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                                                                     Exhibit 4.2

                         COMMON STOCK PURCHASE AGREEMENT

         This Common Stock Purchase Agreement (the "Agreement") is made as of
January 15, 2004 between Questcor Pharmaceuticals, Inc., a California
corporation (the "Company"), and the purchasers who are signatories hereto (the
"Purchasers").

                                    AGREEMENT

         1.       Purchase and Sale of Common Stock.

                  1.1.     Sale to the Purchasers. Subject to the terms and
conditions hereof, the Company will issue and sell to each Purchaser the number
of shares (the "Shares") of Common Stock of the Company, no par value per share
(the "Common Stock"), set forth opposite such Purchaser's name on the signature
page hereto at a purchase price of $0.644 per Share (the "Purchase Price"). The
obligations of each Purchaser hereunder are several and not joint and no
Purchaser shall be obligated to purchase any Shares in excess of the number set
forth opposite such Purchaser's name on the signature page hereto.

                  1.2. Payment of Purchase Price. On or prior to the date hereof
(the "Closing Date"), the Purchase Price shall be payable by the Purchasers by
delivery to the Company of (i) the cash consideration ("Cash Consideration")
indicated on the signature page hereto plus (ii) the value of the warrants to be
surrendered to the Company for cancellation as indicated on the signature page
hereto (the "Warrant Valuation"), together as payment of the Purchase Price for
the Shares purchased by such Purchaser hereunder.

         2.       Closing Date and Delivery.

                  2.1.     Closing Date. The closing of the purchase and sale of
the Shares hereunder (the "Closing") will be held on the Closing Date and shall
occur at the offices of the Company, 3260 Whipple Road, Union City, CA 94587.

                  2.2.     Deliveries at Closing. At the Closing, the Company
shall deliver to each Purchaser a stock certificate registered in such
Purchaser's name, or in such nominee name(s) as designated by the Purchaser in
writing, representing the Shares purchased by such Purchaser. At the Closing,
each Purchaser shall (i) effect a wire transfer to the Company in the amount of
the Cash Consideration and (ii) surrender the warrants set forth opposite such
Purchaser's name on the signature page hereto to the Company for cancellation,
each as provided in Section 1.2.

         3.       Representations and Warranties by the Company. The Company
represents and warrants to each Purchaser as of the Closing Date that, except as
set forth in the SEC Reports (as hereinafter defined):

                  3.1.     Organization and Standing. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of California, and has the requisite corporate power and authority
to own, lease and operate its properties and to carry on its business as now
being conducted. The Company is qualified to do business and is in good standing
as a foreign corporation in every jurisdiction in which the failure to so
qualify would have a material adverse effect on the financial condition or
business of the Company.

                  3.2.     Changes. Except as set forth in the SEC Reports,
since September 30, 2003, the Company has not, to the extent material to the
Company: (a) incurred any debts, obligations or liabilities, absolute, accrued
or contingent, whether due or to become due, other than in the ordinary course
of business; (b) mortgaged, pledged or subjected to lien, charge, security
interest or other encumbrance any of its assets, tangible or intangible, other
than in the ordinary course of business; (c) waived any debt owed to the Company
or its subsidiaries, other than in the ordinary course of business; (d)
satisfied or discharged any lien, claim or encumbrance or paid any obligation
other than in the ordinary course of business; (e) declared or paid any
dividends, other than in the ordinary course of business; or (f) entered into
any transaction other than in the ordinary course of business.

                  3.3.     Litigation. Except as set forth in the SEC Reports,
there are no legal actions, suits, arbitrations or other legal, administrative
or governmental proceedings pending or, to the Company's knowledge, threatened
against the Company or its properties, assets or business, and the Company is
not aware of any facts which might result in or form the basis for any such
action,

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suit or other proceeding, in each case which, if adversely determined, would
individually or in the aggregate have a material adverse effect on the financial
condition or business of the Company.

                  3.4.     Compliance with Other Instruments. Except for such
matters which, either individually or in the aggregate, would not have a
material adverse effect on the financial condition or business of the Company,
the execution and delivery of, and the performance and compliance with, this
Agreement and the transactions contemplated hereby, with or without the giving
of notice or passage of time, will not (a) result in any breach of, or
constitute a default under, or result in the imposition of any lien or
encumbrance upon any asset or property of the Company pursuant to any agreement
or other instrument to which the Company is a party or by which it or any of its
properties, assets or rights is bound or affected; (b) violate the Amended and
Restated Articles of Incorporation (the "Articles") or Amended and Restated
Bylaws (the "Bylaws") of the Company, or any law, rule, regulation, judgment,
order or decree; or (c) except for the registration of the Shares under the
Securities Act of 1933, as amended (the "Securities Act"), the listing of the
Shares on the AMEX and such consents, approvals, authorizations, registrations
or qualifications as may be required under the Securities Exchange Act of 1934,
as amended (the "Exchange Act") and applicable state securities laws in
connection with the purchase of the Shares by the Purchasers, require any
consent, approval, authorization or order of or filing with any court or
governmental agency or body. The Company is not in violation of its Articles or
Bylaws nor in violation of, or in default under, any lien, mortgage, lease,
agreement or instrument, except for such defaults which would not, individually
or in the aggregate, have a material adverse effect on the financial condition
or business of the Company. The Company is not subject to any restriction which
would prohibit the Company from entering into or performing its obligations
under this Agreement, except for such restrictions which would not, individually
or in the aggregate, have a material adverse effect on the ability of the
Company to perform its obligations under this Agreement.

                  3.5.     Reports and Financial Statements. As of their
respective filing dates, the Company's Form 10-K for the year ended December 31,
2002, the Company's Proxy Statement in connection with the 2003 Annual Meeting
of Shareholders and all Forms 10-Q and 8-K filed by the Company with the
Securities and Exchange Commission (the "SEC") after January 1, 2003, in each
case without exhibits thereto (the "SEC Reports") were prepared in all material
respects in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such SEC Reports. The SEC Reports, when read as a
whole, do not contain any untrue statements of a material fact and do not omit
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim financial statements of
the Company included in the SEC Reports have been prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis (except as may be indicated therein or in the notes thereto) and fairly
present, in all material respects, the financial position of the Company as at
the dates thereof and the results of its operations and cash flows for the
periods then ended subject, in the case of the unaudited interim financial
statements, to normal year-end adjustments and any other adjustments described
in such financial statements.

                  3.6.     Securities. The Shares are duly and validly
authorized, issued and outstanding, fully paid, nonassessable and free and clear
of all pledges, liens, encumbrances and restrictions (other than arising under
federal or state securities laws). The issuance of the Shares is not subject to
any preemptive or other similar rights.

                  3.7.     Capital Stock. As of December 17, 2003, 45,355,828
shares of the Common Stock were issued and outstanding, 2,155,715 shares of the
Company's Series A Preferred Stock, no par value per share (the "Series A
Preferred Stock"), which are convertible into 2,155,715 shares of Common Stock,
were issued and outstanding, 9,100 shares of the Company's Series B Preferred
Stock, no par value per share (the "Series B Preferred Stock"), which are
convertible into 9,668,506 shares of Common Stock, were issued and outstanding,
2,531,646 shares of Common Stock issuable upon conversion of convertible
debentures, and options and/or warrants to purchase 18,058,076 shares of Common
Stock, were issued and outstanding. All of the outstanding shares of the
Company's capital stock are validly issued, fully paid and nonassessable. Except
as set forth in this Section 3.7, as of December 17, 2003, there are no
outstanding subscriptions, options, warrants, calls, contracts, demands,
commitments, conversion rights or other agreements or arrangements of any
character or nature whatever under which the Company is or may be obligated to
issue its Common Stock, Series A Preferred Stock, Series B Preferred Stock, or
warrants or options to purchase the Common Stock or the Series A Preferred Stock
or Series B Preferred Stock. No holder of any security of the Company is
entitled to any preemptive or similar rights to purchase any securities of the
Company.

                  3.8.     Corporate Acts and Proceedings. This Agreement has
been duly authorized by the requisite corporate action and has been duly
executed and delivered by an authorized officer of the Company, and is a valid
and binding obligation of the Company, enforceable in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and as to limitations on the

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enforcement of the remedy of specific performance and other equitable remedies.
The requisite corporate action necessary for the authorization, reservation,
issuance and delivery of the Shares has been taken by the Company.

                  3.9.     No Implied Representations. All of the Company's
representations and warranties are contained in this Agreement, and no other
representations or warranties by the Company shall be implied.

                  3.10.    Filing of Reports. Since the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 2002, the Company has filed
with the SEC all reports and other material required to be filed by it therewith
pursuant to Section 13, 14 or 15(d) of the Exchange Act and the Company is
eligible to register the offer and resale of the Shares by the holders thereof
on a Registration Statement on Form S-3.

                  3.11.    Compliance with Laws. The business and operations of
the Company have been conducted in accordance with all applicable laws, rules
and regulations of all governmental authorities, except for such violations
which would not, individually or in the aggregate, have a material adverse
effect on the financial condition or business of the Company.

                  3.12.    Proprietary Rights. To the knowledge of the Company,
the Company owns or is licensed to use all patents, patent applications,
inventions, trademarks, trade names, applications for registration of
trademarks, service marks, service mark applications, copyrights, trade secrets,
licenses and rights in any thereof and any other intangible property and assets
(herein called the "Proprietary Rights") which are material to the business of
the Company. Except as would not have a material adverse effect on the financial
condition or business of the Company, the Company does not have any knowledge
of, and the Company has not given or received any notice of, any pending
conflicts with or infringement of the rights of others with respect to any
Proprietary Rights. Except as would not have a material adverse effect on the
financial condition or business of the Company, no action, suit, arbitration, or
legal, administrative or other proceeding, or investigation is pending or, to
the knowledge of the Company, threatened, which involves any Proprietary Rights.
Except as would not have a material adverse effect on the financial condition or
business of the Company, to the knowledge of the Company, no Proprietary Rights
used by the Company, and no services or products sold by the Company, conflict
with or infringe upon any proprietary rights owned or licensed by any third
party. Except as would not have a material adverse effect on the financial
condition or business of the Company, no claims have been asserted by any person
with respect to the validity of the Company's ownership or right to use the
Proprietary Rights and, to the knowledge of the Company, there is no reasonable
basis for any such claim to be successful.

                  3.13.    Compliance with Environmental Laws. Except as would
not, singly or in the aggregate, have a material adverse effect on the financial
condition or business of the Company, the Company is not in violation of any
applicable statute, law or regulation relating to the environment or
occupational health and safety, and to the Company's knowledge, no expenditures
material to the Company are or will be required to comply with any such existing
statute, law or regulation. To the Company's knowledge, the Company does not
have any liability to any governmental authority or other third party arising
under or as a result of any such past or existing statute, law or regulation,
which liability would be material to the Company.

                  3.14.    Permits, Licenses, Etc. The Company owns, possesses
or has obtained, and is operating in compliance with, all governmental and
administrative licenses, permits, certificates, registrations, approvals,
consents and other authorizations (collectively, "Permits") necessary to own or
lease (as the case may be) and operate its properties, whether tangible or
intangible, and to conduct its businesses or operations as currently conducted,
except such licenses, permits, certificates, registrations, approvals, consents
and authorizations the failure of which to obtain would not have a material
adverse effect on the financial condition or business of the Company. The
Company has not received any notice of proceedings relating to the revocation,
modification or suspension of any Permits or any circumstance which would lead
it to believe that such proceedings are reasonably likely.

                  3.15.    Insurance. The Company maintains insurance of the
type and in the amount which the Company believes is reasonably adequate for its
business, including, but not limited to, insurance covering all real and
personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against
by similarly situated companies, all of which insurance is in full force and
effect.

                  3.16.    Brokers or Finders. No agent, broker, investment
banker or other person (as such term is defined in the Securities Act) is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee from the Company in connection with any of the transactions
contemplated hereby.

         4.       Representations and Warranties by the Purchasers; Restrictions
on Transfer. Each Purchaser severally represents and warrants to, and covenants
and agrees with, the Company, as of the Closing Date, as follows:

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                  4.1.     Authorization. Purchaser has all requisite legal and
corporate or other power and capacity and has taken all requisite corporate or
other action to execute and deliver this Agreement, to purchase the Shares to be
purchased by it and to carry out and perform all of its obligations under this
Agreement. This Agreement constitutes the legal, valid and binding obligation of
Purchaser, enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and as to limitations on the enforcement of the remedy of
specific performance and other equitable remedies.

                  4.2.     Investor Status. Purchaser is an "Accredited
Investor" as defined in Rule 501 of the Securities Act or a "Qualified
Institutional Buyer," as such term is defined in Rule 144A of the Securities
Act. Purchaser is aware of the Company's business affairs and financial
condition and has had access to and has acquired sufficient information about
the Company to reach an informed and knowledgeable decision to acquire the
Shares. Purchaser has such business and financial experience as is required to
give it the capacity to protect its own interests in connection with the
purchase of the Shares and is able to bear the risks of an investment in the
Shares. Purchaser is not itself a "broker" or a "dealer" as defined in the
Exchange Act and is not an "affiliate" of the Company as defined in Rule 405 of
the Securities Act.

                  4.3.     Investment Intent. Purchaser is purchasing the Shares
for its own account as principal, for investment purposes only, and not with a
present view to or for resale, distribution or fractionalization thereof, in
whole or in part, within the meaning of the Securities Act. Purchaser
understands that its acquisition of the Shares has not been registered under the
Securities Act or registered or qualified under any state securities law in
reliance on specific exemptions therefrom, which exemptions may depend upon,
among other things, the bona fide nature of Purchaser's investment intent as
expressed herein. Purchaser has, in connection with its decision to purchase the
Shares set forth in this Agreement, relied solely upon the representations and
warranties of the Company contained herein. Purchaser will not, directly or
indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Shares, except in compliance with the Securities Act and the rules and
regulations promulgated thereunder and all applicable state securities laws.

                  4.4.     Registration or Exemption Requirements. Purchaser
further acknowledges and understands that the Shares may not be resold or
otherwise transferred except in a transaction registered under the Securities
Act and applicable state securities laws unless counsel to the Company shall
advise the Company that such transfer may be effected without such registration.
Purchaser understands that until the Shares have been registered under the
Securities Act and all applicable state securities laws, the certificates
evidencing the Shares will be imprinted with a legend that prohibits the
transfer of the Shares.

                  4.5.     Restriction on Sales, Short Sales and Hedging
Transactions. Purchaser represents and agrees that during the period from the
date Purchaser was first contacted with respect to the potential purchase of the
Shares through the date of the execution of this Agreement by Purchaser,
Purchaser did not, directly or indirectly, execute or effect or cause to be
executed or effected any short sale, option or equity swap transaction in or
with respect to the Common Stock or any other derivative security transaction
the purpose or effect of which is to hedge or transfer to a third party all or
any part of the risk of loss associated with the ownership of the Shares by the
Purchaser.

                  4.6.     No Legal, Tax Or Investment Advice. Purchaser
understands that nothing in this Agreement or any other materials presented to
Purchaser in connection with the purchase and sale of the Shares constitutes
legal, tax or investment advice. Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Shares.

                  4.7.     Brokers or Finders. Upon the consummation of the
transactions contemplated by this Agreement, no agent, broker, investment banker
or other Person is or will be entitled to any broker's or finder's fee or any
other commission or similar fee from the Purchaser in connection with any of the
transactions contemplated hereby.

         5.       Covenants.

                  5.1.     Registration Requirements.

                           (a) Promptly after, but not later than 5 days after,
the Company files its Annual Report on Form 10-K for the fiscal year ending
December 31, 2003 with the SEC (the "Filing Date"), the Company shall prepare
and file a registration statement (the "Registration Statement") with the SEC to
register the offer and resale of the Shares (the "Registrable Securities") by
the Purchasers and shall use commercially reasonable efforts to cause such
Registration Statement to become effective within 30 days

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from the Filing Date or not more than five days from the date upon which the SEC
shall allow the Company to accelerate effectiveness, whichever is shorter. In
the event that the Company shall fail to file the Registration Statement on or
prior to the Filing Date or shall fail to obtain effectiveness of the
Registration Statement within the 30-day period following the Filing Date (the
"Effectiveness Date"), then the Company will make pro rata payments to each
Purchaser (the "Liquidated Damages Payments"), as liquidated damages and not as
a penalty, in an amount equal to 1.0% of the aggregate amount of the Cash
Consideration paid by such Purchaser for each 30-day period or pro rata for any
portion therefore following the date by which such Registration Statement should
have been effective; provided, however, that if the Registration Statement is
subject to review by the SEC staff, then the Effectiveness Date shall be
extended by an additional 90 days without any Liquidated Damages Payments
required to be made; provided, further, the Company shall not be obligated to
make any Liquidated Damages Payments if the Registration Statement is not
effective due to the Purchaser's failure to provide any information about itself
that is necessary to be contained in such Registration Statement.

                           (b) The Company shall pay all Registration Expenses
(as defined below) in connection with any registration, qualification or
compliance hereunder and each Purchaser shall pay all Selling Expenses (as
defined below) and other expenses that are not Registration Expenses relating to
the Registrable Securities resold by such Purchaser. "Registration Expenses"
shall mean all expenses, except for Selling Expenses, incurred by the Company in
complying with the registration provisions herein described, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses and the expense of any special audits incident to or required by
any such registration. "Selling Expenses" shall mean all selling commissions,
underwriting fees and stock transfer taxes applicable to the Registrable
Securities and all fees and disbursements of counsel for any Purchaser.

                           (c) If the Registration Statement becomes effective,
the Company will use commercially reasonable efforts to: (i) keep such
registration effective until the second anniversary of the date such
Registration Statement is declared effective; (ii) except as provided in Section
5.1(f), prepare and file with the SEC such amendments and supplements to the
Registration Statement and the prospectus used in connection with the
Registration Statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by the
Registration Statement; (iii) furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as a Purchaser from time to time may reasonably request; (iv) cause
the Shares to be listed on the AMEX or any securities exchange or quoted on each
quotation service on which the Common Stock of the Company is then listed or
quoted; (v) provide a transfer agent and registrar for all securities registered
pursuant to the Registration Statement and a CUSIP number for all such
securities; and (vi) file the documents required of the Company and otherwise
use commercially reasonable efforts to maintain requisite blue sky clearance in
all U.S. jurisdictions in which any of the Shares are originally sold and all
other states specified in writing by a Purchaser, provided, however, that the
Company shall not be required to qualify to do business in any state in which it
is not now so qualified or has not so consented.

                           (d) The Company shall furnish to each Purchaser upon
request a reasonable number of copies of a supplement to or an amendment of the
prospectus used in connection with the Registration Statement as may be
necessary to facilitate the public sale or other disposition of all or any of
the Registrable Securities held by Purchaser.

                           (e) With a view to making available to Purchasers the
benefits of Rule 144 of the Securities Act and any other rule or regulation of
the SEC that may at any time permit Purchasers to sell Registrable Securities to
the public without registration, the Company covenants and agrees to use
commercially reasonable efforts to: (i) make and keep public information
available as those terms are understood and defined in Rule 144 of the
Securities Act until the earlier of (A) the date on which the Registrable
Securities may be sold pursuant to Rule 144(k) (or any successor rule) or (B)
such date as all of the Registrable Securities shall have been resold; (ii) file
with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and Exchange Act; and (iii) furnish to any
Purchaser upon request, as long as the Purchaser owns any Registrable
Securities, (A) a written statement by the Company that it has complied with the
reporting requirements of the Securities Act and the Exchange Act, (B) a copy of
the most recent annual or quarterly report of the Company, and (C) such other
information as may be reasonably requested in order to avail any Purchaser of
any rule or regulation of the SEC that permits the selling of any such
Registrable Securities without registration.

                           (f) Purchaser hereby acknowledges that there may be
times when the Company must suspend the use of the prospectus forming a part of
the Registration Statement until such time as an amendment to such Registration
Statement has been filed by the Company and declared effective by the SEC or
until the Company has amended or supplemented such prospectus. The Purchaser
hereby covenants that it will not sell any securities pursuant to said
prospectus during the period commencing at the time at which the Company gives
the Purchaser written notice of the suspension of the use of said prospectus and
ending at the time the Company gives the Purchaser written notice that Purchaser
may thereafter effect sales pursuant to said prospectus. Notwithstanding

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anything herein to the contrary, the Company shall not suspend use of the
Registration Statement by Purchaser unless such suspension is required by the
federal securities laws and the rules and regulations promulgated thereunder.

                           (g) As to any particular Registrable Securities, such
securities shall cease to be Registrable Securities when: (i) a registration
statement covering such securities shall have become effective under the
Securities Act and such securities have been disposed of in accordance with such
registration statement; (ii) such securities may be sold pursuant to Rule 144(k)
(or any successor rule); or (iii) such securities shall have ceased to be
outstanding.

                           (h) No Purchaser shall be entitled to any right
provided for in this Section 5.1 after the earlier of (i) five (5) years
following the effective date of the Registration Statement or (ii) the date on
which the Registrable Securities may be sold pursuant to Rule 144(k) (or any
successor rule).

                  5.2.     Indemnification and Contribution.

                           (a) The Company agrees to indemnify and hold harmless
each Purchaser from and against any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) to which such Purchaser may become
subject (under the Securities Act or otherwise) insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise out
of, or are based upon (i) any untrue statement or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact in the
Registration Statement, on the effective date thereof, or any amendment or
supplements thereto; or (ii) any violation by the Company of any Federal, state
or common law rule or regulation applicable to the Company in connection with
any such registration, and the Company will, as incurred, reimburse such
Purchaser for any legal or other expenses reasonably incurred in investigating,
defending or preparing to defend, settling, compromising or paying any such
action, proceeding or claim; provided, however, that the Company shall not be
liable in any such case to the extent that such loss, claim, damage or liability
arises out of, or is based upon (i) an untrue statement or alleged untrue
statement of a material fact or omission or alleged omission in any registration
statement or prospectus in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Purchaser
specifically for use in preparation thereof; (ii) any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or prospectus delivered by the Purchaser after the Company had
notified the Purchaser in writing that such registration statement or prospectus
contained such untrue statement or alleged untrue statement; (iii) any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading after the
Company had notified the Purchaser in writing that such registration statement
or prospectus contained such omission or alleged omission; or (iv) the failure
of the Purchaser to deliver any preliminary or final prospectus, or any
amendments or supplements thereto, required under applicable securities laws,
including the Securities Act, to be so delivered, provided that a sufficient
number of copies thereof had been previously provided by the Company to the
Purchaser.

                           (b) Each Purchaser, severally and not jointly, agrees
to indemnify and hold harmless the Company from and against any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) to which
the Company may become subject (under the Securities Act or otherwise) insofar
as such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon (i) any untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact in the Registration Statement, or any amendment or
supplements thereto, in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Purchaser specifically for use
in preparation of the Registration Statement or (ii) an untrue statement or
alleged untrue statement or omission or alleged omission in any prospectus that
is corrected in any subsequent prospectus or supplement or amendment thereto,
that was delivered to a Purchaser at least one (1) day prior to the pertinent
sale or sales by such Purchaser and not delivered by such Purchaser to the
entity to which it made such sale(s) prior to such sale(s), and each Purchaser,
severally and not jointly, will, as incurred, reimburse the Company for any
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim.

                           (c) Promptly after receipt by any indemnified person
of a notice of a claim or the beginning of any action in respect of which
indemnity is to be sought against an indemnifying person pursuant to this
Section 5.2, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action and, subject to the
provisions hereinafter stated, in case any such action shall be brought against
an indemnified person, the indemnifying person shall be entitled to participate
therein, and, to the extent that it shall wish, to assume the defense thereof,
with counsel reasonably satisfactory to the indemnified person. After notice
from the indemnifying person to such indemnified person of the indemnifying
person's election to assume the defense thereof, the indemnifying person shall
not be liable to such indemnified person for any legal expenses subsequently
incurred by such indemnified person in connection with the defense thereof;
provided, however, that if there exists or shall exist a conflict of interest
that would make it inappropriate in the opinion of outside counsel of the
indemnified person for the same counsel to represent both the indemnified person
and such indemnifying person or any affiliate or associate thereof, the

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indemnified person shall be entitled to retain its own counsel at the expense of
such indemnifying person; provided, further, that the indemnifying person shall
not be obligated to assume the expenses of more than one counsel to represent
all indemnified persons. No indemnifying person shall be liable for any
settlement of any action or proceeding effected without its written consent. No
indemnifying person shall, without the consent of the indemnified person (which
consent shall not be reasonably withheld or delayed), consent to entry of any
judgment or enter into any settlement which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified person
of a release from all liability in respect to such claim or litigation.

                           (d) If the indemnification provided for in this
Section 5.2 is unavailable to or insufficient to hold harmless an indemnified
person under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to therein, then each indemnifying person shall contribute to the amount paid or
payable by such indemnified person as a result of such losses, claims, damages
or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and
each Purchaser on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or a Purchaser on the other. The Company and the Purchasers
agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if the Purchasers
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified person as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified person in connection with investigating or defending any such action
or claim. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Purchaser's obligations in this subsection (d) to contribute are several in
proportion to their sales of Shares, as the case may be, to which such loss
relates and not joint.

                           (e) The obligations of the Company and the Purchasers
under this Section 5.2 shall be in addition to any liability which the Company
and the respective Purchasers may otherwise have and the indemnification
obligations hereunder shall extend, as applicable, upon the same terms and
conditions, to directors, officers, employees and agents of the Company and the
Purchasers and to each person, if any, who controls the Company or any Purchaser
within the meaning of the Securities Act and the Exchange Act.

                  5.3      AMEX Listing. Promptly following the Closing Date,
the Company shall use its commercially reasonable efforts to cause the Shares to
be listed on the AMEX. So long as the Purchasers beneficially own any Shares,
the Company will use its commercially reasonable efforts to maintain the listing
of the Common Stock on the AMEX or a registered national securities exchange.

                  5.4      Short Sales. Until the Registration Statement becomes
effective pursuant to Section 5.1, each Purchaser shall not execute or effect or
cause to be executed or effected any short sale, option or equity swap
transaction in or with respect to the Common Stock or any other derivative
security transaction the purpose or effect of which is to hedge or transfer to a
third party all or any part of the risk of loss associated with the ownership of
the Shares by the Purchaser.

         6.       Restrictions on Transferability of Shares; Compliance with
Securities Act.

                  6.1.     Restrictions on Transferability. The Shares shall not
be resold or otherwise transferred except in a transaction registered under the
Securities Act and applicable state securities laws unless counsel to the
Company shall advise the Company that such transfer may be effected without such
registration.

                  6.2.     Restrictive Legend. Until and unless the Shares are
registered under the Securities Act, each certificate representing the Shares
shall bear substantially the following legend (in addition to any legends
required under applicable state securities laws):

                  THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
                  UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
                  UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE
                  SUBJECT TO

                                       7
<PAGE>

                  RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
                  TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND
                  THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION
                  OR EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY
                  REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
                  SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED
                  TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY
                  APPLICABLE STATE SECURITIES LAWS.

                  6.3      Transfer of Shares. Each Purchaser hereby covenants
with the Company not to make any sale of the Shares except either (a) a sale of
Shares in accordance with the Registration Statement, in which case the
Purchaser covenants to comply with the requirement of delivering a current
prospectus, (b) a sale of Shares in accordance with Rule 144, in which case the
Purchaser covenants to comply with Rule 144 and to deliver such additional
certificates and documents as the Company may reasonably request, or (c) in
accordance with another exemption from the registration requirements of the
Securities Act. The legend set forth in Section 6.2 will be removed from a
certificate representing Shares following and in connection with any sale of
Shares pursuant to subsection (a) or (b) hereof but not in connection with any
sale of Shares pursuant to subsection (c) hereof. The Company will substitute
one or more replacement certificates without the legend at the request of the
Purchaser promptly after such time as the Registration Statement becomes
effective.

         7.       Miscellaneous.

                  7.1      Survival of Representations and Warranties. All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement, any investigation at any time made by or on behalf
of the Purchasers, and the sale and purchase of the Shares and payment therefor.

                  7.2.     Entire Agreement. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous arrangements or understandings with
respect thereto.

                  7.3.     Headings. The headings of the sections of this
Agreement have been inserted for convenience of reference only and do not
constitute a part of this Agreement.

                  7.4.     Choice of Law. It is the intention of the parties
that the internal laws of the State of California, without regard to the body of
law controlling conflicts of law, shall govern the validity of this Agreement,
the construction of its terms and the interpretation of the rights and duties of
the parties set forth herein.

                  7.5.     Counterparts. This Agreement may be executed
concurrently in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

                  7.6.     Assignment; Parties in Interest. This Agreement may
not be pledged, assigned or otherwise transferred by the Purchasers except by
operation of law but all the terms and provision of this Agreement shall be
binding upon and inure to the benefit of and be enforced by the successors in
interest of the parties hereto. Each successive transferee of the Purchasers
shall be deemed to be a Purchaser for the purpose of Section 5 of this
Agreement.

                  7.7.     Amendments. No amendment, modification, waiver,
discharge or termination of any provision of this Agreement nor consent to any
departure by the Purchasers or the Company therefrom shall in any event be
effective unless the same shall be in writing and signed by the party to be
charged with enforcement, and then shall be effective only in the specific
instance and for the purpose for which given. No course of dealing between the
parties hereto shall operate as an amendment of, or a waiver of any right under,
this Agreement.

                  7.8.     Severability. Whenever possible, each provision of
this Agreement shall be interpreted in such manner as to be effective and valid,
but if any provision of this Agreement is held to be invalid or unenforceable in
any respect, such invalidity or unenforceability shall not render invalid or
unenforceable any other provision of this Agreement.

                  7.9.     Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated in
writing by such party to the other party:

                                       8
<PAGE>

                           If to the Company, to:
                           Questcor Pharmaceuticals, Inc.
                           3260 Whipple Road
                           Union City, California 94587
                           Attn: CFO

                           With a copy to:
                           Latham & Watkins LLP
                           701 "B" Street, Suite 2100
                           San Diego, California 92101
                           Attn: David A. Hahn, Esq.

                           If to the Purchaser, to:
                           the address set forth on the
                           signature page of this Agreement

                                [SIGNATURE PAGES FOLLOW]

                                       9

<PAGE>

                  IN WITNESS WHEREOF, the parties have caused this Common Stock
Purchase Agreement to be duly executed and delivered by their proper and duly
authorized representatives as of the day and year first above written

                                                 Questcor Pharmaceuticals, Inc.

                                                 By:____________________________
                                                    Name:
                                                    Title:

                                       10
<PAGE>

                   PURCHASER SIGNATURE PAGE AND QUESTIONNAIRE

         The undersigned Purchaser hereby executes the Common Stock Purchase
Agreement with Questcor Pharmaceuticals, Inc. (the "Company") and hereby
authorizes this signature page to be attached to a counterpart of such document
executed by a duly authorized officer of the Company.

No. of shares of Common Stock
to be Purchased: [__]                                [Purchaser Name]

Cash Consideration:                                  By:________________________
$[__]                                                   Name:
                                                        Title:
No. of Warrants to be
Surrendered to the Company
for Cancellation: [__]

Warrant Valuation:
$[__]

Aggregate Purchase
Price:  $[__]

Name in which shares of Common Stock are to be registered:______________________

Address of registered holder:                             ______________________

                                                          ______________________

Social Security or Tax ID No. of registered holder:       ______________________

Contact name and telephone number regarding
Settlement and registration:                              ______________________
                                                          Name

                                                          ______________________
                                                          Telephone Number

                                       11<PAGE>

                                                                   EXHIBIT 10.21

                   EMPLOYMENT SEPARATION AND RELEASE AGREEMENT

         This Employment Separation and Release Agreement (the "Agreement") is
entered into between Penelope A. Herscher ("Executive") and Cadence Design
Systems, Inc. ("Cadence", and together with Executive, the "Parties").

         1.       TERMINATION DATE. Executive's employment with Cadence will
terminate at the close of business on January 30, 2004 (the "Termination Date");
provided, however, that Executive will be relieved of her duties effective
January 8, 2004 (the "Relinquish Date") and Executive will no longer report to
work, or otherwise have access to Cadence's computer system, including her
email, and her employment location, following the Relinquish Date.

         2.       SALARY AND BENEFITS THROUGH TERMINATION DATE. For the period
ending on the Termination Date, Executive will be paid all accrued salary, and
will continue to receive all benefits and participate in all benefit programs
for which Executive was eligible prior to the Termination Date. Cadence and
Executive acknowledge that no bonuses will be paid for 2003. Upon the
Termination Date, Executive will be eligible to continue health insurance
coverage pursuant to COBRA. Except as provided by this Agreement, Executive will
not be entitled to any other compensation or benefits following the Termination
Date. Executive's funds invested in Cadence's Non-Qualified Deferred
Compensation Plan, if any, shall be treated in accordance with the terms of that
Plan.

         3.       CONSIDERATION FOR ACCEPTANCE OF AGREEMENT. In consideration of
Executive's acceptance of this Agreement and to resolve disputed issues between
Executive and Cadence, and provided that on the Termination Date Executive
executes a release in substantially the form of Section 4 of this Agreement,
Cadence will provide Executive with the following, to which Executive otherwise
would not be entitled:

                  a.       a separation payment of $515,200.00 (minus gross
                           salary paid from January 8, 2004 through January 30,
                           2004), less payroll deductions and withholdings
                           required by law, and deductions requested by
                           Executive, payable on the Termination Date, provided
                           that the Executive has returned all confidential,
                           proprietary and sensitive information to Tim Burch,
                           Cadence's Senior Vice President, Human Resources and
                           Organizational Development, including, but not
                           limited, to all hard and soft copy Cadence documents,
                           materials and files in Executive's possession.

                  b.       vesting on the Effective Date of all outstanding
                           options and restricted stock held by Executive, as
                           enumerated in the attached schedule at Exhibit A.
                           Executive will have the period of time following her
                           Termination Date that is provided in the applicable
                           stock option agreement(s) (each of which provides for
                           no less than 30 days following the Termination Date;
                           provided however, that in no event shall any option
                           be exercisable following its expiration date) to
                           exercise the vested but unexpired portions. Cadence
                           will cause any affiliate legend to be removed
                           promptly

<PAGE>

                           from the certificates representing shares purchased
                           on exercise of any of Executive's outstanding
                           options.

                  c.       If Executive elects to continue her medical, dental
                           and vision insurance coverage under COBRA, Cadence
                           shall pay Executive's monthly COBRA premium until
                           June 30, 2005.

         4.       MUTUAL RELEASE OF CLAIMS.

                  a.       Except as provided in Section 4(f) below, Executive
irrevocably, fully and finally releases Cadence, its parent, subsidiaries,
predecessors, successors, affiliates, employees, directors, officers, agents and
executives ("Releasees") from all causes of action, claims, suits, demands or
other obligations or liabilities, whether known or unknown, suspected or
unsuspected, that Executive ever had or now has as of the time that Executive
signs this Agreement. Except as provided in Section 4(f) below, the claims
released include, but are not limited to, any claims arising from or related to
Executive's employment with Cadence and with Simplex Solutions, Inc. and the
termination of her employment with Cadence, the acquisition of Simplex
Solutions, Inc. by Cadence and the Executive's compensation, including stock
options and restricted stock Executive received in conjunction with that
acquisition, including, but not limited to, claims arising under Title VII of
the Civil Rights Act of 1964 (as amended), the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Older Worker Benefits Protection
Act, the Americans with Disabilities Act, the Equal Pay Act, the Fair Labor
Standards Act, the California Fair Employment and Housing Act, the California
Labor Code, the Employee Retirement Income and Security Act of 1974 (except for
any vested right Executive has to benefits under an ERISA plan), the state and
federal Worker Adjustment and Retraining Notification Act, and the California
Business and Professions Code, any other local, state, federal, or foreign law
governing employment and the common law of contract and tort.

                  b.       Except as provided in Section 4(f) below, Cadence
irrevocably, fully and finally releases Executive, as well as her heirs and
assigns, from all causes of action, claims, suits, demands or other obligations
or liabilities, whether known or unknown, suspected or unsuspected, that Cadence
ever had or now has as of the time that Cadence signs this Agreement. Except as
provided in Section 4(f) below, the claims released include, but are not limited
to, any claims arising from or related to Executive's employment with Cadence
and with Simplex Solutions, Inc. and the termination of her employment with
Cadence, the acquisition of Simplex Solutions, Inc. by Cadence and the
Executive's compensation, including stock options and restricted stock Executive
received in conjunction with that acquisition, any local, state, federal, or
foreign law governing employment and the common law of contract and tort.

                  c.       The Parties each represent and warrant that neither
has filed any claim, charge or complaint against the each other. Executive
further warrants and represents that Executive has not filed any claim, charge
or complaint against a Releasee. Additionally, except as provided in Section
4(f) below, each Party intends that this release of claims cover all claims,
whether or not known to such Party.

                  d.       Each Party recognizes the risk that, subsequent to
the execution of this Agreement, such Party may incur loss, damage or injury,
which such Party attributes to the

                                       2
<PAGE>

claims encompassed by this release. Each Party expressly assumes this risk by
signing this Agreement and voluntarily and specifically waives any rights
conferred by California Civil Code section 1542 which provides as follows:

         A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
         KNOW OR SUSPECT TO EXIST IN HIS FAVOR WHICH IF KNOWN BY HIM MUST HAVE
         MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

                  e.       Each Party represents and warrants that there has
been no assignment or other transfer of any interest in any claim by such Party
that is covered by this release.

                  f.       Notwithstanding anything in this Agreement to the
contrary, this Section 4 shall not apply to (i) claims Executive may have
against Cadence under the Indemnity Agreement between Executive and Cadence,
which is attached hereto as Exhibit B, (ii) claims Cadence may have against the
Executive under Executive's Noncompetition Agreement dated April 24, 2002 (as
modified by Section 5(d) below) and (iii) claims Cadence may have against
Executive under Executive's Employee Proprietary Information and Inventions
Agreement dated April 22, 2002.

         5.       OBLIGATIONS.

                  a.       On or prior to the Relinquish Date, Executive will
                           have returned all Cadence property pursuant to the
                           Executive's Exit Interview Checklist (such as
                           Executive's computer, Blackberry, cellular phone and
                           badge).

                  b.       Executive specifically acknowledges her continuing
                           obligations under the Noncompetition Agreement, dated
                           April 24, 2002, (as modified by Section 5(d) below)
                           which is attached hereto as Exhibit C, and that
                           except as provided in Section 5(d), this Agreement is
                           not intended to alter or modify those continuing
                           obligations.

                  c.       During Executive's employment, Executive has had
                           access to Cadence's confidential and/or proprietary
                           information, and such information belonging to third
                           parties that Cadence has an obligation to keep
                           confidential. Executive will continue to hold that
                           information in confidence and will not disclose or
                           use such information. Executive represents that
                           Executive has returned to Cadence all copies and
                           records in any form of such information. Executive
                           further affirms that Executive received, read and
                           understood Cadence's Code of Conduct while employed
                           with Cadence, and abided by it. Executive
                           specifically acknowledges her continuing obligations
                           under Executive's Employee Proprietary Information
                           and Inventions Agreement dated April 22, 2002 and her
                           Noncompetition Agreement dated April 24, 2002 (as
                           modified by Section 5(d) below).

                  d.       Cadence acknowledges that Executive's continuing
                           obligations under Section 1 of the Noncompetition
                           Agreement, dated April 24, 2002, which is attached
                           hereto as Exhibit B, shall terminate on December 31,
                           2004.

                                       3
<PAGE>

         6.       CONFIDENTIALITY OF TERMINATION DISCUSSIONS AND AGREEMENT. From
the date termination notice was given to Executive through the Effective Date of
this Agreement shall be called the Notice Period. During the Notice Period,
Executive will keep strictly confidential (both within and outside Cadence) the
discussions concerning her termination from Cadence, including the fact and
terms of this Agreement. During the Notice Period, Executive may only discuss
her termination from Cadence and the fact and terms of this Agreement with her
spouse and legal advisor, as long as Executive instructs those individuals to
maintain the confidentiality of that information and they agree to do so. After
Cadence issues an internal announcement regarding Executive's termination, in
substantially the form attached hereto as Exhibit D, both Parties agree that, to
the extent either Party discusses Executive's termination from Cadence, such
Party will say no more about Executive's termination than what is stated in such
announcement. After the Effective Date of this Agreement, Executive will
continue to keep confidential the fact and terms of this Agreement, including
the consideration to be provided to Executive under it, except that Executive
may disclose that information to (a) Executive's spouse, legal advisor, and tax
advisor, as long as Executive instructs those individuals to maintain the
confidentiality of that information and they agree to do so or (b) the extent
the information is otherwise publicly disclosed in a Securities and Exchange
Commission filing made by the Company. Notwithstanding the preceding, it will
not be a violation of this Section 6 for either Party to discuss Executive's
termination if such Party is required to do so by legal process or required or
requested to do so by an official investigative or judicial proceeding invoked
by a governmental agency, other than disclosures by Executive pursuant to an
investigative or judicial proceeding instigated by the actions of Executive.

         7.       NONDISPARAGEMENT. During the Notice Period, and thereafter,
the Parties agree not to criticize, denigrate, or make statements (whether oral
or written) that would otherwise reflect negatively on the reputation of
Executive, Releasees or Cadence's products, employment practices, compensation
policies and practices or business practices. Additionally, Cadence agrees to
instruct its executive officers and directors to comply with the preceding
sentence. The Parties further agree that neither will aid, assist, advise,
counsel, or testify on behalf of, any other person pursuing any claim, charge,
or complaint adverse to the Executive or Releasees, including, but not limited
to, Cadence and its executives, except to the extent either Party is required to
do so by legal process or required or requested to do so by an official
investigative or judicial proceeding invoked by a governmental agency (except in
the case of Executive, pursuant to an investigative or judicial proceeding
instigated by Executive). Executive and Cadence acknowledge that in the event of
a breach of this paragraph, such breach will cause irreparable harm to the other
Party. Executive warrants and agrees that in the event she breaches her
obligations as enumerated in this paragraph, the $515,200 paid by Cadence to the
Executive pursuant to this Agreement shall be immediately due and repayable by
Executive to Cadence as liquidated damages; provided, however, that factual
statements made by Executive as required by legal process or required or
requested by an official investigative or judicial proceeding invoked by a
governmental agency, other than statements made by Executive pursuant to an
investigative or judicial proceeding instigated by Executive, shall not, in and
of themselves, constitute a violation of this Section 7. Both Parties agree
that, in the event the other Party breaches its obligations under this
paragraph, the non-breaching Party shall be entitled to injunctive relief to
prevent further conduct in violation of this paragraph, and to an award of
judgment in the amount of all attorneys' fees necessarily and reasonably
incurred by such Party to secure such relief.

                                       4
<PAGE>

         8.       CONTINUED COOPERATION. During the Notice Period, and following
the termination of employment, Executive shall fully cooperate with Cadence in
all matters relating to her employment, including, but not limited to, the
winding up of her pending work on behalf of Cadence and the orderly transfer of
any such pending work to other executives of Cadence as may be designated by
Cadence. In addition, Executive shall cooperate with Cadence, as requested by
Ray Bingham, Chief Executive Officer of Cadence (or his successor(s)), Mr.
Bingham's designees (or his successor(s)'s designees) or Cadence's Board of
Directors on matters relating to the work she performed at Cadence, including,
but not limited to, consulting with Cadence on matters related to customers,
marketing, research and development and any legal matters that may arise in the
future about which Executive has knowledge.

         9.       REVIEW OF AGREEMENT; REVOCATION OF ACCEPTANCE. Executive has
21 days in which to review and consider this Agreement, although Executive is
free to accept this Agreement anytime within that 21-day period. Executive is
advised to consult with an attorney about the Agreement. If Executive accepts
this Agreement, Executive will have an additional 7 days from the date that
Executive signs this Agreement to revoke that acceptance, which Executive may
effect by means of a written notice sent to R.L. Smith McKeithen. If this 7-day
period expires without a timely revocation, this Agreement will become final on
the eighth day following the date of Executive's signature, which date will
become the "Effective Date" of this Agreement.

         10.      FULL SATISFACTION OF COMPENSATION OBLIGATIONS; ADEQUATE
CONSIDERATION. Executive agrees that the payments and benefits provided herein
are in full satisfaction of all obligations of Cadence to Executive arising out
of or in connection with Executive's employment through the Termination Date and
in Executive's offer letter, dated April 22, 2002, including, without
limitation, all compensation, salary, bonuses, reimbursement of expenses, and
benefits. Executive further acknowledges that the separation payment and the
vesting and acceleration of stock options and restricted stock grants provided
for in Section 3 of this Agreement constitute adequate consideration for the
covenants and releases given by the Executive in this Agreement.

         11.      ARBITRATION. All claims, disputes, questions, or controversies
arising out of or relating to this Agreement or to Executive's employment and
the termination of that employment with Cadence, including, without limitation,
the construction or application of any of the terms, provisions, or conditions
of this Agreement, will be resolved exclusively in final and binding arbitration
in accordance with the Arbitration Rules and Procedures, or successor rules then
in effect, of Judicial Arbitration & Mediation Services, Inc. ("JAMS"). The
arbitration will be held in the San Jose, California, metropolitan area, and
will be conducted and administered by JAMS. Executive and Cadence will select a
mutually acceptable, neutral arbitrator from among the JAMS panel of arbitrator.
Except as provided by this Agreement, the Federal Arbitration Act will govern
the administration of the arbitration proceedings. The arbitrator will apply the
substantive law (and the law of remedies, if applicable) of the State of
California, or federal law, as applicable, and the arbitrator is without
jurisdiction to apply any different substantive law. Executive and Cadence will
each be allowed to engage in adequate discovery, the scope of which will be
determined by the arbitrator consistent with the nature of the claim(s) in
dispute. The arbitrator will have the authority to entertain a motion to dismiss
and/or a motion for summary judgment by any party and will apply the standards
governing such motions under the Federal Rules of Civil Procedure. The
arbitrator will render a written award and supporting opinion that

                                       5
<PAGE>

will set forth the arbitrator's findings of fact and conclusions of law.
Judgment upon the award may be entered in any court of competent jurisdiction.
Cadence will pay the arbitrator's fees, as well as all administrative fees,
associated with the arbitration. Each party will be responsible for paying their
own attorneys' fees and costs (including expert witness fees and costs, if any).
However, in the event a party prevails at arbitration on a statutory claim that
entitles the prevailing party to reasonable attorneys' fees as part of the
costs, then the arbitrator may award those fees to the prevailing party in
accordance with that statute.

         12.      NO ADMISSION OF LIABILITY. Nothing in this Agreement will
constitute or be construed in any way as an admission of any liability or
wrongdoing whatsoever by Cadence or Executive.

         13.      INTEGRATED AGREEMENT. This Agreement is intended by the
parties to be a complete and final expression of their rights and duties
respecting the subject matter of this Agreement, except that nothing in this
Agreement is intended to negate Executive's continuing obligations under
Cadence's Employee Proprietary Information and Inventions Agreement, dated April
22, 2002, and Executive's Noncompetition Agreement, dated April 24, 2002, (as
modified by Section 5(d)) or any other agreement governing the disclosure and/or
use of proprietary information, which Executive signed while working with
Cadence or its predecessors; nor to waive any of Executive's obligations under
state and federal trade secret laws.

         14.      MODIFICATION. This Agreement may not be modified unless such
modification is embodied in writing, signed by the party against whom the
modification is to be enforced.

         15.      SEVERABILITY. In the event that any part of this Agreement is
found to be void or unenforceable, all other provisions of the Agreement will
remain in full force and effect.

         16.      GOVERNING LAW. This Agreement will be governed and enforced in
accordance with the laws of the State of California without regard to its
conflict of laws provision.

                             EXECUTION OF AGREEMENT

         The parties execute this Agreement to evidence their acceptance of it.

         Dated: 12/24/03                     By:  /s/ Penelope A. Herscher
                                                 -------------------------------

                                                           Penelope A. Herscher

                                             CADENCE DESIGN SYSTEMS, INC.

         Dated:  12/24/03                    By: /s/ R.L. Smith McKeithen
                                                 -------------------------------
                                                   R.L. Smith McKeithen
                                                 Senior Vice President, General
                                                      Counsel and Secretary

                                       6
<PAGE>

                                    EXHIBIT B

                               INDEMNITY AGREEMENT

         This Indemnity Agreement (this "Agreement"), dated as of April 1, 2003,
is made by and between Cadence Design Systems, Inc., a Delaware corporation (the
"Company"), and Penelope Herscher, Executive Vice President of the Company (the
"Indemnitee").

                                    RECITALS

         A.       The Company is aware that competent and experienced persons
are increasingly reluctant to serve as directors or officers of corporations
unless they are protected by comprehensive liability insurance or
indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that the
exposure frequently bears no reasonable relationship to the compensation of such
directors and officers;

         B.       The statutes and judicial decisions regarding the duties of
directors and officers are often difficult to apply, ambiguous, or conflicting,
and therefore fail to provide such directors and officers with adequate,
reliable knowledge of legal risks to which they are exposed or information
regarding the proper course of action to take;

         C.       Plaintiffs often seek damages in such large amounts and the
costs of litigation may be so substantial (whether or not the case is
meritorious), that the defense and/or settlement of such litigation is often
beyond the personal resources of officers and directors;

         D.       The Company believes that it is unfair for its directors and
officers and the directors and officers of its subsidiaries to assume the risk
of large judgments and other expenses that may be incurred in cases in which the
director or officer received no personal profit and in cases where the director
or officer was not culpable;

         E.       The Company recognizes that the issues in controversy in
litigation against a director or officer of a corporation such as the Company or
a subsidiary of the Company are often related to the knowledge, motives and
intent of such director or officer, that the Indemnitee is usually the only
witness with knowledge of the essential facts and exculpating circumstances
regarding such matters and that the long period of time which usually elapses
before the trial or other disposition of such litigation often extends beyond
the time that the director or officer can reasonably recall such matters; and
may extend beyond the normal time for retirement for such director or officer
with the result that the Indemnitee, after retirement or in the event of the
Indemnitee's death, the Indemnitee's spouse, heirs, executors or administrators,
may be faced with limited ability and undue hardship in maintaining an adequate
defense, which may discourage such a director or officer from serving in that
position;

         F.       Based upon their experience as business managers, the Board of
Directors of the Company (the "Board") has concluded that, to retain and attract
talented and experienced individuals to serve as officers and directors of the
Company and its subsidiaries and to encourage such individuals to take the
business risks necessary for the success of the Company

<PAGE>

and its subsidiaries, it is necessary for the Company to contractually
indemnify its officers and directors and the officers and directors of its
subsidiaries, and to assume for itself maximum liability for claims against such
persons in connection with their service;

         G.       The Company desires and has requested the Indemnitee to serve
or continue to serve as a director or officer of the Company and/or the
subsidiaries of the Company free from undue concern for claims for damages
arising out of or related to such services to the Company and/or the
subsidiaries of the Company; and

         H.       The Indemnitee is willing to serve, or to continue to serve,
the Company and/or the subsidiaries of the Company that the Indemnitee is
furnished the indemnity provided for herein.

                                    AGREEMENT

         NOW, THEREFORE, the parties hereto, intending to be legally bound,
hereby agree as follows:

         1.       Definitions.

                  (a)      Covered Person. For purposes of this Agreement, a
"covered person" shall include the Indemnitee and any heir, executor,
administrator or other legal representative of the Indemnitee following the
Indemnitee's death or incapacity.

                  (b)      Expenses. For purposes of this Agreement, "expenses"
includes all direct and indirect costs of any type or nature whatsoever
(including, without limitation, all attorneys' fees and related disbursements
and other out-of-pocket costs) actually and reasonably incurred by the
Indemnitee in connection with either the investigation, defense or appeal of a
proceeding or establishing or enforcing a right to indemnification under this
Agreement, Section 145 of the Delaware General Corporation Law or otherwise.

                  (c)      Proceeding. For the purposes of this Agreement,
"proceeding" means any threatened, pending, or completed action, suit or other
proceeding, whether civil, criminal, administrative, legislative, investigative
or any other type whatsoever, and including any of the foregoing commenced by or
on behalf of the Company, derivatively or otherwise.

                  (d)      Subsidiary. For purposes of this Agreement,
"subsidiary" means any corporation of which more than 50% of the outstanding
voting securities is owned directly or indirectly by the Company, and one or
more other subsidiaries, or by one or more other subsidiaries.

         2.       Agreement to Serve. The Indemnitee agrees to serve and/or
continue to serve the Company and/or its subsidiaries in the Indemnitee's
present capacity, so long as the Indemnitee is duly appointed or elected or
until such time as the Indemnitee tenders a written resignation, provided,
however, that nothing contained in this Agreement is intended to create any
right to continued employment by Indemnitee.

                                       2
<PAGE>

         3.       Maintenance of Liability Insurance.

                  (a)      The Company hereby covenants and agrees that, so long
as the Indemnitee shall continue to serve as an officer or director of the
Company or any of its subsidiaries, and thereafter so long as the Indemnitee
shall be subject to any possible proceeding by reason of such service, the
Company, subject to Section 3(b), shall use reasonable efforts to obtain and
maintain in full force and effect directors' and officers' liability insurance
("D&O Insurance") in reasonable amounts from established and reputable insurers.

                  (b)      Notwithstanding the foregoing, the Company shall have
no obligation to obtain or maintain D&O Insurance if the Company determines in
good faith that such insurance is not reasonably available, the premium costs
for such insurance are disproportionate to the amount of coverage provided, the
coverage provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or the Indemnitee is covered by similar insurance
maintained by a subsidiary of the Company.

         4.       Mandatory Indemnification.

                  (a)      Right to Indemnification. In the event a covered
person was or is made a party or is threatened to be made a party to or is
involved in any proceeding, by reason of the fact that the Indemnitee is or was
a director, officer or employee of the Company (including any subsidiary or
affiliate thereof or any constituent corporation or any of the foregoing
absorbed in any merger) or is or was serving at the request of the Company
(including such subsidiary, affiliate or constituent corporation) as a director,
officer or employee of another corporation, or of a partnership, joint venture,
trust or other entity, including service with respect to employee benefit plans,
such person shall be indemnified and held harmless by the Company to the fullest
extent permitted by applicable law, against all expenses, liability and loss
(including, without limitation, attorneys' fees, judgments, fines, ERISA excise
and other taxes and penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith. Such
indemnification shall continue after the Indemnitee has ceased to serve in such
capacity and shall inure to the benefit of the Indemnitee's heirs, executors and
administrators; provided, however, that except for a proceeding pursuant to
Section 7, the Company shall indemnify any such person in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the Board of Directors of the Company.

                  (b)      Exception for Amounts Covered by Insurance.
Notwithstanding the foregoing, the Company shall not be obligated to indemnify a
covered person for expenses or liabilities of any type whatsoever (including,
but not limited to, judgments, fines, forfeitures, attorneys' fees, ERISA excise
taxes or penalties, and amounts paid in settlement) which have been paid
directly to such person by D&O Insurance.

                  (c)      Partial Indemnification. If a covered person is
entitled under any provision of this Agreement to indemnification by the Company
for some or a portion of any expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, forfeitures, attorneys' fees,
ERISA excise taxes or penalties, and amounts paid in settlement) incurred by the
Indemnitee in the investigation, defense, settlement or appeal of a proceeding
but

                                       3
<PAGE>

not entitled, however, to indemnification for all of the total amount thereof,
the Company shall nevertheless indemnify such person for such total amount
except as to the portion thereof to which the Indemnitee is not entitled.

         5.       Mandatory Advancement of Expenses. The Company shall pay all
expenses incurred by a covered person, or in defending any such proceeding as
they are incurred in advance of its final disposition; provided, however, that
if the Delaware General Corporation Law then so requires, the payment of such
expenses incurred in advance of the final disposition of such proceeding shall
be made only upon delivery to the Company of an undertaking, by or on behalf of
such covered person, to repay all amounts so advanced if it should be determined
ultimately that such person is not entitled to the payment of such expenses by
the Company.

         6.       Notice and Other Indemnification Procedures.

                  (a)      Promptly after receipt by a covered person of notice
of the commencement of or the threat of commencement of any proceeding, such
person shall, if such person believes that indemnification with respect thereto
may be sought from the Company under this Agreement, notify the Company of the
commencement or threat of commencement thereof.

                  (b)      If, at the time of the receipt of a notice of the
commencement of a proceeding, the Company has D&O Insurance in effect, the
Company shall give prompt notice of the commencement of such proceeding to the
insurers in accordance with the procedures set forth in the respective policies.
The Company shall thereafter take all necessary or desirable action to cause
such insurers to pay, on behalf of the covered person, all amounts payable as a
result of such proceeding in accordance with the terms of such policies.

                  (c)      In the event the Company shall be obligated to
advance the expenses for any proceeding against the covered person, the Company,
if appropriate, shall be entitled to assume the defense of such proceeding, with
counsel approved by the covered person (such approval not to be unreasonably
withheld or delayed), upon the delivery to the covered person of written notice
of its election so to do. After delivery of such notice, approval of such
counsel by the covered person and the retention of such counsel by the Company,
the Company will not be liable to the covered person under this Agreement for
any fees of counsel subsequently incurred by the covered person with respect to
the same proceeding, provided that (i) the covered person shall have the right
to employ separate counsel in any such proceeding at the covered person's
expense; and (ii) if (A) the employment of counsel by the covered person has
been previously authorized by the Company, (B) the Company shall not, in fact,
have employed counsel to assume the defense of such proceeding, or (C) it is
determined by legal counsel for the Company and the Indemnitee that a conflict
of interest exists requiring the Indemnitee to retain separate counsel, the fees
and expenses of the covered person's counsel shall be at the expense of the
Company.

         7.       Right of Indemnitee to Bring Suit. If a claim for
indemnification or advancement of expenses hereunder is not paid in full by the
Company within sixty days after a written claim has been received by the
Company, except in the case of a claim for an advancement of expenses, in which
case the applicable period shall be twenty days, the covered person may at any
time thereafter bring suit against the Company to recover the unpaid amount of
the claim. If

                                       4
<PAGE>

successful in whole or in part in any such suit, or in a suit brought by the
Company to recover and advancement of expenses pursuant to the terms of an
undertaking, the covered person shall be entitled to be paid also the expense of
prosecuting or defending such suit. In any suit brought by a covered person to
enforce a right to indemnification hereunder (but not in a suit brought by a
covered person to enforce a right to an advancement of expenses) it shall be a
defense that indemnification is not permitted by applicable law. Further, in any
suit by the Company to recover an advancement of expenses pursuant to the terms
of an undertaking, the Company shall be entitled to recover such expenses upon a
final adjudication that indemnification is not permitted by applicable law.
Neither the failure of the Company (including its Board of Directors,
independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the covered
person is proper in the circumstances, nor an actual determination by the
Company (including its Board of Directors, independent legal counsel or its
stockholders) that indemnification is not proper, shall create a presumption
that the covered person is not entitled to indemnification or, in the case of
such a suit brought by a covered person, be a defense to such suit. In any suit
brought by a covered person to enforce a right to indemnification or to an
advancement of expenses hereunder, or by the Company to recover an advancement
of expenses pursuant to the terms of an undertaking, the burden of proving that
the covered person is not entitled to be indemnified, or to such advancement of
expenses, shall be on the Company.

         8.       Limitation of Actions and Release of Claims. No proceeding
shall be brought and no cause of action shall be asserted by or on behalf of the
Company or any subsidiary against the Indemnitee, the Indemnitee's spouse,
heirs, estate, executors or administrators after the expiration of one year from
the act or omission of the Indemnitee upon which such proceeding is based;
however, in a case where the Indemnitee fraudulently conceals the facts
underlying such cause of action, no proceeding shall be brought and no cause of
action shall be asserted after the expiration of one year from the earlier of
(i) the date the Company or any subsidiary of the Company discovers such facts,
or (ii) the date the Company of any subsidiary of the Company could have
discovered such facts by the exercise of reasonable diligence. Any claim or
cause of action of the Company or any subsidiary of the Company, including
claims predicated upon the negligent act or omission of the Indemnitee, shall be
extinguished and deemed released unless asserted by filing of a legal action
within such period. This Section 8 shall not apply to any cause of action which
has accrued on the date hereof and of which the Indemnitee is aware on the date
hereof, but as to which the Company has no actual knowledge apart from the
Indemnitee's knowledge.

         9.       Non-exclusivity. The provisions for indemnification and
advancement of expenses set forth in this Agreement shall not be deemed
exclusive of any other rights which the Indemnitee or any covered person may
have under any provision of law, the Company's Certificate of Incorporation or
Bylaws, the vote of the Company's shareholders or disinterested directors, other
agreements, or otherwise, both as to action in the Indemnitee's official
capacity and to action in another capacity while occupying the Indemnitee's
position as an officer, director or employee of the Company, and the
Indemnitee's right hereunder shall continue after the Indemnitee has ceased to
so act and shall inure to the benefit of any heir, executor, administrator or
other legal representative of the Indemnitee.

                                       5
<PAGE>

         10.      Interpretation of Agreement. It is understood that the parties
hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent now or hereafter
permitted by law.

         11.      Severability. If any provision or provisions of this Agreement
shall be held to be invalid, illegal or unenforceable for any reason whatsoever,
(i) the validity, legality and enforceability of the remaining provisions of the
Agreement (including, without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraphs of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to Section 10
hereof.

         12.      Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties hereto. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver.

         13.      Successors and Assigns. The terms of this Agreement shall
bind, and shall inure to the benefit of, the successors and assigns of the
parties hereto.

         14.      Notice. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed duly
given (i) upon receipt, if delivered by hand, or (ii) on the third business day
after the mailing date, if mailed by certified or registered mail with postage
prepaid. Addresses for notice to either party are as shown on the signature page
of this Agreement, or as subsequently modified by written notice.

         15.      Governing Law. This Agreement shall be governed exclusively by
and construed according to the laws of the State of Delaware, as applied to
contracts between Delaware residents entered into and to be performed entirely
with Delaware.

         16.      Consent to Jurisdiction. The Company and the Indemnitee each
hereby irrevocably consent to the jurisdiction of the courts of the State of
Delaware for all purposes in connection with any action or proceeding which
arises out of or relates to this Agreement

         The parties hereto have entered into this Indemnity Agreement effective
as of the date first above written,

                                  CADENCE DESIGN SYSTEMS, NC.

                                  By: /s/ R.L.Smith McKeithen
                                      ------------------------------
                                        RL. Smith McKeithen
                                        Sr. Vice President, General Counsel and
                                        Secretary

                                       6
<PAGE>

                                  INDEMNITEE

                                  /s/ Penelope Herscher
                                  ----------------------------------------------
                                  Name: Penelope Herscher

                                  Address: _____________________________________

                                           _____________________________________

                                       7
<PAGE>

                                    EXHIBIT C

                            NONCOMPETITION AGREEMENT

<PAGE>

                            NONCOMPETITION AGREEMENT

         THIS NONCOMPETITION AGREEMENT (this "Agreement") is entered into as of
April 24, 2002, by and among Cadence Design Systems, Inc., a Delaware
corporation ("Parent"), Simplex Solutions, Inc., a Delaware corporation (the
"Company"), and Ms. Penelope A. Herscher ("Stockholder"). The Closing Date, as
defined in the Merger Agreement (as defined below), shall be the "Effective
Date" of this Agreement.

                                    RECITALS

         A.       Parent and the Company are engaged in the research, design and
development of electronic design automation software and products, such products
containing hardware, software and both hardware and/or software products,
designs and solutions for, and all intellectual property embodied in the
foregoing, and in commercial electronic design services and/or maintenance
services, such services including all intellectual property embodied in the
foregoing (the "Business").

         B.       The Company has entered into an Agreement and Plan of Merger
with Parent and Zodiac Acquisition, Inc. ("Acquisition"), a wholly-owned
subsidiary of Parent (the "Merger Agreement"), dated as of April 24, 2002, which
provides (subject to the conditions set forth therein) for the merger of
Acquisition with and into the Company with the Company as the surviving
corporation (the "Merger"). As a result of the Merger, the Company will become a
wholly-owned subsidiary of Parent, and Stockholder will receive shares of common
stock of Parent in exchange for Stockholder's shares of capital stock of the
Company. Capitalized terms used but not defined herein shall have their
respective meanings set forth in the Merger Agreement.

         C.       As a condition and essential inducement to Parents and
Acquisition's willingness to enter into the Merger Agreement and in
consideration of the transactions contemplated by the Merger Agreement,
including Stockholder's receipt of Merger Consideration in the Merger,
Stockholder has agreed to the noncompetition, nonsolicitation, confidentiality
and other agreements set forth in this Agreement In addition, Stockholder has
been offered and, concurrently with the execution of this Agreement, has
accepted employment with Parent contingent upon closing of the transactions
contemplated by the Merger pursuant to the terms of a written employment
agreement ("Employment Agreement").

                                    AGREEMENT

         NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants and agreements in the Merger Agreement, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Stockholder hereby covenants and agrees as follows:

         1.       NONCOMPETITION.

                  (a)      During the period commencing at the Effective Date
and ending on the date that is three (3) years after the date on which the
Effective Date occurs, Stockholder shall

                                       2
<PAGE>

not, directly or indirectly (including, without limitation, through any
existing or future Affiliate (as defined below)), own, manage, operate, control,
enable (whether by license, sublicense, assignment or otherwise) or otherwise
engage or participate in, or be a securityholder, director, officer, employee,
partner' member, lender, guarantor or advisor of, or consultant to, any company,
limited liability company, partnership or other Person (as defined below) that,
directly or indirectly, (1) engages in the Business in the Business Area (as
defined below), (2) competes in the Business in the Business Area against Parent
or any of its existing or future Affiliates engaged in the Business, or (3)
markets, distributes or sells any products that are marketed, distributed or
sold, directly or indirectly through intermediaries, in the Business Area that
are competitive to Business products marketed sold or distributed by Parent or
any of its existing or future Affiliates. Without limiting the generality of the
foregoing, Stockholder shall not, directly or indirectly (including, without
limitation, through any existing or future Affiliate or any other Person in
which Stockholder has an interest):

                           (i)      engage in research, development,
                                    manufacture, licensing, marketing,
                                    distribution or sale of any existing or
                                    future products or services relating to the
                                    Business;

                           (ii)     have any interest in, own, manage, operate,
                                    control, be a securityholder (except as
                                    permitted by Section 1(b)), joint venturer,
                                    officer, director, agent, lender,
                                    representative, partner or securityholder
                                    of, or consultant to, or otherwise engage or
                                    invest or participate in, the Business or
                                    any Person that takes any of the actions
                                    described in clauses (1), (2) and (3) of
                                    this subsection (a);

                           (iii)    accept any business relating to the Business
                                    from any existing or prospective Business
                                    customer of Parent or any existing or future
                                    Affiliate of Parent engaged in the Business,
                                    or solicit or encourage any such customer to
                                    terminate or adversely alter any
                                    relationship with respect to the Business
                                    much Person may have with Parent or any of
                                    its existing or future Affiliates engaged in
                                    the Business; or

                           (iv)     market, sell, distribute, endorse or promote
                                    any products or services that are
                                    competitive with existing or future Business
                                    products or services of Parent or any of its
                                    existing or future Affiliates engaged in the
                                    Business.

                  (b)      Notwithstanding anything to the contrary set forth in
Section 1(a):

                           (i)      Stockholder may own (solely as a passive
                                    investor) securities in any publicly-held
                                    company that may be engaged in the Business,
                                    hut only to the extent Stockholder does not
                                    own, of record or beneficially, more than an
                                    aggregate of two percent (2%) of the
                                    outstanding Securities of such company that
                                    represent (either directly or upon
                                    conversion or exchange of any other
                                    securities) equity ownership thereof; and

                                       3
<PAGE>

                           (ii)     In connection with Stockholder's employment
                                    with any Person, Stockholder may engage in
                                    activities that are encompassed within the
                                    Business, provided (A) that the results of
                                    Stockholder's activities are used by
                                    Stockholder's employer solely for internal
                                    purposes for The development of integrated
                                    circuits to be manufactured by such employer
                                    and not for sale, license or use by third
                                    parties and (B) Stockholder a employer does
                                    not compete with Parent or any existing or
                                    future Affiliates of Parent in the Business.

                  (c)      The restrictions set forth in this Section 1 shall
apply worldwide (the "Business Area").

                  (d)      As used herein, "Affiliate" means, with respect to
any Person, any other Person directly or indirectly controlling, controlled by
or under direct or indirect common control with such first Person.

                  (e)      As used herein, "Person" means an individual,
corporation, partnership, limited liability company, association, trust,
unincorporated organization or other legal entity, including any Governmental
Entity.

         2.       NONSOLICITATION OF EMPLOYEES. During the period commencing at
the Effective Date and ending on the date that is three (3) years alter the date
on which the Effective Date occurs, Stockholder shall not, either on his or her
own account or for any company, limited liability company, partnership, joint
venture or other Person (including, without limitation. through any existing or
future Affiliate), solicit any employee of Parent or any existing or future
Affiliate of Parent to leave his or her employment or induce or attempt to
induce any such employee to terminate or breach his or her employment agreement
with Parent or any existing or future Affiliate of Parent, if any.
Notwithstanding the foregoing, Stockholder may place general advertisements for
prospective employees, either on his or her own account or for any company, in
media and in other forms directed to the general public, including but not
limited to newspapers, television, radio and non-Business specific Internet job
boards; provided that the hiring of any employee of Parent or any of its
existing or future Affiliates responding thereto shall be deemed a solicitation
of such person.

         3.       NONSOLICITATION OF CUSTOMERS AND SUPPLIERS. During the period
commencing at the Effective Date and ending on the date that is three (3) years
after the date on which the Effective Date occurs, Stockholder shall not,
directly or indirectly (including, without limitation, through any existing or
future Affiliate), solicit, cause in any part or encourage any current or future
customer of or supplier to Parent or any existing or future Affiliate of Parent
to cease doing business in whole or in part with Parent or any such Affiliate
with respect to the Business.

         4.       CONFIDENTIALITY. Stockholder has entered into an Employee
Proprietary Information and Inventions Agreement with Parent. The provisions of
Section 1 of such agreement are hereby incorporated by reference herein.

                                       4
<PAGE>

         5.       STAY OF TIME. In the event a court of competent jurisdiction
or other Person mutually selected by the parties to resolve any dispute
(collectively a "Court") has determined that Stockholder has violated the
provisions of this Agreement, the running of the time period of such provisions
so violated shall be automatically suspended as of the date of such violation
and shall be extended for the period of time from the date such violation
commenced through the date that the Court determines that such violation has
permanently ceased.

         6.       INJUNCTIVE RELIEF. The remedy at law for any breach of this
Agreement is and will be inadequate, and in the event of a breach or threatened
breach by Stockholder of this Agreement, Parent and its existing and future
Affiliates, if any, shall be entitled to an injunction restraining Stockholder
from breaching or otherwise violating any provision of this Agreement. Nothing
herein contained shall be construed as prohibiting Parent and its existing and
future Affiliates, from pursuing any other remedies available to it or them for
such breach or threatened breach, including, without limitation, the recovery of
damages from Stockholder.

         7.       NOTICE. All notices and other communications pursuant to this
Agreement shall be in writing and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the addresses set forth below or to such other address as the party
to whom notice is to be given may have furnished to the other parties hereto in
writing in accordance herewith. Any such notice or communication shall be deemed
to have been delivered and received (a) in the case of personal delivery, on the
date of such delivery, (b) in the case of telecopier, on the date sent if
confirmation of receipt is received and such notice is also promptly mailed by
registered or certified mail (return receipt requested), (c) in the case of a
nationally-recognized overnight courier in circumstances under which such
courier guarantees next business day delivery, on the next business day after
the date when sent and (d) in the case of mailing, on the fifth business day
following that on which the piece of mail containing such communication is
posted:

         if to Parent or Acquisition, to:

                  Cadence Design Systems, Inc.
                  2655 Seely Avenue
                  San Jose, CA 95134
                  Telecopier: (408) 944-6855
                  Attention: General Counsel

                  with a copy to:

                  Gibson. Dunn & Crutcher LLP
                  One Montgomery Street Telesis Tower
                  San Francisco, CA 94104
                  Telecopier: (415) 986-5309
                  Attention: Gregory J. Conklin, Esq.

         if to Stockholder, to:

                                       5
<PAGE>

         Ms. Penelope A. Herscher
         _________________________
         _________________________
         _________________________

or to such other address as the person to whom notice is given may have
previously furnished to the other, in writing in the manner set forth above. Any
party hereto may give any notice, request, demand, claim or other communication
hereunder using any other moans (including ordinary mail or electronic mail),
but no such notice, request, demand, claim or other communication shall be
deemed to have been duly given unless and until it actually is received by the
individual for whom it is intended.

         8.       SEPARATE COVENANTS. This Agreement shall be deemed to consist
of a series of separate covenants, one for each line of business included within
the Business as it may be conducted by Parent and its existing and future
Affiliates and its successors, if any, on or after the date hereof, and each
city, county, state, country or other region included within the Business Area.
The parties expressly agree that the character, duration and geographical scope
of this Agreement are reasonable in light of the circumstances as they exist on
the date upon which this Agreement has been executed. However, should a
determination nonetheless be made by a Court of competent jurisdiction at a
later date that the character, duration or geographical scope of this Agreement
is unreasonable in light of the circumstances as they then exist, then it is the
intention and the agreement of Parent and Stockholder that this Agreement shall
be construed by the Court in such a manner as to impose only those restrictions
on the conduct of Parent and Stockholder that are reasonable in light of the
circumstances as they then exist and as are necessary to assure Parent and its
existing and future Affiliates of the intended benefit of this Agreement. If, in
any proceeding, a Court shall refuse to enforce all of the separate covenants
deemed included herein because, taken together, they are more extensive than
necessary to assure Parent and its existing and future Affiliates of the
intended benefit of this Agreement, it is expressly understood and agreed among
the parties hereto that those of such covenants that, if eliminated, would
permit the remaining separate covenants to be enforced in such proceeding shall,
for the purpose of such proceeding, be deemed eliminated from the provisions
hereof.

         9.       SEVERABILITY. If any provision of this Agreement shall
otherwise contravene or be invalid under the laws of any state, country or other
jurisdiction where this Agreement is applicable but for such contravention or
invalidity, such contravention or invalidity shall not invalidate all of the
provisions of this Agreement but rather it shall be construed, insofar as the
laws of that state or other jurisdiction are concerned, as not containing the
provision or provisions contravening or invalid under the laws of that state or
jurisdiction, and the rights and obligations created hereby shall be construed
and enforced accordingly.

         10.      GOVERNING LAW; ARBITRATION.

                  (a)      This Agreement shall be construed in accordance with
and governed by the internal laws (without reference to choice or conflict of
laws) of the State of Delaware.

                  (b)      Each of the parties expressly agrees that to the
extent permitted by law and to the extent that the enforceability of this
Agreement is not thereby impaired, any and all

                                       6
<PAGE>

disputes, controversies or claims between Patent and Stockholder arising from or
relaxing to this Agreement, except for matters covered by Section 6 hereof,
shall be determined exclusively by final and binding arbitration before a single
arbitrator in accordance with then existing rules of the American Arbitration
Association ("AAA").

                  (c)      The arbitration shall be held in the San Jose,
California metropolitan area, and shall be administered by the AAA. Under such
proceeding, the parties shall select a mutually acceptable, neutral arbitrator
from among the AAA panel of arbitrators. In the event the parties cannot agree
on an arbitrator, the Administrator of AAA shall appoint an arbitrator. Neither
party nor the arbitrator shall disclose the existence, content or results of any
arbitration hereunder without the prior written consent of all parties, except
as may be compelled by court order. Except as provided herein, the Federal
Arbitration Act shall govern the interpretation and enforcement of such
arbitration and all proceedings. The arbitrator shill apply the substantive law
(and the law of remedies, if applicable) of the State of Delaware, or Federal
law, if Delaware law is preempted, and the arbitrator is without jurisdiction to
apply any different substantive law. The parties agree that both parties will be
allowed to engage in adequate discovery, the scope of which will be determined
by the arbitrator, consistent with the nature of the claims in dispute. The
arbitrator shall have the authority to entertain a motion to dismiss and/or a
motion for summary judgment by any party and shall apply the standards governing
such motions under the Federal Rules of Civil Procedure. The arbitrator shall
render an award that shall include a written statement of opinion setting forth
the arbitrator's findings of fact and conclusions of law. Judgment upon the
award may be entered in any court having jurisdiction thereof. The parties
intend this arbitration provision to be valid, enforceable, irrevocable and
construed as broadly as possible.

                  (d)      Costs of arbitration, except attorneys' fees or
expert fees that Stockholder may incur, shall be borne and paid by Parent. If
any party prevails on a statutory claim that entitles the prevailing party to
reasonable attorneys' fees (with or without expert fees), the arbitrator may
award reasonable attorneys' fees (with or without expert fees) to the prevailing
party in accord with such statute.

                  (e)      Notwithstanding the foregoing provisions of this
Section 10, either Stockholder or Parent may seek and obtain otherwise available
injunctive relief in a court of competent jurisdiction for any violation this
Agreement that cannot be adequately remedied at law or in arbitration. Any such
injunctive proceedings shall be without prejudice to any rights Parent or
Stockholder may have under this Agreement to obtain relief in arbitration with
respect to such matters. The parties hereto hereby consent to the jurisdiction
of Sate and federal courts located in the State of Delaware for purposes of this
clause (e).

         11.      AMENDMENTS AND WAIVERS.

                  (a)      This Agreement may be modified only by a written
instrument duly executed by each party hereto.

                  (b)      No waiver by a party of any default,
misrepresentation or breach of a warranty or covenant hereunder, whether
intentional or not, shall be deemed to extend to any prior or subsequent
default, misrepresentation or breach of a warranty or covenant hereunder or

                                       7
<PAGE>

affect in any way any rights arising by virtue of any prior or subsequent
occurrence. No failure or delay by a party hereto 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. The rights and remedies
herein provided shall be cumulative and not exclusive of any rights or remedies
provided under applicable law.

         12.      ATTORNEYS' FEES. Should any litigation, arbitration or other
proceeding be commenced between the parties concerning this Agreement
(including, without limitation, the enforcement hereof and the rights and duties
of the parties hereunder), the party prevailing shall be entitled, in addition
to such other relief as may be granted, such party's attorneys' fees and
expenses in connection with such litigation, arbitration or other proceeding.

         13.      ENTIRE AGREEMENT. This Agreement, together with the Merger
Agreement and the ancillary documents referred to in the Merger Agreement and
executed in connection therewith, contains the entire understanding of the
parties, supersedes all prior and contemporaneous agreements and understandings
relating to the subject matter hereof.

         14.      COUNTERPARTS, FACSIMILE. This Agreement may be executed by the
parties in separate counterparts and by facsimile, each of which, when so
executed and delivered, shall be enforceable against the parties actually
executing such counterparts, and all of which, when taken as a whole, shall
constitute one and the same instrument.

         15.      SECTION HEADINGS AND REFERENCES. The headings of each Section,
subsection or other subdivision of this Agreement are for reference only and
shall not limit or control the meaning thereof. All references herein to a
Section arc references to a Section of this Agreement, unless otherwise
specified, and include all subparts thereof.

         16.      ASSIGNS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, heirs, personal
representatives and permitted assigns. Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof nor any of
the documents executed in connection herewith may be assigned by any party
without the consent of the other parties; provided, however, that Parent may
assign its rights hereunder, without the consent of Stockholder, to any existing
or future Affiliate of Parent and to any Person that acquires or succeeds to all
or any part of the Business. No such assignment shall relieve the assigning
party of its obligations hereunder if such assignee does not perform such
obligations.

         17.      FURTHER ASSURANCES. From time to time, at Parent's request and
without further consideration, Stockholder shall execute and deliver such
additional documents and take all such further action as reasonably requested by
Parent to be necessary or desirable to make effective, in the most expeditious
manner possible, the terms of this Agreement.

         18.      EXPENSES. Each party hereto shall pay his, her or its own
expenses in connection with this Agreement.

         19.      TERM; TERMINATION. The term of this Agreement commences on the
Effective Date and shall terminate the earlier of either (i) three (3) years
from the Effective Date, or (2) in

                                       8
<PAGE>

the event Parent fails to pay any amounts due to Stockholder pursuant to Section
5 of the Employment Agreement within a reasonable time after either Parent
agrees or an arbitrator has determined in its written statement of opinion
delivered pursuant to Section 14 of the Employment Agreement that Stockholder
was terminated without cause (as defined in the Employment Agreement) or
Stockholder resigned with good reason (as defined in the Employment Agreement).

                                       9
<PAGE>

         IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed on its behalf as of the day and year first above written.

                                           CADENCE DESIGN SYSTEMS, INC.

                                           By: /s/ William Porter
                                               ----------------------------
                                           Name:   William Porter
                                           Title:  Sr. VP & CFO

                                           SIMPLEX SOLUTIONS, INC.

                                           By: /s/ Luis Buhler
                                               ----------------------------
                                           Name:   Luis Buhler
                                           Title:  CFO

                                           STOCKHOLDER

                                           By: /s/ Penelope A. Herscher
                                               ----------------------------
                                           Name:   Penelope A. Herscher

                                       10
<PAGE>

                                    EXHIBIT D

                              FORM OF ANNOUNCEMENT

To:   All Cadence
From: Ray Bingham

Re:   Penny Herscher

Penny has decided to step down from her position as Executive Vice President and
General Manager of the Design and Verification Division. This change is
effective immediately.

Since the formation earlier this year of the design and verification division,
we have made great strides in establishing our presence and technology in the
marketplace. [Additional internal communication items to be added.]

Since joining Cadence in 2002, Penny has made many important contributions. As
Chief Marketing Officer, she rearchitected our marketing programs, and led
strategic planning and the Cadence Design Foundry business. As the first head of
the new Design and Verification division, she brought focus to our customers'
needs in this critical area, and zeal in establishing Cadence's solutions in
this space. And as a member of my executive team, she has made important
contributions to our technology roadmap, our merger and acquisitions strategy,
and our communications with our customers, investors and partners.

As we go into 2004, Penny has decided that she wants to step back from an
operating role at Cadence, as she repositions herself to be a chief executive
officer. During the course of the New Year, while she identifies such an
opportunity, Penny intends to spend time with her family and work with me as
needed to transition her responsibilities and duties. I am grateful for Penny's
contributions to Cadence, and I know that you will join me in wishing her luck
in her future endeavors.

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