean the General Corporation Law of the State of Delaware.

(v) ''DOJ'' shall mean the United States Department of Justice.

(w) ''Environmental Laws'' shall mean any and all applicable statutes, regulations, ordinances, judgments or orders relating to pollution or the protection of the environment (including ambient air, surface water, groundwater or land), as the foregoing are enacted and in effect as of the date hereof.

(x) ''ERISA'' shall mean the Employee Retirement Income Security Act of 1974, as amended.

(y) ''Exchange Act'' shall mean the Securities Exchange Act of 1934, as amended.

(z) ''Flolan'' shall mean a pharmaceutical composition which contains epoprostenol sodium as the active ingredient and is marketed under the name Flolan.

(aa) ''FTC'' shall mean the United States Federal Trade Commission.

(bb) ''GAAP'' shall mean generally accepted accounting principles, as applied in the United States.

(cc) ''Governmental Entity'' shall mean any nation, state, province, territory, county, municipality, district or other jurisdiction of any nature, any government, any governmental or quasi-governmental authority or entity or body, department, commission, board, agency or instrumentality, and any court, tribunal or judicial body, in each case whether federal, state, county, provincial, local or foreign.

(dd) ''GSK Ambrisentan Agreement'' shall mean the License Agreement between Glaxo Group Limited and the Company dated March 3, 2006, and any amendment thereto.

(ee) ''GSK Flolan Agreement'' shall mean the Distribution and Supply Agreement between SmithKlein Beecham Corporation and the Company dated March 3, 2006, and any amendment thereto.

(ff) ''Hazardous Substance'' shall mean any substance, material or waste that is characterized or regulated under any Environmental Law as ''hazardous,'' ''pollutant,'' ''contaminant,'' ''toxic'' or words of similar meaning or effect, including petroleum and petroleum products, polychlorinated biphenyls and asbestos.

(gg) ''HSR Act'' shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

(hh) ''IRS'' shall mean the United States Internal Revenue Service.

(ii) ''Knowledge'' of the Company, with respect to any matter in question, shall mean the actual knowledge of J. William Freytag, Robert Caspari, Michael J. Gerber, Richard J. Gorczynski, Joseph L. Turner or Andrew D. Dickinson.

(jj) ''Legal Proceeding'' shall mean any action, claim (or counterclaim), suit, litigation, proceeding (public or private), criminal prosecution, audit, arbitration, mediation or investigation commenced, brought, conducted or heard by or before any court or other Governmental Entity or any arbitrator or arbitration panel.

(kk) ''Legal Requirement'' shall mean any applicable federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity (or under the authority of Nasdaq).

(ll) ''Liability'' shall mean any liability, indebtedness, obligation or commitment of any kind (whether accrued, absolute, contingent, matured, unmatured or otherwise and whether or not required to be recorded or reflected on a balance sheet under GAAP).

(mm) ''Lien'' shall mean any lien, pledge, hypothecation, charge, mortgage, security interest, encumbrance, claim, infringement, option, right of first refusal, preemptive right, community property interest or restriction of any nature (including any restriction on the voting of any security or restriction on the transfer, use or ownership of any security or other asset).

(nn) ''Nasdaq'' shall mean the NASDAQ Global Market, or any successor inter-dealer quotation system operated by the Nasdaq Stock Market, Inc., or any successor thereto.

(oo) ''Novartis Agreement'' shall mean the Collaboration and Option Agreement between Novartis Institutes for BioMedical Research, Inc. and the Company dated October 8, 2003, as amended on May 23, 2005, and as amended and restated on July 7, 2006.

(pp) ''Order'' shall mean any judgment, decision, decree, injunction, ruling, writ, assessment or order of any Governmental Entity that is binding on any Person or its property under applicable Legal Requirements.

(qq) ''Parent Material Adverse Effect'' shall mean any material adverse effect on the ability of Parent or Purchaser to accept for payment and to pay for any Company Shares pursuant to the Offer or to consummate the Merger or the other transactions contemplated hereby.

(rr) ''Permitted Encumbrances'' shall mean (i) Liens for Taxes not yet due and payable or liens for Taxes being contested in good faith by any appropriate proceedings, (ii) Liens of landlords and Liens of carriers, warehousemen, mechanics and materialmen and other like Liens arising in the ordinary course of business for sums not yet due and payable, (iii) statutory Liens existing as of the Closing Date and claimed or held by any Governmental Entity that are related to obligations that are not due or delinquent, (iv) restrictions on resale of securities imposed by applicable Legal Requirements, (v) security given in the ordinary course of business as of the Closing Date to any public utility, Governmental Entity or other statutory or public authority, where the underlying obligations are not delinquent, (vi) with respect to leased or licensed personal property and Intellectual Property, the terms and conditions of the lease or license applicable thereto, (vii) with respect to real property, zoning, building codes and other land use laws regulating the use or occupancy of such real property or the activities conducted thereon which are imposed by any Governmental Entity having jurisdiction over such real property which are not violated by the current use or occupancy of such real property or the operation of the business of the Company as currently conducted and Liens imposed on the underlying fee interest in Leased Real Property, (viii) easements, covenants, conditions, restrictions and other similar matters affecting title to real property and other encroachments and title and survey defects that do not or would not materially impair the use or occupancy of such real property in the operation of the business of the Company as currently conducted, and (ix) other Liens (other than those securing indebtedness) that do not materially interfere with the use or operation of the property subject thereto.

(ss) ''Person'' shall mean any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity.

(tt) ''Sarbanes-Oxley Act'' shall mean the Sarbanes-Oxley Act of 2002.

(uu) ''SEC'' shall mean the United States Securities and Exchange Commission.

(vv) ''Securities Act'' shall mean the Securities Act of 1933, as amended.

(ww) ''Subsidiary'' of any Person shall mean (i) a corporation more than fifty percent (50%) of the combined voting power of the outstanding voting stock of which is owned, directly or indirectly, by such Person or by one of more other Subsidiaries of such Person or by such Person and one or more other Subsidiaries thereof, (ii) a partnership of which such Person, or one or more other Subsidiaries of such Person or such Person and one or more other Subsidiaries thereof, directly or indirectly, is a general partner and has the power to direct the policies, management and affairs of such partnership, (iii) a limited liability company of which such Person or one or more other Subsidiaries of such Person or such Person and one or more other Subsidiaries thereof, directly or indirectly, is a managing member and has the power to direct the policies, management and affairs of such company, or (iv) any other Person (other than a corporation, partnership or limited liability company) in which such Person, or one or more other Subsidiaries of such Person or such Person and one or more other Subsidiaries thereof, directly or indirectly, has at least a majority ownership and power to direct the policies, management and affairs thereof.

(xx) ''Superior Proposal'' shall mean any unsolicited, bona fide written offer made by a third party unaffiliated with the Company to purchase (by way of merger, tender offer or otherwise) greater than 50% of the Companys assets or greater than 50% of the outstanding shares of Company Common Stock (other than shares of Company Common Stock already held by such third party) that the Company Board shall have reasonably determined in good faith (after consultation with a financial advisor of nationally recognized standing and its outside legal counsel, and after taking into account, among other things, the financial, legal and regulatory aspects of such offer, as well as any revisions to the terms hereof proposed by Parent pursuant to Section 7.2(b) hereof) is more favorable to the Company Stockholders (in their capacities as such) than the terms of the Offer and the Merger (taking into account any revisions to the terms hereof proposed by Parent pursuant to Section 7.2(b) hereof) and reasonably capable of being consummated.

(yy) ''Tax'' shall mean (i) any and all federal, state, local and foreign taxes, including taxes based upon or measured by gross receipts, income, profits, sales, use and occupation, and value added, ad valorem, transfer, franchise, withholding, payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed with respect to such amounts, (ii) any liability for the payment of any amounts of the type described in clause (i) as a result of being or ceasing to be a member of an affiliated, consolidated, combined or unitary group for any period (including any liability under Treasury Regulation Section 1.1502-6 or any comparable provision of foreign, state or local law) and (iii) any liability for the payment of any amounts of the type described in clause (i) or (ii) as a result of any express or implied obligation to indemnify any other Person or as a result of any obligations under any agreements or arrangements with any other Person with respect to such amounts and including any liability for taxes of a predecessor entity.

(zz) ''Tax Returns'' shall mean any return (including any information return), report, statement, declaration, estimate, schedule, notice, notification, form, election, certificate or other document or information filed with or submitted to, or required to be filed with or submitted to, any Governmental Entity in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Legal Requirement relating to any Tax.

(aaa) A ''Triggering Event'' shall be deemed to have occurred if: (i) the Company Board shall have failed, on or before the date of this Agreement, to unanimously recommend that the Company Stockholders accept the Offer and tender their shares of Company Common Stock pursuant to the Offer and vote to adopt this Agreement; (ii) a Company Board Recommendation Change shall have occurred; (iii) the Company shall have failed to include in the Schedule 14D-9 the Company Board Recommendation or a statement to the effect that the Company Board has determined and believes that the Offer and the Merger are in the best interests of the Company Stockholders; (iv) following the disclosure or announcement of an Acquisition Proposal or an Acquisition Inquiry, the Company Board fails to reaffirm publicly the Company Board Recommendation, or fails to reaffirm publicly its determination that the Offer and the Merger are in the best interests of the Company Stockholders, in either case within ten (10) Business Days after Parent requests in writing that such recommendation or determination be reaffirmed publicly; (v) the Company Board shall have approved, endorsed or recommended any Acquisition Proposal; (vi) the Company shall have entered into any letter of intent, memorandum of understanding or similar document or Contract relating to any Acquisition Proposal (other than a confidentiality agreement executed and delivered in accordance with clause (B) of the last paragraph of Section 7.1(a) of this Agreement); (vii) a tender or exchange offer relating to securities of the Company shall have been commenced and the Company shall not have sent to its securityholders, within ten (10) Business Days after the commencement of such tender or exchange offer, a statement disclosing that the Company recommends rejection of such tender or exchange offer; (viii) an Acquisition Proposal is publicly announced, and the Company fails to issue a press release announcing its opposition to such Acquisition Proposal within ten (10) Business Days after such Acquisition Proposal is publicly announced; or (ix) there shall have been a material breach or violation of any of the provisions set forth in Section 7.1 hereof arising from any action taken by the Company or any director, officer or advisor of the Company with knowledge that such action would give rise to a breach of Section 7.1 hereof.

1.2 Additional Definitions. The following capitalized terms shall have the respective meanings ascribed thereto in the respective sections of this Agreement set forth opposite each of the capitalized terms below:

1.3 Certain Interpretations. Unless otherwise indicated to the contrary:

(a) All references herein to Articles, Sections, Annexes, Exhibits, Schedules, clauses, or subclauses shall be deemed to refer to Articles, Sections, Annexes, Exhibits, Schedules, clauses, or subclauses of or to this Agreement, as applicable.

(b) The words ''include,'' ''includes,'' and ''including'' and other words of similar import when used herein shall be deemed in each case to be followed by the words ''without limitation.''

(c) The words ''herein,'' ''hereto,'' and ''hereby'' and other words of similar import shall be deemed in each case to refer to this Agreement as a whole and not to any particular Article, Section or other subdivision of this Agreement.

(d) The word ''if'' and other words of similar import shall be deemed in each case to be followed by the phrase ''and only if.''

(e) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of names and pronouns shall include the plural and vice versa.

(f) The table of contents and headings set forth in this Agreement are for convenience of reference purposes only and shall not affect or be deemed to affect in any way the meaning or interpretation of this Agreement or any term or provision hereof.

(g) When reference is made herein to a Person, such reference shall be deemed to include all direct and indirect Subsidiaries of such Person unless otherwise indicated or the context otherwise requires.

(h) Any reference herein to law or to a Legal Requirement (or, with respect to any statute, ordinance, code, rule or regulation, any provision thereof) shall be deemed to include reference to such law or to such Legal Requirement and any Legal Requirement promulgated thereunder (or provision thereof, as applicable), including any successor thereto, respectively, as may be amended from time to time. Any reference herein to a Governmental Entity shall be deemed to include reference to any successor thereto.

(i) Any reference herein to ''dollars'' or ''$'' shall mean United States dollars.

ARTICLE II
THE OFFER

2.1 The Offer.

(a) Commencement of the Offer. Provided that this Agreement shall not have been terminated pursuant to Section 9.1 or Section 9.2 hereof, as promptly as practicable after the date hereof (but in no event more than ten (10) Business Days thereafter), Parent shall cause Purchaser to, and Purchaser shall, commence (within the meaning of Rule 14d-2 promulgated under the Exchange Act) the Offer to purchase all of the outstanding Company Shares (other than Company Shares described in Section 3.7(a)(ii) hereof) at a price per Company Share equal to the Offer Price (as adjusted as provided in Section 2.1(c) hereof, if applicable) and in compliance with Section 14(d) of the Exchange Act and all other provisions of applicable securities laws.

(b) Terms and Conditions of the Offer. The obligation of Purchaser to accept for payment and to pay for any Company Shares tendered (and the obligation of Parent to cause Purchaser to accept for payment and to pay for any Company Shares tendered) in the Offer and not withdrawn shall be subject only to: (i) the condition that, prior to the then scheduled expiration date of the Offer (as it may be extended from time to time pursuant to Section 2.1(d) hereof), there be validly tendered in accordance with the terms of the Offer and not withdrawn a number of Company Shares that, together with the Company Shares then owned by Parent and Purchaser (if any), and without giving effect to any treasury shares of Company Common Stock, represents more than fifty percent (50%) of the Adjusted Outstanding Share Number (the ''Minimum Condition''); and (ii) the other conditions set forth in Annex A hereto. The conditions to the Offer set forth in Annex A hereto are for the sole benefit of Parent and Purchaser and may be waived by Parent and Purchaser, in whole or in part, at any time and from time to time, in their sole discretion, other than the Minimum Condition, which may be waived by Parent and Purchaser only with the prior written consent of the Company. Parent and Purchaser expressly reserve the right to increase the Offer Price or to waive or make any other changes in the terms and conditions of the Offer; provided, however, that unless otherwise provided in this Agreement or previously approved by the Company in writing, neither Parent nor Purchaser may make any change to the terms or conditions of the Offer that (A) decreases the Offer Price, (B) changes the form of consideration to be paid in the Offer, (C) reduces the number of Company Shares sought to be purchased in the Offer, (D) imposes conditions to the Offer in addition to the conditions to the Offer set forth in Annex A hereto, (E) amends the conditions to the Offer set forth in Annex A hereto so as to broaden the scope of such conditions to the Offer, (F) extends the expiration date of the Offer in any manner other than pursuant to and in accordance with the terms of Section 2.1(d) hereof or (G) amends or waives the Minimum Condition.

(c) Adjustments to Offer Price. The Offer Price shall be adjusted appropriately to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Company Common Stock), cash dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Company Common Stock occurring on or after the date hereof and prior to Purchasers acceptance for payment of, and payment for, Company Shares pursuant to the Offer.

(d) Expiration and Extension of the Offer. Subject to the terms and conditions of this Agreement and the Offer, the Offer shall initially be scheduled to expire at midnight, New York Time, on the date that is twenty (20) business days (for this purpose calculated in accordance with Rule 14d-1(g)(3) promulgated under the Exchange Act) after the date the Offer is commenced (within the meaning of Rule 14d-2 promulgated under the Exchange Act); provided, however, that, notwithstanding the foregoing or anything to the contrary set forth in this Agreement, (i) Purchaser shall extend the Offer for any period required by any rule, regulation, interpretation or position of the SEC or its staff or Nasdaq that is applicable to the Offer, provided that in no event shall Purchaser be required to extend the Offer beyond the Initial Termination Date (or if the conditions to the extension of the Initial Termination Date set forth in Section 9.1(c) hereof are satisfied, the Extended Termination Date), (ii) in the event that any of the conditions to the Offer set forth in Annex A hereto is not satisfied or waived, then, to the extent requested in writing by the Company no less than two Business Days prior to the applicable expiration date, Purchaser shall extend the Offer for three successive extension periods of ten (10) business days each (for this purpose calculated in accordance with Rule 14d-1(g)(3) promulgated under the Exchange Act) in order to permit the satisfaction of the conditions to the Offer (it being understood that the Company may not request that the Offer be extended pursuant to this clause (ii) beyond the date that is fifty (50) business days (for this purpose calculated in accordance with Rule 14d-1(g)(3) promulgated under the Exchange Act) after the date the Offer is commenced); provided, however, that the foregoing clauses (i) or (ii) of this Section 2.1(d) shall not be deemed to impair, limit or otherwise restrict in any manner the right of Parent to terminate this Agreement pursuant to Section 9.1 or Section 9.2 hereof, (iii) Purchaser shall extend the Offer under the circumstances and to the extent set forth in the last sentence of Section 7.2(b) hereto, (iv) Purchaser may, in its discretion (and without the consent of the Company or any other Person), elect to provide for a subsequent offering period (and one or more extensions thereof) in accordance with Section 2.1(f) hereof; and (v) if on any date as of which the Offer is scheduled to expire, any of the conditions to the Offer set forth in Annex A hereto is not satisfied or waived, Purchaser may, in its discretion (and without the consent of the Company or any other Person), extend the Offer for successive extension periods of ten (10) business days each (for this purpose calculated in accordance with Rule 14d-1(g)(3) promulgated under the Exchange Act) in order to permit the satisfaction of the conditions to the Offer.

(e) Payment for Company Shares. Subject to the terms and conditions set forth in this Agreement and the Offer, Purchaser shall accept for payment and pay for all Company Shares validly tendered and not withdrawn pursuant to the Offer as promptly as practicable after the applicable expiration date of the Offer (as it may be extended in accordance with Section 2.1(d) hereof) and in any event in compliance with Rule 14e-1(c) promulgated under the Exchange Act. The Offer Price payable in respect of each Company Share validly tendered and not withdrawn pursuant to the Offer or during any subsequent offering period contemplated by Section 2.1(f) hereof shall be paid net to the holder thereof in cash, subject to reduction only for any applicable federal back-up withholding or other Taxes payable by such holder. To the extent any such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid. Parent shall provide, or cause to be provided to Purchaser, on a timely basis, the funds necessary to pay for any shares of Company Common Stock that Purchaser accepts or is obligated to accept for payment pursuant to the Offer.

(f) Subsequent Offering Period. Purchaser may, and the Offer Documents shall reserve the right of Purchaser to, provide for a subsequent offering period (within the meaning of Rule 14d-11 promulgated under the Exchange Act) in compliance with Rule 14d-11 promulgated under the Exchange Act and all other provisions of applicable securities laws of not less than three (3) nor more than twenty (20) business days (for this purpose calculated in accordance with Rule 14d-1(g)(3) promulgated under the Exchange Act) immediately following the expiration of the Offer. Subject to the terms and conditions set forth in this Agreement and the Offer, Parent shall cause Purchaser to, and Purchaser shall, accept for payment and pay for all Company Shares validly tendered and not withdrawn during such subsequent offering period as promptly as practicable after any such Company Shares are tendered during such subsequent offering period and in any event in compliance with Rule 14e-1(c) promulgated under the Exchange Act.

(g) Schedule TO; Offer Documents. As soon as practicable on the date the Offer is commenced (within the meaning of Rule 14d-2 promulgated under the Exchange Act), Parent and Purchaser shall: (i) file with the SEC a Tender Offer Statement on Schedule TO (together with all amendments and supplements thereto, and including all exhibits thereto, the ''Schedule TO'') with respect to the Offer, which shall contain as an exhibit or incorporate by reference an offer to purchase (the ''Offer to Purchase''), and forms of the related letter of transmittal, a summary advertisement, if any, in respect of the Offer, and such other ancillary documents and instruments to which the Offer will be made or which are required to be filed in connection with the filing of the Schedule TO (collectively, together with any supplements or amendments thereto, the ''Offer Documents''); and (ii) cause the Offer Documents to be disseminated to holders of Company Shares (collectively, the ''Company Stockholders''). The Company shall promptly furnish to Parent and Purchaser in writing all information concerning the Company that may be required by applicable securities laws or reasonably requested by Parent or Purchaser for inclusion in the Schedule TO and the Offer Documents. Parent and Purchaser shall cause the Schedule TO and the Offer Documents to comply in all material respects with the Exchange Act and all other Legal Requirements. Parent and Purchaser hereby further agree that the Schedule TO and the Offer Documents, when filed with the SEC and on the date first published, sent or given to the Company Stockholders, shall 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 were made, not misleading; provided, however, that no representation or warranty is made by Parent or Purchaser with respect to information supplied by the Company in writing specifically for inclusion or incorporation by reference in the Schedule TO or the Offer Documents. The Company hereby agrees that the information provided by or on behalf of the Company in writing specifically for inclusion or incorporation by reference in the Schedule TO or the Offer Documents shall 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 were made, not misleading. Each of Parent, Purchaser and the Company shall promptly correct any information provided by or on behalf of it for use in the Schedule TO or the Offer Documents if and to the extent that such information shall have become false or misleading in any material respect. Parent and Purchaser shall take all steps necessary to cause the Schedule TO and the Offer Documents, as amended to reflect such corrected information, to be filed with the SEC and the other Offer Documents, as amended to reflect such corrected information, to be disseminated to the Company Stockholders, in each case as and to the extent required by applicable federal securities laws. Parent and Purchaser shall provide the Company and its counsel a reasonable opportunity to review and comment on the Schedule TO and the Offer Documents prior to the filing thereof with the SEC. Parent and Purchaser shall provide to the Company and its counsel any and all written comments that Parent, Purchaser or their counsel may receive in writing from the SEC or its staff with respect to the Schedule TO and the Offer Documents promptly after receipt thereof, and Parent and Purchaser shall provide the Company and its counsel a reasonable opportunity to participate in the formulation of any written response to any such written comments of the SEC or its staff.

(h) Legal Requirements. Without limiting the foregoing, Parent and Purchaser shall take all reasonable actions to cause the Offer to be conducted in accordance with all Legal Requirements.

2.2 Top-Up Option.

(a) Subject to Section 2.2(b) and Section 2.2(c) hereof, the Company grants to Parent and Purchaser an assignable and irrevocable option (the ''Top-Up Option'') to purchase from the Company the number of newly-issued shares of Company Common Stock equal to the lesser of (i) the number of shares of Company Common Stock that, when added to the number of shares of Company Common Stock owned by Parent or Purchaser at the time of exercise of the Top-Up Option, constitutes 91% of the number of 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 or (ii) the aggregate number of shares of Company Common Stock that the Company is authorized to issue under its certificate of incorporation but that are not issued and outstanding (and are not subscribed for or otherwise committed to be issued) at the time of exercise of the Top-Up Option.

(b) The Top-Up Option may be exercised by Parent or Purchaser, in whole or in part, at any time at or after the Acceptance Time, so long as the total number of shares of Company Common Stock beneficially owned by Purchaser and Parent constitutes at least 80% of the number of shares of Company Common Stock outstanding. The aggregate purchase price payable for the shares of Company Common Stock being purchased by Parent or Purchaser 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 Purchaser, 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 Purchaser wishes to exercise the Top-Up Option, Parent or Purchaser shall deliver to the Company a notice setting forth (i) the number of shares of Company Common Stock that Parent or Purchaser intends to purchase pursuant to the Top-Up Option, (ii) the manner in which Parent or Purchaser intends to pay the applicable exercise price and (iii) the place and time at which the closing of the purchase of such shares of Company Common Stock by Parent or Purchaser is to take place. At the closing of the purchase of such shares of Company Common Stock, Parent or Purchaser shall cause to be delivered to the Company the consideration required to be delivered in exchange for such shares, and the Company shall cause to be issued to Parent or Purchaser (as the case may be) a certificate representing such shares. The obligation of the Company to issue such shares will be subject to compliance with all applicable regulatory requirements.

2.3 Company Actions.

(a) Company Determinations, Approvals and Recommendations. The Company hereby approves and consents to the Offer and represents and warrants to Parent and Purchaser that, at a meeting duly called and held prior to the date hereof, the Company Board has, upon the terms and subject to the conditions set forth herein:

(i) determined that this Agreement and the transactions contemplated hereby, including the Offer and the Merger, are advisable, fair to and in the best interests of the Company Stockholders;

(ii) approved this Agreement and the transactions contemplated hereby, including the Offer and the Merger, on the terms and subject to the conditions set forth herein;

(iii) to the extent necessary, adopted a resolution for the purpose of causing Purchaser not to be subject to any restriction set forth in any state takeover law or similar Legal Requirement that might otherwise apply to the Offer, the Merger or any of the other transactions contemplated hereby; and

(iv) resolved to recommend that the Company Stockholders accept the Offer, tender their Company Shares to Purchaser pursuant to the Offer and, if required by Delaware Law, vote their Company Shares in favor of the adoption of this Agreement in accordance with the applicable provisions of Delaware Law; provided, however, that such recommendation was made subject to the understanding that it may be withheld, withdrawn, amended or modified in accordance with the terms of Section 7.2(b) hereof.

The Company hereby consents to the inclusion of the foregoing determinations and approvals in the Offer Documents and, to the extent that the foregoing recommendation of the Company Board is not withheld or withdrawn in accordance with Section 7.2(b) hereof, the Company hereby consents to the inclusion of such recommendation in the Offer Documents. To the extent that the foregoing recommendation of the Company Board is amended or modified in accordance with Section 7.2(b) hereof, the Company hereby consents to the inclusion of such recommendation, as so amended or modified, in the Offer Documents.

(b) Schedule 14D-9. As promptly as practicable on the date of commencement of the Offer (within the meaning of Rule 14d-2 promulgated under the Exchange Act), the Company shall (i) file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (together with all amendments and supplements thereto, and including all exhibits thereto, the ''Schedule 14D-9''), and (ii) cause the Schedule 14D-9 to be mailed to the Company Stockholders. To the extent reasonably practicable, the Schedule 14D-9 shall be filed with the SEC concurrently with the filing by Parent and Purchaser of the Schedule TO and shall be mailed to the Company Stockholders with the Offer Documents (and if so, the expense thereof shall be borne by Parent in connection with its dissemination of the Offer Documents). Subject to the provisions of Section 7.2(b) hereof, the Schedule 14D-9 shall include a description of the determinations and approvals of the Company Board set forth in Section 2.3(a) hereof and Section 7.2(a) hereof, and shall include the Company Board Recommendation. Each of Parent and Purchaser shall promptly furnish to the Company in writing upon request all information concerning Parent and Purchaser that may be required by applicable securities laws or reasonably requested by the Company for inclusion in the Schedule 14D-9. The Company shall cause the Schedule 14D-9 to comply in all material respects with the Exchange Act and all other Legal Requirements. The Company hereby further agrees that the Schedule 14D-9 shall 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 were made, not misleading; provided, however, that no representation or warranty is made by the Company with respect to information supplied by Parent or Purchaser or any of their officers, directors, representatives, agents or employees in writing specifically for inclusion or incorporation by reference in the Schedule 14D-9. Parent and Purchaser hereby agree that the information provided by them specifically in writing for inclusion or incorporation by reference in the Schedule 14D-9 shall 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 were made, not misleading. Each of the Company, Parent and Purchaser shall promptly correct any information provided by it for use in the Schedule 14D-9 if and to the extent that such information shall have become false or misleading in any material respect. The Company shall take all steps necessary to cause the Schedule 14D-9, as amended to reflect such corrected information, to be filed with the SEC and disseminated to the Company Stockholders, in each case as and to the extent required by applicable federal securities laws. The Company shall provide Parent, Purchaser and their counsel reasonable opportunity to review and comment on the Schedule 14D-9 prior to the filing thereof with the SEC. The Company shall provide in writing to Parent, Purchaser and their counsel any written comments the Company or its counsel may receive in writing from the SEC or its staff with respect to the Schedule 14D-9 promptly upon receipt thereof, and the Company shall provide Parent, Purchaser and their counsel a reasonable opportunity to comment on any written response to any such written comments of the SEC or its staff.

(c) Company Information. In connection with the Offer, the Company shall, or shall cause its transfer agent to, promptly following a request by Parent, furnish Parent at Parents sole cost and expense with such information as Parent or its agents may reasonably request in order to disseminate and otherwise communicate the Offer to the record and beneficial holders of Company Shares, including a list, as of the most recent practicable date, of the Company Stockholders, mailing labels and any available listing or computer files containing the names and addresses of all record and beneficial holders of Company Shares, and lists of security positions of Company Shares held in stock depositories (including updated lists of stockholders, mailing labels, listings or files of securities positions). Subject to any and all Legal Requirements, and except for such steps as are necessary to disseminate the Offer Documents and any other documents necessary to consummate the Merger, Parent and Purchaser shall (and shall cause their respective officers, directors, agents, representatives, employees, attorneys, accountants and other advisors to):

(i) hold in confidence the information contained in any such lists of stockholders, mailing labels and listings or files of securities positions on the terms and subject to the conditions set forth in the Confidentiality Agreement;

(ii) use such information only in connection with the Offer and the Merger; and

(iii) if (A) this Agreement shall be terminated pursuant to Section 9.1 or Section 9.2 hereof and/or (B) Parent and Purchaser shall withdraw the Offer, upon the Companys request, deliver (and shall use their respective reasonable efforts to cause their agents to deliver) to the Company any and all copies and any extracts or summaries from such information then in their possession or control.

2.4 Company Board of Directors and Committees.

(a) Composition of Company Board and Board Committees. Effective upon the initial acceptance for payment by Purchaser of Company Shares pursuant to the Offer (the ''Acceptance Time,'' the use of which term herein shall not, unless the context otherwise requires, depend upon whether Parent shall exercise its rights under this Section 2.4(a)), and from time to time thereafter, Parent shall be entitled to designate directors to serve on the Company Board up to such number of directors equal to the product (rounded up to the next whole number) obtained by multiplying (x) the number of directors on the Company Board (giving effect to any increase in the number of directors pursuant to this Section 2.4) and (y) a fraction, the numerator of which is the number of Company Shares held by Parent and Purchaser (giving effect to the Company Shares purchased pursuant to the Offer), and the denominator of which is the total number of then outstanding Company Shares. Promptly following a request by Parent, the Company shall use its best efforts to cause the individuals so designated by Parent to be elected or appointed to the Company Board, including (at the election of Parent) either by increasing the size of the Company Board or by seeking and accepting or otherwise securing the resignations of such number of then incumbent directors as is necessary to enable the individuals so designated by Parent to be elected or appointed to the Company Board. From time to time after the Acceptance Time, the Company shall take all actions necessary to cause the individuals so designated by Parent to constitute substantially the same percentage (rounding up where appropriate) as is on the Company Board on each committee of the Company Board the fullest extent permitted by all applicable Legal Requirements and the rules of Nasdaq. Solely for purposes of this Section 2.4, any and all members of the Company Board immediately prior to such designations by Parent who remain on the Company Board after such designations by Parent shall be referred to as ''Continuing Directors''.

(b) Continued Listing. In the event that Parents designees are elected or appointed to the Company Board pursuant to Section 2.4(a) hereof, until the Effective Time, the Company Board shall have at least such number of directors as may be required by the rules of Nasdaq or the federal securities laws who are considered independent directors within the meaning of such rules and laws (''Independent Directors''); provided, however, that in such event, if the number of Independent Directors shall be reduced below the number of directors as may be required by such rules or securities laws for any reason whatsoever, the remaining Independent Director(s) shall be entitled to designate persons to fill such vacancies who shall be deemed to be Independent Directors for purposes of this Agreement or, if no other Independent Director then remains, the other directors shall designate such number of directors as may be required by the rules of Nasdaq and the federal securities laws, to fill such vacancies who shall not be stockholders or Affiliates of Parent or Purchaser, and such Persons shall be deemed to be Independent Directors for purposes of this Agreement.

(c) Section 14(f) of the Exchange Act. The Companys obligation to elect or appoint Parents designees to the Company Board pursuant to Section 2.4(a) hereof shall be subject to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The Company shall promptly take all actions required pursuant to this Section 2.4 and Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill its obligations under this Section 2.4, and shall include in the Schedule 14D-9 such information with respect to the Company and its directors and officers as is required under such Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this Section 2.4. Parent shall provide to the Company in writing, and be solely responsible for any information with respect to itself and its nominees, directors, officers and Affiliates, required by such Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder. The provisions of this Section 2.4 are in addition to, and shall not limit, any right that Purchaser, Parent or any Affiliate of Purchaser or Parent may have (with respect to the election of directors or otherwise) under applicable Legal Requirements as a holder or beneficial owner of shares of Company Common Stock.

(d) Required Approvals of Continuing Directors. Notwithstanding anything to the contrary set forth in this Agreement, in the event that Parents designees are elected or appointed to the Company Board prior to the Effective Time pursuant to Section 2.4(a) hereof and there shall be any Continuing Directors, the approval of a majority of such Continuing Directors (or the sole Continuing Director if there shall be only one (1) Continuing Director) shall be required in order to (i) amend or terminate this Agreement, or agree or consent to any amendment or termination of this Agreement, in any case on behalf of the Company, (ii) extend the time for performance of, or waive, any of the obligations or other acts of Parent or Purchaser under this Agreement, (iii) waive any of the Companys rights under this Agreement, (iv) amend, rescind, repeal or waive the certificate of incorporation or bylaws of the Company, or (v) make any other determination with respect to any action to be taken or not to be taken by or on behalf of the Company relating to this Agreement or the transactions contemplated hereby, including the Offer and the Merger.

ARTICLE III
THE MERGER

3.01 The Merger. Upon the terms and subject to the conditions set forth in this Agreement and the applicable provisions of Delaware Law, at the Effective Time, Purchaser shall be merged with and into the Company, the separate corporate existence of Purchaser shall thereupon cease, and the Company shall continue as the surviving corporation of the Merger. The Company, as the surviving corporation of the Merger, is sometimes hereinafter referred to as the ''Surviving Corporation''.

3.2 The Effective Time. Upon the terms and subject to the conditions set forth in this Agreement, on the Closing Date, Parent, Purchaser and the Company shall cause the Merger to be consummated in accordance with Delaware Law by filing a certificate of merger (or a certificate of ownership and merger, as applicable) in customary form and substance (the ''Certificate of Merger'') with the Secretary of State of the State of Delaware (the ''Delaware Secretary of State'') in accordance with the applicable provisions of Delaware Law (the time of such filing and acceptance by the Delaware Secretary of State, or such later time as may be agreed in writing by Parent, Purchaser and the Company and specified in the Certificate of Merger, being referred to herein as the ''Effective Time'').

3.3 The Closing. The consummation of the Merger (the ''Closing'') shall take place at a closing to occur at the offices of Cooley Godward Kronish LLP, 3175 Hanover Street, Palo Alto, California, at 10:00 a.m. (local time) on the third (3^rd) Business Day after the satisfaction or waiver (to the extent permitted hereunder) of the last to be satisfied or waived of the conditions set forth in Article VIII hereof, or at such other location, date and time as Parent, Purchaser and the Company shall mutually agree upon in writing (the date upon which the Closing shall actually occur pursuant hereto being referred to herein as the ''Closing Date'').

3.4 Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable provisions of Delaware Law. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time all of the property, rights, privileges, powers and franchises of the Company and Purchaser shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Company and Purchaser shall become the debts, liabilities and duties of the Surviving Corporation.

3.5 Certificate of Incorporation and Bylaws.

(a) Certificate of Incorporation. At the Effective Time, subject to the provisions of Section 7.13(b) hereof, the certificate of incorporation of the Company shall be amended and restated in its entirety to read identically to the certificate of incorporation of Purchaser as in effect immediately prior to the Effective Time, and such amended and restated certificate of incorporation shall become the certificate of incorporation of the Surviving Corporation until thereafter amended in accordance with the applicable provisions of Delaware Law and such certificate of incorporation; provided, however, that at the Effective Time the certificate of incorporation of the Surviving Corporation shall be amended so that the name of the Surviving Corporation shall be ''Myogen, Inc.''

(b) Bylaws. At the Effective Time, subject to the provisions of Section 7.13(b) hereof, the bylaws of Purchaser, as in effect immediately prior to the Effective Time, shall become the bylaws of the Surviving Corporation until thereafter amended in accordance with the applicable provisions of Delaware Law, the certificate of incorporation of the Surviving Corporation and such bylaws.

3.6 Directors and Officers.

(a) Directors. At the Effective Time, the initial directors of the Surviving Corporation shall be the directors of Purchaser immediately prior to the Effective Time, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation until his or her respective successor is duly elected or appointed and qualified.

(b) Officers. At the Effective Time, the initial officers of the Surviving Corporation shall be the officers of Purchaser immediately prior to the Effective Time, each to hold office in accordance with the certificate of incorporation and bylaws of the Surviving Corporation until his or her respective successor is duly appointed.

3.7 Effect on Capital Stock.

(a) Capital Stock. Upon the terms and subject to the conditions set forth in this Agreement, at the Effective Time, by virtue of the Merger and without any action on the part of Parent, Purchaser, the Company or the holders of any of the following securities, the following shall occur:

(i) Company Common Stock. Each share of Company Common Stock issued and outstanding immediately prior to the Effective Time (other than (A) shares of Company Common Stock cancelled pursuant to Section 3.7(a)(ii) hereof and (B) Dissenting Company Shares, which shall be treated as provided in Section 3.7(c) hereof) shall be canceled and extinguished and automatically converted into the right to receive cash in an amount equal to the Offer Price, without interest thereon (the ''Merger Consideration''), upon the surrender of the certificate representing such share of Company Common Stock in the manner provided in Section 3.8 hereof (or in the case of a lost, stolen or destroyed certificate, upon delivery of an affidavit (and bond, if required) in the manner provided in Section 3.10 hereof).

(ii) Owned Company Common Stock. Each share of Company Common Stock owned by Parent, Purchaser or the Company, or by any direct or indirect wholly-owned Subsidiary of Parent, Purchaser or the Company, in each case immediately prior to the Effective Time (whether acquired pursuant to the Offer or otherwise) shall be cancelled and extinguished without any conversion thereof or consideration paid therefor.

(iii) Capital Stock of Purchaser. Each share of common stock, par value $0.001 per share, of Purchaser that is issued and outstanding immediately prior to the Effective Time shall be converted into one (1) validly issued, fully paid and nonassessable share of common stock, par value $0.001 per share, of the Surviving Corporation. Each certificate evidencing ownership of such shares of common stock of Purchaser shall thereafter evidence ownership of shares of common stock of the Surviving Corporation.

(b) Adjustment to Merger Consideration. Without duplication to the effects of Section 2.1(c) hereof, the Merger Consideration shall be adjusted appropriately to reflect the effect of any stock split, reverse stock split, stock dividend (including any dividend or distribution of securities convertible into Company Common Stock), cash dividend, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Company Common Stock occurring or with a record date on or after the date hereof and prior to the Effective Time.

(c) Statutory Rights of Appraisal.

(i) Notwithstanding anything to the contrary set forth in this Agreement, all shares of Company Common Stock that are issued and outstanding immediately prior to the Effective Time and held by Company Stockholders who shall have neither voted in favor of the adoption of this Agreement nor consented thereto in writing and who shall have properly and validly exercised their statutory rights of appraisal in respect of such shares of Company Common Stock in accordance with Section 262 of the DGCL (collectively, ''Dissenting Company Shares'') shall not be converted into, or represent the right to receive, the Merger Consideration pursuant to Section 3.7(a)(i) hereof. Such Company Stockholders shall be entitled to receive payment of the appraised value of such Dissenting Company Shares in accordance with the provisions of Section 262 of the DGCL, except that all Dissenting Company Shares held by Company Stockholders who shall have failed to perfect or who shall have effectively withdrawn or lost their rights to appraisal of such Dissenting Company Shares under such Section 262 of the DGCL shall thereupon be deemed to have been converted into, and to have become exchangeable for, as of the Effective Time, the right to receive the Merger Consideration, without any interest thereon, upon surrender of the certificate or certificates that formerly evidenced such shares of Company Common Stock in the manner provided in Section 3.8 hereof (or Section 3.10 hereof, if applicable).

(ii) The Company shall give Parent (A) prompt notice of any demands for appraisal received by the Company, withdrawals of such demands, and any other instruments served pursuant to Delaware Law and received by the Company in respect of Dissenting Company Shares, and (B) the opportunity to participate in all negotiations and proceedings with respect to demands for appraisal under Delaware Law in respect of Dissenting Company Shares. The Company shall not, except with the prior written consent of Parent, voluntarily make any payment with respect to any demands for appraisal or settle or offer to settle any such demands for payment in respect of Dissenting Company Shares.

(d) Restricted Stock. If any share of Company Common Stock outstanding immediately prior to the Effective Time is unvested or is subject to a repurchase option, risk of forfeiture or other condition under any applicable restricted stock purchase agreement or other agreement with the Company or under which the Company has any rights, then the amount payable with respect thereto pursuant to Section 3.7(a)(i) hereof will also be unvested or subject to the same repurchase option, risk of forfeiture or other condition to the extent set forth in such restricted stock purchase agreement or other agreement. The Company shall take all actions that may be necessary to ensure that, from and after the Effective Time, Parent is entitled to exercise any such repurchase option or other right set forth in any such restricted stock purchase agreement or other agreement.

(e) Company Options; Company ESPP. At the Acceptance Time, each Company Option then outstanding under the Company Option Plan shall be treated in accordance with the provisions of Section 7.10(a) hereof. At the Acceptance Time, each purchase right then outstanding under the Company ESPP shall be treated in accordance with the provisions of Section 7.10(b) hereof.

(f) Company Warrants. At the Effective Time, each warrant to purchase a share of Company Common Stock then outstanding shall be treated in accordance with the provisions of Section 7.11 hereof.

3.8 Exchange of Certificates.

(a) Payment Agent. Prior to the Effective Time, Parent shall select a bank or trust company reasonably acceptable to the Company to act as the payment agent for the Merger (the ''Payment Agent'') and, prior to the expiration of the Offer, Parent shall enter into an agreement with the Paying Agent to provide for the foregoing on terms reasonably acceptable to the Company.

(b) Exchange Fund. Prior to the Effective Time, Parent shall deposit (or cause to be deposited) with the Payment Agent, for payment to the holders of shares of Company Common Stock pursuant to the provisions of this Article III, an amount of cash equal to the product obtained by multiplying (x) the Merger Consideration and (y) the aggregate number of shares of Company Common Stock issued and outstanding immediately prior to the Effective Time (excluding shares to be cancelled pursuant to Section 3.7(a)(ii) hereof and Dissenting Company Shares), and upon request of the Paying Agent from time to time thereafter shall promptly deposit such additional cash amounts as are necessary to make the payments contemplated hereby (such cash amounts collectively being referred to herein as the ''Exchange Fund'').

(c) Payment Procedures. As promptly as practicable following the Effective Time, Parent and Purchaser shall cause the Payment Agent to mail to each holder of record (as of immediately prior to the Effective Time) of a certificate or certificates (the ''Certificates''), which immediately prior to the Effective Time represented outstanding shares of Company Common Stock (other than shares cancelled pursuant to Section 3.7(a)(ii) hereof and Dissenting Company Shares) (i) a letter of transmittal in customary form and reasonably acceptable to the Company (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 Payment Agent) and (ii) instructions for use in effecting the surrender of the Certificates in exchange for the Merger Consideration payable in respect thereof pursuant to the provisions of this Article III. Upon surrender of Certificates for cancellation to the Payment Agent or to such other agent or agents as may be appointed by Parent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, the holders of such Certificates shall be entitled to receive in exchange therefor the Merger Consideration payable in respect thereof pursuant to the provisions of this Article III, and the Certificates so surrendered shall forthwith be canceled. The Payment Agent shall accept such Certificates upon compliance with such reasonable terms and conditions as the Payment Agent may impose to effect an orderly exchange thereof in accordance with normal exchange practices. No interest shall be paid or accrued for the benefit of holders of the Certificates on the Merger Consideration payable upon the surrender of such Certificates pursuant to this Section 3.8. Until so surrendered, outstanding Certificates shall be deemed from and after the Effective Time to evidence only the right to receive the Merger Consideration payable in respect thereof pursuant to the provisions of this Article III.

(d) Transfers of Ownership. In the event that a transfer of ownership of shares of Company Common Stock is not registered in the stock transfer books or ledger of the Company, or if Merger Consideration is to be paid in a name other than that in which the Certificates surrendered in exchange therefor are registered in the stock transfer books or ledger of the Company, the Merger Consideration may be paid to a Person other than the Person in whose name the Certificate so surrendered is registered in the stock transfer books or ledger of the Company only if such Certificate is properly endorsed and otherwise in proper form for surrender and transfer and the Person requesting such payment has paid to Parent (or any agent designated by Parent) any transfer or other Taxes required by reason of the payment of Merger Consideration to a Person other than the registered holder of such Certificate, or established to the satisfaction of Parent (or any agent designated by Parent) that such transfer or other Taxes have been paid or are otherwise not payable.

(e) Required Withholding. Each of the Payment Agent, Parent, Purchaser and the Surviving Corporation shall be entitled to deduct and withhold from any cash amounts payable pursuant to this Agreement to any holder or former holder of shares of Company Common Stock such amounts as may be required to be deducted or withheld therefrom under United States federal or state, local or foreign law. To the extent that such amounts are so deducted or withheld, such amounts shall be treated for all purposes under this Agreement as having been paid to the Person to whom such amounts would otherwise have been paid.

(f) No Liability. Notwithstanding anything to the contrary set forth in this Agreement, none of the Payment Agent, Parent, the Surviving Corporation or any other party hereto shall be liable to a holder of shares of Company Common Stock for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

(g) Distribution of Exchange Fund to Parent. Any portion of the Exchange Fund that remains undistributed to the holders of the Certificates on the date that is 180 days after the Effective Time shall be delivered to Parent upon demand, and any holders of shares of Company Common Stock that were issued and outstanding immediately prior to the Merger who have not theretofore surrendered their Certificates evidencing such shares of Company Common Stock for exchange pursuant to the provisions of this Section 3.8 shall thereafter look for payment of the Merger Consideration payable in respect of the shares of Company Common Stock evidenced by such Certificates solely to Parent, as general creditors thereof, for any claim to the applicable Merger Consideration to which such holders may be entitled pursuant to the provisions of this Article III.

3.9 No Further Ownership Rights in Company Common Stock. From and after the Effective Time, all shares of Company Common Stock shall no longer be outstanding and shall automatically be cancelled, retired and cease to exist, and each holder of a Certificate theretofore representing any shares of Company Common Stock (other than Dissenting Company Shares) shall cease to have any rights with respect thereto, except the right to receive the Merger Consideration payable therefor upon the surrender thereof in accordance with the provisions of Section 3.8 hereof. The Merger Consideration paid in accordance with the terms of this Article III shall be deemed to have been paid in full satisfaction of all rights pertaining to such shares of the Company Common Stock. From and after the Effective Time, there shall be no further registration of transfers on the records of the Surviving Corporation of shares of Company Common Stock that were issued and outstanding immediately prior to the Effective Time, other than transfers to reflect, in accordance with customary settlement procedures, trades effected prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Article III.

3.10 Lost, Stolen or Destroyed Certificates. In the event that any Certificates shall have been lost, stolen or destroyed, the Payment Agent or Parent, as applicable, shall issue in exchange for such lost, stolen or destroyed Certificates, upon the making of an affidavit of that fact by the holder thereof, the Merger Consideration payable in respect thereof pursuant to Section 3.7 hereof; provided, however, that Parent may, in its discretion and as a condition precedent to the payment of such Merger Consideration, require the owners of such lost, stolen or destroyed Certificates to deliver a bond in such sum as it may reasonably direct as indemnity against any claim that may be made against Parent, the Surviving Corporation or the Payment Agent with respect to the Certificates alleged to have been lost, stolen or destroyed.

3.11 Taking of Necessary Action; Further Action. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest the Surviving Corporation with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company and Purchaser, the directors and officers of the Surviving Corporation shall be fully authorized to take all such lawful and necessary action on behalf of the Company and Purchaser.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY

Except as set forth in the disclosure schedule delivered by the Company to Parent in connection with the execution and delivery of this Agreement (the ''Company Disclosure Schedule''), the Company hereby represents and warrants to Parent and Purchaser as follows:

4.01 Organization and Standing. The Company is a corporation duly organized, validly existing and in good standing under Delaware Law. The Company has the requisite corporate power and authority to carry on its business as it is presently being conducted and to own, lease or operate its properties and assets. The Company is duly qualified to do business and is in good standing in each jurisdiction where the character of its properties owned or leased or the nature of its activities make such qualification necessary (to the extent the ''good standing'' concept is applicable in the case of any jurisdiction outside the United States), except where the failure to be so qualified or in good standing would not constitute a Company Material Adverse Effect. The Company has delivered or made available to Parent a complete and correct copy of the certificate of incorporation and bylaws, as amended to date, of the Company.

4.02 No Subsidiaries. The Company does not have any Subsidiaries. The Company does not own, directly or indirectly, any capital stock of, or other equity or voting interest in, any Person.

4.3 Authorization. The Company has all requisite power and authority to execute and deliver this Agreement and subject, in the case of the consummation of the Merger, to obtaining the Requisite Stockholder Approval, to consummate the transactions contemplated hereby and to perform its obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby (including the Offer and the Merger) have been duly authorized by all necessary corporate action on the part of the Company and no additional corporate proceedings on the part of the Company are necessary to authorize this Agreement or the consummation of the transactions contemplated hereby (including the Offer and the Merger), other than in the case of the consummation of the Merger, obtaining the Requisite Stockholder Approval. This Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery by Parent and Purchaser, constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as (a) may be limited by applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting or relating to creditors rights generally and (b) is subject to general principles of equity.

4.4 Capitalization.

(a) The authorized capital stock of the Company consists of (i) 100,000,000 shares of Company Common Stock and (ii) 5,000,000 shares of Company Preferred Stock. As of September 29, 2006: (A) 43,009,401 shares of Company Common Stock were issued and outstanding; (B) no shares of Company Preferred Stock were issued and outstanding; and (C) no shares of Company Capital Stock were held by the Company as treasury shares. All outstanding shares of Company Common Stock are validly issued, fully paid, nonassessable and free of any preemptive rights. Since September 29, 2006, the Company has not issued any shares of Company Capital Stock other than pursuant to the exercise of Stock Options, the exercise of rights under the Company ESPP or the exercise of Company Warrants.

(b) The Company has reserved (i) 6,145,030 shares of Company Common Stock for issuance under the Company Option Plan, (ii) 327,418 shares of Company Common Stock for issuance under the Company ESPP and (iii) 1,280,814 shares of Company Common Stock for issuance pursuant to Company Warrants. As of September 29, 2006, (x) with respect to the Company Option Plan, 4,222,127 shares of Company Common Stock were issuable upon the exercise of outstanding Company Options (whether or not vested), and (y) 1,280,814 shares of Company Common Stock were issuable upon exercise of Company Warrants (whether or not vested), and since such date, the Company has not granted, committed to grant or otherwise created or assumed any obligation with respect to any Company Options or Company Warrants, other than as permitted by Section 6.2(b) hereof.

(c) Except as set forth in this Section 4.4, there are (i) no outstanding shares of capital stock of, or other equity or voting interest in, the Company, (ii) no outstanding securities of the Company convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, the Company, (iii) no outstanding options, warrants, rights or other commitments or agreements to acquire from the Company, or that obligates the Company to issue, any capital stock of, or other equity or voting interest in, or any securities convertible into or exchangeable for shares of capital stock of, or other equity or voting interest in, the Company, and (iv) no obligations of the Company to grant, extend or enter into any subscription, warrant, right, convertible or exchangeable security or other similar agreement or commitment relating to any capital stock of, or other equity or voting interest (including any voting debt) in, the Company (the items in clauses (i), (ii), (iii) and (iv), together with the Company Capital Stock, being referred to collectively as ''Company Securities''). There are no outstanding agreements of any kind which obligate the Company to repurchase, redeem or otherwise acquire any Company Securities.

(d) The Company is not a party to any agreement restricting the transfer of, relating to the voting of, requiring registration of, or granting any preemptive rights, anti-dilutive rights or rights of first refusal or similar rights with respect to any securities of the Company.

4.5 Non-Contravention; Required Consents.

(a) The execution, delivery or performance by the Company of this Agreement, the consummation by the Company of the transactions contemplated hereby (including the Offer and the Merger) and the compliance by the Company with any of the provisions hereof do not and will not (i) violate or conflict with any provision of the certificate of incorporation or bylaws of the Company, (ii) subject to obtaining such Consents set forth in Section 4.5 of the Company Disclosure Schedule, violate, conflict with, or result in the breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration under, any Contract to which the Company is a party or by which the Company or any of its properties or assets may be bound, (iii) assuming compliance with the matters referred to in Section 4.5(b) and, in the case of the consummation of the Merger, subject to obtaining the Requisite Stockholder Approval, violate or conflict with any Legal Requirement or Order applicable to the Company or by which any of its properties or assets are bound, or (iv) result in the creation of any Lien upon any of the properties or assets of the Company, except in the case of each of clauses (ii), (iii) and (iv) above, for such violations, conflicts, breaches, defaults, terminations, accelerations or Liens that would not constitute a Company Material Adverse Effect or have a material adverse effect on the ability of the Company to consummate the Offer and the Merger.

(b) No consent, approval, Order or authorization of, or filing or registration with, or notification to (any of the foregoing being a ''Consent''), any Governmental Entity is required on the part of the Company in connection with the execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby (including the Offer and the Merger), except (i) the filing and recordation of the Certificate of Merger with the Secretary of State of the State of Delaware, (ii) such filings and approvals as may be required by any federal or state securities laws, including compliance with any applicable requirements of the Exchange Act, (iii) compliance with any applicable requirements of the HSR Act and any applicable foreign antitrust, competition or merger control laws, and (iv) such filings and approvals as may be required by the rules and regulations of Nasdaq.

4.6 SEC Reports. The Company has filed or furnished (as applicable) all forms, reports and documents with the SEC that have been required to be so filed or furnished (as applicable) by it during the period from January 1, 2004 through the date hereof under the Securities Act and the Exchange Act (all such forms, reports and documents, together with any other forms, reports or other documents filed or furnished (as applicable) by the Company with the SEC during such period, whether or not required to be so filed or furnished, the ''SEC Reports''). Each SEC Report complied, and all forms, reports and documents filed by the Company with the SEC after the date hereof will comply, as of its filing date as to form in all material respects with the applicable requirements of the Securities Act or the Exchange Act, as the case may be, each as in effect on the date such SEC Report was filed. True and correct copies of all SEC Reports filed prior to the date hereof, whether or not required under applicable laws, have been furnished to Parent or are publicly available in the Electronic Data Gathering, Analysis and Retrieval (EDGAR) database of the SEC. As of its filing date (or, if amended or superseded by a filing prior to the date hereof, on the date of such amended or superseded filing), each SEC Report did not contain, and each form, report or document filed by the Company with the SEC after the date hereof 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. Each preclinical test and clinical trial that is described in, or the results of which are referred to in, a SEC Report was and, if still pending, is being conducted in all material respects in accordance with protocols filed with the appropriate regulatory authorities for each test or trial, if required by applicable law and as the case may be; the descriptions of the results of such tests and trials contained in the SEC Reports are accurate in all material respects and fairly present the data derived from such tests and trials in all material respects, and the Company has no Knowledge of any other studies or tests the results of which are inconsistent with, or otherwise call into question in any material respect, the results described or referred to in an SEC Report or raise significant safety issues not described in an SEC Report. Section 4.6 of the Company Disclosure Schedule lists all effective registration statements filed by the Company on Form S-3 or Form S-8 or otherwise relying on Rule 415 under the Securities Act.

4.7 Financial Statements.

(a) The audited consolidated financial statements and unaudited interim consolidated financial statements (including, in each case, the notes, if any, thereto) of the Company filed in or furnished with the SEC Reports complied, and all financial statements of the Company filed or furnished in a report, form or document filed by the Company with the SEC after the date hereof will comply, as to form in all material respects with the published rules and regulations of the SEC with respect thereto, were or will be prepared in accordance with GAAP as in effect on the respective dates thereof applied on a consistent basis during the relevant periods (except as may be indicated therein or in the notes thereto and except with respect to unaudited statements as permitted by Form 10-Q) and fairly present (subject, in the case of the unaudited interim financial statements, to normal, recurring year-end audit adjustments that were not or are not expected to be, individually or in the aggregate, material) the consolidated financial position of the Company as of the respective dates thereof and the consolidated results of its operations and cash flows for the respective periods then ended.

(b) The Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with managements general or specific authorizations, (ii) access to assets is permitted only in accordance with managements general or specific authorization, and (iii) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The management of the Company has designed and implemented disclosure controls and procedures (as defined in Rule 13a-15(e) promulgated under the Exchange Act), or caused such disclosure controls and procedures to be designed and implemented under their supervision, to ensure that material information relating to the Company is made known to the management of the Company by others within the Company. Since the date of the filing of the Companys most recent quarterly report on Form 10-Q prior to the date hereof, the Companys outside auditors and the audit committee of the Company Board have not been advised of (A) any significant deficiencies or material weaknesses in the design or operation of internal control over financial reporting which adversely affect the Companys ability to record, process, summarize and report financial information, and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Companys internal control over financial reporting. Any material change in internal control over financial reporting and any significant deficiency or material weakness in the design or operation of internal control over financial reporting required to be disclosed (X) in any SEC Report or (Y) in any form, report or document filed by the Company with the SEC after the date hereof has been so disclosed.

(c) Each of the principal executive officer and the principal financial officer of the Company (or each former principal executive officer and principal financial officer of the Company, as applicable) has made all certifications required by Rule 13a-14 or 15d-14 promulgated under the Exchange Act and Sections 302 and 906 of the Sarbanes-Oxley Act with respect to the SEC Reports and with respect to any form, report or document filed by the Company with the SEC after the date hereof. For purposes of the immediately preceding sentence, ''principal executive officer'' and ''principal financial officer'' shall have the meanings given to such terms in the Sarbanes-Oxley Act.

4.8 No Undisclosed Liabilities. Except for matters reflected or reserved against in the balance sheet (or notes thereto) as of December 31, 2005 included in the audited financial statements set forth in the Companys annual report on Form 10-K for the year ended December 31, 2005, the Company does not have any Liabilities except Liabilities that (i) were incurred in the ordinary course of business consistent with past practice since December 31, 2005, or (ii) arose under, or were incurred in connection with the transactions contemplated by, this Agreement.

4.9 Absence of Certain Changes. Since December 31, 2005 and through the date hereof, except for actions expressly contemplated by this Agreement or disclosed in the body of a current report on Form 8-K filed by the Company with the SEC prior to the date hereof, the business of the Company has been conducted, in all material respects, in the ordinary course consistent with past practice and there has not been any Company Material Adverse Effect.

4.10 Material Contracts.

(a) For purposes of this Agreement, a ''Material Contract'' shall mean:

(i) any ''material contract'' (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC, other than those agreements and arrangements described in Item 601(b)(10)(iii)) with respect to the Company;

(ii) any employment or consulting Contract (in each case, under which the Company has continuing obligations as of the date hereof) with any current or former officer or other employee of the Company or member of the Company Board providing for an annual base compensation in excess of $300,000;

(iii) any Contract containing any covenant (A) limiting the right of the Company to engage in any line of business, geography or therapeutic area, to make use of any material Company Intellectual Property or to compete with any Person in any line of business, (B) granting to any Person any exclusive rights to any material Company Intellectual Property, or (C) prohibiting the Company (or, after the Closing Date, Parent) from engaging in business with any Person or levying a fine, charge or other payment for doing so, other than any such Contracts that (x) may be cancelled without material liability to the Company or Parent upon notice of ninety (90) days or less or (y) are not, individually or in the aggregate, material to the Company;

(iv) any Contract (A) relating to the disposition or acquisition by the Company after the date of this Agreement of greater than $2,000,000 of assets, or (B) pursuant to which the Company will acquire any ownership interest in any other Person or other business enterprise;

(v) any Contract creating or relating to any partnership or collaboration, or any joint development, joint marketing, distribution or similar arrangement, in each case that involves a sharing of profits, losses, costs or liabilities with another Person;

(vi) any (A) credit agreements, security agreements, capital leases or other extensions of credit that involve liabilities in excess of $1,000,000 or (B) mortgages, indentures, guarantees, loans or other Contracts relating to the borrowing of money, in the case of both (A) and (B) other than trade accounts receivables and payables;

(vii) any settlement Contract other than (A) releases entered into with former employees or independent contractors of the Company in the ordinary course of business, or (B) settlement Contracts only involving the payment of cash (which has been paid) in amounts that do not exceed $1,000,000 in any individual case;

(viii) any other Contract that provides for future payment obligations by the Company of either (A) $5,000,000 or more for Contracts related to clinical trials of Pharmaceutical Products, or (B) $1,000,000 or more for Contracts other than those related to clinical trials of Pharmaceutical Products, in any individual case that is not terminable by the Company without material liability to the Company upon notice of ninety (90) days or less; and

(ix) any other Contract, or group of other Contracts with a Person (or group of affiliated Persons), the termination of which would constitute a Company Material Adverse Effect.

(b) Section 4.10(b) of the Company Disclosure Schedule, the exhibit index to the Companys annual report on Form 10-K for the fiscal year ended December 31, 2005, and the exhibit index to all current reports on Form 8-K and quarterly reports on Form 10-Q filed since the filing of the Companys annual report on Form 10-K for the fiscal year ended December 31, 2005 and prior to the date hereof collectively contain a complete and accurate list of all Material Contracts as of the date hereof, to or by which the Company is a party or is bound. The Company has provided to Parent a true and complete unredacted copy of each Material Contract.

(c) Each Material Contract, other than any Material Contract that by its terms has expired or been terminated since the date hereof (in accordance with Section 6.2 hereof), is valid and binding on the Company and, to the Knowledge of the Company, is valid and binding on each other party thereto and is in full force and effect. Neither the Company nor, to the Knowledge of the Company, any other party thereto, is in material breach of, or default under, any Material Contract, and no event has occurred that with notice or lapse of time or both would constitute such a material breach or default thereunder by the Company or, to the Knowledge of the Company, any other party thereto. To the Knowledge of the Company, no current officer or director of the Company (whether directly or indirectly through another entity in which such Person has a material interest, other than as the holder of less than 2% of a class of securities of a publicly traded company) (i) has any material interest in any property or assets of the Company (except as a stockholder) or any competitor, customer, supplier or agent of the Company or (ii) is currently a party to any Material Contract.

4.11 Compliance with Legal Requirements. The Company is and has at all times since January 1, 2004 been in material compliance with all Legal Requirements and Orders applicable to the Company or to the conduct of the business or operations of the Company. No representation or warranty is made in this Section 4.11 with respect to (a) compliance with the federal securities laws to the extent such compliance is covered by Section 4.6 and Section 4.7 hereof, representations and warranties with respect to which are covered exclusively in such sections to such extent, (b) applicable laws with respect to Taxes, which are covered exclusively by Section 4.14 hereof, (c) Environmental Laws, which are covered exclusively by Section 4.15 hereof, (d) ERISA matters, which are covered exclusively by Section 4.16 hereof, or (e) regulatory matters, which are covered exclusively by Section 4.21 hereof.

4.12 Permits. The Company is and has at all times since January 1, 2004 been in material compliance with the terms of all permits, licenses, authorizations, consents, approvals and franchises from Governmental Entities required to conduct its business as currently conducted (''Permits''), and no suspension or cancellation of any such Permits is pending or, to the Knowledge of the Company, threatened.

4.13 Litigation. As of the date hereof and except as disclosed in Part I, Item 3 of the Companys annual report on Form 10-K for the fiscal year ended December 31, 2005 or in the body of any current report on Form 8-K filed with the SEC since the filing of such annual report and prior to the date hereof or in Part II, Item 1 of any quarterly report on Form 10-Q filed with the SEC since the filing of such annual report and prior to the date hereof, there is no Legal Proceeding pending or, to the Knowledge of the Company, threatened (a) against the Company or any of its properties that (i) involves an amount in controversy in excess of $1,000,000, (ii) seeks to impose any legal restraint on or prohibition against or limit the Surviving Corporations ability to operate the business of the Company, or (iii) constitutes a Company Material Adverse Effect, or (b) against any current director or officer of the Company (in their respective capacities as such) or, to the Knowledge of the Company, any former director or officer of the Company (in their respective capacities as such), or (c) that challenges, or that has the effect of preventing, delaying, making illegal or otherwise materially interfering with, the Offer, the Merger or any of the other transactions contemplated hereby. The Company is not subject to any outstanding Order that constitutes a Company Material Adverse Effect.

4.14 Taxes.

(a) All material Tax Returns required by applicable law to be filed by or on behalf of the Company have been filed in accordance with all applicable laws, and all such Tax Returns were, at the time of the original filing of the Tax Return or any amendment thereto filed prior to the date hereof, true and complete in all material respects.

(b) The Company has paid (or has had paid on its behalf) or has withheld and remitted to the appropriate Governmental Entity all Taxes (including income Taxes, withholding Taxes and estimated Taxes) due and payable without regard to whether such Taxes have been assessed and has established (or has had established on its behalf) in accordance with GAAP an adequate accrual for all Taxes that are not yet due or payable, and regardless of whether the liability for such Taxes is disputed. The Company has made available to Parent and Purchaser complete and accurate copies of the portions applicable to each of the Company and Affiliates of all income, franchise, and foreign Tax Returns that have been requested by or on behalf of Parent, and any amendments thereto, filed by or on behalf of the Company or any member of a group of corporations including the Company for the taxable years ending 1999 through 2005.

(c) There are no material Liens on the assets of the Company relating or attributable to Taxes, other than Liens for Taxes not yet due and payable.

(d) As of the date of this Agreement, there are no Legal Proceedings now pending, or to the Knowledge of the Company, threatened in writing against or with respect to the Company with respect to any Tax, and the Company does not have Knowledge of any audit or investigation with respect to any Liability of the Company for Taxes, and there are no agreements in effect to extend the period of limitations for the assessment or collection of any Tax for which the Company may be liable.

(e) The Company has not executed any closing agreement pursuant to Section 7121 of the Code or any predecessor provision thereof, or any similar provision of state or local law.

(f) The Company has disclosed on its Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code or any similar provision of state or local law.

(g) To the Knowledge of the Company, the Company has (i) not ever been a party to a Contract or inter-company account system in existence under which the Company has, or may at any time in the future have, an obligation to contribute to the payment of any portion of a Tax (or pay any amount calculated with reference to any portion of a Tax) of any group of corporations of which the Company is or was a part (other than a group the common parent of which is the Company) and (ii) no Liability for Taxes of any Person (other than the Company) under Treasury regulation Section 1.1502-6 (or any similar provision of state, local or foreign law) as a transferee or successor, by contract or otherwise.

(h) To the Knowledge of the Company, no written claim has been made during the past five years by any appropriate Governmental Entity in a jurisdiction where the Company filed Tax Returns that it is or may be subject to any material taxation b