1039151--3/16/2010--KENDLE_INTERNATIONAL

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{condition, economic, financial}

{financial, litigation, operation}

{operation, international, foreign}

{system, service, information}

{regulation, change, law}

{stock, price, operating}

{debt, indebtedness, cash}

{cost, contract, operation}

{stock, price, share}

{tax, income, asset}

{competitive, industry, competition}

{product, candidate, development}

{personnel, key, retain}

{regulation, government, change}

{interest, director, officer}

{loss, insurance, financial}

The CRO industry is highly competitive. Revenue and earnings growth rates in the future may not be as robust as in the past. Change in government regulation or healthcare reform could adversely affect the Company. Changes in tax legislation could adversely affect the Company. Risks Related to Our Business The current economic climate has caused the Company to rapidly adjust from a robust growth strategy to a cost containment strategy in a short period of time, which has placed, and is expected to continue to place, significant demands on it. The Company s contracts may be delayed, terminated or reduced in scope with little or no notice. The fixed price nature of many of the Company s contracts could result in financial losses. The Company s backlog may not be indicative of future results. If the Company is unable to attract suitable investigators and volunteers for clinical trials, the Company s business may suffer. If the Company is required to write off goodwill or other intangible assets acquired in its business combinations, its financial position and results of operations would be adversely affected. The Company s indebtedness could adversely affect its business and financial condition. The Company s access to funds under the Facility or its money market fund holdings is dependent on the solvency and liquidity of the participating lenders or fund sponsors. The Company may be exposed to risk from its various counterparties. The Company s international operations are subject to numerous risks. The Company s financial results are exposed to exchange rate fluctuations. The Company s quarterly operating results may vary. The Company s business depends on the continued effectiveness and availability of its information technology infrastructure, and failures of this infrastructure could limit its operations. The Company s business depends on the successful implementation and deployment of its enterprise wide reporting solution and failure could harm the Company s ability to manage its business and obtain accurate financial reporting. The Company s business could expose it to potential liability for personal injury claims that could affect its financial condition. The nature of the Company s business exposes it to litigation and regulatory risk. If the Company fails to hire, retain and integrate qualified personnel, it will be difficult for it to achieve its financial and operational goals. New standards or changes in existing accounting standards issued by the Financial Accounting Standards Board (FASB), SEC or other standard setting bodies may adversely affect the Company s financial statements and could entail significant expenditures. The application of these standards often requires the use of estimates and assumptions that may materially differ from actual results. Risks related to our Common Stock Market conditions have caused significant volatility in the Company s stock price. The Company s convertible note hedge and warrant transactions may affect the trading price of its common stock.

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1039151--3/16/2010--KENDLE_INTERNATIONAL_INC