Document:

<PAGE>
                                                                   Exhibit 10.30

                                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 Exchange Act of 1934, as
amended. REDACTED PORTIONS OF THIS EXHIBIT ARE MARKED BY AN ***.
<PAGE>

                                TABLE OF CONTENTS

Article I.      DEFINITIONS.................................................1

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

Article III.    REGISTRATION AND REGULATORY APPROVAL........................7

Article IV.     COMMERCIALIZATION OF THE LICENSED PRODUCT...................8

Article V.      CANADA AND OTHER TERRITORIES................................9

Article VI.     FEES AND PAYMENTS..........................................10

Article VII.    SUPPLY OF THE LICENSED PRODUCT.............................11

Article VIII.   DEVELOPMENT OF ADDITIONAL PRODUCTS.........................11

Article IX.     INTELLECTUAL PROPERTY MATTERS..............................12

Article X.      CONFIDENTIALITY............................................16

Article XI.     REPRESENTATIONS AND WARRANTIES.............................17

Article XII.    INDEMNIFICATION AND LIMITATION OF LIABILITY................19

Article XIII.   TERM AND TERMINATION.......................................21

Article XIV.    MISCELLANEOUS..............................................23

                                       i
<PAGE>

                                LIST OF EXHIBITS

Exhibit A             Noven Patents

Exhibit B             Supply Agreement

Exhibit C             Additional Products

Exhibit D             Evaluation Plan

                                       ii
<PAGE>
                              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

<PAGE>

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) or any transdermal fentanyl product that is an authorized brand
generic, other than the Licensed Product and Duragesic.

         "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.

                                       2
<PAGE>

         "FDC ACT" means the United States Federal Food, Drug and Cosmetic Act,
21 U.S.C.ss.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.

         "GROSS MARGIN" means Net Sales less Cost of Goods Sold.

         "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.

                                       3
<PAGE>

         "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.

                                       4
<PAGE>
         Section 1.02. OTHER DEFINITIONS. Each of the following terms is defined
in the section of this Agreement referenced opposite such term.

         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

                           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

                                       5
<PAGE>

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 or Duragesic(R) 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. CHANGE OF CONTROL. If this Agreement is assigned or
transferred to any third party (the "Surviving Entity") by Noven or Endo
pursuant to Section 14.04, and such third party has a Competing Product or
Duragesic(R) on the market in the Territory (a "Competing Assignment") the
following shall apply:

         (a) In the case of a Competing Assignment by Noven, in order to insure
that the supply of Licensed Product to Endo is continued, the Surviving Entity
shall continue to supply Licensed Product to Endo in accordance with the Supply
Agreement until such time as it transfers all such supply responsibility to a
qualified third party reasonably acceptable to Endo. Additionally, for so long
as the Surviving Entity is selling a Competing Product and supplying Licensed
Product to Endo pursuant to the Supply Agreement, the limitation on liability of
Section 9.02(c) in the Supply Agreement shall not apply in the event of any
breach of the supply agreement for failure

                                       6
<PAGE>

to supply. Noven shall be free to qualify a third party supplier that is
reasonably acceptable to Endo at any time during the term of this Agreement, and
the Agreement with such third party supplier shall specifically name Endo as a
third party beneficiary with the right to take over all rights and obligations
of the contract in the event of a Noven bankruptcy or a Competing Assignment by
Noven.

         (b) In the case of a Competing Assignment by Endo to a party with a
Competing Product on the market in the Territory, in order to insure that the
sales of the Licensed Product are continued the following shall apply:

                  (i) the Surviving Entity shall, within *** of the closing date
of the Competing Assignment (the "Closing Date"), (A) cease selling Competing
Product in favor of selling Licensed Product only; (B) divest either the
Competing Product or the Licensed Product to a third party (which third party,
in the case of Licensed Product, is reasonably acceptable to Noven); (C)
promptly terminate this License Agreement and the Supply Agreement and return
the Product ANDA to Noven for no additional consideration or (D) pay to Noven
its share of Gross Margin per Section 6.03 and 9.03 where the applicable Gross
Margin is adjusted in accordance with Schedule 2.06. Following the *** period
the Surviving Entity may still take any of the foregoing actions, however, from
and after the end of the *** period Noven shall be entitled to receive its share
of the Gross Margin as calculated per Schedule 2.06.

                  (ii) In no event shall the Surviving Entity be permitted to
close any divestiture of the Licensed Product under Section 2.06(b)(i) during
the period of time that begins *** days before *** and ends *** days following
the Launch.

         (c) In the case of a Competing Assignment by Endo to a Surviving Entity
with Duragesic(R)on the market in the Territory and no Competing Product on the
Market the following shall apply:

                  (i) if at the time of the Closing Date there has already been
a conversion of Duragesic(R)sales to generic sales of at least *** (as
demonstrable by IMS data) then there shall be no restriction on the "Competing
Assignment" except as set forth in Section 14.04.

                  (ii) if at the time of the Closing Date there has not yet been
a conversion of Duragesic(R)sales to generic sales of at least *** (as
demonstrable by IMS data) then within four months of the Closing Date the
Surviving Entity shall either (A) divest the Licensed Product to a third party
(which third party, in the case of Licensed Product, is reasonably acceptable to
Noven); or (B) terminate this License Agreement and the Supply Agreement and
return the Product ANDA to Noven for no additional consideration.

               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

                                       7
<PAGE>

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. 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,

                                       8
<PAGE>

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 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. ***

         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

                                       9
<PAGE>

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 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

                                       10
<PAGE>

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 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:

         Amount of Delay                    Reduction in Launch Milestone
         ---------------                    -----------------------------

         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

         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

                                       11
<PAGE>

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 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 neither party may develop,
license, or commercialize that compound for transdermal delivery with a third
party for *** under any terms and for *** under terms that are more favorable to
the third party than those last offered to the other party to this Agreement. If
the parties agree to commercial terms and a development plan and budget within
such *** period, then the parties will work to prepare and execute a
commercialization agreement within *** days. If the parties are unable to
execute a commercialization agreement within such *** period, then the same
restrictions on development with a third party shall apply.

                   ARTICLE IX. INTELLECTUAL PROPERTY MATTERS

         Section 9.01. INFRINGEMENT BY THIRD PARTIES.

                                       12
<PAGE>

         (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, at its sole
cost and expense, 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 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, at Noven's cost and
expense (which cost and expense shall not include the fees of the attorneys that
represent Endo, even if such attorneys represent Noven as well), if and to the
extent reasonably requested by Endo, including joining as a party to such
Proceeding, if necessary to maintain standing.

         (c) Endo shall consult with Noven with respect to its decision whether
to take any action of the nature specified in Section 9.01(b), giving due
consideration to Noven's views with respect to the necessity or desirability of
taking such action and with respect to whether and how any such Proceeding
should be maintained, settled, or appealed throughout the pendency of such
Proceeding. In deciding whether to initiate any Proceeding brought to prevent or
eliminate infringement of the Noven Patents, Endo shall give careful
consideration to what extent the claims of any Noven Patent reads on the
allegedly infringing article, the identity of the alleged infringers, and the
extent of the alleged infringement by quantifying the harm being suffered or
projected to be suffered by Endo as a result of the alleged infringement. Endo
shall keep Noven apprised throughout, and until final disposition of, any
Proceeding brought to prevent or eliminate infringement of the Noven Patents,
and give due consideration to Noven's views in connection with such Proceeding.

         (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 deemed to be
Gross Margin under Section 6.03 and subject to split between the parties after
the fees, costs and expenses of each of Noven and Endo in respect of the
Proceeding have first been reimbursed.

         (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

                                       13
<PAGE>

such event, all amounts awarded as damages, profits or otherwise in connection
with any action taken by Noven shall be paid to and become the sole property of
Noven.

         (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) In the event of any Proceeding or threatened Proceeding
contemplated by Section 9.02(a), whether or not initiated as a declaratory
judgment action or by counter claim, affirmative defense or otherwise in
connection with a Proceeding initiated under Section 9.01, Noven shall have the
right, but not the obligation, to assume control of the defense of such
Proceeding or threatened Proceeding, using counsel of its own choosing. Noven
shall confer with Endo concerning the Proceeding and keep Endo apprised of the
progress of the Proceeding.

         (c) In the event of any Proceeding or threatened Proceeding
contemplated by Section 9.02(a), Noven shall bear 100% of the fees, costs and
expenses incurred by or on behalf of Noven in defense of such Proceeding or
threatened Proceeding; PROVIDED, HOWEVER, that if the Proceeding or threatened
Proceeding is in relation to a Competing Product or otherwise arises out of or
follows an assertion by Endo of an affirmative claim against the third party
which is asserting the claim in such Proceeding or threatened Proceeding
(including by way of counterclaim or affirmative defense in a Proceeding brought
by Endo under Section 9.01(b)), Endo shall bear 100% of the fees, costs and
expenses incurred by or on behalf of itself and Noven in defense of such
Proceeding or threatened Proceeding (excluding Noven's costs and expense in
cooperation which shall not include the fees of the attorneys that represent
Endo, even if such attorneys represent Noven as well), unless Noven exercises
its right under 9.02(b) to assume control of the defense, in which case Noven
shall be responsible for and shall pay 100% of such fees, costs and expenses
associated with defending the validity and enforceability of the Noven Patents.

         Section 9.03. RIGHTS OF ELECTION REGARDING POTENTIAL INFRINGEMENT.

         It is the intention of the parties to equally share the risk of
infringement of third party Intellectual Property Rights that may arise out of
any and all activities associated with the Licensed Product in the Territory
except as follows. If a party determines that it no longer wishes to share in
such risk it may provide notice to the other party of its desire to opt out of
such risk. Such notice to opt out may be provided at any time prior to
Commercial Launch except that if notice of a claim of infringement is received
by either party, the parties time to opt

                                       14
<PAGE>

out shall end with respect to such notified claim thirty days following receipt
of such notice of a claim of infringement. In order to opt out the parties shall
proceed as follows:

         (a) In the event that Noven determines that it no longer wishes to
share the risk of infringement, then upon reaching such decision Noven shall
promptly notify Endo of such decision. Endo shall thereafter have the choice of
either terminating this Agreement and the Supply Agreement or assuming all risks
of infringement of third party Intellectual Property Rights. In the event that
Endo determines to assume the risk of infringement, Endo shall thereafter fully
indemnify and defend Noven pursuant to Section 12.01(d) below, the split of
Gross Margin per Section 6.03 shall thereafter be *** to Endo and *** to Noven,
and the License Agreement and Supply Agreement shall otherwise continue
unmodified and in full force and effect. In the event that Endo determines to
terminate this Agreement and the Supply Agreement, such agreements shall
immediately terminate, and each party shall not make use or sell Licensed
Product or any Competing Product for a period of one year thereafter.
Additionally, the parties may mutually agree to suspend their obligations until
such time as they agree to proceed.

         (b) In the event that Endo determines that it no longer wishes to share
the risk of infringement, then upon reaching such decision Endo shall promptly
notify Noven of such decision. Noven shall thereafter have the choice of either
terminating this Agreement and the Supply Agreement or assuming all risks of
infringement of third Party Intellectual Property Rights. In the event that
Noven determines to assume the risk of infringement, Noven shall thereafter
fully indemnify and defend Endo pursuant to Section 12.01(d) below, the split of
Gross Margin per Section 6.03 shall thereafter be *** to Noven and *** to Endo,
and the License Agreement and Supply Agreement shall otherwise continue
unmodified and in full force and effect. In the event that Noven determines to
terminate this Agreement and the Supply Agreement, both agreements shall
immediately terminate, and each party shall not make use or sell Licensed
Product or any Competing Product for a period of one year thereafter.
Additionally, the parties may mutually agree to suspend their obligations until
such time as they agree to proceed.

         Section 9.04. INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS.

         (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) The "Controlling Party" in the defense of any Proceeding
contemplated by Section 9.04(a) shall be Noven; provided however that if Endo
assumes the risk of infringement per Section 9.03(b) then Endo shall be the
"Controlling Party."

         (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

                                       15
<PAGE>

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) Except as otherwise explicitly provided in this Article 9 , Endo
and Noven shall share equally in the fees, costs, expenses and any resulting
Damages associated with prosecuting and/or defending Proceedings under this
Article 9. Notwithstanding the foregoing, Noven shall be solely liable for all
fees, costs, expenses and Damages resulting from a breach of Section 11.02.

         Section 9.05. CERTAIN LITIGATION. Notwithstanding Section 9.04(f), in
the event that one or both of Noven and Endo become involved in patent
litigation with *** or any of its affiliates or subsidiaries involving the
Licensed Product, or in a litigation concerning any counterpart patent or
national phase patent corresponding to ***, Endo hereby agrees that it shall be
solely responsible for the first *** in fees, costs and expenses arising out of
such litigation. Such defense shall otherwise be governed by Section 9.03 above.
Additionally, Noven agrees that if it unreasonably refuses a proposed settlement
to a litigation under this Section 9.05 where such settlement would reduce
Endo's out of pocket fees, costs and expenses to less than ***, then Endo's
obligation to pay the first *** in expenses shall cease and Noven shall share
the expenses as per Section 9.04(f) above.

                           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

                                       16
<PAGE>

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 (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:

                                       17
<PAGE>

         (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 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.

                                       18
<PAGE>

            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

                                       19
<PAGE>

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 any tort claims of bodily injury relating to or
arising out of any use of Licensed Product that is attributable to any
negligence or willful misconduct in Noven's design of the Licensed Product or
any breach of any of Noven's representations or warranties in the Supply
Agreement.

                  (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 the negligence or willful misconduct of Endo,
its sublicensees or subcontractors, in the storing or handling the Licensed
Product after it has been tendered to Endo by Noven or associated with the
marketing or promotional activities of Endo, its sublicensees or subcontractors
for the Product.

                  (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), Noven and Endo shall share such liability equally by
reimbursing the other for one half of such actual Damages incurred.

         (d) INTELLECTUAL PROPERTY. To the extent that Endo or Noven shall elect
to assume the risk of infringement pursuant to Section 9.03 above that party
shall defend, indemnify and hold the other party, its Affiliates, and each of'
their respective officers, directors, agents, employees, shareholders or members
(collectively, "Infringement Indemnitees") harmless from and against any and all
Damages which the Infringement Indemnitees may incur, or suffer, or with which
any of them maybe faced arising out of the infringement of any Intellectual
Property Rights of any third party with respect to any activities associated
with the Licensed Product:

         (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

                                       20
<PAGE>

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 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,

                                       21
<PAGE>

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 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) If at any time during the term of this Agreement, Endo, directly or
indirectly, takes any action or assists or supports any third party in taking
any action challenging any of Noven' rights in the Noven Patents, including any
action in connection with an opposition, reexamination, revocation or
invalidation proceeding, or requests a declaration of an interference against or
otherwise attacks the validity or enforceability of any Noven Patent, or
contests or disputes Noven's entitlement to or ownership of the Noven Patents,
Noven shall have the right to immediately terminate this Agreement.

         (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) Either party may terminate this Agreement in accordance with the
provisions of Section 9.03 immediately upon notice to the other party if such
other party notifies it of its election to disavow any risk of infringement
pursuant to such Section. Any termination pursuant

                                       22
<PAGE>

to Section 9.03 and this Section 13.02(g) shall be subject to all the terms and
conditions of Section 9.03, including the restriction on making, using or
selling Licensed Product or any Competing Product for a period of one year after
such termination.

         (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. 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. ss. 365(n) of the Bankruptcy Laws, licenses of rights to "INTELLECTUAL
PROPERTY" as defined under 11 U.S.C. ss. 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. ss. 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:

                                       23
<PAGE>

         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.
                  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

                                       24
<PAGE>

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 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

                                       25
<PAGE>

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 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,

                                       26
<PAGE>

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 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.

                                       27
<PAGE>

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

NOVEN PHARMACEUTICALS, INC.            ENDO PHARMACEUTICALS INC.

By: /s/ ROBERT C. STRAUSS              By: /s/ PETER A. LANKAU
   -----------------------------          --------------------------------------
Name: Robert C. Strauss                Name: Peter A. Lankau
Title: President, CEO, and Chairman    Title: President and CEO
Date: February 25, 2004                Date: February 25, 2004

                                       28
<PAGE>
                                  SCHEDULE 2.06

                              ADJUSTED GROSS MARGIN

In the event of a Competing Assignment where the Gross Margin subject to sharing
with Noven under the Agreement (the "Adjusted Gross Margin") is to be calculated
in accordance with this Schedule 2.06 such share shall be calculated as follows:

Adjusted Gross Margin share payable to Noven = Adjusted Gross Margin Split x
Gross Margin

Adjusted Gross Margin Split=  ***x(Applicable Gross Margin Split)

***

Gross Margin = the sum of the actual Net Sales of Licensed Product and *** less
the applicable Cost of Goods Sold ***

Applicable Gross Margin Split = the unadjusted applicable share of the Gross
Margin otherwise payable to Noven pursuant to Section 6.03 and 9.03.

***

                                       29
<PAGE>
EXHIBIT A

                                  NOVEN PATENTS

United States Patent NO. 5,474,783

United States Patent NO. 5,958,446

United States Patent NO. 5,656,286

United States Patent NO. 6,024,976

United States Patent NO. 5,686,099

United States Patent NO. 6,638,528

                                       30
<PAGE>

                                    EXHIBIT B

                                SUPPLY AGREEMENT

                                       31
<PAGE>
                                    EXHIBIT C

                               ADDITIONAL PRODUCTS

***

                                       32
<PAGE>

                                    EXHIBIT D

                                 EVALUATION PLAN

                                    [TO COME]

                                       33<PAGE>
                                                                   Exhibit 10.31

                                SUPPLY 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 EXCHANGE ACT OF 1934, AS
AMENDED. REDACTED PORTIONS OF THIS EXHIBIT ARE MARKED BY AN ***.

<PAGE>

                                SUPPLY AGREEMENT

THIS SUPPLY AGREEMENT (the "AGREEMENT"), is hereby entered into as of February
25, 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 and Endo are contemporaneously herewith entering into a License
Agreement (the "License Agreement") related to a fentanyl transdermal patch
product (the "Product" as further defined herein) developed by Noven;

WHEREAS, Noven desires to manufacture and supply Endo with its requirements of
Product; and,

WHEREAS, Endo desires to purchase its requirements of the Product from Noven
pursuant to the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:

                              ARTICLE I DEFINITIONS

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

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

         "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 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.

         "API" means the active pharmaceutical ingredient fentanyl base.

         "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,

                                       2
<PAGE>

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.

         "CONFIDENTIAL INFORMATION" means all secret, confidential or
proprietary data, know-how and related information, including all regulatory
applications and other regulatory filings, regulatory and clinical materials,
Materials, 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 information disclosed or accessed by a party
from the other in connection with this Agreement.

         "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.

         "FDC ACT" means the United States Federal Food, Drug and Cosmetic Act,
21 U.S.C.ss.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.

         "GMP" means the current Good Manufacturing Practices as that term is
presently or hereafter defined by the FDA or other applicable Regulatory
Authority.

         "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 securities exchange such as 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.

         "LABEL" shall mean any package (primary or secondary container)
labeling designed for use with the Product, including the package insert; and
any variation of such term, such as "Labeled" or "Labeling", shall mean the act
of doing the foregoing.

                                       3
<PAGE>

         "MATERIALS" means all ingredients, items or substances (including those
that may not appear in the Product) used or required for use by Noven to
manufacture the Product, including the API, all other active drug ingredients,
excipients, packaging components, printed materials and manufacturing materials
associated with the Product.

         "MANUFACTURING FACILITY" means Noven's facility located at 11960 S.W.
144th Street, Miami, Florida 33186 or such other FDA-approved facility as Noven
may notify to Endo from time to time.

         "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.

         "PRODUCT" or "PRODUCTS" means the products listed in Exhibit C which
are the fully packaged, labeled and released fentanyl transdermal patch product
that is the subject of the Product ANDA.

         "QUALITY AGREEMENT" means the Quality Agreement attached hereto as
Exhibit B.

         "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 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.

         "SPECIFICATIONS" means, collectively, the manufacturing, packaging and
testing procedures and standards for Product, including all applicable control
procedures and analytical test methods, each as described in the Product ANDA as
amended, supplemented or otherwise modified from time to time in accordance with
Applicable Law.

         "TERRITORY" shall have the meaning set forth in the License Agreement
as may be amended from time to time.

         "VALIDATION BATCHES" means the batches which Noven elects to utilize to
satisfy the FDA requirements regarding validation of its commercial
manufacturing process. ***

                                       4
<PAGE>

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

         Term                                                       Section
         ----                                                       -------

         Agreement ................................................Preamble
         Collar........................................................4.03
         Endo......................................................Preamble
         Effective Date ...........................................Preamble
         Force Majeure Event .........................................11.13
         Launch Quantities ............................................3.09
         License Agreement ........................................Recitals
         Noven.....................................................Preamble
         Rejection Notice ..........................................3.07(a)
         Tech Transfer Services....................................10.02(e)
         Term ........................................................10.01

                  ARTICLE II. COMMITMENT TO SUPPLY AND PURCHASE

         Section 2.01. SUPPLY. Subject to the terms and conditions of this
Agreement and the license rights granted to Endo in the License Agreement, from
and after the Effective Date: (1) Noven shall use commercially reasonable
efforts to supply Endo with its requirements of Product as ordered by Endo
pursuant to the terms of this Agreement; (2) Noven shall not supply Product to
any third Party for use or sale within the Territory without the prior written
consent of Endo; (3) Endo shall purchase Product exclusively from Noven; and,
(4) Endo shall only use and sell Product within the Territory.

         Section 2.02. API. In the event that either party is able to secure a
lower price for the API from a source that meets Noven's quality requirements,
subject to Noven's contractual commitments with its suppliers, Noven will work
with Endo in good faith to utilize such API in place of its own source of API.
Once agreed to by both parties to qualify a lower price API, Endo and Noven
shall equally share all out of pocket expenses in qualifying and otherwise
securing such new API source. To the extent that Noven is able to use such lower
priced API, the lower cost will be reflected in Noven's manufacturing costs for
the Product. *** In the period prior to commercial launch of the Product, to the
extent that Endo supplies Noven with the API, Endo will invoice Noven for the
portion of the cost of such API for which Noven is assuming risk pursuant to
Section 3.09 below. All such invoices shall be due and payable within thirty
days of receipt and shall bear interest at the rate of 1% per month or the
maximum allowable by law on any overdue amounts. Noven shall include such API
costs in its manufacturing costs and Endo shall deduct the API costs not
invoiced to Noven from the next *** payment otherwise owed Noven under the
License Agreement. After the commercial launch of the Product, Endo shall deduct
the cost of the API it supplies Noven from the next *** payment otherwise owed
Noven under the License Agreement.

         Section 2.03. COMPLIANCE WITH APPLICABLE LAW. Endo hereby covenants and
agrees that Endo and its Affiliates shall store, handle, transport, market,
promote, sell, distribute, use and otherwise dispose of any Product supplied by
Noven, and any materials used in connection with

                                       5
<PAGE>

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

             ARTICLE III FORECASTS, ORDERS, DELIVERY AND ACCEPTANCE

         Section 3.01. FORECASTS. Within 30 days of the Effective Date, Endo
shall provide to Noven a good faith, but non-binding, forecast of its
requirements for Product for the following twenty-four (24) months. Beginning
approximately 9 months before the anticipated commercial launch date of the
Product by Endo and within ten Business Days after the first day of each
calendar month thereafter during the Term, Endo will provide Noven with a
non-binding (except as otherwise provided in Section 3.03), rolling 12-month
forecast of its requirements of Product to be delivered by Noven. Endo shall use
reasonable commercial efforts to ensure that its forecasts are as accurate as
possible.

         Section 3.02. VALIDATION BATCHES AND INITIAL ORDER. Noven and Endo
hereby acknowledge and agree that, in order to address the initial requirements
for the commercial launch of the Product, the lead times associated with
manufacturing Product and the general preparation for such commercial launch,
Noven and Endo will consult with each other in good faith regarding the
anticipated commercial launch date. In connection with such discussions Endo
will provide a binding initial purchase order to Noven approximately ***; the
delivery date for such purchase orders shall be between one and thirty days
prior to the anticipated commercial launch date of the Product. The initial
purchase orders shall be for quantities of the Product sufficient for launch and
for the first month of sales of the Product; such amount of product shall be no
less than ***and no greater than *** of Endo's most recent forecasted
requirements for the first month of sales of the Product; provided, however,
that upon request by Endo, Noven shall attempt in good faith to supply a
quantity of the Product in excess of *** of the amount.

         Section 3.03. FUTURE ORDERS. For anticipated sales of Product by Endo
in the second month following commercial launch of the Product and thereafter
during the Term Endo shall submit purchase orders to Noven for such Product on a
monthly basis. Each purchase order shall be submitted at least ninety (90) days
prior to the expected respective sales month. Each purchase order shall specify
an amount of Product that is at least *** and no greater than *** of Endo's most
recent previous forecast for the applicable month; provided, however, that upon
request by Endo, Noven shall attempt in good faith to supply a quantity of the
Product in excess of *** of the amount previously forecasted by Endo for any
such month. Each purchase order shall be binding, and shall specify a delivery
date that is no sooner than ninety days after submission of the purchase order
to Noven. In the event that the terms and conditions of any purchase order are
inconsistent with or conflict with the terms and conditions of this Agreement,
the terms and conditions of this Agreement shall govern.

         Section 3.04. ORDER SIZE. All purchase orders for Product placed by
Endo shall be for amounts of product equal to a full manufacturing batch or
multiples thereof with the amount ordered based on the estimated actual yields.
An estimate of the number of units per batch is attached hereto as Exhibit A.
The actual number of units delivered pursuant to any purchase order for Product
shall be equal to the number of units produced in each batch thereof, subject to
reduction of the number of units produced in any batch by the number of units
not suitable for

                                       6
<PAGE>

release or otherwise retained pursuant to the provisions of the Quality
Agreement. In the event that Noven shall deliver less than *** of the units
ordered by Endo pursuant to any purchase order (which number shall be determined
with reference to the number of units estimated to be yielded by each batch
ordered by Endo as reflected on Exhibit A), Noven shall notify Endo in writing
of the amount of such shortfall upon discovery of the shortfall of the Product.
Endo shall, within 30 days of receipt of such delivery, either (a) accept such
delivery in full satisfaction of the purchase order (as to quantity only and not
in waiver of Endo's opportunity to reject under pursuant to Section 3.07), or
(b) issue a replacement purchase order for an additional batch of the Product,
and Noven shall use reasonable commercial efforts to deliver such Product within
60 days of the date of such replacement purchase order; provided, that in either
case Endo shall accept and pay to Noven the price for the units of Product
delivered. Endo's failure to issue a replacement purchase order within such
30-day period shall be deemed as an acceptance of such delivery pursuant to
subsection (a) above. Any replacement Purchase order submitted by Endo to Noven
pursuant to this Section 3.04 shall be subject to the same terms and conditions
of this Agreement as purchase orders submitted pursuant to section 3.03.

         Section 3.05. DELIVERY. Product shall be delivered to Endo by Noven Ex
Works (Incoterms 2000) Noven's Manufacturing Facility. All Products shall be
properly prepared for safe and lawful shipment by Noven, shall be shipped to
Endo's distribution center in Memphis, Tennessee or other location designated by
Endo, via the common carrier selected by Endo, and shall be accompanied by
appropriate transportation and other agreed upon documentation including,
without limitation, DEA form 222. Noven shall ensure that the common carrier
vehicles onto which the Product is loaded are environmentally controlled
vehicles. Noven shall make all arrangements for shipping via the common carrier
at Endo's expense. No product of any other party shall be shipped with the
Products. Shipping cost actually prepaid by Noven will be billed to Endo monthly
by Noven on separate invoices.

         Section 3.06. ACTIVE INGREDIENT QUOTA. On April 1 of each calendar
year, Endo shall deliver to Noven a forecast of its requirements of the Product
for the following calendar year, for the purpose of assisting Noven in
projecting its demand for the Active Ingredient for such calendar year for
submission to and approval by the DEA.

                                       7
<PAGE>
         Section 3.07.  ACCEPTANCE AND REJECTION OF THE PRODUCT.

         (a) Endo shall, (i) in the case of defects which are discovered during
incoming inspection by Endo, within 30 days after Endo receives delivery of
shipment of the Product, or (ii) in the case of latent defect, within 30 days
from the date that Endo discovered such defect, notify Noven, in writing, of any
rejection of any such Product ("REJECTION NOTICE"), on the basis of (A) any
non-compliance with the Specifications or (B) failure of any such shipment to
conform with any product warranty set forth in this Agreement. Failure to
provide Rejection Notice to Noven within the applicable 30-day period shall
constitute acceptance by Endo of the shipment. Any such possible Rejection
Notice shall state in reasonable detail (sufficient to enable Noven to identify
the nature of the problem for tests or studies to be conducted by or on its
behalf or to dispute the same) the reason why Endo believes the Product may not
be acceptable to Endo. Endo shall, within five business days of its receipt of a
request by Noven for samples of rejected Product, provide samples of the Product
being rejected, if appropriate, and copies of written reports relating to tests,
studies or investigations performed to date by or on behalf of Endo on the
Product being rejected.

         (b) Endo's test results or basis for rejection shall be conclusive
unless Noven notifies Endo, within 30 days of receipt by Noven of the Rejection
Notice, that it disagrees with such test results or basis for rejection. If Endo
and Noven fail to agree within 10 days after Noven's notice to Endo as to
whether any Product identified in the Rejection Notice (i) deviates from the
Specifications to any extent, or (ii) breaches a representation or warranty in
this Agreement to an extent that the Product is not saleable, representative
samples of the batch of the Product in question shall be submitted to a mutually
acceptable independent laboratory or consultant (if not a laboratory analysis
issue) for analysis or review. If such laboratory needs to be qualified, then
Endo and Noven will equally share the cost and expense of the qualification. The
results of such evaluation shall be binding upon the parties. If Noven and Endo
determine by agreement or if such evaluation certifies that the Product was
properly rejected by Endo, Endo may reject the Product in the manner
contemplated by Section 3.07(c). The party that is determined to have been
incorrect in its determination of whether the Product should be rejected shall
pay the costs of any such evaluation. Should the fees associated with the work
conducted by the independent laboratory or consultant be due up front, Endo and
Noven shall each pay 50% of such upfront fees; PROVIDED, that if it is
determined by the independent laboratory or consultant that either party shall
have been incorrect in its determination, such party shall reimburse the other
party for such 50% of fees.

         (c) In the event an order or partial order is rejected by Endo pursuant
to the provisions of this Section 3.07, Endo shall return to Noven (or, at the
election of Noven, destroy and provide evidence of such destruction to Noven)
any units of such rejected Product. Noven shall, at Endo's election, either (i)
credit the original invoice in respect of the rejected Product and re-invoice
Endo for the units that were not rejected and credit Endo any reasonable
expenses incurred by it related to the shipping of the rejected Product to Endo
and the return or destruction of the rejected Product against other amounts then
due Noven hereunder or (ii) at Noven's cost and expense, replace such rejected
Product with conforming Product as soon as practicable. Noven shall have no
obligation to Endo with regard to any defective Product if it is determined

                                       8
<PAGE>

that any such defect is attributable to the failure by any Person to properly
store, transport or care for such Product after such Product leaves Noven's
possession.

         (d) Notwithstanding any other provision of this Agreement to the
contrary (except Section 3.09 below), in the event that Endo receives Product in
violation of the Product dating warranty set forth at Section 5.01(d), Endo will
attempt to mitigate the damages caused by such breach by using commercially
reasonable efforts to sell such Product with twelve (12) or more months of
dating, provided, however, that Noven shall remain responsible for its breach of
Section 5.01(d) in the event that Endo is unsuccessful in its efforts to sell
such Products or its results result in the Product being sold at a reduced
price.

         Section 3.08. NOTICES REGARDING SUPPLY. If at anytime during the Term
of this Agreement Noven determines that its ability to supply Endo's
requirements of Product may be hindered, Noven shall promptly notify Endo.

         Section 3.09 ENDO RESPONSIBILITY FOR LAUNCH QUANTITY API. In the event
that any portion of the Validation Batches or orders for the first three months
of commercial supply (the "Launch Quantities") become unsaleable due to delay in
receiving final FDA Regulatory Approval for the Product, FDA required changes in
the Product labeling (including the printed patch backing) or a Force Majeure
event (including in each case where the unsaleability is due to a resulting
diminished remaining shelf-life), the parties shall share the risk as follows:
Endo shall be responsible for the actual API costs for such unsaleable Product
as follows: (i) *** of the API cost for unsaleable validation batches, (ii) ***
of the API Cost for unsaleable Product ordered for the *** and *** following
launch, and (iii) *** of the API cost for unsaleable Launch Quantities above the
Noven API Launch Cost Cap (as defined in this paragraph). Noven shall have not
responsibility to Endo for any API costs above the Noven API Launch Cost Cap.
The initial Noven API Launch Cost Cap shall be ***, and is based on the
preliminary launch quantity estimates set forth on Schedule 3.09. In the event
that the actual Launch Quantities ordered are in excess of the amounts set forth
in Schedule 3.09, then the Noven API Launch Cost Cap shall be increased by the
proportional increase in the amount of API required to make such additional
quantities up to a maximum aggregate Noven API Launch Cost Cap of ***. By way of
example, if Endo's orders for launch quantities require *** more API then the
estimated orders set forth on Schedule 3.09, then the Noven API Launch Cost Cap
would be ***. Additionally, Endo shall reimburse Noven for one-half of all of
Noven's actual incremental variable costs associated with the manufacturing of
the Launch Quantities in excess of the estimated quantities set forth in
Schedule 3.09. Noven shall bear the risk of loss for all costs associated with
manufacturing the Launch Quantities other than Endo's responsibility for Launch
Quantity API and incremental manufacturing costs set forth above; and, in the
event that Noven is bearing the cost of the API then Noven shall invoice Endo
for the amount of the API cost for which Endo is responsible pursuant to this
Section 3.09 at the time such API is received by Noven. Such invoices shall be
due and payable within thirty days of receipt by Endo, and Endo shall deduct
such API costs from the next Gross Margin payment otherwise owed Noven under
this License Agreement.

                                       9
<PAGE>

                          ARTICLE IV PRICE AND PAYMENT

         Section 4.01. INVOICE. Following shipment of each order of the Product
to Endo, Noven shall promptly invoice Endo for such shipment. Each invoice shall
specify the amount of product shipped, the per unit invoice Price of the Product
as further described in Section 4.02 below, and the total invoice amount.
Subject to Section 3.07(c), Endo shall pay Noven for each shipment of Product
the total invoiced amount within thirty (30) days after the date of receipt of a
correct invoice, the Product and all supporting documentation (such as the
certificate of analysis) required to perform an incoming quality assurance
inspection; PROVIDED THAT with respect to any shipments for which Endo has
identified a quality assurance issue during such thirty (30) day period, payment
therefore shall be ten (10) business days from the date of resolution of such
quality assurance issue. Both parties agree to provide their full cooperation
with any quality assurance investigation and to use commercially reasonable
efforts to achieve the prompt resolution of any such investigation. All payments
required to be made hereunder shall be paid in United States dollars and made by
corporate check drawn on a United States bank or a United States branch of a
foreign bank, or by wire transfer of immediately available funds to the
financial institution, account number and account party's name designated in
writing by Noven to Endo from time to time. Should Endo dispute any portion of
an invoice, it shall not be required to pay any portion of such invoice until
such time as the dispute is resolved and Endo receives a fully corrected
invoice; PROVIDED THAT, in such an event, Noven shall have the option of issuing
a new, correct invoice for the portion of the original invoice not in dispute,
and Endo shall pay such new invoice within 10 business days of the receipt of
the corrected invoice (provided that Endo shall have no obligation to pay
earlier than when the payment following the original invoice would have been
due). Interest shall accrue on any overdue and undisputed amount due and payable
to Noven at the lesser rate of 1% per month or the maximum rate permitted by law

         Section 4.02. INVOICE PRICE. Noven shall charge Endo for shipped
Product manufactured for commercial sale in the United States on a per unit
basis at Noven's actual fully loaded manufacturing cost. Noven shall charge Endo
for shipped Product manufactured for commercial sale in Canada on a per unit
basis at Noven's actual fully loaded manufacturing cost plus ***. Noven's fully
loaded manufacturing cost shall be calculated in accordance with Section 4.03
below. A non-binding estimate of the price for the first year of commercial
supply of the U.S. Product, together with a detailed allocation of the
calculation of each component of Noven's fully loaded manufacturing costs, is
set forth on Schedule 4.02. Noven shall provide Endo with a similar estimate
within 30 days of the beginning of each subsequent contract year. The transfer
price for the Product charged to Endo in each Invoice will be based on good
faith estimates by Noven of the actual fully loaded manufacturing cost of
Product. Semi-annually Noven shall reconcile the amount invoiced to Endo and
paid by Endo with Noven's actual fully loaded manufacturing cost. Noven shall
provide a copy of each reconciliation to Endo. To the extent that Noven has
overcharged Endo, Noven shall credit to Endo all amounts overcharged. To the
extent that Noven has undercharged Endo, Noven shall invoice Endo for the
undercharged amount in accordance with the terms of this Agreement. In the event
of a dispute between Endo and Noven as to the proper calculation of the Product
Price, such dispute shall be referred to an independent accounting firm mutually
agreeable to the parties per Section 6.01 below, whose opinion shall be final
and binding.

                                       10
<PAGE>

         Section 4.03. LIMIT ON OVERHEAD ALLOCATION. For purposes of determining
Noven's fully loaded manufacturing cost of Product supplied to Endo hereunder,
Noven shall include Noven's actual cost of materials and labor and an allocation
of Noven's total manufacturing overhead. This allocation shall be determined
using the same methodology Noven uses in determining its cost of goods for the
other products it manufactures, all in accordance with GAAP consistently
applied, but subject to the further limitations described in this Section 4.03.
For the ***, provided that the total units shipped in such period are within the
range set forth in Schedule 4.03, Noven shall allocate between *** (the
"Collar") of overhead to its Product manufacturing cost. For each succeeding ***
period, the Collar shall be adjusted by the change in the Producer Price Index
(Pharmaceutical Preparations, ethical PCU2834#), published by the United States
Department of Labor, Bureau of Labor Statistics, or comparable successor index,
again provided that the total units shipped in each such period are within the
range set forth in Schedule 4.03. To the extent that the total units actually
shipped to Endo in any contract year fall outside of the range set forth in
Schedule 4.03, the corresponding upper or lower limit of the collar will be
adjusted by a percentage equal to *** of the percentage increase or decrease in
shipments. For example, if Noven's shipments in a contract year were *** higher
than the highest amount forecast in Schedule 4.03, the then existing upper limit
of the collar would be increased by ***. If Noven's shipments in a contract year
were *** lower than the lowest amount forecast in Schedule 4.03, then the lower
limit of the collar would be reduced by ***.

             ARTICLE V MANUFACTURING STANDARDS AND QUALITY ASSURANCE

         Section 5.01. PRODUCT WARRANTIES. Noven hereby covenants and agrees
that:

         (a)      Noven will manufacture and deliver to Endo the Product in
                  accordance with, and the Product will conform with, the
                  Specifications and the Quality Agreement; all Product supplied
                  by Noven to Endo shall be manufactured, packaged, tested,
                  stored and handled in accordance with the then current version
                  of the ANDA and shall not be adulterated or misbranded.

         (b)      Noven will comply with all Applicable Laws and current good
                  manufacturing practices relating to the Product.

         (c)      All Product supplied by Noven hereunder shall be transferred
                  to Endo free and clear of all liens, title claims,
                  encumbrances and security interests.

         (d)      Except for Product manufactured before final approval of the
                  Product in fulfillment of Endo orders for Launch Quantities,
                  all Product supplied by Noven shall have a minimum of *** of
                  the shelf life set forth in the applicable Product
                  registration still available at the time of delivery to Endo.

         Section 5.02. THE SPECIFICATIONS. Endo or Noven shall not change the
Specifications at any time without the prior written consent of the other party;
provided, however, that either party may change the Specifications upon
reasonable advance notice to the other party if such change is required by an
applicable Regulatory Authority.

                                       11
<PAGE>

         Section 5.03. QUALITY AGREEMENT. Contemporaneously with the execution
of this Agreement, the parties are entering into a Quality Agreement which is
attached hereto as Exhibit B.

         Section 5.03. DISCLAIMER. NOVEN HEREBY DISCLAIMS ALL WARRANTIES NOT
EXPRESSLY PROVIDED IN THIS AGREEMENT, INCLUDING ANY IMPLIED WARRANTIES,
INCLUDING WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE AND WARRANTIES OF
MERCHANTABILITY.

                    ARTICLE VI AUDITS AND INSPECTION RIGHT'S

         Section 6.01. RECORDS AND AUDITS. Noven shall keep complete and
accurate records concerning its manufacturing costs and any other costs and
expenses relevant to the amounts payable to Noven hereunder. Such records shall
be kept in accordance with GAAP applied on a consistent basis. Noven shall, at
Endo's request and expense, make those records available during normal business
hours upon ten (10) business days prior written notice for examination by
independent certified public accountants or auditors designated by Endo and
reasonably acceptable to Noven; PROVIDED, that Endo shall only have access to
such records once in each calendar year. In the event an underpayment or
overpayment is discovered, the applicable party shall make payment to the other
of the respective amount within 15 days of notification of the determination. In
the event that an overpayment by Endo of greater than 5% is discovered, the cost
of such audit shall be borne by Noven. Notwithstanding any provision in this
Agreement to the contrary, the terms of the Quality Agreement will govern all
quality assurance inspections.

         ARTICLE VII ADDITIONAL COVENANTS AND AGREEMENTS OF THE PARTIES

         Section 7.01. CONFIDENTIALITY. The parties hereby agree that the terms
and conditions of this Agreement and each party's activities hereunder shall be
subject to the confidentiality obligations (and all applicable exceptions
thereto) set forth in the License Agreement.

         Section 7.02. PACKAGING AND LABELING. All Products supplied hereunder
shall be in finished dosage form, packaged and Labeled for commercial sale in
accordance with the terms and conditions of this Agreement, the Specifications
and applicable Laws. Subject to the provisions of this Section 2.03, Endo shall
control the content and type of all Labeling for the Products. Endo shall supply
to Noven, in a timely fashion, all artwork required to Label the Products with
such trademarks, logos or designs as Endo shall select and in accordance with
Applicable Laws. Noven shall have the responsibility for: (i) securing any
approvals required by the FDA or other applicable Regulatory Authorities for the
initial Label; (ii) securing any approvals required by the FDA or other
applicable Regulatory Authorities for any changes or supplements to the Labeling
requested by Endo following regulatory approval of the Product ANDA, provided
that Noven is the holder of the Product ANDA at such time; and (iii) any Noven
information on the Label which shall be approved in advance by Noven. In the
event that Endo wishes to modify or change the Label, Endo shall provide
reasonable advance notice of

                                       12
<PAGE>

such desired change to Noven and forward such modifications or changes to Noven
for Noven's review and approval (which shall not be unreasonably withheld).

         Section 7.03. PRODUCT RECALL. Product recalls shall be conducted in
accordance with the terms of the Quality Agreement. Each of Noven and Endo shall
make a permanent, complete and accurate record of all costs incurred by its
connection with any Product recall, a copy of which shall be delivered to the
other party upon its request as soon after the completion of such recall or
seizure as practically may be done. If the cause of, or reason for, said recall
is attributable to any reason beyond the reasonable control of the parties, the
total cost of the recall to the parties shall be shared equally among the
parties. If the cause of, or reason for, said recall or seizure arises is both
not attributable to reasons beyond the reasonable control of the parties and is
attributable to the negligence or breach of this Agreement by a party hereto,
such party shall reimburse the other for all reasonable costs incurred by it in
effecting such recall or seizure. If Noven and Endo cannot agree which party is
at fault or whether the recall was reasonably beyond the control of the parties,
then an independent technical expert, acceptable to both, will be designated to
make the determination. The so designated technical expert shall not be an
employee, consultant, officer, director or shareholder of or otherwise
associated with any party or an Affiliate of any party. The technical expert's
determination shall be, in the absence of fraud or manifest error, binding and
conclusive upon the parties.

         Section 7.04 PRODUCT SHELF LIFE. Noven shall use commercially
reasonable efforts to obtain *** expiration dating, and will to continue to use
such efforts even if the Product is initially approved by the FDA with less than
*** expiration dating.

                   ARTICLE VIII REPRESENTATIONS AND WARRANTIES

         Section 8.01. 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 duly qualified to do business in each
jurisdiction where the character of its business (after giving effect to the
Contemplated Transactions) 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 it 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 by it 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

                                       13
<PAGE>

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 of 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 or delayed.

             ARTICLE IX INDEMNIFICATION AND LIMITATION OF LIABILITY

         Section 9.01 INDEMNIFICATION. Indemnification for activities related to
this Agreement shall be provided pursuant to the License Agreement between the
parties entered into on the same date.

         Section 9.02. LIMITATION OF LIABILITY. 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 SHALL BE
PAYABLE TO A THIRD PARTY.

         Section 9.03 WAIVER OF LIMITATION OF LIABILITY. In the event that that
there is a Change in Control (as defined in the License Agreement) which results
in Noven being acquired or controlled by an entity with a Competing Product (as
defined in the License Agreement) and Noven has not qualified a second source of
supply with an independent third party pursuant to a supply agreement which
allows Endo to immediately purchase its requirements of Product directly from
such third party upon the same terms as Noven in the event of (i) Noven's
bankruptcy or insolvency or (ii) a Change in Control of Noven to an entity with
a Competing Product, then the limitation of liability set forth in Section 9.02
shall not apply to any breach of this Agreement by Noven or its successors and
assigns.

                         ARTICLE X TERM AND TERMINATION

         Section 10.01. TERM. This Agreement shall continue in full force and
effect until the earlier of (a) the termination of the License Agreement, or (b)
termination of this Agreement in accordance with Section 10.02 (the Effective
Date until such termination, the "TERM").

                                       14
<PAGE>

         Section 10.02. CERTAIN TERMINATION EVENTS.

         (a) Except as otherwise contemplated by Sections 3.05 and 10.02(c),
either Noven or Endo shall have the right to terminate this Agreement if the
other commits any continuing or material breach of any of the provisions of this
Agreement and (in the case of a breach which is capable of remedy) fails to
remedy the same within 60 days after receipt of written notice giving full
particulars of the breach and requiring it to be so remedied;

         (b) In the event that at any time during the Term Noven shall, (i)
during any period of six consecutive months, fail to supply at least *** of the
aggregate number of units of Product (which number of units shall be determined
with reference to the number of units estimated to be yielded by each Batch
ordered by Endo as reflected in Exhibit A) ordered pursuant to Purchase Orders
properly submitted by Endo during such period (other than by reason of the fault
of Endo), or (ii) fail to provide *** of the aggregate number of units of
Product ordered during any two separate periods of three consecutive months,
Endo shall (A) have the right to terminate its obligation to exclusively
purchase Product from Noven and have a third party manufacture on its behalf the
Product to supply and (B) have the right to withdraw any purchase orders
submitted to Noven for amounts in excess of Noven's ability to supply.

         (c) Either party may terminate this Agreement with immediate effect if
the Product is withdrawn from the market in the Territory for serious adverse
health or safety reasons.

         (d) Either Noven or Endo may terminate this Agreement with immediate
effect in the event a Force Majeure Event as to the other shall exist and be
continuing for a period of 120 consecutive days.

         (e) Noven may terminate its obligation to supply Endo with its
requirements of Product under this Agreement upon twenty-four months notice in
the event that Noven's gross margins on the manufacture of Product (taking into
account all Endo payments hereunder and under the License Agreement in
calculating such margins--except for the milestone payments) drops to less than
*** of its fully allocated manufacturing cost for the Product in two consecutive
calendar quarters. Such termination notice shall contain the election of Noven
to either (1) continue to be paid its share of the Gross Margin per the License
Agreement, or (ii) be paid its fully loaded manufacturing costs plus *** for
Product, during the period following the notice until Noven no longer supplies
Product hereunder, in exchange for the immediate and permanent termination of
any and all gross margin splits and royalty obligations otherwise due and
payable pursuant to the License Agreement. Noven agrees to provide the technical
transfer services set forth in Schedule 10.02 (the "Tech Transfer Services"),
including the delivery to Endo of the Technical Transfer Documentation Package
within *** of the termination notice and completion of the transfer of all
analytical methods within *** of the termination notice. The termination by
Noven shall become effective *** following receipt of the notice by Endo,
provided, however, that the effective date of the termination shall be extended
by each day of delay in excess of the corresponding time periods set forth above
which it takes Noven to complete the transfer of the Technical Transfer
Documentation Package and the analytical methods. The manufacturing period,
however, shall not be extended to the extent such delay occurs through no fault
of Noven. To the extent that such alternative manufacturer would need to use
technology owned by, or

                                       15
<PAGE>

protected by intellectual property owned by, Noven, access to such technology
would be provided on limited basis and restricted solely to use for the
manufacture of Product.

         (f) In the event of a termination by Endo pursuant to Section 10.02
(a), (b) or (d), Noven agrees to work in good faith with Endo to qualify a
suitable alternative manufacturer for the Product that has been identified by
Endo and that agrees to undertake such manufacturing. Endo agrees to work in
good faith with Noven regarding such transfer and ensure that the third party
works in good faith with Noven as well. Noven shall, as promptly as is
reasonably practicable, perform the Tech Transfer Services. In the event the
delivery to Endo of the Technical Transfer Documentation Package is completed
within *** of the termination notice and the transfer of all analytical methods
is completed within *** of the termination notice, or such time periods are
exceeded due to no fault of Noven, Endo shall reimburse Noven for the time of
its technical staff in performing such transfer at the rate of *** and all
reasonable travel expenses pre-approved by Endo. In the event that such services
are not completed within such time periods due to the fault of Noven, Endo will
reimburse Noven its reasonable pre-approved travel expenses in full but shall
have no other payment obligation for the technology transfer. To the extent that
such alternative manufacturer would need to use technology owned by, or
protected by intellectual property owned by, Noven, access to such technology
would be provided on limited basis and restricted solely to use for the
manufacture of Product.

         Section 10.04. OBLIGATIONS ON TERMINATION. Within 30 days of any
expiration or termination of this Agreement other than a termination by Endo
pursuant to Section 10.02 (a), (b) or (d), or a termination by Noven pursuant to
Section 10.02 (e), (i) Endo shall cease to use and shall deliver to Noven, upon
written request, all Confidential Information of Noven, except for any documents
or records that Endo is required to retain by Applicable Law, and (ii) Noven
shall cease to use and shall deliver to Endo, upon written request, all
Confidential Information of Endo except for any documents or records that Noven
is required to retain by Applicable Law. In the event of a termination by Endo
pursuant to Section 10.02 (a), (b) or (d), a termination by Noven pursuant to
Section 10.02 (e), Endo shall be permitted to retain and use the Confidential
Information in the manufacture of the Product, and to disclose such Confidential
Information to its third party manufacturer, provided that such third party
manufacturer is under obligations of confidentiality no less stringent than this
Agreement.

         Section 10.05. EFFECT OF TERMINATION. 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) Section
7.01 (Confidentiality), (b) this Article 10, (c) Section 11.9 (Governing Law),
(d) Section 11.11 (Entire Agreement), and (e) Section 11.12 (Expenses) and any
other provisions which expressly survive termination. The rights and remedies
provided in this Article X shall be cumulative and not exclusive of any rights
or remedies provided by Applicable Law. 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.

                                       16
<PAGE>
                            ARTICLE XI MISCELLANEOUS

         Section 11.01. 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.
                  100 Painters Dr.
                  Chadds Ford, PA  19317
                  Attention: General Counsel
                  Telecopy:  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, by air courier or by mail, (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.

         Section 11.02. INDEPENDENT CONTRACTORS. In making and performing this
Agreement, the parties are acting and shall act as independent contractors.
Nothing in this Agreement shall be deemed to create an 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 be solely employees of Endo and shall not represent
themselves as employees of Noven.

                                       17
<PAGE>

         Section 11.03. ASSIGNMENT. Noven shall not have the right to assign
this Agreement or delegate any of its rights, interests duties or obligations
hereunder without the prior written consent of Endo, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing, at any time during the
term of this Agreement either party may assign this Agreement to any of its
Affiliates without the prior written consent of the other parties; PROVIDED,
that no such assignment of this Agreement shall relieve the assignor of any of
its obligations or liabilities under this Agreement. Notwithstanding the
foregoing, any party may assign this Agreement without the other parties' prior
written consent in connection with the transfer or sale of all or substantially
all of its assets or business or its merger or consolidation with another Person
upon written notice to the other parties. Any attempted assignment in violation
of this Section 11.04 shall be void.

         Section 11.04. 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 11.05. 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 11.06. 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 11.07. 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 be executed in
any number of counterparts, each of which shall be 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 11.08. 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 fit this
Agreement, any reference to the masculine, feminine or neuter gender shall
include all genders, the plural shall include the singular, and 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

                                       18
<PAGE>

respective successors and assigns. The words "include," "includes" and
"including" when used herein shall be deemed to the 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 entirety 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 11.9. 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 11.10. 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 11.11. ENTIRE AGREEMENT. This Agreement, together with any and
all schedules, exhibits and appendices hereto, 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 of 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 and the other Transaction
Documents.

         Section 11.12. 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 11.13. FORCE MAJEURE. If the performance of this Agreement or
any obligation hereunder (except the payment of money) by any party is prevented
or hindered, 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, delay

                                       19
<PAGE>

of carrier, shortage or failure in the supply of materials, labor disturbance or
acts, regulations or laws of any government adopted after the date of this
Agreement or 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 (a "FORCE MAJEURE EVENT"), 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 11.14. INSURANCE. Throughout the Term, each of Noven and Endo
shall maintain commercial liability insurance, including blanket commercial
liability insurance covering the obligation of that party under this Agreement
through the term of this Agreement and for five years thereafter, which
insurance shall afford limits of not less than US$10,000,000 per occurrence,
(and in the aggregate only with respect to personal injury liability) for bodily
injury liability, products liability, property damage liability, contractual
liability and completed operations liability with an insurance carrier qualified
to do business in the United States. Each of Noven and Endo shall promptly
furnish to the other evidence of the maintenance of the insurance required
hereunder and shall name the other as an "additional insured" under a broad form
vendor's endorsement to such insurance policy. In case any such policies are
written on a "claims made" basis, such policies shall remain in effect for a
period of five years following the expiration or earlier termination of this
Agreement. Notwithstanding the foregoing, the obligation of each of Noven and
Endo to obtain insurance in accordance with this Section 7.04 is subject to the
availability of such insurance from nationally recognized carriers at reasonable
rates and on reasonable terms and conditions, which reasonableness shall be
determined in the judgment of each party, respectively, in accordance with such
party's past practices to the ordinary course of business. In the event either
party shall be unable to obtain insurance as contemplated by this Section 7.04,
such party shall notify the other party as soon as practicable and shall have
the right to self-insure such coverage; PROVIDED that any party opting to so
self-insure shall provide to the other party reasonable information regarding
its self-insurance program.

         Section 11.15. NO DEBARRED PERSONS. Each of Noven and Endo covenants
and agrees that it has not and will not use in any capacity the services of any
Person debarred under subsections (a) or (b) of Section 306 of the FDC Act in
connection with its performance of this Agreement.

                                       20
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
effective as of the Effective Date.

NOVEN PHARMACEUTICALS, INC.            ENDO PHARMACEUTICALS INC.

By: /s/ ROBERT C. STRAUSS              By: /s/ PETER A. LANKAU
   -----------------------------          --------------------------------------
Name: Robert C. Strauss                Name: Peter A. Lankau
Title: President, CEO and Chairman     Title: President and CEO
Date: February 25, 2004                Date: February 25, 2004

                                       21

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]