SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT (“Separation Agreement”) sets forth the voluntary
agreement reached between Robert C. Strauss (“Executive”) and Noven
Pharmaceuticals, Inc. (“Noven”), a Delaware corporation (Executive and Noven,
collectively, referred to as “Parties”). The “Effective Date” of this Separation
Agreement shall be the eighth day following the signing of this Separation
Agreement by Executive.

WHEREAS, Executive and Noven entered into an Amended and Restated Employment
Agreement dated November 5, 2003 (“Employment Agreement”), which Employment
Agreement expired on December 31, 2007;

WHEREAS, Executive shall retire contemporaneously with the expiration of the
Employment Agreement; and

WHEREAS, the Parties desire to end the employment relationship on the terms and
conditions set forth in this Separation Agreement.

NOW THEREFORE, in order to provide for an amicable end to the employment
relationship and to ensure resolution of any potential disputes between them,
Noven and Executive enter into this Separation Agreement and agree to the
following:

1. Executive’s employment with Noven ended December 31, 2007, contemporaneously
with the expiration of the Employment Agreement. The Employment Agreement is of
no further force or effect and all rights and obligations of the Parties stated
in or provided for by the Employment Agreement terminated. Executive shall not
execute this Separation Agreement prior to December 31, 2007.

2. Executive’s position as Chief Executive Officer and President and Executive’s
position as a Director of Noven and as Chairman of the Board of Directors of
Noven terminated effective December 31, 2007.

3. In exchange for the promises Executive makes in this Separation Agreement,
Noven will:

  a.   Pay Executive an amount equal to $1,080,597, minus applicable taxes and
withholding (“Separation Pay”). The Separation Pay will be paid in lump sum on
or before March 15, 2008.

  b.   Pay Executive an amount under the 2007 Management Incentive Plan (“MIP
Award”). The amount of the MIP Award shall be based on Noven’s financial
performance in 2007 against the Management Incentive Plan’s performance matrix,
subject to and consistent with any adjustments made by Noven for its executive
officers. The MIP Award, minus applicable taxes and withholding, shall be paid
at the same time and in the same manner as paid to the Noven’s executives
officers.

  c.   Grant to Executive on the Effective Date of this Separation Agreement,
pursuant to the Noven Pharmaceuticals, Inc., 1999 Long-Term Incentive Plan
(“Plan”), restricted stock units (“RSUs”) for 50,000 shares (the “Shares”) of
Noven’s Common Stock, par value $0.0001 per share (the “Common Stock”), in
accordance with the terms and conditions of the Award Agreement attached hereto
as Exhibit A. So long as Executive does not violate the covenants provided for
by Sections 12 and 14 of this Separation Agreement, Executive shall vest in the
RSUs two (2) years after the Effective Date of this Separation Agreement
(“Vesting Date”). In the event Executive violates the covenants provided for by
Sections 12 and 14 of this Separation Agreement at any time prior to the Vesting
Date, the RSUs will immediately be forfeited and any right to receive the Shares
pursuant to the RSU shall immediately terminate. Within ten (10) business days
after the Vesting Date, except as otherwise provided below, Noven shall deliver
to Executive (or his estate) the Shares corresponding to the vested RSUs (on a
one-for-one basis of one Share for each RSU). The number of Shares to be
delivered in connection with the RSU grant shall be subject to adjustment as
provided in the Plan. Upon delivery of the Shares to Executive, Executive shall
deliver to Noven such amount of money, or instruct Noven to withhold a portion
of such Shares, as required for Noven to satisfy its withholding obligation
under applicable tax laws or regulations. Except as expressly provided in this
Separation Agreement, Executive shall not have any rights with respect to any
Shares subject to the RSUs until the Shares have been delivered to Executive.
The RSUs are not transferable otherwise than by will or under applicable laws of
descent and distribution.

  d.   Allow each of Executive’s outstanding vested stock options and vested
stock appreciation rights in Noven to be exercised on or before the earlier of
December 31, 2009; provided, however, that no stock option or stock appreciation
right may be exercised after the expiration of its term as provided for in the
applicable award agreement. All stock options and stock appreciation rights not
vested as of December 31, 2007, shall be forfeited and terminated. Except as
provided in this paragraph, each stock option and stock appreciation right must
be exercised in accordance with its award agreement and the applicable plan.

  e.   Pay Executive an amount equal to his unused vacation time which had
accrued as of December 31, 2007, minus applicable taxes and withholding
(“Vacation Pay”). This Vacation Pay will be paid as a lump sum, minus applicable
taxes and withholding, within fifteen (15) business days after the Effective
Date of this Separation Agreement.

4. The above payments and benefits referred to in Section 3 constitute the
entire separation package being offered to Executive. Executive shall not be
entitled to receive any other payments, salary, compensation, bonuses,
commissions, incentives, benefits, perquisites, or other monies or remuneration
from Noven or any of the Releasees (as defined below).

5. Executive acknowledges and agrees that the payments and benefits he is
receiving in Sections 3a. and 3c. constitute adequate and sufficient
consideration for the promises and obligations arising under the terms of this
Separation Agreement and agrees that such payments and benefits constitute
consideration to which he would not otherwise be entitled but for his execution
of this Separation Agreement. Executive acknowledges he has entered into this
Separation Agreement voluntarily and knowingly.

6. Executive agrees that he is not entitled to reemployment with Noven, and that
he will not seek employment with Noven or any of the Releasees in any capacity
at any time in the future. Executive agrees that this forbearance to seek future
employment is purely contractual and is in no way involuntary, discriminatory or
retaliatory.

7. Subject to Sections 8 and 21, Executive waives and fully releases and forever
discharges Noven and any and all of its parent companies, affiliates, holding
companies, subsidiaries or other related entitles, and any and all of their
respective past and present officers, directors, shareholders, attorneys,
agents, insurers, employees, predecessors, successors, and assigns, both in
their representative and individual capacities (collectively referred to with
Noven as “Releasees”), from any and all claims, rights, and causes of action, in
law or in equity, of any kind whatsoever, which Executive has or may have
against any or all of the Releasees as of the date Executive signs this
Separation Agreement, whether such claims, rights, or causes of action are now
known or are later discovered. Subject to Sections 8 and 21, Executive agrees
that this waiver and release shall be construed as broadly as possible and shall
include, without limitation, any (1) contractual or other claims of employment
or payment Executive may have against any or all of the Releasees; (2) claims,
if any, arising out of or in connection with the initiation, separation, or
existence of Executive’s employment relationship with any or all of the
Releasees; (3) claims, if any, regarding accrued leave, vacation, bonuses, back
pay, overtime, commissions, or any other form of benefits connected with
Executive’s employment with any or all of the Releasees; and (4) claims, if any,
arising under the Age Discrimination in Employment Act or the Older Workers
Benefit Protection Act and any other federal, state, or local statute or
regulation, and any allegation for costs, fees or other expenses including
attorney’s fees.

8. The waiver contained in the above Section does not affect Executive’s
entitlement to (i) Executive’s rights under this agreement, and (ii) any vested
benefits under any Noven employee pension or welfare benefit plans. Executive’s
entitlement to any vested pension or welfare benefits will continue to be
governed by the terms of those plans.

9. Executive shall not sue any or all of the Releasees, except in the event that
Noven breaches this Separation Agreement or where Executive challenges the
validity of this Separation Agreement under the Age Discrimination in Employment
Act/Older Workers Benefit Protection Act. Executive retains the right to file a
charge with, or participate in any investigation or proceeding before any
governmental agency such as the Equal Employment Opportunity Commission. If
Executive does file such a charge, however, this Separation Agreement prevents
Executive from recovering any relief whatsoever, including any award of money,
as a result of such charge or future action/proceeding based on such charge.

10. Executive acknowledges that Executive has been paid all salary and bonuses
and any and all other pay and incentives due to Executive, through the date
hereof; that Executive has been provided with all leave (including leave under
the Family and Medical Leave Act) to which Executive may have been entitled, if
any; and that Executive has not suffered any workplace illness or injury other
than any injury or illness of which Executive has already advised Noven, if any.

11. Executive shall not take any action or make any comments which would
reasonably be expected to embarrass, harass or adversely affect Noven or any of
the Releasees, or their respective business operations, practices or services.
In particular, Executive agrees not to contact the press or media, Noven’s or
any of the Releasees’ associates, attorneys, staff, or clients, or any entity
that has a business relationship with Noven or any of the Releasees, in order to
disparage, directly or indirectly, the good reputation or business practices of
Noven or any of the Releasees, or any of their current or former shareholders,
attorneys, officers, directors, managers, or employees.

12. Executive acknowledges that the provisions of this Section are reasonable
and necessary for the protection of Noven’s legitimate business interests.

  a.   Executive agrees that for a period of twenty-four (24) months following
the Effective Date of this Agreement (“Restricted Period”), Executive will not,
directly or indirectly (in any capacity, on Executive’s own behalf or on behalf
of any other person or entity):

  i.   Anywhere in the World, own an interest in any business, including but not
limited to, an individual proprietorship, partnership, corporation, joint stock
company, joint venture, limited liability company, trust or other form of
business entity, or unincorporated organization (except for an ownership
interest not exceeding five percent (5%) of a publicly-traded entity), that is
engaged in any business that is of the type or character of business in which
Noven has been engaged at any time during Executive’s employment by Noven;

  ii.   Anywhere in the World, as an individual proprietor, principal, partner,
shareholder, joint venturer, member, trustee, officer, director, consultant,
broker, employee, agent, trustee, independent contractor, or in any manner
whatsoever, perform any work for or provide any services to or receive any
remuneration from any person or entity that is engaged in any business that is
of the type or character of business in which Noven has been engaged at any time
during Executive’s employment by Noven;

  iii.   Divert or attempt to divert from the Noven or otherwise interfere with
any business relationship which exists/existed between the Noven and any
specific prospective or existing client of the Noven; and/or

  iv.   Hire or engage any Noven employee or contractor to enter into an
employment or business relationship with any other person or entity or recruit,
solicit or otherwise induce any Noven employee or contractor to terminate
his/her employment or engagement with the Noven. This covenant applies as to any
employee or contractor who, at the time of the recruitment/hire, is currently
employed or engaged with the Noven or who was employed or engaged with the Noven
at any time during the six month period preceding the date of the attempted
employment, recruitment, or solicitation.

  b.   It is the intention of the Parties that this Section be enforceable to
the fullest extent permissible. Accordingly, Executive agrees that in the event
that any restriction stated in this Section, or any portion thereof, shall be
declared or held to be invalid or unenforceable by a court of competent
jurisdiction, then such restriction shall be amended or modified, as necessary,
to render it valid and enforceable. Further, if Executive violates any
restriction stated in this Section, such restriction shall remain in full force
and effect beyond the expiration of its twenty-four (24) month term(s), such
that Noven receives the full benefit of its bargain.

  c.   If Noven reasonably and in good faith determines that Executive has
breached or has threatened to breach any or all of the restrictions provided for
by this Section or Section 14: (i) Executively shall be immediately deemed to
have forfeited the RSUs otherwise granted under Section 3(c) of this Separation
Agreement and any right of Executive to receive Shares pursuant to the RSU grant
shall terminate; and (iii) Noven shall be relieved any further obligations under
Section 3(c) of this Separation Agreement.

  d.   Executive further agrees that a breach of this Section or Section 14
would result in irreparable and continuing damage to Noven. Accordingly, in the
event of a breach or threatened breach by Executive, Noven shall be entitled to
pursue immediately any and all remedies it may have against Executive in a court
of competent jurisdiction by specific performance, injunction, or such other
remedies and relief as may be available. Executive’s obligations under this
Section 12 are independent of any obligation of Noven. The existence of any
other claim or cause of action by Executive, including but not limited to any
other claim or cause of action under this Agreement, does not constitute a
defense to the enforcement by Noven of the covenants contained in this Section
or Section 14.

13. Executive agrees that prior to the commencement of any employment or
consulting relationship with any person or entity, Executive will advise the
person or entity of the restrictive covenant terms contained in this Separation
Agreement.

14. Executive agrees that Noven provided him with access to certain confidential
and proprietary business information during his employment with Noven.

  a.   Executive acknowledges that Noven has a legitimate business interest in
preventing disclosure and dissemination of its Confidential Information (as
defined below). Accordingly, Executive agrees that all Confidential Information
(i) is the sole and exclusive property of Noven, (ii) will not be used by
Executive for any reason or purpose and (iii) will not be disclosed by Executive
in whole or in part to any person or entity. For the purposes of this Agreement,
“Confidential Information” means and includes all information, data and
knowledge in any way regarding or relating to Noven or, whether provided to or
obtained by Executive, including, without limitation: all Trade Secrets (as
defined by applicable law); Work Product (as defined below); algorithms,
computer programs, methods, models, software (including both source code and
object code) and related documentation; computer, network and telephony
structures, schematics and designs; information security information, processes
and designs; sales and marketing information and plans; business plans, ideas
and methods; financial information; pricing information and policies;
procedures; research; business practices; know-how; employee information;
customer-related and supplier-related information (including, without
limitation, customer lists, client lists, customer contracts, supplier lists,
supplier contracts, terms and conditions, billing and payment information and
e-mail lists); training materials and techniques; internal industry forecasts;
product development, research, designs, concepts and ideas; pricing histories;
distribution information; and any information or material of third parties that
Noven is required to keep confidential. “Confidential Information” does not
include information that has previously been or is hereafter made public,
without breach of a confidential relationship, by an authorized representative
of Noven.

  b.   Executive further assigns and transfers to Noven all of Executive’s
right, title and interest in and to any and all Proprietary Information, whether
or not patentable or registrable under copyright or similar statutes, made or
conceived or reduced to practice or learned by Executive, either alone or
jointly with others during a period in which Executive was employed by or
serving as a Executive to Noven. The term “Proprietary Information” shall
include all ideas, inventions, trademarks, service marks, trade dress,
discoveries, designs (whether ornamental or otherwise), writings, documents,
presentations, audio or video recordings, know-how, technical information,
technology, algorithms, computer programs, software or code (both source and
object) and related documentation of any kind, and all other works of authorship
of any type or kind whether in written, printed, verbal, electronic or other
form (including, but not limited to, any useful process, method, formula,
technique, or computer program, as well as improvements thereto), which were
prepared, created, conceived, authored or produced in whole or in part by the
Executive, whether or not any such item or any portion thereof is patentable,
copyrightable, registered as a trademark or service mark, or susceptible to
other forms of intellectual property protection). Inventions assigned to Noven,
or to a third party as directed by Noven, are referred to as “Company
Inventions.”

  c.   Executive acknowledges that all original works of authorship which were
made by Executive (solely or jointly with others) while Executive was employed
by or serving as an Executive to Noven and which are protectible by copyright
(collectively “Works”) are “works made for hire,” pursuant to United States
Copyright Act (17 U.S.C. Section 101). In the event any such Works shall be
deemed not to be a work made for hire, Executive hereby sells, assigns, and
transfers to Noven, its successors, and assigns, all right, title, and interest
in and to such Works, in the United States and throughout the world, forever,
including any and all copyright terms, and all extension terms of copyright, for
all uses and purposes whether now known or hereafter created, free from payment
of any royalty or further compensation. Upon request of Noven, Executive shall
take such further actions, including execution and delivery of instruments of
conveyance, that Noven may reasonably deem necessary or desirable to accomplish
or evidence more further any transfer of right, title, or interest necessary to
fulfill the intent of this Agreement.

  d.   Executive will, upon Noven’s request and at Noven’s expense, assist Noven
in every proper way to obtain, and from time to time enforce, United States and
foreign Proprietary Information relating to Company Inventions in any and all
countries. To that end Executive will execute, verify and deliver such documents
and perform such other acts (including appearances as a witness) as Noven may
reasonably request for use in applying for, obtaining, perfecting, evidencing,
sustaining and enforcing such Proprietary Information and the assignment
thereof. In addition, Executive will execute, verify and deliver assignments of
such Proprietary Information to Noven or its designee. Executive hereby waives
and quitclaims to Noven any and all claims, of any nature whatsoever, which
Executive now or may hereafter have for infringement of any Proprietary
Information assigned hereunder to Noven.

15. Executive agrees that all records, files, plans, documents, software,
reports, research, and policies and procedures relating to the business of Noven
that Executive prepared, used or came into contact with shall be and shall
remain the sole property of Noven and shall not be copied without written
permission from Noven. Executive shall not remove and shall return any and all
property belonging to Noven, including but not limited to all files, lists,
records, computer software or records or any other information relating to Noven
no later than the Effective Date.

16. Executive will, prior to signing this Separation Agreement, disclose to
Noven any and all matters, information, or concerns of any type whatsoever of
which Executive is aware regarding Noven’s actions, policies, practices, and/or
procedures, which Executive believes constitute non-compliance with law,
regulatory or safety rules, or other guidelines. All such disclosures shall be
in writing and attached to and made a part of this Separation Agreement. In
addition, if no such writing is attached to this Separation Agreement,
Executive’s signature on this Separation Agreement evidences the fact that
Executive is not aware of any such matter, information, or concern which could
have, or should have, been disclosed, but which has not been disclosed.

17. In the event of a breach by Executive of any provision of this Separation
Agreement, Noven shall be entitled to pursue immediately any and all remedies it
may have against Executive in a court of competent jurisdiction by specific
performance, injunction, or such other remedies and relief as may be available.
It is agreed that in the event of any litigation or proceeding under this
Separation Agreement (other than an action challenging the validity of this
Separation Agreement under the Older Workers Benefit Protection Act), including
with regard to the enforcement of the restrictive covenants set forth in this
Separation Agreement, the prevailing party shall be entitled to all costs and
expenses incurred in such litigation or proceeding, including reasonable
attorney’s fees from trial through appeal.

18. Any waiver by Executive or Noven of a breach of any provision of this
Separation Agreement shall not be construed to be a waiver of any other breach
of any provision of this Separation Agreement. The failure of Executive or Noven
to insist upon strict adherence to any term of this Separation Agreement shall
not constitute a waiver by such party to require at some subsequent time strict
adherence to such term. To be effective, any waiver must be in writing and
signed by the waiving party.

19. Neither this Separation Agreement, nor anything contained herein, shall be
construed as an admission or concession by Noven or by Executive of any
liability, unlawful conduct, or wrongdoing whatsoever.

1.

20. Executive may not assign any rights and/or benefits due and/or owing under
this Agreement unless Noven agrees to such assignment in writing. This
Separation Agreement shall be binding upon the personal representative, heirs,
and permitted assigns of Executive. This Separation Agreement may be assigned by
Noven and shall inure to the benefit of and be enforceable by any successors and
assigns of Noven.

21. This Separation Agreement contains the complete, full, and exclusive
understanding of Executive and Noven and supersedes any and all other oral or
written agreements between them; provided however, that nothing herein shall
adversely effect Noven’s existing indemnification obligations owed to Executive
under the Indemnity Agreement made and entered into as of March 26, 1999, by and
between Noven Pharmaceuticals, Inc., and Robert C. Strauss. Any amendments to
this Separation Agreement shall be effective and binding on Executive and Noven
only if any such amendments are in writing and signed by both parties.

22. If any provision of this Separation Agreement is invalid, illegal or
unenforceable, except for the release/waiver provisions in Section 7 or the
covenants as provided in Sections 12 and 14, it shall not affect the other
provisions of this Separation Agreement, which shall remain in effect. This
Separation Agreement shall be construed in all respects as if such invalid or
unenforceable provision was omitted.

23. This Separation Agreement is governed by the laws of the State of Florida,
and venue of any action brought under this Separation Agreement shall be
exclusively in Miami-Dade County, Florida. Each of the parties to this
Separation Agreement: (a) consents to the personal jurisdiction of all Florida
courts located in Miami-Dade County, Florida, and the federal court for the
Southern District of Florida in the event any dispute arises out of this
Separation Agreement; and (b) agrees that he or it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court. Each of the parties further agrees that he or it will not assert any
claim of inconvenient forum. Any trial/hearing/proceeding under this Separation
Agreement shall be heard by a JUDGE WITHOUT A JURY.

24. Executive has up to 21 days after receiving this Separation Agreement to
decide whether to sign it. Executive should take as much of the 21 days as the
Executive needs to in order to properly evaluate the release/waiver and other
provisions contained in this Separation Agreement. Any changes of whatever kind
which may be made after the Separation Agreement is initially provided to
Executive will not restart the running of the 21 day period. Executive is
advised to consult with an attorney prior to signing this Separation Agreement.

25. Executive may revoke this Separation Agreement by providing written notice
of revocation to: Jeff Mihm, Vice President and General Counsel, Noven
Pharmaceuticals, Inc., 11960 SW 144th Street, Miami, Florida 33186, to be
received not later than the end of the seventh day after Executive signs this
Separation Agreement. If there is no timely revocation, the Separation Agreement
shall become effective and enforceable.

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BOTH PARTIES, HAVING HAD A FULL OPPORTUNITY TO REVIEW THE FOREGOING, AND BOTH
PARTIES, BEING IN COMPLETE AND FULL AGREEMENT AS TO THE TERMS OF THIS SEPARATION
AGREEMENT, HAVE VOLUNTARILY SIGNED THIS AGREEMENT.

      ROBERT C. STRAUSS   NOVEN PHARMACEUTICALS, INC.
/s/ Robert C. Strauss
  /s/ Jeff Mihm
Print Name: Jeff Mihm,
in his/her capacity as authorized representative
of Noven Pharmaceuticals, Inc.

Title: Vice President, General Counsel and Corporate Secretary

     
1/2/2008
Date
  1/2/2008
Date

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