Exhibit 10.1

Execution Version

SHARE AND ASSET PURCHASE AGREEMENT

among

WEST PHARMACEUTICAL SERVICES, INC.

WEST PHARMACEUTICAL SERVICES GROUP, LTD.

and

ARCHIMEDES PHARMA LIMITED

Dated as of December 24, 2004

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TABLE OF CONTENTS

Page

ARTICLE I.

DEFINITIONS

1

1.1.

Definitions

1

ARTICLE II.

PURCHASE AND SALE OF SHARES AND CONVEYED ASSETS;

CLOSING

8

2.1.

Purchase and Sale of Shares of the Company

9

2.2.

Purchase and Sale of Conveyed Assets

9

2.3.

Consents; Subsequent Documentation

10

2.4.

Excluded Assets of the Business

11

2.5.

Assumption of Certain Obligations of the US Business

12

2.6.

Retained Liabilities of the Business

12

2.7.

Purchase Price

14

2.8.

Closing

15

2.9.

Closing Obligations

15

(a)

Obligations of Parent and Selling Sub

15

(b)

Obligations of Buyer

16

ARTICLE III.

CONDITIONS TO CLOSING

17

3.1.

Conditions to the Obligations of Buyer and each of Parent and Selling Sub

17

(a)

No Order

17

(b)

Legality

17

(c)

Investment Transactions

17

(d)

Leuprolide and Budesonide Arrangement

17

3.2.

Conditions to the Obligations of Buyer

18

(a)

Representations and Warranties

18

(b)

Agreements and Covenants

18

i

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TABLE OF CONTENTS

(continued)

Page

(c)

FIRPTA Certificate

18

(d)

Closing Deliverables

18

(e)

No Material Adverse Change

19

(f)

Consents

19

3.3.

Conditions to the Obligations of Parent and Selling Sub

19

(a)

Representations and Warranties

19

(b)

Agreements and Covenants

19

(c)

Closing Deliverables

19

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES

19

4.1.

Representations and Warranties of Parent and Selling Sub

19

(a)

Authority

19

(b)

No Conflict

20

(c)

Ownership of Shares

20

(d)

Organization and Standing of the Company

21

(e)

Organization and Standing of Parent

21

(f)

Capital Structure of the Company

21

(g)

Subsidiaries and Equity Interests

22

(h)

Financial Statements

22

(i)

Properties

22

(j)

Intellectual Property

23

(k)

Contracts

24

(l)

Litigation; Decrees

25

ii

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TABLE OF CONTENTS

(continued)

Page

(m)

UK Benefit Plans

26

(n)

US Benefits Plans

27

(o)

Compliance with Applicable Laws

28

(p)

Licenses; Permits

28

(q)

Environmental Matters

28

(r)

Employee and Labor Matters

30

(s)

Assets

31

(t)

Sufficiency of Conveyed Assets

31

(u)

Brokers

31

(v)

Tax Matters

32

(w)

Absence of Changes or Events

33

(x)

Suppliers

33

(y)

Products

34

(z)

Undisclosed Liabilities

34

(aa)

Pharmaceutical Regulatory Compliance

34

4.2.

Representations and Warranties of Buyer

35

(a)

Organization, Authority

35

(b)

No Conflict

35

(c)

Sufficient Funds

36

(d)

Investment Intent

36

(e)

Litigation; Decrees

36

(f)

Investigation

36

iii

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TABLE OF CONTENTS

(continued)

Page

(g)

Brokers

37

ARTICLE V.

COVENANTS

37

5.1.

Covenants of each of Parent and Selling Sub

37

(a)

Access

37

(b)

Ordinary Conduct

37

(c)

Assignment of Confidentiality Agreements

40

(d)

Covenant Not to Compete

40

(e)

Confidentiality

40

(f)

Non-Solicitation of Employees

41

(g)

Payment of 2004 Bonuses to UK Employees

41

(h)

Schedules

41

(i)

US Personnel

42

5.2.

Covenants of Buyer

42

(a)

Confidentiality

42

(b)

Change of Name

42

5.3.

Mutual Covenants

42

(a)

Consents and Approvals, Antitrust

42

(b)

Publicity

43

(c)

Further Assurances; Covenant to Satisfy Conditions

43

5.4.

Tax Matters

43

(a)

Transfer Taxes

43

(b)

Tax Cooperation

44

5.5.

Intellectual Property

44

iv

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TABLE OF CONTENTS

(continued)

Page

5.6.

Records

44

5.7.

Liability to Taxes

44

5.8.

Option Liabilities

47

5.9.

Bonus Liability

48

5.10.

Pensions

49

ARTICLE VI.

OTHER AGREEMENTS

50

6.1.

Bulk Transfer Laws

50

6.2.

Notification of Certain Matters

50

ARTICLE VII.

MISCELLANEOUS

50

7.1.

Assignment

50

7.2.

No Third-Party Beneficiaries

51

7.3.

Termination

51

7.4.

Indemnification; Survival of Representations, Warranties and Covenants

52

(a)

Survival of Representations

52

(b)

Indemnification by each of Parent and Selling Sub

52

(c)

Indemnification by Buyer

53

(d)

Mitigation

53

(e)

Losses Net of Insurance, Etc

53

(f)

Defense of Third Party Claims

53

(g)

Cooperation

54

(h)

Limitation on Claims

55

(i)

Other Limitations

55

(j)

Exclusive Remedy

56

v

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TABLE OF CONTENTS

(continued)

Page

(k)

Tax Treatment

56

7.5.

Collateral Sources

58

7.6.

Tax Relief

58

7.7.

2004 Reliefs

59

7.8.

Expenses

59

7.9.

Amendments

60

7.10.

Notices

60

7.11.

Consent to Jurisdiction

61

7.12.

Severability

61

7.13.

Interpretation

62

7.14.

Waiver

62

7.15.

Counterparts

62

7.16.

Entire Agreement

62

7.17.

Governing Law

62

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LIST OF EXHIBITS AND SCHEDULES

Schedule

1.1(a)

Investment Documents

Schedule

1.1(b)

Knowledge of Buyer

Schedule

1.1(c)

Knowledge of Sellers

Schedule

1.1(d)

UK Employees

Schedule

2.2(a)

Equipment and Equipment Leases

Schedule

2.2(b)(1)

Assumed Contracts

Schedule

2.2(b)(2)

Excluded Contracts

Schedule

2.7(a)

Stock Consideration

Schedule

2.7(b)

Allocation

Schedule

3.2(f)

Required Consents

Schedule

4.1(b)(i)

No Conflict

Schedule

4.1(b)(ii)

Consents

Schedule

4.1(f)

Capital Structure

Schedule

4.1(h)

Financial Statements

Schedule

4.1(i)(i)

Permitted Liens

Schedule

4.1(i)(iii)

Real Property Leases

Schedule

4.1(j)

Intellectual Property

Schedule

4.1(k)

Material Contracts

Schedule

4.1(k)(iii)

Affiliate Transactions

Schedule

4.1(k)(iv)

Intellectual Property Warranty

Schedule

4.1(m)

UK Benefit Plans

Schedule

4.1(n)

US Benefit Plans

Schedule

4.1(o)

Compliance with Applicable Laws

Schedule

4.1(p)

Licenses; Permits

Schedule

4.1(q)

Environmental Matters

Schedule

4.1(r)

Employment and Labor Matters

Schedule

4.1(s)

Assets

Schedule

4.1(v)

Tax Matters

Schedule

4.1(w)

Absence of Changes or Events

Schedule

4.1(x)

Suppliers

Schedule

4.1(y)

Products

Schedule

4.1(aa)(i)

Pharmaceutical Regulatory Compliance

Schedule

4.1(aa)(ii)

Pharmaceutical Regulatory Compliance (Manufacturing Operations)

Schedule

4.1(aa)(iii)

Adverse Reaction Reports

Schedule

4.2(b)(i)

No Conflict

Schedule

4.2(b)(ii)

Consents

Schedule

5.1(b)

Ordinary Conduct

Schedule

5.2(c)(v)

Severance Policy

Annex A

Additional Consideration

Exhibit A

Form of Transition Services Agreement

Exhibit B

UK Employment Contract (Executive Positions)

Exhibit C

UK Employment Contract (Non-Executive Positions)

vii

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SHARE AND ASSET PURCHASE AGREEMENT

SHARE AND ASSET PURCHASE AGREEMENT, dated as of December 24, 2004 (the
“Agreement”), among WEST PHARMACEUTICAL SERVICES, INC., a Pennsylvania
corporation (“Parent”), WEST PHARMACEUTICAL SERVICES GROUP, LTD., a company
registered in England and Wales under company number 2352532 whose registered
office is at Bucklers Lane, St. Austell, Cornwall PL 25 3JU, England (“Selling
Sub”) and ARCHIMEDES PHARMA LIMITED, a company registered in England and Wales
under company number 5308647, whose registered office is at 10 Upper Bank
Street, London E14 5JJ, England (“Buyer”).

BACKGROUND

A.

Parent and WEST PHARMACEUTICAL SERVICES DRUG DELIVERY & CLINICAL RESEARCH
CENTER, LTD., a company registered in England and Wales under company number
02360391 whose registered office is at Albert Einstein Centre, Nottingham
Science and Technology Park, Nottingham NG7 2TH, England (the “Company”) are
engaged in the Business.

B.

Selling Sub owns the entire issued share capital of the Company, which consists
of 1,133 ordinary shares of £0.10 each in the capital of the Company (the
“Shares”).

C.

Parent owns the Conveyed Assets.

D.

The parties hereto desire that (i) Buyer shall purchase from Selling Sub and
Selling Sub shall sell to Buyer the Shares and (ii) Buyer shall purchase from
Parent and Parent shall sell to Buyer the Conveyed Assets, in each case, upon
the terms and subject to the conditions set forth herein.

TERMS

In consideration of the foregoing and the mutual covenants and agreements herein
contained, and intending to be legally bound hereby, the parties hereto hereby
agree as follows:

ARTICLE I.

DEFINITIONS

1.1.

Definitions.  As used in this Agreement, the following terms shall have the
following meanings:

“2004 Relief” shall mean a Relief arising in respect of the year ending December
31, 2004 which can be surrendered pursuant to Section 402 Income and Corporation
Taxes Act 1998.

“Accounts Date” shall mean December 31, 2003.

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“Accounts” shall mean the audited financial statements of the Company, prepared
in accordance with the Companies Act for the accounting reference period ended
on the Accounts Date and attached hereto as Schedule 4.1(h).

“Additional Consideration” shall have the meaning set forth in Annex A hereto.

“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under common control with, such Person
at any time during the period for which the determination of affiliation is
being made.

“Agreement” shall have the meaning set forth in the Introduction.

“Allocation” shall have the meaning set forth in Section 2.7(b).

“Applicable Law” shall have the meaning set forth in Section 4.1(o).

“Assumed Contracts” shall have the meaning set forth in Section 2.2(b).

“Assumed Liabilities” shall have the meaning set forth in Section 2.5.

“Balance Sheet” shall have the meaning set forth in Section 4.1(h).

“Balance Sheet Date” shall have the meaning set forth in Section 4.1(h).

“Benefit Plans” shall mean the US Benefit Plans and the UK Benefit Plans.

“Business” shall mean the US Business together with the UK Business.

“Business Day” shall mean any day other than a Saturday or Sunday or a day on
which banking institutions located in New York or London are authorized or
obligated by law or executive order to close.

“Buyer” shall have the meaning set forth in the Introduction.

“Buyer Indemnified Parties” shall have the meaning set forth in Section 7.4(b).

“Buyer Material Adverse Effect” shall mean a material adverse effect on the
assets, business, condition (financial or otherwise) or results of operations of
the Buyer and its Subsidiaries taken as a whole or the ability of the Buyer to
consummate the transactions contemplated hereby.

“CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980.

“Claims” shall have the meaning set forth in Section 7.4 (a).

2

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“Contracts” shall mean all Equipment Leases, all Assumed Contracts and all other
indentures, loan agreements, security agreements, and all other contracts,
commitments, partnership or joint venture agreements, license agreements,
service contracts, employment, commission, and consulting agreements, suretyship
contracts, letters of credit, reimbursement agreements, including contracts or
commitments limiting or restraining the Parent, with respect to the Business, or
the Company from engaging or competing in any lines of business or with any
Person, documents granting the power of attorney with respect to the affairs of
the Parent, with respect to the Business, or the Company, agreements not made in
the ordinary course of business consistent with past practice, options to
purchase any assets or property rights of the Business, working capital
maintenance or other form of guaranty agreements, and all other agreements in
each case to which the Parent, with respect to the Business, or the Company is a
party.    

“Closing” shall have the meaning set forth in Section 2.8.

“Closing Date” shall have the meaning set forth in Section 2.8.

“Collateral Source” shall have the meaning set forth in Section 7.4(e).

“Company” shall have the meaning set forth in the Background.

“Companies Act” shall have the meaning set forth in Section 2.9(a)(iv)(C).

“Confidentiality Agreement” shall have the meaning set forth in Section 5.2(a).

“Conveyed Assets” shall have the meaning set forth in Section 2.2.

“Code” shall mean the United States Internal Revenue Code of 1986, as amended.

“DEA” shall have the meaning set forth in Section 4.1(y).

“Debt - Free Purchase Price” shall have the meaning set forth in Section 2.7(a).

“Employees” shall mean all US Employees and UK Employees.

“Environmental Laws” shall mean in all applicable jurisdictions any applicable
statute, law, ordinance, code regulation, rule, writ, judgment, notice, order or
decree of or issued or promulgated by a Governmental Authority relating, in any
way, to the protection of the environment, pollution, or the use, treatment,
storage, disposal, arrangement for disposal or transportation, management,
handling or Release or threat of Release of any Hazardous Substances or
preservation or reclamation of natural resources, each as in effect as of the
Closing Date, CERCLA, the Federal Water Pollution Control Act, the Clean Air Act
of 1970, the Toxic Substances Control Act of 1976, the Emergency Planning and
Community Right-to-Know Act of 1986, the Safe Drinking Water Act of 1974, the
Hazardous Materials Transportation Act, the National Environmental Policy Act,
the Superfund Amendment and Reauthorization Act of

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1986, the Environmental Protection Act 1990 (UK) and any similar or implementing
state or local law, and all amendments thereto or regulations promulgated
thereunder.

“Environmental Liability” means any liability or obligation arising under
Environmental Laws in connection with the Company, the Business, the Conveyed
Assets or the Assumed Liabilities.

“Environmental Permits” shall have the meaning set forth in Section 4.1(q)(i).

“Equipment” shall have the meaning set forth in Section 2.2(a).

“Equipment Leases” shall have the meaning set forth in Section 2.6(l).

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

“ERISA Affiliate” means any other entity that is, or at any relevant time was,
together with Parent, treated as a “single employer” under Section 414(b)),
414(c) or 414(m) of the Code.

“Estimate” shall have the meaning set forth in Section 2.7(d).

“Excluded Assets” shall have the meaning set forth in Section 2.4.

“FDA” shall have the meaning set forth in Section 4.1(y).

“FDCA” shall have the meaning set forth in Section 4.1(y).

“Final Schedules” shall have the meaning set forth in Section 5.1(h).

“Financial Statements” shall have the meaning set forth in Section 4.1(h).

"GAAP" means United States generally accepted accounting principles.

“Governmental Authority” means any governmental department, commission, board,
bureau, agency, court or other instrumentality of the United States or foreign
country (or Parliament, any employment tribunal or the Inland Revenue or Customs
in the UK) or any county, jurisdiction, municipality or other political
subdivision thereof or any other supranational organization of sovereign states.

“Governmental Authorizations” shall mean all licenses, permits, certificates,
orders and authorizations and approvals under applicable laws, ordinances or
regulations of any Governmental Authority.

“Group Relief” shall have the meaning set forth in Section 5.7(c).

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“Hazardous Substances” shall mean any hazardous, toxic or polluting substance,
material or waste, including, but not limited to, petroleum or any derivative or
by-product thereof, asbestos containing materials, radioactive materials and
polychlorinated biphenyls and any substance or material regulated under any
Environmental Law.

“Incentive Plans” shall have the meaning set forth in Section 4.1(m)(ii)(J).

“Indebtedness” shall mean (a) all Intercompany Liabilities; (b) any borrowing or
indebtedness in the nature of borrowing (including, without limitation, any
indebtedness for moneys borrowed or raised under any bond, note, bill of
exchange or commercial paper, or other transaction having the commercial effect
of a borrowing); and (c) all Payables.

“Indemnified Parties” shall have the meaning set forth in Section 7.4(b).

“Intellectual Property” shall mean all rights to patents and patent
applications, including reissues, continuations, divisions, continuations in
part, renewals or extensions, trademarks (registered or unregistered), trade
names, Internet sites, domain names and service mark registrations and
applications for registration, copyright registrations, applications for
registration and domain name registrations, trade secrets and other proprietary
information, database rights, rights in patentable inventions, improvements,
know-how, processes, formulas, batch records, inventor logs, common law marks
and unregistered copyrights, and all other intangible rights existing in any
jurisdiction throughout the world.

“Intellectual Property Licenses” shall have the meaning set forth in Section
2.2(d).

“Intercompany Liabilities” shall mean liabilities of the US Business or the UK
Business to Parent or a subsidiary of Parent, other than the Company.

“Intercompany Receivables” shall mean all accounts receivable held by the US
Business or the Company which are payable by Parent or a subsidiary of Parent,
other than the Company.

“Inventory” shall have the meaning set forth in Section 2.2(c).

“Investment Documents” mean the documents related to the financing of the Buyer
set forth on Schedule 1.1(a).

“Knowledge of Buyer” or words of similar import shall mean the actual knowledge
of the individuals set forth on Schedule 1.1(b).

“Knowledge of Sellers” or words of similar import shall mean the actual
knowledge of the individuals set forth on Schedule 1.1(c).

“Liabilities” shall mean any and all debts, liabilities and obligations, whether
accrued or fixed, known or unknown, absolute or contingent, matured or unmatured
or determined or determinable.

5

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“Liens” shall mean all claims, security interests, liens, mortgages, options,
charges, pledges, escrows, proxies, rights of first refusal, preemptive rights,
hypothecations, title retention agreements, indentures or security agreements or
any similar encumbrances or restrictions.

“Losses” shall have the meaning set forth in Section 7.4(b).

“Loss Threshold” shall have the meaning set forth in Section 7.4(i).

“Material Adverse Effect” shall mean a material adverse effect on the assets,
business, condition (financial or otherwise) or results of operations of the
Business taken as a whole or the ability of Parent or Selling Sub to consummate
the transactions contemplated hereby.  Each of Parent and Selling Sub, as
applicable, may at its option, include in the Schedules of this Agreement or
elsewhere items which would not have a Material Adverse Effect within the
meaning of the previous sentence in order to avoid any misunderstanding, and
such inclusion shall not be deemed to be an acknowledgement by either Parent or
Selling Sub that such items would have a Material Adverse Effect or further
define the meaning of such term for the purpose of this Agreement.

“Material Contracts” shall have the meaning set forth in Section 4.1(k)(i).

“Parent” shall have the meaning set forth in the Introduction.

“Parent IP” shall have the meaning set forth in Section 5.5.

“Payables” shall mean (a) Trade Payables and all other accounts payable of the
Business including without limitation those reflected in the accrued capital
spending, intercompany and payroll related accounts payable and (b) all other
current liabilities including salaries, wages and bonus, taxes payable and other
accrued liabilities, in each case calculated in accordance with GAAP
consistently applied with the principles applied in the preparation of the
Balance Sheet.

“Permits” shall have the meaning set forth in Section 4.1(p).

“Permitted Liens” shall have the meaning set forth in Section 4.1(i)(i).

“Person” shall mean an individual, a corporation, a limited liability company, a
partnership, an association (unincorporated or otherwise), a trust or other
entity or organization, including a federal, state, local or foreign government
or regulatory entity or political subdivision or an agency or instrumentality
thereof.

“Preliminary Schedules” shall have the meaning set forth in Section 5.1(h).

“Product” shall have the meaning set forth in Section 4.1(y).

“Purchase Price” shall have the meaning set forth in Section 2.7(a).

“Real Property Lease” shall have the meaning set forth in Section 4.1(i)(iii).

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“Release” shall have the same meaning as set forth in Section 9601(22) of
CERCLA.

“Relief” shall have the meaning set forth in Section 5.7(a)(ii).

“Retained Liabilities” shall have the meaning set forth in Section 2.6.

“Returns” shall have the meaning set forth in Section 4.1(v)(i).

“Scheduled Intellectual Property” shall have the meaning set forth in Section
4.1(j).

“Scheme” shall have the meaning set forth in Section 4.1(m)(ii)(E).

“Seller Indemnified Parties” shall have the meaning set forth in Section 7.4(c).

“Selling Sub” shall have the meaning set forth in the Introduction.

“Shares” shall have the meaning set forth in the Introduction.

“Stock Consideration” shall have the meaning set forth in Section 2.7(a).

“Subsidiary” shall mean an entity as to which any Person prior to Closing owns
directly or indirectly more than fifty percent (50%) of the voting power or
similar interest.

“Survival Period” shall have the meaning set forth in Section 7.4(a).

“Tax” shall mean any federal, state, foreign or local net or gross income,
alternative minimum, accumulated earnings, personal holding company, franchise,
doing business, capital stock, net worth, capital, profits, windfall profits,
gross receipts, business, securities transaction, value added, sales, use,
excise, custom, transfer, registration, stamp, stamp duty or related tax,
premium, real property, personal property, ad valorem, charges, levies,
contributions, intangibles, rent, occupancy, license, occupational, employment,
unemployment, social security, disability, workers’ compensation, payroll, all
National Insurance contributions, withholding, estimated or other similar tax,
duty or other governmental charge of any kind whatsoever, whether of the United
States, the United Kingdom or elsewhere (including all interest and penalties
thereon and additions thereto).

“Termination Date” shall have the meaning set forth in Section 7.3(a).

“Third Party Claim” shall have the meaning set forth in Section 7.4(f).

“Trade Payables” shall mean the aggregate of accounts payable of the Business
(inclusive of accrued interest thereon) as determined in accordance with GAAP,
including any accounts payable reflected in the Balance Sheet.

“Transaction Documents” shall mean this Agreement, the Transition Services
Agreement, the Bill of Sale, the Assignment and Assumption Agreement, the
Investment

7

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Documents and any other agreements, documents, certificates, instruments
contemplated hereby or thereby.

“Transfer Tax” shall have the meaning set forth in Section 5.4(a).

“TUPE” shall mean the Transfer of Undertakings (Protection of Employment)
Regulations 1981 (as amended).

“UK Benefit Plans” shall have the meaning set forth in Section 4.1(m)(i).

“UK Business” shall mean the business of researching, developing, licensing and
marketing systems for the delivery of therapeutic compounds for sale throughout
the world covering a range of delivery technologies for various types of
administration, including, nasal, oral and parenteral, and products that
incorporate these technologies, in each case that employ (i) the Company's
patented or proprietary chitosan or pectin nasal technology or starch-capsule
coating oral technology or (ii) any Scheduled Intellectual Property or Conveyed
Assets.

“UK Employees” shall mean those individuals with whom the Company maintains on
the Closing Date an employer-employee relationship (including any individual on
short-term disability, or an approved leave of absence, but excluding any
individual on long-term disability whose primary responsibilities relate to the
UK Business and whose names (together with other particulars of employment) are
specified in Schedule 1.1(d).

“Unassigned Contract” shall have the meaning set forth in Section 2.3(a).

“US Benefit Plans” shall mean all employment, bonus, incentive, stock purchase,
stock ownership, stock option, deferred compensation, severance, termination,
paid time off or other material employee fringe benefit plans, programs,
agreements or arrangements presently maintained by, or contributed to or for any
US Employees or under which any US Employees has any right to payments or
benefits..

“US Business” shall mean (i) the business of researching, developing, licensing
and marketing systems for the delivery of therapeutic compounds for sale
throughout the world covering a range of delivery technologies for various types
of administration, including, nasal, oral and parenteral, and products that
incorporate these technologies, in each case that employ (a) the Company's
patented or proprietary chitosan or pectin nasal technology or starch-capsule
coating oral technology or (b) any Scheduled Intellectual Property or Conveyed
Assets and (ii) the business of developing a generic manually administrable
fluticasone product.

“US Employees” shall have the meaning set forth in Section 2.6(h).

ARTICLE II.

PURCHASE AND SALE OF SHARES AND CONVEYED ASSETS; CLOSING

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2.1.

Purchase and Sale of Shares of the Company.  On the terms and subject to the
conditions of this Agreement, at the Closing referred to below, Selling Sub
shall sell, transfer and deliver to Buyer, and Buyer shall purchase from Selling
Sub, good title to the Shares free and clear of any Liens.  Buyer shall purchase
the Shares with effect from and including the Closing Date to the intent that
all rights and advantages accruing to the Shares, including any dividends or
distributions declared on or after that date, or made or paid on the Shares on
or after that date, shall belong to Buyer.

2.2.

Purchase and Sale of Conveyed Assets.  On the terms and subject to the
conditions of this Agreement, at the Closing, Parent shall sell, convey, assign
and transfer to the Buyer, and the Buyer shall purchase, acquire and accept from
Parent, free and clear of all Liens other than the Permitted Liens, all of
Parent’s right, title and interest in and to the following assets, properties
and rights owned or held by Parent (collectively, the “Conveyed Assets”):  

(a)

the furniture, equipment, laboratory equipment, machinery, computer hardware,
supplies, personal property and other tangible property owned, leased or
licensed by Parent and used or held for use in, or which are attributable to,
the Business (the “Equipment”) set forth on Schedule 2.2(a);

(b)

the rights and benefits inuring to Parent, its Affiliates or the Company under
Contracts, licenses, agreements and commitments primarily relating to, or which
are primarily attributable to, the Business including, without limitation, those
Contracts set forth on Schedule 2.2(b)(1) (“Assumed Contracts”) but excluding
(i) the Contracts set forth on Schedule 2.2(b)(2) and (ii) any Contracts (other
than that certain License Agreement, dated as of January 1, 2000, between
Parent, as licensee, and the Company, as licensor, which shall be an Assumed
Contract) the parties to which consist only of the Parent and its Affiliates,
including the Selling Sub and the Company;

(c)

all materials, works in progress, supplies, finished goods, samples or stores
primarily relating to, or which are primarily attributable to, the Business
(“Inventory”), including Inventory of the Business held at any location
controlled by Parent or any of its Affiliates and any Inventory of the Business
previously purchased and in transit to Parent or any of its Affiliates,
including, without limitation, all chitosan and starch capsule Inventory and any
Inventory reflected in the Balance Sheet;

(d)

all rights in Intellectual Property primarily used or held for use in, or
primarily attributable to, the conduct the Business (including, without
limitation, the Intellectual Property set forth on Schedule 4.1(j) and any
pharmaceutical Intellectual Property used in the Company’s patented or
proprietary chitosan or pectin nasal technology or starch-capsule coating oral
technology) other than the Parent IP (the “Business Intellectual Property” and
the licenses

(e)

relating to Intellectual Property so licensed by Parent sometimes referred to as
the “Intellectual Property Licenses”);

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(f)

all prepaid expenses (other than those relating to Excluded Assets and Retained
Liabilities) attributable to the Business;

(g)

Governmental Authorizations and Environmental Permits owned, utilized or
licensed (subject to the terms of such licenses) by Parent primarily relating
to, or which are primarily attributable to, the Business to the extent their
transfer is permitted by law;

(h)

(A) the databases and software programs, source codes and user manuals owned,
used, leased by or licensed to Parent and primarily used or held for use in the
operation of the Business and (B) the computer hardware primarily used or held
for use primarily in the Business;

(i)

all customer and vendor lists to the extent relating to the Business, and all
files and documents (including credit information) to the extent primarily
relating to customers and vendors of the Business, and other business and
financial records, files, books and documents (whether in hard copy or computer
format) to the extent primarily relating to the Business, including, without
limitation, books and records related to inventory, purchasing, accounting,
sales, pricing, research and development, quality control, engineering,
manufacturing, maintenance, repairs, marketing, banking, Intellectual Property,
shipping records, personnel files for Continuing Employees and all files,
customer and supplier lists, records, literature and correspondence and other
communication; provided, however, that Parent shall be entitled to make and
retain copies of such books and records to the extent they relate to Excluded
Assets or Retained Liabilities or to the extent required to do so by Applicable
Law; and

(j)

the assets used or held for use by Parent primarily in connection with the
research and development of fluticasone.

To the extent that any of the Conveyed Assets are located at premises that after
Closing will be controlled by Parent, Selling Sub or any of their Affiliates
(other than the Company). Parent and Buyer shall make the necessary arrangements
to deliver such Conveyed Assets to the Company or as otherwise directed by
Buyer, and Buyer shall bear the expenses incurred in connection with such
arrangements.  In order to facilitate delivery, Parent shall grant Buyer
reasonable access to the Parent’s facilities during normal business hours.

2.3.

Consents; Subsequent Documentation.

(a)

Subject to Section 3.2(f), there shall be excluded from the transactions
contemplated by this Agreement any Real Property Lease, Equipment Lease,
Intellectual Property License, Contract, agreement, lease, license or right that
is not assignable or transferable without the consent of any Person other than
Parent, Selling Sub, Company or Buyer, to the extent that such consent shall not
have been given prior to the Closing (“Unassigned Contract”); provided, however,
that each of Parent, Selling Sub and the Company shall have the continuing
obligation after the Closing to use reasonable efforts to obtain all necessary
consents to the assignment or transfer of any Unassigned Contract and, upon
obtaining the requisite third party consents thereto, such Unassigned Contract,
if otherwise includable in the Conveyed Assets or the transactions contemplated
hereby, shall be transferred and assigned to Buyer hereunder without the payment
of any additional consideration by the Buyer and shall cease to be an Unassigned
Contract for the purposes of this Agreement.  Parent and Selling Sub

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shall, at their cost and expense, use reasonable efforts to obtain (i) all
necessary consents, waivers, authorizations and approvals of all Governmental
Authorities and of all Persons, other than the Buyer, required in connection
with the execution, delivery and performance of the Transaction Documents and
the consummation of the transactions contemplated thereby and (ii) all consents
set forth on Schedule 3.2(f), including without limitation all consents required
to transfer or assign to Buyer all Intellectual Property Licenses necessary to
conduct the Business in the ordinary course consistent with past practice.
 Nothing herein shall require Parent, Selling Sub or Buyer to pay money to,
grant any accommodation (financial or otherwise) to, or commence litigation
against, any third party in complying with this Section 2.3.

(b)

With respect to any Unassigned Contract that is not assigned or transferred to
Buyer at the Closing by reason of Section 2.3(a), after the Closing, the parties
shall cooperate with each other, upon written request, in endeavoring to obtain
for Buyer an arrangement which Buyer reasonably shall desire and which is
designed to provide Buyer the benefits and obligations of such Unassigned
Contract in some other manner.  Each of Parent and Selling Sub, on the one hand,
and Buyer, on the other hand, shall bear its own internal expenses in complying
with this Section 2.3(b).

(c)

Except as otherwise expressly provided herein and subject to Section 5.1(b),
each of Parent and Selling Sub may take (or cause one or more of its Affiliates
to take) such action as is necessary or advisable to transfer, effective as of
the Closing Date, the Excluded Assets from the Company for such consideration or
for no consideration, as may be determined by each of Parent and Selling Sub in
its sole discretion.  After the Closing Date, Buyer shall take all actions (or
shall cause its Affiliates to take all actions) reasonably requested by Parent
and Selling Sub, at Parent’s or Selling Sub’s expense, to effect the provisions
of this Section 2.3(c).

2.4.

Excluded Assets of the Business.  Notwithstanding any provision in this
Agreement, Parent shall retain all assets, other than the Conveyed Assets, the
Shares and the assets of the Company except to the extent expressly set forth
below, including, without limitation, the following assets and properties of the
Business (the “Excluded Assets”):

(a)

all (i) cash and cash equivalents on hand, wherever located, including bank
balances and bank accounts, and similar cash items on hand and (ii) investment
securities and other short- and medium- term investments of the US Business, in
the case of both (i) and (ii) as of the Closing and set forth in the Estimate;

(b)

all trade accounts receivable (including Intercompany Receivables) of the
Business up to the amount of such receivables set forth in the Estimate and in
each case accrued as of the Closing Date calculated in accordance with GAAP
consistently applied with the principles applied in the preparation of the
Balance Sheet;

(c)

all losses, loss carry forwards and rights to receive refunds, credits and
credit carry forwards with respect to any and all Taxes related to the US
Business or the Conveyed Assets, to the extent attributable to a taxable period
ending on or prior to the Closing Date, including, without limitation, interest
thereon;

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(d)

the corporate books and records of Parent and the Selling Sub (but not the
corporate books and records of the Company);

(e)

all insurance policies;

(f)

the Parent IP, including without limitation the name “West Pharmaceutical
Services, Inc.” and all trademarks derivative thereof and the diamond logo;

(g)

any assets solely related to the GFI clinical trial site located in Evansville,
Indiana;

(h)

except as expressly set forth herein, all assets of any employee benefit plan
related to any liabilities retained by Parent under Sections 2.6(h) and 2.6(i);

(i)

any Unassigned Contract until such date that Parent, Selling Sub or the Company
has obtained the necessary consents to the assignment or transfer of such
Unassigned Contract.  On such date, such Unassigned Contract shall become part
of the Conveyed Assets; and

(j)

clinical trial contracts for leuprolide and budesonide.

2.5.

Assumption of Certain Obligations of the US Business.  On the terms and subject
to the conditions of this Agreement, Buyer agrees, effective at the Closing, to
assume the following Liabilities of Parent to the extent directly relating to
the Conveyed Assets or the US Business and shall satisfy and discharge such
Liabilities, whether accrued or fixed, known or unknown, absolute or contingent,
matured or unmatured or determined or determinable as of the Closing Date, other
than Retained Liabilities (all of such liabilities and obligations being herein
collectively called the “Assumed Liabilities”):

(a)

all Liabilities arising under any Contracts set forth on Schedule 2.2(b)(1) to
the extent that such Contracts relate to the US Business, but excluding
Liabilities arising out of a breach or default of a Contract prior to Closing;
and

(b)

Indebtedness reflected in the Estimate and included as a reduction to the
Purchase Price.

2.6.

Retained Liabilities of the Business.  Notwithstanding any provision in this
Agreement, Parent shall retain and be responsible for all Liabilities of Parent
and its Affiliates  other than the Assumed Liabilities (the “Retained
Liabilities”).  Retained Liabilities shall include, without limitation, the
following:

(a)

all Liabilities resulting from ownership of the Shares or the conduct of the
Business prior to the Closing Date;

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(b)

Liabilities resulting from all lawsuits pending or threatened against Parent,
Selling Sub or the Company as of the Closing Date or to the extent arising from
events occurring prior to the Closing Date;

(c)

Liabilities for which Parent or Selling Sub expressly has responsibility
pursuant to the terms of this Agreement;

(d)

Liabilities associated with the Excluded Assets;

(e)

any Liability under Contracts, agreements, leases, licenses or such other
arrangements to which Parent is a party or by or to which Parent or any of its
assets, properties or rights is bound or subject, which are not set forth on
Schedule 2.2(b)(1) or which are specifically set forth on Schedule 2.2(b)(2);

(f)

Intercompany Liabilities, except to the extent reflected in the Estimate and
included as a reduction to the Purchase Price pursuant to Section 2.7(d);

(g)

Liabilities for Indebtedness of the US Business or the Company other than
Indebtedness reflected in the Estimate and included as a reduction in the
Purchase Price;

(h)

Liabilities to or in respect of all employees or former employees (including any
individual on short-term or long-term disability or leave of absence) of Parent
and its Affiliates or the US Business (other than UK Employees) (“US
Employees”), including, without limitation (i) Liabilities for retirement
benefits with respect to all periods whether prior to Closing, and Liabilities
under any US Benefit Plan and (ii) any bonuses or other similar payments to US
Employees, which are made in respect of the 2004 calendar year, regardless of
when paid;

(i)

Pension Liabilities to the UK Employees to the extent relating to their
employment prior to the Closing Date;

(j)

(i) any and all Tax Liabilities related to the US Business or the Conveyed
Assets for taxable periods ending on or prior to the Closing Date; and (ii) any
Tax Liabilities related to Taxes of any of Parent, Selling Sub or the Company
for or attributable to taxable periods ending on or prior to the Closing Date;

(k)

all Liabilities arising under Environmental Laws attributable to or incurred as
a result of any acts, omissions, or conditions first occurring or in existence
as of or prior to the Closing, including, but not limited to, any Liability with
respect to the Release, handling, discharge, treatment, storage, generation,
disposal, or presence of Hazardous Materials as of or prior to the Closing; and

(l)

subject to Section 2.3(b), all Liabilities associated with any Unassigned
Contract until such date that any Real Property Lease, leases relating to
Equipment leased by Parent (the “Equipment Leases”), Intellectual Property
License, Assumed Contract, agreement,

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lease, license or right ceases to be an Unassigned Contract under Section 2.3.
 On such date, all Liabilities associated with such Unassigned Contract shall
become Assumed Liabilities.

2.7.

Purchase Price.  

(a)

In consideration of the sale and transfer of the Shares and the sale and
transfer of the Conveyed Assets, Buyer shall (i) pay to Selling Sub an aggregate
purchase price of $7,085,000 (the “Debt - Free Purchase Price”) minus the amount
of any Indebtedness set forth in the Estimate, (ii) agree to pay Selling Sub the
Additional Consideration, (iii) issue to Parent and Selling Sub the number of
shares of common stock of the Buyer set forth next to each in the Schedule
2.7(a) (the “Stock Consideration”), and (iv) assume the Assumed Liabilities.  At
the Closing, Buyer will deliver the Debt-Free Purchase Price minus the amount of
the Indebtedness set forth in the Estimate (the “Purchase Price”), in
immediately available funds, by wire transfer in accordance with written
instructions given by each of Parent and Selling Sub to Buyer not less than two
(2) Business Days prior to the Closing.

(b)

Allocation of the Purchase Price.  Each of Parent and Selling Sub and Buyer have
agreed to the allocation of the Purchase Price as set forth on Schedule 2.7(b)
(the “Allocation”).  Each of Parent and Selling Sub, on the one hand, and Buyer,
on the other, shall (a) be bound by the Allocation for purposes of determining
any Taxes, (b) prepare and file, and cause its Affiliates to prepare and file,
its tax returns on a basis consistent with the Allocation, and (c) take no
position, and cause its Affiliates to take no position, inconsistent with the
Allocation on any applicable tax return or in any proceeding before any taxing
authority or otherwise.  In the event that the Allocation is disputed by any
Governmental Authority, the party receiving notice of the dispute shall promptly
notify the other party hereto concerning resolution of the dispute.  Each of
Parent, Selling Sub and Buyer acknowledges that the Allocation was done at arm’s
length based upon a good faith estimate of fair market values.

(c)

Additional Consideration.  Buyer hereby agrees to pay Additional Consideration
to Selling Sub in accordance with, and subject to the provisions of, Annex A
hereto.

(d)

Pre-Closing Estimate of Purchase Price.  Not later than two (2) calendar days
prior to the Closing Date, Sellers shall deliver to Buyer in writing a statement
setting forth its good faith estimate (the “Estimate”) of (i) the Indebtedness
of the US Business and the Company as of the Closing Date and a schedule setting
forth the calculation of such Indebtedness and (ii) the trade accounts
receivable (including Intercompany Receivables) of the US Business and the
Company as of the Closing Date and a schedule setting forth the calculation of
such trade accounts receivable.  The Estimate shall be prepared in the same
format (including the same line items) as the Balance Sheet.  Amounts recorded
in the Estimate shall be determined in accordance with GAAP consistently applied
with those employed in preparing the Balance Sheet.  The Purchase Price payable
at Closing shall be reduced by the amount of Indebtedness set forth in the
Estimate.

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2.8.

Closing.  Unless this Agreement shall have been terminated and the transactions
herein contemplated shall have been abandoned pursuant to Section 7.3, the
closing of the purchase and sale of the Shares and the Conveyed Assets (the
“Closing”) will take place at 10:00 a.m. no later than two (2) Business Days
after the satisfaction of the conditions set forth in Sections 3.1, 3.2 and 3.3
hereof (other than the respective actions the parties will take at the Closing
itself), at the offices of Dechert LLP, 4000 Bell Atlantic Tower, 1717 Arch
Street, Philadelphia, Pennsylvania, unless another date, time or place is agreed
to in writing by the parties hereto (the “Closing Date”).

2.9.

Closing Obligations.

(a)

Obligations of Parent and Selling Sub.

(i)

Not less than two (2) Business Days prior to the Closing Date, each of Parent
and Selling Sub shall deliver to Buyer payment instructions indicating the bank
accounts to which Buyer should transfer, by wire transfer of immediately
available funds, the Purchase Price.

(ii)

On the Closing Date, each of Parent and Selling Sub shall deliver to Buyer the
certifications specified in Sections 3.2(a), 3.2(b) and 3.2(c).

(iii)

At the time of the Closing, Parent shall execute and deliver to Buyer:

(A)

the Transition Services Agreement in a form substantially similar to Exhibit A
attached hereto;

(B)

the Bill of Sale in a form reasonably satisfactory to the parties; and

(C)

the Assignment and Assumption Agreement in a form reasonably satisfactory to the
parties; and

(D)

short form assignments of all Intellectual Property listed in Schedule 4.1(j)
suitable for filing in the relevant governmental office.

(iv)

At the time of Closing, Selling Sub shall deliver to Buyer:

(A)

duly executed share transfers in respect of the Shares in favor of Buyer or as
it may direct, together with the relevant share certificates and stock powers or
other documents of title, or in the event that such share certificates have been
lost, stolen or destroyed, an affidavit of loss and an indemnity to the Company
all in a form acceptable to Buyer;

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(B)

written resignations from their offices from all persons who, on or immediately
prior to Closing, may be directors or secretaries of the Company, resigning from
their offices;

(C)

the unqualified resignation with effect from Closing of the present auditors as
auditors of the Company by notice in accordance with section 392 of the
Companies Act of 1985 (the “Companies Act”) which shall contain a statement in
accordance with section 394 of the Companies Act together with confirmation that
the resigning auditors have no claims against the Company for loss of office,
unpaid fees or expenses; and

(D)

the certificate of incorporation, any certificates of incorporation on change of
name and copies of the memorandum and articles of association of the Company and
the registers and books required by the Companies Act to be kept by the Company,
all of which shall be written up to date as of the Closing Date.

(v)

Prior to the Closing Date, the Selling Sub shall procure that a Board Meeting of
the Company will be held at which the Board of the Directors of the Company will
transact the following business:

(A)

(subject only to them being duly stamped) the approval of the transfer of the
Shares and the Buyer being entered in the Register of Members as the holder of
the shares specified in those transfers;

(B)

the appointment of such persons as the Buyer may nominate as directors and
secretary of the Company; and

(C)

the acceptance of the various resignations of directors, officers, secretaries
and auditors referred to in this section.

(vi)

At the time of the Closing, Parent and Selling Sub shall deliver to Buyer all
instruments and documents necessary to transfer to Buyer valid title to or
leasehold interest in the Conveyed Assets, free and clear of all Liens other
than the Permitted Liens.

(b)

Obligations of Buyer.

(i)

On the Closing Date, Buyer shall deliver to Parent the certifications specified
in Sections 3.3(a) and 3.3(b).

(ii)

At the time of the Closing, Buyer shall deliver to Parent or Selling Sub, as
applicable, the Purchase Price and Stock Consideration, as provided in Section
2.7.

(iii)

At the time of the Closing, Buyer shall execute and deliver to Parent:

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(A)

the Transition Services Agreement in a form substantially similar to Exhibit A
attached hereto;

(B)

the Bill of Sale in a form reasonably satisfactory to the parties; and

(C)

the Assignment and Assumption Agreement in a form reasonably satisfactory to the
parties.

ARTICLE III

CONDITIONS TO CLOSING

3.1.

Conditions to the Obligations of Buyer and each of Parent and Selling Sub.   The
respective obligations of Buyer and each of Parent and Selling Sub to effect the
purchase and sale of the Shares and Conveyed Assets shall be subject to the
satisfaction or waiver by each of Buyer,  Parent and Selling Sub (where
permissible) at or prior to the Closing Date of the following conditions:

(a)

No Order.   No Applicable Law, preliminary or permanent injunction, order or
decree of any court or administrative agency of competent jurisdiction or
Governmental Authority or other regulatory authority shall be in effect which
restrains or prohibits the purchase and sale of the Shares or the Conveyed
Assets or any other transaction contemplated hereby or shall be pending or
threatened which seeks to (i) enjoin, restrain, or prohibit the consummation of
the transactions contemplated hereby, (ii) impose limitations on the ability of
Buyer to exercise full rights of ownership of the Conveyed Assets or the Shares
or (iii) require the divestiture by Buyer or any of its Affiliates of the
Conveyed Assets or Shares.

(b)

Legality.   No Applicable Law of any Governmental Authority shall be in effect
that makes the purchase and sale of the Shares or the Conveyed Assets or any
other transaction contemplated hereby illegal.

(c)

Investment Transactions.  The Investment Documents shall have been executed and
delivered by the parties thereto and shall be in full force and effect.

(d)

Leuprolide and Budesonide Arrangement.  Parent, on the one hand, and Buyer or
the Company, on the other hand, shall have entered into a written agreement, in
a form mutually satisfactory to Buyer and Parent, pursuant to which Parent and
the Company set forth the terms and conditions of each of the parties’
respective rights to leuprolide and budesonide, including ownership and
licensing rights and incorporating the following terms: (i) Buyer or Company
shall own all Intellectual Property rights to leuprolide, including patent
rights on the class of compounds including leuprolide, except for any
Intellectual Property that is exclusive solely to leuprolide, which shall be
owned by Parent and Parent shall bear the costs of any clinical trials currently
in process with respect to Leuprolide but neither Parent nor Selling Sub shall
be under any obligation to continue such clinical trials; (ii) Buyer or Company
shall own all Intellectual Property rights, including patent rights, to
budesonide but Parent shall be responsible for the costs of any clinical trials
currently in process with respect to budesonide, but neither Parent nor Selling
Sub shall be under any obligation to continue such clinical trials; (iii) Buyer
or

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Company shall grant Parent an exclusive, royalty free, perpetual, worldwide
license under the Intellectual Property to develop, manufacture and sell
leuprolide using chitosan in treating endometriosis; (iv) Buyer or Company shall
have access to and rights to use all data on products developed by Parent under
the agreement; and (v) Parent shall provide to Buyer or Company an annual report
on the status of regulatory proceedings and copies of all correspondence filed
in connection therewith, within thirty days of receipt by Parent.  The parties
shall undertake to negotiate the definitive terms of such arrangement in good
faith.

3.2.

Conditions to the Obligations of Buyer.   The obligation of Buyer to purchase
and pay for the Shares and the Conveyed Assets shall be subject to the
satisfaction or waiver by Buyer (where permissible) on or prior to the Closing
Date of the following conditions:

(a)

Representations and Warranties.  Each of the representations and warranties of
each of Parent and Selling Sub set forth in Section 4.1 qualified by Material
Adverse Effect or materiality shall be true and correct in all respects and all
other representations and warranties shall be true and correct in all material
respects, in each case, on and as of the Closing Date, as though made on and as
of the Closing Date (except those representations and warranties that address
matters only as of a particular date which shall be true and correct in all
respects or in all material respects, as applicable, as of that date) and each
of Parent and Selling Sub shall have delivered to Buyer a certificate signed by
a duly authorized signatory of each of Parent and Selling Sub to that effect.

(b)

Agreements and Covenants.  Each of Parent and Selling Sub shall have performed
or complied in all material respects with their respective agreements and
covenants contained in this Agreement required to be performed or complied with
by them on or prior to the Closing Date, and each of Parent, Selling Sub and the
Company shall have delivered to uyer a certificate signed by duly authorized
signatories of Parent, Selling Sub and the Company to that effect.

(c)

FIRPTA Certificate.  Parent shall have delivered to Buyer a certificate, in
accordance with Treasury Regulation Section 1.1445-2(b), to the effect that
Parent is not a foreign Person for purposes of Sections 897 and 1445 of the
Code.

(d)

Closing Deliverables.  Parent and Selling Sub shall each have delivered all
documents and performed all duties and obligations as required pursuant to
Section 2.9(a) hereof.

(e)

No Material Adverse Change.  During the period from the date hereof to the
Closing Date, there shall not have occurred any event which has had or would
reasonably be expected to have a Material Adverse Effect.

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(f)

Consents.

The consents and approvals identified on Schedule 3.2(f) shall have been
obtained, and none of such consents or approvals shall have imposed any
condition or conditions that materially interfere with or impair the Business.

(g)

Delivery of Final Schedules.  The Final Schedules shall have been delivered to
Buyer and such Final Schedules shall be reasonably satisfactory to Buyer.

3.3.

Conditions to the Obligations of Parent and Selling Sub.  The obligation of (i)
Selling Sub to sell and deliver the Shares to Buyer and (ii) Parent to sell,
convey, assign and transfer the Conveyed Assets to Buyer shall be subject to the
satisfaction or waiver by Parent and Selling Sub, as applicable, at or prior to
the Closing Date of the following conditions:

(a)

Representations and Warranties.  The representations and warranties of Buyer set
forth in Section 4.2 qualified by Buyer Material Adverse Effect or materiality
shall be true and correct in all respects and all other representations and
warranties shall be true and correct in all material respects, in each case, on
and as of the Closing Date, as though made on and as of the Closing Date (except
those representations and warranties that address matters only as of a
particular date which shall be true and correct in all respects or in all
material respects, as applicable, as of that date) and Buyer shall have
delivered to each of Parent and Selling Sub a certificate signed by a duly
authorized signatory of Buyer to that effect.

(b)

Agreements and Covenants.  Buyer shall have performed or complied in all
material respects with all agreements and covenants contained in this Agreement
required to be performed or complied with by Buyer on or prior to the Closing
Date, and Buyer shall have delivered to each of Parent and Selling Sub a
certificate signed by a duly authorized signatory of Buyer to that effect.

(c)

Closing Deliverables.  Buyer shall have delivered all documents and performed
all duties and obligations as required pursuant to Section 2.9(b) hereof.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

4.1.

Representations and Warranties of Parent and Selling Sub.  Parent and with
respect only to those representations and warranties exclusively related to the
Selling Sub, the Company, the Shares or the UK Business, Selling Sub, hereby
represent and warrant to Buyer as follows:

(a)

Authority.  Parent and Selling Sub have all requisite corporate power and
corporate authority to enter into the Transaction Documents and to consummate
the transactions contemplated thereby.  All corporate acts and other proceedings
required to be taken by Parent or Selling Sub to authorize the execution,
delivery and performance of the Transaction Documents and the consummation of
the transactions contemplated thereby have been duly and properly taken.  This
Agreement has been duly executed and delivered by Parent and Selling Sub and
constitutes the legal, valid and binding obligation of Parent and Selling Sub,
enforceable against

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them in accordance with its terms.  Each Transaction Document, when executed and
delivered by the Parent and the Selling Sub party thereto, will constitute the
legal, valid and binding obligation of Parent or Selling Sub, as the case may
be, enforceable against them in accordance with its terms.

(b)

No Conflict.

(i)

The execution, delivery and performance by Parent and Selling Sub of the
Transaction Documents and the consummation by Parent and Selling Sub of the
transactions contemplated thereby will not (A) violate or conflict with the
articles of incorporation or bylaws of Parent or the certificate of
incorporation or memorandum and articles of association of the Selling Sub or
the Company, (B) violate any provision of Applicable Law to which Parent or
Selling Sub is subject or violate or conflict with any order, judgment,
injunction or decree applicable to Parent or Selling Sub or (C) except as
disclosed on Schedule 4.1(b)(i), violate, breach or constitute a default (with
or without notice or lapse of time, or both) under or give rise to a right of
termination, cancellation or acceleration of any right or obligation of Parent
and Selling Sub under, or result in the creation of a Lien on any of the
properties or assets of the Company, Parent or Selling Sub pursuant to, any
provision of any agreement, contract, note, bond, mortgage, indenture, or lease
or other instrument binding upon the Company, Parent or Selling Sub or any
license, franchise, permit or other similar authorization the Company, Parent or
Selling Sub, except in the case of the foregoing clause (C) for any such
violation, conflict, default, right or Lien which would not individually or in
the aggregate have had a Material Adverse Effect.

(ii)

Except as set forth on Schedule 4.1(b)(ii), the execution, delivery and
performance by Parent and Selling Sub of the Transaction Documents do not
require any consent, approval, license, permit, order or authorization of or
registration, declaration or filing with any Governmental Authority or any third
party except for (A) any consent, approval, license, permit, order,
authorization, registration, declaration or filing that Buyer is required to
obtain or make disclosed on Schedule 4.1(b)(ii); and (B) consents, approvals,
licenses, permits, orders, authorizations, registrations, declarations or
filings which, if not obtained or made, will not individually or in the
aggregate have a Material Adverse Effect.

(c)

Ownership of Shares.  Selling Sub owns all of the Shares free and clear of any
Liens whatsoever.  Selling Sub has all requisite legal right, power and
authority to transfer such Shares to Buyer.  Assuming Buyer has the requisite
corporate power and authority to be the lawful owner of the Shares, upon
delivery to Buyer at the Closing of certificates representing the Shares and a
duly executed stock transfer form relating to the Shares to Buyer and receipt by
Selling Sub of the consideration therefor, Buyer will acquire the Shares free
and clear of any Liens whatsoever, other than those arising from acts of Buyer
after the Closing Date.  Other than this Agreement, the Shares are not subject
to any voting trust, voting agreement, shareholders’ agreement or other
contract, agreement, arrangement, commitment, or understanding, including

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any such agreement, arrangement, commitment or understanding restricting or
otherwise relating to the voting, dividend rights or disposition of the Shares.

(d)

Organization and Standing of the Company.  The Company is a company duly
registered and validly existing under the laws of England and Wales.  The
Company has all corporate power and corporate authority to own, lease or
otherwise hold its properties and assets and to carry on its business as
presently conducted, and is qualified or registered as a foreign corporation and
in good standing in all jurisdictions in which the character of the properties
owned, operated or leased by the Company or the nature of its activities is such
that qualification or registration by such entity as a foreign corporation is
required by applicable law, except where the failure to have such power and
authority or to qualify and be in good standing would not have a Material
Adverse Effect.  The Company has delivered to Buyer true and complete copies of
its certificate of incorporation, as amended to date, and its memorandum and
articles of association, as in effect on the date hereof.

(e)

Organization and Standing of Parent.  Parent is a corporation duly organized and
validly existing and in good standing under the laws of the Commonwealth of
Pennsylvania.  Parent has all corporate power and corporate authority to own,
lease or otherwise hold its properties and assets and to carry on its business
as presently conducted, and is qualified or registered as a foreign corporation
and in good standing in all jurisdictions in which the character of the
properties owned, operated or leased by Parent or the nature of its activities
is such that qualification or registration by such entity as a foreign
corporation is required by applicable law, except where the failure to have such
power and authority or to qualify and be in good standing would not have a
Material Adverse Effect.

(f)

Capital Structure of the Company.  The authorized share capital of the Company
consists of 1,000,000 ordinary shares of £0.10, of which 1,133 shares,
constituting the entire issued share capital and defined as the Shares, are
validly issued and outstanding, fully paid and nonassessable.  Selling Sub is
the recorded, legal and beneficial owner of the Shares.  Except for the Shares,
there are no shares of capital stock or other equity securities of the Company
outstanding.  The Shares have not been issued in violation of, and none of the
Shares are subject to, any preemptive, subscription or similar rights under any
provision of law, the certificate of incorporation or the memorandum and
articles of association of the Company, any contract, agreement or instrument to
which the Company is subject, bound or a party or otherwise.  Except as
disclosed on Schedule 4.1(f), there are no outstanding warrants, options,
agreements, rights, “phantom” stock rights, subscriptions, convertible or
exchangeable securities or other commitments (other than this Agreement) (a)
pursuant to which the Company or Selling Sub is or may become obligated to
issue, sell, purchase, return or redeem any shares of capital stock (including
the Shares) or other securities of the Company or (b) that give any person the
right to receive any benefits or rights similar to any rights enjoyed by or
accruing to the holders of shares of capital stock of the Company.  No equity
securities of the Company are reserved for issuance for any purpose.  There are
no outstanding bonds, debentures, notes or other indebtedness having the right
to vote an any matters on which stockholders of the Company may vote.  

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(g)

Subsidiaries and Equity Interests.  The Company has no Subsidiary Undertakings
(as defined in Section 736 of the Companies Act 1986) nor does it own, directly
or indirectly, any shares of, or any other equity interest in, any other
corporation, partnership or other Person and the Company is not a member of or a
participant in any partnership, joint venture or similar Person.

(h)

Financial Statements.  The unaudited balance sheet attached as Schedule 4.1(h)
(the “Balance Sheet”) as of November 30, 2004 (the “Balance Sheet Date”) and the
related unaudited statement of cash flows for the eleven (11) month period then
ended (together, the “Financial Statements”) (A) reflect the assets and
liabilities of the Business other than the Excluded Assets and the Retained
Liabilities as of the Balance Sheet Date, (B) were derived from the internal
books and records of Parent, Selling Sub and the Company, and (C) have been
prepared in a manner consistent with Parent’s, Selling Sub’s and the Company’s
current management reporting practices with respect to the Business, which
practices are described on Schedule 4.1(h).  The Accounts show a true and fair
view of the state of affairs of the Company as at the Accounts Date and of its
profits/losses for the financial period ended on the Accounts Date.  The
Accounts have been prepared and audited in accordance with generally accepted
United Kingdom accounting conventions, policies and principles consistently
applied and comply with the requirements of the Companies Act and all relevant
UK accounting standards and UK statements of standard accounting practice.  

(i)

Properties.

(i)

Either Parent or the Company has good and valid title to, or a valid and binding
leasehold interest in, all of the real and personal properties and assets
primarily used or held for use in the Business (including the Real Property
Leases described below and those properties or assets related to the Business,
except property sold or otherwise disposed of in the ordinary course of business
consistent with past practice and not in violation of this Agreement and except
for the Shares, which are held by the Selling Sub) free and clear of all Liens
and attachments of any nature whatsoever, except (A) liens for Taxes,
assessments and other charges by a Governmental Authority arising in the
ordinary course of Business consistent with past practice that are not yet due
and payable, (B) mechanics’, carriers’, workmen’s, repairmen’s, landlord’s or
other similar liens arising from or incurred in the ordinary course of Business
consistent with past practice and for which the underlying payments are not yet
delinquent, and (C) Liens set forth on Schedule 4.1(i)(i) (collectively, the
“Permitted Liens”).  None of the Permitted Liens has or could materially impair
the continued use and operation of the assets to which they relate in the manner
currently used and operated in the Business.

(ii)

There is no real property owned by Parent or the Company used or held for use
in, or attributable to, connection with the Business.

(iii)

Set forth on Schedule 4.1(i)(iii) is a list of all leases for all real property
leased by Parent or the Company and primarily used or held for use in, or
primarily attributable to, the Business (the “Real Property Leases”).  Each Real
Property Lease is in full force and effect and neither Parent nor the Company
nor, to the Knowledge of Sellers, any other

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party thereto, is in material default under any Real Property Lease. The
Business enjoys peaceful and undisturbed possession under such Real Property
Leases sufficient for current use and operations.  Parent or the Company has
good and valid title to the leasehold estates that are the subject of the Real
Property Leases free and clear of all Liens, leases, assignments, subleases,
easements, covenants, rights-of-way and other similar restrictions of any nature
whatsoever other than Permitted Liens.

(j)

Intellectual Property.  The Parent or the Company owns all right, title and
interest in and to (free and clear of all Liens other than licenses of
Intellectual Property set forth in any schedule to this Agreement or Liens that
would not materially affect the use or enjoyment of the benefits of such
Intellectual Property), or holds licenses to use, all of the Intellectual
Property used in the conduct of the Business as currently conducted, and such
licenses are valid, binding and enforceable against Parent or the Company, as
the case may be, and in full force and effect and, to the Knowledge of Sellers,
enforceable by Parent or the Company, as the case may be, in accordance with its
terms, except for contracts that expire in accordance with their terms prior to
the Closing Date (none of which are material to the Business).  Schedule 4.1(j)
sets forth a true and complete list of all patents and patent applications,
trademark and service mark applications and registrations, domain name
registrations, copyright applications and registrations existing anywhere in the
world and included in the Intellectual Property owned or held for use by Parent
or any of its Affiliates (the “Scheduled Intellectual Property”) and sets forth
the owner of record and jurisdiction for each item.  Except as set forth in
Schedule 4.1(j), neither Parent nor the Company has Knowledge of any claim,
notice, opposition, cancellation, proceeding or action  being threatened or
asserted by any third party that the operations of the Parent or the Company in
respect of the Business infringe the intellectual property rights of such third
party or challenging the validity or ownership of the Intellectual Property.
 Except as set forth in Schedule 4.1(j), Parent, Selling Sub or the Company has
no pending claim that a third party has infringed any Intellectual Property used
or held for use in connection with the Business. Except for the consents set
forth on Schedule 3.2(f) or as would not have a Material Adverse Effect, no
other consents in respect of the Intellectual Property Licenses are necessary to
conduct the Business following the Closing in the ordinary course consistent
with past practice.  Each Person who is or was an employee, independent
contractor or consultant of Parent or the Company and who is or was involved in
the creation or development of any proprietary Intellectual Property has signed
a valid and enforceable agreement containing an irrevocable assignment of
Intellectual Property to the Parent or the Company for which such Person is or
was an employee or independent contractor.  Each of Parent and Company has taken
all reasonable steps to maintain the confidentiality of and otherwise protect
and enforce its rights in all confidential proprietary Intellectual Property,
including, but not limited to trade secrets, know-how, inventions and all other
proprietary information and none of the Intellectual Property has been used,
disclosed or appropriated to the detriment of the Parent or the Company.

(k)

Contracts.   

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(i)

Schedule 4.1(k) lists each of the following types of Contracts (whether written
or oral) to which Parent, with respect to the Business, or the Company is a
party or by which any of the Conveyed Assets or the Company’s assets is subject
(collectively, “Material Contracts”):

(A)

any mortgage, indenture, note, or installment obligation, or other instrument
for or relating to indebtedness;

(B)

any guaranty of any obligation for borrowings or performance, or guaranty or
warranty of products or services, excluding endorsements or guaranties of
instruments made in the ordinary course of business consistent with past
practice in connection with the deposit of items for collection, and statutory
warranties;

(C)

any agreement for the sale or lease of any of its assets other than in the
ordinary course of business consistent with past practice;

(D)

any Contract or agreement or other arrangement for the purchase of any real
estate, machinery, equipment, or other capital assets in excess of $50,000;

(E)

any Contract for the future purchase of materials, supplies, services,
merchandise, or equipment parts in excess of $50,000;

(F)

any Contract pursuant to which Parent or the Company is or may be obligated to
make payments, contingent or otherwise, on account of or arising out of prior
acquisitions or sales of businesses, assets, or stock of other companies;

(G)

any distribution, dealership, representative, broker, sales agency, advertising
or consulting contract excepting any such contract that is terminable at will,
or by giving notice of thirty (30) days or less, without Liability;

(H)

any lease or other agreement for the use of real or personal property with rent
in excess of $50,000 per year;

(I)

any Contract or agreement imposing non-competition or exclusive dealing
obligations on the Business or the Company;

(J)

any agreement providing for payments to or by any Person based on sales,
purchases, or profits, other than direct payments for goods;

(K)

any Contract or agreement for the employment of any stockholder, director,
officer, consultant or key employee not terminable without penalty or Liability
arising from such termination or any severance or change-in-control contract or
arrangement;

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(L)

any Contract relating to cleanup, abatement or other actions in connection with
Environmental Liabilities; or

(M)

any other Contract which is material to the Business or which involves future
payment by or to the Company or the Business in excess of $50,000.

(ii)

Each Material Contract is valid, binding and enforceable against Parent or the
Company, as the case may be, and in full force and effect and, to the Knowledge
of Sellers, enforceable by Parent or the Company, as the case may be, in
accordance with its terms, except for contracts that expire in accordance with
their terms (none of which are material to the Business).  Neither Parent nor
the Company is in breach or default under any Material Contract and, to the
Knowledge of Sellers, no other party to any such Material Contract is in default
thereunder.  The insurance coverage of the Company and Parent with respect to
the Business is adequate and sufficient to cover claims in the ordinary course
of business consistent with past practice and is consistent with the coverage
maintained by corporations engaged in similar lines of business.

(iii)

Except as set forth on Schedule 4.1(k)(iii), there are no agreements, loans,
transactions or other arrangements among (i) the Parent, Selling Sub or any of
their Affiliates (other than the Company), Subsidiaries, directors, officers,
employees or equity holders, on the one hand, and (ii) the Company or the
Business, on the other hand (“Affiliate Transactions”).   

(iv)

Schedule 4.1(k)(iv) of the Final Schedules includes all:  (i) licenses,
sublicenses and other agreements in which the Parent or Company has granted to
any person the right to use the Business Intellectual Property; (ii) licenses,
sublicenses and other agreements in which the Company has been granted the right
to use any Intellectual Property of any third party; and (iii) all other
consents, indemnifications, forbearances to sue, settlement agreements and
licensing or cross-licensing arrangements to which the Parent or Company is a
party relating to the Business Intellectual Property.  Except for that certain
Patent and Know-How License Agreement, dated December 19, 1996, between
Warner-Lambert Company, by its Capsugel division, Parke, Davis & Company, and
The West Company, Inc., neither the Parent nor the Company is under any
obligation to pay royalties or other payments in connection with any license,
sublicense or other agreement, nor will the Parent or Company be, as a result of
the execution and delivery of this Agreement or the performance of its
obligations under this Agreement, in breach of any license, sublicense or other
agreement relating to the Business Intellectual Property or proprietary rights
of any third party.

(l)

Litigation; Decrees.  There are no lawsuits, claims, actions, proceedings, labor
disputes or investigations pending or, to the Knowledge of Sellers threatened
against Parent, the Company or the Business or their respective properties,
assets, operations or businesses which have had or reasonably could be expected
to have a Material Adverse Effect, or which challenge the legality of this
Agreement or any action to be taken in connection herewith.  There are no
judgments, orders, injunctions, rulings or decrees of any Governmental Authority
against or affecting Parent, Selling Sub, the Company, the Business or any of
their respective

25

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properties, assets, operations or businesses that have had or would reasonably
be expected to have a Material Adverse Effect.  Parent, Selling Sub or the
Company is not in default under any judgment, order or decree, except for such
defaults that would not have a Material Adverse Effect.

(m)

UK Benefit Plans.

(i)

Schedule 4.1(m) sets forth each pension, welfare, bonus, incentive, stock
purchase, stock ownership, stock option, deferred compensation or other material
employee fringe benefit plan, program or arrangement presently maintained by, or
contributed to by, Parent, Selling Sub or the Company for the benefit of any UK
Employee, or with respect to which Selling Sub or the Company has any Liability
(but excluding any such plans, programs or arrangements maintained by a
Governmental Authority) (the “UK Benefit Plans”).  A true and complete copy of
each written UK Benefit Plan, and a description of each UK Benefit Plan that is
not written has been provided to Buyer.

(ii)

Except as set forth on Schedule 4.1(m):

(A)

The Company and the Selling Sub has operated each UK Benefit Plan in accordance
in all material respects with the provisions of all applicable laws, regulations
and requirements.  Each of the UK Benefit Plans complies with and has been
administered in compliance, in all material respects, with its terms and with
the provisions of all applicable laws, regulations and requirements.

(B)

All material contributions to, and payments from, the UK Benefit Plans required
to be made in accordance with the terms of any such plan, and, any applicable
laws, have been timely made.

(C)

All material reports, returns and similar documents with respect to any UK
Benefit Plan required to be filed with any government agency or distributed to
any UK Benefit Plan participant have been duly and timely filed or distributed.

(D)

There are no pending audits or investigations by any Governmental Authority
involving the UK Benefit Plans, no material claims pending or, to the Knowledge
of the Selling Sub or the Company, threatened (except for claims for benefits
payable in the normal operation of the UK Benefit Plans), suits or proceedings
against or in respect of any UK Benefit Plan or asserting any rights or claims
to benefits under any UK Benefit Plan.

(E)

Other than the West Pharmaceuticals Services UK Pension & Life Assurance Scheme
(the “Scheme”), the Company does not contribute to or participate in (and has
not previously contributed to or participated in) any agreement or arrangement
for the provision or payment of pensions, allowances, lump sums or other similar
benefits on retirement or death for any employee or former employee (or their
dependants) of the Company.

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(F)

The Company has at all times complied with the requirements of the Welfare
Reform and Pensions Act 1999 and all other regulatory or legislative
requirements relating to the provision of stakeholder pensions.

(G)

Every person who has at any time had the right to join or apply to join the
Scheme has been properly advised of that right.  No employee or former employee
of the Company has been excluded from membership of the Scheme or from benefits
under the Scheme in contravention of Article 141 of the EC Treaty, Section 62 of
the Pensions Act 1995 or other applicable laws or requirements or the provisions
of the Scheme or otherwise.

(H)

The Scheme has at all times been approved by the Board of the Inland Revenue for
the purposes of Chapter I of Part XIV of the Income and Corporation Taxes Act
1988 and is contracted-out (and there has at all times been a valid
contracting-out certificate in place in respect of the employees of the Company
who are active members of the Scheme).

(I)

The Company has been properly admitted to participation in the Scheme and the
Board of the Inland Revenue has approved the participation of the Company in the
Scheme.

(J)

Other than the West Pharmaceutical Services, Inc. 1998 Key Employee Incentive
Compensation Plan, the West Pharmaceutical Services, Inc. 2004 Stock-Based
Compensation Plan, the West Pharmaceutical Services, Inc. Annual Management
Incentive Bonus Plan and the West Pharmaceutical Services, Inc. Annual Earnings
Per Share Bonus Plan (together the "Incentive Plans"), the Parent, Selling Sub
or the Company does not maintain or contribute to, and has not made payments or
granted awards under, any other bonus, incentive, stock purchase, stock
ownership, stock option, deferred compensation or other material employee fringe
benefit plan, program or arrangement for the benefit of or to any UK Employee or
former employee of the Company.

(n)

US Benefit Plans.  Except as disclosed on Schedule 4.1(n):

(i)

Each US Benefit Plan has been maintained, operated and administered in
compliance with its terms and any related documents or agreements and the
applicable provisions of ERISA, the Code and other applicable law.

(ii)

Neither Parent nor any ERISA Affiliate has been required to contribute to, or
incurred any withdrawal liability within the meaning of ERISA §4201, including
any contingent liability under ERISA § 4202, to any multiemployer plan as
defined in ERISA §3(37).

(iii)

None of the Conveyed Assets is subject to any lien under Code Section
401(a)(29), ERISA Section 302(f) or Code Section 412(n), ERISA Section 4068 or
arising out of any action filed under ERISA Section 4301(b). Neither Parent nor
any ERISA

27

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Affiliate has incurred any liability, or reasonably expects to incur any
liability, which in either case, could subject Buyer or any Conveyed Asset to
liability under Title IV of ERISA.

(o)

Compliance with Applicable Laws.  Except as set forth in Schedule 4.1(o), the
Business and the Company and their respective properties and assets are, and in
the past have been, in compliance with all applicable statutes, laws,
ordinances, rules and regulations of any Governmental Authority, including those
relating to occupational health and safety (“Applicable Law”), except where
noncompliance would not have a Material Adverse Effect.  Except as set forth on
Schedule 4.1(o), none of Parent, the Company or the Business has received any
written communication from any Person that alleges that the Business or the
Company is, or in the past has been, in violation of any Applicable Law, except
for communications regarding violations which would not have a Material Adverse
Effect.

(p)

Licenses; Permits.  The Parent and the Company have all of the governmental
approvals, variances, licenses, franchises, permits or authorizations
(“Permits”) which are required to carry on the Business as the Business is
currently conducted and for the ownership and use of the Conveyed Assets, except
for such permits the failure to obtain would not have a Material Adverse Effect.
 The Conveyed Assets include all the material Permits primarily related to the
US Business, except those that by their terms cannot be transferred or assigned,
which such Permits are set forth on Schedule 4.1(p).  The Company and the
Business are in compliance and have complied with all requirements in connection
such Permits and the same will not be subject to suspension, modification or
revocation as a result of the Transaction Documents or the consummation of the
transactions contemplated thereby, except as set forth on Schedule 4.1(p) or
except as where any such failures to comply or any such suspensions has not had
or could not be reasonably be expect to have a Material Adverse Effect.  None of
the Parent, the Selling Sub, the Company nor the Business has received any
written communication from any Person alleging any violation or failure to
comply with such Permits or any actual, proposed, possible, or potential
revocation, withdrawal, suspension, cancellation, termination or modification
thereof.

(q)

Environmental Matters.  Except as disclosed on Schedule 4.1(q):  

(i)

the Parent and the Company, and the operation of the Business and ownership of
the Conveyed Assets, are, and for the last five years have been, in compliance
in all material respects with all applicable Environmental Laws and all Permits
required by the Environmental Laws for the conduct of the Business as currently
conducted (“Environmental Permits”);

(ii)

the Parent, in respect of the US Business, and the Company have obtained all
material Environmental Permits;

(iii)

Neither Parent nor, to the Knowledge of Sellers, after reasonable due diligence
including inquiry of relevant employees and agents of the Company, the Company
have received any written notice of any noncompliance, citation, summons, order,
complaint,

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penalty, violation investigation or review by any Person in connection with the
Business (A) with respect to any actual or alleged violation by the Business of
Environmental Law, (B) with respect to any alleged failure of Parent or the
Company to have any Environmental Permit or a written notice from a Governmental
Authority specifically addressed to the Company (and not including, for example,
general notices of future actual or proposed changes in Environmental Laws or
permitting requirements) relating to any revocation, withdrawal, suspension,
cancellation, termination or material modification of any material Environmental
Permit, or (C) with respect to any generation, treatment, storage, recycling,
transportation or disposal of any Hazardous Substance.

(iv)

Neither Parent nor the Company have received any unresolved written request for
information, notice of claim, demand or notification that Parent or the Company
is or may be potentially in breach of part 11-A of the Environmental Protection
Act 1990 in connection with the Business.

(v)

Neither Parent nor the Company has entered into or agreed to any court decree,
order or agreement and are not subject to any judgment, decree, order or
agreement with respect to any property currently or formerly owned or operated
by Parent, Selling Sub or the Company for use in connection with the Business
relating to compliance with any Environmental Law or to investigation or cleanup
of Hazardous Substances under any Environmental Law.

(vi)

To the Knowledge of Sellers, after reasonable due diligence including inquiry of
relevant employees and agents of the Company, no Hazardous Substance has been
Released or otherwise come to be located in, at, beneath or near any real
property or assets formerly owned or leased by Parent, in connection with the
Business, or the Company or at any real property that is subject to a Real
Property Lease (i) in violation of any Environmental Law, or (ii) in such manner
as could reasonably be expected to cause Environmental Liability, in each case
which could reasonably be expected to constitute a criminal offense under
applicable Environmental Law or to have a Material Adverse Effect on the
Business as currently conducted.

(vii)

To the Knowledge of Sellers, after reasonable due diligence including inquiry of
relevant employees and agents of the Company, no other act or negligent omission
has occurred by Parent or Company which has created a condition in connection
with the Business which is in existence as of the date which could reasonable be
expected to result in Environmental Liability which could reasonable be expected
to constitute a criminal offense under applicable Environmental Law or to have a
Material Adverse Effect on the Business as currently conducted.

(r)

Employee and Labor Matters.  

(i)

Neither Parent solely with respect to the Business, nor the Company is a party
to any collective bargaining agreement or other labor union contract applicable
to persons employed by them, and no such collective bargaining agreement is
being negotiated by Parent or the Company with respect to the Business.  There
is no labor strike, or

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organized labor dispute, or material work stoppage or lockout actually pending
or, to the Knowledge of Sellers, threatened against or affecting Parent or the
Company with respect to the Business.  As of the date hereof, (i) Parent, the
Company and all Affiliates are, with respect to the Business, in compliance with
all Applicable Laws relating to employment and employment practices, wages,
hours, and terms and conditions of employment and no amount due to or in respect
of any Employee or former Employee is in arrears and unpaid (including bonuses)
other than salary for the month current at the date of this Agreement, (ii)
there are no charges against Parent or the Company or any Affiliate with respect
to the Business pending before the Equal Employment Opportunity Commission or
any Governmental Authority responsible for the prevention of unlawful employment
practices and (iii) there is no unfair labor practice charge or complaint
against Parent or the Company or any Affiliate with respect to the Business
pending or, to the Knowledge of Sellers, threatened before the National Labor
Relations Board or any comparable foreign or state agency, in each case except
as disclosed on Schedule 4.1(r).

(ii)

There is directors' and officers' liability insurance in place for each of the
officers of the Company and a copy of the relevant policy has been disclosed to
Buyer.

(iii)

No person is or has been a shadow director of the Company.

(v)

The particulars set forth on Schedule 1.1(d) list all the UK Employees, and are
true, complete and accurate and disclose in relation to each UK Employee (or,
where appropriate, to each category of UK Employee): period of continuous
service and workplace location; including job title or job function, job grade
(if applicable), pay, notice periods, holiday entitlements, benefits (car,
healthcare etc.), restrictive covenants, bonus arrangements and any entitlements
to severance or other payments on termination of employment (including enhanced
redundancy payments); arrangements relating to hours of work (including any
night work and part-time work) and overtime; details of each UK Employee's
entitlement (if any) to participate in any share option, incentive or similar
scheme of the Company and, in particular, details of the Employee's entitlements
under the Incentive Plans); and any benefits provided to any of their UK
Employees on an ex gratia or discretionary basis.  All of the UK Employees at
the level of Vice-President and above, are employed on the terms and conditions
set forth on Exhibit B and all of the UK Employees below the level of
Vice-President, are employed on the terms and conditions set forth on Exhibit C,
in each case subject only to any minor variations for individual contracts of
employment.

(vi)

No UK Employee will be entitled to receive any payment, right or benefit arising
out of or in connection with this Agreement or the Closing.

(viii)

The Company has not made any outstanding offer nor agreed to employ any person
who is not a UK Employee at the date of this Agreement.

(xi)

There is not outstanding any contract of employment between the Company and any
of its directors, officers or employees which is not terminable by the Company
without payment in lieu of notice, damages or compensation (other than any
compensation payable by statute) on more than one month's notice given at any
time.

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(x)

No UK Employee has given notice to terminate his contract of employment or is
under notice of dismissal.

(xi)

There are no outstanding loans made by the Company to any UK Employees.

(xii)

The Company is not a party to any outsourcing, consultancy or contracting-out
arrangements.

(xiii)

Except as set forth on Schedule 1.1(d), Parent, Selling Sub or the Company has
not made payments or granted awards under, any other bonus, incentive, stock
purchase, stock ownership, stock option, deferred compensation or other material
fringe benefit plan, program or arrangement for the benefit of or to any UK
Employee.

(s)

Assets.   Except as set forth on Schedule 4.1(s), either Parent or the Company
owns, leases or has the legal right to use the assets used or held for use in,
or attributable to, the Business, including without limitation the Conveyed
Assets and the Shares (other than Real Property, which is the subject of Section
4.1(i) and the Intellectual Property, which is the subject of Section 4.1(j)).
 Except as disclosed on Schedule 4.1(s), either Parent or the Company has good
and marketable title to (or in the case of leased assets, a valid leasehold
interest in) the assets used or held for use in, or attributable to, the
Business, in either case, other than for Permitted Liens.

(t)

Sufficiency of Conveyed Assets.  The Conveyed Assets together with the transfer
to the Shares and giving effect to the Transition Services Agreement are
sufficient to enable Buyer immediately following the Closing to conduct the
Business in substantially the same manner as the Business has been operated by
the Parent and the Company immediately prior to the date of this Agreement,
except for general corporate overhead functions, including without limitation,
executive management, legal, accounting, financial, human resources, information
technology, auditing, treasury, strategic planning and similar functions, and
except for the Excluded Assets.  For the purposes of this Section 4.1(t), Buyer
acknowledges that no US Employees or real property used by the US Business is
being conveyed to Buyer as part of the transactions contemplated hereby.

(u)

Brokers.   No broker, investment banker, financial advisor, consultant or other
Person, other than Houlihan Lokey Howard & Zukin Capital (the fees and expenses
of which shall be paid by each of Parent and Selling Sub), is entitled to any
broker’s, finder’s, financial advisor’s or other similar fee or commission in
connection with this Agreement based upon arrangements made by or on behalf of
Parent, Selling Sub or the Company.

(v)

Tax Matters.

(i)

Except as disclosed in Schedule 4.1(v):

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(A)

All Tax returns, statements, accounts, claims for relief, applications,
notifications, computations, reports, forms, registrations and assessments
required to be filed by or on behalf of Parent in respect of the Business or the
Company (collectively, the “Returns”) have been filed within the relevant
statutory time limits.

(B)

The Returns are complete, true and accurate, give full disclosure of all
material facts and circumstances and are not the subject of any question or
dispute nor, so far as Parent or Selling Sub are aware, are likely to become the
subject of any question or dispute with any tax authority.

(C)

The Company has properly and punctually paid all Taxes which it has become
liable to pay.

(D)

There is no action, suit, proceeding, audit or investigation pending or, to the
knowledge of, threatened against Parent, Selling Sub with respect to the
Business or the Company in respect of any Tax.

(E)

Any and all proposed deficiencies for Taxes arising as a result of any Tax audit
or investigation of Parent, Selling Sub in respect of the Business or the
Company have been paid or are adequately reserved for on the books of Parent,
Selling Sub or the Company.

(F)

There are no liens for Taxes upon the assets of Parent, Selling Sub or the
Company except liens for current Taxes not yet due and payable.

(G)

Provision or reserve (as appropriate) has been made in the Financial Statements
or Accounts:

(1)

for all Taxes liable to be assessed on the Company or for which the Company is
accountable (whether primarily or otherwise) in respect of all income, profits
or gains earned, accrued or received on or before the Balance Sheet Date or
deemed to have been or treated as earned, accrued or received for Tax purposes
on or before the Balance Sheet Date and/or in respect of any event occurring or
deemed to have occurred on or before the Balance Sheet Date, including
distributions made on or before the Balance Sheet Date or provided for in the
Financial Statements or Accounts; and

(2)

for all deferred Tax of the Company in accordance with generally accepted
accounting practice in the United Kingdom or international accounting standards
as defined in section 50(2) of the Finance Act 2004.

(H)

No charge to Tax will arise on the Company merely as a result of entering into
or completion of this Agreement.

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(I)

The Company is not and has never been treated for the purposes of section 43 to
43C Value Added Tax Act 1994 (groups of companies) as a member of a group.

(J)

The Company has properly operated and complied with all provisions dealing with
PAYE and National Insurance contributions and has deducted tax as required by
law from all payments to or treated as made to or benefits provided for
employees, officers, ex-employees, ex-officers and persons rendering services to
the Company and has duly accounted to the Inland Revenue or other relevant tax
authority for tax so deducted and contributions payable.  The Company has
maintained and retained such books and records relating to PAYE and to National
Insurance contributions in such manner and for such period as it is required to
maintain and retain.

(K)

The Company has not remunerated any employee, officer or other person rendering
services to the Company other than in cash payable to that employee, officer or
other person and there are no arrangements for the Company to provide any such
non-cash remuneration.

(L)

There is no instrument to which the Company is a party, or which is necessary to
establish the Company’s rights or the Company’s title to any asset, which is
liable to stamp duty (or any like duty or tax in a jurisdiction outside the
United Kingdom) which has not been duly stamped or which would attract stamp
duty, interest or penalties if brought within the relevant jurisdiction.

(M)

The Company was incorporated in and is and always has been resident only in the
United Kingdom for Tax purposes and for the purposes of any double taxation
agreement.  The Company is not liable to, and has at no time incurred any, Tax
in any jurisdiction other than the United Kingdom.

(w)

Absence of Changes or Events.  Except as set forth in Schedule 4.1(w), since the
Balance Sheet Date, the Business has been conducted in the ordinary course of
the Business consistent with past practice and there has not occurred any event
or condition which has had or is reasonably likely to have a Material Adverse
Effect.  None of Parent, Selling Sub or the Company have taken any action since
the Balance Sheet Date that, if taken after the date of this Agreement, would
constitute a breach of any of the covenants set forth in this Agreement.

(x)

Suppliers.  Schedule 4.1(x) sets forth a true and complete list of each supplier
of raw materials to the Business who supplies more than 5% of the Business’s raw
materials.  To the Knowledge of Sellers, none of such suppliers has indicated
that such supplier intends to terminate is relationship with Parent or the
Company as a result of the transactions contemplated hereby or otherwise within
one year after the Closing Date.

(y)

Products.   Except as set forth on Schedule 4.1(y), each product that is
manufactured, tested, licensed, distributed, sold and/or marketed by the
Business (each such product, a “Product”) is being manufactured, tested,
distributed, sold and/or marketed in

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substantial compliance with all applicable U.S. Food and Drug Administration
(“FDA”) regulations and requirements under the Federal Food, Drug and Cosmetic
Act and the regulations thereunder (the “FDCA”) and similar foreign, state and
local laws and regulations, including but not limited to those relating to good
manufacturing practices, labeling, sanitation, advertising, record keeping,
filing of reports and security.  Neither the FDA nor any similar state or
foreign Governmental Authority, to Knowledge of Sellers, has threatened to
investigate or suspend any research activities, preclinical programs or clinical
trials being conducted by or on behalf of the Business.  No Product manufactured
and/or distributed by the Business is adulterated within the meaning of 21
U.S.C. §351 (or similar state or foreign laws or regulations), or misbranded
within the meaning of 21 U.S.C. § 352 (or similar state or foreign laws or
regulations), or is a product that is in violation of 21 U.S.C. §355 (or similar
state or foreign laws or regulations). As to each Product that is a controlled
substance, such Product is being manufactured, tested, distributed and/or
marketed in substantial compliance with all federal, state and foreign laws and
regulations applicable to such controlled substances, including but not limited
to those relating to labeling, recordkeeping, filing of reports and security.
 None of Parent, Selling Sub or the Business has at any time, and since April 1,
1998, the Company has not received notice of any proceeding or investigation by
any Governmental Authority (including but not limited to the U.S. Drug
Enforcement Administration (the “DEA”), and the U.S. Department of Justice)
involving any controlled substance manufactured, tested, distributed and/or
marketed by the Business or the Company.  The Product registration files and
dossiers of the Business have been maintained in accordance with reasonable
industry standards.

(z)

Undisclosed Liabilities.  To Knowledge of Sellers, the Business does not have
any Liabilities that are not reflected or reserved for in the Financial
Statements or Accounts, other than (i) Liabilities incurred in the ordinary
course of Business consistent with past practice since the Balance Sheet Date or
the date of the relevant Financial Statements or  Accounts or (ii) Liabilities
set forth in any Schedule to this Agreement.

(aa)

Pharmaceutical Regulatory Compliance.  

(i)

Schedule 4.1(aa)(i) sets forth a list of (i) Forms 483, (ii) Notices of Adverse
Findings (within the meaning of the FDCA) (or comparable reports) and (iii)
warning letters or other correspondence from the FDA in which the FDA asserted
that the operations of the Business may not be in compliance with applicable
laws, regulations, orders, judgments or decrees, and the response to the FDA to
such notices.  True and complete copies of such Forms 483, Notices of Adverse
Findings (or comparable reports), letters and other correspondence and Parent’s
or the Company’s responses have heretofore been made available to Buyer.  

(ii)

Except as set forth on Schedule 4.1(aa)(ii), all manufacturing operations of the
Business are being conducted in compliance with the good manufacturing practice
regulations set forth in 21 C.F.R. Parts 210 and 211 and similar state or
foreign regulations.

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(iii)

Schedule 4.1(aa)(iii) sets forth all Adverse Reaction Reports (within the
meaning of the FDCA) (and comparable reports) filed by Parent or the Company
with the FDA or state or foreign regulatory authorities relating to the
Business.

(iv)

To the Knowledge of Sellers, neither Parent or the Company nor any officer,
employee or agent thereof has made an untrue statement of a material fact or
fraudulent statement to the FDA or any other Governmental Authority, failed to
disclose a material fact required to be disclosed to the FDA or other
Governmental Authority, or committed an act, made a statement, or failed to make
a statement that, at the time such disclosure was made, could reasonably be
expected to provide a basis for the FDA or any other Governmental Authority to
invoke its policy respecting “Fraud, Untrue Statements of Material Facts,
Bribery, and Illegal Gratuities”, set forth in 56 Fed. Reg. 46191 (September 10,
1991) or any similar policy.  

(v)

The clinical trials and the human and animal studies relating to the products in
clinical development by the Business have been and are currently being conducted
in accordance in all material respects with standard medical and scientific
research procedures and in compliance with the protocols that have been
submitted to the FDA or other similar Governmental Authorities with respect
thereto.

4.2.

Representations and Warranties of Buyer.  Buyer hereby represents and warrants
to each of Parent and Selling Sub as follows:

(a)

Organization, Authority.  Buyer is a corporation duly organized and validly
existing and in good standing under the laws of England and Wales.  Buyer has
all requisite corporate power and corporate authority to enter into the
Transaction Documents and to consummate the transactions contemplated hereby.
 All corporate, partnership or limited liability company acts and other
proceedings required to be taken by Buyer to authorize the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated hereby, have been duly and properly taken.  This Agreement has been
duly executed and delivered by Buyer and constitutes the legal, valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms.

(b)

No Conflict.

(i)

The execution, delivery and performance by Buyer of each of the Transaction
Documents and the consummation by Buyer of the transactions contemplated thereby
will not (A) violate or conflict with the articles of incorporation or bylaws of
Buyer, (B) violate any provision of Applicable Law to which Buyer is subject or
violate or conflict with any order, judgment, injunction or decree applicable to
Buyer or (C) except as disclosed on Schedule 4.2(b)(i), violate, breach or
constitute a default (with or without notice or lapse of time, or both) under or
give rise to a right of termination, cancellation or acceleration of any right
or obligation of Buyer under, or result in the creation of a Lien on any of the
properties or assets of Buyer pursuant to, any provision of any agreement,
contract, note, bond, mortgage, indenture, or lease or other instrument binding
upon Buyer or any license, franchise, permit or other similar

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authorization of Buyer, except in the case of the foregoing clause (C) for any
such violation, conflict, default, right or Lien which would not individually or
in the aggregate have had a Buyer Material Adverse Effect.

(ii)

Except as set forth on Schedule 4.2(b)(ii), the execution, delivery and
performance by Buyer of each of the Transaction Documents do not require any
consent, approval, license, permit, order or authorization of or registration,
declaration or filing with any Governmental Authority or any third party except
for (A) any consent, approval, license, permit, order, authorization,
registration, declaration or filing that Buyer is required to obtain or make;
and (B) consents, approvals, licenses, permits, orders, authorizations,
registrations, declarations or filings which, if not obtained or made, will not
individually or in the aggregate have a Buyer Material Adverse Effect.

(c)

Sufficient Funds.  As of the Closing, Buyer will have cash available sufficient
to enable it to consummate the transactions contemplated hereby.  Warburg Pincus
Private Equity VIII, L.P. and Warburg Pincus International Partners, L.P.  have
delivered to Parent a guarantee letter in respect of the delivery of the cash
portion of the Purchase Price to be made by Buyer as of the Closing Date.  Such
equity commitment letter is and shall remain in full force and effect as of the
date hereof and through the Closing Date.

(d)

Investment Intent.  The Shares are being acquired by Buyer pursuant to this
Agreement solely for its own account, for investment only and not with a view to
any public distribution thereof.

(e)

Litigation; Decrees.  There are no lawsuits, claims, proceedings,
investigations, injunctions, judgments, orders or decrees pending or, to the
Knowledge of Buyer, threatened which challenge or seek to enjoin or delay this
Agreement or the transactions contemplated hereby or which would materially
adversely affect Buyer’s ability to perform its obligations under this Agreement
or to consummate the transactions contemplated hereby.

(f)

Investigation.  Buyer has conducted such investigation of the Business as it has
deemed sufficient to make an informed decision concerning the transactions
contemplated hereby.  Buyer acknowledges that it has (i) had an opportunity to
review all materials and information requested by it, (ii) had an opportunity to
review all of the documents, records, reports and other materials identified in
the Schedules, (iii) been given access to the properties and assets of Parent
and the Company and is familiar with the condition thereof and (iv) has had an
opportunity, upon reasonable request, to interview, question or otherwise
solicit relevant and non-privileged information concerning the Business from the
management of the Business.  Buyer acknowledges that Parent and Selling Sub have
made no representation, warranty or agreement except as expressly set forth in
this Agreement (including the Schedules hereto).  Buyer is not relying on any
representation, warranty, agreement, statement, document, record, report,
material or information made or provided by Parent and the Selling Sub or any of
their Affiliates, representatives or agents except as expressly set forth in
this Agreement (including the Schedules hereto).  Buyer further acknowledges
that (i) no promise or inducement for this

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Agreement has been made to Buyer except as set forth herein, (ii) this Agreement
is executed by Buyer freely and voluntarily and without reliance upon any
statement or representation of Parent, Selling Sub, the Company, any Affiliates
or any of their attorneys or agents except as set forth herein, (iii) Buyer has
read and fully understands this Agreement and the meaning of its provisions,
(iv) Buyer is legally able to enter into this Agreement and to accept full
responsibility therefor, and (v) Buyer has consulted with counsel before
entering into this Agreement.

(g)

Brokers.  No broker, investment banker, financial advisor, consultant or other
Person is entitled to any broker’s, finder’s, financial advisor’s or similar fee
or commission in connection with this Agreement based upon arrangements made by
or on behalf of Buyer.

ARTICLE V

COVENANTS

5.1.

Covenants of each of Parent and Selling Sub.   Each of the Parent and Selling
Sub covenants and agrees, jointly and severally, as follows:

(a)

Access.   From the date hereof to the Closing, Parent and Selling Sub will, and
will cause the Company and each of their respective Affiliates to, (i) give
Buyer and its authorized representatives, employees, counsel and accountants
full access to the officers, management, agents, books, records, offices and
other facilities and properties of Parent (to the extent related to the US
Business) and the Company during normal business hours, and (ii) furnish to
Buyer and its authorized representatives such information concerning the
Business, the Conveyed Assets, the Shares and other properties, contracts,
Intellectual Property, assets, liabilities, personnel and aspects of Parent (to
the extent related to the Business) and the Company; provided, that Buyer and
its authorized representatives shall not contact or hold discussions with
customers, suppliers or non-management employees of Parent or the Company
without the prior written consent of Parent or Selling Sub.  Notwithstanding the
foregoing, granting such access does not include access to conduct any
environmental sampling or testing without Parent’s prior written consent, such
consent not to be unreasonably withheld by Parent.

(b)

Ordinary Conduct.   From and after the date hereof and prior to the Closing or
earlier termination of this Agreement pursuant to Section 7.3, and unless Buyer
shall otherwise consent or agree in writing or except as contemplated by this
Agreement or as disclosed on Schedule 5.1(b), each of Parent and Selling Sub
will, and Selling Sub will cause the Company to:

(i)

conduct the UK Business and the US Business (as applicable) in the ordinary
course of business consistent with past practice although Buyer acknowledges
Parent has terminated US Employees and is under no continuing obligation to
employ any US Employee except as required by Section 5.1(i);

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(ii)

use all reasonable efforts to preserve the organization of the UK Business and
the US Business (as applicable) intact, to maintain the services of the present
key employees of the UK Business and the US Business (as applicable) and to
preserve the goodwill of, and relationships with, the suppliers, customers and
others having business dealings with the UK Business and the US Business (as
applicable) although Buyer acknowledges Parent has terminated US Employees and
is under no continuing obligation to employ any US Employee except as required
by Section 5.1(i);

(iii)

not amend the certificate of incorporation or memorandum and articles of
association of the Company;

(iv)

not issue any Shares or other securities of the Company or rights, warrants or
options to acquire such Shares or other securities (including, without
limitation, any phantom interest) or issue any securities convertible into such
Shares or convertible into securities in turn so convertible into Shares, or
grant any options, warrants or rights to acquire any such convertible securities
nor repay or redeem any shares or loan capital of the Company or agree to do so;

(v)

solely with respect to the Company, not merge or consolidate with or acquire the
business of any other Person or, except in the ordinary course of business
consistent with past practice, acquire any property or assets of any other
Person;

(vi)

not adopt or amend in any material respect any UK Benefit Plan, except as may be
required by law or as may be necessary to maintain any such UK Benefit Plan’s
tax qualified status, nor, enter into or amend any employment or consulting
agreement or arrangement with any present or former director, officer or
salaried employee of the UK Business, nor increase the compensation or fringe
benefits of any officers, directors or salaried employees of the UK Business,
except in the ordinary course of business consistent with past practice;

(vii)

not make any sale, assignment, transfer, abandonment or other conveyance of the
Conveyed Assets or any part thereof, except transactions pursuant to
pre-existing contractual terms disclosed in the Schedules hereto and
dispositions of Inventory or of worn-out or obsolete equipment for fair or
reasonable value in the ordinary course of business consistent with past
practice;

(viii)

solely with respect to the Company, not incur any additional indebtedness for
borrowed money or issue any debt securities or assume, guarantee or endorse the
obligations of any person, except for indebtedness incurred in the ordinary
course of business consistent with past practice, which individually or in the
aggregate do not exceed $50,000, endorsements for the purpose of collection
provided that in no event shall the Company incur, assume or guarantee any
long-term indebtedness for borrowed money;

(ix)

not amend or terminate any contract listed on Schedule 4.1(k) of, or on behalf
of, Parent, Selling Sub or the Company with respect to the Business;

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(x)

not subject any of the Conveyed Assets, or any part thereof, to any Lien or
permit such to exist other than such Liens as may arise in the ordinary course
of the Business consistent with past practice or by operation of law and that
will not, individually or in the aggregate, have a Material Adverse Effect or
interfere materially with the use, operation, enjoyment or marketability of any
of the Conveyed Assets;

(xi)

not make or commit to make any capital expenditure by or on behalf of the
Company or that would be an Assumed Liability as defined in Section 2.5 in
excess of $25,000;

(xii)

solely with respect to the Company, not pay, lend or advance any amount to, or
sell, transfer or lease any properties or assets, to, or enter into any
agreement or arrangement with, any of their respective Affiliates, except as
expressly contemplated hereby or by the Transaction Documents;

(xiii)

solely with respect to the Parent and Selling Sub, not sell, transfer or lease
the Conveyed Assets and Shares to, or enter into any agreement or arrangement
with respect to the Conveyed Assets or Shares with, any of their respective
Affiliates, except as expressly contemplated hereby or by the Transaction
Documents;

(xiv)

not fail to keep in full force and effect insurance comparable in amount and
scope of coverage maintained in respect of the Business as currently conducted;

(xv)

not take any other action that would cause any of the representations and
warranties made by them in this Agreement not to remain true and correct;

(xvi)

not make any change in any method of accounting or accounting principle, method,
estimate or practice except for any such change required by reason of a
concurrent change in generally accepted accounting principles in the United
States or write down the value of any Inventory or write off as uncollectible
any accounts receivable except in the ordinary course of the Business consistent
with past practice;

(xvii)

not settle, release or forgive any claim or litigation or waive any right
related to the Business;

(xviii)

continue to maintain, in all material respects, the Conveyed Assets in
accordance with present practice in a condition suitable for its current use;

(xix)

file, when due or required, federal, state, foreign and other Returns and other
reports required to be filed and pay when due all Taxes, assessments, fees and
other charges lawfully levied or assessed against them, unless the validity
thereof is contested in good faith and by appropriate proceedings diligently
conducted;

(xx)

maintain all Intellectual Property listed on Schedule 4.1(j) and not sell,
pledge, lease, license or dispose of any such Intellectual Property; and

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(xxi)

not agree to do any of the foregoing.

(c)

Assignment of Confidentiality Agreements.  On the Closing Date, Parent and
Selling Sub shall assign to Buyer its rights under all confidentiality
agreements entered into by Parent or Selling Sub with prospective bidders in
connection with the proposed sale of the Business to the extent such rights
relate to confidential information of the Company or the Business (it being
understood that Parent and Selling Sub shall retain all other rights under such
confidentiality agreements).  At the Closing, Parent and Selling Sub will
provide Buyer a copy of each such confidentiality agreement.  Notwithstanding
the foregoing, neither Parent nor Selling Sub shall assign, or provide copies
of, any such confidentiality agreement if doing so would result in a breach
thereof.

(d)

Covenant Not to Compete.

(i)

Parent agrees that for the period commencing on the date of this Agreement and
ending on the second anniversary of the Closing date it shall not, and shall not
permit its Subsidiaries to, participate or engage, directly or indirectly, for
themselves or on behalf of or in conjunction with any Person, whether as an
employee, agent, officer, director, member, shareholder, partner, joint venture,
investor or otherwise, in any business that competes with the Business in any
jurisdiction in which the Business is conducted, (including, without limitation,
where products of the Business are sold, provided, however, that the foregoing
shall not be deemed to prohibit Parent, or any such Subsidiary from (x) owning
up to 5% of the outstanding equity interests in any publicly traded entity which
engages in any such activity or (y) acquiring control of any entity or
undertaking which engages in the same types of business conducted by the
Business, provided that such business is incidental to the core business of the
entity or undertaking acquired.

(ii)

Parent and Selling Sub agree that a monetary remedy for a breach of the
agreement set forth in this Section 5.1(d) will be inadequate and impracticable
and further agrees that such a breach would cause Buyer irreparable harm, and
that Buyer shall be entitled to temporary and permanent injunctive relief
without the necessity of proving actual damages.  In the event of such a breach,
Parent and Selling Sub agree that Buyer shall be entitled to such injunctive
relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions as a court of competent jurisdiction shall determine.

(iii)

If any provision of this Section 5.1(d) is determined by a court of competent
jurisdiction to be invalid in part, it shall be curtailed, both as the time and
location, to the minimum extent required for its validity under the applicable
law and shall be binding and enforceable with respect to Parent and Selling Sub
as so curtailed.

(e)

Confidentiality.  From and after the Closing, Parent and Selling Sub shall, and
shall cause their Affiliates and representatives to, keep confidential and not
disclose to any other Person or use for their own benefit or the benefit of any
other Person any trade secrets or other confidential or proprietary information
in their possession or control regarding the Business and its operations,
including but not limited to information regarding customers, vendors,
suppliers, Intellectual Property, training programs, manuals or materials,
technical information,

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contracts, systems, procedures, mailing lists, know-how, trade names,
improvements, price lists, financial or other data (including revenues, costs or
profits associated with any of the Business’s products or services), business
plans, code books, invoices and other financial statements, computer programs,
software systems, databases, discs and printouts, plans (business, technical or
otherwise), customer and industry lists, correspondence, internal reports,
personnel files, sales and advertising material, telephone numbers, names,
addresses or any other compilation of information.  The obligation of Parent and
Selling Sub under this Section 5.1(e) shall not apply to information which (i)
is or becomes generally available to the public without breach of the commitment
provided for in this Section; or (ii) is required to be disclosed by law, order
or regulation of a court or tribunal or governmental authority; provided,
however, that, in any such case, Parent and Selling Sub shall (x) notify Buyer
as early as reasonably practicable prior to disclosure to allow Buyer to take
appropriate measures to preserve the confidentiality of such information and (y)
take all steps reasonably necessary to minimize the amount of confidential
information to be disclosed.

(f)

Non-Solicitation of Employees.  For a period of two (2) years after the Closing
Date, Parent and Selling Sub agree that neither Parent nor Selling Sub nor any
Affiliates thereof will hire, or make an offer or solicit to employ, whether as
an employee, consultant or otherwise, any of the UK Employees as of the date
hereof, without obtaining the prior written consent of Buyer; provided, that
neither Parent nor Selling Sub shall be in violation of this Section 5.1(f) to
the extent any such employees were involuntarily terminated Buyer or the Company
after the Closing Date.

(g)

Payment of 2004 Bonuses to UK Employees.  Parent shall determine the bonus
compensation, if any, payable to such UK Employees as are employed by the
Company on the date of the payment of bonuses in accordance with the next
sentence (for all purposes treating employment with the Company as though such
Employees had been employed continuously by the Parent or its Affiliates through
such date) in respect of the 2004 calendar year, which amounts shall be
determined and paid in a manner consistent with past practices.  Parent agrees
to pay all such bonus amounts to UK Employees as determined in accordance with
this Section 5.1(g) substantially concurrently with the payment of bonuses to
Parent’s other bonus plan participants but subject to and in accordance with
Section 5.9 below.

(h)

Schedules. Parent and Selling Sub have prepared the Schedules (other than the
Schedules to the Buyer's representations), dated as of the date of this
Agreement, in good faith (the “Preliminary Schedules”).  However, the parties
hereto acknowledge that the Preliminary Schedules may contain omissions,
inaccuracies or be incomplete in some respects.  Parent and Selling Sub hereby
covenant and agree to deliver final Schedules (the “Final Schedules”), which
will replace the Preliminary Schedules in their entirety, within fifteen (15)
business days of the date of this Agreement.  Buyer shall have the opportunity
to review and comment on the Final Schedules and shall not be required to accept
changes to Schedules that

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would alter in a manner adverse to Buyer the Conveyed Assets, Excluded Assets,
Assumed Liabilities or Retained Liabilities.

(i)

US Personnel.  For a period of twenty (20) calendar days immediately following
the date hereof, Parent shall use its reasonable efforts to make each US
Employee set forth on Schedule B of the Transition Services Agreement available
during normal business hours at the request of Buyer for the purpose of
transferring information relating to the day-to-day operations of the Business
and to facilitate the acquisition of the Business, subject to applicable law or
Parent’s policies regarding holidays, vacation and leaves of absence. In
connection therewith, Parent covenants and agrees that it shall not take any
action to terminate any of the US Employees on Schedule B to the Transition
Services Agreement on any date that would result in their notice period ending
prior to the expiration of such twenty (20) day period; provided that nothing in
this Section 5.1(i) shall prevent Parent from terminating any such US Employee
for cause.  The parties hereto acknowledge that nothing in this Section 5.1(i)
is intended to create any employment relationship between Buyer and any such US
Employee.

5.2.

Covenants of Buyer.   Buyer covenants and agrees as follows:

(a)

Confidentiality.  Buyer acknowledges that all information provided to it by each
of Parent, Selling Sub or the Company, including, but not limited to,
information provided pursuant to Section 5.1(a), is subject to the terms of a
confidentiality agreement dated July 29, 2004 between Warburg Pincus and
Houlihan Lokey Howard & Zukin Capital (the “Confidentiality Agreement”), the
terms of which are incorporated herein by reference. Effective upon, and only
upon, the Closing, the Confidentiality Agreement shall terminate.  

(b)

Change of Name.  On or within six (6) weeks of the Closing Date, the Buyer shall
cause the Company to, change its name to such name not containing any portion of
Parent’s name or any name similar to or derivative of such names.

5.3.

Mutual Covenants.   Each of the parties hereto covenants and agrees as follows:

(a)

Consents and Approvals, Antitrust.  Each of the parties hereto agrees to use all
reasonable efforts to obtain as soon as possible, and to file or cause to be
filed all necessary documentation with the appropriate Governmental Authorities
as soon as practicable, to obtain as soon as possible, all consents, approvals,
authorizations and waivers required by any Governmental Authorities in order to
consummate the transactions contemplated by this Agreement.  Each of the parties
hereto further covenants and agrees to use its commercially reasonable efforts
to prevent the entry, enactment or promulgation of any pending or threatened
preliminary or permanent injunction or other order or decree that would
adversely affect the ability of the parties hereto to consummate the
transactions contemplated hereby, and to lift or rescind any such existing
injunction or other order or decree.  Parent and Selling Sub, on the one hand,
and the Buyer, on the other hand, further agree to use their commercially
reasonable efforts to comply promptly with and, where appropriate, to respond in
cooperation with each other to,

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all requests or requirements which Applicable Law or Governmental Authority may
impose on them with respect to the transactions which are the subject of this
Agreement.  

(b)

Publicity.  Prior to the Closing, no party shall issue any press release or
other public announcement concerning the transactions contemplated hereby
without the prior written consent (which consent shall not be unreasonably
withheld) of Buyer (in the case of each of Parent, Selling Sub or the Company)
or Parent and Selling Sub (in the case of Buyer), except as such release or
announcement may be required by law or the rules or regulations of any United
States or foreign securities exchange, in which case the party required to make
the release or announcement shall allow Buyer or each of Parent, Selling Sub and
the Company (as the case may be) reasonable time to comment on such release or
announcement in advance of such issuance.

(c)

Further Assurances; Covenant to Satisfy Conditions.  Subject to the terms and
conditions of this Agreement, each party will, severally, use its commercially
reasonable efforts to (i) ensure the conditions set forth in Article III are
satisfied, insofar as such matters are within the reasonable control of such
party, (ii) defend any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the performance of the obligations
hereunder or thereunder, (iii) execute and deliver such instruments and take
such actions as the other parties hereto may reasonably require in order to
carry out the intent of this Agreement and effect the transactions contemplated
hereby and (iv) prepare and make or cause to be made any required filings,
submissions and notifications under the laws of any domestic or foreign
jurisdiction to the extent that such filings are necessary to consummate the
transactions contemplated hereby in a manner consistent with applicable law.
 Parent and Selling Sub hereby constitute and appoint, effective as of the
Closing Date, Buyer, its successors and assigns as the true and lawful attorney
of Parent and Selling Sub with full power of substitution in the name of Buyer
or in the name of Parent and Selling Sub but for the benefit of Buyer (a) to
enforce ownership of Buyer of the Conveyed Assets and the Shares and (b) to
institute and prosecute all proceedings which Buyer may in its discretion deem
proper in order to enforce its ownership of the Conveyed Assets and the Shares
or to assert or enforce any right, title or interest in, to or under the
Conveyed Assets and the Shares and to defend or compromise (subject to Section
7.4 hereof) any and all actions, suits or proceedings in respect of any of the
Conveyed Assets or the Shares.  

5.4.

Tax Matters.

(a)

Transfer Taxes.   Buyer agrees to pay all Transfer Taxes arising on the
acquisition of the Shares. Buyer, Parent and Selling Sub will use their
reasonable efforts to obtain any certificate or other document from any
Governmental Authority or any other person as may be necessary to mitigate,
reduce or eliminate any Transfer Taxes, to the extent that such certificate or
other document would not increase the Taxes of Buyer, Parent or Selling Sub.
 Transfer taxes shall mean all transfer, documentary, sales, use, excise, ad
valorem, registration, recordation, stamp, value-added, withholding, income and
other Taxes imposed or assessed as a

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result of Buyer’s acquisition of the Conveyed Assets and Shares, whether such
Tax would be imposed by law upon Buyer, Parent or Selling Sub (“Transfer Tax”).

(b)

Tax Cooperation.   After the Closing Date, Parent shall submit to Buyer blank
tax return workpaper packages reasonably necessary for Parent to prepare any
Form 5471 with respect to the Company.  Buyer shall prepare or cause to be
prepared completely and accurately all information that Parent shall reasonably
request in such workpaper packages and shall submit to Parent such packages
within the later of sixty (60) days after Buyer’s receipt thereof or forty-five
(45) days after the close of the taxable period to which a workpaper package
relates.  Each party shall cooperate with the other, as reasonably requested, in
connection with any Tax filing, investigation, audit or other proceeding.  Buyer
and Parent shall preserve and cause to be preserved all information, returns,
books, records and documents relating to any liabilities for Taxes with respect
to a taxable period until the later of the expiration of all applicable statutes
of limitation and extensions thereof, or the conclusion of all litigation with
respect to Taxes for such period.

5.5.

Intellectual Property.   Buyer hereby acknowledges and agrees that nothing in
this Agreement grants or shall be deemed to grant to Buyer the right to use or
any interest in (i) the name “West Pharmaceutical Services, Inc.” or any
trademark, trade name, service mark or other similar mark or similar right which
is a derivative of the name “West Pharmaceutical Services, Inc.” (the “Parent
IP”) except for uses permitted in accordance with the terms of the Transition
Services Agreement.  The prohibitions in this Section 5.5 shall apply to any and
all uses whatsoever of the Parent IP including, without limitation, the use of
the Parent IP on any stationery or invoices, or identifying signs on any
properties of the Business, which identify or in any way make use of the Parent
IP.  Neither Buyer nor any of its Affiliates shall use any signs or stationery,
purchase order forms, packaging or other similar paper goods or supplies,
advertising and promotional materials, product, training and service literature
and materials, or computer programs or like materials that include the words
“West Pharmaceutical Services, Inc.” used in a trademark sense or contain any
trademarks, trade names, service marks or corporate or business names, derived
from or including the words “West Pharmaceutical Services, Inc.” (in logotype
design or any other style or design) in whole or in part.

5.6.

Records.  After the Closing, upon reasonable written notice, each party hereto
agrees to furnish or cause to be furnished to the other party and their
representatives, employees, counsel and accountants access, during normal
business hours, to such information (including Records pertinent to the Company
and the Business) and assistance relating to the Company the Business as is
reasonably necessary for financial reporting and accounting matters, the
preparation and filing of any Returns, or the defense of any Tax claim or
assessment; provided, however, that such access does not unreasonably disrupt
the normal operations of Buyer, the Company or the Business.

5.7.

Liability to Taxes.

(a)

For the purposes of this Section 5.7, Liability to Taxes shall include any of
the following:

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(i)

a liability to make a payment of or relating to Taxes;

(ii)

the application of all or part of any relief, exemption, allowance, set-off,
deduction or credit relevant to the computation of any liability to make a
payment of or relating to Taxes (“Relief”) (other than the application of a
Relief, which has arisen in the 12 month period to December 31, 2004) in
computing either profits earned, accrued or received on or before Closing or
Taxes arising in respect of any event on or before Closing in circumstances
where the Relief was not available before Closing but arises in respect of any
event occurring or period ending after Closing and where but for such
application the Company would have been liable to make a payment of or relating
to Taxes in respect of which the Buyer would have been able to make a claim
under this Agreement.  For the purposes of this Section 5.7(a), Relief shall not
be construed to include 2004 Relief;

(iii)

the loss or non-availability of all or part of any Relief, or the application of
all or part of any Relief in computing profits or Taxes, where that Relief has
been taken into account as an asset of the Company in preparing the Accounts or
in computing (and so reducing) any provision relating to Taxes which appears in
the Accounts (or which but for the presumed availability of such Relief would
have appeared in the Accounts) in circumstances where the Relief would (were it
not for the said loss, non-availability or application) have been available in
full to the Company.

(b)

The Parent and Selling Sub hereby jointly and severally covenant to pay to Buyer
the amount of any Liability to Taxes suffered by Buyer or the Company resulting
from or in respect of:

(i)

any event occurring or deemed, for the purposes of Taxes, to have occurred on or
before Closing; or

(ii)

any profits earned, accrued or received in respect of any period ending on or
before Closing.

(c)

The Parent and Selling Sub hereby jointly and severally covenant to pay to
Buyer:

(i)

the amount of any liability of the Company to repay in whole or in part any
payment for group relief (as such term is defined by section 402 Income and
Corporation Taxes Act 1988) ("Group Relief") or payment for the surrender of
surplus advance corporation tax or payment for a transferred tax refund received
pursuant to any agreement or arrangement entered into on or before Closing; and

(ii)

the amount of any payment for Group Relief or payment for the surrender of
surplus advance corporation Tax or payment for a transferred tax refund made
pursuant to any agreement or arrangement entered into on or before Closing by
the Company to the extent that the Company is unable to obtain or utilize the
Group Relief, surplus advance corporation Tax or tax refund as contemplated by
the agreement or arrangement in question.

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(d)

The Parent and Selling Sub hereby jointly and severally covenant to pay to Buyer
the amount of any Liability to Taxes suffered by Buyer or the Company resulting
from or in respect of any liability in respect of income Tax or national
insurance contributions suffered by the Company as a result of i) the exercise
or vesting, assignment or release of any option granted; or ii) the satisfaction
or vesting of any award granted before Closing to an Employee of the Company
pursuant to the West Pharmaceutical Services, Inc 1998 Key Employee Incentive
Compensation Plan, West Pharmaceutical Services, Inc 2004 Stock-Base
Compensation Plan or otherwise.

(e)

The Parent and Selling Sub hereby jointly and severally covenant to pay to Buyer
the amount of all costs and expenses reasonably incurred or payable by Buyer or
the Company in connection with any matter for which liability arises under
Section 5.7 regardless of whether a payment is made by Parent or Selling Sub.

(f)

All sums payable by the Parent and Selling Sub in respect of Tax under this
Agreement shall be paid free and clear of all deductions or withholdings
whatsoever save only as may be required by law.  If any such deductions or
withholdings are required by law the Parent and/or Selling Sub shall pay such
sum as will, after such deduction or withholding has been made, leave the amount
which would have been received in the absence of any such requirement to make a
deduction or withholding.

(g)

In the event that any sum paid as a result of a claim made in respect of a
covenant or indemnity or breach of warranty or representation contained in this
Agreement is or will be subject to Taxes, the Parent and/or Selling Sub shall
pay such sum as will, after payment of the Taxes so charged, leave a sum equal
to the amount that would otherwise be payable under any such obligation.

(h)

The Parent and/or Selling Sub may, by notice in writing to Buyer, elect to
reduce or eliminate any liability under this Agreement by surrendering or
procuring the surrender to the Company of Group Relief to the extent permitted
by law but without any payment being made by Buyer or the Company in
consideration of the surrender.  The liability of the Parent and Selling Sub
under this Agreement shall be reduced or eliminated to the extent of the amount
of Taxes relieved by any such surrender.  Buyer shall procure that the Company
takes all such steps as the Parent and Selling Sub may reasonably require to
permit and effect such surrender and claim for Group Relief.

(i)

Parent and Selling Sub hereby jointly and severally covenant to pay to Buyer an
amount equal to the product of (x) $85,000 times (y) where (y) represents the
quotient obtained by dividing (A) the amount of the Reliefs represented in the
draft tax computations of the Company (in which the amount of the Reliefs
represented was £744,271) to be carried forward as at December 31, 2004 which is
lost, unavailable or used to reduce Parent's or Selling Sub's liability under
this Agreement (regardless of whether the Company's and/or Buyer's profits or
Tax are such that the Relief could have been fully utilized) by (B) £744,271.

5.8.

Option Liabilities.

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(a)

For the purposes of this Section 5.8 only:

(i)

“Employees” means employees or officers or former employees or officers of any
member of the Group and any of their relatives and "Employee" means any one of
them;

(ii)

"Employee Taxation" means the amount for which any member of the Group becomes
liable to account to the UK Inland Revenue under Pay As You Earn ("PAYE") in
respect of income tax chargeable under section 476 of ITEPA in respect of an
Option Gain and primary Class 1 National Insurance contributions for which any
member of the Group is so liable to account in respect of earnings or
remuneration represented by an Option Gain;

(iii)

"Employer NICs" means secondary Class 1 National Insurance contributions which
any member of the Group is liable to pay to the Inland Revenue in respect of
earnings or remuneration represented by an Option Gain;

(iv)

"Group" means the Buyer (or any holding company or subsidiary of Buyer), the
Company and any of the Company's subsidiaries;

(v)

"ITEPA"  means the Income Tax (Earnings and Pensions) Act 2003;

(vi)

"Option Gain" means the taxable amount which counts as employment income of the
Employee under section 476 of ITEPA in relation to the Relevant Option;

(vii)

"Relevant Option" means a stock option granted under the Plans to an Employee;

(viii)

"Plans" means together the West Pharmaceutical Services, Inc. 1998 Key Employee
Incentive Compensation Plan and the West Pharmaceutical Services, Inc 2004
Stock-Based Compensation Plan;

(b)

The provisions of this Section 5.8 shall have effect in the event that any
Employee realizes an Option Gain and any member of the Group is obliged to
account for any Employee Taxation or to pay any Employer NICs arising in respect
of the Option Gain.

(c)

If the Parent receives a valid notice from an Employee who is the holder of a
Relevant Option that he or she is exercising, assigning or releasing the
Relevant Option:

(i)

the Parent will within 5 days from the date of such notice, notify Buyer of:

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(A)

the fact of the exercise, assignment or release of the Relevant Option (as the
case may be);

(B)

the amount of the Option Gain (or sufficient details to enable Buyer to
calculate the Option Gain);

(C)

the identity of the holder of the Relevant Option; and

(D)

the date of grant of the Relevant Option.

(ii)

Buyer will procure that the relevant member of the Group will inform the Parent
of the amount of Employee Taxation and Employer NICs due to be accounted for in
respect of the Option Gain within 7 days of the notification referred to in
Section 5.8(c)(i) above; and

(iii)

the Parent will use its reasonable endeavors to exercise and enforce all of its
rights under the rules of the Plans or otherwise to recover all Employee
Taxation in respect of the Option Gain and will procure that any Employee
Taxation so recovered will be paid, together with any applicable Employer NICs,
to the relevant member of the Group within seven Business days thereof.

(d)

Parent will provide to Buyer all information that the member of the Group is
required to notify to the UK Inland Revenue in respect of the exercise,
assignment or release of Relevant Options upon request by the Buyer to the
extent that such information is not otherwise in the possession of Buyer or any
other member of the Group.

5.9.

Bonus Liabilities

.

(a)

For the purposes if this Section 5.9 only;

(i)

"Bonus"  means any payment or award made by the Parent or a subsidiary of the
Parent to an Employee on or after Closing;

(ii)

"Employees"  means employees or officers or former employees or officers of any
member of the Group and "Employee" means any one of them;

(iii)

"Employee Taxation" means the amount of income tax and primary Class 1 National
Insurance contributions which an Employee is liable to pay and/or any member of
the Group is liable to account for in respect of a Bonus;

(iv)

"Employer NICs" means any secondary Class 1 National Insurance contributions
which any member of the Group is liable to pay and account for in respect of a
Bonus;

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(v)

"Group" means the Buyer, (any holding company or subsidiary of the Buyer), the
Company and any of the Company’s subsidiaries.

(b)

The provisions if this Section 5.9 shall have effect in the event that a Bonus
is paid to an Employee.

(i)

If Parent (or any subsidiary of the Parent) intends to pay a Bonus to an
Employee the Parent will, within 7 days prior to the intended payment, notify
Buyer of:

(A)

the intention to pay the Bonus;

(B)

the amount of the Bonus;

(C)

the identity of the Employee to whom the Bonus is paid; and

(D)

the intended date of the Bonus payment.

(ii)

Buyer will procure that the relevant member of the Group informs the Parent of
the amount of Employee Taxation and Employer NICs due to be accounted for in
respect of the Bonus within 5 days of the notification referred to in Section
5.9(b)(i) above; and

(iii)

Parent will procure that the Employee Taxation is withheld from the Bonus and/or
otherwise recovered from the Employee and together with the applicable Employer
NICs is paid to the relevant member of the Group within 7 days of the payment of
the Bonus to the Employee and Buyer shall procure that the relevant member of
the Group will account for the same to the appropriate tax authority.

5.10.

Pensions.  

(a)

Parent unconditionally and irrevocably agrees, as a continuing obligation, to
indemnify Buyer and the Company against any Liabilities (including but not
limited to Liability arising under section 75 of the Pensions Act 1995 or
regulations made under that section or pursuant to sections 38 or 43 of the
Pensions Act 2004) as a result of the Company having participated in or
contributed to the Scheme or any other agreement or arrangement for the
provision or payment of pensions, allowances, lump sums or other similar
benefits on retirement or death for any employee or former employee (or their
dependants) of the Company.

(b)

Within 14 days of the date on which the certificate is produced, Parent shall
pay the Company the amount of that Company’s debt as shown on the certificate
(unless the certificate has shown that no debt is due).  Buyer will procure that
the Company will pay the amount so received to the Scheme.  For these purposes
the certificate shall have an effective date as at the date of the Closing Date.

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ARTICLE VI

OTHER AGREEMENTS

6.1.

Bulk Transfer Laws.  Buyer waives compliance by Parent with respect to any
applicable bulk sale or bulk transfer laws or similar laws; provided, however,
that Parent shall indemnify and hold harmless Buyer against any and all Losses
which may be asserted by third parties against Buyer as a result of
non-compliance with any such bulk sale or bulk transfer laws, other than Assumed
Liabilities.

6.2.

Notification of Certain Matters.  From time to time prior to the Closing Date,
and as soon as reasonably practicable after becoming aware of such a matter,
each of Parent, Selling Sub and Buyer, as applicable, shall promptly notify the
other of (a) any matter that, if known, existing or occurring as of the date of
this Agreement, would constitute a breach of any of its representations,
warranties or agreements contained herein or would have been required to be set
forth or described on any Schedule to this Agreement, or that is necessary to
complete or correct any information in any of its representations or warranties
contained in this Agreement, (b) the existence or non-existence of any
circumstance or condition, or the occurrence or non-occurrence of any event,
that would be reasonably likely to cause any condition to the obligations of any
party to consummate the transactions contemplated hereby not to be satisfied by
the Termination Date, or (c) the failure of such party to perform, comply with
or satisfy any covenant, agreement or conditions to be performed, complied with
or satisfied pursuant to this Agreement that would reasonably be likely to
result in any condition to the obligations of any party to consummate the
transactions contemplated hereby not to be satisfied by the later of the
Termination Date or the Closing Date; provided, however, that receipt of
information pursuant to this Section 6.3 shall not affect any representation or
warranty of Parent, Selling Sub or Buyer or the conditions to the obligations of
Parent, Selling Sub or Buyer or be deemed to amend or supplement the Schedules
hereto or prevent or cure any misrepresentation or breach of warranty.

ARTICLE VII

MISCELLANEOUS

7.1.

Assignment.   This Agreement and the rights and obligations hereunder shall not
be assignable or transferable by any party (including by sale of stock,
operation of law in connection with a merger, or sale of substantially all the
assets of Buyer) without the prior written consent of the other parties hereto;
provided that Buyer may assign or delegate its rights, obligations and
liabilities under this Agreement in whole or in part to any Affiliate or
Subsidiary of the Buyer or combination of such Affiliates or Subsidiaries
without the consent of Parent, Selling Sub or the Company; provided, however,
that Buyer shall remain fully liable for the fulfillment of all such obligations
or liabilities.  This Agreement shall inure to the benefit of, and be binding
upon and enforceable against, the successors and permitted assigns of the
respective parties hereto.

7.2.

No Third-Party Beneficiaries.  This Agreement is for the sole benefit of the
parties hereto and their permitted assigns and nothing herein expressed or
implied shall give or be construed to give to any person or entity, other than
the parties hereto and such assigns, any legal or equitable rights hereunder.  A
Person who is not a party to this Agreement may not

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enforce any of its terms under the Contracts (Rights of Third Parties) Act 1999
but this does not affect any right or remedy of a third party which exists or is
available otherwise under that act.

7.3.

Termination.

(a)

This Agreement may be terminated (i) by written agreement of Buyer and Parent,
(ii) by written notice given by Buyer to Parent or by Parent to Buyer if the
Closing shall not have occurred on or before March 1, 2005 (the “Termination
Date”) (unless the failure to consummate the Closing by such date shall be due
to the failure of the party seeking to terminate this Agreement to have
fulfilled any of its obligations under this Agreement), (iii) by Buyer if any of
the conditions set forth in Sections 3.1 or 3.2 have become incapable of being
fulfilled prior to the Termination Date and have not been waived by Buyer or
(iv) by Parent and Selling Sub if any of the conditions set forth in Sections
3.1 or 3.3 have become incapable of being fulfilled prior to the Termination
Date and have not been waived by Parent and Selling Sub or (v) if (A) the
purchase and sale of the Shares or Conveyed Assets contemplated hereby shall
violate any non-appealable final order, decree or judgment of any court or
Governmental Authority having competent jurisdiction or (B) there shall be an
Applicable Law which makes the purchase and sale of the Shares or Conveyed
Assets contemplated hereby illegal or otherwise prohibited.

(b)

In the event of termination pursuant to paragraph (a) of this Section 7.3,
written notice thereof shall forthwith be given to the other party and the
transactions contemplated by this Agreement shall be terminated, without further
action by either party.  If the transactions contemplated by this Agreement are
terminated as provided pursuant to this Section 7.3 it shall become null and
void and of no further effect except as provided in this Section 7.3(b):

(i)

Buyer shall return all documents and other material received from or on behalf
of each of Parent, Selling Sub, or the Company relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof,
to Parent, Selling Sub or the Company, as applicable;

(ii)

all confidential information received by Buyer with respect to the US Business
or the Company shall be treated in accordance with the Confidentiality
Agreement, which shall remain in full force and effect notwithstanding the
termination of this Agreement;

(iii)

the provisions of Sections 5.2(a), 7.8, 7.11, 7.12, 7.13, 7.16 and 7.17 shall
remain in full force and effect; and

(iv)

in no event shall any termination of this Agreement limit or restrict the rights
and remedies of any party hereto against any other party which has willfully
breached any of the agreements, covenants, representations, warranties or other
provisions of this Agreement prior to termination hereof.

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7.4.

Indemnification; Survival of Representations and Warranties and Covenants.

(a)

Survival of Representations.  The representations and warranties of each of
Parent, Selling Sub and Buyer contained in this Agreement (including the
Schedules and Exhibits attached hereto) and in the certificates delivered
pursuant to Sections 3.2(a), 3.2(b), 3.2(c), 3.3(a) and 3.3(b) shall survive for
a period of eighteen (18) months following the Closing Date; provided, however,
that the representations and warranties contained in Sections 4.1(a), 4.1(c),
4.1(q), 4.1(s) and 4.1(u) shall survive the Closing indefinitely and the
representations and warranties contained in Sections 4.1(v) shall survive the
Closing for the applicable statute of limitations.  The covenants of each of
Parent, Selling Sub and Buyer to be performed prior to Closing shall survive the
Closing and remain in effect indefinitely. The applicable periods during which
the representations, warranties and covenants survive according to this Section
7.4(a) are referred in this Agreement as the “Survival Period”.  The obligations
to indemnify and hold harmless any Buyer Indemnified Party or Seller Indemnified
Party under this Section 7.4 with respect to a breach of a representation or
warranty or a breach of covenant shall terminate when the applicable Survival
Period terminates except with respect to claims for indemnification made in
writing prior to the termination of the applicable Survival Period or in respect
of actions (whether instituted before or after such termination) based on any
claim made in writing prior to such termination (any such claims or actions
“Claims”).

(b)

Indemnification by each of Parent and Selling Sub.  Subject to the other
provisions of this Section 7.4, if the Closing occurs, and notwithstanding any
knowledge or information that Buyer may have, Parent agrees to indemnify, save
and hold harmless Buyer and its Affiliates and Subsidiaries and their respective
officers, directors, principals, attorneys, partners and agents (the “Buyer
Indemnified Parties” and together with the Seller Indemnified Parties, the
“Indemnified Parties”) from and against any and all losses, damages,
liabilities, costs and expenses (including, without limitation, reasonable
attorneys’ fees and expenses of investigation and cooperation), judgments and
settlements (whether or not arising out of third-party claims) but excluding
lost profits, punitive or consequential damages other than in respect of
punitive damages payable by any Indemnified Party to a third party (“Losses”),
incurred as a result of or arising out of:

(i)

any breach of any representation or warranty made by Parent or the Selling Sub
in this Agreement (including the Schedules and Exhibits attached hereto) and in
the certificates delivered pursuant to Sections 3.2(a), 3.2(b) and 3.2(c);

(ii)

any breach of any covenant or agreement made by Parent or the Selling Sub or the
Company in this Agreement; and

(iii)

the Retained Liabilities or the Excluded Assets.

(c)

Indemnification by Buyer.  Subject to the other provisions of this Section 7.4,
if the Closing occurs, Buyer shall indemnify, save and hold harmless each of
Parent and Selling Sub, as applicable and their Affiliates and Subsidiaries and
their respective officers,

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directors, principals, attorneys, partners and agents (the “Seller Indemnified
Parties”) from and against any and all Losses, incurred as a result of or
arising out of:

(i)

any breach of any representation made by Buyer set forth in Section 4.2 hereof
and in the certificates delivered pursuant to Section 3.3(a) and 3.3(b); and

(ii)

any breach of any covenant or agreement made by Buyer or the Company (following
the Closing) in this Agreement; and

(iii)

the Assumed Liabilities.

(d)

Mitigation.   Nothing provided in this Section 7.4 shall limit any duty of an
Indemnified Party to mitigate Losses under applicable law.  For the purposes of
indemnification provided in Section 7.4(b) and (c), in determining whether the
representations or warranties of Parent, Selling Sub or Buyer have been
breached, no effect will be given to any materiality or Material Adverse Effect
qualifier or dollar threshold set forth in such representations and warranties
or related definitions.

(e)

Losses Net of Insurance, Etc.   The amount of any Losses for which
indemnification is provided under this Section 7.4 shall be net of (i) any
amounts actually recovered by Indemnified Parties pursuant to any
indemnification by or indemnification agreement with any third party (net of any
costs incurred to obtain such recovered amounts) and (ii) any insurance proceeds
or other cash receipts or sources of reimbursement received as an offset against
such Losses (net of any costs incurred to obtain such proceeds or reimbursement
and all deductions and adjustments to premiums; and no right of subrogation
shall accrue to any insurer or third party indemnitor hereunder) (each such
source named in clauses (i) and (ii), a “Collateral Source”); and (iii) an
amount equal to the Tax benefit, if any (net of the Tax cost, if any),
attributable to such Losses; provided, however, that nothing in this Section
7.4(e) shall limit in any way the ability of Buyer to (x) take (or refrain from
taking, as the case may be) any position for Tax purposes that Buyer determines
to take (or refrain from taking) in its sole discretion, or (y) refrain from
pursuing any Collateral Source recovery that Buyer determines, in its sole
discretion, would be commercially inadvisable to pursue.  

(f)

Defense of Third Party Claims.  If any third party shall notify any Indemnified
Party with respect to any matter (a “Third Party Claim”) which may give rise to
a claim for indemnification against any other party (each an “Indemnifying
Party” and collectively the “Indemnifying Parties”) under this Section 7.4
(including the commencement of any administrative proceeding, including without
limitation an administrative proceeding with respect to Taxes), written notice
thereof shall be given by the Indemnified Party to the Indemnifying Parties
promptly (and in any event within fifteen (15) calendar days after receiving
notice of the Third Party Claim).  The failure of any Indemnified Party to give
timely notice hereunder shall not affect rights to indemnification hereunder,
except to the extent that the Indemnifying Parties are materially prejudiced by
such failure to give notice.  After such notice, Indemnifying Parties shall be
entitled, if they so elect at their own cost and expense and upon

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their irrevocably and unconditionally notifying the Indemnified Party in writing
that they shall indemnify all Indemnified Parties in respect of such matter,
(i) to take control of the defense and investigation of such lawsuit or action,
(ii) to employ and engage attorneys of their own choice to handle and defend the
same unless the Indemnified Party has been advised by counsel that joint counsel
for the Indemnified Party and the relevant Indemnifying Party shall result in a
conflict under the applicable rules of professional conduct, in which event the
Indemnified Party shall be entitled, at the Indemnifying Parties’ cost, risk and
expense to separate counsel of its own choosing, and (iii)  if such Third Party
Claim seeks only money damages (all of which are to be paid by the Indemnifying
Parties) to compromise or settle such claim; provided, that the Indemnifying
Party shall not agree to any compromise or settlement that does not include a
complete release of the Indemnified Party from all liability with respect
thereto without the consent of Indemnified Party, which will not be unreasonably
withheld or delayed.  No Third Party Claim which seeks equitable or non-monetary
relief may be settled by the Indemnifying Parties without the consent of the
Indemnified Parties, which shall not be unreasonably withheld or delayed.  The
Indemnified Party may, at its own cost, participate in (but not control) the
investigation, trial and defense of such lawsuit or action and any appeal
arising therefrom.  Any Indemnified Party is hereby authorized prior to the date
on which it receives written notice from the Indemnifying Parties that they
intend to assume the defense, appeal or settlement of a Third Party Claim, to
file any motion, answer or other pleading and take such other action which it
shall reasonably deem necessary to protect its interest or that of the
Indemnifying Parties until the date on which the Indemnified Party receives such
notice from the Indemnifying Parties, provided that, prior to filing such
motion, answer or other pleading or taking such other action, the Indemnified
Party shall have made reasonable efforts to consult with the Indemnifying
Parties and shall have concluded reasonably and in good faith that any delay in
filing such motion, answer or other pleading or taking other actions would
adversely affect the rights of such Indemnifying Party.  If the Indemnifying
Parties fail to assume the defense of such claim within thirty (30) calendar
days after receipt of the notice of claim by the Indemnifying Parties, the
Indemnified Party against which such claim has been asserted will (upon
delivering notice to such effect to the Indemnifying Parties) have the right to
undertake, at the Indemnifying Parties’ cost and expense, the defense of such
claim (but shall not have authority to settle such claim without the consent of
the Indemnifying Parties (which shall not be unreasonably withheld or delayed)
unless the Indemnifying Parties fail, within ten (10) days of notice that
Indemnified Party intends to settle the claim (which notice shall describe the
terms of such proposed settlement), to agree to assume control of the defense of
such claim).  If the Indemnified Party assumes the defense of the claim, the
Indemnified Party will keep the Indemnifying Parties reasonably informed of the
progress of any such defense.  Subject to the other provisions hereof, the
Indemnifying Parties shall be liable for any settlement of any action effected
pursuant to and in accordance with this Section 7.4 and for any final judgment
(subject to any right of appeal) and the Indemnifying Parties agree to indemnify
and hold harmless each Indemnified Party from and against any Losses by reason
of such settlement or judgment.

(g)

Cooperation.  Any Indemnified Party shall cooperate in all reasonable respects
with the Indemnifying Parties and their attorneys in the investigation, trial
and defense

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of such lawsuit or action and any appeal arising therefrom and, at no
out-of-pocket cost to the Indemnified Party, shall furnish such records,
information and testimony, and attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably requested in connection
therewith.  Such cooperation shall include access during normal business hours
afforded to Parent, Selling Sub and Buyer and their respective agents and
representatives (including legal counsel) to, and reasonable retention by the
Indemnified Party of records and information which are reasonably relevant to
such third party claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided
hereunder.  The parties shall cooperate with each other in any notifications to
insurers.

(h)

Limitation on Claims.   

(i)

With respect to Parent’s indemnity obligations pursuant to Section 7.4(b)(i),
the maximum aggregate liability obligation of Parent to the Buyer Indemnified
Parties (including, but not limited to, liabilities of Parent and Selling Sub
for costs, expenses and attorneys’ fees paid or incurred in connection therewith
or in connection with the curing of any or all breaches of Parent’s and Selling
Sub’s representations and warranties) collectively pursuant to Section 7.4(b)(i)
shall not exceed $2 million; provided, however, that with respect to any Claims
made in writing prior to the 91st day after the Closing, such maximum aggregate
liability shall be $7 million; provided, further, that in no event shall
Parent’s indemnity obligations pursuant to Section 7.4(b)(i) exceed $7 million .
 

(ii)

With respect to Buyer’s indemnity obligations pursuant to Section 7.4(c)(i), the
maximum aggregate liability obligation of Buyer to the Seller Indemnified
Parties (including, but not limited to, liabilities of Buyer for costs, expenses
and attorneys’ fees paid or incurred in connection therewith or in connection
with the curing of any or all breaches of Buyer’s representations and
warranties) collectively pursuant to Section 7.4(c)(i) shall not exceed $2
million; provided, however, that with respect to any Claims made in writing
prior to the 91st day after the Closing, such maximum aggregate liability shall
be $7 million; provided, further, that in no event shall Buyer’s indemnity
obligations pursuant to Section 7.4(c)(i) exceed $7 million.

(i)

Other Limitations.

(i)

No Buyer Indemnified Parties shall be entitled to recover from Parent for any
Losses pursuant to Section 7.4(b)(i) unless the aggregate amount of all Losses
for which the Buyer Indemnified Parties would, but for this sentence, be
entitled to receive indemnification pursuant to such Section 7.4(b)(i) exceeds
$250,000 (the “Loss Threshold”).  In the event that such Losses exceed the Loss
Threshold, the Buyer Indemnified Parties shall be entitled to recover any and
all such Losses from Parent from the first dollar of Loss.

(ii)

No Buyer Indemnified Parties shall be entitled to recover from Parent for any
Losses for any individual claim unless such claim is in an amount greater than
$25,000.

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(iii)

No Seller Indemnified Parties shall be entitled to recover from Buyer for any
Losses pursuant to Section 7.4(c)(i) unless the aggregate amount of all Losses
for which the Buyer Indemnified Parties would, but for this sentence, be
entitled to receive indemnification pursuant to such Section 7.4(c)(i) exceeds
the Loss Threshold.  In the event that such Losses exceed the Loss Threshold,
the Seller Indemnified Parties shall be entitled to recover any and all such
Losses from Buyer from the first dollar of Loss.

(iv)

No Seller Indemnified Parties shall be entitled to recover from Buyer for any
Losses for any individual claim unless such claim is in an amount greater than
$25,000.

(j)

Exclusive Remedy.  After the Closing, the rights set forth in this Section 7.4
shall be the Indemnified Parties’ sole and exclusive remedies with respect to
any and all claims relating to this Agreement, the parties hereto, the events
giving rise to this Agreement and the transactions provided for herein or
contemplated hereby; provided, however, that nothing in this Section 7.4(j)
shall limit Buyer’s right to seek injunctive or other equitable relief to
enforce the performance by Parent or Selling Sub of their obligations hereunder.
  Notwithstanding the foregoing, this Section 7.4(j) shall not affect the
parties’ rights under the Investment Documents and Buyer shall have the right to
pursue remedies against Parent and Selling Sub outside of this Section 7.4 to
enforce covenants contained in the Transition Services Agreement.

(k)

Tax Treatment.  Any indemnification payments under this Section 7.4 shall be
treated to the extent permitted by applicable law, for Tax purposes, as
adjustments to the Purchase Price.  

(l)

Parent and Selling Sub shall not be liable for any claim under this Agreement in
respect of any Liability to Taxes or relating to Taxes to the extent that:

(i)

allowance, provision or reserve for it is made in the Financial Statements and
such allowance, provision or reserve has reduced the Purchase Price in
accordance with Section 2.7 of this Agreement;

(ii)

it would not have arisen but for any voluntary act, omission, transaction or
arrangement after the Closing Date of the Company or the Buyer or any person
connected with either of them (applying for this purpose section 839 of the
Taxes Act to determine whether any person is connected with another) or their
directors or employees (which the person concerned was aware, or ought
reasonably to have been aware, gave rise to the Taxes in question) otherwise
than in the ordinary course of business of the Company as presently carried on
but excluding any act pursuant to a legally binding agreement entered into by
the Company or the Parent on or prior to the Closing Date or act carried out at
the request of the Parent, Selling Sub or their Affiliates;

(iii)

it arises (or is increased) because of:

(A)

any claim, election, surrender or disclaimer made or notice or consent given or
any other thing done after the Closing Date by the Company or the Buyer or

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any subsidiary of either of them or any person connected (within the meaning of
section 839 of the Income and Corporation Taxes Act 1988) with either of them
under the provisions of any legislation relating to Tax other than where such
claim, election, surrender, disclaimer, notice, consent or other thing was taken
into account in preparing the Accounts or Financial Statements;

(B)

a failure or omission on the part of the Company on or after the Closing Date to
make any claim, election, surrender or disclaimer or give any notice or consent
or do any other thing under the provisions of any legislation relating to Tax
the making, giving or doing of which was taken into account in computing the
provision for Tax in the Financial Statements or the Accounts provided the
Parent or Selling Sub has provided the Buyer with written details of such claim,
election, surrender, disclaimer, notice, consent or other thing within 10 days
of Closing or 30 days prior to the date on which such claim, election,
surrender, disclaimer, notice, consent or other thing is required to be
submitted, made or done, whichever is the later;

(iv)

it arises in consequence of, a voluntary change in the date to which the Company
makes up its accounts or a change of any of its accounting policies, bases or
practices in either case after the Closing Date other than where such change us
to correct an accounting policy, bases or practice so that it accords with UK
GAAP or international accounting standards in force at Closing;

(v)

it arises in consequence of any change in legislation or any change in the rate
of any Tax or any imposition of Tax or change in the published practice of, or
general concession operated by, any tax authority in each case coming into
effect after the Closing Date;

(vi) the Buyer has recovered damages or any other amount under the Agreement in
respect of the same loss, liability, damage or event;

(vii) the liability to Tax would not have arisen but for a disclaimer of capital
allowances or any Relief or a revision to or revocation of a claim therefore
where such revision or disclaimer is caused or made by the Company after the
Closing Date and such disclaimer, revisions or revocation is not taken into
account in the Accounts or Financial Statements; or

(viii) the liability to Tax arises or is increased as a consequence of any
failure by the Buyer or the Company to comply with any of their respective
obligations under this Agreement; or

(ix) to the extent that the liability to Tax is mitigated by the setting off of
any Relief of the Company incurred in or in respect of a period ended on or
before the Closing Date (other than a Relief described in Section 5.7(a)(ii) or
(iii)) for no consideration or no cost to the Buyer or the Company or any such
Relief would have been so available to mitigate but for the setting off of the
Relief against profits or a liability to Tax, in either case in respect of which
the Buyer would not have been able to make a claim under this Agreement; or

(x) the Tax arises or is increased by the application of a 2004 Relief;

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(xi) to the extent that the liability to Tax arises or is increased as a result
of any delay of more than 5 Business Days or default by the Buyer or the Company
in paying over to any tax authority any amount received from the Parent or
Selling Sub or any of them under clause 5.7 of this Agreement; or

(xii) to the extent that it has been discharged before the Closing Date; or

(xiii) to the extent that it has been made good by insurers or otherwise
compensated for without cost to the Buyer or the Company; or

(xiv) to the extent that it would not have arisen but for a cessation of, or any
changes in the conduct of, any trade carried on by the Company at the Closing
Date, being a cessation or charge occurring on or after the Closing Date;

7.5.

Collateral Sources.  If the Parent or Selling Sub have made full payment to the
Buyer under this Agreement and the Company is entitled to recover from any third
party (including any tax authority) any sum in consequence of any event to which
the payment made by the Parent or Selling Sub relates, subject to this Section
7.5 and the Parent and Selling Sub providing an indemnity to the Buyer for its
costs which is reasonably satisfactory to the Buyer, the Buyer shall and shall
procure that the Company shall use all reasonable endeavours to effect such
recovery and the Parent or Selling Sub may require the Buyer by notice in
writing to take and to procure that the Company takes such action as the Parent
or Selling Sub reasonably request to recover such sums.  Pursuant to this
Section 7.5, the Buyer covenants with the Parent and Selling Sub to pay to the
Parent or Selling Sub (as appropriate) within 5 business days after receipt of
any sum so recovered, an amount equal to any sum (up to but not exceeding the
amount paid by the Parent or Selling Sub to the Buyer under this Agreement)
referred to in Section 7.6(i) (including any interest or repayment supplement)
which the Company actually recovers less any liabilities, Taxes, reasonable
costs, fees or expenses incurred by the Buyer or the Company in respect of the
matter in question.

7.6.

Tax Relief.

(i)

If:

(A)

the auditors for the time being of the Company shall certify (at the request and
expense of the Parent and the Selling Sub) that any liability for Tax which has
resulted in a payment having been made or becoming due from the Parent and or
the Selling Sub under this Agreement will give rise to a relief (a “Tax Relief”)
for the Company which would not otherwise have arisen and shall further certify
the value of that Tax Relief (taking into account timing differences); or

(B)

the Company shall become entitled to any repayment of corporation tax overpaid
by the Company in respect of any period ending on or before the Closing Date
then any such amounts shall be dealt with in accordance with Section 7.6(ii).

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(ii)

Where it is provided under Section 7.6(i) that any amount (the "Relevant
Amount") is to be dealt with in accordance with this Section 7.6(ii):

(A)

the Buyer shall, or shall procure that the Company shall, notify the Parent or
the Selling Sub (and provide the Parent or the Selling Sub with full details
thereof) as soon as reasonably practicable, and in any event within four
Business Days of it coming to the notice of the Buyer or the Company that there
is likely to be a Tax Relief or right of repayment as referred to in Section
7.6(i), and the Buyer shall provide prompt replies to reasonable enquiries by
the Parent or the Selling Sub and their agents, and provide reasonable
assistance and information in relation to these matters.

(B)

the Relevant Amount shall first be set off against any payment then due from the
Parent or the Selling Sub under this Agreement; and

(C)

to the extent there is an excess, the Buyer shall procure that a refund shall be
made to the Parent or the Selling Sub of any previous payment or payments made
by the Parent or the Selling Sub under this Agreement and not previously
refunded under this sub-Section up to the amount of such excess; and

(D)

to the extent that the excess referred to in Section 7.6(ii)(C) is not exhausted
under that paragraph, the remainder of that excess shall be carried forward and
set off against any future payment or payments which become due from the Parent
or Selling Sub under this Agreement.

(iii)

Where any such certification as is mentioned in  7.6(i) has been made, the
Parent, Selling Sub or the Buyer may (at their/its own expense) request the
auditors to review such certification in the light of all relevant
circumstances, including any facts which have become known only since such
certification, and to certify whether such certification remains correct or
whether, in the light of those circumstances, the amount that was the subject of
such certification should be amended.

(iv)

If the auditors certify under Section 7.6(iii) that an amount previously
certified should be amended, that amended amount shall be substituted for the
purposes of Section 7.6(ii) of this clause as the Relevant Amount, and such
adjusting payment (if any) as may be required by virtue of the above-mentioned
substitution shall be made as soon as practicable by the Parent or Selling Sub
or (as the case may be) to the Parent or Selling Sub.

7.7.

2004 Reliefs.  Notwithstanding the foregoing, upon the direction of Parent, the
Buyer covenants that it will cause the Company to surrender up to the full
amount of the 2004 Reliefs to Selling Sub or any one or more other subsidiary or
affiliated company(s) of Parent (“UK affiliates”) as may be entitled to claim
Group Relief in respect of such 2004 Reliefs.  No payment for shall be made to
the Company for the 2004 Reliefs so surrendered.  No Reliefs other than 2004
Reliefs shall be, or shall be required to be, surrendered by the Buyer or the
Company to the Parent, Selling Sub or their Affiliates.

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7.8.

Expenses.  Whether or not the transactions contemplated hereby are consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
or expenses, except as may otherwise be expressly provided in this Agreement.

7.9.

Amendments.  No amendment to or modification of this Agreement shall be
effective unless it shall be in writing and signed by each of the parties
hereto.

7.10.

Notices.  All notices and other communications hereunder shall be in writing and
shall be deemed given (a) on the date of delivery if delivered personally; (b)
on the date of transmission if sent via facsimile transmission to the facsimile
number given below, and telephonic confirmation of receipt is obtained promptly
after completion of transmission; (c) on the date after delivery to a reputable
nationally recognized overnight courier service or (d) three (3) days after
being mailed by registered or certified mail (return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):

(i)

If to Buyer, to:

Archimedes Pharma Limited

10 Upper Bank Street

London E14 5JJ

Attention:  Nicholas Lowcock

Telecopier: [44]207-321-0881

With a required copy to:

Willkie Farr & Gallagher LLP

787 Seventh Avenue

New York, NY 10019

Attention:

Steven J. Gartner

Gregory B. Astrachan

Telecopier:

(212) 728-8111

(ii)

If to Parent, to:

John R. Gailey III, Esq.

Vice President, General Counsel and Secretary

West Pharmaceutical Services, Inc.

101 Gordon Drive

Lionville, PA  19341

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With a required copy to:

Dechert LLP

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA 19103

Attention:

Christopher G. Karras, Esq.

Telecopier:

(215) 994-2222

(iii)

If to Selling Sub, to:

John R. Gailey III, Esq.

Vice President, General Counsel and Secretary

West Pharmaceutical Services, Inc.

101 Gordon Drive

Lionville, PA  19341

With a required copy to:

Dechert LLP

4000 Bell Atlantic Tower

1717 Arch Street

Philadelphia, PA 19103

Attention:

Christopher G. Karras, Esq.

Telecopier:

(215) 994-2222

Such addresses may be changed from time to time by means of a notice given in
the manner provided in this Section (provided that no such notice shall be
effective until it is received by the other parties hereto).

7.11.

Consent to Jurisdiction.   With respect to any action or claim arising out of or
relating to this Agreement or the transactions contemplated hereby, the parties
hereto hereby expressly and irrevocably (a) agree and consent to be subject to
the exclusive jurisdiction of any United States District Court located in New
York, New York (and in the absence of Federal jurisdiction, the parties consent
to be subject to the exclusive jurisdiction of the state courts located in New
York, New York, (b) agree not to bring any action related to this Agreement or
the transactions contemplated hereby in any other court (except to enforce the
judgment of such courts), (c) agree not to object to venue in such courts or to
claim that such forum is inconvenient and (d) agree that notice or the service
of process in any proceeding shall be properly served or delivered if delivered
in the manner contemplated by Section 7.10.  Final judgment by such courts shall
be conclusive and may be enforced in any manner permitted by law.

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7.12.

Severability.   If any provision of this Agreement or the application of any
such provision to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof.

7.13.

Interpretation.   All references to immediately available funds or dollar
amounts contained in this Agreement shall mean United States dollars.  The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.  The
parties acknowledge and agree that (a) each party and its counsel have reviewed
the terms and provisions of this Agreement and have contributed to its drafting,
(b) the normal rule of construction, to the effect that any ambiguities are
resolved against the drafting party, shall not be employed in the interpretation
of it, and (c) the terms and provisions of this Agreement shall be constructed
fairly as to all parties hereto and not in favor of or against any party,
regardless of which party was generally responsible for the preparation of this
Agreement.  Any fact or item that is disclosed in a Schedule shall be deemed to
have been disclosed for all applicable Schedules or representations as long as
the applicability of the Schedules and representations as to which the matter is
not expressly and specifically identified is plainly evidenced on the face of
the disclosure included in the Schedule in which such disclosure appears.

7.14.

Waiver.   Waiver of any term or condition of this Agreement by any party shall
be effective if in writing and shall not be construed as a waiver of any
subsequent breach or failure of the same term or condition, or a waiver of any
other term of this Agreement.  No failure or delay by any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

7.15.

Counterparts.   This Agreement may be executed in any number of counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
parties and delivered to the other parties.

7.16.

Entire Agreement.   This Agreement, including the Schedules hereto, and the
Confidentiality Agreement contain the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersede all
prior and contemporaneous agreements, negotiations, correspondence, undertakings
and understandings, oral or written, relating to such subject matter.  

7.17

Governing Law.   This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York applicable to agreements made
and to be performed entirely within the State of New York, without regard to the
conflicts of law principles thereof.

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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first written above.

WEST PHARMACEUTICAL SERVICES, INC.

By: /s/ D. E. Morel

Name: Donald E. Morel, Jr.

Title: President

WEST PHARMACEUTICAL SERVICES GROUP, LTD.

By: /s/ J. R. Gailey

Name: John R. Gailey III

Title: Director

ARCHIMEDES PHARMA LIMITED

By: /s/ Simon Turton

Name: Simon Turton

Title: Director

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ANNEX A -Additional Consideration

1.  Definitions.  For purposes of calculating the Additional Consideration,
Capitalized Terms used but not defined herein shall have the meanings ascribed
thereto in the Agreement to which this Annex is appended and the following terms
shall have the following meanings:

“Cash Consideration” shall mean the after-Tax cash proceeds actually received by
the Buyer from a Product Sale to an independent, third-party customer in bona
fide arms length transactions.

"Net Sales" shall mean with respect to the Products distributed and sold by the
Buyer or any of its Subsidiaries, the total gross amount received for such
Product sold to independent, third-party customers in bona fide arms length
transactions, less

(i)

quantity and/or cash discounts actually allowed or taken,

(ii)

any sales, excise, value-added, turnover or similar taxes and any duties and
other governmental charges imposed upon the importation, use or sale of the
Product,

(iii)

amounts allowed or credited by reason of rejections, return of goods, and
retroactive price reductions specifically identifiable as relating to the
Product,

(iv)

third party rebates and chargebacks related to the sale of the Product, to the
extent allowed,

(v)

transportation, insurance and handling expenses if separately invoiced and
directly chargeable to such sales of Products, and

(vi)

any other specifically identifiable amounts included in the Product's gross
sales that will have been or ultimately will be credited and that are
substantially similar to those listed above.

Net Sales shall not include any consideration received by Buyer, its Affiliates
or its licensees or sublicensees in respect of the sale, use or other
disposition of a Product in a country as part of a clinical trial prior to the
receipt of all regulatory approvals required to commence full commercial sales
of such Product in such country.

 “Products” shall mean shall mean any formulation of a pharmaceutical compound
that incorporates or is derived from any of the Subject Technologies.

“Product Sale” shall mean any sale (other than in connection with an Exit (as
such term is defined in the Investment Documents)) of all of the Buyer’s rights
to develop, market and sell a Product.

“Royalty Revenues” shall mean the cash royalty revenues of the Buyer and its
Subsidiaries actually received under licenses of the Subject Technologies for
use in Products to independent, third-party customers in bona fide arms length
transactions, less

(i)

any milestone, research and development or similar payments; and

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(ii)

expenses or funding costs of the Buyer or its Subsidiaries that are prepaid
under any such licenses.

“Subject Technologies”  shall mean the Chi-Sys, Pectin and Targit technologies
for the delivery of therapeutic compounds.

2.  Payment of Additional Consideration.  As additional consideration for the
Conveyed Assets and the Shares, Buyer shall pay to Selling Sub an amount (the
“Additional Consideration”) equal to the sum, without duplication, of (a) 3%
(such percentage, the “Royalty Rate”) of any Royalty Revenues, plus (b) 1.8%
(such percentage, the “Net Sales Rate”) of Net Sales of any Products, plus (c)
2.0% (such percentage, the “Sales Rate”) of any Cash Consideration received in
respect of any Product Sale, in each of (a), (b) and (c) during the period (the
“Payment Period”) commencing on the Closing Date and ending on December 31,
2014; provided, however, that in the event that the aggregate Additional
Consideration paid or payable hereunder exceeds $19,000,000, (i) the Royalty
Rate applied to any Royalty Revenues received thereafter shall be reduced to
0.25% ,(ii) the Net Sales Rate applied to any Net Sales of Products received
thereafter shall be reduced to 0.15% and (iii) the Sales Rate applied to any
Cash Consideration received thereafter shall be reduced to 0.15%.

3.  Payment Terms.  Payments by Buyer to Selling Sub of Additional Consideration
under this Annex shall be calculated and paid annually.  All such annual
payments of Additional Consideration shall be made on the 45th calendar day
after receipt by Buyer of its audited financial statements in respect of each
fiscal year of the Buyer during the Payment Period (each, a “Payment Date”).
 All payments shall be paid in United States dollars in Philadelphia, PA,.  If
sales of Products are made, or Royalty Revenues are received, in currencies
other than U.S. dollars, the Additional Consideration payable hereunder shall be
computed in local currency based on the amount of Net Sales, Royalty Revenues
and Cash Consideration, as applicable, and then converted into U.S. dollars at
the noon buying rate for the applicable currency published in the Wall Street
Journal prevailing on the day immediately preceding the Payment Date.

(a)

In connection with the making of each payment by Buyer to Selling Sub under this
Annex, Buyer shall deliver to Selling Sub a schedule setting forth the
computation of the Additional Consideration and a copy of the financial
information used in making such computation.  Buyer’s computation of any payment
under this Annex shall be conclusive and binding upon the parties hereto unless,
within thirty business days following Selling Sub’s receipt of the
aforedescribed payment and information, Selling Sub notifies Buyer in writing
(the “Objection Notice”) that it disagrees with Buyer’s computation of the
Additional Consideration.  Such notice by Selling Sub shall include a schedule
setting forth Selling Sub’s computation of the Additional Consideration,
together with a copy of any financial information, other than that previously
supplied by Buyer to Selling Sub, used in making Selling Sub’s computation.

(b)

Selling Sub’s computation of the Additional Consideration under this Annex shall
be conclusive and binding upon the parties hereto unless, within thirty business
days following Buyer’s receipt of the Objection Notice, Buyer notifies Selling
Sub in writing that it disagrees with Selling Sub’s computation of the
Additional Consideration.  If Buyer disagrees with Selling Sub’s computation of
the Additional Consideration, Buyer and Selling Sub shall

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request a national firm of independent certified public accountants mutually
agreeable to Buyer and Selling Sub to compute the amount of the Additional
Consideration as promptly as possible, which computation shall be conclusive and
binding upon Buyer and Selling Sub.  The expenses of any computation by any such
national accounting firm selected by the Buyer and Selling Sub to resolve
computational disputes hereunder shall be borne equally by Buyer and Selling
Sub.

(c)

In the event the amount of Additional Consideration to be paid by Buyer to
Selling Sub in accordance with paragraph 3(a) for any Contract Period is
recomputed in accordance with paragraph 3(c), the adjustment to amount of
Additional Consideration shall be paid by Buyer to Selling Sub within twenty
business days after the date of final recomputation of such payment.

4.  Books and Records.  Buyer shall keep books of account containing all
particulars that may be necessary for the purpose of showing the amounts payable
to Selling Sub hereunder.  The books of account shall be kept at Buyer's
principal place of business or the principal place of business of the
appropriate division of Buyer to which this Agreement relates.  At reasonable
times and upon reasonable notice, for two(2) years following the end of the
fiscal year to which they pertain, the books of account and the supporting data
shall be made available, upon the reasonable request and at reasonable times, to
Selling Sub or its agents during regular business hours for the purpose of
verifying, and only to the extent necessary to verify, the amount of Additional
Consideration payable under this Agreement, but in no event more than once per
calendar year and provided that such access does not unreasonably disrupt the
normal operations of the Buyer.

5.  No Grant of Intellectual Property Rights; Operation of the Business.
 Nothing in this Annex or this Agreement shall be deemed to grant, transfer or
convey to Selling Sub any right, title or interest, including licenses or rights
to use, in and to the Subject Technologies or any Intellectual Property related
thereto, whether now existing or hereinafter created, nor shall Selling Sub
retain any residual rights in any Intellectual Property Selling Sub may have had
heretofore under such Intellectual Property.  Selling Sub acknowledges that (i)
upon the closing of the transactions contemplated by this Agreement and except
as expressly provided to the contrary in this Agreement, Buyer has the right to
operate the Business and the Company and Buyer’s other businesses in any way
that Buyer deems appropriate in Buyer’s sole discretion, (ii) Buyer has no
obligation to operate the Business and Buyer’s other businesses in order to
maximize the amount of any Additional Consideration, (iii) Buyer is under no
obligation to manufacture or sell Products or license the Subject Technologies,
(iv) the Additional Consideration is speculative and is subject to numerous
factors outside the control of Buyer, (v) there is no assurance that Seller will
receive any Additional Consideration, (vi) Buyer owns no fiduciary duty or
express or implied duty to Selling Sub, including an implied duty of good faith
and fair dealing, (vii) nothing in this Agreement shall prohibit Buyer from
selling any or all of its rights in the Subject Technologies or any Intellectual
Property related thereto and (vii) the parties solely intend the express
provisions of this Agreement to govern their contractual relationship.  Seller
hereby waives any fiduciary duty or express or implied duty of Buyer to Selling
Sub, including an implied duty of good faith and fair dealing.

6.  Right of Setoff.  Buyer shall have the right to set off any amounts payable
under this Annex against any amounts payable to Buyer by Parent or Selling Sub
under this Agreement, including pursuant to any rights to indemnification under
Section 7.4 of this Agreement.

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