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                                                                   EXHIBIT 10.46

                                LICENSE AGREEMENT

                          DATED AS OF FEBRUARY 25, 2004

                                 BY AND BETWEEN

                           NOVEN PHARMACEUTICALS, INC.

                                       AND

                            ENDO PHARMACEUTICALS INC.

         THE CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN FILED SEPARATELY
         WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A CONFIDENTIAL
         TREATMENT REQUEST IN ACCORDANCE WITH RULE 24B-2 OF THE SECURITIES AND
         EXCHANGE ACT OF 1934, AS AMENDED. REDACTED PORTIONS OF THIS EXHIBIT ARE
         MARKED BY AN ***.

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                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                                                 <C>
Article I.           DEFINITIONS.................................................................................    1

Article II.          LICENSE GRANTS..............................................................................    5

Article III.         REGISTRATION AND REGULATORY APPROVAL........................................................    6

Article IV.          COMMERCIALIZATION OF THE LICENSED PRODUCT...................................................    7

ARTICLE V.           CANADA AND OTHER TERRITORIES................................................................    8

ARTICLE VI.          FEES AND PAYMENTS...........................................................................    9

Article VII.         SUPPLY OF THE LICENSED PRODUCT..............................................................   10

Article VIII.        DEVELOPMENT OF ADDITIONAL PRODUCTS..........................................................   10

Article IX.          INTELLECTUAL PROPERTY MATTERS...............................................................   11

Article X.           CONFIDENTIALITY.............................................................................   13

Article XI.          REPRESENTATIONS AND WARRANTIES..............................................................   14

ARTICLE XII.         INDEMNIFICATION AND LIMITATION OF LIABILITY.................................................   16

Article XIII.        TERM AND TERMINATION........................................................................   18

Article XIV.         MISCELLANEOUS...............................................................................   20
</TABLE>

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                                LIST OF EXHIBITS

Exhibit A             Noven Patents

Exhibit B             Supply Agreement

Exhibit C             Additional Products

Exhibit D             Evaluation Plan

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                                LICENSE AGREEMENT

         This LICENSE AGREEMENT (the "Agreement") is entered into as of this
25TH day of February, 2004 (the "Effective Date"), by and between NOVEN
PHARMACEUTICALS, INC., a Delaware corporation ("Noven"), and ENDO
PHARMACEUTICALS INC., a Delaware corporation ("Endo").

                                   WITNESSETH:

         WHEREAS, Noven has developed and sought regulatory approval relating
to, and is the owner of record of, an abbreviated new drug application (the
"Product ANDA" as further defined below) relating to a generic fentanyl
transdermal patch (the "Licensed Product" as further defined below);

         WHEREAS, Noven holds rights to certain intellectual property relating
to the Licensed Product including without limitation certain patents, patent
applications, and know-how;

         WHEREAS, pursuant to the terms of this Agreement Noven wishes to
provide a license to Endo to commercialize the Licensed Product under its
Product ANDA and its intellectual property rights;

         WHEREAS, pursuant to the terms of this Agreement, Endo is willing and
able to accept such a license and to fully commercialize the Licensed Products;

         WHEREAS, Noven and Endo additionally desire to jointly identify and
develop additional compounds for transdermal delivery and for eventual full
scale commercialization (the "Additional Products" as further defined below);
and,

         WHEREAS, Noven and Endo are entering into a supply agreement
contemporaneously with the execution of this Agreement under which Noven will
supply Licensed Product to Endo (the "Supply Agreement").

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:

                             ARTICLE I. DEFINITIONS

         Section 1.01. Definitions. As used herein, the following capitalized
terms have the following meanings:

         "Additional Products" means potential products comprising those
compounds identified in Exhibit C.

         "Affiliate" means with respect to a Person, any legally distinct
corporation, firm, individual or other form or business organization which is,
directly or indirectly, controlled by, controlling, or under common control with
the subject Person hereto. An entity shall be regarded

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as being in control of another entity if such first entity has the direct or
indirect power to order or cause the direction of the management and policies of
the other entity, whether through ownership of at least fifty percent (50%) of
the outstanding voting securities or participating profit interest of such
entity, through other dominant equity ownership or by contract, statute,
regulation or otherwise.

         "ANDA" means an abbreviated new drug application filed with the FDA
pursuant to 21 U.S.C. 355(j).

         "Applicable Law" means, with respect to any Person, any domestic or
foreign, federal, state or local statute, treaty, law, ordinance, rule,
regulation, administrative interpretation, order, writ, injunction, judicial
decision, decree or other requirement of any Governmental Authority applicable
to such Person or any of such Person's respective properties, assets, officers,
directors, employees, consultants or agents (in connection with such officers',
directors', employees', consultants' or agents' activities on behalf of such
Person).

         "Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in New York, New York, USA are authorized or required
by law to close.

         "Code of Federal Regulations," or "C.F.R" means the codification of the
general and permanent rules published in the Federal Register. Title 21 of the
C.F.R. contains the regulations promulgated by the FDA pursuant to the FDC Act.

         "Competing Product" means any transdermal fentanyl drug product
approved by a Regulatory Authority that is rated as therapeutically equivalent
to Duragesic(R) ***.

         "Confidential Information" means all secret, confidential or
proprietary data, know-how and related information, including, without
limitation, all confidential Regulatory Applications, Regulatory and Clinical
Materials and related filings, applications and data, the content of any
unpublished patent applications, operating methods and procedures, marketing,
manufacturing, distribution and sales methods and systems, sales figures,
pricing policies and price lists and other business information and shall
include all confidential information disclosed or accessed by the parties
pursuant to the provisions of this Agreement.

         "Cost of Goods Sold" means the respective amount paid to Noven by Endo
pursuant to the Supply Agreement for Licensed Product sold hereunder.

         "Damages" means all liabilities, demands, obligations, assessments,
judgments, levies, losses, fines, penalties, damages (including compensatory
damages), costs and expenses, including reasonable attorneys', accountants',
investigators', and experts' fees and expenses, reasonably sustained or incurred
in connection with the defense or investigation of any Proceedings (including
any Proceedings to establish insurance coverage).

         "FDA" means the United States Food and Drug Administration and any
successor agency thereto.

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         "FDC Act" means the United States Federal Food, Drug and Cosmetic Act,
21 U.S.C. Section 301 et seq., as amended, and the regulations promulgated there
under, as amended from time to time.

         "GAAP" means generally accepted accounting principles in effect in the
United States from time to time.

         "Governmental Authority" means any foreign, domestic, federal,
territorial, state or local governmental authority, quasi-governmental
authority, instrumentality, court, government or self-regulatory organization
(including any national or international securities exchange and "The NASDAQ
Stock Market), commission, tribunal or organization or any regulatory,
administrative or other agency, or any political or other subdivision,
department or branch of any of the foregoing.

         ***

         "IND" means an Investigational New Drug Application, as defined in 21
C.F.R. 312.3.

         "Intellectual Property Rights" means any and all existing and future
proprietary rights, including but not limited to property rights, know-how
rights, trade secret rights, copyrights, design rights, any existing or future
United States patents and patent applications and all continuations,
continuations-in-part, divisions, reissues, reexaminations, extensions or other
government actions which extend the subject matter of the foregoing, and any
corresponding foreign patent applications, and any corresponding patents,
patents of addition, or other equivalent foreign patent rights issuing, granted
or registered and all other intellectual property rights (including without
limitation the right, if any, to sue or bring other actions for past, present
and future infringement of such Intellectual Property Rights). With respect to
Noven, the foregoing shall include the Noven Patents.

         "Launch" means the sale of product to a major retail chain or a major
distributor (as those terms are commonly understood in the industry) after
Regulatory Approval.

         "Licensed Product" means the fentanyl transdermal patch product
submitted for Regulatory Approval in the Product ANDA.

         "Net Sales" means the quantity of Licensed Product multiplied by the
gross price per unit of Licensed Product, each as invoiced by Endo or its
Approved Subdistributors to third parties (other than an Approved
Subdistributor), less the total value of cash discounts and/or rebates and
charge backs offered *** for the purchase of such product, and/or required
payments under governmental agency programs, including Medicare and Medicaid, as
well as any credits or allowances actually granted on account of price
adjustments or rejection or return of such product previously sold. ***

         "Noven Patents" means those patents and patent applications listed in
Exhibit A together with any and all improvement patents, reissues,
confirmations, renewals, extensions, counterparts, divisions, continuations,
continuations-in-part or patents-of-addition issued to or assigned to Noven, but
only to the extent that they specifically read on the Licensed Product or a
Competing Product, as applicable.

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         "Person" means an individual, a corporation, a general partnership, a
limited partnership, a limited liability company, a limited liability
partnership, an association, a trust or any other entity or organization,
including a Governmental Authority.

         "Proceedings" means governmental, judicial, administrative or
adversarial proceedings (public or private), litigation, suits, arbitration,
disputes, claims, causes of action or investigations involving third party
claims.

         "Product ANDA" means ANDA no. 76-804, filed by Noven pertaining to a
fentanyl transdermal patch product.

         "Regulatory and Clinical Materials" means all documents, supporting
materials and other materials relating to the Regulatory Application, any
Regulatory Approval or other matter required to be submitted to any Regulatory
Authority in relation to the Product, including any IND, NDA, ANDA, and
documents, supporting materials and other materials relating to any drug master
file, investigators' brochures, clinical studies (including any Phase IV
clinical studies), safety data, adverse event reports, questionnaires,
consultant reports, correspondence (including correspondence with any Regulatory
Authority), batch reports, protocols, specifications, quality assurance, quality
control, customer queries and any responses thereto, and any compilation or
evaluations thereof, and question and answer scripts.

         "Regulatory Application" means the applications submitted by Noven to
the FDA seeking approval for the development, manufacture, testing, storage,
transport, marketing, advertisement, promotion, sale, use, distribution or other
disposal of the Product in all or any portion of the Territory, including the
Product ANDA.

         "Regulatory Approval" means final approval by the applicable Regulatory
Authority to market the Product.

         "Regulatory Authority" means a Governmental Authority that has the
authority over the manufacture, use, storage, import, export, clinical testing
transport, marketing, sale or distribution of the Licensed Product in all or any
portion of the Territory, including the FDA.

         "Securities Laws" means the United States Securities Act of 1933, as
amended, the United States Securities Exchange Act of 1934, as amended, and any
other similar law or regulation of a Governmental Authority, or any successor to
any such laws or regulations, together with any rules, regulations or listing
standards, or agreements of any national or international securities exchange or
The NASDAQ Stock Market.

         "Territory" means the United States of America and Canada.

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         Section 1.02. Other Definitions. Each of the following terms is defined
in the section of this Agreement referenced opposite such term.

<TABLE>
<S>                                                                                    <C>
Agreement...........................................................................        Preamble
Adjusted Gross Margin...............................................................   Schedule 2.06
Approved Subdistributor.............................................................            2.04
Approved Subdistributor Agreement...................................................            2.04
Canadian Election...................................................................            5.06
Closing Date........................................................................      2.06(b)(i)
Competing Assignment................................................................            2.06
Disclosing Party....................................................................        10.01(a)
Effective Date .....................................................................        Preamble
Endo         .......................................................................        Preamble
Endo Indemnitees ...................................................................        12.01(b)
Indemnified Party ..................................................................        12.01(f)
Indemnifying Party .................................................................        12.01(f)
Infringement Indemnitees............................................................        12.01(d)
Marketing Plan......................................................................            4.03
Noven        .......................................................................        Preamble
Noven Indemnitees...................................................................        12.01(a)
Reduced Launch Milestone Payment....................................................         6.02(b)
Receiving Party ....................................................................        10.01(a)
SEC          .......................................................................           14.15
Surviving Entity....................................................................            2.06
</TABLE>

                           ARTICLE II. LICENSE GRANTS

         Section 2.01. License Grant: Subject to the terms and conditions of
this Agreement, Noven hereby grants to Endo an exclusive license under the
Product ANDA and its Intellectual Property Rights solely to use and sell or
otherwise dispose of the Licensed Product solely in the Territory. For purposes
of this Agreement, the phrase use and sell, or otherwise dispose of the
"Licensed Product" includes only the right to market, advertise, promote,
distribute, offer to sell and sell the Licensed Product throughout the Territory
pursuant to the associated obligations of Endo under this Agreement. The term
"exclusive" as used in this Article means the specific rights conferred on Endo
are to the exclusion of all other Persons and entities, including but not
limited to Noven.

         Section 2.02. Limitations on License Granted Under Section 2.01. No
right or license other than those specifically granted to Endo herein are
granted, and all rights not specifically granted to Endo herein are hereby
explicitly retained by Noven including, without limitation, the right to make
Licensed Product and to supply Licensed Product to Endo. Except as specifically
set forth in Section 2.04 and Article V of this Agreement below, the license to
Endo hereunder shall not include the right of Endo to sublicense any of the
rights granted to Endo.

         Section 2.03. Quality Control. Endo shall only market, promote, sell,
distribute, use or otherwise dispose of the Licensed Product, and any materials
used in connection with the

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Licensed Product, including any labeling, packaging and advertising, in
accordance with all Applicable Laws.

         Section 2.04. Sublicense. Subject to Section 5.01 and to the written
consent of Noven, which consent may be withheld in Noven's sole discretion, Endo
shall have the right (a) to appoint any Person as a subdistributor in the
Territory (and/or such other territory as the parties may agree upon from time
to time) as provided herein (each such approved subdistributor, an "Approved
Subdistributor") and (b) to delegate to such Approved Subdistributor the whole
or any part of its obligations; provided that (i) Endo shall remain primarily
liable for the Approved Subdistributor's compliance with this Agreement, (ii)
prior to or concurrently with its appointment, each Approved Subdistributor
shall enter into an agreement with Endo (each, an "Approved Subdistributor
Agreement") that is consistent with this Agreement, and that shall not
thereafter be amended or modified in any manner inconsistent with the terms
hereof, (iii) each Approved Subdistributor Agreement shall name Noven as a third
party beneficiary, and (iv) no Approved Subdistributor Agreement shall permit
such Approved Subdistributor to appoint or assign such agreement, or delegate
any obligations, to any other subdistributor. Endo shall be solely responsible
for the fees of, and any other payments to, each Approved Subdistributor. Upon
Noven's request, Endo shall make available to Noven a redacted copy of each
Approved Subdistributor Agreement evidencing such agreements conformance with
the requirements of this Section 2.04. The foregoing notwithstanding, nothing
herein shall prevent or prohibit Endo from using subcontractors to perform
certain of its internal business functions, such as utilizing a contract sale
force, ad agency, contract distribution services and contract safety services:
provided, however, that (i) Endo shall retain strategic control over the
marketing and sale of Licensed product, (ii) Endo shall remain fully liable and
responsible to Noven for all actions and/or inactions of its subcontractors
under this Agreement as though such actions and/or inactions were made by Endo
itself; and, (iii) Endo shall be solely responsible for the fees of, and any
other payments to, each subcontractor.

         Section 2.05. Non-compete. Except as provided in Section 2.06, during
the term of this Agreement, the Parties shall not make, use, sell, market or
distribute any Competing Product *** in the Territory, or grant to any Third
Party a right to make, use, sell, market or distribute a Competing Product in
the Territory.

         Section 2.06. ***

                ARTICLE III. REGISTRATION AND REGULATORY APPROVAL

         Noven will be responsible for obtaining, and will use commercially
reasonable efforts to obtain, Regulatory Approval of the Product ANDA in the
United States. Noven agrees to keep Endo fully informed of its progress in
seeking Regulatory Approval, including providing Endo with copies of any and all
correspondence between Noven and the FDA relating to the Product ANDA. Within
thirty (30) days of the first commercial sale of the Licensed Product, Noven
will transfer the Product ANDA to Endo. Thereafter, during the term of this
Agreement, Endo will be responsible for maintaining Regulatory Approval in the
U.S. Noven shall provide Endo with all data and support reasonably necessary for
Endo's maintenance of such Regulatory Approval.

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Within thirty (30) days of the expiration or termination of this Agreement, Endo
shall transfer all of its right, title and interest in and to the Product ANDA
back to Noven for no additional consideration.

              ARTICLE IV. COMMERCIALIZATION OF THE LICENSED PRODUCT

         Section 4.01. Commercialization Generally. Endo shall use commercially
reasonable efforts to Launch the Licensed Product promptly after Regulatory
Approval of the Product ANDA and, at its own expense, to actively and diligently
promote, market and sell the Licensed Product in the Territory during the term
of this Agreement. Such efforts shall be no less than those efforts Endo would
undertake for its own generic products with similar market potential.

         Section 4.02. Commercial Launch.

         (a) Subject to subsections (b), (c) and (d) of this Section 4.02, Endo
shall Launch the Licensed Product within the territory within thirty (30) days
of Regulatory Approval of the Licensed Product.

         (b) Endo's obligation to Launch shall be suspended until such time as
it has received all launch supplies of Licensed Product properly ordered from
Noven pursuant to the Supply Agreement; provided that any delays or non-delivery
of Licensed Product under the Supply Agreement are not a result of a breach of
the Supply Agreement by Endo.

         (c) Endo's obligation to Launch and to sell Licensed Product shall be
suspended ***

         (d) Endo's obligation to Launch and sell Licensed Product shall be
suspended for such time as it is prevented from selling Licensed Product by a
court order in the relevant territory that Licensed Product infringes a valid
claim of a patent of a Third Party or Endo is prohibited from marketing the
Licensed Product by any judgment, order, injunction, decree or award of any
court, administrative agency, or arbitrator or government body.

         (e) Except as otherwise set forth in this Article IV and Section 14.14,
if Endo fails to commence to market any Licensed Product in accordance with the
requirements of this Article IV, and such failure continues for a period of
fifteen (15) business days after written notice from Noven to Endo, then this
Agreement shall immediately terminate upon notice to Endo by Noven. Thereafter,
Noven shall be free to use and sell Licensed Product in the territory as it may
see fit. If Noven determines to terminate this Agreement with respect to the
Licensed Product, Endo shall promptly take such actions as Noven may reasonably
request, in order to transfer to Noven or its designee, for no additional
consideration, all of Endo's right, title, and interest in and to any Regulatory
Approvals relating to the Licensed Product in such country, and all information
relating to any Regulatory Approvals not previously supplied to Noven.

         Section 4.03 Marketing Plan. No later than ninety (90) days before the
first commercial sale of Licensed Product, Endo shall provide Noven with a
written marketing plan setting forth a detailed description of Endo's strategies
and business plan with respect to the marketing, distribution, and sale of the
Licensed Product in the Territory (the "Marketing Plan"). Thereafter, Endo
Agrees to keep Noven apprised of its strategies and business plan with respect
to the marketing, distribution, and sale of the Licensed Product in the
Territory, and to provide to

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Noven such other marketing related information as Noven shall reasonably
request. Endo shall also provide Noven with an updated copy of the Marketing
Plan prior to the beginning of each subsequent calendar year during the term of
this Agreement. At Noven's request, designated employees of each of the parties
shall confer not more than once every calendar quarter either in person at a
location to be mutually agreed upon, or by teleconference, to discuss the
Marketing Plan, competitive market conditions, strategic changes in the
marketplace and Endo's respective actions and planned responses thereto.

         Section 4.04 Limitations on Endo's Marketing of the Licensed Product.
Endo shall be permitted to market and sell the Product as it would normally
market and sell products of comparable market potential in the ordinary course
of Endo's business. ***

                     ARTICLE V. CANADA AND OTHER TERRITORIES

         Section 5.01. Canada. Noven hereby authorizes Endo to appoint an
Authorized Subdistributor (as defined in Article II above) to distribute
Licensed Product in Canada. The terms of this Agreement and the Supply Agreement
shall govern the parties' activities in Canada with respect to Licensed Product,
except that in the case of a conflict between this Article V and the rest of the
terms of this Agreement and/or the Supply Agreement the terms of this Article V
shall govern.

         Section 5.02. Supply. Noven shall exclusively supply Licensed Product
to Endo, and Endo shall exclusively purchase from Noven Licensed Product, for
sale and use in Canada per the terms of the Supply Agreement.

         Section 5.03. Regulatory Matters. Endo, together with the Approved
Subdistributor, shall be responsible for filing, obtaining and maintaining all
necessary Regulatory Approvals in Canada in order to use and sell the Licensed
Product in Canada. Endo, together with the Approved Subdistributor, shall use
commercially reasonable efforts to obtain such Canadian Regulatory Approval
within a reasonable period of time and to thereafter promote, market and sell
Licensed Product in Canada. Noven will provide all such information, as
reasonably requested by Endo, that Noven may have in its possession in order to
support such Canadian regulatory filings.

         Section 5.04. Financial Terms. There shall be no profit split regarding
sales of licensed Product in Canada.

         Section 5.05. Liability. As further addressed in Section 12.01(e), Endo
shall be responsible for third party claims for damages associated with selling
and using Licensed Product in Canada which are not due to a breach of Noven's
warranties in this Agreement or the Supply Agreement.

         Section 5.06. Termination. In the event that Endo determines at any
time that it will not pursue, or continue to pursue, marketing and selling of
Licensed Product in Canada, it will promptly notify Noven and return all rights
related to Licensed Product in Canada to Noven for no additional consideration.
Endo's rights in Canada pursuant to this Article 5 are contingent upon (i) Endo
evaluating the opportunity in Canada and notifying Noven in writing within one
year of the Effective Date that it intends to proceed with seeking Regulatory
Approval to market

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Licensed Product in Canada and to market Licensed Product in Canada upon
receiving such Regulatory Approval (the "Canadian Election"), and (ii) that Endo
makes a commercial sale of License Product in Canada within two years of the
Canadian Election, provided, however, that so long as Endo is using, and
continues to use, commercially reasonable efforts to develop, register or launch
the Licensed Product in Canada, this contingency shall be extended for up to two
additional years. Endo's foregoing obligations of commercially reasonable
efforts shall be subject to notice by Noven and cure by Endo per Section
13.02(a). The foregoing notwithstanding, If Endo has not made a commercial sale
of Licensed Product in Canada within *** of its Canadian Election, Endo's rights
in Canada under this Agreement and the Supply Agreement shall immediately cease,
all rights related to Licensed Product in Canada shall be returned to Noven for
no additional consideration, and Noven shall thereafter be free to pursue the
Canadian market in any fashion that it sees fit

                          ARTICLE VI. FEES AND PAYMENTS

         Section 6.01. Upfront Payment. Endo shall pay to Noven Eight Million
Dollars ($8,000,000) within three (3) business days of the execution of this
Agreement.

         Section 6.02. Milestone Payments.

         (a) Launch Milestone Payment. Within ten (10) business days of Endo's
first commercial sale of Licensed Product, Endo shall pay to Noven Ten Million
Dollars ($10,000,000), if fewer than ***other generic formulations of
Duragesic(R) have been approved or launched, ***.

         (b) Reduced Launch Milestone Payment. Within ten (10) business days of
Endo's first commercial sale of Licensed Product, Endo shall pay to Noven Seven
Million Five Hundred Thousand Dollars ($7,500,000) (the "Reduced Launch
Milestone Payment"), if *** or more other generic formulations of Duragesic(R)
have been approved or launched, including ***.

         (c) In the event that Endo makes the Reduced Launch Milestone Payment
and IMS data proves that fewer than *** competitors had commenced commercial
shipments during the thirty (30) day period immediately following Regulatory
Approval of the Licensed Product, and Endo received the launch supplies of
Licensed Product properly ordered from Noven pursuant to the Supply Agreement,
then Endo shall pay Noven an additional launch milestone payment of $2.5 million
within fifteen (15) business days of Endo's receipt of such data. In no event
shall Endo be responsible for more than Ten Million Dollars ($10,000,000) in
total, aggregate launch milestone payments. For the purpose of this paragraph, a
competitor to Endo shall not be deemed to have made a "commercial shipment" if
they made only a single, token shipment for the purpose of triggering patent
litigation.

         (d) Delayed Launch Milestone Reduction. In the event that (i) the final
ANDA approval for the Licensed Product or (ii) the delivery to and acceptance by
Endo of the Licensed Product ordered for the first month of commercial launch by
Endo in accordance with the Supply Agreement (provided that shipment by Endo to
its customers shall constitute acceptance and, in the absence of any quality
issues reasonably identified by Endo, such acceptance shall not occur later than
ten business days after Endo's receipt of the Licensed Product and all required

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supporting documentation, including the certificate of analysis) occurs thirty
(30) days or more after the first shipment of a Competing Product by ***, then
the Launch Milestone or Reduced Launch Milestone otherwise due and payable shall
be reduced in accordance with the following schedule:

<TABLE>
<CAPTION>
Amount of delay                    Reduction in launch milestone
---------------                    -----------------------------
<S>                                <C>
30-59 days                                  $1,000,000

60-89 days                                  $1,500,000

90-119 days                                 $2,000,000

120 or more days                            $2,500,000
</TABLE>

         Section 6.03 ***. Endo shall pay to Noven *** in the United States up
to and including *** in any calendar year; and *** in the United States over ***
in any calendar year. *** shall be determined on a calendar quarter by calendar
quarter basis throughout the term of this Agreement. Endo shall pay to Noven its
share of *** within thirty (30) days of the end of each applicable calendar
quarter in which sales of Licensed Product have been made by Endo. Each ***
payment shall be preceded by a statement which includes a detailed calculation
of each of the applicable Net Sales, Cost of Goods Sold, *** and the share of
*** due and payable. Such statement shall be provided to Noven within fifteen
(15) days of the end of each calendar quarter following sales of Licensed
Product under this Agreement and shall ***.

         Section 6.04 Payments. All payments by Endo to Noven shall be made in
United States Dollars by wire transfer to such account as Noven may notify to
Endo from time to time.

                   ARTICLE VII. SUPPLY OF THE LICENSED PRODUCT

         Noven shall be the exclusive supplier of Licensed Product to Endo, and
shall supply Licensed Product to Endo at Noven's fully loaded manufacturing
cost. The supply of Licensed Product to Endo by Noven shall be governed by the
Supply Agreement, which shall address, among other things, the supply price,
forecasts, purchase orders and minimum orders, and a Quality Agreement, which
shall delineate the regulatory responsibilities of the Parties.

                ARTICLE VIII. DEVELOPMENT OF ADDITIONAL PRODUCTS

         Section 8.01 Noven's Commitment Regarding Additional Products.
Following receipt of the Up-Front Payment of Eight Million Dollars ($8,000,000)
pursuant to Section 6.01 above, Noven hereby commits to allocate One Million
Five Hundred Thousand Dollars ($1,500,000) to the evaluation of, and the conduct
of feasibility studies for, ***compounds identified by Endo, and mutually agreed
by the parties, as candidates for transdermal delivery. Noven will not
unreasonably reject a candidate proposed by Endo. The first such compound is
identified in Exhibit C. Endo will nominate the additional ***candidates by July
1, 2004, and the additional agreed nominees will be added to Exhibit C by
amendment upon mutual agreement of the parties. Once a compound has been added
to Exhibit C, Endo and Noven shall work exclusively with each other to develop
that compound for transdermal delivery. Noven will conduct the

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evaluation and feasibility studies pursuant to the Evaluation Plan which will be
mutually agreed to between the Parties and set forth in Exhibit D and Noven will
use reasonable efforts to provide the deliverables described therein to Endo by
December 31, 2004. Endo will establish criteria for determining whether the
Additional Products thereafter progress into pilot clinical development. The
parties may mutually agree to substitute candidates for development at any time,
but there shall be no obligation to substitute a new candidate in place of a
candidate that has failed the feasibility studies.

         Section 8.02 Additional Commitments Regarding Additional Products. As
Noven performs its technical feasibility work, the product candidates will be
evaluated by the parties against Endo's clinical development criteria. Endo will
determine whether an Additional Product will move into pilot studies within ***
of receiving from Noven its feasibility evaluation. Once Endo has determined
that an Additional Product will move into pilot studies, Endo will conduct pilot
studies on the successful candidates ***. Within *** days of the completion of
human pharmacokinetic studies on each Additional Product that has been nominated
for pilot studies, Endo will determine whether such Additional Product will move
into full clinical development. If Endo determines that an Additional Product is
to move into final clinical work then the parties will negotiate a
Commercialization Agreement pursuant to Section 8.03 below. Endo will move each
nominated Additional Product for which a Commercialization Agreement is entered
into between the Parties into full clinical development. If Endo at any time
makes a final decision not to advance an Additional Product into pilot studies
or nominate it for full clinical development, Noven shall be thereafter free to
develop, license and/or commercialize such compound for its own benefit. Noven
agrees to work with Endo in good faith to provide additional information to aid
Endo in making its determination of whether to move each Additional Product into
pilot studies and thereafter into full clinical development . Endo agrees to
work with Noven in good faith in determining whether to move each Additional
Product into pilot studies and thereafter into full clinical development.

         Section 8.03. Commercialization Agreement. Once a product is nominated
for full clinical development, the parties will have *** days to establish
business terms for commercialization and to establish a clinical plan and budget
for that candidate. Endo will fund and conduct the clinical development. If the
parties cannot agree to terms in the *** period, then ***.

                    ARTICLE IX. INTELLECTUAL PROPERTY MATTERS

         Section 9.01. Infringement by Third Parties.

         (a)      If, at any time on or after the Effective Date, either party
shall become aware of any infringement or threatened infringement of the Noven
Patents or any unfair competition, inappropriate or unauthorized use,
disparagement or other tortious act by any third party in relation to the
Licensed Product, then the party having such knowledge shall give prompt notice
thereof to the other party.

         (b)      Subject to Section 9.02, Endo shall have the right *** using
counsel reasonably acceptable to Noven, to take such action as it deems
appropriate to enforce the Noven Patents in the Territory against any Competing
Product that may be infringing the Noven Patents, including

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initiating an appropriate Proceeding or threatening to initiate an appropriate
Proceeding to prevent or eliminate the infringement of such Noven Patents with
regard to any Competing Product, or the unfair competition, inappropriate or
unauthorized use, disparagement or other tortious act by any third party in
relation to the Licensed Product in the Territory. Subject to Section 9.01(c)
below, Noven agrees to cooperate with Endo, ***, if and to the extent reasonably
requested by Endo, including joining as a party to such Proceeding, if necessary
to maintain standing.

         (c)      ***

         (d)      Endo shall not enter into any settlement, agreement, consent
judgment or other voluntary final disposition of a Proceeding or threatened
Proceeding under this Section 9.01, in whole or in part, without the prior
written consent of Noven, which shall not be unreasonably withheld.

         (e)      All amounts awarded as damages, profits or otherwise in
connection with any action specified in Section 9.01(b) taken by Endo shall be
***.

         (f)      If Endo elects not to take any action of the nature specified
in Section 9.01(b) within sixty (60) days of becoming aware or receiving notice
under Section 9.01 (a) of any infringement, threatened infringement, unfair
competition, disparagement or other tortious act identified in Section 9.01(a),
Endo shall give Noven notice of such decision, and Noven thereafter shall have
the right to take any action of the nature specified in Section 9.01(g). In such
event, all amounts awarded as damages, profits or otherwise in connection with
any action taken by Noven shall be ***.

         (g)      Except for the rights specifically granted to Endo pursuant to
Section 9.01(b) above, Noven shall have the sole and exclusive right to protect
and enforce its Intellectual Property Rights in any Proceeding. All associated
fees, costs and expenses shall be borne by Noven and all amounts awarded as
damages, profits or otherwise in connection with any action specified in this
Section 9.01(g) taken by Noven shall be the sole property of Noven.

         Section 9.02. Third Party Claims regarding the Noven Patents.

         (a)      If, at any time on or after the Effective Date, any party
shall become aware of any Proceeding or threat of any Proceeding by a third
party alleging that any of the Noven Patents (or any claims asserted in the
Noven Patents) are invalid or unenforceable, or otherwise seeking to limit the
scope, construction or interpretation of any of the Noven Patents (or any claims
asserted in the Noven Patents), such party shall promptly notify the other party
of the same.

         (b)      ***

         (c)      ***.

         Section 9.03. Rights of Election Regarding Potential Infringement . ***

         Section 9.04. Infringement of Third Party Intellectual Property Rights.

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         (a)      If, at any time on or after the Effective Date, any party
shall become aware of any Proceeding or threat of any Proceeding by a third
party alleging that the Licensed Product infringes the Intellectual Property
Rights of any third party or otherwise seeking to prevent, or seek damages in
relation to, the marketing of Licensed Product, such party shall promptly notify
the other parties of the same.

         (b)      ***

         (c)      In the event of any Proceeding or threatened Proceeding
contemplated by Section 9.03(b), the Controlling Party shall assume control of
the defense of such Proceeding or threatened Proceeding, using counsel of its
own choosing, that is reasonably acceptable to the other Party. The
non-controlling party agrees to cooperate with the Controlling Party, at its own
cost and expense, if and to the extent reasonably requested by the Controlling
Party.

         (d)      The Controlling Party shall consult with the other party with
respect to whether and how any such Proceeding should be defended, maintained,
settled, or appealed throughout the pendency of such Proceeding. The Controlling
Party shall keep the other party apprised throughout, and until final
disposition of, any such Proceeding and give due consideration to the other
party's views in connection with such Proceeding.

         (e)      The Controlling Party shall not enter into any settlement,
agreement, consent judgment or other voluntary final disposition of a Proceeding
or threatened Proceeding under this Section 9.04, in whole or in part, without
the prior written consent of the other party, which shall not be unreasonably
withheld.

         (f)      ***

         Section 9.05. Certain Litigation. ***

                           ARTICLE X. CONFIDENTIALITY

         Section 10.01. Confidentiality.

         (a) Pursuant to the terms of this Agreement, each party (in such
capacity, the "Disclosing Party"), has disclosed and will disclose to the other
parties and/or their Affiliates or representatives (in such capacity, the
"Receiving Party"), certain Confidential Information of the Disclosing Party.
The Receiving Party shall make no use of such Confidential Information except in
the exercise of its rights and the performance of its obligations set forth in
this Agreement. The Receiving Party shall use the same efforts to keep secret,
and prevent the disclosure to third parties of, the Confidential Information of
the Disclosing Party as it would use with respect to its own Confidential
Information. Confidential Information disclosed by the Disclosing Party shall
remain the sole and absolute property of the Disclosing Party, subject to the
rights granted herein. The above restrictions on the use and disclosure of
Confidential Information shall not apply to any information which (i) is already
known to the Receiving Party at the time of disclosure by the Disclosing Party,
as demonstrated by competent proof, (ii) is or becomes generally available to
the public other than through any act or omission of the Receiving Party in
breach of this Agreement, (iii) is acquired by the Receiving Party free of an
obligation of confidentiality from a third party who is free to provide the
information as such, or

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(iv) is developed independently by the Receiving Party without use, direct or
indirect, of information that is required to be held confidential hereunder.

         (b)      Notwithstanding the provisions of Section 10.01(a):

                  (i)      Endo shall be permitted to disclose to its
         distributors, wholesalers and other direct customers such Confidential
         Information relating to the Product as Endo shall reasonably determine
         to be necessary or useful in order to effectively market and distribute
         the Licensed Product;

                  (ii)     Noven shall be permitted to disclose such
         Confidential Information relating to the Licensed Product as Noven
         shall reasonably determine to be necessary or useful in order to
         effectively perform its obligations under this Agreement and the Supply
         Agreement;

                  (iii)    Noven shall be permitted to disclose such
         Confidential Information relating to the Licensed Product as it shall
         reasonably determine to be necessary or useful in order to pursue or
         obtain any Regulatory Approvals in respect of any other transdermal
         drug delivery products;

                  (iv)     each of Noven and Endo shall he permitted to disclose
         to a Regulatory Authority such Confidential Information relating to the
         Licensed Product as it shall reasonably determine (but only after
         consulting with the other parties to the extent practicable) to be
         necessary to comply with the provisions of Applicable Law; and

                  (v)      nothing in this Section 10.01 shall be interpreted to
         limit the ability of either Noven or Endo to disclose its own
         Confidential Information.

         (c)      Each of Noven and Endo acknowledge and agree that the terms
and conditions of this Agreement shall be considered Confidential Information of
each party and shall be treated accordingly.

         (e)      Each party specifically recognizes that any breach by it of
this Section 10.01 may cause irreparable injury to the other parties and that
actual damages may be difficult to ascertain, and in any event, may be
inadequate. Accordingly (and without limiting the availability of legal or
equitable, including injunctive, remedies under any other provisions of this
Agreement), each party agrees that in the event of any such breach,
notwithstanding the provisions of Section 12.02 hereof, the other parties shall
be entitled to seek, by way of private litigation in the first instance,
injunctive relief and such other legal and equitable remedies as may be
available.

                   ARTICLE XI. REPRESENTATIONS AND WARRANTIES

         Section 11.01. Representations and Warranties. Each party hereby
represents and warrants to the other that as of the Effective Date:

         (a)      Organization. It is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation. As of the Closing Date, it will be

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duly qualified to do business in each jurisdiction where the character of its
business (after giving effect to this Agreement) make such qualifications
necessary to carry on its business.

         (b)      Power, Authority and Enforceability. It has full corporate
power and authority to enter into and perform this Agreement and to consummate
the transactions contemplated herein. This Agreement has been or shall be duly
executed and delivered by duly authorized signatories. This Agreement
constitutes a valid and binding obligation, enforceable against in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights generally.

         (c)      No Violation. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby, will (i)
conflict with or result in a breach of any of the terms, conditions or
provisions of its certificate of incorporation or other governing or charter
document, or of any statute or administrative regulation, or, to the best of its
knowledge, of any order, writ, injunction, judgment or decree of any court or
governmental authority or of any arbitration award or any agreement binding upon
it or its assets, or (ii) to the best of its knowledge, contravene or conflict
with, or constitute a violation of, any provisions of any Applicable Law binding
upon it.

         (d)      No Default. It is not a party to any unexpired, undischarged
or unsatisfied written or oral contract, agreement, indenture, mortgage,
debenture, note or other instrument under the terms of which performance by it
according to the terms of this Agreement will be a default, or whereby timely
performance by it according to the terms of this Agreement may be prohibited,
prevented or delayed.

         Section 11.02 Noven hereby represents and warrants to Endo that:

         (a)      Noven is the owner of, or has sufficient rights to, all of the
Noven Intellectual Property Rights in existence on the Effective Date for the
Manufacture, marketing and sale of the Products and to grant to Endo the rights
granted under this Agreement (including the right to market and promote the
Products). To the knowledge of Noven, as of the Effective Date, all of the Noven
Intellectual Property Rights are valid, in full force and effect and have been
maintained to date, and, are not the subject of any interference or opposition
proceedings in the Territory.

         (b)      As of the Effective Date, to the knowledge and belief of the
executive officers and Intellectual Property Counsel of Noven, ***.

         (c)      To the actual knowledge of the executives of Noven as of the
Effective Date, Noven is not aware of any asserted or unasserted claims,
interferences, oppositions or demands of any Third Party against the Noven
Intellectual Property Rights or the Licensed Product in existence as of the
Effective Date in the Territory.

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            ARTICLE XII. INDEMNIFICATION AND LIMITATION OF LIABILITY

         Section 12.01. Indemnification. In order to allocate between themselves
the responsibility for claims arising out of this Agreement, and except as
otherwise specifically provided for herein, from and after the Effective Date,
the parties shall indemnify each other as provided in this Section 12.01.

         (a)      Indemnification Obligations of Endo. From and after the
Effective Date, Endo shall defend, indemnify and hold Noven, its Affiliates, and
each of their respective officers, directors, agents, employees and shareholders
(collectively, "Noven Indemnitees'"), harmless from and against any and all
Damages which Noven Indemnitees may incur or suffer, or with which any of them
may be faced arising out of:

                  (i)      the breach by Endo of this Agreement including any
breach of its representations, warranties, covenants or obligations under this
Agreement;

                  (ii)     the enforcement by Noven Indemnitees of their rights
under this Section 12.01(a);

                  (iii)    Endo's violation of any Applicable Law; and

                  (iv) Endo's negligence or willful misconduct;

provided, however, that, in each such case, Endo shall not be liable hereunder
to the extent such Damages arise from the willful misconduct or negligence of,
or a violation of any Applicable Law by or from the breach of the provisions of
this Agreement or the Supply Agreement by Noven, its Affiliates, agents,
employees or contractors or to the extent such liability is allocated in
Sections 12.01 (c), (d) or (e) below.

         (b)      Indemnification Obligations of Noven. From and after the
Effective Date, Noven shall defend, indemnify and hold Endo, its Affiliates, and
each of' their respective officers, directors, agents, employees, shareholders
or members (collectively, "Endo Indemnitees") harmless from and against any and
all Damages which Endo Indemnitees may incur, or suffer, or with which any of
them maybe faced arising out of:

                  (i)      the breach by Noven of this Agreement including any
breach of its representations, warranties, covenants or obligations under this
Agreement;

                  (ii)     the enforcement by Endo Indemnitees of their rights
under this Section 12.01(b);

                  (iii)    Noven's violation of any Applicable Law; and,

                  (iv)     Noven's negligence or willful misconduct;

provided, however, that, in each such case, Noven shall not be liable hereunder
to the extent such Damages arise from willful misconduct or negligence of, or a
violation of any Applicable Law or from the breach of the provisions of this
Agreement or the Supply Agreement by Endo, its

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Affiliates, agents, employees or contractors or to the extent such liability is
allocated in Sections 12.01 (c), (d) or (e) below.

         (c)      Product Liability. Except with regard to Section 12.01(e)
below, all other provisions of this Agreement notwithstanding, this Section
12.01(c) shall govern the allocation of liability with respect to torts of
bodily injury related to the use of the Licensed Product.

                  (i)      From and after the Effective Date, Noven shall
defend, indemnify and hold the Endo Indemnitees harmless from and against any
and all Damages which the Endo Indemnitees may incur, or suffer, or with which
any of them may be faced arising out of ***.

                  (ii)     From and after the Effective Date, Endo shall defend,
indemnify and hold the Noven Indemnitees harmless from and against any and all
Damages which the Noven Indemnitees may incur, or suffer, or with which any of
them may be faced arising out of ***.

                  (iii)    To the extent that either the Endo Indemnitees or the
Noven Indemnities incur, suffer, or are faced with Damages arising out of any
tort claims of bodily injury relating to or arising out of any use of Licensed
Product attributed to any reason other than those set forth in the preceding
subsections (i) and (ii), ***.

         (d)      Intellectual Property. ***

         (e)      Canada. Anything else in this agreement to the contrary
notwithstanding, from and after the Effective Date, Endo shall defend, indemnify
and hold the Noven Indemnitees harmless from and against any and all Damages
which the Noven Indemnitees may incur, or suffer or with which any of them maybe
faced arising out of the any and all activities associated with the Licensed
Product in Canada; provided, however, that in each such case, Endo shall not be
liable hereunder to the extent such Damages are due to any defect in Noven's
design of the Licensed Product or any violation of Noven's representations or
warranties in this Agreement or the Supply Agreement.

         (f)      Procedure. If any Proceeding arises as to which a right of
indemnification provided in this Article XII applies, the Person seeking
indemnification (the "Indemnified Party"), shall within twenty (20) days notify
the party obligated under this Article XII to indemnify the Indemnified Party
(the "Indemnifying Party"), thereof in writing, except to the extent that such
failure to notify within 20 days does not prejudice the Indemnifying Party's
ability to defend or contest any such Proceeding, and allow the Indemnifying
Party and its insurers to assume direction and control of the defense against
such Proceeding, at its sole expense, including the settlement thereof at the
sole option of the Indemnifying Party or its insurers; provided, however, that
the Indemnifying Party may not enter into any compromise or settlement without
the prior written consent of the Indemnified Party unless such compromise or
settlement includes as an unconditional term thereof the giving by each
plaintiff or claimant to the Indemnified Party of a release from all liability
in respect of such claim and only if such compromise or settlement does not
include any admission of legal wrongdoing on the part of the Indemnified Party.
The Indemnified Party shall fully cooperate with the Indemnifying Party and its
insurer in the disposition of any such matter and the Indemnified Party will
have the right and option to participate in (but not control) the defense of any
Proceeding as to which this Article

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VI applies, with separate counsel at its election and cost. If the Indemnifying
Party fails or declines to assume the defense of any such Proceeding within
thirty (30) days after notice thereof, the Indemnified Party may assume the
defense thereof for the account and at the risk of the Indemnifying Party. The
Indemnifying Party shall pay promptly to the Indemnified Party any Damages to
which the indemnity under this Article XII applies, as incurred.

         Section 12.02. LIMITATION OF LIABILITY.

         (a)      NO PARTY SHALL BE ENTITLED TO RECOVER ANY PUNITIVE, INCIDENTAL
OR CONSEQUENTIAL DAMAGES (INCLUDING LOST PROFITS FROM LOST SALES TO THIRD
PARTIES) WHATSOEVER UNDER THIS AGREEMENT, EXCEPT TO THE EXTENT ANY SUCH
PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARE PAYABLE TO A THIRD PARTY AND
SUBJECT TO INDEMNIFICATION UNDER THIS ARTICLE 12.

         (b)      Notwithstanding anything to the contrary contained herein,
although a party may be entitled to make a claim for indemnification pursuant to
more than one section of this Article 12, a party shall not be entitled to
recover indemnification for the same claim under more than one section of this
Article 12.

                       ARTICLE XIII. TERM AND TERMINATION

         Section 13.01. Term. This Agreement and the license granted hereunder
shall take effect as of the Effective Date and continue in full force and effect
in each country throughout the Territory for a period of ten (10) years from the
first commercial sale of the Licensed Product . Upon expiration of this
Agreement, the Parties may mutually agree to extend this Agreement on terms to
be negotiated in good faith taking into account the expiration of the applicable
patents by giving written notice to the other party of its intention to do so
prior to the end of any such term.

         Section 13.02. Certain Termination Events.

         (a)      If either Endo or Noven should fail to discharge fully and
promptly any of its material obligations under this Agreement and/or the Supply
Agreement attached as Exhibit B, including, without limitation, obligations to
make payments, and should such party failing to discharge any of its material
obligations fail to cure such failure within thirty (30) days in the case of
failure to make payments or with in sixty (60) days for other failures after
notice in writing thereof by the other party, which period to cure may be
extended for up to sixty (60) days, upon written request, if such additional
time is reasonably necessary to effect such cure and provided that such party is
using diligent effort to pursue such cure, this Agreement can thereupon be
terminated at the aggrieved party's option upon notice to that effect; provided,
however, that such termination shall not come into effect unless and until the
time period for the chief executive officers of the parties to negotiate a
resolution of the dispute, pursuant to Section 14.02 has expired without the
dispute having been resolved.

         (b) Either party may terminate this Agreement with immediate effect in
the event that any proceeding under a Bankruptcy Act or any insolvency,
receivership or dissolution

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proceeding is filed against the other party and such proceeding is not dismissed
within sixty (60) days after the filing thereof.

         (c) Either party may terminate this Agreement with immediate effect
with respect to any Licensed Product that is permanently and completely
withdrawn from all markets in the Territory for serious adverse health or safety
reasons.

         (d) ***

         (e) Either party may terminate this Agreement with immediate effect
upon notice to the other party, if the other party or their Affiliates, makes,
markets, sells, or distributes any transdermal product in the Territory that is
a Competing Product.

         (f) Following launch of the Licensed Product either party may terminate
this Agreement upon ninety (90) days prior written notice to the other party if
the Gross Margin to be split by the parties pursuant to Section 6.03 is less
than ***of the corresponding Net Sales in any two (2) consecutive calendar
quarters. In the event of such a termination, if the non-terminating party
desires to continue commercializing the Licensed Product, the terminating party
shall transfer to the non-terminating party sufficient rights under this
Agreement to enable the non-terminating party to continue to use and sell
Licensed Product under the Product ANDA and the Intellectual Property Rights.
The terminating party shall have no further obligations under this Agreement but
shall be entitled to a royalty of *** of net sales of Licensed Product by the
non-terminating party in the event that the non-terminating party continues to
commercialize the Licensed Product.

         (g) ***

         (h) Endo may terminate this Agreement with immediate effect upon notice
to Noven before the Commercial Launch of Licensed Product in the event that that
the delay referred to in Section 6.02(d) exceeds 120 days.

         Section 13.03. Effect of Termination.

         (a) Upon termination of this Agreement for any reason, Endo shall
promptly take such actions as Noven may reasonably request, in order to transfer
to Noven or its designee, free of charge, all of Endo's right, title and
interest in and to any Regulatory Approvals relating to the Licensed Products,
and all information relating to any Regulatory Approvals not previously supplied
to Noven.

         (b) Upon termination, this Agreement shall forthwith become void and of
no further force or effect, except for the following provisions, which shall
remain in full force and effect: (a) Article 10 (Confidentiality), (b) this
Section 13.03, (c) Section 14.10 (Governing Law), (d) Section 14.15(Public
Announcements and Publications), (e) Section 14.12 (Entire Agreement) and (f)
Section 14.13 (Expenses). In addition, in the event of a termination of this
Agreement by Noven related to the Licensed Product, Endo may, at its option,
continue with the development of any other products in development, and this
Agreement shall remain in force and effect to the extent applicable to such
development products. The rights and remedies provided in this Article VII shall
be cumulative and not exclusive of any rights or remedies provided by Applicable
Law.

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Any termination of this Agreement shall not affect any right or claim hereunder
that arises prior to such termination, which claims and rights shall survive any
such termination.

(c) Nature of Licenses. All rights and licenses granted pursuant to this
Agreement are, and shall otherwise be deemed to be, for purposes of 11 U.S.C.
Section 365(n) of the Bankruptcy Laws, licenses of rights to "intellectual
property" as defined under 11 U.S.C. Section 101(35A) of the Bankruptcy Laws.
The Parties agree that Endo, as a licensee of such rights under this Agreement,
shall retain and may fully exercise all of its rights, including any right to
enforce any exclusivity provision of this Agreement, remedies, and elections
under Bankruptcy Laws. To the fullest extent permitted by law, the Parties
further agree that, in the event of the commencement of a bankruptcy proceeding
by or against Noven under the Bankruptcy Laws, Endo shall be entitled to all
applicable rights under 11 U.S.C. Section 365(n) of the Bankruptcy Laws,
including copies and access to, as appropriate, any such intellectual property
and all embodiments of such intellectual property upon written request therefor
by Endo, and such, if not already in its possession, shall be promptly delivered
to Endo.

                           ARTICLE XIV. MISCELLANEOUS

         Section 14.01. Notices. All notices, claims, certificates, requests,
demands and other communications hereunder shall be in writing and shall be
delivered personally or sent by confirmed facsimile transmission, air courier,
or registered or certified mail, return receipt requested, addressed as follows:

         if to Noven:

                  Noven Pharmaceuticals, Inc.
                  11960 S. W. 144th Street Miami, Florida 33186
                  Attention: CEO & General Counsel
                  Telecopy: 305-964-3340

         with copies (which shall not constitute notice) to:

                  Frommer Lawrence & Haug LLP
                  745 Fifth Avenue
                  New York, New York  10151
                  Attention: Edgar H. Haug, Esq.
                  Telecopy: 212-588-0500

         if to Endo:

                  Endo Pharmaceuticals Inc.

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                  100 Painters Dr.
                  Chadds Ford, PA 19317
                  Attention: General Counsel
                  Facsimile No.: (610) 558-9684

or to such other address as the party to whom notice is to be given may have
furnished to the other party in writing in accordance herewith. Any such
communication shall be deemed to have been delivered (a) when delivered, if
delivered personally, (b) when sent (with written confirmation received), if
sent by facsimile transmission on a Business Day, (c) on the first Business Day
after dispatch (with written confirmation received), if sent by facsimile
transmission on a day other than a Business Day, (d) on the second Business Day
after dispatch, if sent by air courier, and (e) on the fifth Business Day after
mailing, if sent by mail.

         Section 14.02. Disputes. In the event of any controversy or claim
arising out of, relating to or in connection with any provision of this
Agreement, or the rights or obligations of the parties hereunder, the parties
shall try to settle their differences amicably between themselves. Any party may
initiate such informal dispute resolution by sending written notice of the
dispute to the other parties, and within ten (10) days after such notice, the
Chief Executive Officers of the parties shall meet for attempted resolution by
good faith negotiations. If they are unable to resolve such disputed matter
within thirty (30) days of initiating such negotiations, the parties agree first
to try in good faith to settle the dispute by mediation in New York, New York
under the Commercial Mediation Rules of the American Arbitration Association. If
following any such mediation the parties still have not been able to resolve any
such dispute, the parties agree to submit the dispute to final and binding
arbitration before a single arbitrator in New York, New York under the
Commercial Arbitration Rules of the American Arbitration Association. The
parties agree that a judgment may be entered on the arbitrator's award in any
court of competent jurisdiction. The arbitrator in reviewing any claim under
this Agreement shall have the exclusive authority to determine any issues as to
the arbitration of any such claim or related disputes under this Agreement. In
reaching a decision, the arbitrator shall interpret, apply and be hound by this
Agreement and by Applicable Law. The arbitrator shall have no authority to add
to, detract from or modify this Agreement or any Applicable Law in any respect.
The arbitrator may not grant any remedy or relief that a court of competent
jurisdiction could not grant, nor any relief or remedy greater than that sought
by the parties, nor any punitive, incidental or consequential damages, except to
the extent any such punitive, incidental or consequential damages arc payable to
a third party. Any up-front costs of the arbitrator shall be home equally by the
parties; provided, however, that the non-prevailing party in any such
arbitration shall pay, and to the extent applicable reimburse the prevailing
party for, the costs and expenses of the arbitrator, including costs and
expenses payable to the American Arbitration Association mid to the arbitrator;
and provided further, that in the event each party prevails as to certain claims
in connection with any such arbitration, the fees of the arbitrator shall be
paid and/or reimbursed in accordance with the decision of the arbitrator. Each
party shall bear its own costs incurred in connection with attorneys' fees and
related expenses. Notwithstanding the foregoing provisions of this Section 8.02,
nothing in this Agreement shall limit or in any way restrict the ability of any
party to seek injunctive or other equitable relief in a court or other judicial
body.

         Section 14.03. Independent Contractors. In making and performing this
Agreement, the parties are acting and shall act as independent contractors.
Nothing in this Agreement shall be

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deemed to create all agency, joint venture or partnership relationship between
the parties hereto. No party shall have the authority to obligate another party
in any respect, and no party shall hold itself out as having any such authority.
All personnel of Noven shall be solely employees of Noven and shall not
represent themselves as employees of Endo. All personnel of Endo shall he solely
employees of Endo and shall not represent themselves as employees of Noven.

         Section 14.04. Assignment. Subject to Section 2.06 the parties may not
assign or otherwise transfer this Agreement, in whole or in part, without the
prior written consent of the other, and any such attempt to do so shall be null
and void, except that each Party may assign its rights and transfer its duties
hereunder without obtaining such written consent in the event of such Party's
merger, consolidation or sale of all or substantially all of its assets.

         Section 14.05. Binding Effect; Benefit. This Agreement shall inure to
the benefit of and be binding upon the parties hereto, and their successors and
permitted assigns. Nothing in this Agreement, express or implied, is intended to
confer on any Person other than the parties hereto, and their respective
successors and permitted assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement.

         Section 14.06. Amendments. This Agreement shall not be modified,
amended or supplemented except pursuant to an instrument in writing executed and
delivered on behalf of each of the parties hereto.

         Section 14.07. No Waiver. The failure in any one or more instances of a
party to insist upon performance of any of the terms, covenants or conditions of
this Agreement, to exercise any right or privilege conferred in this Agreement,
or the waiver by said party of any breach of any of the terms, covenants or
conditions of this Agreement, shall not be construed as a subsequent waiver of
any such terms, covenants, conditions, rights or privileges, but the same shall
continue and remain in full force and effect as if no such forbearance or waiver
had occurred. No waiver shall be effective unless it is in writing and signed by
an authorized representative of the waiving party.

         Section 14.08. Counterparts. This Agreement shall become binding when
any one or more counterparts hereof, individually or taken together, shall bear
the signatures of each of the parties hereto. This Agreement may he executed in
any number of counterparts, each of which shall he deemed an original as against
the party whose signature appears thereon, but all of which taken together shall
constitute but one and the same instrument. Each party may execute this
Agreement on a facsimile of the Agreement. In addition, facsimile signatures of
authorized signatories of any party shall be valid and binding and delivery of a
facsimile signature by any party shall constitute due execution and delivery of
this Agreement.

         Section 14.09. Interpretation. The article and section headings
contained in this Agreement are for convenience of reference only and shall not
affect the meaning or interpretation of this Agreement. As used in this
Agreement, any reference to the masculine, feminine or neuter gender shall
include all genders, the plural shall include the singular, arid singular shall
include the plural. Unless the context otherwise requires, the term "party" when
used herein means a party hereto. References herein to a party or other Person
include their respective successors and assigns. The words "include," "includes"
and "including" when used

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herein shall be deemed to be followed by the phrase "without limitation" unless
such phrase otherwise appears. Unless the context otherwise requires, references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement.
Unless the context otherwise requires, the words "hereof," "hereby" and "herein"
and words of similar meaning when used in this Agreement refer to this Agreement
in its entirely and not to any particular Article, Section or provision hereof.
With regard to each and every term and condition of this Agreement, the parties
understand and agree that the same have or has been mutually negotiated,
prepared and drafted, and that if at any time the parties desire or are required
to interpret or construe any such term or condition or any agreement or
instrument subject thereto, no consideration shall be given to the issue of
which party actually prepared, drafted or requested any term or condition of
this Agreement.

         Section 14.10. Governing Law. This Agreement and any claims, disputes
or causes of action relating to or arising out of this Agreement shall be
construed in accordance with and governed by the substantive laws of the State
of New York, without giving effect to the conflict of laws principles thereof.

         Section 14.11. Unenforceability. If any provisions of this Agreement
are determined to be invalid or unenforceable in any jurisdiction, such
provisions shall be ineffective to the extent of such invalidity or
unenforceability in such jurisdiction, without rendering invalid or
unenforceable the remaining provisions hereof or affecting the validity or
enforceability of any of such provisions of this Agreement in any other
jurisdiction. The parties will use their best efforts to substitute the invalid
or unenforceable provision with a valid and enforceable one which conforms, as
nearly as possible, with the original intent of the parties.

         Section 14.12. Entire Agreement. This Agreement, together with the
Supply Agreement and the Quality Agreement, embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements, commitments, arrangements,
negotiations or understandings, whether oral or written, between the parties
hereto and their respective Affiliates with respect thereto. There are no
agreements, covenants or undertakings with respect to the subject matter of this
Agreement other than those expressly set forth or referred to herein and no
representations or warranties of any kind or nature whatsoever, express or
implied, are made or shall be deemed to be made herein by the parties hereto,
except those expressly made in this Agreement, the Supply Agreement and the
Quality Agreement.

         Section 14.13. Expenses. Except as expressly set forth herein, each
party hereto shall bear all fees and expenses incurred by such party in
connection with, relating to or arising out of the execution, delivery and
performance of this Agreement and the consummation of the Contemplated
Transactions, including attorneys', accountants' and other professional fees and
expenses.

         Section 14.14. Force Majeure. If the performance of this Agreement or
any obligation hereunder (except the payment of money) by any party is prevented
by reason of any cause beyond the reasonable control of the affected party,
including fire, flood, riot, war, explosions, acts of God (including hurricanes
and tropical storms), acts of a public enemy, labor disturbances or acts,
regulations or laws of any government adopted after the date of this Agreement
or

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subject to a new interpretation after the date of this Agreement that render
impossible or illegal the performance by a Party of its obligations under this
Agreement, the party so affected, upon notice to the other parties, shall be
excused from such performance; provided that the party so affected shall use
diligent effort to avoid or remove such cause or causes of non-performance and
shall continue to perform hereunder with the utmost dispatch whenever such cause
or causes are removed.

         Section 14.15 Public Announcements and Publications. Except as required
by law, governmental regulation or by the requirements of any securities
exchange on which the securities of a Party hereto are listed, no Party to this
Agreement shall make, or cause to be made, any press release or public
announcement in respect of this Agreement, including its existence, or the
transactions contemplated hereby or otherwise communicate with any news media
without the prior written consent of the other Party, which consent shall not be
unreasonably withheld, and the parties shall cooperate to the extent practicable
as to the timing and contents of any such press release or public announcement.
Notwithstanding the foregoing, the Parties hereby agree to jointly prepare a
press release announcing the existence of this Agreement, such press release to
be approved by each Party prior to any distribution to any media outlet.
Notwithstanding the foregoing, the Parties specifically understand and agree
that neither Party shall make any public announcement or disclose to any Third
Party the identity of any API being investigated and developed hereunder other
than fentanyl without mutual written agreement between the parties. In the event
that a Party is required to file or disclose the terms of this Agreement
pursuant to the rules and regulations of the U.S. Securities and Exchange
Commission (the "SEC"), such Party may file or disclose such Confidential
Information to the extent it determines in its sole discretion that it is so
required subject to requesting appropriate confidential treatment from the SEC.

         IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
effective as of the Effective Date.

NOVEN PHARMACEUTICALS, INC.                     ENDO PHARMACEUTICALS INC.

By:_____________________________                By:_____________________________

Name:                                           Name:

Title:                                          Title:

Date:                                           Date:

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                                  SCHEDULE 2.06

                                       ***

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                                    EXHIBIT A

                                  NOVEN PATENTS

                                       ***

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                                    EXHIBIT B

                                SUPPLY AGREEMENT

                                       ***

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                                    EXHIBIT C

                               ADDITIONAL PRODUCTS

                                       ***

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                                    EXHIBIT D

                                 EVALUATION PLAN

                                       ***

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